The May 2007 issue of HBR had a nice little article by Stuart Rose, the CEO of Marks & Spencer, on the turnaround of the British icon. Rose’s account presents an interesting read from the perspective of Change Management and highlighted some of the principles in the change models presented in Leading Change and Managing Transitions approaches.
Just as in Kotter’s Leading Change, the change effort started with emphasising the critical need for change – by emphasising that the current state was untenable. Rose noted that inventory was not being managed effectively, decision making was being delegated without accountability or senior management sign-off, and customers were being attracted to newer, dynamic competitors. Change was imperative.
Second, Rose started the change process with a core team of trusted people he had worked with – and he knew their strengths. Rose brought with him the Executive Director of IT, Supply Chain, and Property, and the Executive Director of Marketing and Store Design. With this core team, Rose was “able to hit the ground running.”
Third, Rose deliberately decided not to call in an army of consultants to analyse market demographics and customer segmentation, conduct industry competitor analysis, or plan organisational restructuring. Rose described the period prior to his leadership unflatteringly as the “consultant years, which were awash in numbers and surveys and complexity.” Rose reviewed the current use of consultants, and eliminated all but 10 of the consultants’ 31 existing “strategic projects.” Rose did not develop a lengthy and sophisticated strategy for renewal – and, indeed, declined to call his approach a strategy, because “that makes it sound terribly complicated.”
Instead, Rose put forward what Guy Kawasaki in The Art of the Start calls a “mantra,” and what Jim Collins in Good to Great called a “hedgehog concept.” That is, Rose provided a simple, communicable statement of what had to be done, that got to the heart of the matter and which was easily communicated yet specific enough to focus effort in the directions required. For Rose, the Mantra was simple: “improve the product, improve the stores, and improve the service.” Rose provided a simple, accessible and operational guiding vision.
Fourth, Rose reinforced the communication of the message symbolically to reinforce the point, and focus energy around the core direction. For example,
The most symbolic thing we did was to have a massive housecleaning. Because there were so many different subbrands in our shops, we had lots of signage and titles and names on cardboard cluttering up our shops. We had a skip delivered to all the stores – every single one – and asked them to toss everything out. On the scale of things, that may not seem like a big deal, but it quickly made quite an impact on the way the stores looked and how employees felt.
The message was communicated to customers. Food halls were now decked out in matte steel refrigerators and shiny black tile floors to create an environment in which people felt good about the premium they were being asked to pay for the quality of products. The message was also reinforced through the use of 60s fashion icon Twiggy as a “face” of women’s clothing at Marks & Spencer.
Fourth, Rose drove the change down into the “DNA” of the organisation not only by putting everyone through training on the basics, but sat in on operational day to day meetings to the “level of micromanagement” to focus the conversation in detail on the key points. Incentive structures were realigned to reward service performance instead of seniority, redefining the career progression path. The entire 56,000 strong workforce was put through motivational training sessions focused around teamwork and customer service.
The above actions are examples of the first five steps of change in Kotter’s Leading Change model of Change Management.
However, Rose’s management can also be seen as an effective example of Bridges Managing Transitions approach to Change Management.
For example, Rose encountered an environment where “people within M&S were already lobbying for different plans, different strategies.” However, because “the Christmas season is the key to the entire retail year and how industry analysts gauge a company’s health”. there were clear timelines to achieve results. There was no time to try one direction and perhaps change to a different course if that didn’t work. Rose committed to the direction he had selected, and “there was no Plan B.” Like Caesar crossing the Rubicon, or burning his boats when he reached Britain, Rose picked his direction – and there was no turning back. There was a clear, unequivocal, simple message. That is, Rose committed to letting go of alternative ideas and the status quo, and committed the organisation to the new path.
In both the Kotter and Bridges models of change, it is important to generate initial wins and to celebrate those successes. Rose recounted a story of a manager who responded to an observation regarding an opportunity by rapidly delivering a new product – and “he got a bottle of champagne.” These stories played an important role in maintaining the momentum for change. Rose went on to say: “I used his story to just what could be achieved. I still talk about him. Fortunately, many employees follow his example.”
One of the key steps in the Kotter model is to celebrate the successes and consolidate the gains – but don’t stop there. Rose exemplifies this attitude. Rose comments:
I finally used the “r” word – recovery . . . we are now at a better place, and we’re making good profits. There’s more work to be done though, just to carry out what I said I’d do three years ago, let alone take the business to the next stage . . . We still have a long way to go.
And perhaps that is the spirit of change management. Celebrate the wins. But don’t stop there. Keep moving towards new targets, new goals and new improvements. And institutionalise the changes into the culture.
Otherwise, as Kotter points out, there is always the risk of falling back into the old ways.