The Keys to Driving Transformational Change
The only certainty is change. And what’s certain about organizational change is that it will be challenging, uncomfortable, and worth your effort. In today’s marketplace, staying competitive requires dedication to continuous improvement across the business. Join this fireside chat with Professor, Dr. Nikolas Beutin, Managing Director, Accenture Strategy and PROS Strategic Consultant, Bill Dudziak as they share perspective on how you can successfully drive impactful transformation forward.
About the Speakers
Nikolas Beutin leads the Pricing & Commercial Strategy Practice at Accenture Strategy in Europe. Prior to his career at Accenture, Beutin led “Customer Practice” at PwC Germany and then across all verticals at PwC Europe. Beutin was also an Executive Partner for Management Consulting at Ernst & Young and CEO/President/Owner of Homburg & Partner — the German Hidden Champion consultancy for Sales & Marketing. He has achieved 50B+ revenue and 20B+ EBITDA growth for his clients in his projects.
Beutin has done consulting in 32+ countries for DJ, EuroSToxx DAX, and MDAX companies as well as for numerous family-owned businesses. Nikolas has taught and teaches Pricing, Sales & Marketing at many different leading universities and has 200+ national and international publications. He is also Professor at the Quadriga University where he is leading the MBA in Leadership & Sales Management. He studied economics and law at the University of Bonn, completed his Ph.D. program at the University of Mannheim after studying at the WHU Koblenz and the Colorado State University. Nikolas is also alumni of the Harvard Business School. Specialties: Strategy, Commercial & Sales Excellence, Pricing Excellence & Implementation, Service Excellence, Innovation and Market Research
A goal-oriented Pricing and Commercial leader, Steven Tselepi is the Head of Commercial Pricing at Winc Australia. Steven has extensive Profit and Revenue Management experience in the highly transformational Private Equity space. He has a consistent track record of success in change management and the roll-out of large-scale Pricing solutions to drive improved commercial outcomes. With a passion for people, Steven invests in mentoring and developing commercial teams to ensure they thrive in today’s hyper-dynamic environment. Steven is a Certified Supply Chain Professional and earned a Bachelor of Commerce in Economics and Supply Chain Management from the University of Wollongong.
Full Transcript
Bill Dudziak: Hi, my name is Bill Dudziak. I am a lead strategic consultant with PROS. I am here partnering with Nicolas Puton today and we are going to be talking about the keys to driving transformational change. Nikolas, why don't you introduce yourself please?...
Nikolas Beutin: Yeah, thanks Bill. Hi I'm Nikolas I'm a managing director at Accenture Strategy and I'm responsible for the pricing and commercial strategy practice of Accenture in Europe. And I've been driving this topic of pricing and commercial transformation now for almost 25 years and I'm very glad to be here and to be having this chat together with you Bill.
Bill Dudziak: Excellent. Thank you. And over those 25 years you must have had a lot of instances of implementation that I know the audience will look forward to listening to today. Prior to my joining PROS, I've been with PROS about two years prior to that I was the merchandising vice-president for Whole Foods. I drove everything that helped a merchant make better decisions so everything from decision sciences to pricing to data operations. Prior to that, I led pricing at Home Depot and I've also set up centers of excellence for pricing and manufacturing and distribution. Each stop along the way I have also built out centers of excellence and done system enterprise implementation like we will be talking about today.
Bill Dudziak: So if we can get started, let's go ahead and talk about the keys to driving transformative improvement. Really the issue today is we want to be transformative we don't want to be transactional. And most systems and with a lack of forethought you're still going to drive ROI but it's not going to get that change that you really need to drive your business forward. In today's economy in the way that it's fast moving whether from COVID or it seems like about a decade ago but just eight months ago everybody was worried about tariffs is how you can react. And how fast you can react is going to really drive whether you're a winner or a loser in today's economy. And that change is all about how fast you can adopt technology, how fast you can adopt new processes and whether your organization is set up for that adoption. That's really the key whether we're talking about a process, a new technology, whether it's pricing, new manufacturing techniques or anything like that it is that speed of adoption that is going to drive us forward. Nikolas, anything to add there?
Nikolas Beutin: No, I totally agree with you. Maybe if I would add maybe one more thing it's exactly this next slide. You have to understand your organization or your company's unique story and I would even add unique situation. So, this means that you clearly have to understand what is your business type and what different types of business you have. Because typically organizations don't only have one type of business. Then you have to understand all your customer types and you have to understand your product types. So nowadays, even if you are in a manufacturing environment or even in the retailing environment you're not relying on products alone but you typically have services. And for example, if you sell these services with subscription models then alone your business becomes much more complicated and the technology you want to implement looks much different than if you would just be selling products. So, I think this is a pretty clear statement that you have to understand where you stand and what you are doing and what you are selling.
Nikolas Beutin: The second point maybe to do is every company that I know has some kind of USP, something that makes them unique, better than other companies. Because if you just would be a me too company it's very difficult to do business. So every company has a unique product, a unique service and unique sales channels or something like this. And when we talk about pricing and the implementation later on this is very important.
Nikolas Beutin: And Bill, I'm sorry, but I have to say with regard to the IT I should say one more thing. It's nice if you have the IT tools but there's a famous saying and it says, "A fool with a tool is still a fool." So what is very important when you really want to transfer form your business is that you take your people with you, that the people are convinced and that they actually let's say want to use new tools and new IT systems and so on and so on and on the other hand that they're also able to do it. Because just if you want to isn't enough, you also have to be able. And we will see later on in a couple of our discussions I think that this is a very important point.
Nikolas Beutin: So, I think if you look at this chart you will see the first thing is to roll up your sleeves. And if you combine this with the second one, with the data, that's basically it. So, every transformation that we are currently doing and every successful one which I've been doing in the last 25 years always started with getting the facts and the data right. And this sounds trivial but it is not. Because if you look at the data, sometimes you have very, very bad data quality and the master data is really bad. So sometimes it takes weeks if not even months to clean this up. Just to give you two examples, if you look at the customer master data you will typically have let's say double customers. You have customers where their hierarchy is not clear. You have customers that maybe the company has a new name or was merged or had an acquisition. So a lot of things and a lot of areas where you typically have to clean up the data. [crosstalk 00:07:05]
Bill Dudziak: Nikolas, I'm just going to interrupt there. It's just simple things like looking at customer names, sometimes the presence of an accent if they're French, Canadian, or French as opposed to an American spelling that will drive issues within the data. Simple things like the color black whether it is identified as black, BL, BLK, and everything like that, all that has to be taken care of really before you can implement any system.
Nikolas Beutin: Correct. I totally agree. And if you look on the other side on the product master data or material master data it's basically the same. So especially if you have for example two companies that have merged or if you have bought some kind of a distributor or a wholesaler you typically have double material numbers and double product master data for the same product. You quite often have very incomplete product master data. And very often you have even not existing master data for products. For example, if you were just selling some kind of a product from somebody else and you act just as a reseller and to get this right is very, very important if you want to have a clear architecture afterwards. So Bill, what you just mentioned on the customer side of course applies also on the product side.
Bill Dudziak: It's amazing to think of one of the reasons that you can't drive returns from a business integration, whether you're buying or selling a business or something like that is because the data is not conducive to really bringing the companies together and really integrate system and drive that synergy that you probably bought the business for.
Nikolas Beutin: Correct. Now, let's assume that we let's say that we got both data's on a decent level, obviously then we need to do some kind of analytics and maybe there's something to say here. I mean, please don't start with downloading things, getting a two megabyte and gigabyte big extracts and trying to upload them in [inaudible 00:09:39] These days are really over so nowadays you have really altered artificial intelligence tools and advanced analytics tools where you can do all analytics that you are dreaming of in let's say a couple of hours, days or minimum let's say in a week.
Nikolas Beutin: And the second thing is, please do not relate only on the data from your own organization. So, if you only look at the financial data which is in your ERP you will probably jump too short. So as I said before, the modern analytics solutions you can combine the internal data with external data and this is something you really should do to understand your organization and what is unique about it.
Bill Dudziak: That is a great point and I love that. If you're only looking at your own data you're trying to move forward looking in a mirror and that's very difficult to do.
Nikolas Beutin: Yep and the last point you see here is of course you have to understand how your organization ticks and who are the important decision makers. So for example, if an organization or a company is really focused on sales and everybody is talking about sales and the great big projects and the great new products that are selling and so on then it might be a little bit more difficult to focus on margins and focus on marketing things and positioning.
Nikolas Beutin: So in this case, let's say this department of course is let's say more or less the owner of the company and running the company. And if this is the case, obviously you have to take this into account when you plan a transformation. On the other hand if your company let's say is a little bit in trouble then it's more likely that the CFO has much more power on it and looks on it from a pure financial standpoint. And from a pure, let's say a profitability standpoint this would make the CFO of the company probably be the most influential person. And I think it's very clear depending on those two very simple examples you can see that the stakeholders and the power of the stakeholders and what they want is totally different from the beginning.
Bill Dudziak: That's a great point. [crosstalk 00:12:12] I'm sorry. [crosstalk 00:12:14] That's exactly right. Who owns the power within the organization. And it's informal just as well as it is formal. It's also important to find out who the vocal people are, not only to the departments but who the vocal people are within the department. Who are going to champion it pro because they are quick to adopt change? Who are going to be the people who are going to really talk against your project just because they are resistant to change? Identifying those people, bringing them on board early, making them a convert and helping them sell to the rest of the organization is a key strategy for moving forward.
Nikolas Beutin: I totally agree and maybe if I add, one life example from a company I was working for that was actually a lady in the marketing department on level four or five of the company but she was actually the wife of the CFO. So her weight in the marketing department and her voice as you called it was actually quite high. And I think we saw the things that you have to understand, who are the stakeholders and who's connected with whom, who speaks up, who does not speak up, who has which power. And this sounds very tedious but experience shows if you sit down and start doing this it actually comes together quite fast. And if you start documenting it there comes a lot of power to this, what we actually call a stakeholder map. So, this is a good way let's say to really understand your organization and what is unique about your organization
Bill Dudziak: And part of that stakeholder map should be identifying the receipt chart or do they need to be informed or are they actually responsible for the changes that are going on. Excellent. Okay. Well, let's move ahead a little bit and talk about defining the roadmap for the transition. So, it's key that the project team doesn't go off by themselves and do a big reveal. It is key as we discussed on the last page that they really need to identify all the stakeholders and bring them in to the discussion and the vision building of how it works together.
Bill Dudziak: So, the key here is to plan, communicate, and be willing to adjust as you move forward, adjust for changes for things that you didn't identify, adjust for successes, adjust for failures. But I would say that everything is a success, a failure is simply learning something that you did not know before, be willing to change, accept it and move forward for there.
Bill Dudziak: So, let's talk a little bit about that communication plan. It is starting with why are we doing this? And that is often really not talked about enough. Are we losing market share? Are we actually in a margin decline? Are our competitors really outflanking us in terms of price? So reacting to one of those challenges or identifying a new one is very, very important. And then communicating out to everyone, that gives everybody a rallying point. You think about, I believe it was Cortez when he said, "We are staying," and he set all the ships on fire. That became a very, very good rallying point for everyone. Nikolas, anything to add there?
Nikolas Beutin: Nope, I totally agree with you and I think that this C level commitment of let's say burning the ships behind you can set the mass into motion. And I think this is extremely important that the sea level really gives the direction. Maybe something to add here is obviously it's important that you stay true let's say to the philosophy and to your company's culture. Because if you let's say are trying to change let's say the IT, the processes and maybe the business model and the culture I think this might be a little bit too much. And I have companies, I've seen a lot of companies that try to do too much at once and they actually failed because the culture and the people then stopped and they stopped believing and said, "This is too much and the jump is too big for us."
Bill Dudziak: That's a great point and that goes into our last point about being realistic. I'm going to back up a little bit for one thing that you said. You really focused on the executive leadership team championing the project and championing the communication. If it is the executive leadership team who can communicate constantly, that's going to drive a lot more impact. If you can find those stakeholders with the informal authority of the organization to champion and communicate that is a big deal as well.
Bill Dudziak: I found early in my career when I was doing my first system implementation that the sales team did not want to hear from me as a non-sales person about how to use the process and the tools to drive better pricing. So I actually brought on a couple of sales people into the pricing organization and really made them the believers and them the trainers. And they had the instant authority and gravitas with the rest of the sales organization so that they could move the team forward and they had that respect that the rest of the sales organization would listen to.
Bill Dudziak: It's also important in that communication that you define the end point. Where are we going? And so, the journey might be years long and that's okay but define your points along the way. What is the path we're going on and understand that that path might need to have breaks in it, so stage gates. People just if they're on this constant pressure to change, to change, to change, they might need a week or two off to evaluate, to learn, to adjust, or really just to rest during this change process. It's a lot to push people constantly through change if they're not used to it all at once.
Bill Dudziak: We spoke a lot about it again the vocal blockers, both the people who are pros and cons who are going to support, who are going to move the organization both from a authoritative and just a informal view. But then finally, and we started to touch on this, you have to be realistic. This change is not going to happen overnight, it's not going to be perfect. When there are successes you need to celebrate those successes. And everything is a success. Either it went exactly the way you want or it didn't go quite like you wanted but you learned from it and you can adjust going forward. So, identifying that root cause and adjusting is great. And finally, every success needs to be communicated and really celebrated throughout the organization. I guess, maybe going on to the next slide Nikolas, what are your thoughts on how to execute your transformational vision?
Nikolas Beutin: Yeah, thanks Bill. That's a very good point. And at the end of the day, all of those transformation are huge animals. I know it's not probably politically correct to say us but I just mean this literally. So if you want to eat an elephant you have to cut this elephant in little slices. And basically what I have seen are a couple of mistakes that are always done by organizations when they want to execute on the transformation. The first one is that the plans and the responsible packages are not detailed enough. So I have seen a lot of two year, three year, four year transformation plans that had something like 20 work packages and one of those work packages was running six months. This is actually not detailed enough to be able to execute on the transformation. So typically those working packages should be broken down into steps that are either let's say in the two or three week area with clear KPIs and measures where you can measure let's say if the step was not fulfilled or not.
Nikolas Beutin: The second point in this is that many companies lack let's say C level involvement in this area because C levels don't like to look at PMO plans with 200 lines and so on. They don't like this. And after a certain while they get really tired of this. Maybe they attempt the first to meetings but then they get tired. And then we see that the energy for transformation in an organization drops down dramatically. And this leads me to my third point, the energy will drop down and it drops down in every transformation. So you really want to be sure that you keep this energy up and Bill like you said celebrating successes is a really great way of doing this. And if you do this let's say in different formats and in different elements and with the different let's say incentives I think this is a great way of keeping the energy up.
Bill Dudziak: I really enjoyed, I really liked one thing. Go ahead.
Nikolas Beutin: Yeah the last point maybe and then I'd love to hand it over to you again is that no plan no matter how sophisticated and how good well-planned and how many people you implemented, no plan is going to survive the first enemy contact. So your plan, your three year, two year, one year, five year transformation plan will never be carried on as you planned it. So, this comes back to a couple of things that I already said.
Nikolas Beutin: So first of all, please be open in your thinking and really accept that there are a lot of things which will go wrong, a lot of things which will be postponed. People that are project managers will go out of the company and get a job somewhere else. So many, many things will happen. So what you really need, and this comes back to this two, three week tracking, is you have to be able to keep up to date and to be very honest and say, "Hey, here we are behind the plan and this is not going to work out as we planned. And does this have any impact on our other plans?" So this is quite important that you have what we would today call an [inaudible 00:25:01] execution of the plan. So, and this starts with the mindset. It starts again with the leadership from my point of view.
Bill Dudziak: There's a lot that you said there are, a couple of things that I really liked. First, if you want to eat an elephant you have to slice it or take a bite at a time. My actual undergraduate was in civil engineering and you just don't build a bridge, you break it down into a series of small definable tasks that can be undertaken. And it's those series of tasks when laid together in the proper framework you end up with a bridge at the end.
Bill Dudziak: The second thing you talked about was the makeup of the team and there is going to be a change of personnel as you go along. The project cannot be a person, the project has to live on in and of its own accord. So, if one person leaves and the project falls apart then that person hasn't done a good job. So, as a project manager or a project executive sponsor keep your eye on that and make sure that even whether it's a person who moves internally to accompany that the project can live and go on without one or two particular people.
Nikolas Beutin: I totally agree with you and this only actually shows the strength of your organization. So, if the organization should never depend on the people or one person itself. To be very honest one of the learnings of my life and what I've seen over the last 25 years is every one of us is replaceable. And if you manage a transformation in this way I think then you are in a good way. Then you don't have a showstopper of one person but you have the project and you have the company in itself. And I think this is what you should strive for. And because, like I said, there are always uncertainties and there are always environmental factors which you cannot control and which you cannot plan for and you have to take these into account.
Nikolas Beutin: Another thing Bill maybe to add to the end is you have to make every single step in the project measurable. So, what I've seen in a lot of transformations that failed is that they had had a big North Star where everybody wanted to go to. For example say, we want to double our business in five years or something like this but that it was then not really broken down. And then some smaller steps let's say in this transformation plan were lacking and were not taken into account and suddenly the whole building tumbled and fell apart. So, I think it's very important that you not only in the execution plan break it down but that you also break it down in the measurable targets that you give to every small step in your transformation plan.
Bill Dudziak: I think that's a great point, right? So, making sure that, first make sure that the measurement and the project aligns with the company and the company objectives. Make sure that you can measure actually what you are trying to change. And one thing that people honestly overlook quite a bit is make sure that the change you're making aligns with the company incentive system. If you are asking a salesperson to do something that is against how they're compensated you are ripe and set up for failure.
Nikolas Beutin: Absolutely and maybe also to add it depends also which target you really want to achieve. And this depends especially on the culture that you have and the culture in different countries across the globe is different. So my advice to companies always is if you want to achieve 10% and you plan to achieve for 10% it's better to communicate 15% at the beginning.
Bill Dudziak: That is a great point. That is a great point. A lot of times when people shoot for that 10 that 10 will only happen if all the stars align and they don't assign a risk or a probability factor to each of those incremental steps. So, that is a great point.
Bill Dudziak: We are drawing to a close here. I want to thank everybody for attending. Thank you Nikolas for this very insightful session. I'm really happy that we got to interact today and that you could share a lot of the experience that you received over the last 25 years. I would now like to introduce Valerie Howard and Loretta [inaudible 00:30:21] as they're going to discuss breaking down the walls between sales and pricing. Thank you very much for attending and enjoy the rest of Outperform 2020.