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CEM Change v1

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Marta Ritzer

on 13 November 2014

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Transcript of CEM Change v1

Organizational Change
Marie, Tetsuro, Yu, Ahmad, Toshi, Marta
Think Different
Change!
Q & A
Organizational Change
• Organizations face rapid change like never before.

• Globalization has increased markets and opportunities.

• Organizational change is undertaken to improve the performance and effectiveness of an organization.

Case 1: Change through innovation
Universal forces of the 21st century:
3 Case Studies
Change through Innovation

Change through Globalisation

Change through Market Conditions

Tokio Marine & Nichido Fire Insurance Co., Ltd.

Traditional non-life insurance company in Japan

Established in 1879 (135 years history, oldest)

24% of market share in Japanese non-life insurance market (biggest)

Case 2: Change through globalization
Sumitomo Corporation

Traditional trading company based in Tokio

Agrochemical industry ($50bn market)

Started operations in 1970's

Case 3: Change through Market Conditions
NCTC is a Dubai based general contracting company that specializes in infrastructure and road construction. 

NCTC has been in the UAE market for over 50 years and employs a workforce of 8000 professionals from over 20 nationalities. 

NCTC undertakes turnkey government contracts.

Case 3: New rules
Market post 2009 & Economic Crisis:

* Clients ( Government authorities ) unable to finance on going projects
* A severe slowdown in payment and no planned projects on the horizon
* NCTC took on projects in other Emirates due to non payment 
* NCTC facing difficulty in paying bank interest on project credit facility
* Majority of projects floated in the market are category 1 & 3  

Case 2: Context
Trading => distributor (fabless)
30 countries in the world
3 - 5 % of market share
Strategy & planning are totally different
Strategy and planning are totally different things; combining them in one process is a toxic mixture.

Case 3: Context
NCTC enters bidding process for government clients to win projects

Majority of projects floated in the market are divided into 3 categories:
$200M> Contract Value 
$200M< Contract Value <$900M
$900M< Contract Value 

NCTC's capable of targeting projects
ranging from $200M to $900M

Case 3: Strategic Options - Change
1) Raise capital and invest in new plant and machinery to target $900M and above projects

2) Downsize the company to target the $200M and below projects. 

Case 1: New rules
The progress of advanced safety vehicles
→ ASV technology: already commercially available
→ Self driving technology: within 20 years
→ Decrease of car accidents
→ Driver's risk decrease (automobile insurance sales will drop)
→ Manufacturer's risk (increase in product liability or new risks)

A significant decrease in the sales of non-life insurance companies

Case 1: Context
Domestic non-life insurance (1879)→ Domestic life insurance (1996)→
International insurance (2002)

Average annual growth rate for the past 5 years
(Domestic non-life insurance) 4%
(Domestic life insurance) 13%
(International insurance) 32%

Domestic & international non-life insurance
Summary & conclusion
We see these established companies having to change

Factors that need to be taken into account:

- Competitive landscape
- Size of the market
- Costs of restructuring
- Balance sheet & cash flow statement
- Merger risks
- Supply chain
- Sociopolitical changes

Flashes of insight :)
Harnessing insight to make choices
Strategy is about harnessing insight to make choices; about the best use of limited resources in order to create competitive advantage.

Case 1: Strategic Options - Change
1. Invest in research and development of new products and services for auto manufacturer's risks

2. Expand the domestic non-life insurance business through acquisition

3. Focus on the other business domains (life-insurance and international insurance)

The Challenge We Face
Organizations create future through strategies

Ability to create winning strategies and
mobilize employee commitment is key

Trouble: vague definitions of strategy and change

It’s crucial to analyze market and
competitive forces
Strategic Leadership
Strategy is about harnessing insight to make choices; about the best use of limited resources in order to create competitive advantage.

Strategy and planning are totally different things; combining them in one process is a toxic mixture.

The distillation of strategy is an organization’s Winning Proposition; what unique benefits will we offer our customers/stakeholders which provide a compelling reason for them to do business with us?

The essential elements are clarity and simplicity; a well crafted winning proposition produces the few key priorities on which the organization rigorously pursues in order to win.

Case 2: Strategic Options / Change
1. Company mergers within Japan

2. Alliance with mid size foreign company

3. Expansion of supply chain (buy up of retail market)

4. Expansion of product portfolio (i.e. fertilizers - $10bn market)

The distillation of strategy is an organization’s winning proposition
What unique benefits will we offer our customers/stakeholders which provide a compelling reason for them to do business with us?

Case 2: New rules
"Leadership is a public act. You cannot lead in private. Leadership is that moment when people are looking to you" Grant Ackerman

“In this time of rapid change – a world extraordinarily linked together – things move incredibly fast.” Cliff Schorer
 
“Companies cannot keep using the same business model and survive.” Cliff Schorer

"Cannot react to what's out there. Ned to think how to change things and impact" Cliff Schorer
 
“Today, all organizations have to move quickly.” Peter Meola

"Execution without strategy is the fog before defeat" Peter Meola
Full transcript