Building Block: Results

This building block consists of 7 criteria and 20 characteristics.

The Lion Nathan case study shows three types of indicators:

  • 1) Change of leadership styles and company culture (LSI 1 and OCI®)
  • 2) Business indicators (revenue, EBITDA, Net Profit After Taxes) and results for customers

Figure 5.9 Enabler assessment Act for case study Lion Nathan.

3) Customer satisfaction surveys (five surveys from 2001 to 2004), i.e. perception of customers

These results are excellent, according to the results assessment table (Figure 5.10).

If we look at the table of the assessment of the results, we see some shortcomings.

Scope and Relevance

Results of OCI® and LSI are clearly present and show a positive trend (Figure 511).

As we mentioned earlier, there is not enough information on what impact the planned change in company culture has on the results of the different stakeholders. The 2011 update indicates that Constructive cultures produce higher levels of employee commitment and greater levels of cooperation

Evolution of the organizational culture from 1998 to 2008

Figure 5.10 Results assessment for case study Lion Nathan.

Figure 5.11 Evolution of the organizational culture from 1998 to 2008. (a) Relationship between Constructive Culture and Share Price, (b) Relationship between Constructive Culture and Return on Capital. Research and development by Robert Cooke, PhD and J. Clayton Lafferty, PhD. Copyright © 1973 by Human Synergistics International; All rights reserved. Quentin Jones, Dexter Dunphy, Rosalie Fishman, Margherita Larne and Corinne Canter, In Great Company, Unlocking the Secrets of Cultural Transformation, A Human Synergistics Publication (2006).

(Continued) Evolution of the organizational culture from 1998 to 2008

Figure 5.11 (Continued) Evolution of the organizational culture from 1998 to 2008. (a) Relationship between Constructive Culture and Share Price, (b) Relationship between Constructive Culture and Return on Capital. Research and development by Robert Cooke, PhD and J. Clayton Lafferty, PhD. Copyright© 1973 by Human Synergistics International; All rights reserved. Quentin Jones, Dexter Dunphy, Rosalie Fishman, Margherita Larne and Corinne Canter, In Great Company, Unlocking the Secrets of Cultural Transformation, A Human Synergistics Publication (2006).

across groups in the organization, and have an increased capacity to adapt to the changing marketplace through innovation and productivity. However, no data are shown for the last 10 years. More detailed information is probably present but needs to be verified on-site.

Segmentation

Segmentation is not explicitly explained in the text. However, as the instruments OCI® and LSI are widely used, we can expect that the deployment for OCI® and LSI is done.

There is a good probability the operational results are good to excellent as the results for Return on Capital Employed (ROCE) increase year after year.

Targets

OCI® and LSI results are achieved. However, there is no information available on targets for the other strategic goals. This needs to be verified on-site.

Over the course of 5 years since Lion Nathan commenced using the customer satisfaction survey, the organization’s performance in terms of customer satisfaction has consistently been around 80%. The case study does not mention the target nor the segmentation or benchmark. Therefore, it is difficult to determine the level of excellence of Lion Nathan’s customer satisfaction results. There are no results shown for the period 2004-2008.

Table 51 illustrates well how the Constructive styles gradually increased over the years, while the Defensive styles decreased. This was also the objective specifically addressed for improvement by Lion Nathan top management.

As the company culture shifts to a more Constructive culture (see Figure 5.5), the operational results increase too (see Table 5.2).

Table 5.1 Lion Nathan shift in styles 1998-2004 (percentile score)

Year

Constructive

Passive/Defensive

Aggressive/Defensive

1998

40

55

75

2002

55

40

55

2004

60

35

45

Table 5.2 Evolution of share price (A$), Net Profit after Taxes (million A$) (NPAT) and Return on Capital Employed (ROCE) (%)

Year

Share price

NPAT

ROCE

1998

3.58

2000

3.69

120

6.1

2002

5.17

160

8.9

2004

7.38

220

10.0

2006

8.10

12.7

2008

9.27

13.1

Comparison with Benchmarks

The text doesn’t give information about this comparison. Is a ROCE of 13.1% for the brewery sector exceptional? How have these results evolved between 2008 and 2011? This could be the proof of sustainability of results.

Building Block: Management of Process

This building block consists of nine criteria.

The Lion Nathan case study describes the project of cultural change. The cultural change project is a bi-annual cycle and has been repeated several times. This is different from a normal business process, which is part of daily management. It is not clear why aspects such as risk management, relationship with a strategic plan, systematic simplification of the process, and audit are not applied. We would expect that a major change program,

i.e. cultural change, would be driven by strategic motives.

Table 5.3 gives a quick overview of the assessment results of the management of process of change management at Lion Nathan. Four management activities are not described and need to be verified on-site.

We can also review the maturity of the process. The process being assessed for maturity is the process of change in organizational culture (Figure 5-12).

We assign Lion Nathan a score of 4 for the process of cultural change. This is a good, working level for a successful organization.

Finally, we can assess the last item in the BEST-tool, i.e. process format.

Table 5.3 Assessment of the management of the process of Lion Nathan Best Practice

Subject

NOK

OK

Comment

1

Owner of key process

X

Top managers are responsible for the application of OCI and LSI.

2

Integrity

X

Constructive styles imply also integrity.

3

Risk management

X

Not described in the text.

4

Relation with strategic plan

X

Not described in the text.

5

Adding value

X

Cultural change has a positive impact on business results and customer results.

6

Systematic simplification

X

Simplification of processes and procedures is not described in the text.

7

KPI

X

Mainly OCI and LSI for this case study.

8

Audit

X

Not described in the text.

9

Maturity level of process

X

Building Block: Process Format

This building block consists of 13 criteria.

Here we assess to what extent the process is described fully. Figure 5.13 shows very strong assessment results. All 13 characteristics are considered as OK.

Summary of the Assessment of the Lion Nathan Case Study and Conclusion

The Lion Nathan case study can be considered as a Best Practice. The clear majority of characteristics of the BEST-tool receive high scores for the enabler (Plan, Do, Check, and Act) and results segments. Also, the format of the process gets a high score.

It would be helpful to visit the company to confirm the findings observed in this assessment. Some complementary checks could be conducted, like

Figure 5.12 Assessment of the maturity of the management of the process of Lion Nathan Best Practice.

segmentation of the processes and results, the deployment of the constructive company culture to the lowest levels, satisfaction and motivation of employees and customers, and the alignment of objectives with the strategy of the company. It would also be valuable to verify KPIs, in particular, business results, employee results, and customer results.

 
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