Jim Hemerling is a leader at Boston Consulting Group who has created a model for organizational change which brilliantly summarizes organisational shifts into five simple steps. This post discusses Hemerlings Five Imperatives of Organisational Change in light of Zurich UK Life; one of the world’s largest insurance companies.
Since the publication of Geoffrey Moores’ best-seller “Crossing the chasm” in 1991, the book has become something of a blueprint of survival for marketers and entrepreneurs. Now in its third edition and close to a million sold copies, the book is referenced in most of today’s prominent management literature; including Merson (2011), Godin (2001), Downes and Nunes, (2014), and Ramadan et al. (2016).
Crossing the Chasm is about the disruptive change in product life-cycles and how each disruptive phase will attract sometimes completely new audiences with new needs and wants. This, according to Moore’s ‘Adoption Life Cycle’ (Fig 1, below), needs to be reflected in marketing, chains of distribution, and sales. Consequently, for organizations going through disruptive change, and especially those built around a single product; each chasm will demand significant organizational change.
Fig 1:Geoffrey Moore’s Technology Adoption Lifecycle
In this article, organizational expert Jim Hemerling’s approach of managing organizational change is discussed (TED, 2018) which is built around the following strategic imperatives:
- #Inspire through purpose
- Connecting the transformation with a deeper sense of purpose.
- #Go all in
- Organizations need to go all in to succeed with transformational processes and, for example, rather than just cutting costs, also need to think about initiatives that fundamentally change the way the organization operates. This demands investments in leadership, talent, and hard structures—such as new office architectures reflecting and promoting the new strategy.
- #Enabling people with the capabilities they need to succeed during the transformation and beyond.
- For a transformational process to succeed, people need to have the right skills and tools to succeed.
- #Instill a culture of continuous learning
- To stay competitive, the organization needs to evolve and constantly adapt to the market. This demands a culture of learning.
- #Clear leadership with accountability
- In transformational processes leaders need to have a vision and a clear roadmap; and people responsible for the transformation also need to be held accountable for their actions.
#The validity of Hemmerling five imperatives.
It should be noted that Hemmerlings model is not peer-reviewed and currently lacks objective- and validated data. To test the validity of the model, I have analyzed it in light of Zurich UK Life, one of the world’s largest insurance companies which has gone through a major transformational change described in an excellent whitepaper by CIPD in conjunction with the University of Bath, School of management (2015).
#Zurich UK life case study
Zurich UK life is one of the world’s largest insurance groups with over 60.000 employees worldwide. Operating on a market which the last few years have experienced a significant change in public policy, regulation and competition—not only have Zurich UK Life had difficulties to compete with new entrants to the market offering cheaper and more market adapted products—but its employees also did not feel valued. The leadership team, consequently, recognized that not only did the company need to cut cost, but a sustainable change in corporate culture also had to be achieved for the transformation to succeed.
How Zurich UK Life’s transformational process adheres to the Hemmerlings five imperatives.
In this section, Zurich UK Life’s transformational process is examined in light of Hemmerlings’ five imperatives.
- Inspire through purpose.
- The first step taken by Gary Shaughnessy when becoming the new CEO at Zurich UK Life to which he was head-hunted to lead the transformation of the company to become more adapted to the new conditions of the market, was to get his executives to focus—not primarily on financial figures—but on the corporate mission to be a great company fulfilling its obligations to customers and co-workers. Shaughnessy also emphasized “a notion of clarity of purpose,” and that each decision of transformational change should have a communicated rationale understood and “agreed” upon by everyone working in the organisation.
- Clear leadership with vision, milestones and accountability.
- In the new strategy of Zurich UK Life managers roles are “to lead and not to get involved in the detail of work unless necessary.” To make decision processes shorter, product managers also have been given more trust and empowered to make decisions which previously would demand multiple signatures by people higher in the hierarchy. Another important change of the leadership structure, is that all work in the organisation should be guided by the corporate mission of being a great company—contrary to the old strategy grounded in financial KPIs.
- Enable people with the capabilities they need to succeed during the transformation and beyond.
- In the new organization, “red tape” has been reduced, and teams now for themselves can decide how the workload should be structured. Employees also have been given tools supporting their work, which include laptops to enable more efficient work performance.
- Instill a culture of continuous learning.
- In the new organization, management has rolled out several initiatives to help people advance their careers, to become more skilled, and also encouraged people to take responsibility for their own learning and careers. These new initiatives include training sessions, inspirational events, and awards recognizing employees that work hard and contribute to make Zurish UK Life a great company.
- Go all in.
- Maybe the strongest evidence of a genuine will and determination by the leadership of Zurich UK Life to break with old structures is not the move to a new office building with an open space architecture that boosts operational efficiency and promote collaboration. Neither are the many new initiatives to empower, educate, and motivate all members of the organization. The most significant testimony that Shaughnessy and his teams are sincere in their determination to root change, is to be found in their new and revolutionary recruitment strategy which explicitly states that HR should “move away from recruiting people like us”, to recruiting “people who challenge the current way Zurich UK life is operating.” This new policy, in my view, is one of the most interesting and brave initiatives taken by an exec team in modern business history, as it is guaranteed to challenge—not only present organizational processes—but also current power structures and leadership. In essence; implementing this policy, Shaughnessy’s team has planted a seed for a perennial change and thereby also have put their personal career at stake.
While the report discussed in this article (CIPD and University of Bath, 2015) note that the transformational process of Zurich UK Life has generated significant positive economic outcomes and a gold accreditation from ‘Investors In People’ (p.59); the real win is much less bureaucracy and red tape which has made employees more empowered and satisfied (p.60). These changes not only have made Zurich UK Life a more profitable organization but also a healthier one with more satisfied customers and happier co-workers (p. 59).
As noted in this article; while Hemmerlings model not yet has been established in independent studies, its five imperatives of change can be observed in most successful transformational processes. What Hemmerling has done, though, is to create a modelwhich brilliantly summarizes organisational change into five simple steps which are easy to understand and implement.
- CIPD and University of Bath (2015). Landing transformational change. [online] cipd.co.uk, pp.53-60. Available at: https://www.cipd.co.uk/Images/landing-transformation-change_2015-gap-theory-practice_tcm18-9050.pdf [Accessed 10 Feb. 2018].
- Downes, L. and Nunes, P. (2014). Big bang disruption. New York: Portfolio / Penguin.
- Godin, S. (2001). Unleashing the ideavirus. New York: Hyperion, p.152.
- Kim, W. and Mauborgne, R. (2015). Blue ocean strategy. Massachusetts: Havard Business School Publishing Corporation.
- Merson, R. (2011). Guide to managing growth. Hoboken (NJ): Wiley.
- Moore, G. (1991). Crossing the chasm. 1st ed. Chichester: Capstone.
- Ramadan, A., Peterson, D., Lochhead, D. and Maney, K. (2016). Play bigger.
- TED (2018). 5 ways to lead in an era of constant change. Available at: https://www.ted.com/talks/jim_hemerling_5_ways_to_lead_in_an_era_of_constant_change [Accessed 10 Feb. 2018].