Study Success in Change - Hungary

SUCCESS
IN
CHANGE
HUNGARIAN CHANGE READINESS INDEX 2019
A study by Staufen AG

CONTENTS:
ABOUT THE SURVEY.
S. 4
PART 1: GENERAL QUESTIONS.
PART 2: CHANGE READINESS INDEX.
2.1 STRUCTURE.
2.2 PROCESSES.
2.3 MANAGEMENT AND CORPORATE CULTURE.
2.4 EMPLOYEES AND QUALIFICATIONS.
S. 5
S. 11
S. 13
S. 21
S. 30
S. 38
PART 3: RESULTS AND OUTLOOK.
S. 46
PART 4: STATISTICAL QUESTIONS.
S. 58
CONTACT.
S. 62

ABOUT THE SURVEY:
FOR THE „HUNGARIAN CHANGE READINESS INDEX 2019“, MANAGEMENT CONSULTANCY
STAUFEN SURVEYED A TOTAL OF 104 COMPANIES IN HUNGARY
ON THE SUBJECT OF „SUCCESS IN CHANGE“.
THE SURVEY TOOK PLACE IN SPRING – SUMMER 2019.
57 PERCENT OF THE COMPANIES SURVEYED COME FROM
THE AUTOMOTIVE INDUSTRY
THE ELECTRICAL INDUSTRY
THE MECHANICAL AND
PLANT ENGINEERING INDUSTRY.

PART 1:
GENERAL QUESTIONS.

1.1:
How much has your business changed over the past two years?
not at all
2%
less
21%
37%
very much
40%
much
In Hungary three quarters of
the companies are experiencing
major changes

1.2:
What were the main drivers of this transition?
Only participants who have stated in the previous question that their company has changed very much or much.
Technological progress (e.g. digitization, networked
production)
Change of the working world (new working time
models, ...)
Progressive customization of products and services
58%
54%
67%
Globalization of the economy
30%
Demographic transition
29%
Legal changes
18%
Geopolitical developments and upheavals
8%
Participants were allowed to choose up to 4 options
Technological progress and
digitalization is the main driver
of change

1.3:
Which of the following terms do you associate with the topic
of transition?
Innovation Uncertainty
Mistrust
Chances Future
Risk
Disruption
Doubt
Openness
Strategy
Learning
Resistance
Euphoria
Courage
Trust
Sobriety
A good strategy is essential
to keep up in times of change

1.3:
Which of the following terms do you associate with the topic
of transition?
Future
78%
Uncertainty
26%
Strategy
76%
Trust
25%
Innovation
65%
Resistance
20%
Learning
58%
Sobriety
15%
Risk
48%
Mistrust
9%
Chances
46%
Doubt
8%
Openness
45%
Disruption
7%
Courage
37%
Euphoria
1%
Participants were allowed to choose up to 8 options
A good strategy is essential
to keep up in times of change

1.4:
To what extent do you generally see a risk of disruption for …
very high risk high risk low risk no risk
your industry
18%
37%
40%
5%
your company as a whole
7%
38%
45%
10%
our business model / business models
7%
34%
46%
13%
individual products / services of your
company
2%
40%
46%
12%
0% 20% 40% 60% 80% 100%
Risk of disruption is seen in
every second company,
especially in their own industry

PART 2:
CHANGE
READINESS INDEX.

varied
composition
openness to change
developing
talents
pioneering spirit
knowledge building
Employees
and qualifications
CHANGE
Structure
cooperative
collaboration
customeroriented
living a shared vision
agile organization
regular review
positive error
culture
lived values
trust
Management
and corporate
culture
personal
responsibility
Processes
flexible
continuous adjustment
lean –
without interfaces
structured
Success factors of change

PART 2.1:
CHANGE
READINESS INDEX -
STRUCTURE.

2.1.1: What characterizes your organizational structures?
applies
applies more
or less
applies less
does not
apply
Changes are usually prescribed from the top
34%
48%
17%
1%
Our organization is strongly focused on
innovation
23%
36%
31%
10%
Our company is characterized by flat hierarchies
24%
31%
22%
23%
Our organization is learning and designed for
continuous improvement and systematic problem
solving. […]
17%
34%
32%
17%
The organizational structures in our company are
flexible and changeable
12%
33%
43%
12%
Our organization is more inward-looking and less
open to external impulses
13%
23%
42%
22%
0% 20% 40% 60% 80% 100%

2.1.1:
What characterizes your organizational structures?
Answers „applies“ + „applies more or less“
Our organization is strongly focused on innovation
59%
Our company is characterized by flat hierarchies
55%
Our organization is learning and designed for
continuous improvement and systematic problem
solving. […]
The organizational structures in our company are
flexible and changeable
45%
51%
Changes are usually prescribed from the top
82%
Our organization is more inward-looking and less
open to external impulses
36%
Despite all agility:
Most companies still have a
classic organizational structure

2.1.2: Please try to describe your organization using the following
pairs of terms:
To indicate this, move the slider to the position that suits you.
1
2
3
4
5
6
product -oriented
1%
17%
13%
26%
34%
9%
Customer-oriented
silo thinking
1%
13%
13%
25%
40%
8%
cooperative
collaboration
change is a threat
0%
8%
18%
29%
32%
13%
change is opportunity
bureaucratic
13%
16%
25%
23%
14%
9%
unbureaucratic
adhering to plans
5%
8%
14%
34%
30%
9%
situational
0% 20% 40% 60% 80% 100%

2.1.2:
Please try to describe your organization using the following
pairs of terms:
(expressed in average values)
4,0
product-oriented
customer-oriented
silo thinking
4,1
cooperative
collaboration
change is a threat
3,4
4,2
change is
opportunity
bureaucratic
unbureaucratic
4,0
adhering to plans
1 2 3 4 5 6
situational
Many organizations are
still characterized by
bureaucratic thinking

2.1.3:
To what extent does the following apply to your company?
already successfully
implemented
being
developed
planned
nonexistent
A constructive cooperation with suppliers and
customers
28%
53%
19%
0%
Flexible work environments
21%
46%
24%
9%
An interested look outside the box […]
27%
39%
22%
12%
Kinds of a trend or change radar
12%
63%
18%
7%
A structured collaboration with other
external partners
11%
53%
21%
15%
Time for open exchange of employees and
executives away from day-to-day business
21%
38%
18%
23%
Platforms for lateral thinking
(e.g. creative workshop)
8%
30%
36%
26%
0% 20% 40% 60% 80% 100%
There is still a lack of
creative thinking among
employees

2.1.4: Based on your company structure, to what extent are you prepared
for emerging challenges?
applies
applies more
or less
applies less
does not
apply
We share a strong vision that shows where the
journey is going
37%
40%
13%
10%
We actively develop the mutability of our
company
33%
43%
21%
3%
We systematically filter the topics that are
important to us from the multitude of
information
18%
57%
19%
6%
We set clear priorities and communicate
transparently
21%
49%
23%
7%
0% 20% 40% 60% 80% 100%

2.1.4: Based on your company structure, to what extent are you prepared
for emerging challenges?
Answers „applies“ + „applies more or less“
We share a strong vision that shows where the
journey is going
77%
We actively develop the mutability of our company
76%
We systematically filter the topics that are
important to us from the multitude of
information
We set clear priorities and communicate
transparently
75%
70%
Hungarian companies are optimistic
about their preparation for the future

PART 2.2:
CHANGE
READINESS INDEX -
PROCESSES.

2.2.1: Please describe the status quo based on the following questions
yes rather yes rather no no
Is the responsibility for the processes
clearly defined?
33%
50%
14%
3%
Are your processes comprehensibly
documented?
40%
42%
14%
4%
Are your processes regularly put to the
test?
21%
49%
24%
6%
Are your processes flexible?
21%
49%
27%
3%
Have your processes been reviewed for
future challenges?
23%
41%
30%
6%
0% 20% 40% 60% 80% 100%

2.2.1: Please describe the status quo based on the following questions
Answers „yes“ + „rather yes“
Is the responsibility for the processes clearly
defined?
83%
Are your processes comprehensibly
documented?
82%
Are your processes regularly put to the test?
70%
Are your processes flexible?
70%
Have your processes been reviewed for future
challenges?
64%
The sustainability of processes
have not yet been checked

2.2.2: What is the idea behind the processes in your company?
applies
applies more
or less
applies less
does not
apply
We streamline our processes
29%
53%
15%
3%
We are strictly committed to our processes
33%
42%
20%
5%
We reduce friction losses within the teams as
much as possible
23%
47%
23%
7%
We pay particular attention to the functioning
of interfaces
12%
56%
24%
8%
0% 20% 40% 60% 80% 100%

2.2.2: What is the idea behind the processes in your company?
Answers „applies“ + „applies more or less“
We streamline our processes
82%
We are strictly committed to our processes
75%
We reduce friction losses within the teams as
much as possible
70%
We pay particular attention to the functioning of
interfaces
68%
The focus is on
efficient processes

2.2.3: To what extent do you pay attention to a balanced relationship
between dynamics and routine?
applies
applies more
or less
applies less
does not
apply
Innovations are driven systematically and
routinely by us
11%
52%
29%
8%
Our risk management system continuously
secures our processes
25%
38%
35%
2%
We are able to accelerate processes
18%
44%
32%
6%
We manage complexity with meaningful
instruments and develop them continuously […]
14%
46%
37%
3%
Creative processes are designed in a
structured manner
13%
35%
39%
13%
0% 20% 40% 60% 80% 100%

2.2.3:
To what extent do you pay attention to a balanced relationship
between dynamics and routine?
Answers „applies“ + „applies more or less“
Innovations are driven systematically and
routinely by us
63%
Our risk management system continuously
secures our processes
63%
We are able to accelerate processes
62%
We manage complexity with meaningful
instruments and develop them continuously […]
60%
Creative processes are designed in a
structured manner
48%
Creative processes are very
unstructured

2.2.4: To what extent do you succeed in continuously adapting processes
to changes?
not at all3% comprehensively
3%
less fully
41%
53%
nearly fully

2.2.4:
To what extent do you succeed in continuously adapting processes
to changes?
comprehensively
nearly fully
3%
53%
56%
believe that they are able
to adapt processes to
changes nearly fully to
comprehensively
Almost half of the companies
are not yet able to continuously
adapt their processes

PART 2.3:
CHANGE
READINESS INDEX -
MANAGEMENT AND
CORPORATE CULTURE.

2.3.1: Which leadership and performance culture prevails in
your company?
applies
applies more
or less
applies less
does not
apply
Target agreements and compensation systems
are predominantly KPI-based
24%
44%
19%
13%
For us, the traditional image of the manager as
the boss prevails
25%
37%
25%
13%
We predominantly fill our management
positions internally
24%
37%
25%
14%
Our feedback culture is more dictated ritual
than lived communication culture
19%
24%
43%
14%
0% 20% 40% 60% 80% 100%

2.3.1:
Which leadership and performance culture prevails in
your company?
Answers „applies“ + „applies more or less“
Target agreements and compensation
systems are predominantly KPI-based
68%
For us, the traditional image of the
manager as the boss prevails
62%
We predominantly fill our management
positions internally
61%
Our feedback culture is more dictated ritual
than lived communication culture
43%
Traditional leadership culture
prevails in 62% of all companies

2.3.2: How would you describe the corporate culture of your
company in general?
To indicate this, move the slider to the position that suits you.
1
2
3
4
5
6
conservative attitude
13%
15%
25%
26%
16%
5%
pioneering spirit
focus on the guilt question
5%
13%
26%
34%
15%
7%
positive error culture
values exist only on paper
3%
13%
23%
25%
26%
10%
values are lived
control
10%
11%
28%
23%
23%
5%
trust
external control
7%
16%
13%
35%
21%
8%
personal responsibility
0% 20% 40% 60% 80% 100%

2.3.2:
How would you describe the corporate culture of your
company in general?
(expressed in average values)
conservative
attitude
3,3
pioneering spirit
focus on the guilt question
3,6
positive error
culture
3,9
values exist only on paper
values are lived
3,5
control
trust
3,7
external control
personal responsibility
1 2 3 4 5 6
Corporate culture:
somewhere between a pioneer
spirit and independence

2.3.3:
How is good leadership promoted in your company? Which
instruments do you already use?
already successfully
implemented
being developed planned nonexistent
Program for systematic leadership development
23%
30%
26%
21%
Executive coaching or supervision
20%
31%
18%
31%
Use of Shop Floor Management
25%
15%
24%
36%
Forward-looking succession planning for
management positions
18%
20%
47%
15%
0% 20% 40% 60% 80% 100%
Only every fourth company
has experience with
Shop Floor Management

2.3.4: What are your current challenges in leadership and
corporate culture?
applies
applies more
or less
applies less
does not
apply
We find it difficult to establish/implement
management structures that support the
change of the company […]
20%
31%
33%
16%
We follow an outdated understanding of
leadership and career
21%
28%
25%
26%
We have big problems to fill leadership positions
15%
20%
44%
21%
Here, there are generational clashes caused by
attitudes, abilities and life goals
10%
21%
36%
33%
0% 20% 40% 60% 80% 100%

2.3.4:
What are your current challenges in leadership and
corporate culture?
Answers „applies“ + „applies more or less“
We find it difficult to establish/implement
management structures that support the
change of the company […]
51%
We follow an outdated understanding of
leadership and career
49%
We have big problems to fill leadership positions
35%
Here, there are generational clashes caused by
attitudes, abilities and life goals
31%
Companies find it difficult
to anchor leadership forms
which support change

PART 2.4:
CHANGE
READINESS INDEX -
EMPLOYEES AND
QUALIFICATIONS.

2.4.1: How well are the employees in your company prepared for the
work environment 4.0?
very well well less well not well
at all
Diverse composition of the workforce with
different qualifications, talents, work experience
and personalities
13%
49%
31%
7%
Willingness to face new challenges
18%
43%
33%
6%
Openness of employees towards instruments
and behavior of modern management
8%
46%
39%
7%
Current state of knowledge on topics such as
Industry 4.0, digitization and internationalization
3%
28%
57%
12%
0% 20% 40% 60% 80% 100%

2.4.1:
How well are the employees in your company prepared for the
work environment 4.0?
Answers „very well“ + „well“
Diverse composition of the workforce with
different qualifications, talents, work experience
and personalities
62%
Willingness to face new challenges
61%
Openness of employees towards instruments
and behavior of modern management
54%
Current state of knowledge on topics such as
Industry 4.0, digitization and internationalization
31%
There is still a lack of
necessary knowledge for
the work environment 4.0

2.4.2: To what extent do your employees identify with the company?
applies
applies more
or less
applies less
does not
apply
Our employees are loyal to their employer
26%
51%
21%
2%
Our employees are proud of their employer
26%
46%
21%
7%
The team spirit among the employees is high
20%
52%
23%
5%
Confidence in the executives is high
21%
43%
31%
5%
Our employees do only what they are told to
do, not more
17%
47%
33%
3%
There is more of a culture of mistrust in our
company
13%
16%
30%
41%
0% 20% 40% 60% 80% 100%

2.4.2:
To what extent do your employees identify with the company?
Answers „applies“ + „applies more or less“
Our employees are loyal to their employer
77%
Our employees are proud of their employer
72%
The team spirit among the employees is high
72%
Confidence in the executives is high
64%
Our employees do only what they are told to
do, not more
64%
There is more of a culture of mistrust in our
company
29%
“Working by rule” is widespread
amongst employees

2.4.3:
What is your company doing to make employees fit for the
Flexible Workplace 4.0?
already successfully
implemented
being developed planned nonexistent
The personnel development is integrated into
the strategic management
22%
33%
22%
23%
We work with IT-supported training as well as
e-learning and self-learning […]
28%
27%
22%
23%
We carry out systematic competence
analyses […]
12%
28%
33%
27%
We have regulations on holidays, salaries and
working hours that fit in with the working
environment 4.0
15%
22%
15%
48%
There is a cross-company talent management
15%
19%
23%
43%
0% 20% 40% 60% 80% 100%
Only every second company
prepares its employees for the
Flexible Workplace 4.0

2.4.4: What challenges does your company face in
personnel management?
applies
applies more
or less
applies less
does not
apply
We have great problems finding
suitable employees
34%
46%
15%
5%
There are too few resources for necessary
accompanying and further education measures
23%
40%
30%
7%
There is uncertainty about future-proof
requirements profiles of employees in the age
of Industry 4.0
22%
41%
25%
12%
There is a lack of knowledge about the talents
and special abilities of our employees
14%
23%
37%
26%
Our employees have little interest in
personal development
5%
32%
39%
24%
Our employees perceive their daily work
as meaningless
3%
12%
40%
45%
0% 20% 40% 60% 80% 100%

2.4.4:
What challenges does your company face in
personnel management?
Answers „applies“ + „applies more or less“
We have great problems finding
suitable employees
80%
There are too few resources for necessary
accompanying and further education measures
There is uncertainty about future-proof
requirements profiles of employees in the age
of Industry 4.0
63%
63%
There is a lack of knowledge about the talents
and special abilities of our employees
37%
Our employees have little interest in
personal development
37%
Our employees perceive their daily work
as meaningless
15%
Companies have difficulties
finding suitable employees

PART 3:
RESULTS
AND OUTLOOK.

3.1: To what extent do you see your company prepared for the future in
the following areas?
highly prepared prepared less prepared not prepared at all
Structure
8%
56%
29%
7%
Processes
12%
44%
41%
3%
Leadership and corporate
culture
19%
39%
32%
10%
Employees and
qualifications
5%
46%
41%
8%
0% 20% 40% 60% 80% 100%

3.1:
To what extent do you see your company prepared for the future in
the following areas?
average values
Structure
2,66
Processes
2,64
Leadership and corporate
culture
2,66
Employees and
qualifications
2,47
0 1 2 3 4
not prepared at all
highly prepared
Companies have the biggest
problems in the areas
employees and qualifications

Change Readiness Index (CRI) of Hungarian companies
on a scale from 0 = "not at all" to 100 = "complete"
Overall index.
Structures.
Processes.
Leadership and corporate culture.
Employees and qualifications.
54
58
61
50
51
With the CRI companies are best
positioned regarding processes

3.2:
Please judge the responsiveness to change in …
very well well less well not well at all
your business
17%
46%
27%
10%
your industry
10%
54%
36%
0%
0% 20% 40% 60% 80% 100%
Companies see themselves
as average in the industry regarding
terms of change

Assessment of adaptability
on a scale from 0 = "not at all" to 100 = "complete"
Structures
perceived change readiness
actual change readiness
58
67
perception gap
10
Processes
perceived change readiness
actual change readiness
61
66
5
Management
perceived change readiness
actual change readiness
50
67
17
Employees &
qualifications
perceived change readiness
actual change readiness
51
40 50 60 70
62
11
Companies overestimate
their adaptability to change

3.3: To what extent will your company change in the years ahead?
to a great extent to a moderate extent to a lesser extent not at all
within the next two years
17%
42%
36%
5%
within the next five years
31%
55%
12%
2%
within the next ten years
59%
34%
7%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

3.3:
To what extent will your company change in the years ahead?
Answers „to a great extent “ + „to a moderate extent “
86%
93%
59%
within the next
two years
within the next
five years
within the next
ten years
Change is happening at a rapid pace:
60 percent expect major changes
within two years

3.4:
To what extent have you established Lean Management
in your company?
21%
26%
34%
9% 10%
Level 0 −
no lean management
measures introduced
Stufe 1 −
a continuous
improvement process
has been established
Level 2 −
value added is aligned
with the main Lean
principles
Stufe 3 −
even the indirect areas
already follow Lean
principles
Level 4 −
strategy and organization
comprehensively
implement the Lean
philosophy
Lean on the rise:
47 percent of companies still
have a long way to go

CRI
100
Relationship between the degree of implementation of
Lean Management and the change readiness of companies
90
80
70
60
50
40
30
20
10
0
The Change Readiness
Index (CRI) increases by
3 points with every
increase in the
Lean level
Lean levels
Level 0 Level 1 Level 2 Level 3 Level 4
There is a clear connection
between Lean and
readiness for Change

Ln CRI
5,0
Relationship between the degree of implementation of
Lean Management and the change readiness of companies
4,8
4,5
4,3
4,0
3,8
3,5
3,3
3,0
2,8
The Change Readiness
Index (CRI) increases by
5.25 percentage points
with every increase in the
Lean level
Lean levels
Level 0 Level 1 Level 2 Level 3 Level 4
There is a clear connection
between Lean and
readiness for Change

PART 4:
STATISTICAL
QUESTIONS.

4.1: What industry does your company operate in?
Mechanical and plant engineering
25%
Construction industry
Electrical industry
Automotive industry - OEM/System supplier
Automotive industry – classical/traditional
supplier or subcontractor
9%
12%
10%
10%
Aerospace
Chemical-pharmaceutical industry
Medical engineering
Food and beverage industry
Banks and insurance
Energy
Other services
0%
2%
2%
5%
0%
0%
9%
Other 16%

4.2: How many employees does your company have?
up to 99
23%
100 – 249
250 – 499
16%
16%
500 – 999
12%
1.000 – 4.999
19%
more than 5.000 14%
4.3: How big is your annual turnover?
up to 49 Mio. euros
50 – 249 Mio. euros
250 – 499 Mio. euros 10%
500 Mio. – 1 billion euros 2%
more than 1 billion euros 9%
no details 14%
27%
38%

4.4: What role do you play in your company?
Shareholder / owner
9%
Managing Partner
4%
Managing Director / Board
24%
Division Manager
5%
Main Department Manager
Department or Team Manager
10%
17%
Other
31%

INSIDE EVERY COMPANY
THERE IS AN EVEN BETTER ONE.
STAUFEN.AG
Consulting.Academy.Investment
Blumenstraße 5
73257 Köngen
Germany
+49 7024 8056 0
www.staufen.ag
Balázs Garliczky
Country Manager Hungary
+36 70 236 16 80
b.garliczky@staufen.ag
Róbert Velenczei
Country Manager Hungary
+36 20 380 10 39
robert.velenczei@staufen.ag