managing_change_original

22 Finance and Management Faculty

June 2008 SPECIAL REPORTMANAGING CHANGE

Between March 2000 and March 2003, the Reuters shareprice nosedived from over £16 to just 95p. It was areflection of the market’s slowly dawning recognition thatthis pioneer of information-gathering was a company indeep trouble.

What it did not show was that, by the time it hadbottomed, plans for recovery were well under way. But itwas to take another four years for the transformation to bevalidated by last year’s announcement of a £8.7bn mergerwith Thomson Corporation, the Canada-basedinternational media and business publishing group

It was a “somewhat dysfunctional, structurallycumbersome and unnecessarily complex” organisation thatDavid Grigson joined as chief financial officer in 2000.Under Tom Glocer, the new chief executive who was totake over at the helm the following year, he was chargedwith master-minding what was effectively a rescuecampaign.

“We found a company that had grown very rapidly withno idea of where it was going or why,” says Grigson.Through the 1980s and early 1990s Reuters had seenrevenue pour in the door faster than it could cope with.But in 2000 the internet bubble burst and the financialservices industry was on the brink of a sharp downturn.

It was a downturn that Reuters was totally unprepared for.At the heart of its problems were a product range withthousands of price lines and a poor service record. Incontrast, its main rival, the New York-based financial

information group Bloomberg, was going from strength tostrength, offering a single product – what came out of thebox was what you got.

“We were competitively weak, our service record wasappalling and management was dysfunctional,” commentsGrigson. “We had data centres that were old, running onold-fashioned technology, no disaster recovery or businesscontinuity. All the basic things that a tech-basedorganisation should have.”

There was a view that Reuters existed for the globalgood rather than to makemoney for its shareholders

David Grigson has been CFO of Reuters Group PLC sinceAugust 2000. He was previously at Emap PLC wherehe was group finance director and chairman of EmapDigital. He is a qualified chartered accountant. He is a non-executive director of The CarphoneWarehouse Group and sits on both the ImplementationBoard and Culture Board (as chairman) of LondonLegacy 2020 and on the board of ChildLine. Heformerly held senior finance roles in the UK and US atSaatchi and Saatchi Plc (1984-1989) and held a numberof financial positions at Esso UK from 1980 to 1984. Heis a former chairman of Radianz and non-executivedirector of Instinet [email protected]

Interview: David Grigson

CASE STUDY: THE REUTERS STORY – 1

TURNING AROUND A GLOBAL INFORMATION GIANT

In the early 2000s, structural problems emerged at the large international information-based group Reuters – the share price fell and confidence eroded. Serious change wasnecessary to rebuild the fortunes of the business. Financial writer Mike Tate talks first toDavid Grigson, chief financial officer (CFO) of Reuters Group PLC, and then to Carolyn Bresh, Grigson’s deputy at the time, about this vast exercise. He describessome of the steps that were taken in an ultimately successful reorganisation.

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GeographicHow had this happened? It is important to understandthat, despite its huge global reach, Reuters is a relativelysmall company. For 150 years it had grown by justplanting its flag in a new territory and telling people to geton with it, and it was still being run on this geographicmodel. There was also a view held by many of the seniormanagement that Reuters existed for the global goodrather than to make money for its shareholders.

Crucially, however, all the power within the organisationresided in the heads of the ‘geographies’. They made alltheir own decisions – how they built their product, howthey supported it and how they priced it.

It was immediately clear to Glocer and Grigson that acomplete overhaul of the company structure was vital.Only a reorganisation along divisional lines with ultimatecontrol restored to head office would give Reuters thechance of a future.

Early attempts, however, fizzled out as it proved impossibleto wrest control from the ‘geographies’ without effectivefinancial management information systems and at a timewhen the business was haemorrhaging badly.

The complexity of the existing structure provided everyonewith an excuse, something to hide behind. It enabled theforces of resistance to grow and multiply. “So we said let’snot try and fight that problem because we’ll just lose it andmeanwhile the company’s sinking,” Grigson recalls. “Wehad another battle to fight – to get cost out and get it outfast. Fortunately the ‘balkanised’ nature of the businessmeant that there was a lot of cost to take out.”

In 12 months of near-carnage, some £450m – about 15%– was slashed from the cost base. “That became ‘PhaseOne’. It didn’t have a project name – just ‘Help!’”

DivisionalThe transformation from a geographic to divisionalstructure, while crucial to Reuters’ future, was shelved untilphase two. ‘Fast Forward’, as it was known, “was aboutmaking a small number of very big changes that wouldfundamentally change how Reuters did business,” saysGrigson. But ‘divisionalisation’ itself was to take three moreyears.

While it was clear that power had to be prised away fromthe ‘geographies’ it was far from clear how. Reuters did nothave the necessary management information systems inplace. A huge programme of simplification was going tobe needed first.

Grigson knew only that Bloomberg had shown what couldbe achieved by its rapid growth over two decades.Bloomberg, however, had the advantage of being a privatecompany. Operating under the public gaze was, forGrigson, a major handicap. “You need more than one biteat the cherry, because you can’t see more than a year ortwo ahead, and markets hate that.” But he and Glocerwere turning it into an advantage.

In February 2003, they took what proved to be amomentous decision. They went public with ‘Fast Forward’

and, crucially, their target – a further £440m of savings.There were no detailed plans in place, Grigson recalls.“We’d done some desktop calculations, but they didn’tcome anywhere near £440m. Our necks were on the line.”

According to Grigson, only then did the outside worldbegin to grasp just how serious Reuters’ problems were.What mattered was the impact it had internally. “Nobodyhad an excuse for thinking we were not serious anymore.”

TransformationThe transformation began in finance, whose first task wasto get the company’s information processed in a way thateverybody could understand and act on. In order to drivethe same message consistently throughout theorganisation, finance had to be brought into a singleglobal organisation reporting to the centre.

Previously there were a large number of embedded financepeople working alongside the business in individualgeographies. Three major changes took place. First,transaction procession was taken out of the geographiesand moved to regional shared service centres and the newfinance centre in Bangalore, India (all of which wereowned and managed by finance), this resulted in increasedindependence and objectivity in terms of the numbers.

Second, all reporting lines for finance staff went throughGrigson, rather than the previous route through localmanaging directors. Finally, financial support wasstrengthened in critical areas – high quality people weretransferred from the geographies to the divisions andshared service centres where they could provide support tothe wider organisation.

Once finance had been streamlined in this way, it was ableto help shape the reorganisation elsewhere, oiling thewheels, keeping the scorecard. With a better quality andflow of management information, Grigson developed‘profitability insight’, an activity-based costingmethodology which allowed him “to allocate cost from thebig central buckets of activity against products in a waythat enabled people to see true profitability up and downtheir product groupings”.

23Finance and Management Faculty

SPECIAL REPORT June 2008 MANAGING CHANGE

Once finance had beenstreamlined, it was able tohelp shape the reorganisationelsewhere, oiling the wheels,keeping the scorecard



Grigson is very proud of his new team in Bangalore. “Theyhave become exceptionally good at looking through theother end of the telescope, identifying inefficiencies withinthe organisation and designing solutions. By shining thelight in the opposite direction they are adding real input.” This was vital as Reuters finally embarked on its quest todrive down costs from 2.9% of total revenue to 1.5%within three years by fundamentally changing the way itdid business.

Fast Forward would call initially for a massive reduction inthe product set from 1,500 to less than 50, a simplificationof the pricing structure, a comprehensive realignment ofreporting lines and a shrinking in the data centre networkfrom 256 to just nine.

HitchesThere were hitches. A ‘change team’ was establishedearly on, but was dismantled. “We found decisions werejust being referred up rather than being taken wherepeople could be held accountable,” Grigson explains.

Benchmarking progress proved a problem; Reuters’ maincompetitor was a private company and its other rival,Thomson, semi-private. In finance, Grigson used thirdparty benchmarking data. “We benchmarked individually –our data systems operations against people who ran datasystems, our software product development operationsagainst similar businesses and our networks against otherhigh-speed networks.”

Grigson estimates that it “probably took two to threeyears” to get ‘operations’ intellectually onside and evenlonger until they were fully behind the strategy. “It was likecompletely rebuilding all four engines on a jumbo jet whilein flight. You have to be really careful not to just dismantleeverything and see the thing fall out of the sky.”

By the end of 2005, Grigson and his team had taken out£900m of costs, but they knew they had not put anythingback in. Financial markets were growing and flourishingbut Reuters had not been investing.

With the divisional structure now in place, they launchedthe third phase of their programme, ‘Core Plus’, with twinobjectives of a further £150m of cost saving and takingadvantage of the new growth opportunities that wereappearing.

“For the first time ever we felt comfortable that, when wewere investing money in new products, someone,somewhere was keeping an eye on the profitability of thatproduct, over its lifespan and that therefore we’d knowwhether we had successes or failures on our hands.”

Market rateTaking out £1bn-plus in costs is an achievement but couldonly really be regarded as a success if Reuters met its CorePlus growth target, set at the anticipated market rate plus3%, by Year 3 – 2008.

“We feel very comfortable that we’ve achieved it,” Grigsonpurrs. “It feels like quite a good time to sell the company,actually.” ■

At the height of the crisis at Reuters, with the share pricecollapsing, losses piling up, revenue and customersdisappearing out of the door, the new executive team hadtheir work cut out dealing with the company’s externalstakeholders.

With early plans to restructure the business streamstemporarily abandoned, and a public commitment tofocus on taking out £450m of cost within 12 months, TomGlocer and David Grigson had their hands full withbankers, shareholders, analysts and the media.

It was to Carolyn Bresh that the task fell of driving thestrategy internally. Her challenge was to ensure that thecost savings were delivered. “Carolyn was my numbertwo. She was a very solid and trusted lieutenant, whoseview was respected throughout the organisation. She wasindependent of politics and had a reputation for beingable to see the bigger picture. It was Carolyn,” saysGrigson, “who kept me honest.”

“I found it very scary,” Bresh confesses, “but the publiccommitment convinced everybody. They could see thecompany was a burning platform. They understood that alot of people would have to go, or Reuters was going outof business after 150 years. ”

SandbaggedBresh had already been at Reuters for more than five yearswhen Grigson arrived. She knew the organisation and“where the money was being sandbagged and misspent”.This gave her an advantage, “but I also knew I wasn’tgoing to win any popularity contests.”

The pressure on her was exacerbated by the decision totake out senior people first. “Normally, you would re-engineer things before letting people go. What happened

How do you restructure such a large publiccompany as Reuters? Carolyn Bresh, formerlygroup financial controller, discusses with Mike Tate her role alongside David Grigson inthe reorganisation of Reuters and theimportance of the finance department inleading by example to reestablish the companyon solid ground.

CASE STUDY: THE REUTERS STORY – 2

HOW FINANCE PUT THE PLANINTO ACTION



was that we let the heads go before we knew how wewere going to re-engineer the processes and the work!”

Reuters, however, had no time, and quick wins were vitalto keep the City onside. It was a risky strategy and onewhich owed its success to the nerve of the executive ingoing public with their massively aggressive targets.

Management of internal expectations, together withBresh’s own internal credibility, were key, but a third“absolutely critical” factor was the drastic action takenwithin finance itself, which helped sell the message to therest of the organisation. “We led by example. Both Davidand I let some of our own direct reports go at the start.Once we’d done that, we felt we had earned the right tobang the table at others!”

Finance was a microcosm of the group as a whole. Despitebeing staffed with hardworking and competent people,

the accounting function was both desperately inefficientand pretty ineffective, a result of operating out of 60different centres, every one of which made up its ownrules, and took its own decisions.

So it was here that the axe swung first, with some 200jobs sacrificed, which essentially enabled finance to claimthe moral high ground. “We had absolutely no issues atall in facing down reluctant managers,” says Grigson.

For Bresh, though, it was hard, and it was traumatic. “It’sall well and good when it’s numbers on a white board,but when it translates into telling people in your ownteam, one on one, it’s painful.”

HeadcountKeeping tabs on progress was vital and, althoughcustomer and employees surveys were undertaken, thekey measures were provided by finance. Every week,Bresh produced a report for the senior managementteam, keeping them fully up to date on the costs andthe headcount, how many people had gone from eachfunction and which parts of the programme wereperforming.

If people did not deliver, they became casualtiesthemselves, which in turn served as a warning to others.“Some very sacred cows were sacrificed,” Breshremembers, “even people from the inner sanctum.” Itwas a mark of the seriousness with which theprogramme was being pursued.

Bresh believes the role of finance during change is thatof an enabler and gatekeeper. “Finance can never ownthe targets, but it has to help the business people

Quick wins were vital to keepthe City onside

Interview: Carolyn Bresh

Carolyn Bresh is a partner/owner at Everymind, aconsultancy that helps optimise business and financeperformance. She qualified with Price Waterhouse and,after five years in practice, moved into industry. Rolesincluded CFO of Blenheim Group PLC’s US operations andoperational finance director and group financial controllerfor Reuters Group PLC. She has an Executive MBA fromthe London Business School and is a guest lecturer on theMBA programme at Ashridge Management School. She ison the board of Headliners and a member of the ICAEWFinance and Management Faculty [email protected]

2007 2006 2005 2004 2003 2002 2001 2000 1999 1998

Revenue (£m) 2,605 2,566 2,409 2,339 3,235 3,593 3,885 3,592 3,125 3,032

Profit before tax (£m) 273 313 238 396 56 (344) 158 657 632 580

EPS (p) 17.3 22.6 16.3 25.4 3.6 (18.3) 3.3 37.1 30.9 26.7

Employees 17,900 16,900 15,300 14,465 16,744 17,414 19,429 18,082 16,546 16,938

Under IFRS Under UK GAAP

REUTERS GROUP PLC – THE 10-YEAR STORY




deliver.” Almost every unit head had a finance personbeside him or her, chivvying them and knocking backthe excuses.

At the same time, of course, finance was losing people andresources from its own team. “There was a triple whammy,in that we lost one in four of our people very quickly, whiledriving the businesses to deliver their targets and collatingall the additional data.”

For those who stayed, however, it could be stimulating.“When businesses are doing well, finance obviously has akey role, but when you’re fighting for survival, it’s critical.You feel that you’re adding value. It gave us quite a buzzto help save the company.”

Some people were better suited to the task than others.Finance people are used to dealing in detail, and gettingeverything exact, but different skills were required here. “Itwas about ballparks and estimates, and quickly. Davidwould say we need to save £50m by doing this, and Ineed to know by tomorrow whether it’s realistic, and whatis the risk.”

Turf warsAt the beginning, of course, the programme was runningin parallel with the early abortive attempts at thetransformation of the business structure. Aware of the riskof ‘turf wars’ developing, particularly given the fragmentednature of the business, external consultants wereappointed.

“They came in at great expense – I have a figure of £6m inmy head – with classic models for change,” Bresh recalls.“There were thousands of PowerPoint slides and lots ofdiscussion around perfect models but there was no realimpetus for change. The financial performance was still

looking strong, so we just sat around with the consultants,debated the models, created ‘decision trees’ and stuff, andjust procrastinated.”

Adding to the confusion and general indecisiveness werethe pending departures of the previous CEO and FD, bothof whom were looking to leave on a high, followed byhandovers to Glocer and Grigson. “In all, we lost four orfive years,” says Bresh. “That’s when we got fat and lazyand Bloomberg came in to eat our lunch.”

However fantastic the consultants’ models looked, ofcourse, the bottom line was about stripping power awayfrom the ‘geographies’, and the centre did not yet havethe artillery or the ammunition to take them on.

Consultants or DIY?Because finance was organised along the same lines as theorganisation as a whole, the centre did not have thefinancial information necessary to support the attempt.All the data was collected by the ‘geographies’. “Salesnumbers would go to HQ, where they would have to bere-cut by product, by which time it was a week later andafter the fact, and nobody was interested.” Moreimportantly, nobody wanted to stand up to the‘geographies’.

When Glocer and Grigson were finally able to focus on‘divisionalisation’, they opted for a do-it-yourself solution.By then, Grigson had concluded that “for every pound youspent on a consultant, you only really saved a pound and apenny and that unless you could figure out how to do ityourself you were never going to break through.” Towhich Bresh adds, “we’d been left with a bit of a sour tastein the mouth after the earlier external models had failed towork.”

Their response was, once again, to go public, this timewith product and divisional ‘profit and loss accounts’.“They were very flaky”, Bresh remembers, “but they droveeverybody internally. Once they were out there, they werereal. There could be no more excuses.” ■

Reuters Group PLC and Thomson Corporation announcedin May 2007 an agreement to combine the two groups.They said that they believed there is “a natural fit andcompelling logic in creating a global leader in electronicinformation services, trading systems and news.” Themerger is currently proceeding.

If people did not deliver, theybecame casualtiesthemselves, which in turnserved as a warning to others

● You can never communicate too much duringchange: people are very information hungry andwhen you don't know all the answers you have toacknowledge that and say “I don't have an answerat the moment but I'll let you know by x.”

● Ensure that finance leads by example: at Reuters,finance was the first to remove inefficiencies byreducing its headcount, and this helped createcredibility with the rest of the business.

● The role of finance during change is that of anenabler and gatekeeper: finance cannot own thetargets but it can help the rest of the businessdeliver them.

● Different skills are required by finance duringperiods of change: It can be more about speed andestimates rather than detail and precision, whichsome people are better suited to than others.

● You have to own and drive the change internally.Consultants can be useful for ideas and models butit is the team inside the company who must ownand lead any change programme. Otherwise it willfail.

THE REUTERS STORY – THE KEY POINTS



Michael Penny has made a career out of ‘change’. He cuthis teeth co-ordinating the absorption of the Peter Dominicoff-licence chain into Threshers group in the mid 1990sbefore being hired at the turn of the millennium to pulltogether probably the most complex of mergers to havetaken place in the DIY industry.

After many years of solid growth, the DIY sector wasoverdue for rationalisation when the relatively little-knownFocus group more than doubled in size with the purchaseof the Do-It-All chain in 1998. Two years later Focus paidsome £300m in highly-leveraged debt for the significantlylarger Wickes. By December 2000, Great Mills had alsobeen devoured and Focus had emerged as No 2 in the DIYmarketplace after B&Q.

Enter Penny, as corporate and operations finance director,with a brief to integrate Great Mills into Focus. It soonbecame clear, though, that the task would call for theassimilation of, not two but three, or even four, vastlydifferent cultures.

“This was the single biggest challenge we faced,” herecalls. “Focus had been in venture capitalist (VC)ownership for many years, whereas Great Mills came outof RMC Group, and had a ‘blue chip’ culture. Wickes, ofcourse, had been a plc in its own right.”

The problem was the different pace at which peopleoperated. “In a VC environment, you can have an idea,send a note out and have the thing agreed within 24hours – rather than preparing a paper and making a notefor the next board meeting in line with the processes andprocedures of a blue chip organisation.”

“Fortunately”, he adds, “at Focus Wickes, it was the VCswho were calling the shots. If we’d been the ‘blue chip’,and the roles reversed, it would have been much harder.We were, in a sense, unlocking the blocks.”

DistrustHowever it was still far from easy. Wickes had been veryproud of what they had achieved and there was an inbuiltdistrust of the Focus people who were seen as a bunch ofVC-backed managers on a mission to asset-strip thebusiness. A lot of things had been said in the heat of thebattle that had left their mark.

“Not only did day one see the departure of a number ofkey personnel, but those who stayed had just come

through six months of being told how poor Focus were!”he recalls. What helped was the decision, for soundmarketing reasons, to allow Wickes to retain its ownidentity. Wickes was a good brand that was under-performing and, under the new ownership, significantchanges in product range, space utilisation and marketinghelped transform the return on capital.

CASE STUDY: DIY MERGERS

DOING IT YOURSELF IN THE CHANGE BUSINESS

Michael Penny discusses with Mike Tate his role in the integration of Great Mills withthe rapidly expanding Focus group, and highlights important areas that anyoneattempting to manage such a process should heed.

Michael Penny is group finance director of PinnacleRegeneration Group, a provider of investment and services to the social housing market – it is a privatelyowned company. He is a specialist in changemanagement and corporate finance activity. He qualified as a chartered accountant and is a Finance and Management Faculty [email protected]

Interview: Michael Penny

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The task called for theassimilation of three, or evenfour, vastly different cultures


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So, too, did a cull of suppliers. “We identified the cheapest– Focus, Great Mills and Wickes each had their own – onevery individual product, and then pushed for an increasedbulk discount.”

LoyaltiesThis exercise was, however, to cause Penny one of his fewheadaches. “There were loyalties stretching back manyyears which made life very difficult during the noticeperiod. Some suppliers were not paid as quickly as theyshould have been. While this did not impact on the finalresult it did cause a lot of grief, and it affected the qualityof information we were receiving.

We found ourselves forced into a ‘good cop, bad cop’scenario, with our buyers sympathising while blamingeverything on the finance department.

Did this impact on the credibility of finance within thebusiness itself? Not in Penny’s view. “We actually becamemore visible within the business, and this meant otherpeople respected us more.” This is essential. Finance notonly creates the environment for change but it is throughthe financial performance that the business assesseswhether its objectives are being met.

Penny does not underestimate the part played byoperations. They have to implement the plan. “Whathelped us enormously was that all the senior managementhad shares. They understood the business plan and couldsee for themselves the impact it was likely to have on theirequity. Incentivisation of senior management certainlymade the life of finance a lot easier.”

All the same, finance came under considerable pressure.“You are providing lots of additional information with notmuch extra resource – and at a time when you’re learningto operate a new finance system. In other words, there’sless time to do the day job.”

However, mergers also have a Darwinian element, in that arapid self-select process takes place among the staff. “Anumber of people left because they were apprehensiveabout the forthcoming period of change. Those whostayed were, by definition, more positive – as, of course,were the new recruits.”

So the team was significantly improved, if not necessarilyin quality, certainly in attitude and enthusiasm.

PaternalisticPenny acknowledges that he did not get everything righton the people front. Both Focus and Wickes had beenquite paternalistic and, on occasion, people foundthemselves in positions to which, following the rapiddevelopment of the business, they were not suited. A kindof passive ‘Peter principle’. “People we assumed to be asafe pair of hands were found wanting. It was a problemand is something I would watch for in future.”

For Penny, the integration process was “something of aroller-coaster”. He explains: “There is so muchinterdependence. Finance is only a small piece of thejigsaw. The successful integration of any business is relianton everybody delivering what they’re supposed to. Ifanyone doesn’t deliver, the whole project is going to fail.”

Fundamental to the success of an M&A changemanagement programme is an understanding of thebusiness and the key drivers behind the acquisition, saysPenny. “In any M&A there is so much to do, but only somuch you can do. It’s about prioritisation and you can onlyprioritise if you really understand what the business istrying to achieve.”

It’s important, then, that the business – operations andfinance – all have the same priorities. “We’ll have differentpriorities en route but it is vital that we all agree on theultimate goal.”

As it turned out, those who saw Focus as short term-ist didnot have to wait long to be proved right. In December2004 Wickes was sold, to Travis Perkins, for £900m, threetimes its 2000 purchase price. Not a bad four years’ work.

And Michael Penny was to spend the next yeardismantling the structure he had put together! ■

Finance and Management Faculty


Mergers have a Darwinianelement, in that a rapid self-select process takes placeamong the staff

● Merging cultures can be very challenging;particularly the fast pace of a VC-owned companywith the processes and procedures of a moretraditional blue chip one.

● Finance plays a critical role in creating theenvironment for change as well as assessing itsfinancial success.

● Be prepared for the pressure on finance – there willbe additional demands for information, a newfinance system to get to grips with and all of this ison top of the day job.

● You need to understand the business and the keydrivers behind the acquisition in order to prioritiseyour demanding workload.

DIY MERGERS – THE KEY POINTS



While I was group finance director at Reed Health PLC, thehealthcare recruitment group, I led a project to makechanges that led to a saving of £500k p.a. in un-recoveredVAT.

Reed Health provided temporary staff in a number ofhealth and social care sectors including doctors, nurses,social workers and other health professionals. One of thedivisions, for historical and legal reasons, was supplying itsservices exempt of VAT – which meant that as a group wewere losing more than £500,000 in un-recovered VAT eachyear. In an environment of significantly reducing marginsespecially in that sub-market I felt it was worth exploringthe alternatives.

By selecting expert external advisers and researching taxand related law myself it became apparent that withsignificant operational, legal and financial modificationsthis supply could be made VAT-able. As the clients had noissue in recovering input VAT, I decided to recommend thechanges at board level and the plan was then approved.

The changes involved sales, operations and finance staffand so I called together a small project team withrepresentatives of all three parts of the business and ourexternal advisers. A brainstorming session was used to look

at all the proposed changes and their impact on all parts ofthe business. A communication was then drafted and usedas a briefing document throughout the company toexplain what changes were going to happen, what thechanges meant and what the benefit would be. Atailored communication was also produced for clients.

As this was ultimately a tax project, I designated myfinance manager as the project manager and shedelivered the project on time and on budget with noadverse operational impact. There was some internal andexternal resistance to change but ultimately all partiesagreed to it.

This was no mean feat considering this change requiredall relevant clients to agree to new terms of business, achange in their billing and VAT charges and for Customs& Excise, as it was then, to approve the changes. Thiswas in addition to the changes in accounting treatment,sales tools and general understanding in the company.

Looking back, this was a successful project because ithad a clearly defined goal, each stakeholder understoodthe business rationale and a cross-functional team wasput together to deliver the project. I have undertakenmany other projects over the past 10 years, not all ofthem went as smoothly as this one. If you ever bumpinto me at a faculty event I will happily share some ofthose experiences with you too! ■

CASE STUDY: REED HEALTH

LESSONS OF A TAX PROJECT

Mark Garratt of Cordant Group PLC draws lessons from one project he undertookwhen working at Reed Health PLC and outlines the approach he takes when settingout to implement a change programme.

The project was successfulbecause it had a clearlydefined goal

● Situation analysis – where are we now?● Envisioning a better way – what can we do better,

cheaper, faster?● Researching options – what is already in the market

and what could be developed?● Present recommendations to board – get buy-in,

and resources.● Building a team – who grasp the vision and deliver

the project.● Select a partner organisation (if required) – who

can best help us get there?● Manage internal and external expectations – ‘pain

before gain’.● Produce detailed project plan – what are the

critical steps?● Direct project – give clear leadership.● Review progress at key milestones – do we need to

change the plan?● Achieve change – we got there!● Review project – did we end up where we planned

and have we achieved objectives?● Regularly monitor – has anything changed that

might impact this area?

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Mark Garratt is CFO, recruitment division, Cordant Group [email protected]

DEVELOPING A CHANGE PROGRAMME


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