|MARIA SCHNEIDER, CEO|
If your company is like most, the last big change initiative was not that long ago. Whether you deployed a new ERP
system, launched a data initiative, redesigned processes, or optimized your workforce, it’s likely that the memory is still
fresh – as is the desire to avoid that type of disruption again, if possible.
In reality, the only constant in business is change. And it seems that the next wave of change – digital transformation –
is happening faster and more pervasively than ever. Agile enterprises that are ready to adjust continuously are better
positioned to thrive than firms that act too slowly. Flexible organizations also find it less painful and disruptive to
Maria Schneider, CEO
“I’ve worked my way to CEO over a 20-year career.
During my time at Global Vision, our business has
evolved but never to the extent that I’ve witnessed
over the past two years. The business is experiencing
turmoil due to significant competitive and market
pressures, and the board is expecting change, one
way or the other.”
Michael Smith, CFO
“I’m relatively new at Global Vision. I’m considered
a trusted advisor, but to-date, I’ve experienced
significant pushback from my peers on my
recommendations for changes needed to move the
business forward. Although I’m respected for my
knowledge of finance, I’m perhaps perceived as being
too focused on cost reduction, when my real priority
is supporting strategic growth.”
Mark Di Paulo, COO
“I joined the company less than two years ago,
coming from a world-class manufacturer. I have a
broad perspective of operations experience, and I’m
frustrated by both the current state of operations
and also the pace of change. Based on my
experiences, I believe there are tremendous
opportunities to improve operational efficiency.”
Senior Vice President, Sales
“I’m a hard charger and successful in my sales role.
I’m concerned, however, about new competition
entering the market, the experience we deliver to our
customers, products that may be reaching end of life,
and a lack of transparency into both customer and
product profitability. I’m driving good sales numbers,
but how can I tell if they are truly profitable?”
Makayla Lewis, CMO
“Effectiveness of marketing campaigns and a better
view of customers and consumers are my major
concerns. Are we addressing the full digital
experience? How can we better use technology to
market more effectively across channels? Are we
projecting the right brand to the street?”
Tiffany Yung, Vice PRESIDENT, Corporate Development
“Quality of data is my major concern. We’ve achieved a lot of inorganic growth through M&A, but that brought significant integration challenges, which severely impacted my effectiveness. Future cash flows and other funding options are unreliable. We need tools to evaluate potential acquisitions and to model possible outcomes. And, due to our current complexities, we’ll have to make significant efforts to realize synergies.”
Nikki Andreessen, CIO
“I am mainly concerned about disconnects between
expectations and IT’s ability to deliver. An outdated
infrastructure has become more complex with
additional acquisitions and significant customizations.
I’m worried that increasing systems complexity is
inhibiting growth, especially as we acquire new
Dale Jones, Senior Vice
PRESIDENT, Supply Chain
“I’m very experienced with our company, but I have
limited exposure to other ways of working. Some of
my major concerns include globalization of
manufacturing operations, safety and quality,
increasingly shorter lead times, inventory pressures,
manufacturing efficiency, and strategic supplier
Chief Risk Officer
“As CRO, I am dealing with existing risk but also a host
of developing risks, including conduct, cyber, data
integrity, digital, and sustainability. My concerns are
around how we should adapt to expanded, fragmented,
and complex regulations. The risk and audit committee
is under increasing pressure from regulators to
demonstrate that we have effective risk
Taking the first steps toward change can be daunting. However, with strong executive leadership and unremitting focus on a value-driven
transformative strategy, business leaders can not only rise to the challenges of the digital age but actively leverage innovation to increase
The need for transformation is the same for all top executives, but how they act on the challenges transformation brings can be quite different. The
corporate drive for growth is often a goal of transformation, and each business leader brings a unique perspective on enterprise change that should
be considered before, during, and after the transformation.
Let’s consider the requirements of the key enterprise executives (see sidebar). When the perspectives of key executives are shared and leaders
collaborate to change the business, the transformation process executes faster, with less disruption, and at a lower cost.
Industry change and new market competitors were ratcheting up the pressure on Global Vision. An international firm with tens of thousands of
customers, an extensive supplier network, and a 50-year history of success, Global Vision was accustomed to leading its market.
But the ground was shifting, and everyone knew it. The recent Investor Relations Day saw the culmination of a challenging year. Financial results
were below market expectations, and analysts wanted to know why. The share price was heading south. And shareholders were demanding action.
The company’s board and top leaders already recognized what would soon become obvious to the rest of the stakeholders: Global Vision needed to
transform itself. The only other options were to significantly restructure, divest the business, or be acquired.
Company CEO Maria Schneider called her team together.
185 268 370 385 396 405 411 416 427 432 448 451 455 460436%
Increase in share of CEOs who
2 3 4 5 6 7 8 9 10 11 12 13 14 1516%
Decrease in share of CEOs who
Nine of the top executives from Global Vision were in the hotel conference room, waiting for the CEO to arrive. The executives spoke among themselves, wondering why they were called here for the second time in the same calendar year when off-site executive events were typically held only once a year. Most of the attendees agreed that an off-site meeting again so soon was not a good sign.
Subdued discussions turned to silence when CEO Schneider entered the room and settled into her seat at the head of the table. “Well, here we are again,” she opened. “Same problems, same results.”
“We’re still in the same place that we were last time we met,” she said. “Our strategic transformation must move faster. We’re too scared, and the plans we implemented in our meeting just a few months ago seem stale already. You all know about the results of our Investor Relations Day. It’s time to rethink our entire strategy, because the things we’re doing to compete simply aren’t working.”
Executives were able to see only partial views of company performance in their own areas of the business. They knew they bore some responsibility for the big picture under question by the CEO. But that holistic view was elusive. Difficult to see and even harder to manage, performance was segregated into silos. Data visibility, transparency, and fundamental accountability and ownership seemed vague and ambiguous at best – despite all efforts and initiatives to remove artificial walls that had begun after the previous off-site meeting.
The executives each suspected that something was very wrong, but none could define or articulate it accurately. Some secretly blamed others around the table for the problems they collectively faced. They all anticipated a difficult meeting.
The CEO, an expert at reading a room, knew it was time to change the tone. “We’re going to conduct this meeting differently,” she said. “Today will
be a microcosm of how we intend to run the company from this point on: as a forward-looking operation. We’re not going to scour and review
performance metrics, scorecards, or financial reports. Instead of everyone describing pain points and barriers, I want you to tell me what you think
will move this company forward.”
Schneider continued. “Let’s begin with an assumption that all ideas are good, nothing is impossible, and everything is on the table,” she said. “Let’s
be creative, innovative, and transformational. Focus on the possibilities and visions for the future rather than rehashing the past.”
A palpable sense of relief came over the team as they realized things were changing. This meeting would be different. Gone was the dread, replaced
by hope that a different kind of plan would emerge over the next few days – a plan that could improve the lives of their customers, suppliers,
business partners, and employees. They wanted to strengthen the company that they each believed in wholeheartedly. It was clearly time to reinvent
5 10 15 16 17 19 21 23 25 26 27 29 33 3536%
|Of companies prioritize a few cross
-functional capabilities at the company
level and expect functional leaders to
identify how they contribute to the
10 14 19 24 27 31 33 36 38 42 45 49 51 5355%
|Of companies work in silos, with each
function making its own decisions on
which capabilities matter most4
10 14 19 24 27 32 36 42 45 48 52 55 58 6061%
|Of companies say the solution to
reaching their strategic goals is
collaborating more across functions,
paired with faster decision-making5
In a global economy in which frequent change, real-time customer experiences, and industry disruption are more the rule than an exception, many
companies are looking for ways to not only survive but also prosper. Decision-making requires action over reaction, prediction over reflection, new
styles of teamwork, and unrelenting urgency. When traditional management styles fail to transform the company in response to these pressures,
company boards and officers find themselves seeking change.
In addition to helping companies meet these new market demands, digital transformation can be accomplished more quickly than any change
initiative of the past. With that in mind, starting now is key. Change is coming to your industry too, and it’s likely that your competitors have already
begun to transform themselves. Will you be ready?
|Decision-making requires action over reaction,
prediction over reflection, new styles of
teamwork, and unrelenting urgency.
The CEO went around the room, asking for concise executive feedback.
The COO, Mark Di Paulo, was the first to speak. His opinions were not only the most prolific of the group but often the most accurate. “We need to be able to quickly identify, understand, and correct our direction – with more impactful and complete information – in those areas where we’ve lost control of processes and procedures, such as manufacturing and production,” he said. “There are areas that fall under cost containment, parts availability, and so on, which are under my purview. Working in conjunction with Dale and the supply chain team, we can address those areas for major impact and identify our starting point to ove forward with this process.”
“If we can optimize our processes and procedures across business units, we can achieve control, balance, and integrity in my areas,” Di Paulo said. “The true magic will happen if the business units can work together to change culture and embrace a more holistic approach to the root cause analysis and corrective actions related to all of our jobs. That means manufacturing, production, and supply chain management. But this requires streamlining both supply channels and international trade protocols and processes.”
The senior vice president of sales, Chaz Wilson, was next. He frowned at the mere suggestion of lowering prices. “We offer premium products,” he countered, “and we must continue to lead the market in which cheaper prices are common. Our true opportunity is to expand the market, not just into new regions but also to a different customer base. We need to expand the brand through marketing, promotions, and strategic bundling – not through discounting.”
The teams conducted significant research and planning on SAP solutions, which was especially useful given Global Vision’s investment in SAP offerings, its partnership in this process with SAP, and SAP’s leadership position in the market. The teams also gathered proof points to show how these solutions have been implemented successfully on a large and complex scale among the company's peers.
Discussions coupled quantitative value metrics with the qualitative considerations to create an expected value equation worthy of justification and approval by the board. This included a viewpoint on how
Figure 5: Capabilities Requirements
The teams also developed a high-level view of a road map to success, along with execution options requiring deliberation. This included an overview
of three different deployment scenarios for moving to SAP S/4HANA and the value achievement variations posed by each scenario (see Figure 7 and
||SAP S/4HANA Cloud|
||SAP S/4HANA including
SAP HANA Enterprise Cloud
and infrastructure as a service
After reviewing the four main sets of recommendations, the CFO turned to the next step in the meeting. “As you can tell,
there are significant opportunities identified across all areas,” he said. “However, addressing these opportunities with our
current systems will not only be difficult and very costly – it will also leave us with a platform that cannot support new
revenue models. It will not provide the agility we need to capitalize on new business opportunities. And it will not allow
us to take advantage of efficiencies gained through automation.”
Over the years, he reminded the executives, Global Vision had tried to optimize its legacy systems with system updates
and customizations. “This patchwork will not be viable for any future business evolution, especially of the nature we
currently have in front of our teams,” Michael said.
The CFO asked the CIO to discuss potential paths the company could take from an IT perspective and discuss the
paths other companies have taken. Nikki, the CIO, agreed to lay out the three options based on the company’s
current state of affairs.
The CIO had examined all of the transformation options and was prepared to share her findings with the executives.
She explained that the current solution had been in place since the company deployed it 10 years ago. “A significant amount of customization has
occurred in the past, making our systems costly to maintain,” she said. “And our reporting has become a tangled mess that requires major manual
effort.” This heavy customization causes training issues and increases risk when there are personnel changes.
The quality of the data was another huge issue. “Having no global master data governance means we have far less insight into key vendor and
customer relationships,” she added. “Bank accounts, for instance, have proliferated over the years with each acquisition. I could go on, but we are all
aware of the impacts of these issues.”
The CFO thanked the CIO for her presentation.
The CEO looked at her watch and realized time was flying. She knew that a big decision was still to be made to get ready for an upcoming board meeting.
“We’ve heard a lot today from Michael and Nikki on a path forward,” she said. “If we proceed down a recommended path, it will take a commitment and buy-in from all of you to make this program successful. It will also take a commitment from our board for the investment needed. I’m happy to take our proposal to the board, but only if I have a commitment from all of you.”
She continued. “To do this, we need to make a decision on which of the three paths to take,” she said. “Let’s walk through each of them in more detail.”
Businesses that move to an intelligent platform gain critical momentum over their competitors. SAP S/4HANA is the latest generation of
SAP Business Suite software. Characterized by streamlined transactions, a better user experience, simplified data flows, and new functionality,
SAP S/4HANA helps enable strategic insight that can unlock new opportunities, evolve business processes, or solve previously intractable challenges.
“During times of significant change, . . . silos can be stubborn obstacles to creating a more effective path to growth and profitability.”3
“My predecessors would have made a lot of decisions based on their experience and intuition. They are still very important, but you have got to triangulate them with data. As I always say: ‘In God we trust; everybody else, bring data.’”