2. We’ll Discuss..
SNI
The organization and the crisis
How should SNI be transformed
The suggested framework
How change is initiated
Schulmeyer and Andy Chew
What actions Andy Chew took
Gaps in the actions taken
More analysis
Challenges ahead
4. Siemens Nixdorf Informationsysteme AG
Formed in 1990 by the merger of
Nixdorf Computer AG and
Siemens Data Information Services (DIS) division
Business of SNI
Service, Solutions(SAP/R3), Product
Products from SNI
PC, mainframes, s/w & support services
Largest IT company in Europe once
Split in the late 1990s however
Fujitsu Siemens Computers and Wincor Nixdorf
5. SNI Facing Crisis – Losses Continue
Losses ever since merger 1000
900
Sales (M dm)
Sales stagnent 800
700
Capital Spent
1994 600
500
(M dm)
$8 billion revenue 400
300
Employees
(,000)
39000 people 200
100
Loss (M dm)
$350 million Net Loss 0
90-91 91-92 92-93 93-94
Problems diagnosed: M dm : Million German Marks
Slow to adapt to market realities
Sluggish customer responsiveness
High competition
Nimble entrepreneurial rivals focused on single markets
Rigid, bureaucratic culture
Not fit enough for an IT services / solutions company
6. Differences in Culture Identified
Vital Signs Nixdorf Siemens
Power Empowered to affect Sense of resignation
change
Identity Identify with the Seek the safety of their
enterprise as a whole profession, locations and
teams
Conflict Handled directly and non- Avoid conflict or flare up
interfering
Learning More receptive to ideas Less receptive
7. Schulmeyer Joins as CEO
Comes from Outside – ABB USA
With academic exposure to managerial change
At MIT as guest lecturer
His key responsibility?
Bring profitability to SNI
His key goals?
Make SNI customer driven
Evaluate employee based upon the value created
Reduce number of employees by 4300
Increase global market share
Improve communication
9. Initiate The Change
Create Sense of Urgency
Siemens
DEFREEZE SNI
Nixdorf
Form A Powerful Coalition
10. Revitalize The Culture
Conceptualize Create Vision
Concretize Plan and Document
Articulate Communicate & Empower
Indoctrinate Walk the Talk
Internalize Create Short Term Gains &
Consolidate
FREEZE Institutionalize Attain Maturity
12. Schulmeyer Sets 3 Objectives
Culture change is mandatory: Schulmeyer
Three Objectives:
Change the behavior of managers & employees
To achieve improvements in performance and
results
Change Work systems
To achieve operational excellence
Change Processes
Be customer oriented. Ensure better service
13. Andy Chew Joins as Change Agent
Andy Chew comes from
Solutions business, UK as GM
Problems in Solutions Business are
Slow information flow
Inadequate communication bet. divisions & regions
Low morale hampering innovation and enthusiasm
Pilot project of change is finalized for Andy
Revitalize SAP/R3 department in Solution Business
14. There are Obstacles to Change
Andy is seen as outsider
Relocated to Germany from UK
“Schulmeyer Kinder” – “special”
Andy is open and upfront. Shares issues openly
Locals are not
Andy underestimated the magnitude of change
Old hands reluctant to change
Resources are limited
Cultural differences crop up
Immediate supervisor is not supportive
15. Gaps Observed So Far....
Change process handover not proper
Schulmeyer sets the mandate and assumes Andy would
execute thereafter !
Andy takes over assuming execution is the next step and
it would be easy as well! He ignores initial steps.
The managerial layer between Andy and Schulmeyer is
not visibly active.
Change plan is not adequate
Obstacles are underestimated
17. Andy Chew Closes The Gaps
1. Started with adapting to the environment
Changed his management style
Revisited the scope of the plan
2. Established a sense of urgency
3. Formed a coalition of 50+ people
Engaging the right talent
Growing the coalition strategically
Working as a team not just as a collection of
individuals
4. BUT Compelling vision statement lacking
18. Andy Chew Takes More Initiatives
5. Creates a prioritized 12 point plan
To give direction
To get buy-in from “key individuals”
6. Improves communication channels
Has open door policy - symbolism
Initiates information workshops
Conducts Team building exercises
7. Empowers the team
To develop a strategy for implementation
8. Obtains full support of Jaeger, R3’s head
Sets the desired tone from top.
9. Tries to create a self-evaluative “consultancy culture” with
support of BCG
20. How to Manage Depth & Scope?
Can such sweeping cultural change be mandated from
the top and left to middle levels for implementation?
No. What should be the ideal composition?
Ensure participation at all level
Ensure coverage of know-how and skills
Can they really address 19 initiatives at once?
Too big scope
Create vision first. Define objectives.
Categorize multiple initiatives and group them under the
objectives.
Small number is manageable
21. How To Deal With Resistance?
How to dilute the staff’s resistance?
Broaden staff’s interests. Let them identify with the
vision
Give importance to social and human considerations
Is formal authority and dictates of top management
enough to break down their resistance? No!
Resistance can not be broken through authority
Organization is like a family
It needs sensitivity, care and love
22. Challenges...
Does Andy Chew have the skills and resources
necessary to effect a cultural change in this
environment?
No Visible HR support
HR has important role in cultural changes
Resource overrun
Already utilized too much of time
Skill and ability gap
Andy doesn’t have established credentials of transformational
leader
His coalition team is still small and narrow
23. Steps Ahead...
Define short term gains
Measurable
Increase involvement
Reward employees
When milestones achieved
Revitalize periodically
Institutionalize the change