Sanjeev Verma, Director, Offices - Group Property at Rolls Royce & Hilary Jeffery, Director at Aecom - When there are no more costs to cut - Moving on from austerity

Sanjeev Verma, Director, Offices - Group Property at Rolls Royce & Hilary Jeffery, Director at Aecom - When there are no more costs to cut - Moving on from austerity

• 1.
  When there areno more costs to cut Moving on from austerity Sanjeev Verma and Hilary Jeffery
• 2.
  The burning platformis changing 1st generation 2nd generation 3rd generation Getting fitter Getting smarter Becoming strategic • Cost reduction • Reducing headcount • Tackling expenses • Cost avoidance • Becoming more agile • Doing more with less • Engaging with stakeholders • Driving business value • Getting to root causes • Tackling business inefficiency • Integrated solutions • Whole system approach
• 3.
  Are we dealingin false economies? 3 Some all too familiar examples: - Cutting research and innovation programmes - Employee benefit reductions - Client facing reductions - Efficiency programmes potentially leaving companies ill prepared for problems
• 4.
  Shifting the conversation 90% of projects still operate here Changing how . resource used . Org structure/ workstyles Changing what people do Business process Changing how people do it Culture Influencing business direction Vision and objectives
• 5.
  Limiting the valuewe can add Introduce more mobility/sharing BUT Paper based workflow ‘that’s the way we’ve always done it’ Focus on limiting risk Changing how resource used Org structure/ workstyles Changing what people do Business process Changing how people do it Culture Influencing business direction Vision and objectives
• 6.
  Limiting the valuewe can add Reduce physical barriers between teams BUT Email audit trails required Blame culture Reward individuals, not teams Changing how resource used Org structure/ workstyles Changing what people do Business process Changing how people do it Culture Influencing business direction Vision and objectives
• 7.
  Limiting the valuewe can add New iPhones for all staff to support innovation BUT Complex and stringent rules for usage Monthly ‘shame’ reports on bills Conflicting innovation/cost reduction views Changing how resource used Org structure/ workstyles Changing what people do Business process Changing how people do it Culture Influencing business direction Vision and objectives
• 8.
  The Rolls-Royce story– so far… 1st generation 7 years of reduction 2nd generation Refining our toolkit 3rd generation Testing some early ideas Getting fitter Getting smarter Becoming strategic • Year on year 5% reduction over last 5 years and is ongoing • Exhausted opportunities for cost cutting • 20% of our sites are agile • Targeting 45% by 2016 • Ongoing portfolio rationalisation • Focusing on productivity and doing more with less • Integrating all workstreams – whole of systems approach • Identifying early pilot groups to test ideas
• 9.
  Trent XWB vision 1.To produce the world’s most efficient engine 2.To be producing an engine a day by 2016 3. To address the challenges prevalent in Gas Turbine New Product Introduction (NPI), in particular: • Inefficient programme management • Challenges with number of design iterations • Complex and hierarchical organisational structure leading to difficulties in teamwork • Lack of focus on customer • Workspace that didn’t support how people worked
• 10.
  If we hadtackled the challenge from a 1st or 2nd generation perspective 1st generation response 2nd generation response • Reduce headcount • Flatline salaries • Reduce sqm • Reduce travel • Reduce technology spend • Restructure the team – combining roles • Invest in agile working to reduce footprint • Co-location • Introduce new technologies
• 11.
  A 3rd generationapproach New organisational construct - key principles: • Aligned interaction with clear accountabilities • Integrated Project Team (IPT) model • High-performance team-based working • Dissolution of boundaries • Clear, consistent communication Designed to: - drive a high performance culture - allow accountability for both System and Sub-System integration in one project team - Enable teams based on complementary skills Minimum direct supervision and external support
• 12.
  The challenge Orgstructure and design Ways of working/processes Workplace and IT What we did Transformation team - business lead, HR, IT and Comms • New organisational structure • Capability to form and disband teams • Co-located support teams • Clear role statements • Leadership training programme • Voice of the customer events • Process redesign • Staff training • Definition of culture and values – all involved • Programme of celebrating successes • Employee defined space • Neighbourhood strategy • Project spaces • Inspiring design • Supporting technology & visual management • Wide range of collaboration spaces
• 13.
  Sustaining the change 1. Continuous Improvement 2. Transfer ownership 3. Maintain Champion network 4. Lead by example 5. Effectively use the spaces available
• 14.
  Return on investment Impact on behaviours • Increased informal collaboration • Quicker information sharing and decision making • Failing smarter and faster • Faster iteration across teams Impact on Product • Pushing iteration up the design process • Less costly rework • More engaged, empowered workforce
• 15.
  If you’re seriousabout doing this 15 The Business Output How work, worker & workplace support that output That the new model works The hurdles blocking the way The changes promised Define Determine Demonstrate Diffuse Deliver
• 16.
  If you’re seriousabout doing this 16 - Whole of system thinking throughout: - Business cases to include mandatory identification of, and engagement with, other parts of business impacted (e.g. HR, IT, Comms, Brand etc.) - Return to logic – what is the problem? What will be the (measureable) benefit/costs of addressing it? What needs to change throughout the business to fix it? - Proper diagnostics to understand root causes - Fully resourced and integrated transformation team - Thorough understanding of the mechanics of the business - Require experts in process engineering - Strong relationships with senior leaders - Change management done in an authentic way - can’t just consist of a handful of workshops…. - Sufficient time to properly address issues - Identification of a pilot project to test ideas and gain buy in
• 17.
  Thank you Anyquestions? Sanjeev Verma and Hilary Jeffery