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Mastering the Change Management Challenge

Shared Services Week Europe 2011May 9-11, Amsterdam

Mike ColicchioManaging Director, Celanese Hungary Kft.

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′Nothing endures but change.

′

Heraclitus

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Outline

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Introduction: Celanese

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Change: is it necessary?

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Preparing for Change

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Managing expectation when Change comes

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Change when it happens: acceptance

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What to change after Change happened?

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Celanese

Corporation: an overview

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We produce chemicals and advanced materials used in consumer products and industrial applications

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95% of our products hold a leading market position

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Based in Dallas, Texas, we have approximately 7,250 employees worldwide

(nearly 400 in Budapest)

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A Fortune 500 company

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Over $5.9

billion in sales in 2010

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55

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Budapest Business Services Center

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Established in 2007 to centralize and standardize back-office activities

Finance & Accounting

Customer Service

Delivery and Logistics

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Providing a range of services to other members of the Celanese Corporation in 10 countries in Europe and North-America

General Ledger

Accounts Payable

Accounts Receivable

Treasury

Master Data

Growing to... Internal Audit

Procurement

IT Security

Communications

Business Planning & Analysis

Customer Service

Delivery & Logistics

Celanese in Hungary

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Change: is it necessary?►

„Nothing endures but change.”►

Identifying what drives the ChangeOrganization mindset?

Adapting to rapidily changing markets?

Financial reasons?

Philosophy?

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Identifying the kind of Change needeExpansion or closure?

Outsourcing or centralizing?

Change in leadership?

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Identifying the main challenges of ChangeDoes it vary among organizations or is it the same challenge for

all?

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No two Change is every the same!

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Change, the necessary evil►

We live in a globalized world → if you don’t want to fall behind you have to adapt to Change

And do it rapidly!

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Never settle for almost great –

pursue premier!Achieving top performance is not possible if you are static

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Change is neither good nor bad, it’s a state►

Main challenges:How to get people to change or transition?

How to create positive messaging even when change is the

„neccesary evil”?

How to keep your people motivated when you’re cutting down jobs?

How to maintain the image of a credible employer?

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Change Management: the most important tool

at your disposal

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Preparing for Change►

Create a culture of Change, not just a one-off opportunityCulture creation takes time, but it’s more beneficial in the long run

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Do the homework!Map your stakeholders thoroughly

Prepare for the unexpected: keep an open mind all the way

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Personal leadership: the key for successful Change management

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Identify the right peopleWhen it comes to managing Change, you can only settle for the best

Change Management Expert: laying down the rules

You: the face of Change

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Effective communication

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Drive and lead Change, don’t just go with the flowFirst and foremost importance: get people to embrace the change

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Celanese Case Snapshot 1.Budapest Finance Migration►From an admin organization scattered around the globe →

to a

world-class Business Services Center

2006 Sep 09

Financ

e TrackWave 1

Involve the Change Management Team all the way

Jan 07 Jul 07 Jan 08 Jul 08 Jan 09

Planning period

4 Waves of hiring for migrated processes

4 Waves of hiring for migrated processes

Migration CompleteFinance

Track Wave 2 Finance

Track Wave 3 Finance

TrackWave 4

BBSCLaunch

Change Manager / Team on board Supply Chain transition

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Managing Expectations when the Change comes

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Prepare for honest & continuous communication

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Manage down (employees), manage up (board)

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Meet with your stakeholders regularlySet up a steering committee, but be perpared to lead!

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Set the schedule, set KPIs

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Manage the mind of business leadersDo all it takes to secure complete buy-in

If back-up is lacking, a Change cannot be successful...

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Good documentation is essential

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Map your messages consistentlyMake sure to keep every stakeholder updated

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Be willing to accept your mistakes!

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Choosing the Right Person

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Change Management: a profession

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Two key figures: You & Change ManagerYou are the face of the Change

The Change Manager is the body

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Choosing the right person is crucial

to succeedDiversity of person is essential in a Change Manager Role!

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Change Manager: ideally a local person

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A good Change Manager is able to adapt

to the Change all the way

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Always assess the Change Management TeamChallenge the status quo

If necessary, change the composition of the team as you go

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Change at Large: acceptance►

Identify strong key messagesEven if change is not good, it’s necessary

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Emphasize the positive aspects of ChangeYou cannot achieve success if you’re static

Change goes hand-in-hand with a globalizing world

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Do not only focus on people losing their job → the ones you keep will be your strongest base in the future

Make sure they experience Change positively

They will help you train your replacements...

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You cannot repeat it enough: Change has nothing to do with the employees, it’s a company decision!

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Use the golden rule of ‚KISS’ – Keep it Short and Simple!Keep the information flowing and be honest all the way

Explain it in a way they understand

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Your #1 Priorities:

Celanese Case Snapshot 2.Budapest Supply Chain Migration ►All Supply Chain processes centralized to one location: Budapest

Customer Service

Delivery & Logistics

►Jobs affected: Germany & US

►Numerous challengesColleagues keeping jobs

Leavers having to train new hires

New hires: work shadowing with leavers for long period of time

Process still in transition

Relatively short period of time

Cultural differences

Customer angle...

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How to lessen the blow?When it comes to people losing jobs...►Find the right person to lead Change

►Develop a robust communications strategyKeep information flow continuous, messages consistent and positive all the way

Make sure to get all stakeholders behind

►Involve experts from Day 1remember: more eyes see more!

►Offer consultation and outplacement for those losing jobsIf possible, offer new roles within the company

►Monitor the Change Management Team regularylAnd change if necessary

Adapt to changing expectations

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Changing after Change happened

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Realize: Change Management is not static!If needed, change the Change Management or parts or whole of the

process

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Get people to embrace the ChangeProvide proper communication and continuous information flow

Keep messaging consistent, even after change is implemented

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Stabilize people who underwent ChangeThink about it... Do retention measures have to be all financial?

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Be a sensitive employerImportant to keep motivation

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Think about the future

→ plan for unforseen ChangeEmployees will ask: will it happen to me

next?

Thinking ahead is the only way to create a culture of

acceptance and positive Change experience

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Celanese Case Snapshot 3.

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To enable employees to improve the way the perform their daily job

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To further integrate the processes of different departments/tracks

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To play the transition management role in M&As

and divestitures►

To proactively seek for areas of improvement

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To align the representatives of all company

units that take part in business processes

identified for improvement/reengineering

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To promote the concept of “learning organization”

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To ensure sustainability of the improved process

Change Management in a micro setting: Budapest FIT

Team

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Questions?Questions?

Thank you for your attention!Thank you for your attention!