Q5 Newsletter Edition VIII by Q5

Volume 8

NEWSLETTER

Q5 presents:

CHANGE LEADERSHIP We share the findings of our recent research project

ALAN RUSBRIDGER

We spoke to the former Guardian editor-in-chief on his experience of leading change

DISRUPTION IN UTILITIES & ENERGY The Q5 view on what to do about it

OUR AWARD WINNING GROWTH

Opening new sectors, winning awards and plaudits

A few people question the logic of sending out paper newsletters in the modern era. However, Q5 has long found it to be the simplest way of keeping in contact with our clients and friends.

We work with our clients rather than “do to them”. We collaborate with their teams to ensure effective implementation, using accelerated transformation and ‘solid’ change management tools.

Q5 is a fast growing consultancy that specialises in Organisation Change and Business Transformation. Founded in 2009, we have teams of experienced consultants based in London, New York and Sydney.

We stand or fall on the response and satisfaction of our clients. So we surround ourselves with the very brightest and best people.

We are in the game of helping business leaders deliver the most effective, agile organisations possible. Our firm is always focused on results, not about embarking on ill-defined and never-ending journeys. We never design something without first getting under the skin of our clients’ businesses so that we truly understand what works and what doesn’t.

It is a particular thrill that our back page interview in this newsletter is with one of the great editors of recent times, Alan Rusbridger, who was at the helm of the Guardian for 20 years. Over that period, Alan turned the Guardian into one of the most recognisable digital news brands in the world. Many business leaders refer to organisation culture; Alan simply refers to ‘Baker’s Yeast’. Do you have that in your business? And if you haven’t heard of Q5, but are considering hiring one of the “big firms” to help you on an organisation challenge, please call us. We would welcome the chance to pitch against them!

What we deliver is unique to our clients and for their businesses . . . but we use excellent tools, techniques and approaches that we leave with our clients once we’ve gone.

Olly Purnell, Managing Partner

WHAT WE DO A word from our new Chair

Q5 specialises in Organisation Change. Our team actively serves, and invests in, 5 key industry groupings:

I am delighted to become the Chair of Q5.

Media, Entertainment & Sport

For a number of years, I led Maxxim Consulting, the London-based organisation development firm, which I co-founded in 2001. We would occasionally compete with Q5 in client pitches. About a year ago, we discussed the opportunity of bringing our firms together. I am thrilled that we recently achieved this feat, creating a single consulting brand, focused on organisation design and transformation. We are now better positioned to serve clients across more sectors, from bases across the UK, US and Australia.

Retail & Consumer Goods

Over recent months, I have been able to evaluate how well we have done in bringing together our vibrant teams. The first reflection is one of intensely shared purpose where our clients are concerned. There isn't much point in coming to work as a consultant if you don't get excited by getting the right answer and it's been a joy, not just to see, but to hear the buzz of teams getting to grips with client challenges; sharing views, approaches and ideas. The second reflection is one of the imagination and thoughtfulness that our team brings for the future. We have the opportunity to build a global consultancy that still feels like an expert, small business, listening to and challenging our clients in equal measure. It's been an exhilarating few months, involving office moves, team development, and delivering client projects. Now, I must go and see if I can find that chair of mine….

Infrastructure & Resources Financial Services Public & Third Sector That said, we believe that our people, tools and change expertise make us relevant to business leaders across all industry sectors, and have many clients that do not fit neatly into one of the categories above. There are five areas we specialise in:

Strategy

Process

Stucture

People

Change

People often ask us about our name... Q5 means Quarter 5 - beyond the current year. Our aim is to help our clients deliver successful ‘change’, not just in the short-term (ie in Q1, Q2 etc.) but in a sustainable way, that will deliver success for years.

SPOTLIGHT ON MEDIA: DOW JONES Supporting Dow Jones’ global transformation Over the past 134 years, Dow Jones has delivered news and information powering some of the world’s biggest business decisions, through products such as The Wall Street Journal and Factiva. Q5 has supported Dow Jones across the globe, working with its senior leadership team across its three core hubs: New York, London and Hong Kong. Dow Jones selected Q5 because of our unparalleled experience in the media sector and our ability to utilise our worldwide office network to deliver a company wide, global solution. The rapidly changing landscape in the news and information market means media firms need to think and operate in more innovative and agile ways. Q5 has worked across the full range of Dow Jones teams to ensure the company is best positioned for accelerated growth. We have conducted a series of organisational design programmes that have helped shape a company that:

Claire Arnold, Chair

is fully committed to its print products is focused on innovative new digital products puts customer needs at the heart of everything it does The results are impressive: WSJ subscriber numbers are rising and Dow Jones has recently launched a new global edition of the newspaper in major European and Asian cities. At the same time, new digital apps and products they have released such as WSJ City and Newsmart, targeting audiences across the globe.

PROUD TO WORK WITH:

LEADING CHANGE Are you an effective change leader? Change is a permanent feature within organisations. Change management tools and skills are important, but not enough. Change leadership is key. As experts in change management, Q5 has extensive experience in seeing how change is led across many organisations, and the rising need for change leadership capabilities. During Summer 2015, in collaboration with the Occupational and Business Psychology department at Kingston University, we looked into the key elements of successful change leadership, and explored why few organisations recognise or develop it as a core competency. Our report on change leadership is available on our website q5partners.com/thoughts

7/10 of our respondents said that less than half of the organisations they have worked in included change leadership skills in their leadership framework.

Our research identified five key characteristics and tactics of effective change leaders:

1. Excellent communication skills that involve listening, telling stories and focus on ‘reducing the fear’ of change

2. Visibly showing their personal commitment to the change, from early stages through to post-implementation

3. High emotional intelligence, with the ability to flex messages and style as people move through the change process

Only 11% of survey respondents thought that change leadership skills were a natural ability.

4. Demonstrating resilience for themselves and others, and the

11%

agility to gather and act on feedback in a timely manner

5. Understanding and leveraging the formal structure and

informal networks of the organisation to drive best results

Traditionally, investing in change leadership has not been a priority for organisations. Only a minority of the organisations we spoke to currently factor change leadership into their recruitment and development processes for leaders. In cases where change has been part of development programmes, the focus is typically on the programme aspects of change management like stakeholder management, communication plans and project management.

You can have the best strategy in the world for a change or management change to deliver an objective, but if you haven’t got ‘buy in’ and understanding from the team then forget it.

It’s clear from our research that the old school approach to change, of creating a compelling platform and driving change into the organisation, doesn’t work without change leadership to make it happen. Amongst the organisations we work with, we are seeing an increased investment and focus on developing change leadership skills, through formal development programmes, coaching, role modelling and on-the-job learning. This works most successfully in organisations where there is also a strong alignment of culture and values, a focus on the ‘how’ as well as the ‘what’ in performance management processes, and where networks and collaborative working are valued highly. The best organisations are already beginning to see the benefits of investing in change leadership capability; others must ask themselves whether they can afford not to.

You can read the full research report on our website q5partners.com or, to discuss what it might mean for your organisation, drop a line to claire.hamlin@q5partners.com

AWARDS SEASON

Q5 has recently won a handful of awards. Humility is the true key to success, so in a way we probably shouldn’t mention them! However, we would not have won the awards if it wasn’t for the clients who engage us, and work so diligently to make their projects successful. So, we would like to raise a toast to them: News UK. Together, we were awarded the Best Change Management Programme in the TJ Awards (Training Journal) for “Newsroom 360”, which involved a three year roll out of a new multi-platform newsroom system.

British Council, lastminute, DeBeers and others. The projects that we delivered with these organisations led Personnel Today to naming Q5, Consultancy of the Year. And finally, we are thrilled that Q5 has been identified as number 35 in the Sunday Times Best 100 Small Companies to work for.

SPOTLIGHT ON UTILITIES: BRITISH GAS A Q5 case study

The Challenge British Gas Residential Energy (BGRE) operates in a dynamic, regulatory driven market. Buffeted by external change, the business had become overly complex and inefficiencies had crept in, making it difficult to focus on the customer. British Gas (BG) approached us to help them reach a common articulation of the strategy, re-design the organisation to deliver against the strategic objectives, and place the customer at the centre of what BGRE does.

What we did Unpacking the strategy British Gas had three strategic priorities. Our first step was to help their teams develop an articulation of how their roles related to those priorities by: Engaging with people across the business, including holding focus groups with a cross section of employees at British Gas sites across the country Working closely with the MD and Executive team to design two day-long sessions to involve and engage the wider leadership team Facilitating sessions with the Executive team to finalise the articulation of the strategy for the business Developing a bespoke prioritisation model to help the business prioritise those initiatives in line with its strategy

Aligning strategy with structure The analysis of the strategy led to clear implications for the operating model, and so the business and Q5 embarked on a re-design of the organisation. We: Worked through a high-level design of the operating model to deliver the businesses strategic objectives Ran a business led process to design each function within the new operating model Facilitated sub-working groups of key stakeholders and decision makers to discuss cross-functional issues to ensure alignment Helped HR implement the new organisation design

The results We delivered: A set of three narratives that clearly described the purpose of BGRE in relation to the British Gas strategy A single energy business structured around an end-to-end value chain and new operating model Integrated front and back end customer operations (from contact through to billing and collection). Smart activities moved from running as a stand-alone operation to becoming fully integrated across the value chain

The result was a organisation truly focused on customer outcomes and ready to execute its strategy. It had a leaner structure with 13% of addressable cost removed, while delivering higher employee engagement and customer Net Promoter Scores.

To find out more speak to: daryl.edwards@Q5partners.com

DEALING WITH DISRUPTION IN ENERGY & UTILITIES

The (new) drivers of change Disruption has become a popular discourse in the energy utility sector in recent years. In reality, change is a constant for the sector. Pre WWII, electricity in the UK was generated and supplied by as many as 300 private and municipal power companies serving local/regional markets. Today’s dominant model of centralised power and supply instigated post-war, is changing (again). We’ve seen fundamental business model disruption on several fronts… Growing consumer appetite for choice and control: Consumers need relevant, personalised offerings, actionable in real time Technological facilitation of more open and interconnected systems: From self-optimising micro and smart grids to smart-enabled bundled energy and service offers, it is becoming increasingly possible, and expected that organisations will operate and serve clients across traditional boundaries The financial and environmental cost of energy: Rising prices, including the cost of carbon (financial and non financial), is sparking regulatory, political and consumer-driven demand for changes to the generation mix, pricing structures and beyond

Our Experience

How to respond?

Develop a vision and strategy based on the drivers, not signals, of disruption Radically reorienting some or all of your business is uncomfortable and challenging. Departmentally-focused and incremental responses to change are the default, but not always adequate as a long-term response to disruption.

Prioritise Numerous external challenges caused by ‘disruption’ often lead to multiple internal initiatives. In our experience organisations that do too much, often do nothing much at all. Only pursue things that fit with your strategy.

Align your structure with your strategy In our experience responding to disruption requires innovation from within, which requires functions to work together. Often, the way Utilities are set up makes collaboration across functions difficult. Change it.

Govern your digital infrastructure Digital capabilities are vital to organisations grappling with large volumes of data and changing customer expectations. Over time, organisations often evolve multiple pockets of digital activities and assets. Without consistent standards and robust governance of both digital platforms and content, this will lead to confusion both internally and for the customer.

To find out more speak to : jen.gramolt@Q5partners.com

Q5 Australia is up and running

“This move is hugely exciting for Q5. As one of our longest standing ‘Q5ers’, Tom takes with him a wealth of consulting experience, expertise and is the perfect man for the job. I have no doubt that our existing and prospective clients will be well served under Tom’s leadership.” - Olly Pu rnell, Managing Pa r tner of Q5

Launching our Sydney office

The venture is being headed up by Tom Leary, the newly appointed Managing Director of Q5 Australia. Tom Leary, MD of Q5 Australia, said: “Opening the Sydney office is very exciting for us and is the end result of a huge amount of planning.We are excited to learn and help organisations with the challenges they are facing. We think we bring something different to the sector. You can tell us if you agree!” Australian executive teams are grappling with ongoing digital changes, improving customer journeys and readjusting their operations to new market conditions. With a relatively flat medium-term economic outlook, cost base pressures are also increasingly on the agenda . Q5 looks forward to partnering with leading Australian companies to help them achieve their transformation ambitions.

Digital; tool not an ambition

Cambodian Children’s Fund Digital, like topics such as 'big data' before it, has executives keen to ensure they are at the cutting edge, or at the very least not falling behind . When people think about

digital, it conjures up all sorts of images; 'inno vation', 'speed to market', 'closer to customers', 'beating the competitio n', ‘the silver bullet’. In our experience, whilst digital technology (which is of course nothing new) is a key enable r, there are three critical building blocks for any digital transfo rmation:

The Cambodian Children’s Fund (CCF) is an inspirational, Australian based charity delivering education, sustenance and hope to underprivileged children at their amazing facility in Steung Meanche y, Cambodia.

Firstly – be crystal clear as to what 'the why' is. Why do you want to change? Is it to boost

performance,re-structure your cost base, provide a more seamless customer experience? Be clear on this up front, write it down and keep holding the mirror up to the organisation throughout this journey. Secondly - define clearly what digital actually means in the context of enabling your future vision. To be digitally enabled is perfectly reasonable however it’s important to understand precisely and deliberately what it will allow you to do differently. In addition, you will need to understand what organisationally you will need to change too. The digital element is only one piece of a broader change you are looking to make. Thirdly - without senior leadership truly understanding why digital is important and how it is going to allow you to 'turn the dial', you will struggle to effect the desired result. Demonstrable buy-in, right from the top, is critical. You will note that none of this is specific to 'digital'. And that's the point. Let digital enable your ambition rather than being the ambition itself. Like any desired change, it is about understanding which platform is burning, defining a compelling vision and inspiring people to get behind it. As with 'big data', if you don't position it correctly, at best you will gain no traction, at worst you will waste a lot of time and money, with little to show for it.

CCF is seeking to better understand their future organisational requirements as they continue to grow their operation. In early 2016, Q5 will assist CCF on this journey. The work will focus on assessing: CCF’s o rganisational con text Future-p roofed organisational design charac teristics People development needs (skills & capabilities)

We are proud to assist such a passion ate and principled organisation.

Q5 INTERVIEWS MARK SCOTT, MANAGING DIRECTOR, AUSTRALIAN BROADCASTING CORPORATION

In 2010, Mark Scott was appointed to a second five-year term as the ABC's Managing Director. His time at the ABC, Australia's public broadcaster, has been marked by extensive change, including the creation of iView a market leading catch-up TV service and the 24-hour news channel ABC News 24 as well as a major expansion into digital and on-line technology How did you find moving from publishing to broadcasting?

My background was in news and news was a core part of what the ABC does. It gave me a good understanding of the culture that underpinned newsrooms. I had already experienced the changes that digital transformations brought to traditional media. There were a whole series of practical questions that I had limited understanding on; I had never worked in Television, nor Television production. The ABC had a lot of specialists in those areas I could draw on and who were generous with me.

Any regrets with how you achieved what you have over the last 10 years?

I often think, why didn’t we do this three years ago? But then you look back three years and realise we were doing other important things. It took a while for us to be ready and ambitious enough to do it. We needed to define the burning platform to really engage people around the idea of a centralized ABC digital experience. If the executive was misaligned, we would never have been able to pull it off.

The media industry is full of fiery leaders. What characterizes your leadership style?

There are many things I’m sure you are proud of, but in your mind what is your greatest achievement at the ABC to date?

I don’t think I’m fiery or one of those ‘type A chair throwers’. I hope I’m respectful in my dealings with people, but at the same time, I have an understanding of how people need to work to deliver a strategic vision. I think I’m collegial, I’m a consensus builder, but that doesn’t mean I see leadership as a popularity contest. People will back you as long as they feel you are moving in the right direction.

One of my happier achievements was iView. I said to my team, ‘I want one, you’ve got no budget, off you go.’ One team looked at the streaming model, one team looked at the download model and we ended up with a market leading product for years and years. I’m not sure if we threw millions and millions at it we would have got a better result.

How did you get your team to rally round your desire to embrace digital? Were there people that didn’t get it?

The ABC had always had powerful content divisions, predicated around traditional platforms, radio and television in particular. I knew on arrival that convergence would be key. The ABC hero brand was so much stronger than the sum of its parts and would be even stronger if the divisions could work better together. That meant promoting the ABC executive as a whole and in a sense drawing power into some collective decision making at the centre. Some people struggled with that. Over time some of those people turned around and some left the organisation. What were the biggest challenges you faced on the ABC digital journey?

When I started there was an innovative but small-scale digital centre, quite isolated from the real content machines. I devolved that group out to the content machines and we started getting good digital product progress. The weakness of that model is that those products don’t really relate to each other and don’t build the ABC digital experience as much as we need. In the absence of a digital rule book, are there organisations or individuals you look to for inspiration? I have gleefully watched and borrowed from whatever bright ideas I can find, including The Guardian, the BBC, the New York Times, National Public Radio. I’ve also had good conversations with Jeff Jarvis, Jay Rosen about the future of journalism and Tony Golsby-Smith about design thinking, human centred design and agile approaches to product development – all of which are now mainstream in what it is that we are trying to do here.

What trends do you think the ABC will have to grapple with in the next 5 years?

Technology remains the massive driver. The hardware and software industries transform audience expectations. How much infrastructure we own and carry, how we use the cloud, how we use outsourcing. I think this will be pretty profound and fundamental. What characterises the type of organization you would see yourself working with next and why?

I was appointed here at what looks like a really young age. When I look back I think, wow I was 43, how brave was that board! Someone offering me a lot of money is not enough motivation it turns out. I’ve got finite time, it needs to be something important and significant. It might not be in the media, there are other big interesting challenges out there. I’ve had some advice; don’t rush, take it easy, think it through and you’ll know it when you see it. And I’m hoping that’s right. Q5 launched its third global office this September, with Sydney joining our New York and London locations. Q5 Partners LLP Sydney: +61 02 8310 5354 London: +44 (0) 20 7340 0660 New York: +1 (646) 569-9198

MAGIC SPONGE INTERVIEW Alan Rusbridger is the principal of the Oxford University college Lady Margaret Hall, is on the board of the National Theatre, an author of several books, and he was, of course, editor-in-chief of the Guardian for twenty years. One of the distinguishing features of Alan's period at the helm of the Guardian and the Observer was the way in which he oversaw radical newsroom change. Leading 600 journalists through the globalisation and digitalisation of their organisations, is worthy of note for leaders in all sectors. As our recent research into change leadership underlines, changing an organisation's culture in a sustainable and engaging way is a challenge that requires a special combination of skills, inspiration and tenacity. As Alan prepares for his new role as chair of the Scott Trust, he reflects on what leadership means for him. Alan, what was the initial spark that made you want to go into journalism?

I grew up reading newspapers because my father was obsessed with them. I wrote to the local paper, the Surrey Advertiser, who took me on for some work experience. From day one I thought it was the best, most fun and interesting job you could possibly do. So that was it. You were at the helm of the Guardian for 20 years.�What was your leadership philosophy?

Well, I was never the brightest boy at school or university and certainly not at the Guardian either. I was surrounded by incredibly bright people and because the Guardian does not have a proprietor, your only relationship is with your colleagues. So, when I did succeed, it was as a result of unleashing the creativity and cleverness in others. You cannot be a good leader if you feel threatened by other bright people. The Guardian embraced the digital world early on. How did you educate your colleagues into thinking that digital was a place where people should want their voice, words and stories heard?

That was a huge challenge. With 600 journalists, there were both hares and tortoises. There were people who absolutely did not believe in ‘digital’, who felt threatened by it, and did not want to move. And others who believed that if you didn’t move in the next five minutes, never mind the next 5 hours or next 5 days, you were going to be left behind. One of the skills in leadership is keeping everybody together. The other challenge is being in a situation where you cannot provide definitive answers. You are, after all, making your best educated hunch at the way the world will go; but nevertheless you have to get everyone to buy in to that. The only way I could encourage people to do that was by getting people together in groups and setting them the same dilemma that was rattling around in my own head. Nearly always the groups would arrive at the same conclusions that I had. The value was not necessarily that everyone would agree with you, but that they could see and follow the thought process behind the decision. You moved the Guardian out of some rather antiquated and messy offices in Farringdon to the modernity of Kings Place. Looking back, was that new environment something that helped you drive rather more sweeping change at the Guardian?

Well it is one of those mantras of change; if you only change the building and do not use it as a vehicle for other forms of change then you have wasted an opportunity. Moving to one, modern building presented an opportunity to bring everyone together. It was not just about seating plans but about the fundamental relationships between four distinct groups of people who had very different cultures and ways of working, and integrating them into a streamlined collective that was able to work together.�It was crucial to unify those people with a common sense of what the Guardian and The Observer were going to be. When you started your editorship, the Guardian was very much a UK-based news organisation, but over course of the past few years it has invested in operations around the world. How did you go about extending the Guardian’s influence and reach? Was it problematic?

Well if there was a metaphor for that, my wife has just got into bread making. Bakers carry around little pots of Baker’s yeast …. disgusting stuff! Our pot lives in the kitchen on the shelf. Some bakers have pots that go back hundreds of years; you can remake it and adjust the ratios. I think you need a bit of that. You can buy office space in New York and stick the Guardian on the door, but you need some of this� Guardian yeast to start the culture, which then makes it the Guardian. You have to have enough brilliant people from the Guardian, who can then go and work with Australians or Americans and spread that this is how the Guardian actually is. Then suddenly within a year you have something that is recognisably the Guardian … you have this beautiful loaf. It is quite challenging moving up in scale but if you get it right then it is hugely exciting. Looking back over your many years at the Guardian, putting the stories to one side, what do you feel was your greatest achievement?

My tenure as editor of the Guardian coincided with a time where the economic model of the newspaper industry was under intense pressure. Everything was in flux. Yet we were able to keep our journalists together, and focused on producing proper journalism. Because of this, our audience has never been larger. If the Guardian� switched the print presses off tomorrow, it is 80% of the way to being a digital news organisation that is economically sustainable.