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MU Insight Survey 2012 Change and Productivity

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<strong>Change</strong> & <strong>Productivity</strong> in Europe<br />

The Mercuri Urval <strong>Insight</strong> <strong>Survey</strong> <strong>2012</strong> – Key Findings


Participating countries:<br />

Austria, Belgium, Denmark, Finl<strong>and</strong>,<br />

France, Germany, Italy, Netherl<strong>and</strong>s,<br />

Norway, Portugal, Spain, Sweden,<br />

Switzerl<strong>and</strong>, United Kingdom<br />

Period of data collection:<br />

January/February <strong>2012</strong><br />

Sample:<br />

1400 Managers from privately owned<br />

small <strong>and</strong> midsized Companies (50-500 Employees)<br />

Everyone representing a different company<br />

20% Owners/CEOs<br />

40% Middle Management / Division Heads<br />

40% Lower Management / Group Leaders<br />

<strong>Survey</strong> Method:<br />

Computer-assisted telephone interviews (CATI)<br />

r<strong>and</strong>omly-selected, anonymous, representative<br />

<strong>Survey</strong> conducted by:


Foreword<br />

By Richard Moore<br />

These days of course change is part of all our daily lives. In business<br />

good intentions in changing things sometimes leads to results<br />

we did not expect, or event want.<br />

That’s, what 1.400 Managers from companies all over Europe also<br />

expressed, when they took part in the Mercuri Urval <strong>Insight</strong> <strong>Survey</strong><br />

<strong>2012</strong>.<br />

Among many other interesting findings, two facts st<strong>and</strong> out:<br />

• Asked about the successful achievement of goals after change<br />

processes, managers estimate a hit rate of only 66 % – leaving<br />

a lot of room for improvement.<br />

• And managers also observed a loss in productivity of up to 43%<br />

during change processes.<br />

So often goals are not achieved, <strong>and</strong> the costs of making the<br />

changes are high.<br />

Against the background of intensified competition – leading to<br />

more frequent strategic change – <strong>and</strong> so ever faster change<br />

processes, these results can be seen as quite alarming. And<br />

all of these facts lead to the following question being put on all<br />

our agendas: How can organisations deliver better performing<br />

change?<br />

By directing our focus on the topic of productivity during change<br />

processes, Mercuri Urval’s research team set out to explore<br />

change in more depth, providing insights that we hope helps all of<br />

us deliver better performing change in the future.<br />

Richard Moore<br />

Executive Vice President<br />

Group Client Services


37%<br />

Did you undergo a<br />

change process in 2011<br />

Country trends in undergoing a change process in 2011<br />

49%<br />

56%<br />

51%<br />

Austria<br />

Belgium<br />

Denmark<br />

Finl<strong>and</strong><br />

70%<br />

52%<br />

France<br />

Germany<br />

60%<br />

57%<br />

48%<br />

21%<br />

41%<br />

65%<br />

Italy<br />

Netherl<strong>and</strong>s<br />

Norway<br />

Portugal<br />

Spain<br />

Sweden<br />

Expected change processes in <strong>2012</strong>, by country<br />

49 %<br />

25 %<br />

26 %<br />

49% 51%<br />

53 %<br />

24 %<br />

23 %<br />

Austria<br />

Belgium<br />

Yes No<br />

28 %<br />

17 %<br />

55 %<br />

38 %<br />

29 %<br />

32 %<br />

Denmark<br />

Finl<strong>and</strong><br />

60 %<br />

22 %<br />

18 %<br />

42 %<br />

17 %<br />

41 %<br />

France<br />

Germany<br />

Yes Possibly No<br />

26 %<br />

32 %<br />

42 %<br />

50 %<br />

11 %<br />

39 %<br />

41 %<br />

43 %<br />

16 %<br />

Italy<br />

Netherl<strong>and</strong>s<br />

Norway<br />

Portugal<br />

Do you expect to undergo a<br />

change process in <strong>2012</strong><br />

60 %<br />

22 %<br />

18 %<br />

21%<br />

35%<br />

49%<br />

Switzerl<strong>and</strong><br />

Spain<br />

Sweden<br />

Switzerl<strong>and</strong><br />

53%<br />

UK<br />

UK<br />

44%<br />

No Yes Possibly<br />

60 %<br />

8 %<br />

32 %<br />

23 %<br />

8 %<br />

69 %<br />

50 %<br />

12 %<br />

38 %<br />

34 %<br />

30 %<br />

37 %<br />

51%<br />

Total<br />

44 %<br />

21 %<br />

35 %<br />

Total


Goal achievement by country of changes delivered in the last 2 years<br />

66%<br />

64%<br />

63%<br />

66%<br />

56%<br />

70%<br />

Austria<br />

Belgium<br />

Denmark<br />

Finl<strong>and</strong><br />

France<br />

Germany<br />

50%<br />

The dynamic of change among companies in Europe<br />

seems unbroken. While 51% of managers<br />

experienced an ongoing change process in their<br />

company in 2011, 56% expect or would not exclude<br />

such for <strong>2012</strong>.<br />

However, a closer look at the country specific findings<br />

demonstrates the multiplicity of national economic<br />

situations – <strong>and</strong> to a certain extent reflects<br />

also socio-economic backgrounds <strong>and</strong> sometimes<br />

even differences in management <strong>and</strong> leadership<br />

styles.<br />

While, for example, 69% of Swedish managers expect<br />

further change processes for their companies<br />

in <strong>2012</strong>, France, Portugal <strong>and</strong> Spain lead those who<br />

are more likely to exclude a change process for the<br />

ongoing year.<br />

Not only for those thinking of doing business in another<br />

country, it is worth going into detail about what<br />

aspects, measures <strong>and</strong> behaviors at the very end<br />

Italy<br />

Netherl<strong>and</strong>s<br />

Norway<br />

Portugal<br />

Spain<br />

Sweden<br />

Switzerl<strong>and</strong><br />

High levels of change, <strong>and</strong> more to come<br />

65%<br />

81%<br />

78%<br />

77%<br />

67%<br />

71%<br />

61%<br />

UK<br />

66%<br />

Total<br />

contribute to a successful change process across<br />

Europe.<br />

On average, goal<br />

achievement is rated at<br />

66%, leaving lots of room<br />

for improvement ”<br />

Although the European picture seems to vary significantly<br />

between countries in terms of change<br />

frequency, the assessment of the success of<br />

change processes is quite similar: The average, goal<br />

achievement is rated at 66%, leaving lots of room for<br />

improvement.


Ranking of goals:<br />

What was the result aimed for in the change process?<br />

Total <strong>2012</strong> Total 2011<br />

Lower costs/higher cost efficiency 72,2% 75,1%<br />

More efficient business or production processes 71,4% 69,8%<br />

Better customer/market orientation 60,3% 61,7%<br />

Higher sales/turnover 56,1% 47,0%<br />

Adjustment to technical changes/innovations 45,6% 42,6%<br />

<strong>Change</strong>s in company culture 39,8% 41,4%<br />

Business segment expansion 33,7% 30,9%<br />

Other goals 17,9% 16,6%<br />

And where do manager believe change failed? Well there is<br />

need for improvement regarding:<br />

Total<br />

Ability to communicate 78,2%<br />

Openness towards change 77,8%<br />

Ability to manage conflict 74,1%<br />

Motivation 71,2%<br />

Experiences with change management 70,1%<br />

Openness towards innovation 69,2%<br />

Team play 67,6%<br />

Ability to compromise 65,7%<br />

Flexibility 65,2%


How to reach the goals of change<br />

Predominant goals for change processes in 2011<br />

were in lowering costs/creating higher cost efficiency;<br />

creating more efficient business or production<br />

processes <strong>and</strong> the improvement of customer<br />

<strong>and</strong> market orientation. While these three major<br />

topics form most of the change processes also for<br />

<strong>2012</strong>, another issue comes up: higher sales <strong>and</strong><br />

turnover. Whether this might be wise foresight or a<br />

mere existential need, it gives a clear signal of an<br />

evolving agenda – <strong>and</strong> will most likely leader to further<br />

competition.<br />

In implementing such change – enabling people to<br />

better contribute to business success – managers<br />

also see a wider range of need for improvement in<br />

their companies.<br />

At the top of the ranking, ability to communicate<br />

needs to be improved according to almost 80% of<br />

managers. Equally, managers see a need for more<br />

openness towards change among their employees.<br />

And about 3 out of 4 managers see a need<br />

for stronger competence in managing conflict. In<br />

general, managers look for improvements in almost<br />

every single issue, they were asked about.<br />

Taking a look in the mirror, managers also assessed<br />

their own capabilities in improve change results.<br />

The ability to communicate is also seen as managers’<br />

most important asset – <strong>and</strong> sometimes challenge.<br />

Followed by the ability to motivate others <strong>and</strong><br />

drive goal-oriented behavior, it is made pretty clear,<br />

which roles managers see for themselves within a<br />

change process – the communicators, energisers<br />

<strong>and</strong> goals setters. So the idea is clear, but what is<br />

the reality?<br />

Total<br />

Ability to communicate 58,5%<br />

Ability to motivate others 52,2%<br />

Goal-oriented behaviour 50,6%<br />

Ability to cooperate 49,6%<br />

Willingness to take on responsibility 49,5%<br />

Solution-oriented behaviour 46,3%<br />

Ability to manage conflict 46,1%<br />

Interpersonal skills 45,2%<br />

Flexibility 44,6%<br />

Objectivity 39,2%<br />

Power of judgment 37,7%<br />

Assertiveness 35,9%<br />

Stamina 33,2%<br />

Analytic skills 30,6%<br />

Empathy 30,5%<br />

Independence 19,9%


<strong>Productivity</strong> loss during change, by country<br />

42%<br />

43%<br />

29%<br />

31%<br />

34%<br />

Most effective activities to avoid loss of productivity or efficiency:<br />

40%<br />

Austria<br />

Belgium<br />

Denmark<br />

Finl<strong>and</strong><br />

France<br />

Germany<br />

Making the goals <strong>and</strong> strategies of change-processes more transparent 53,3%<br />

Increasing the participation of middle <strong>and</strong> first-level management during the conception<br />

<strong>and</strong> planning process of change measures<br />

Seeing that new technology, IT, software etc. can be adopted without issues <strong>and</strong> be<br />

easily used<br />

Total<br />

43,7%<br />

41,2%<br />

More <strong>and</strong> better change-related coaching for employees 24,8%<br />

Rewarding employees with special incentives to avoid loss of productivity 20,9%<br />

Intensified monitoring of employees’ productivity during the change 17,3%<br />

Limiting the change-related assignments for each employee 14,2%<br />

Including independent change suppliers during the implementation of change measures<br />

to relieve in-house employees<br />

49%<br />

50%<br />

12,0%<br />

In case of doubt changing the staff 11,0%<br />

34%<br />

54%<br />

53%<br />

26%<br />

45%<br />

Italy<br />

Netherl<strong>and</strong>s<br />

Norway<br />

Portugal<br />

Spain<br />

Sweden<br />

Switzerl<strong>and</strong><br />

51%<br />

43%<br />

UK<br />

Total


Avoiding productivity loss<br />

We did not exactly know what to expect, when asking<br />

managers for their estimation about productivity<br />

loss in their company during a change process. But<br />

we had an idea from listening with our clients worldwide.<br />

And it proved right: 43% seemed to us an honest<br />

figure – <strong>and</strong> yet at the same time an alarming one.<br />

Practically speaking, for 2 out of 5 days, people are<br />

prevented from contributing to results by a change<br />

process, in half of all companies. Of<br />

course nobody intended this, so the obvious<br />

questions arise:<br />

What are people doing, if they are not<br />

able to contribute? What is stopping<br />

them? If they are not able to be successful<br />

with their work, what is going on?<br />

Although there is a certain span between<br />

Sweden’s 26% <strong>and</strong> Portugal’s 54%<br />

impairment on productivity, from a<br />

business perspective addressing this<br />

productivity ‘crisis’ is not only an exercise<br />

of optimisation, but more a matter of fundamentally<br />

rethinking setups, goals <strong>and</strong><br />

procedures. The quality of change processes needs<br />

improving. So how can we make things work better?<br />

Our goal was to try to find some solutions.<br />

From our respondents’ point of view, there are 3<br />

measures outnumbering others, when dealing with<br />

productivity loss. First of all, making the goals <strong>and</strong><br />

strategies of change-processes more transparent<br />

was named. Additionally, managers expected<br />

increasing participation of middle <strong>and</strong> first-level<br />

management during the conception <strong>and</strong> planning<br />

of change measures would help them to avoid<br />

productivity loss. And for 2 out of 5 managers, new<br />

technology, IT <strong>and</strong> software all facilitate productivity<br />

in change.<br />

Turning the focus on people, managers again see an<br />

intensive need for a broad range of personal capabilities<br />

<strong>and</strong> skills.<br />

We did not ask if managers think they could change<br />

the personality of people. For more than 40 years<br />

Total<br />

The employee’s goal orientation 76,2%<br />

The employee’s professional expertise 71,5%<br />

The employee’s ability to work under pressure 67,3%<br />

The employee’s stamina 63,3%<br />

The employee’s ability to convince others 62,6%<br />

The employee’s self-assuredness 62,4%<br />

The employee’s influence on others 62,1%<br />

The employee’s degree of informal integration 56,8%<br />

of management consulting, we know our answer to<br />

that question. From our point of view another question<br />

becomes rather interesting though, <strong>and</strong> in it lies<br />

the answer to reducing productivity loss through<br />

change:<br />

How do you identify <strong>and</strong> arrange the capabilities that<br />

your people have (or don’t have), to secure successful<br />

changes today <strong>and</strong> in the future?<br />

In the table above you can see what it is it about people<br />

that enables them to deliver change results <strong>and</strong><br />

maintain productivity.


Perspectives<br />

Over a two year period, 72% of managers deal with<br />

change processes.<br />

This underlines the fact: change is a constant companion<br />

for European companies.<br />

Given the diverse socio-economic backgrounds<br />

of the participating countries in this survey, it is of<br />

course expected that change is not seen in the same<br />

way everywhere.<br />

However, for many topics in this research, there is a<br />

common European level for managers: similar goals<br />

that sit behind changes, the need for improvement<br />

during change (not just at the end) <strong>and</strong> managers’<br />

own needed change leading capabilities are all quite<br />

common.<br />

Besides pan-European insights we can also learn<br />

from these findings how change processes are<br />

perceived in different countries <strong>and</strong> when working<br />

internationally. A knowledge that is of crucial value in<br />

an increasingly international business world where<br />

change process not only apply anymore to people<br />

working in one country:<br />

The management of change <strong>and</strong><br />

keeping up productivity cannot be<br />

separated from the management<br />

of people anymore.<br />

• For the future, we can definitely expect that<br />

change has to work cross border.<br />

• We can prepare for new capabilities needed by<br />

change managers – the ability to communicate,<br />

to manage conflict <strong>and</strong> to team-play in a more<br />

<strong>and</strong> more international business environment, for<br />

example<br />

• And what consequences do multi-national backgrounds<br />

in the same company have on the manageability<br />

of change <strong>and</strong> how it is approached?<br />

And a key question for all of us, locally, regionally or<br />

globally:<br />

• Will it be possible to establish a culture of constant<br />

change according to market needs within<br />

your company?<br />

Whatever the answer to this question, the management<br />

of change <strong>and</strong> keeping up productivity cannot<br />

be separated from the management of people<br />

anymore.


<strong>Change</strong> & <strong>Productivity</strong>:<br />

You know what – we know who<br />

Business means results, <strong>and</strong> improved results<br />

means change. What else could business be about?<br />

While finding out “what” to change is a strategic issue,<br />

the “how to” part – depends on people.<br />

At Mercuri Urval, we might not be able to predict<br />

the future, but we can help you prepare<br />

for it<br />

We believe that any change has to start inside<br />

the minds of your people. Once you get people to<br />

change the way they think, they’ll start doing things<br />

differently <strong>and</strong> your business strategy comes to life.<br />

Given our experience in Business Transformation,<br />

we agree with those 62% of the interviewed SME<br />

managers that say:<br />

“change needs to be co-initiated by lower management,<br />

so they can be integrated into daily business<br />

without losing efficiency.”<br />

Find out more information about our research or<br />

how we can help you with the ‘how to question’,<br />

please contact<br />

Global_client_services@mercuriurval.com or the<br />

Research leader<br />

Dr. Jeannine Hertel<br />

International Project Coordinator<br />

Mercuri Urval <strong>Insight</strong> <strong>Survey</strong><br />

Jeannine.hertel@mercuriurval.com<br />

Austria: Georg Ertler<br />

Belgium: Herman Gansemann<br />

Denmark: Christian Steen Larsen<br />

Finl<strong>and</strong>: Sanja Aimola<br />

France: Stéphane Beaumont, Olivier Berenger<br />

Germany: Felix Facius, Dr. Stephanie Plassmeier<br />

Italy: Davide Muscara<br />

Netherl<strong>and</strong>s: Hjalmar van Marle, Noortje Vrind<br />

Norway: Anders Svendsen<br />

Portugal: Maria Jose Dos Santos<br />

Spain: Dolores Servert<br />

Sweden: Josef Ericson<br />

Switzerl<strong>and</strong>: Christian Mende, Peter Weingartner<br />

United Kingdom: Chloe Esposito


Making strategies work. It’s all about people.

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