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Transforming an organization's management model
from “command and control” to “Beyond Budgeting”:
The Logoplaste case                        GERAL
                                                            A Nossa Empresa
                                                         Os nossos Parceiros
                                                                Our Products
                                             Logoplaste throughout the World
                                                      Logoplaste in numbers
This white paper is based upon a public case presentation held on 21.02.2008
at the InterNews seminar “Beyond Budgeting” in São Paulo.



                                                                           Info@logoplaste.com
                                                                                   logoplaste.com
                                                                               www.logoplaste.com
The company: Logoplaste Group



 Founded in 1976.
 49 plants in Austria, Brazil, Canada, Czech Republic, France, Holland,
 Portugal, Spain, England, USA and Asia.
 3rd largest container transformer in Europe.
 2nd largest container transformer in Brazil employing 450 people.
 1st in integrated operations in Brazil and Europe.
 Approx. 150,000 tons of raw material processed in 2007.
 5.5 billions in plastic packaging sold in 2007 throughout the world.
Our organization in South America


                                    2007: 8 plants
A selection of Logoplaste plastic packaging products in Brazil
The board's vision for the company's future



 “There is a need to grow, so that we do not disappear (...)
 The sheer size of this sector is a driving competitive factor.”
 (Alexandre Relvas, FIEP Conference, February 2002)


 Our goal:
 • “.. 15% annual growth rate in each country”
 • “A new contract every year, in each country”
 (Annual Report 2006)

 Logoplaste in the Future
 Transforming the model to achieve the board's goals:
 “Competitiveness – Growth – One Logoplaste”
Why should we change?

• We are not regarded as a leading company within our sector in Brazil, today.

• Our profitability has decreased over time
  (greater customer demands are not reflected in the price).
• We are overly reactive to customer demands
• We lack agility in responding to the market, resulting in missed opportunities.
• “Paternalism” from Headquarters in Europe has created a comfort zone,
  excessive job stability and bureaucracy in the decision making process.
• We have lost market space and have not developed the market.
    • Is our price too high?
    • Is our structure too expensive?
    • Are we efficient?
    • How long can we stand this?
Conclusion: Given the historic results recorded by Logoplaste over the last five
years, it is not possible to meet the goals set by the Board (15% per year),
if we do not make significant changes.
Oct/07: How the story began...




 10/17/2006   Seminar “Leading people and teams –
              new concepts for the 21st century”
              Participation: Managers
              Speaker: Niels Pflaeging – Director of the Beyond Budgeting Round Table
Our urgency: The world has changed!

                                                            • Recently installed capacity at one of our units is
                            Information Age                   already smaller than what the client needs
                                                            • Continuous production re-scheduling
                    Highly competitive, unpredictable       • Constant changes in new project assumptions

                    Abrupt/unpredictable change                • Product life spans: from eight years to
                                                                 three years (with impact on investment)
                                                               • Demand from customers for greater
                            Short life cycles                    innovation on the part of Logoplaste
 Speed of Change




                                                                    • More complicated contract renewals
                             Price pressure                         • More competitive electronic bids
                                                                    • R$ 1.5 MM in Technology and Change
                                                                      Investments in 1 year
                           Disloyal customers
                                                                    • One project was passed on to our competitors
                                                                      by partner-customer
                          Demanding employees                       • Lost 18MM PET containers from our customer
                                                                    • Electronic bids

                             Transparency                           • Strike at one of our units (Nov/07)
                                                                    • Demand for “positions&salaries“ policy
                   1980      1990     2000      2010    2020          and
                                                                   2030 more recognition

                                                        • ERP Restructuring project
                                                        • Internal and external audits
Today's Critical Success Factors (CSF) require “freedom”

                                                                                  All are important
                                                                                        today!
                            Information Age
                    Highly competitive, unpredictable             Critical Success Factors

                    Abrupt/unpredictable change                       Fast response

                            Short life cycles                           Innovation
 Speed of Change




                             Price pressure                     Operational excellence

                           Disloyal customers                   Customer relationship

                          Demanding employees                     Best place to work

                             Transparency                             Ethical behavior

                   1980      1990     2000      2010    2020   2030
But we have gone down a different path:
“Classic” and “alternative” paths for an organization's evolution


Low degree                                              Differentiation      Classic path:
of decentralization/                                                         Stagnation within the
                                                            Phase            tayloristic model
empowerment.
Out of sync with
today's critical success factors!
                                    Classic path:                   Alternative path:
                                    Bureaucratization and           Transformation,     This is our
                                    functional differentiation,     based on radical    path now!
                                    owed to growth and              decentralization,
                                    application of                  leadership and process
                                    “tayloristic“ principles        change.

High degree of
decentralization/                             Alternative path:                                 Extension of the
empowerment.           Pioneering             Maintenance of an                  Integration    decentralized
Aligned with today's      Phase               empowerment and                       Phase       model throughout
critical success factors!                     confidence culture                                operations


                           Foundation                      Time Scale –                       Several decades old
                                                 increasing age of the organization
Critical Success Factors (CSF)




  Importance of management model:
  Most organizations use the “management model” that
  has been designed for efficiency....while the problem today is complexity*.

                                                  * Multiple critical factors for competitive
                                                    success that include efficiency

  Creating adaptive organizations:
  “The secret of success is not being able to predict the future and create
  an organization that prospers in the unforeseen future.”
                                                     Michael Hammer
Traditional management processes
from the command and control model are “straightjackets.”

                Strategy
                 Strategy

         Strategic Learning cycle



                “Fixed”
                 “Fixed”
              performance
               performance            They conflict with our
                contract
                 contract            Critical Success Factors!


          Management control
                cycle


                 Control
                  Control
Our entire management model actually restricts performance

   Success factors                    Examples of non-alignment

  • Fast response                   • Delays caused by excessive planning processes
  • Innovation                      • Innovation is asphyxiated by central bureaucracy
  • Operations excellence           • Budget mentality: ‘spend it or lose it’
  • Close customer relations        • Incentives created short-termism
  • The best people                 • Motivation is extrinsic rather than intrinsic
  • Ethical behavior                • Individualism causes dysfunctional and even
                                       unethical behavior



  • Financial performance           • Inferior financial performance

                    When pressure increases, the problems get worse!
The Beyond Budgeting model: Rooted in science and in practice.

 Sciences:                                                                                           Practice:
 Thought leaders                            •   Stafford Beer                                 Industry leaders
                                            •   Margareth Wheatley
 (selected)                                 •   Niklas Luhmann                                         (selected)
                                            •   Kevin Kelly
                                            •   Ross Ashby
                                            •   Joseph Bragdon
              •   Douglas McGregor          •   …
              •   Chris Argyris                         Complexity
              •   Jeffrey Pfeffer                        theories     Manufacturing
              •   Stephen Covey
              •   Viktor Frankl
              •   Howard Gardner             Social
              •   Reinhard Sprenger      sciences & HR                         Distribution
              •   …

                  •   Peter Drucker       Leadership &
                  •   Tom Peters                                               Services
                  •   Charles Handy         Change
                  •   John Kotter
                  •   Peter Senge                      Strategy &
                  •   Thomas Davenport                                Government
                                                      performance    & Not-for profit
                  •   Peter Block
                  •   …                               management
                                            •   Charles Horngren
                                            •   Henry Mintzberg
                                            •   Gary Hamel
                                            •   Jeremy Hope
                                            •   Michael Hammer
                                            •   Thomas Johnson
Source: Niels Pflaeging/BBTN                •   …
“Command and control“ and budgetary management: widely
recognized as a problem: BBRT membership between 1998 and 2007
•   ABB                      •   De Beers                 •   Maxager                •   Softlab
•   ABC Technologies         •   DFW Airport              •   Mencap                 •   Solver Inc.
•   ACCO Europe              •   Diageo                   •   Millipore Corp.        •   Southco
•   ACNeilsen                •   Deutsche Bank            •   National Power         •   Standard Life
•   Accenture                •   Deloitte & Touche ERS    •   Navigant Consulting    •   Statoil
•   Alcan Packaging          •   DHL                      •   Novartis               •   Stratature
•   Alstom                   •   EADS                     •   Omgeo LLC              •   T-Online
•   American Express         •   eNiklas                  •   openBC (agora: XING)   •   TelecomNewZealand
•   Anheuser Busch           •   Ernst & Young            •   Park Nicollet Health   •   Texas Instruments
•   Archstone Consulting     •   EBRD                         Services               •   Thames Water
•   Armstrong-Laing          •   Exelon                   •   Parker Hannifin        •   The World Bank
•   Andersen                 •   Halifax                  •   Pentland Group         •   ThinkFast Consulting
•   Ascom                    •   Hammond Suddards         •   proDacapo              •   Time Warner Telecom
•   Barclays Bank            •   HON Comp.                •   Puget Sound Energy     •   TPG
•   BT Group                 •   Housing Associations     •   Priority Health        •   UBS AG
•   Burmah Castrol           •   HP Bulmer                •   Resorts World          •   United Engineering
•   BG Transco               •   Hyperion                 •   Royal Mail                 Forgings
•   Boots The Chemists       •   IBM-BCServices           •   Rugby Group            •   Unilever
•   Cadbury Schweppes        •   Ingersoll Rand           •   Sainsbury's            •   US Analytics
•   Charles Schwab           •   Interbrew UK                 Supermarkets           •   Vaisala Oy
•   CIBC                     •   International Finance    •   SAS Performance        •   Valmet Corporation
•   CIMA                     •   Johnsonville Sausage         Management             •   Verisign
•   CITB                     •   Kaiser Permanente        •   Schneider Electric     •   Wachovia Corp
•   Clariant International   •   Kingfisher               •   Schwan Food            •   Welsh Devel. Agency
•   Cognos                   •   KPMG Consulting          •   Scottish Enterprise    •   West Bromwich
•   Coors Brewers            •   Mars Confectionery       •   Siemens                    Building Society
•   CorVu                    •   Port of Tyne Authority   •   Sight Savers Intl.     •   Wright Williams&Kelly
•   CSIRO Livestock          •   MasterCard               •   SKF                    •   ...


 Fonte: www.bbrt.org
Learning more about Beyond Budgeting:
pioneering organizations we met, visited, researched or interviewed




   - Each one of these companies has developed its own, unique management model,
     according to its reality.
   - However, all of these organizations share the same principles for decentralized
     and adaptive leadership (“Beyond Budgeting principles“), including clearly
     defined values, relative performance contracts and result-orientation, aligned with
     the reality of the “Information Age.”
Critical success factors in today's world
              ½B@2010: An ambitious Transformation Program aimed at building the
              foundations for Logoplaste 2010 centred around 5 themes…
                                  Best for the community
                   Company-oriented   6. Effective governance          Market-oriented
                                                                                         Best to invest in
                                                                                         7. Creation of greater
                                                                                           sustainable value
                                                                Think Differently/
                       Align Minds!                               Disruptively
   Best for doing business                                          Innovate!
    2. Close customer relations
         3. Fast response                Reshape the Way
           4. Innovation                  We Organize!
     5. Operations excellence
                                                                                          Best place to work
                                                                                         1. Best people and teams
                                                           Pursue
                      Nurture our
                                                        Commercial
                         Talent!
                                                      Aggressiveness!
       The common factor among pioneering companies: There is a conviction
       that stakeholders´ interests actually are united within a virtuous cycle, integrating
       today´s critical success factors within one mental model.
                                                               LOGOPLASTE 27
Feb/07: Management workshop and Beyond Budgeting diagnostic




February/2007 Workshop at Logoplaste
              Duration: 1 day.
              Participation: Directors and Managers.
              Workshop facilitators: Valeria Junqueira, César Souza, Niels Pflaeging.
              BBRT Diagnostic Survey conducted on-line.
A formula for change:
How transformational change can be achieved




                        DxVxS>R
       •   Dissatisfaction
       •   Vision
       •   Strategy & Steps (change strategy and the first steps)
       •   Resistance
The BBRT online diagnostic: assessing your perception of the firm,
in relation to the “Beyond Budgeting” model
Our diagnostic survey results: A first ‘case for change’
(Step 1: “Create a sense of urgency”)
              Dissatis                    Strategy            Re-
         f(   -faction
                         x   Vision   x   & Steps
                                                     )>    sistance
Mapping the organizational culture –
an analyses of necessary and desired changes made by the team

           Acquire                         Consolidate                 Eliminate
                Communication
                Initiative
                Accessibility                                    Departmentalization
                Extension                Customer solution
                                                                 Feudalism
  Closer relations with               Service Provider Concept
                                                                 Communication failures
  customers (internal and               Commitment to the
  external)                                company               Reactivity
     Commitment                       Individual competencies    Lack of commitment with
             Speed                                               final overall result
                                         Focus on business
             Agility
                                            profitability        Prima Donnas
                       Innovation
                       Pro-activity

Culture = Habits, beliefs, values, modus operandi
How to change: Documenting the top management's
commitment to change, early-on.




References
Creating profound change, based upon a structured process that
  encompasses both organizational and individual change
                                                                      References
                                                   3.
                                                Beginning

 Organizational change
 process according to                              2.
   John Kotter/HBS                            Neutral Zone


     1.             2.         3.               4.         5.        6.         7.          8.
 Establish a   Create a                   Communicat Create       Generate Consolidate Anchor new
                          Develop a
  sense of coalition that vision and      e the change empower- short term gains and approaches
  urgency      will guide                     vision   ment and    gains    produce     in culture
                           strategy
             the program                              broad based          more change
                                                         action
                                                                                        References




                                                    1.         Individual change
                                                  Ending      process according to
“Double Helix Transformation Framework“                          William Bridges
Source: Niels Pflaeging/BBTN
Mar/07: Managerial workshop “Building a vision“




Workshop “Building a vision for change”
• Participation: Directores and Managers
• Duration: 2 days
• Consultants: Niels Pflaeging and Roberto Ebina
Managerial workshop “Building a vision“
Descriptive vision of what we think about as an organization:
How we envision our company within 3-5 years


  •   “We want a decentralized company, run by an inspiring group of leaders,
      people who can form new leaders to face uncertain situations which the future
      will certainly bring.”
  •   “It will be one of the 10 best companies to work for and will make
      professionals feel attracted enough to want to work for it.”
  •   “It has a fantastic and transparent information system that enables quick
      responses and ready solutions anchored to the desire to continually improve.”
  •   “The people are happy. There is a culture of innovation and creativity, which
      serves as a market benchmark.”
  •   “Our management model is talked about throughout the market as a
      benchmark to be copied. We are asked to bring this experience to other units in
      other countries and to our surprise the parent company as well.”
  •   “People will enjoy working at Logoplaste.”
Questions raised by the participants



•   “Who will be the teams closest to the customers at Logoplaste? This is an answer
    that must be found over the short term as well as the level of autonomy they should
    have.”
•   “How do we connect the center and the outside, leading and not managing? This
    cannot be done by command and control.”
•   “How can we create dialogue and transparency among 100% of the people at
    Logoplaste? Without transparency, there is no change. Several measures refer to
    transparency.”
•   “How can we turn people who occupy space into the enterprising people they
    deserve?”
•   “How do we put an end to our own arrogance?“
Apr/07: Beyond Budgeting conference in São Paulo
and visit from Robin Fraser (BBRT) at Logoplaste
                                                                         e



• Conference: Presentations by BBRT directors related to the Beyond Budgeting
  concept, and case companies that have achieved success because “they apply
  a totally different model” (Toyota, Google, Egon Zehnder and Handelsbanken).
• BBRT meeting (www.bbrt.org) with discussions on transformation hosted at
  Logoplaste´s head office in Brazil.
At Logoplaste Brazil, Beyond Budgeting gets a new brand:
“Decentralize – Lead - Grow”, or DLC
Forming a Guiding Coalition that will lead the change initiative
(Step 2: “Forming the guiding coalition”)

“Make sure that a strong group can be relied upon to direct the first changes
and who have leadership skills, availability to act, credibility, communication
skills, authority and analytical competency.”                      John Kotter


                                                   Members of the Guiding Coalition:
                                                   June/2007:               March/2008:
                                                   1.   Andreia Gil         1.    Andreia Gil
                                                   2.   Carlos Reis         2.    Carlos Reis
                                                   3.   Eugénio Barroso     3.    Eugénio Barroso
                                                   4.   José Pilão          4.    Hideko Teruya
                                                   5.   Júlio Fontana       5.    José Pilão
                                                   6.   Oldecir Antunes     6.    Júlio Fontana
                                                   7.   Ricardo Fagionato   7.    Morivaldo Souza
                                                   8.   Silvio Carvalho     8.    Oldecir Antunes
                                                   9.   Valéria Junqueira   9.    Paulo Finardi
                                                                            10.   Reginaldo Souza
                                                                            11.   Ricardo Fagionato
                                                                            12.   Silvio Carvalho
                                                                            13.   Valéria Junqueira
Jun/07: Putting a guiding coalition together




           The Guiding Coalition's mission:
           • Write a first draft of the “Change Manifesto” (“Version 1.00”).
           • Lead the transformation process, in order to assure success.
           • Involve and influence people to assure implementation of actions.
           • Initiate and support DLC Task Forces.
           • Create internal communication platforms to explain and represent DLC,
             and to align ideas.
           • Continuously measure “process temperature” and stand up to resistance.
Aug-Nov/07: Leadership development activities



• Aug/07: Team Building Workshop
  Participants: Directors and Managers
• Module I – Leadership self-awareness
  (Create self-awareness for devolved leadership)
     • Aug/2007: Managers and directors
     • Sep/2007: Supervisors and plant forepersons
• Module II – Leadership returned and formation of high Performance teams
  (Understand and practice devolved leadership and envision the decentralized model)
     • Oct/2007 – Managers and directors
     • Nov/2007 – Supervisors and forepersons
Aug/07: Team-building workshop with full management team




           Julho/2007
                                        Workshop Team Building




                               Participants: Directors and Managers
                               Objectives:
                               • Create understanding of the group for the
                                  need to work as a team
                               • Identify the first steps of change * Kotter
Jun/07 to Feb/08: Writing up the “Change Manifesto”
(Step 3: “Define the change vision and strategy“)

The document's structure and contents:
1. Urgency for change at Logoplaste do Brasil
   (or: “Why we need to change now!”)
2. Our vision for change
   (or: “What do we want to be”)
3. Business model and values that are
   consistent with our company (reason for being, limits etc.)
   (or: “What will guide us as a firm and as people”)
4. Our strategy for change
   (or: “What will we do”/“How will we get there”)
5. What will we do so that we will not fall back
   into the old model and so that the model
   continues to remain on the minds of people?
   (or: “How can we guarantee that this will work?”)
6. Final comments: What do we get out of this?
The change manifesto
The change manifesto: On hierarchy and human nature


          Theory X                                   Theory Y




      “Why is it that every time             “Motivation and the potential
   I need a pair or arms, there is        to develop, a capacity to assume
     a brain that comes with it?”    responsibility, all that is present in all people.
             (Henry Ford)                        It´s not the executives
                                             who induce these qualities.”
                                                   (Douglas McGregor,
                                          Harvard Business School, 1960).
The change manifesto: Explaining the principles
of a model beyond “command and control”

              Principles                      Do this!                                 Not that!
              Customers and                Customer focus                          Focus on the boss
               responsibility            Responsible teams                            Centralization
 Leadership




              Performance and           Performance culture                       Inspired by the past
                                                               6 devolved
                   freedom        Autonomy and responsibility               Adherence to fixed plans
                                                           leadership principles
              Governance and    Clearly defined objectives and values              Impose objectives
               transparency         Open and shared information                   Restrict information
                 Goals and      Goals related to continual improvement           Fiscal year fixed goals
                  rewards        Rewards related to company results             Reward local fixed goals
 Processes




               Planning and                        6 adaptive management down annual planning
                                  Continuous and inclusive planning    Top
                  controls                               process principles
                                Compare performance against actuals           Variations against fixed plans
               Resources and           Resources on demand                     Annual budget allocations
                coordination       Coordinate dynamic interactions                Departmentalization

Source: BBRT
The change manifesto: 10 guiding principles
(or key values), in line with principle # 5 of the model

         1) Decentralize: create a            6) Dialogue: Talk as equals to
            chain of collaboration and           equals. Work as a team, share.
            empower people
                                              7) Consult: Apprenticeship attitude,
         2) Lead: Influence people to work       you cannot know it all, all of the
            as a team and at their               time.
            maximum capacity
                                              8) Dare: Everything can be
         3) Grow: company growth                 improved, risk, challenge
            depends on the individual            surpass limits
                                              9) Work with zeal: Happiness is
         4) Be transparent: ethics in            contagious; celebrate
            relationships, information and       conquests.
            experience
                                              10) Act as an entrepreneur:
         5) Respect: Do not discriminate.        feel as if you owned the
            Do not be biased. Paternalistic      business, foresee problems
            attitudes are against our            and opportunities.
            principles.

                                                                           te, in any situation.”
                                            tions by all people at Logoplas
            “To serve as a guide for all ac
The change manifesto: The firm as a “collaborative network” (with
  decentralized decision-making power and “devolved” leadership)
  Traditional model (supports efficiency)                  New model (supports complexity)
               (“Taylorism”)                                 (“DLC”/“Beyond Budgeting“)

  Centralized                                                                       Decentralized
  hierarchy,                                                                          network,
“command and                                                                         “Sense and
   control“                         Six critical                                      respond“
                                    success factors
                                    •   Fast response
                                    •   Innovation
                                    •   Operations
                    Strategy
                     Strategy           excellence                     Relative
                                                                        Relative
                                                                     Performance
                                                                      Performance
                                    •   Close customer                 Contracts
   Fixed                                relations                       Contracts     Dynamic
 processes            Fixed
                       Fixed        •   The best people                              Processes
                  performance
                   performance
                    contracts                                         Dynamic
                     contracts      •   Ethical behavior             Coordination


                    Control
                     Control
Sep/07: Spreading DLC with “tandem bicycles”
(Step 4: “Communicate to achieve understanding and acceptance“)

The Tandem Bicycle concept enables involvement of
all persons in the change process, encouraging
dialogue among the 450 people at Logoplaste in Brazil.




                                                           * Kotter
Our change scorecard
Nov/07: “Breaking the pyramid” at one of our eight plants

• Urgency for action in the unit is identified by
  DLC guiding coalition
• 22/23 November – initial event held at unit with 19 people
  from different areas of the local team                            DLC - DESCENTRALIZAR, LIDERAR E
                                                                      DLC - DESCENTRALIZAR, LIDERAR E
                                                                                     CRESCER
     • Transparency in relation to changes to be made                                 CRESCER
                                                                   Nosso modelo de gestão é estruturado em células
                                                                    Nosso modelo de gestão é estruturado em células
       (by commercial director)                                    auto-gerenciáveis e descentralizadas que regem
                                                                     auto-gerenciáveisseguintes princípios: regem
                                                                          através dos e descentralizadas que
                                                                            através dos seguintes princípios:
     • “Museum” exercise and Knowledge Turntables create                          1º. Somos responsáveis pela Qualidade
                                                                                     1º. Somos responsáveis pela Qualidade


       urgency and vision for new model
                                                                                2º. Somos intolerantes com o desperdício
                                                                                   2º. Somos intolerantes com o desperdício
                                                                  3º. Somos responsáveis por cumprir o programa - assegurar a produção

• 28 November – local guiding coalition meeting
                                                                     3º. Somos responsáveis por cumprir o programa - assegurar a produção
                                                                              4º. Somos responsáveis pelo que prometemos
                                                                                 4º. Somos responsáveis pelo que prometemos


     • group being formed by plant manager                     5º. Seremos ágeis, simples e eficientes em todos os processos e combateremos
                                                                  5º. Seremos ágeis, simples e forma de burocracia os processos e combateremos
                                                                                         toda eficientes em todos
                                                                                            toda forma de burocracia


     • outline of the new model is developed                    6º. Trabalharemos como um verdadeiro time, mantendo espírito de equipe,
                                                                   6º. Trabalharemos dinâmica e sinergia - “somos solidários”
                                                                             gerando como um verdadeiro time, mantendo espírito de equipe,
                                                                                gerando dinâmica e sinergia - “somos solidários”


• Detailed preparation of future cell structure,
                                                                7º. Nos comprometemos a compartilhar experiência e desenvolver pessoas
                                                                   7º. Nos comprometemos a compartilhar experiência e desenvolver pessoas
                                                                                8º. Somos parte do problema e da solução

  including job analyses and functions during work sessions                        8º. Somos parte do problema e da solução
                                                                  9º. Nós praticaremos a melhoria continua e estimulamos o ambiente de
                                                                     9º. Nós praticaremos a melhoria continua e estimulamos o ambiente de
                                                                      participação e criatividade - “nenhuma idéia pode ser censurada”

  (local guiding coalition)                                              participação e criatividade - “nenhuma idéia pode ser censurada”
                                                                        10º. Somos transparentes em todas as nossas comunicações
                                                                          10º. Somos transparentes em todas as nossas comunicações

• Weekly work meetings/follow-up by local guiding coalition                  11º. Informações disponíveis com transparência
                                                                               11º. Informações disponíveis com transparência


  (“on Tuesdays“), supported by coalition support group
                                                                          12º. Somos francos e éticos em todas as nossas atitudes
                                                                            12º. Somos francos e éticos em todas as nossas atitudes



• Action groups against waste are being formed
“Breaking the organizational pyramid “ at a production plant:
Designing a new, networked model for a 130-people unit




 • Unit (local) guiding coalition team develops new
   structure, helped by the central guiding coalition;
 • Members of other plants take part in the process;
 • At local coalition meetings, real examples from the plant
   are discussed in detail.
Designing the model in a production unit at a client site
and making it work, by involving a local guiding coalition
Designing a networked organization structure for
 a 130-people unit – an example
                                                                      Shareholders
                                                                      Shareholders     What characterizes a “cell”,
                                        “Team”
    Customer
    Customer                                                                           within the model?
                        Cell 5
                              (all cells within a unit)
                                                              Cell 4                   • It contains several functions,
                       Former                                Former
                     production                                                          roles and duties, which would
                                                           production
                      line No.6                             line No.5                    be traditionally separated into
                                                                                         different departments. A cell
                                                                                         integrates functions and roles
                            Support                    Support                         • It offers and sells products
                                                          cell I
                             cell II
                                                    (rest of former
                                                                                         and/or services on its own,
Banks
Banks                                                departments)                        and is independent in its
                                                                                         decisions about them.
             Cell 1
              Cell 1                                                       Cell 3
        Former serigr.
         Former serigr.
                                                                                       • It is customer focused, in
                                       Support                            Former
        and Production
        and Production                                                  production       that it responds to internal or
           line No.1                    cell III
            line No.1                                                 lines Nos.3/4      external clients, not to hierarchy.
                                                                                       • It is held accountable by the
                                                                                         company leadership and is
                                          Cell 2                                         responsible for it’s own
                                         Former                                          value creation.
                                       production                             Market
                                        line No.2
                                                                              Market   • It applies the 12 Beyond
    Competition
    Competition
                                                                                         Budgeting principles.
Jan/08: Foundation of further DLC Task Force begins
(Step 5: “Empower all others to act”)
• Task Force “Cell networks within the plant units”
  (“Break the pyramid” – create networks of highly autonomous teams responsible for results)
• Task Force “Compensation systems” (reward success based on relative performance)
• Task Force “Financial and non-financial reports” (promote open and shared information)
• Other Task Forces (TFs) and Work Groups (WGs) to be created:
  “TF Cell Network in the main office“, “WG Waste reduction” at units and head office
Apr/08: Ready to put steps 4, 5 and 6 of the
organizational change process into action
                                 • Publish the manifesto;                  • Prepare improvement plans at cells;
                                 • Run more “tandem bicycles“              • Attack waste;
                                 • Create on-line discussion forum.        • Create rational system of variable
Organizational change                                                        compensation;
process according to                                                       • Eliminate some departments.
  John Kotter/HBS


    1.          2.            3.                    4.       5.        6.         7.          8.
Establish a Create a                                       Create   Generate Consolidate Anchor new
                         Develop a              Communi- empower- short-term gains and
 sense of coalition that vision and                                                      approaches
 urgency will guide the strategy                 cate the ment and   gains    produce
                                                 change broad-based                       in culture
            program                                                          more change
                                                  vision   action



  •   Map and remove areas of resistance;                             • Create mechanisms to test new ideas
  •   Create a network of cells and local coalitions for change.        and solutions;
  •   Install DLC Task Forces and work groups.                        • Practice waste elimination culture;
  •   Make information accessible for decision making processes.      • Leadership becomes challenging and
  •   Transfer knowledge and technical competencies to the cells.       is monitored.
Reinventing Logoplaste´s DNA




 If you want one year of prosperity, plant seeds.
 If you want 10 years of prosperity, plant trees.
 If you want 100 years of prosperity, plant people.
                                                Chinese proverb
GERAL
                                         A Nossa Empresa
                                      Os nossos Parceiros
                                             Our Products
Thank you!                Logoplaste throughout the World
                                   Logoplaste in numbers

Maria Valéria Junqueira
valeria.junqueira@logoplaste.ind.br



                                              Info@logoplaste.com
                                                  logoplaste.com
                                              www.logoplaste.com

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BetaCodexC2 - Case Study "Logoplaste" on Transformation

  • 1. Transforming an organization's management model from “command and control” to “Beyond Budgeting”: The Logoplaste case GERAL A Nossa Empresa Os nossos Parceiros Our Products Logoplaste throughout the World Logoplaste in numbers This white paper is based upon a public case presentation held on 21.02.2008 at the InterNews seminar “Beyond Budgeting” in São Paulo. Info@logoplaste.com logoplaste.com www.logoplaste.com
  • 2. The company: Logoplaste Group Founded in 1976. 49 plants in Austria, Brazil, Canada, Czech Republic, France, Holland, Portugal, Spain, England, USA and Asia. 3rd largest container transformer in Europe. 2nd largest container transformer in Brazil employing 450 people. 1st in integrated operations in Brazil and Europe. Approx. 150,000 tons of raw material processed in 2007. 5.5 billions in plastic packaging sold in 2007 throughout the world.
  • 3. Our organization in South America 2007: 8 plants
  • 4. A selection of Logoplaste plastic packaging products in Brazil
  • 5. The board's vision for the company's future “There is a need to grow, so that we do not disappear (...) The sheer size of this sector is a driving competitive factor.” (Alexandre Relvas, FIEP Conference, February 2002) Our goal: • “.. 15% annual growth rate in each country” • “A new contract every year, in each country” (Annual Report 2006) Logoplaste in the Future Transforming the model to achieve the board's goals: “Competitiveness – Growth – One Logoplaste”
  • 6. Why should we change? • We are not regarded as a leading company within our sector in Brazil, today. • Our profitability has decreased over time (greater customer demands are not reflected in the price). • We are overly reactive to customer demands • We lack agility in responding to the market, resulting in missed opportunities. • “Paternalism” from Headquarters in Europe has created a comfort zone, excessive job stability and bureaucracy in the decision making process. • We have lost market space and have not developed the market. • Is our price too high? • Is our structure too expensive? • Are we efficient? • How long can we stand this? Conclusion: Given the historic results recorded by Logoplaste over the last five years, it is not possible to meet the goals set by the Board (15% per year), if we do not make significant changes.
  • 7. Oct/07: How the story began... 10/17/2006 Seminar “Leading people and teams – new concepts for the 21st century” Participation: Managers Speaker: Niels Pflaeging – Director of the Beyond Budgeting Round Table
  • 8. Our urgency: The world has changed! • Recently installed capacity at one of our units is Information Age already smaller than what the client needs • Continuous production re-scheduling Highly competitive, unpredictable • Constant changes in new project assumptions Abrupt/unpredictable change • Product life spans: from eight years to three years (with impact on investment) • Demand from customers for greater Short life cycles innovation on the part of Logoplaste Speed of Change • More complicated contract renewals Price pressure • More competitive electronic bids • R$ 1.5 MM in Technology and Change Investments in 1 year Disloyal customers • One project was passed on to our competitors by partner-customer Demanding employees • Lost 18MM PET containers from our customer • Electronic bids Transparency • Strike at one of our units (Nov/07) • Demand for “positions&salaries“ policy 1980 1990 2000 2010 2020 and 2030 more recognition • ERP Restructuring project • Internal and external audits
  • 9. Today's Critical Success Factors (CSF) require “freedom” All are important today! Information Age Highly competitive, unpredictable Critical Success Factors Abrupt/unpredictable change Fast response Short life cycles Innovation Speed of Change Price pressure Operational excellence Disloyal customers Customer relationship Demanding employees Best place to work Transparency Ethical behavior 1980 1990 2000 2010 2020 2030
  • 10. But we have gone down a different path: “Classic” and “alternative” paths for an organization's evolution Low degree Differentiation Classic path: of decentralization/ Stagnation within the Phase tayloristic model empowerment. Out of sync with today's critical success factors! Classic path: Alternative path: Bureaucratization and Transformation, This is our functional differentiation, based on radical path now! owed to growth and decentralization, application of leadership and process “tayloristic“ principles change. High degree of decentralization/ Alternative path: Extension of the empowerment. Pioneering Maintenance of an Integration decentralized Aligned with today's Phase empowerment and Phase model throughout critical success factors! confidence culture operations Foundation Time Scale – Several decades old increasing age of the organization
  • 11. Critical Success Factors (CSF) Importance of management model: Most organizations use the “management model” that has been designed for efficiency....while the problem today is complexity*. * Multiple critical factors for competitive success that include efficiency Creating adaptive organizations: “The secret of success is not being able to predict the future and create an organization that prospers in the unforeseen future.” Michael Hammer
  • 12. Traditional management processes from the command and control model are “straightjackets.” Strategy Strategy Strategic Learning cycle “Fixed” “Fixed” performance performance They conflict with our contract contract Critical Success Factors! Management control cycle Control Control
  • 13. Our entire management model actually restricts performance Success factors Examples of non-alignment • Fast response • Delays caused by excessive planning processes • Innovation • Innovation is asphyxiated by central bureaucracy • Operations excellence • Budget mentality: ‘spend it or lose it’ • Close customer relations • Incentives created short-termism • The best people • Motivation is extrinsic rather than intrinsic • Ethical behavior • Individualism causes dysfunctional and even unethical behavior • Financial performance • Inferior financial performance When pressure increases, the problems get worse!
  • 14. The Beyond Budgeting model: Rooted in science and in practice. Sciences: Practice: Thought leaders • Stafford Beer Industry leaders • Margareth Wheatley (selected) • Niklas Luhmann (selected) • Kevin Kelly • Ross Ashby • Joseph Bragdon • Douglas McGregor • … • Chris Argyris Complexity • Jeffrey Pfeffer theories Manufacturing • Stephen Covey • Viktor Frankl • Howard Gardner Social • Reinhard Sprenger sciences & HR Distribution • … • Peter Drucker Leadership & • Tom Peters Services • Charles Handy Change • John Kotter • Peter Senge Strategy & • Thomas Davenport Government performance & Not-for profit • Peter Block • … management • Charles Horngren • Henry Mintzberg • Gary Hamel • Jeremy Hope • Michael Hammer • Thomas Johnson Source: Niels Pflaeging/BBTN • …
  • 15. “Command and control“ and budgetary management: widely recognized as a problem: BBRT membership between 1998 and 2007 • ABB • De Beers • Maxager • Softlab • ABC Technologies • DFW Airport • Mencap • Solver Inc. • ACCO Europe • Diageo • Millipore Corp. • Southco • ACNeilsen • Deutsche Bank • National Power • Standard Life • Accenture • Deloitte & Touche ERS • Navigant Consulting • Statoil • Alcan Packaging • DHL • Novartis • Stratature • Alstom • EADS • Omgeo LLC • T-Online • American Express • eNiklas • openBC (agora: XING) • TelecomNewZealand • Anheuser Busch • Ernst & Young • Park Nicollet Health • Texas Instruments • Archstone Consulting • EBRD Services • Thames Water • Armstrong-Laing • Exelon • Parker Hannifin • The World Bank • Andersen • Halifax • Pentland Group • ThinkFast Consulting • Ascom • Hammond Suddards • proDacapo • Time Warner Telecom • Barclays Bank • HON Comp. • Puget Sound Energy • TPG • BT Group • Housing Associations • Priority Health • UBS AG • Burmah Castrol • HP Bulmer • Resorts World • United Engineering • BG Transco • Hyperion • Royal Mail Forgings • Boots The Chemists • IBM-BCServices • Rugby Group • Unilever • Cadbury Schweppes • Ingersoll Rand • Sainsbury's • US Analytics • Charles Schwab • Interbrew UK Supermarkets • Vaisala Oy • CIBC • International Finance • SAS Performance • Valmet Corporation • CIMA • Johnsonville Sausage Management • Verisign • CITB • Kaiser Permanente • Schneider Electric • Wachovia Corp • Clariant International • Kingfisher • Schwan Food • Welsh Devel. Agency • Cognos • KPMG Consulting • Scottish Enterprise • West Bromwich • Coors Brewers • Mars Confectionery • Siemens Building Society • CorVu • Port of Tyne Authority • Sight Savers Intl. • Wright Williams&Kelly • CSIRO Livestock • MasterCard • SKF • ... Fonte: www.bbrt.org
  • 16. Learning more about Beyond Budgeting: pioneering organizations we met, visited, researched or interviewed - Each one of these companies has developed its own, unique management model, according to its reality. - However, all of these organizations share the same principles for decentralized and adaptive leadership (“Beyond Budgeting principles“), including clearly defined values, relative performance contracts and result-orientation, aligned with the reality of the “Information Age.”
  • 17. Critical success factors in today's world ½B@2010: An ambitious Transformation Program aimed at building the foundations for Logoplaste 2010 centred around 5 themes… Best for the community Company-oriented 6. Effective governance Market-oriented Best to invest in 7. Creation of greater sustainable value Think Differently/ Align Minds! Disruptively Best for doing business Innovate! 2. Close customer relations 3. Fast response Reshape the Way 4. Innovation We Organize! 5. Operations excellence Best place to work 1. Best people and teams Pursue Nurture our Commercial Talent! Aggressiveness! The common factor among pioneering companies: There is a conviction that stakeholders´ interests actually are united within a virtuous cycle, integrating today´s critical success factors within one mental model. LOGOPLASTE 27
  • 18. Feb/07: Management workshop and Beyond Budgeting diagnostic February/2007 Workshop at Logoplaste Duration: 1 day. Participation: Directors and Managers. Workshop facilitators: Valeria Junqueira, César Souza, Niels Pflaeging. BBRT Diagnostic Survey conducted on-line.
  • 19. A formula for change: How transformational change can be achieved DxVxS>R • Dissatisfaction • Vision • Strategy & Steps (change strategy and the first steps) • Resistance
  • 20. The BBRT online diagnostic: assessing your perception of the firm, in relation to the “Beyond Budgeting” model
  • 21. Our diagnostic survey results: A first ‘case for change’ (Step 1: “Create a sense of urgency”) Dissatis Strategy Re- f( -faction x Vision x & Steps )> sistance
  • 22. Mapping the organizational culture – an analyses of necessary and desired changes made by the team Acquire Consolidate Eliminate Communication Initiative Accessibility Departmentalization Extension Customer solution Feudalism Closer relations with Service Provider Concept Communication failures customers (internal and Commitment to the external) company Reactivity Commitment Individual competencies Lack of commitment with Speed final overall result Focus on business Agility profitability Prima Donnas Innovation Pro-activity Culture = Habits, beliefs, values, modus operandi
  • 23. How to change: Documenting the top management's commitment to change, early-on. References
  • 24. Creating profound change, based upon a structured process that encompasses both organizational and individual change References 3. Beginning Organizational change process according to 2. John Kotter/HBS Neutral Zone 1. 2. 3. 4. 5. 6. 7. 8. Establish a Create a Communicat Create Generate Consolidate Anchor new Develop a sense of coalition that vision and e the change empower- short term gains and approaches urgency will guide vision ment and gains produce in culture strategy the program broad based more change action References 1. Individual change Ending process according to “Double Helix Transformation Framework“ William Bridges Source: Niels Pflaeging/BBTN
  • 25. Mar/07: Managerial workshop “Building a vision“ Workshop “Building a vision for change” • Participation: Directores and Managers • Duration: 2 days • Consultants: Niels Pflaeging and Roberto Ebina
  • 27. Descriptive vision of what we think about as an organization: How we envision our company within 3-5 years • “We want a decentralized company, run by an inspiring group of leaders, people who can form new leaders to face uncertain situations which the future will certainly bring.” • “It will be one of the 10 best companies to work for and will make professionals feel attracted enough to want to work for it.” • “It has a fantastic and transparent information system that enables quick responses and ready solutions anchored to the desire to continually improve.” • “The people are happy. There is a culture of innovation and creativity, which serves as a market benchmark.” • “Our management model is talked about throughout the market as a benchmark to be copied. We are asked to bring this experience to other units in other countries and to our surprise the parent company as well.” • “People will enjoy working at Logoplaste.”
  • 28. Questions raised by the participants • “Who will be the teams closest to the customers at Logoplaste? This is an answer that must be found over the short term as well as the level of autonomy they should have.” • “How do we connect the center and the outside, leading and not managing? This cannot be done by command and control.” • “How can we create dialogue and transparency among 100% of the people at Logoplaste? Without transparency, there is no change. Several measures refer to transparency.” • “How can we turn people who occupy space into the enterprising people they deserve?” • “How do we put an end to our own arrogance?“
  • 29. Apr/07: Beyond Budgeting conference in São Paulo and visit from Robin Fraser (BBRT) at Logoplaste e • Conference: Presentations by BBRT directors related to the Beyond Budgeting concept, and case companies that have achieved success because “they apply a totally different model” (Toyota, Google, Egon Zehnder and Handelsbanken). • BBRT meeting (www.bbrt.org) with discussions on transformation hosted at Logoplaste´s head office in Brazil.
  • 30. At Logoplaste Brazil, Beyond Budgeting gets a new brand: “Decentralize – Lead - Grow”, or DLC
  • 31. Forming a Guiding Coalition that will lead the change initiative (Step 2: “Forming the guiding coalition”) “Make sure that a strong group can be relied upon to direct the first changes and who have leadership skills, availability to act, credibility, communication skills, authority and analytical competency.” John Kotter Members of the Guiding Coalition: June/2007: March/2008: 1. Andreia Gil 1. Andreia Gil 2. Carlos Reis 2. Carlos Reis 3. Eugénio Barroso 3. Eugénio Barroso 4. José Pilão 4. Hideko Teruya 5. Júlio Fontana 5. José Pilão 6. Oldecir Antunes 6. Júlio Fontana 7. Ricardo Fagionato 7. Morivaldo Souza 8. Silvio Carvalho 8. Oldecir Antunes 9. Valéria Junqueira 9. Paulo Finardi 10. Reginaldo Souza 11. Ricardo Fagionato 12. Silvio Carvalho 13. Valéria Junqueira
  • 32. Jun/07: Putting a guiding coalition together The Guiding Coalition's mission: • Write a first draft of the “Change Manifesto” (“Version 1.00”). • Lead the transformation process, in order to assure success. • Involve and influence people to assure implementation of actions. • Initiate and support DLC Task Forces. • Create internal communication platforms to explain and represent DLC, and to align ideas. • Continuously measure “process temperature” and stand up to resistance.
  • 33. Aug-Nov/07: Leadership development activities • Aug/07: Team Building Workshop Participants: Directors and Managers • Module I – Leadership self-awareness (Create self-awareness for devolved leadership) • Aug/2007: Managers and directors • Sep/2007: Supervisors and plant forepersons • Module II – Leadership returned and formation of high Performance teams (Understand and practice devolved leadership and envision the decentralized model) • Oct/2007 – Managers and directors • Nov/2007 – Supervisors and forepersons
  • 34. Aug/07: Team-building workshop with full management team Julho/2007 Workshop Team Building Participants: Directors and Managers Objectives: • Create understanding of the group for the need to work as a team • Identify the first steps of change * Kotter
  • 35. Jun/07 to Feb/08: Writing up the “Change Manifesto” (Step 3: “Define the change vision and strategy“) The document's structure and contents: 1. Urgency for change at Logoplaste do Brasil (or: “Why we need to change now!”) 2. Our vision for change (or: “What do we want to be”) 3. Business model and values that are consistent with our company (reason for being, limits etc.) (or: “What will guide us as a firm and as people”) 4. Our strategy for change (or: “What will we do”/“How will we get there”) 5. What will we do so that we will not fall back into the old model and so that the model continues to remain on the minds of people? (or: “How can we guarantee that this will work?”) 6. Final comments: What do we get out of this?
  • 37. The change manifesto: On hierarchy and human nature Theory X Theory Y “Why is it that every time “Motivation and the potential I need a pair or arms, there is to develop, a capacity to assume a brain that comes with it?” responsibility, all that is present in all people. (Henry Ford) It´s not the executives who induce these qualities.” (Douglas McGregor, Harvard Business School, 1960).
  • 38. The change manifesto: Explaining the principles of a model beyond “command and control” Principles Do this! Not that! Customers and Customer focus Focus on the boss responsibility Responsible teams Centralization Leadership Performance and Performance culture Inspired by the past 6 devolved freedom Autonomy and responsibility Adherence to fixed plans leadership principles Governance and Clearly defined objectives and values Impose objectives transparency Open and shared information Restrict information Goals and Goals related to continual improvement Fiscal year fixed goals rewards Rewards related to company results Reward local fixed goals Processes Planning and 6 adaptive management down annual planning Continuous and inclusive planning Top controls process principles Compare performance against actuals Variations against fixed plans Resources and Resources on demand Annual budget allocations coordination Coordinate dynamic interactions Departmentalization Source: BBRT
  • 39. The change manifesto: 10 guiding principles (or key values), in line with principle # 5 of the model 1) Decentralize: create a 6) Dialogue: Talk as equals to chain of collaboration and equals. Work as a team, share. empower people 7) Consult: Apprenticeship attitude, 2) Lead: Influence people to work you cannot know it all, all of the as a team and at their time. maximum capacity 8) Dare: Everything can be 3) Grow: company growth improved, risk, challenge depends on the individual surpass limits 9) Work with zeal: Happiness is 4) Be transparent: ethics in contagious; celebrate relationships, information and conquests. experience 10) Act as an entrepreneur: 5) Respect: Do not discriminate. feel as if you owned the Do not be biased. Paternalistic business, foresee problems attitudes are against our and opportunities. principles. te, in any situation.” tions by all people at Logoplas “To serve as a guide for all ac
  • 40. The change manifesto: The firm as a “collaborative network” (with decentralized decision-making power and “devolved” leadership) Traditional model (supports efficiency) New model (supports complexity) (“Taylorism”) (“DLC”/“Beyond Budgeting“) Centralized Decentralized hierarchy, network, “command and “Sense and control“ Six critical respond“ success factors • Fast response • Innovation • Operations Strategy Strategy excellence Relative Relative Performance Performance • Close customer Contracts Fixed relations Contracts Dynamic processes Fixed Fixed • The best people Processes performance performance contracts Dynamic contracts • Ethical behavior Coordination Control Control
  • 41. Sep/07: Spreading DLC with “tandem bicycles” (Step 4: “Communicate to achieve understanding and acceptance“) The Tandem Bicycle concept enables involvement of all persons in the change process, encouraging dialogue among the 450 people at Logoplaste in Brazil. * Kotter
  • 43. Nov/07: “Breaking the pyramid” at one of our eight plants • Urgency for action in the unit is identified by DLC guiding coalition • 22/23 November – initial event held at unit with 19 people from different areas of the local team DLC - DESCENTRALIZAR, LIDERAR E DLC - DESCENTRALIZAR, LIDERAR E CRESCER • Transparency in relation to changes to be made CRESCER Nosso modelo de gestão é estruturado em células Nosso modelo de gestão é estruturado em células (by commercial director) auto-gerenciáveis e descentralizadas que regem auto-gerenciáveisseguintes princípios: regem através dos e descentralizadas que através dos seguintes princípios: • “Museum” exercise and Knowledge Turntables create 1º. Somos responsáveis pela Qualidade 1º. Somos responsáveis pela Qualidade urgency and vision for new model 2º. Somos intolerantes com o desperdício 2º. Somos intolerantes com o desperdício 3º. Somos responsáveis por cumprir o programa - assegurar a produção • 28 November – local guiding coalition meeting 3º. Somos responsáveis por cumprir o programa - assegurar a produção 4º. Somos responsáveis pelo que prometemos 4º. Somos responsáveis pelo que prometemos • group being formed by plant manager 5º. Seremos ágeis, simples e eficientes em todos os processos e combateremos 5º. Seremos ágeis, simples e forma de burocracia os processos e combateremos toda eficientes em todos toda forma de burocracia • outline of the new model is developed 6º. Trabalharemos como um verdadeiro time, mantendo espírito de equipe, 6º. Trabalharemos dinâmica e sinergia - “somos solidários” gerando como um verdadeiro time, mantendo espírito de equipe, gerando dinâmica e sinergia - “somos solidários” • Detailed preparation of future cell structure, 7º. Nos comprometemos a compartilhar experiência e desenvolver pessoas 7º. Nos comprometemos a compartilhar experiência e desenvolver pessoas 8º. Somos parte do problema e da solução including job analyses and functions during work sessions 8º. Somos parte do problema e da solução 9º. Nós praticaremos a melhoria continua e estimulamos o ambiente de 9º. Nós praticaremos a melhoria continua e estimulamos o ambiente de participação e criatividade - “nenhuma idéia pode ser censurada” (local guiding coalition) participação e criatividade - “nenhuma idéia pode ser censurada” 10º. Somos transparentes em todas as nossas comunicações 10º. Somos transparentes em todas as nossas comunicações • Weekly work meetings/follow-up by local guiding coalition 11º. Informações disponíveis com transparência 11º. Informações disponíveis com transparência (“on Tuesdays“), supported by coalition support group 12º. Somos francos e éticos em todas as nossas atitudes 12º. Somos francos e éticos em todas as nossas atitudes • Action groups against waste are being formed
  • 44. “Breaking the organizational pyramid “ at a production plant: Designing a new, networked model for a 130-people unit • Unit (local) guiding coalition team develops new structure, helped by the central guiding coalition; • Members of other plants take part in the process; • At local coalition meetings, real examples from the plant are discussed in detail.
  • 45. Designing the model in a production unit at a client site and making it work, by involving a local guiding coalition
  • 46. Designing a networked organization structure for a 130-people unit – an example Shareholders Shareholders What characterizes a “cell”, “Team” Customer Customer within the model? Cell 5 (all cells within a unit) Cell 4 • It contains several functions, Former Former production roles and duties, which would production line No.6 line No.5 be traditionally separated into different departments. A cell integrates functions and roles Support Support • It offers and sells products cell I cell II (rest of former and/or services on its own, Banks Banks departments) and is independent in its decisions about them. Cell 1 Cell 1 Cell 3 Former serigr. Former serigr. • It is customer focused, in Support Former and Production and Production production that it responds to internal or line No.1 cell III line No.1 lines Nos.3/4 external clients, not to hierarchy. • It is held accountable by the company leadership and is Cell 2 responsible for it’s own Former value creation. production Market line No.2 Market • It applies the 12 Beyond Competition Competition Budgeting principles.
  • 47. Jan/08: Foundation of further DLC Task Force begins (Step 5: “Empower all others to act”) • Task Force “Cell networks within the plant units” (“Break the pyramid” – create networks of highly autonomous teams responsible for results) • Task Force “Compensation systems” (reward success based on relative performance) • Task Force “Financial and non-financial reports” (promote open and shared information) • Other Task Forces (TFs) and Work Groups (WGs) to be created: “TF Cell Network in the main office“, “WG Waste reduction” at units and head office
  • 48. Apr/08: Ready to put steps 4, 5 and 6 of the organizational change process into action • Publish the manifesto; • Prepare improvement plans at cells; • Run more “tandem bicycles“ • Attack waste; • Create on-line discussion forum. • Create rational system of variable Organizational change compensation; process according to • Eliminate some departments. John Kotter/HBS 1. 2. 3. 4. 5. 6. 7. 8. Establish a Create a Create Generate Consolidate Anchor new Develop a Communi- empower- short-term gains and sense of coalition that vision and approaches urgency will guide the strategy cate the ment and gains produce change broad-based in culture program more change vision action • Map and remove areas of resistance; • Create mechanisms to test new ideas • Create a network of cells and local coalitions for change. and solutions; • Install DLC Task Forces and work groups. • Practice waste elimination culture; • Make information accessible for decision making processes. • Leadership becomes challenging and • Transfer knowledge and technical competencies to the cells. is monitored.
  • 49. Reinventing Logoplaste´s DNA If you want one year of prosperity, plant seeds. If you want 10 years of prosperity, plant trees. If you want 100 years of prosperity, plant people. Chinese proverb
  • 50. GERAL A Nossa Empresa Os nossos Parceiros Our Products Thank you! Logoplaste throughout the World Logoplaste in numbers Maria Valéria Junqueira valeria.junqueira@logoplaste.ind.br Info@logoplaste.com logoplaste.com www.logoplaste.com