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DR PATRICIA SMITH on leading transformational change
RONAN FOLEY on putting ethics at the top of the governance agenda
Most businesses at some time require transformational change when unexpected or accelerated changes in the external environment dictate a different business model for survival. To get started, everyone must understand and buy into the root cause of the problemand accept the need for substantial and urgent change. If the change plan involves dismantling a businessmodel that has been built by management, then the engagement of proven external advisers may be necessary to look unemotion- ally at exactly what and how much change is required. Thorough analysis and diagnosis of the problem will
lead to a clear change plan with easily identified, timed milestones and quantitative KPIs. Breaking the change plan down into manageable projects and carefully appointing committed teamleaders to each projectmakes the challenge less overwhelming. Open and ongoing communication of the new vision for
the organisation and the milestones is critical to success. The plan needs to be understood and institutionalised. Visible leadership from the board is essential and the directors need to be accessible to management, providing clear and consistent direction. The milestones are hugely important in giving manage-
ment a clear picture ofwhat the organisationwill look like after implementation (the vision), and along with the KPIs they will enable the board to monitor progress. Celebrating even small milestone achievements helps
the organisation to stay motivated. Rewarding achieve- ment is important but addressing non-delivery is also necessary. Change rarely, if ever, makes people happy but winning does! The board is also responsible for ensuring that ade-
quate skills and knowledge exist within the organisation for implementation. Often new skills or broader experi- ence is required, forcing headcount reductions in other areas to balance costs. Maintaining positivity at this time is challenging but also vital in retaining strong existing employees. A strong planning culture within your organisation will
deliver a year-end business plan that includes a thorough analysis and forecast of both external and internal threats and a detailed roadmap of how to deal with those threats before their impact necessitates transformational change.
Dr Patricia Smith is chief executive officer of Bio-Medical Research, Galway. She has just completed the IoD Chartered Director Programme.
Organisations are generally categorised either as gov- ernmental, commercial or not-for-profit (NFP). I firmly believe that a governance-led approach to a new fourth category, which adopts an amalgam of principles from these three categories along with new principles, can form the basis of a new approach. CSR in its current guise is in itself limiting.
Corporations seeking to walk the talk should look at changing their very business structures to more accu- rately answer the question: “What are we doing to make a real difference?” My suggested fourth way would require putting ethics
at the top of the agenda from board level down. Organisations must develop more formal structures incorporating all stakeholders. The development of programmes such as the IoD’s business ethics course signals a changing corporate view. Wouldn’t it be amazing if commercial entities offered board positions to community leaders and social influencers? What if companies announced a ‘stake- holder dividend’ each year? As CSR grows in momentum and scope, the NFP sec-
tor can provide all the necessary tools from information to implementation. To do this, NFPs must change their mindset to put themselves in the position of the busi- ness leader and see the world from their viewpoint. CEOs of charities and NFPs have a major role to play. Repositioning themselves as solution providers to com- panies to meet CSR objectives, NFPs can change the way they are viewed by businesses. I am constantly amazed at the innovation in the NFP
sector and closer collaboration within the sector through organisations such as The Wheel will lead to consensus and consistency in the relationship between the second (profit) and third (NFP) category organisations. It is possible for NFPs to become independent auditors
of this ‘stakeholder dividend’ vision. Either way,NFPs can move frombeing seen as beneficiaries to facilitators, part- nering commercial bodies towards a bigger, stakeholder- led picture. There is a period of development ahead in cementing CSR as a backbone constituent of business, but things are changing for the better. Where it goes from here, time will tell.
Ronan Foley is managing director for Ireland at Ecclesiastical Insurance Group.
Spring 2011 Irish Director 23
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