Siemens: Culture and Change Agents

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The Change Agent Program at Siemens Nixdorf

Post-script – What actually happened?
The following material is excerpted from the original article and provides some overview of the actual evaluation that took place. * In terms of “hard” financial results, SNI produced its first profitable year in 1994-95, the first year of the CCP. Until Siemens intervened, it remained mildly profitable, with reported sales of almost DM18bn and net income of DM500m in 1998. This performance was insufficient, however, to convince senior Siemens management that SNI should remain as a stand-alone information technology company. On the “softer” side, employee satisfaction surveys indicated a steady improvement in morale and confidence over the period of the CCP Unstructured observations indicated that, after a slow start, a growing number of employees at all levels of the organization saw both personal and institutional benefits from changed and more focused values, beliefs and attitudes. The take-over by Siemens came as a shattering psychological blow to many SNI personnel, as the CCP came to an abrupt end with the parent company showing a marked reluctance to consider the culture change initiatives previously undertaken. In truth, SNI was seen as something of a dilettante privileged, overpaid and a constant drain on resources - so that there was little willingness to adopt their ideas, regardless of merit. * An objective measure of program outcome is a count of the number of participants who remain with the company. Over the six years of the program, 142 “graduated” as change agents. By December 2001 - one year after cessation of the program - 85 (60 per cent) remained with the company. Of these, many are now in strategically important positions within Siemens AG. For those who left, exit interviews revealed that the main reasons were `couldn't find an appropriate post-SNI position” and “was not being used properly.” Indeed, a large number left in the 1998-99 period, in the immediate aftermath of the SNI absorption. (Change agents contracted to stay with the company for at least two years after completing the program. A small number of change agents - never more than 2 per year - chose to leave while still under contract.) The most popular destination for these leavers was start-up companies, implying that the program had imbued them with an entrepreneurial spirit and tolerance of change. In fact, these change agents were in heavy demand from outside employers, who universally viewed the program in a very positive light. * Interviews with 12 graduates (from the first four classes) of the CAP program yielded wide agreement that it offered a superb learning and growth opportunity. As a result of this largely positive outcome, almost all participants returned to SNI with the belief that they had the tools and capability to change the culture and operations of this traditionally conservative company. Some of the details included: - The delivery of a mini-MBA, customized to the change needs of SNI: This included a strong emphasis on entrepreneurship, leadership, and cross-functional integration. In addition, every effort was made to ensure that faculty fully understood the issues facing the company. This program tailoring improved steadily as the program evolved, especially when taken over by internal personnel. - The graduates were exposed to truly top-notch faculty, including Ed Schein, Arnaldo Hax, Gary Hamel, and Peter Senge. - The ability to take an international standpoint on challenges facing the modern corporation. This was particularly important to SNI, who sought to shake off their parochial German image and replace it with a “global” presence. - The chance for real-time application of holistic learning within the business projects. This also created layers of support within the company through the involvement of “business leaders” and “executive sponsors.” - The contribution, beginning in 1997, of a strong...
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