All companies change. Some are bad at it and some are great. Our team voted on the Top 5 successful changes.
When in 2008 Santander wanted to establish a stronghold in the UK banking sector, its strategy was to acquire a portfolio of heritage-centric UK financial institutions – Abbey National, Bradford and Bingley, and Alliance and Leicester.
Grupo Santander chairman Emilio Botin felt, however, that the legacy in these UK financial institutions, dating as far back as 1849, had left them incapable of change and, therefore, unable to evolve and grow.
In buying these traditional UK financial institutions and unifying them under the Santander brand, Santander aimed to break down their engrained processes and turn them into a formidable retail bank.
To do this, they would need a fast-track, systems-led banking model. Only this could bring clarity, efficiency and best practice to institutions that had become totally entrenched in ‘their way’ of doing things. For incoming Santander UK CEO António Horta-Osório, his focus would be ensuring that all stakeholders grasped the value of shedding ‘old ways’ and embracing the new era in banking – a revolution, rather than evolution.
There were many opportunities during the change program for cultural misunderstandings. Counter-intuitively, this can be particularly noticeable when national or linguistic similarities give a false illusion of commonality. In fact, the cultures of the UK acquisitions were very different, they had developed as regional building societies and their footprints, portfolios and client bases were each unique. This meant that forceful and careful management would be needed to integrate the systems, processes and people in the different organizations.
In January 2010, Santander UK was launched against ferocious economic and banking headwinds. By 2013, it had become one the country’s leading retail banks and one of the largest providers of savings and mortgages.
In 2004 Shell was facing an oil reserves crisis that hammered its share price. The situation was compounded by the abrupt departure of the oil group’s chairman, Sir Philip Watts. The new group chairman, Jeroen van der Veer, believed that in order to survive, the corporation had to transform its structure and processes.
A series of global, standardized processes were identified. These, if introduced, would impact more than 80 Shell operating units. While the changes were vital to survival, they proved unpopular in the short term as some countries stood to lose market share.
The message was a tough one, and many operating units balked.
However, for a change program of this scale to be successful, everyone had to adhere to the new systems and processes.
Those leading the change had to ensure that the major players in all their markets knew what was required and why. They needed to be aligned with the change requirement. From the start, it was recognized that mandating the changes was the only way for them to drive the transformational growth they aimed for. This wasn’t an opt-in situation.
The main message of the change team, led by van der Veer, was that simpler, standard processes across all countries and regions that benefited Shell globally trumped local, individual needs. That meant everything from common invoicing and finance systems to bigger more centralized distribution networks. By identifying and rapidly addressing the many areas of resistance that emerged – such as that some influential stakeholders stood to lose control or market share – adoption was accelerated.
Lego’s reinvention has seen its story hailed as the greatest turnaround in corporate history. From 1932 until 1998, Lego had never posted a loss. By 2003, it was an entirely different story. Sales were down by 30% year-on-year and the brand was $800 million in debt. What didn’t help their situation was that Lego hadn’t added anything of value to its portfolio for a decade.
So, what happened between Lego’s CEO, Jørgen Vig Knudstorp, admitting that the brand is running out of cash and he wouldn’t survive, and when it overtook Ferrari as the world’s most powerful brand in 2015?
Much like Netflix, Lego eventually realized that its lifespan of physical products wasn’t going to have an infinite interest. After a period of expansion, this beloved toy company was near bankruptcy in 2004. With this realistic yet disastrous outcome on the horizon, Lego decided it was time to start restructuring.
To begin, the business implemented digital transformation. Instead of putting their sole focus on physical toy products, Lego is increasingly concentrating on bridging the physical and virtual augmented reality (AR) experiences.
By finding new sources of revenue, LEGO has managed to transform its brand and keep up with the requirements of its target audience today.
Perhaps no organization has been through change management challenges quite like the Coca-Cola Company. One example is from the 1980s when bitter rivals Pepsi started to aggressively target Coca-Cola.
In response, the latter released New Coke – a sweeter version of its classic drink.
New Coke wasn’t a success and didn’t appeal to the public. Coca-Cola wasted no time in replacing it with the older formula.
It even stretches as far back as World War II. By offering free drinks to soldiers, Coca-Cola quickly marketed itself as a symbol of the US war effort. At the same time, it boosted brand recognition in destination countries that allied forces were occupying. During this process, Coca-Cola cemented its presence through 64 extra manufacturing sites across the world.
This accelerated the company’s post-war global expansion strategy.
These are just some of the change management examples which show how Coca-Cola manages to stay ahead of the curve. To respond to greater health consciousness, Coca-Cola released Enviga, Diet Coke and Coca-Cola Zero to appeal to this target market. Then during the Asian financial crisis, the organization pursued an acquisition strategy to better deal with consumer preferences.
By reacting quickly and acting proactively in anticipation of changing trends. It’s clear how change management is a vital component in Coca-Cola’s overall strategic vision.
In 1997, the gargantuan media-services provider Netflix was born. Previously, the model offered customers monthly subscriptions to have movies posted to their door. This meant they avoided the late fees which traditional movie rental business imposed upon customers.
From the beginning, Netflix proved to be a disruptive organization. This likely resulted in its capability to transform and adapt to the digital world. Streaming began in 2007 for the business. Meaning subscribers no longer needed to wait for DVDs to come through the mail.
Netflix successfully implemented change management to meet the needs of the consumers that would begin to watch content online. It was at a crossroads, when its long-term sustainability was dependent on how it managed the change to a digital future.
After surviving a drop in subscription numbers and stock figures, Netflix subscribers grew from 23 million in 2011 to more than 137 million in 2018. So trusting their plan worked, as the business knew DVDs were on their way out and they needed to shift gears.
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