MoC in Practice (OpExp - Presentation)

Leading Organisational Change

Case: Woodward Governor 1996

Oliver ParkerWarwick MBA 1994-95

Woodward GovernorThe Company & History

• Woodward Governor Company: est.1870, HQ; Rockford (Illinois), 3,300

employees

• Products & Services: design, manufactures & distribution of energy

control components & systems.

• Key Customers: OEMs (Caterpillar, GE, Honeywell, Rolls Royce…)

• Target Market Sectors: Power Generation, Transportation, Process

Industries, Aerospace

• Organisation Culture - paternalistic.

Woodward Governor: What Products?Custom Control Systems Solutions

Woodward Governor CompanyWhy Was Change Needed?

• Marketing Mix – Product (poor quality), Price (high), Promotion (what?) & Place (delivery)

• Product-led company - tried to dictate what customers would receive.

• Market Changes – WGC didn’t know what customers wanted…

changing markets, technologies & ‘new’ entrants!

• B2B Accounts (OEMs) – rationalisation of suppliers & partners

• End-user Applications – new skills needed, e.g. project management (‘turnkey’ solutions)

• New Acquisitions - into the organisation structure

Woodward Governor CompanyIdentified Issues & Problems

The Change Programme

A Case for Change

Create Vision / Mission

Measure Results

Internal Capabilities

Establish Goals

Determine Strategies

Business Plan Integration

Deployment & implementation

External Environment

Shareholder SatisfactionCustomer Satisfaction Member Satisfaction

Assess Business Performance

Change Programme

‘Road Map to Business

Excellence’

•$500M in Sales 2003

•40% Market Share

•20% E.F.O.

Change ProgrammeThe ICG Mission & Goals

“Woodward Industrial Controls Group is in the business ofdesigning, manufacturing, applying, installing and servicing

components and systems for the control of industrial engines and turbines greater than 300 HP and their driven loads”

Steam

Turb

WGC

Change ProgrammeMarket Opportunity

Automotive

&

High Speed

Industrial Control

&

Plant Control Systems

Market Opportunity $2.1 Billion

Current Market Share 16%?

Slow &

Medium

Engines

Gas

TurbHydro

Turb

•$ 500 million, •40% Market Share,•20% EFO

Change ProgrammeThe ICG Strategic Plan

Total Customer Satisfaction

QDRC

Invest in People

Grow market position

$ 300M OEM partnership

Winning products

Push pull sales$ 100M End User sales

$ 100M Distribution

Quality sales

Short development times

Smart components

System / solution capability

Change Programme

Winning OEM Business / Push - Pull Sales

OEM

Packager

End User

$

$

$

+

+

=

Maximized Profitability

Components & Software

Services &Aftermarket

Systems &Integration

Push Pull

Change ProgrammeOvert Signals

Change ProgrammeIs this a Leader of Change?

Change Programmethat was the plan…now implementation

• MRPII Business Operations – CP built on this foundation…also TQM & Six Sigma

• Total Training - ‘Members’ & Agents• Change Strategy – take ownership &

cascade down…• Organisation Structure – create new…• Sell Change to Stakeholders –

– EuroDistribution Conference 1998

Implementationbased on MRP ll

MRP ll Implementation

Woodward & Parker:an unholy alliance!

• Aftermarket Business Manager – hired 1996, based in Reading, UK plant

• Objective - from ‘reactive’ Service & Repair to a ‘proactive’ Sales & Services to end-user customer

• Aftermarket Team - ‘Direct’ parts, service, training (15) + ‘Indirect’ services agents (10) for EMEA

• OP – first job after Warwick MBA (1995)– Full of tools and models…and jargon…

Oliver Parker MBA so what did I do?

• Reviewed existing Aftermarket organisation & service agents (‘AISF’)

• UK Aftermarket ‘back-office’• Focus: proactive sales solutions. • Regional distributor network model • Training - EuroAftermarket Conference 1998• Co-ordinate WGC ‘Distribution’ Plan ($300M)• European Aftermarket organisation structure.

EURODISTRIBUTION CONFERENCE

Athens ‘98

ICG Global AftermarketProposed Structure

IC G E uroA fte rm ark e t (& G loba l L ink s )

A m ericasA fte rm ark e t

H ydro -M ec han ic a l P roduc ts

E lec tron ic P roduc ts

E uroT ra in ing

U S A R etu rns W arran tyA dm in is tra t ion

M a in tenanc eC on trac ts

S ervice & R epa ir(c us tom er s upport)

T enders /Q uotes ,R e tro fits

S pare P arts

N ew C ontro ls

D is tribu tion N e tw orkC D R eg iona l M anagem ent

S a les & M ark e ting

F ie ld S ervic e E ng ineers

P roduc tO bs o les c ence

T A G H e lpL ine

F ie ld S ervic eA dm in is tra t ion

T A GT ec hn ic a l S upport

A pp lic a tions /C om m is s ion ing E ng ineering(to s upport D is tribu tion . N e tw ork )

E uroa fte rm ak e tM anager

A s ia -P ac if icA fte rm ark e t

G loba l IC G A fte rm ark e t O pera tionsIn fo rm ation T echno logy, W arran ty P o lic y, IC G S tra tegy, M arke ting & S a les , N e tw ork S tandards

(IC G A fte rm ark e t M anagem ent o f 3 s tra teg ic g loba l reg ions - c o -o rd ina tion on ly)

EuroAftermarketReading & Hoofddorp BUs

T B AT ra iner

M echan ica l

T B AT ra in ing M anager

E lec tron ics

D is tribu tion N e tw orkC D s , A D s , A IS F s'T he S a les fo rce '

John R eesS ales M anager

T A GA ud it

W orkshop3 /4 T echn icans

Lance Lennon , Ivo r D ough ty,K evin C o lm an, ?

S ervice E ng ineersD on Lees

G ary V oc k insW ill T rave ll

D ave N orrisS ervice M anager

T A GW kshp/F ie ld S vce

R ead ing R espons ib ility:N orthern E urope

M Idd le E as tA frica

T A G G roup2 E ng ineers

P au l M agrijnT A GA ud it

T ra in ing

D is tribu tion N e tw orkC D & A IS F s

'T he sa les fo rc e '

G erben S eevinckS a les M anager

S ervice E ng ineering T eam

Jan D ijks traS ervice M anager

R on van der G aardenM ich ie l van der M aas

C us tom er S ervice T eamW orkshop T echn ic ians

F ed inand H ansonW orkshop M anagerR epa ir & O verhau l

H oo fddorp R espons ib ility:W es tern E uropeE as te rn E urope

O live r P arkerR dg A fte rm arke t B us . M gr.

F rits F eddem aM R P II P lann ing M anager

E uroA fte rm ark et B us iness P lan

EuroAftermarket Distributor Network Regions

MiddleEast Africa

EasternEurope

Western & CentralEurope

Scandinavia

$320K

$290K$800K

$409K

$2.7M

What Really Happened

• Collaboration & Co-ordination (informal):– EMEA, Americas & Asia-Pacific…co-operative, but…

• EuroAftermarket (organisation & training):– conflicting interests (UK vs. NL plants)

• Regional Networks:– Middle East; first to ‘roll-out’– Other Networks; slow & problematic (Nordic, SA)

• Systems Solutions Sales:– New agents appointed with WGC Aftermarket support

• …too slow in launch, implementation & results!

What Really Happened?

RE-LAUNCH OF CHANGE PROGRAMME…3 YEARS LATER!

Resistance from ‘Old Guard’ and

other vested interests

Not resolved…

WHATWOULD

YOUDO?

My Reflection• Too timid…• Strategic Planning…

– searched for too much info that wasn’t there!

• Took too long to implement • Needed to create stronger coalitions• Needed to take tougher ‘HR’ decisions• Tougher performance management

Faster, Decisive & Results-Driven