Scratch Post
2009
Make Sure You Keep the Change…
The financial services ‘meltdown’ and its alarmingly rapid domino effect on global economies has resulted in incredibly testing trading conditions, against which few sectors are completely immune. Inevitably, this has led to significant organisational restructuring.
But how do you ensure that restructuring (whatever the motive, strategic or survival) not only delivers short-term improvements, but also longer term, ‘subsurface’ changes - required to absorb and adjust to the full-blast impact – to actually help take things forward?
As ever, there are a multitude of management models to help inform thinking; from Kurt Lewin’s 3 step model of ‘unfreeze – move – refreeze (always seemed like instructions for defrosting the freezer to me), through Kotter’s 8 step model (good as a 100m dash, but loses energy towards the finish line of anything longer) and the Kubler-Ross based change curve (potentially powerful in its simplicity and now probably done to death). Many models can be helpful and insightful….. many are not.
I quite like the simple formula, developed by Beckhard & Harris, which succinctly identifies important factors that need to be strongly evident for effective change to happen. Used in conjunction with other models it can help cut through quite a lot of noise and nonsense.
The Beckhard & Harris Change Formula (1987)
C = [ A × B × D ] > X
C = change
A = level of dissatisfaction with status quo
B = desirability of the proposed change/goal
D = practicality of the change (likely disruption, risk etc)
X = ‘cost’ of change
Basically, A, B and D must outweigh X (cost) – where any of these factors is not sufficiently manifest, then the cost will be too high and change will be resisted. So, if the goal or plan is not clear, if there is not enough dissatisfaction, or if the risks and barriers are seen to outweigh benefits – it’ll be an uphill struggle, with no certainty of success. This approach can be very useful in identifying what needs to be done and where the focus is required in ensuring these factors all stack up. If necessary, other models can then be used to help leverage them (e.g. Kotter’s emphasis on creating urgency, strong coalitions and powerful vision etc).
Simple really, but putting it all into practice is where the fun begins!
Nodding Donkeys or Value Adding?
NED Pay Increases
Income Data Services reports that average pay for Non-Executive Directors increased last year by 6.3%, (an average of £57,056 p.a). Interestingly, BT NEDs received a rise of 50% - the same percentage by which the company share price dropped. A fundamental requirement of NEDs, is ensuring good corporate governance, including reining in overt ambitions and excesses of CEOs where necessary. Yet the current financial services turmoil questions the extent to which some NEDs are adding value and suggests some are too closely aligned to their executive boards.
Follow this link - NEDs getting bread >>
Wildcat View: demonising senior bankers and banking boards appears to be a national sport these days, yet there are fundamental questions on strategic decision making and risk management (including the role of Remuneration Committees agreeing reward mechanisms that encourage high risk). Having said all that, it is probably fair to say that most NEDs are scrupulously conscientious and do strive to add value in what is an increasingly complex and demanding role. The question of how long a NED can serve on a board before their objectivity and independence comes into question, however, is perhaps a moot one.
Falling Inflation Freezes Pay
With RPI now at zero and a backdrop of deflation and economic recession, pay bargaining and pay reviews are likely to prove very interesting this year. It is hardly surprising that many companies expect to freeze pay, although few have gone as far as to instigate pay cuts. According to PwC, the greatest pressures on containing staff costs will come in the areas of bonuses and pension arrangements - especially where defined benefits schemes are increasingly difficult to afford. This might see a shift towards increasing employee contribution levels, or a move away from final salary based schemes altogether.
Follow this link - why falling inflation might mean pay freezes all round >>
Wildcat View: a move towards bonuses being given for exceptional performance, rather than as a quasi-contractual salary supplement, may not be a bad idea to many minds. However, there will inevitably be a period of ‘dust settling’, where alternative attraction, retention and reward mechanisms are designed. Pension scheme affordability continues to concern and with increasing numbers of FTSE companies having withdrawn, or signalling a withdrawal, from final salary schemes one wonders as to their realistic longevity. Remuneration specialists will be very busy.
Changes in Employment Law
A reminder that a number of legislative changes came into force this month;
- Changes to dispute resolution procedures (disciplinary and grievance, to you and me) and repeal of the statutory three step procedure
- Increase in statutory annual holidays
- Extension to flexible working rights
Further details are available through the link, or call Pat or Michelle, here at Wildcat One Ltd.
Follow this link - information on changes to employment law >>
Your future may, truly, lie in your stars.
An insurance company in Austria recently placed a recruitment advertisement looking for people born under the star signs of Capricorn, Leo, Aries, Taurus and Aquarius to apply for sales and management roles. Apparently, the company defended its position by stating that staff with these zodiac signs had proved to be the best performers. On the basis that the advertisement was not discriminatory, in relation to existing legislation, complaints against it by equal opportunities campaigners were dismissed. http://www.mcgrigors.com/pdfdocs/WB/WB09Feb09.pdf
Wildcat View: sounds like a load of bull to me. As for Aquarians, well – as water carriers – they must be good at taking the….. I think you get the point.
