A proven approach to managing strategic change, requiring hard cuts + new growth.

1. Managing Cuts +
New Growth
Un:balanced Transformation

2. AGENDA
What is change?
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3. What is change?
I have to move my
We’re restructuring desk! 
our complete
organization! 
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4. What is change?
New operations New way of working
Merger Turnaround
New organisational
New strategy structures
Reengineering Downsizing
New processes
New IT system
New management tools New culture
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5. AGENDA
Why change?
Adapt to changing conditions.
Become competitive.
Stay competitive.
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6. AGENDA
How to lead
change?
= the BIG question we‘re
trying to answer!
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7. Narrow ↔ Broad
Discontinuous ↔ Continuous
Periodic ↔ Constant
Fast ↔ Slow
Top Down ↔ Bottom Up
Hard Cuts ↔ New Growth
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8. What am I supposed to do?
I need some orientation…
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9. © Doujak Corporate Development

10. OK…let’s start by
analyzing the
overall situation!
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11. The Change Map
What‘s your situation?
High
Securing survival
Crisis management -
restructuring
Current Necessity for Change
Radical repositioning
Strategic turnaround -
organizational redesign
Renewal
Growth
Mobilizing
Adapting and developmental Learning organization
capacity Market responsiveness
Low
Low High
Change Capability
© Doujak Corporate Development

12. The Change Map
Different challenges require different appraoches.
High • Turnaround projects
Securing survival
Crisis management - • Goal: focus on survival + decrease the
restructuring current need for change
Current Necessity for Change
Radical repositioning
Strategic turnaround -
organizational redesign
Renewal
Growth
Mobilizing
Adapting and developmental Learning organization
capacity Market responsiveness
Low
Low High
Change Capability
© Doujak Corporate Development

13. The Change Map
What‘s your situation?
High
Securing survival
Crisis management -
restructuring
Current Necessity for Change
Radical repositioning
Strategic turnaround -
organizational redesign
Renewal
Growth
• Goal: increase the capabilities and willingness for change
of individuals, groups, and organisations.
Mobilizing
Adapting and developmental Learning organization
capacity Market responsiveness
Low
Low High
Change Capability
© Doujak Corporate Development

14. The Change Map
What‘s your situation?
• Proactive turnaround, anticipating a crisis + strategic
High redesign
Securing survival
Crisis management - • Goal: move into a more stable environment and
restructuring increase the change capacity of the organisation
Current Necessity for Change
Radical repositioning
Strategic turnaround -
organizational redesign
Renewal
Growth
Mobilizing
Adapting and developmental Learning organization
capacity Market responsiveness
Low
Low High
Change Capability
© Doujak Corporate Development

15. The Change Map
What‘s your situation?
High
Securing survival
Crisis management -
restructuring
• Goal: find, test and imlement innovative
Current Necessity for Change
Radicalpotentials for new growth and success.
repositioning
• The identity
Strategic turnaround - of company is being
organizational redesign and renewed.
transformed
Renewal
Growth
Mobilizing
Adapting and developmental Learning organization
capacity Market responsiveness
Low
Low High
Change Capability
© Doujak Corporate Development

16. The Change Map
What‘s your situation?
High
Securing survival
Crisis management -
restructuring
Current Necessity for Change
Radical repositioning
Strategic turnaround -
organizational redesign
Renewal
• Change is day to day business for the learning
Growth
organisation (emergent change).
• Continuous development and innovation
• Decentral self-organisation, fostered by the market,
reward systems and the organisation‘s culture.
Mobilizing
Adapting and developmental Learning organization
capacity Market responsiveness
Low
Low High
Change Capability
© Doujak Corporate Development

17. The Change Map
In which direction to move?
High
Securing survival
Crisis management -
restructuring
Current Necessity for Change
Radical repositioning
Strategic turnaround -
organizational redesign
Renewal
Growth
Mobilizing
Adapting and developmental Learning organization
capacity Market responsiveness
Low
Low High
Change Capability
© Doujak Corporate Development

18. The Change Map
Un:balanced Transformation
High
Securing survival
Crisis management -
restructuring
Current Necessity for Change
Radical repositioning
Strategic turnaround -
organizational redesign
Renewal
Growth
Mobilizing
Adapting and developmental Learning organization
capacity Market responsiveness
Low
Low High
Change Capability
© Doujak Corporate Development

19. The Change Map
What to think about...
What‘s influencing What‘s influencing the capabilities and
the need? the readiness?
• Financial pressure • Has the organization some experiences
• Competitive pressure with change?
• Market pressure • Do people have the skills for change?
(Change Mgmt know how)
• The organization‘s ability to perform
(compared to peers) • How is the need for change perceived?
• Level of coordination • Is it a radical change?
• Level of target achievement • Are systems and support structures in place
to facilitate the change?
• Level of customer satisfaction
• How high is the trust in the ability to
• Internal systems
change?
• Structure and processes
• How high is the personal readiness for
• Organizational culture change?
• Leadership, values, „climate“ • Does the change match people‘s values?
• ... • ...
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20. Un:Balanced Transformation
Anchoring hard cuts and new growth simulaneously
Hard cuts New growth
Focus on short-term performance, efficiency and economic Focus on long-term success, future growth potential and
Goals capital intellectual capital
Top-down – close, clear, directive, linear, by program – Bottom-up involvement: self-organization, collaboration and
Steering “planned change” networking, open. Emergent change.
Decrease resources/costs – focus on processes, structure,
Contents systems, downsizing
Involvement, participation, innovative culture
HR a cost factor capital, a resource, “entrepreneurs”
longer coping processes (worries, distrust, aggression, focus, community (teams are important) and a basic feeling of joy,
Logic of feelings disappointment, leave-taking – gradual new commitment) challenge and confidence
Reality Buoyant optimism, a combination of discipline and spirit of
Feelings of loss and defeat influence perception
construction adventure influence perception (pioneers, winners of the future)
Support autonomous initiatives and structures and short-term
Core team steers the process of hard cuts – intense
Architecture involvement of HR and line managers for implementation
experiments – conducted on the sidelines of day-to-day operation
(“incubation” until matured)
Pull towards the past and to the inside – a need for
Pull towards the future and to the outside – desire to “ignore” or
Orientation stabilization and renewal of the employee – company
overcome existing conditions
contract
Producers, ambassadors and bringers of “bad news” – the
Architects, enablers and promoters of innovation – the situation
situation calls for their presence in the roles of
Executives “implementers”, coaches, communicators and
calls for letting go and strengthening autonomy, encouraging
“revolutionaries”
crisis/transition experts (security, orientation)
Motivator for Security and risk minimization, finding one’s own position, Involvement, challenge and free play, commitment. Performance
people maintaining stability in new, demanding areas
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21. Approaches to Change
Old and new images of transformations
Old Images New Images
Maintaining a balance between fields of tension and Change management as management of Unbalance and
contradictions accelerates change. Balance.
Conflicts must be deescalated. Transformation needs conflict.
Feelings are a side-effect in transformation processes; we
Feelings are the motor for all phases of change.
have to accept them.
The combination of top-down decisions and bottom-up
Transformation decisions require a broad consensus.
involvement is crucial.
Transformation is change planned top-down; management Transformations are a squaring of the circle - “planned
accounting and controls are a success factor (“planned quantum leap” (planned change) and at the same time self-
change”). generated change “emergent change”.
From step one, concept development must be interlinked with
A good concept makes up 90% of success.
implementation work.
For all those involved, transformation also means (more or
Now the others need to change. After all, we initiated it.
less extensive) personal change.
Clear-cut and step-by-step integration according to phases and
It is important to always involve everyone.
stakeholders.
Before we can step outside, we need to have solved
Integration of relevant environments from the very beginning.
everything on the inside.
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22. • Get your team (management, change, ...) together.
• Plan 3-4 hours.
• Put the change map on the floor.
• Ask everybody to postion him/herself.
• Spend the next 3 hours on deciding on a common
view of your situation.
• Agree on how to evaluate the need.
• Agree on how to evaluate the capacity.
© Doujak Corporate Development

23. Next we need a road
map & outline who
does what when.
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24. The
perform
ability to
perceived
organizations
Breaking through routine –
1
we must change
Creating visions of the future
How to Change
2
The Five Phases Model
- develop architecture and
roadmap
Courageous decisions
3
- jumping into the cold water
Consistent implementation
© Doujak Corporate Development
4
- connecting the desire for
innovation with
broad involvement
Mastering the difficulties on
5
the highland planes
– anchoring successes
Time

25. How to Change
The Five Phases Model
Breaking through routine: We must change!
Creating visions of the future: Develop architecture and roadmap
Courageous decisions: Jump into the cold water
Consistent implementation: Connect the desire for innovation with broad involvement
Mastering the difficulties on the highland planes: Anchor successes
© Doujak Corporate Development

26. Phase One
Breaking through routine – we must change
1 2 3 4 5
Key strategies:
Creating visions of the future -
- jumping into the cold water
Mastering the difficulties on
• Disrupting routine:
Consistent implementation
Breaking through routine –
- connecting the desire for
develop architecture and
– anchoring successes
Courageous decisions
“Change starts with me”
the highland planes
broad involvement
• Evaluating the need for action:
we must change
innovation with
“From outside to inside”
• Assessment of the willingness and
roadmap
ability to change:
“Let’s test ourselves!”
Typical situation and dynamics
Time
• Communicating by shaking up:
• Diversity of perspectives and views concerning
“Opening up – taking a position –
situation and future developments sending signals”
• Energy for change varied • Identifying the key players:
• Contradictory signals from stakeholders “Finding the best people”
• Doubts about information quality
• Ambivalent collective mood: routine vs.
increasing interest in renewal vs. fear/blockades
© Doujak Corporate Development

27. Phase Two
Creating visions of the future – develop a roadmap
1 2 3 4 5 Key strategies:
Creating visions of the future -
- jumping into the cold water
Mastering the difficulties on
• Work on the vision: “We are creating
Consistent implementation
Breaking through routine –
- connecting the desire for
develop architecture and
– anchoring successes
Courageous decisions
a (fitting) future.”
the highland planes
broad involvement
• Develop strategy and master plan :
we must change
innovation with
“Big picture of drastic cuts and new
growth”
roadmap
• Decide architecture and teams:
“Containment due to process stability
Time and trust”
Typical situation and dynamics • Communicate seriously and
• First concepts and ideas about possible future
transparently: “That’s there we want
• Concepts too vague to get implemented on a 1:1
to go and how we get going”
basis
• Unclear: who will be concerned, degree of
• Deepen and broaden change
commitment, details of implementation
management know-how: “About the
• Only key people are involved art of change”
• Perceived performance increases, potential
threats are felt less
• Collective emotional level: interest is
predominant, those who are directly involved feel
spirit of a new era
© Doujak Corporate Development

28. Phase Three
Courageous decisions – jumping into the cold water
1 2 3 4 5 Key strategies:
Creating visions of the future -
- jumping into the cold water
Mastering the difficulties on
Consistent implementation
Breaking through routine –
• Plan and implement pilots and quick
- connecting the desire for
develop architecture and
– anchoring successes
Courageous decisions
wins: “Taking advantage of the
the highland planes
broad involvement
trampoline”
we must change
innovation with
• Cost-cutting and decisions
roadmap
about people “Challenging the
unpleasant aspects first – with
support measures”
Typical situation and dynamics
Time
• Promote growth and innovation:
• First implementation steps: try out big things “en “Incentives and scope for freedom”
miniature” • Deal with resistance: “Work with the
• Initial euphoria resistance – not against it!”
• Subsequent disillusionment: • Use evaluation as a motor: “Broad,
“misunderstandings”, “misinterpretations” stimulating – with consequences”
• Resistance: reactions out of fear, sometimes
aggressive
• Collective emotional level: “Defending the former
identity” vs. “Conquering new territories”
© Doujak Corporate Development

29. Phase Four
Consistent implementation – connecting the desire for innovation with
broad involvement
1 2 3 4 5 Key strategies:
Creating visions of the future -
- jumping into the cold water
Mastering the difficulties on
• Speed up implementation activities
Consistent implementation
Breaking through routine –
- connecting the desire for
develop architecture and
– anchoring successes
Courageous decisions
and projects consistently: “Pulling
the highland planes
broad involvement
yourself out of the swamp.”
we must change
innovation with
• Adapt architecture continuously:
“Nothing is forever”
roadmap
• Winning over undecided and skeptical
individuals: “From the team to the
Time organization”
Typical situation and dynamics • Adapt systems step by step: “Good
• Initial euphoria has worn off by now – the systems save energy”
setbacks have hit home • Continue to learn and build up skills
• “Should we stop or continue” for transformation: “Looking behind
• Middle-management are at the centre of change the backdrop and creating skills”
as mentors and multipliers responsible for
implementation
• Change process becomes broader, more and
more projects are completed
• Top-management impatient, middle-
management overloaded with work, many people
who will be affected are not yet involved
© Doujak Corporate Development

30. Phase Five
Mastering the difficulties on the highland – anchoring successes
1 2 3 4 5
Key strategies:
Creating visions of the future -
- jumping into the cold water
Mastering the difficulties on
• Harmonizing leadership systems:
Consistent implementation
Breaking through routine –
- connecting the desire for
develop architecture and
– anchoring successes
“Integration at all levels.”
Courageous decisions
the highland planes
• Cultural change: integrate behavior,
broad involvement
we must change
innovation with
norms, values into day2day-business:
“Awareness creates new possibilities”
roadmap
• Continue training on a broad basis:
“Practice, practice, practice!”
Time • Increase outward orientation:
Typical situation and dynamics “Happiness lies on the back of a
• Longest and most decisive phase – albeit not the
horse”
most exiting one
• Bring leadership into the focus of
• Clear project orientation and broad
implementation,
attention and finish the
• Systems integration and in-depth anchoring:
transformation:
slowly but surely – all systems, all staff members “With enthusiasm towards new
• Transformation is becoming second nature to efficiency”
people
© Doujak Corporate Development

31. • Well it depends very much on the phase you‘re in!
• The team (change, management,...) should be aware
of these phases!
• The question is „In which phase is the organization?“
versus „In which phase is the change/mgmt team?“
• Think of how the people must feel
• Get some feedback from the organisation
• Establish a sounding board
• Establish regular feedback loops
• How does your team feel?
© Doujak Corporate Development

32. See the book starting
on page 235 for specific
actions in each phase.
Let me know how they
worked!
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33. How to I get people to
come along?
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34. I´m going to be
I hope they‘ll be confronted with
able to keep it I‘m afraid. Will horrible emotions...
under control... I loose my job?
I couldn’t care
Cool! Finally less…
some change!
© Doujak Corporate Development

35. The Logic of Emotions
Every emotion has a function
daily routine curiosity fear
interest uncertainty
joy daily routine
courage anger
aggression
disappointment
sadness
© Doujak Corporate Development

36. The Logic of Emotions
Emotions are the drivers of change processes
Thinking and feeling cannot Implications for
be seperated. leadership.
• Emotions are drivers and • Emotional and affective tune is just as
barriers to our thinking. important as the cognitive understanding.
• Communication doesn‘t work without a
• Emotions bias our focus and
minimum of emotional conformity (being
attention.
on the same page).
• Emotions impact learning and • As a result affective accomodation,
remembering. responding to people, picking them up
• Emotions attract certain where they are is important.
thoughts and reject others. • Affective moods, verbal and non-verbal,
are highly infective. They spread at
lightning speed and impact following
situations and messages.
© Doujak Corporate Development

37. The Logic of Emotions
Emotions are the drivers of change processes
Emotional Consternation Emotional Leadership
Fear, insecurity: denial of the need for Stabilization: address fears, crossover
change, mental block, unable to act model, strategies for crisis management,
positive: focus enable a solution orientated mood
Anger, aggression: borders are being Tension regulation: “fighting arena”, offer
defined, defence through devaluation support to prevent burnout, expectation
positive: things worth keeping are management
defended
Disappointment, resignation, sadness: Continuous: reliable communication,
structures, dissolve, holding points are ongoing rhythms and rituals, consistent
lost, doubt about own competencies and staffing, celebrate (small) quick wins
problem solving capacity, slowdown, cling appreciate the past, farewell rituals
to the past, depressive mood
positive: open mind for new things
© Doujak Corporate Development

38. The Logic of Emotions
How people act
Discrimination dynamics Projections on outside world
Increasing fear
scapegoats, mobbing, groups, customers, other
insecurity, time pressure,
in-group/out-group- departments, leadership,
burnout, stress
dynamics, intrigues idealization and devaluation
Position fights, power games Psychological illness
Betrayal, cynicism, mistrust “dog-eat-dog”-mentality depression, anxiety disorder,
(social Darwinism) addiction
Psychosomatic illness
Decreasing loyalty
back problems,
Resistance, avoidance internal dismissal, decreasing
cardiovascular diseases,
commitment, quitting
stomach problems
© Doujak Corporate Development

39. Expecting resistance
Where is it coming from?
• Is the urgency for change considered low?
• Are there any ambiguous expectations?
• Are there doubts about successful project closure?
• Are the results uncertain?
• Are negative results to be expected?
• Are the results unalterable?
• Are the results associated with few advantages but with high costs?
• Is the change profound?
• Are those affected insufficiently involved?
• Does the change imply poor performance up until now?
The more often you answer „Yes“ to these questions, the higher the expected resistance.
© Doujak Corporate Development

40. The Logic of Emotions
How to deal with Hard Cuts
• Decide wisely – layoffs as the last resort
• Communicate as clear and concise as possible – open – interactive – with
content and emotional messages
• Plan hard cuts comprehensively based on a stakeholder analysis
• Communicate plausibly what the hard cuts will bring and why they are
necessary
• Implement as announced including support
• Monitor and evaluate results continuously
© Doujak Corporate Development

41. The Logic of Emotions
Leadership needed
• Clear language and information:
vision, objectives, tasks, feedback
Assuring one‘s own ability • Open communication: speak and
to work through Assuring employees‘ listen honestly
willingness and capability ability to work through • Build transparency: motives and
to self-reflection, self- containment, and security foreseeable consequences, culture of
criticism, self-honesty. information
• Social perception
• Ability to deal with conflicts, provide
structure (“containment”)
• Appreciative, accepting and
respectful attitude with resistance
Enabler of processes: Development of and fears. Practice listening!
impulses, facilitation, individuals, groups and • Employee participation: views,
coaching the organisation experiences, competences, in an
appropriate manner
© Doujak Corporate Development

42. More on Managing Cuts and Hard Cuts...
www.doujak.eu/thinking
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43. Thanks for your attention!

44. Marc Sniukas
Doujak Corporate Development
Lainzer Strasse 80
A-1130 Vienna
Mobile: +43 699 122 333
marc.sniukas@doujak.eu
Follow Marc at
www.twitter.com/sniukas
Blogging for Manchester Business School at
http://sniukas.tm.mbs.ac.uk
© Doujak Corporate Development

46. Doujak Corporate Development
What we do
Doujak Corporate Development is a consulting company partnering with CEOs and their executive
teams to resolve the global strategic and organizational challenges they face.
We help them to shape strategy and develop the capabilities and organizational culture,
structure, processes and systems needed for global execution and transforming their businesses.
Strategy Change Management Professional Development
• Purpose & Culture • Un:balanced Transformation • Top Executive Coaching
• Strategic Innovation • Hard Cuts + New Growth • Top Executive Teambuilding
• Strategy Development • Restructuring • Inhouse Programs
• Strategy Implementation • High Impact IT • Open Programs
© Doujak Corporate Development

47. Corporate Development
Developing....
Purpose
Stakeholder Culture
Relationships
Leadership Strategy
Organization
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48. Our Focus
Dimensions of our work
Content Process
What? Why? Who? How?
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49. Lainzer Strasse 80
A-1130 Vienna
Austria
Tel: +43.1.306 33 66
Fax: +43.1.306 33 66 9
office@doujak.eu
www.doujak.eu