Collyer, M. (2001), "Communication - the route to successful change management: lessons from the Guinness Integrated Business Programme", Measuring Business Excellence, Vol. 5 No. 2. https://doi.org/10.1108/mbe.2001.26705bab.002Download as .RIS
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Copyright © 2001, MCB UP Limited
Communication - the route to successful change management: lessons from the Guinness Integrated Business Programme
Communication - the route to successful change management: lessons from the Guinness Integrated Business Programme
It has been reported that over 75 per cent of all business transformation projects fail. Two of the biggest problems seem to be lack of communication with employees, and the failure to recognise the impact that a change project will have on the business as a whole. Guinness is a successful global player. In 1997, the company realised that it needed to further strengthen its brand presence in the marketplace. To do this it needed to consolidate its regional businesses and adopt more global systems and processes. Up until then the company had been working as a number of separate businesses units around the world and this was hindering the way that Guinness was bringing its product to market. With the help of Druid, Guinness embarked on a project that broke down geographic barriers to ensure that its business processes and IT systems supported its brand development.
Guinness is the brewing division of Diageo, which was formed in 1997 by the merger of Guinness plc and Grand Metropolitan plc. Guinness operates in 150 markets worldwide. It employs more than 10,000 people, and had a turnover of £2,234 million in the year ended 30 June 1999. In line with Diageo's objectives, Guinness has a strategic plan to grow its business significantly in both volume and profit over the next four years.
The Integrated Business Programme
As part of this strategy, Guinness embarked on a project – the Integrated Business Programme (IBP) – which was launched in February 1998. It is a three-year change programme which includes the design and implementation of common business processes and IT systems across five businesses – Guinness Ireland Group, Guinness Global Support, Guinness Great Britain, Guinness Europe and Guinness Bass Import Company in the USA.
The underlying aim of the project was to integrate the international supply chain and replace inefficient activities with more effective and simplified ways of working throughout Guinness. This would provide a sound platform for the company to go forward into the new millennium and face the business challenges of the future with renewed confidence. Two key components underpinned the success of the project. First, Guinness needed to provide access to more accurate information more quickly, so that better and faster decisions could be made. And second, it needed to streamline and integrate its core business processes and systems across what were traditionally separate regional operations.
In 1997, Guinness had re-evaluated its corporate IT systems. It was faced with the choice of going for separate systems within each of the businesses globally, or having just one integrated system. It decided to go with the latter and opted for SAP R/3.
Ray Joy, finance director and IBP sponsor, explains:
The situation forced us to look at our business and the processes we had in place. Both cultural and organisational changes were needed as we had very separate businesses operating globally. Each Guinness site had been working effectively as a separate business unit, but with the development of new global products we realised that this needed to change. We needed visibility of stock orders around the world, to consolidate our suppliers and improve relationships with them, and ultimately just have one set of processes underpinning all of this.
About the same time as Guinness was enhancing its IT strategy, its parent company, Guinness plc, merged with Grand Metropolitan to form Diageo plc. This further fuelled the need for the IBP programme, and the board was doubly determined to resource the project and achieve a successful end.
Communicating the change process
Some of the best people within Guinness were drawn out of all parts of the global business for the project. Although it was painful for the organisation at the time, it demonstrated the company's commitment to the project and it enabled important decisions on the programme to be taken quickly.
"Communication was key during this period and indeed it still is", explains Roy Jakes, IS director of Guinness Global Support and team leader for the implementation. "It was essential to get buy in from everyone across the organisation for a project like this right from the start. Leadership from the top was excellent and really helped in building awareness of what was going on at a time of great cultural change and nervousness."
Having already worked on the conceptual design side of the project, Guinness needed a partner to bring the project to fruition. Ray Joy explains:
"We needed a partner that could help us translate our concepts outside of the IT box. At Guinness it is always important to work with people whose style and culture fit with our own".
Druid's business transformation team demonstrated an understanding of the many issues that Guinness would have to address to make a success of this project. Druid provided Guinness with a methodology that cut through the concept it had already developed and broke it down into key segments and manageable phases of the project. These centred around five integral business processes – finance, sales and operations planning, procurement, customer order fulfilment and product supply.
Guinness planned to increase its growth in volumes from sales to the USA and Europe and exports from Dublin. But to achieve this it needed to enhance its existing logistics processes and systems so that it could improve product freshness and reduce stock levels and costs. By implementing global business processes Guinness would reduce its operating costs and increase its asset utilisation.
From a technical point of view, IBP was not just about the implementation of a SAP solution however. The programme included workflow, datawarehousing and advanced supply chain planning solutions, around and on top of the core ERP implementation. The project also had to cope with the integration of some legacy systems at various Guinness sites.
Guinness has now consolidated all of its transactional financial processes into Shared Services Centres (SSCs) for UK and Ireland. This process involved organisation design, human resource programme management and the management of associated change issues for many of the Guinness employees who were previously based at other sites. The processes within SSCs include consolidation of financial accounting and reporting, online access to up-to-date information, as well as the centralised operation of accounts payable and accounts receivable functions.
As a result of IBP implementation, Guinness has been able to globalise its purchasing processes and rationalise its supplier base. This will be an evolving activity but has already improved relations with suppliers and enabled guided sourcing, which has brought overall benefits to Guinness' spend.
Visibility of orders around the world will greatly improve with the introduction of one integrated plan for product demand and supply. Using Manugistics supply chain planning tools alongside SAP means that Guinness now has advanced supply chain planning processes from demand forecasting of products, to material and production scheduling. The new sales and operations planning process uses Guinness' new datawarehouse to provide critical planning information on product sales.
The new customer order fulfilment processes and implementation of SAP has eased the integration of order processing activities across Guinness' businesses and will lead to the consolidation of order offices as the overall structure of Guinness moves away from a regional basis. On the logistics side of order fulfilment Guinness now has a process which supports greater control of its assets, e.g. kegs of beer, to ensure better traceability of products and ultimately improve customer satisfaction and quality management.
January 1999 saw the first "go-live" of the baseline SAP system across Guinness in the UK and this was followed by the rollout of IBP within the UK in May. In July this was extended to sites in Ireland, and in November customer order fulfilment went live in both the UK and Ireland, and IBP was rolled out to Northern Ireland. Further rollout of customer order fulfilment was planned for the USA and for Guinness Ireland Group in 2000.
Ray Joy comments:
At this stage it is not easy to quantify the benefits of a programme but there are definitely real benefits emerging. Very often intangible benefits can be the most beneficial to the organisation as a whole. For example, the new developments in systems allow better planning, scheduling, packaging and overall consolidation of the business. This is a more efficient way of going to market. We can now have more effective discussions with suppliers and this leads to better relationships with our customers.
Both Joy and Jakes emphasise the importance of focus throughout the programme and agree that the freedom to succeed only comes when clear responsibilities are put in place with agreed success criteria. Senior management presence and involvement is also critical. However, above all, they stress the point that you cannot over communicate what is happening throughout the project – this is the crucial element for success.
Roy Jakes concludes:
Internal PR has been very important throughout the project and we used lots of different ways to communicate what we were doing. We generally tried to make it fun as you've got to use all the levers you can to make a project like this work.
Key lessons to be learned
The lessons to be learned from the Guinness IBP are many and varied (see Table I). From a company perspective, the following quotations from staff involved in the project demonstrate the paramount importance of communication, across the business, between functions and from board room to factory floor:
This is not my project. It is our project to make the business a success.
The seemingly impossible can be achieved through team work, excellent planning and huge effort.
This is a business process change not a systems change.
Stay very close to the business users.
Can you please support your perception with facts.
User transformation testing as a process was excellent.
Strong decisive and focused programme management was crucial to ensuring delivery.
The programme has been a fantastic example of inter-company working and shared learnings across all regions resulting in the achievement of a common goal (finance director).
We are only now beginning to realise the scale of the change that this has brought about.
Congratulations – how does it feel to give birth?
Table I Key lessons learned from the Guinness IBP
Guinness discovered very quickly the differences between a systems project and a change management project – so many of the former fail to deliver their full potential because of a failure to recognise the need to help people adapt to change and provide a business infrastructure that supports/facilitates the process of change. Understanding these needs and communicating them clearly, consistently and widely was arguably the single most important lesson that Guinness learned from the IBP exercise.
From the perspective of a consultant/ change agent, the importance of close contact with the client throughout the process and a clear understanding of the business culture, based on a positive history of effective collaboration, was strongly underlined. Less evident at the outset but a key lesson to emerge from the project was having the ability to recognise when to stand back and allow internal staff to take control of the change management process. Systems projects tend to be more narrowly defined within clearly delineated functional boundaries and so consultants tend to find themselves dealing with "How to" and "What if" questions. With more holistic projects that go beyond "simple" systems implementation, such as the IBP on which Druid was engaged at Guinness, full exploitation of the benefits can only be achieved if the change (people, processes, systems and infrastructure) is organic. The key input that the consultant makes in these circumstances is not the provision of a solution but a catalyst identifying needs, raising awareness and communicating key areas in which internal management should be engaged.
Mark CollyerManagement Consultant Druid plc, Reading, UK
Note1. Druid is a leading IT management consultancy delivering successful business results through business change supported by integrated technology solutions. Its unique methodology helps clients attain their business vision through strategy interpretation, business design, change management and implementation.