Value realised
The approach and criteria provided to Diageo to establish which processes to roll out as ‘global’, which to set up as ‘common’, and which to be ‘local’ enabled the senior management team to allocate funds and responsibilities, which in their estimation saved them several hundreds of millions of pounds over three year.
Engagement focus
As part of its strategic review – including setting up a shared service centre in Europe – Diageo acknowledged the need to overhaul, reorganise and standardise its processes. It was recognised that a key element was to differentiate between global processes (identical across all Diageo’s markets), common processes (the ‘same’ across Diageo’s markets), and local processes (focused on specific markets).
A global process meant that it would be done in the same way, using the one system, with the one process and management team, and therefore in one location. In that way it would be executed in an identical way across all markets. It was also recognised that this would be an expensive process, particularly with regard to the change management aspects.
A common process on the other hand would be set up by different teams, under different managers, on similar systems in different locations. It was seen as likely that within a short time there would be small variations between implementations and this was accepted as inevitable.
Finally, local processes were under the direct governance of the local management team and were expected to be different as they were to reflect local circumstances.
Despite the practical and action-orientated culture of the organisation, the debate as to where the boundaries lay between ‘global’, common’ and ‘local’ was fast becoming esoteric. Senior management, frustrated by the circular nature of the debate, decided the discussion either ceased or was brought to a satisfactory conclusion.
Their preference was for the latter as it was accepted as potentially there were significant cost savings to be made by differentiating between them appropriately.
Approach to solution
CITI started by clarifying the Diageo change vision and strategy, and confirmed with the senior management the current organisational state (the ‘As Is’) and the desired future state (the ‘To Be’). We further assessed the change programme using our evaluation methods and it soon became apparent that a number of projects did not have a robust business case and were not being driven by their value to Diageo.
We developed a value model which directly linked the benefits to the changes that are to be introduced in the organisation – and proving that these are able to give rise to those benefits and to what extent. The developed value model included specific metrics and KPIs for the changes that were to be introduced in Diageo.
This identified which projects (and hence which processes) were not aligned to the business benefits and also the ones that the claimed benefits did not have any means by which they could be achieved. This led to the closing of those projects with no clear benefits case and to aligning others into a more coherent programme of change.
The Diageo board has since demanded that the CITI approach is adopted across their business units and for all its corporate projects.
Lessons learned
The importance of establishing a clear ‘line of sight’ between the change vision, the work that needs to be undertaken, and the benefits to be realised is ruthlessly pursued. In the end the final decision as to what type of process is what is determined by the level of contribution the decision made makes to the benefits and the vision. It is not a technical discussion.
Models / tools used
SIP Methodology
Benefit – impact – product modelling
Programme management toolkit
RACI
Value proposition
You can read more about the strategies used during this engagement here:
PAshton
Latest posts by PAshton (see all)
- Bulletin – September 2015 - September 16, 2015
- Nick Dobson - September 15, 2015
- CITI introductory video - September 15, 2015