Siemens culture and change agents

The following material is excerpted from the original article and provides some overview of the actual evaluation that took place. * In terms of “hard” financial results, SNI produced its first profitable year in 1994-95, the first year of the CCP. Until Siemens intervened, it remained mildly profitable, with reported sales of almost DM18bn and net income of DM500m in 1998. This performance was insufficient, however, to convince senior Siemens management that SNI should remain as a stand-alone information technology company.

On the “softer” side, employee satisfaction surveys indicated a steady improvement in morale and confidence over the period of the CCP Unstructured observations indicated that, after a slow start, a growing number of employees at all levels of the organization saw both personal and institutional benefits from changed and more focused values, beliefs and attitudes. The take-over by Siemens came as a shattering psychological blow to many SNI personnel, as the CCP came to an abrupt end with the parent company showing a marked reluctance to consider the culture change initiatives previously undertaken.

In truth, SNI was seen as something of a dilettante privileged, overpaid and a constant drain on resources – so that there was little willingness to adopt their ideas, regardless of merit. * An objective measure of program outcome is a count of the number of participants who remain with the company. Over the six years of the program, 142 “graduated” as change agents. By December 2001 – one year after cessation of the program – 85 (60 per cent) remained with the company. Of these, many are now in strategically important positions within Siemens AG.

For those who left, exit interviews revealed that the main reasons were `couldn’t find an appropriate post-SNI position” and “was not being used properly. ” Indeed, a large number left in the 1998-99 period, in the immediate aftermath of the SNI absorption. (Change agents contracted to stay with the company for at least two years after completing the program. A small number of change agents – never more than 2 per year – chose to leave while still under contract. ) The most popular destination for these leavers was start-up companies, implying that the program had imbued them with an entrepreneurial spirit and tolerance of change.

In fact, these change agents were in heavy demand from outside employers, who universally viewed the program in a very positive light. * Interviews with 12 graduates (from the first four classes) of the CAP program yielded wide agreement that it offered a superb learning and growth opportunity. As a result of this largely positive outcome, almost all participants returned to SNI with the belief that they had the tools and capability to change the culture and operations of this traditionally conservative company.

Some of the details included: – The delivery of a mini-MBA, customized to the change needs of SNI: This included a strong emphasis on entrepreneurship, leadership, and cross-functional integration. In addition, every effort was made to ensure that faculty fully understood the issues facing the company. This program tailoring improved steadily as the program evolved, especially when taken over by internal personnel. – The graduates were exposed to truly top-notch faculty, including Ed Schein, Arnaldo Hax, Gary Hamel, and Peter Senge. The ability to take an international standpoint on challenges facing the modern corporation.

This was particularly important to SNI, who sought to shake off their parochial German image and replace it with a “global” presence. – The chance for real-time application of holistic learning within the business projects. This also created layers of support within the company through the involvement of “business leaders” and “executive sponsors. ” – The contribution, beginning in 1997, of a strong self-awareness and personal leadership skills component to the program. The establishment of a tightly knit network of change agents. The intensity of the program experience led to the creation of strong bonds and a mutually supportive passion for change that was enthusiastically taken back into the company. However, despite the positive comments on the program, the participants were frustrated by the re-entry process. * In many cases, participants received little support from senior managers back at the office. This phenomenon manifested itself in a number of ways.

First, change agents were often allocated to positions that differed little, if at all, from their pre-program jobs. Consequently, there was limited opportunity to stimulate change from positions of weak authority or responsibility Secondly, there was considerable variance in post-program enthusiasm from project “business leaders” and “executive sponsors. ” In business units or departments where management truly embraced the philosophy of the CCP, some significant progress was made.

One surrogate measure of change implementation was perceived project success. While it is difficult to assess financial performance, and project outcome depends on more than senior executive involvement, it was calculated that 10 to 25 per cent of projects were “successful”. SNI was left with the interesting situation of having isolated areas of change excellence, while other areas of the company remained largely unaffected. It should be noted, however, that this situation improved in the later years of the program.

Efforts were made to “train” senior managers as to their responsibilities (including participating in part of the program) and to create realistic expectations for project implementation. * The CAP initially generated considerable resentment on the part of personnel not selected for the program. This was particularly evident when the change agents returned to work and tried to assume a leadership role in change initiatives. A certain amount of jealousy and resistance was to be expected. The situation at SNI was exacerbated by some additional considerations.

In launching the CAP, Schulmeyer had made it clear that the future of the company depended, in large part, on these “chosen few”. In short, expectations were very high. Moreover, he was deeply and personally involved in a selection process that appeared to lack transparency. This led to the somewhat warped but widespread view that participants were “anointed” by the CEO to lead the culture change charge. The change agents became known sarcastically as “Schulmeyer Kinder” or “Schulmeyer Kids”, because they were viewed as “special” elites designated by the boss.

In some cases, they believed their own publicity, going back to the office with an elevated sense of their own importance and an unrealistic belief in their ability swiftly to encourage change. Here again, the situation improved over time with much greater transparency and equity being used in participant selection for the later programs and a strong effort being made to keep change agent feet rooted firmly on the ground. * The post-program integration of the change agents back into the company lacked a clearly defined road map.

How could they be best used both to communicate and to operationalize what they had learned? How could they be a continuous stimulus to change? These decisions, in fact, were largely left to the individual change agent to make. Little HR support was forthcoming in the form of coaching on how to implement ideas and sensitively assume leadership roles. Although the change agents built supportive informal networks, very few formal events were arranged where former participants could get together to seek guidance and share experiences.

While accepting the need to be somewhat proactive, most change agents desperately needed an organizational framework that outlined a flexible but consistent modus operandi. This shortage of structure, along with senior management’s ambivalence, caused many change agents to question the true commitment of the company to genuine cultural change. Things did improve in the 1999-2000 period, when formal post-program coaching was introduced. Change Agent Program Impact Any program assessment must start with the paradoxical role of Gerhart Schulmeyer. It was his vision and energy that took a dysfunctional company and gave it a sense of purpose and direction. It was his imagination and entrepreneurial spirit that saw the need for a both a CCP and an associated CAP to help facilitate the change process. It was his dedication and tireless support that led to the design of two of the most sophisticated change programs heretofore seen. But in the end, it is execution that counts.

Schulmeyer was seen as a Godfather, an enlightened leader, a breath of fresh air – change agents talked of being incredibly galvanized by his motivational speeches on their role in the change process – but he could not guarantee implementation. In fact, his own missionary zeal may well have clouded his judgment. He failed to realize that not all managers shared his passion, and he therefore relied heavily on his own personal inspiration rather than the creation of pedantic but much needed operational checkpoints and structures. Expectations for change were set too high. In order to achieve the vision of becoming the `European partner of choice among world-class information technology players’, the goal was set to alter the culture to a “customer-driven ideas factory (where) we encourage entrepreneurship throughout the entire Siemens Nixdorf network. ” The change agents were expected to be a vital component in this change process. But the difficulties and barriers that they confronted have been seen.

The more radical the intended change, the greater the likelihood of resistance, especially in an inherently conservative culture as found in this large German company, where many managers could be considered “uncertainty avoiders. ” Change partners needed to be found at all levels of the organization and this the change agents found hard to do as they strove to shake-off their “exclusive club” image. * The change agents were expected to inoculate the whole of the organization with their entrepreneurial ideas and culture change style. This they intended to do through Friday Forums and other forms of broad communication.

In reality, however, their impact where positively felt – was mainly at the departmental and business unit level. Here, they were able to assume a leadership role in bringing a project to market, in building entrepreneurial teams, and winning the confidence of close colleagues by sharing learned knowledge. Thus change – where it took place – was a largely incremental rather than dramatic occurrence. As noted earlier, by the time of the SNI take-over a growing number of employees had embraced the requirement for cultural adjustment. This leads to an interesting conclusion.

Change Agent Programs should be evaluated at three levels: (a) the individual; (b) the business unit; and (c) the corporation. It is at the first two levels, at least in the short run, where positive impact can be best expected. It is noteworthy, however, that the company continues to gain above-average contributions from old change agents who claim that their experience in the program is significantly responsible for their enhanced performance. We are left with a major change experiment that produced variable results. It does provide us with some powerful lessons, especially on the role of change agents within the change process.

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