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Creating Lasting Change at Estée Lauder

Published: Reading time: 8 min
o9 Solutions The Digital Brain Platform
o9 SolutionsThe Digital Brain Platform
Published:

During a roundtable discussion led by Tarik Fathallah, Organization Effectiveness Manager at Estée Lauder, participants explored the primary drivers of change, how to support change processes, and the most common constraints companies face.

The Barriers to Change

To start the roundtable discussion, Tarik asked participants what they thought was the biggest impediment to organizational change. One participant mentioned "top-down communication" as a significant barrier to change in their experience. They noted that leaders often need to consult those who will be impacted by the change, leading to a lack of alignment between decision-makers and those directly affected by the change. Other barriers mentioned included tradition, siloed work, and a need for clear strategy and visibility for middle management.

"I've been working in the steel and metals industry for the past twenty years, probably one of the most conservative industries," explained one participant. "Every time you try to introduce something new, the usual response is, 'yeah, but we have never done it this way; we have always done it another way. Why should we change?' That's the "tradition" part. The other point is working in silos. Some say, 'this is Logistics, this is Operations, and this is Sales. We don't want to deal with anybody outside our silos; this is our responsibility. This is our field that we play in, and we don't want anybody else to play with us.'"

What's Driving Change in Today's World

The discussion continued with Tarik referring to a quote by Lauren Bacall, "Standing still is the fastest way of moving backward in a rapidly changing world." The quote provided context for his assertion that change is an integral aspect of modern business, particularly in a VUCA world characterized by volatility, uncertainty, complexity, and ambiguity. Tarik explained that stable growth involves the ability to continuously generate new ways of expanding the market and customer base while maintaining a dynamic equilibrium where change has a symbiotic and harmonized relationship with stability. He cited Netflix as an apt example of this.

On the other hand, maintaining relevance involves continuously innovating and transforming the product or service and value proposition, as Amazon exemplifies. In contrast, Radioshack was cited as a poor example of this. It is important for businesses to consider these drivers of change and how they align with their goals to make informed decisions about change initiatives.

"Maintaining relevance is the ability to continuously innovate and transform your product or service and value proposition. A good example of that is Amazon. A bad example would be Radioshack."

Change is Good, Just Not Too Much

According to Tarik, the COVID-19 pandemic has accelerated the rate of change within the supply chain, highlighting the need for companies to have more resilient and agile operations that can respond quickly to customer needs. As a result, many supply chains have undergone significant transformations, including improving supply chain visibility, implementing end-to-end planning, and enhancing collaboration with suppliers and customers. These transformations often involve changes in mindsets and behaviors, rules of engagement and collaboration, and tools and technology.

However, the success of initiatives can be hindered by bottlenecks and a lack of clear communication and motivation from leadership. "There was also a wave of digital transformations that got 'turbo-charged' over these last few years," said Tarik. "Some companies are now leading 15-20 transformation projects simultaneously, and no matter what size you are, many transformations will create critical bottlenecks and a huge amount of complexity for the organization."

Addressing the Four Major Constraints of Change

Tarik emphasized the importance of addressing four major constraints of change: change capacity, change complexity, change saturation, and fear of admitting failure. He explained that having the right people in the right roles, controlling complexity growth, avoiding overwhelming team members with too many projects for too long, and addressing the fear of failure are crucial for avoiding negative impacts on productivity, quality, and team morale. A participant also pointed out the fear of admitting defeat in traditional industries, which can be seen as a personal failure and impact someone's evaluation.

"Many people cannot deal with multiple changes at the same time because they are not used to it in their daily lives," noted one participant on the overwhelm by too many projects. "This means that projects can get extended or, in worst case scenarios, the whole project fails because people will not give support or mentally withdraw from the project because they cannot cope with the number of changes or transformation projects you want to drive at the same time."

"In the start-up environment, you are allowed to admit when you have failed," said another participant. "But in more traditional industries, this is not really allowed. It's not the project or the measure, but you as a person who has failed, so people are very reluctant to admit that the transformation project didn't work. They try to push it to the end at all costs, even if the outcome will be meaningless and won't have any benefit to the company."

Is your Organization Ready for Change?

Tarik discussed strategies for proactively maintaining the success of a transformation project. He identified several change readiness factors, including organization size, geographic spread, number of sites, strategic timeline, technical readiness, clarity of vision and purpose, trust in leadership, employee experience, and resources. Among these factors, Tarik emphasized the importance of leadership alignment, culture, and employee engagement. He explained that it's essential for leaders to clearly define and understand the vision and purpose of the transformation project and for the company to foster a culture of engagement and involvement among employees.

He emphasized the importance of assessing culture and engagement as part of a change management process. He explained that culture could be divided into visible symbols, decisions and behaviors, and embedded ways of thinking. To measure engagement, he recommended reviewing past changes, collecting direct feedback through stakeholder interviews, and gathering insights on a team's health from the project manager. By considering these factors, organizations can better understand the current state of their culture and engagement and identify areas for improvement.

"Engagement enables adoption, and without adoption, transformations simply fail."

Tarik's Recommendations for Effective Change Management

Tarik ended his presentation by sharing insights with leaders, project managers, people managers, and teams on effectively guiding change management.

1. For Leaders

He encouraged leaders to create a change landscape view by evaluating ongoing transformations against the change pipeline and their impact on teams and prioritizing their change efforts on the most critical elements, starting with the customer. Tarik also recommended aligning the transformation portfolio to control for complexity growth.

2. For Project Managers

For project managers, he suggested validating the value of change by testing assumptions against business and change outcomes, not just milestones, and establishing value-based metrics to measure adoption, not just usage. He emphasized the importance of being able to stop the transformation process if something is not working. Said Tarik, "If you only look at milestones and not the values generated across the board, you will hinder your transformation process. People should feel empowered to pull the plug when they see something is not working." 

3. For People Managers

Tarik advised people managers to lead through change by managing resources and leading people, reminding them that change management is not about controlling the outcome but guiding people through the change process. "Change management is not about controlling the outcome," explained Tarik. "You can control resources; change management is the process of leading people to change."

4. For Teams

Finally, he encouraged teams to shape their change experience by voicing their opinions and concerns to help co-design and co-plan the implementation, providing feedback, sharing pain points, and offering suggestions to take control of their experience with the change.

The Takeaways

1. Top-down communication, tradition, siloed work, and a lack of clear strategy and visibility for middle management can be barriers to organizational change.

2. Change is an integral aspect of modern business. It is driven by the need to continuously generate new ways of expanding the market and customer base (stable growth) or to constantly innovate and transform the product or service and value proposition (maintaining relevance).

3. The COVID-19 pandemic has accelerated the rate of change within the supply chain. It has highlighted the need for companies to have more resilient and agile operations that can quickly respond to customer needs.

4. Successful change initiatives require clear communication and motivation from leadership and should be aligned with company goals.

5. The four major constraints of organizational change are time, money, people, and organizational structure, which should be considered when implementing change.

6. Change management is the process of leading people through change, and leaders should focus on managing resources and leading people rather than controlling the outcome. Project managers should validate the value of change by testing assumptions against business and change outcomes and establishing value-based metrics to measure adoption. People managers should lead through change by managing resources and leading people, and teams should shape their change experience by voicing their opinions and concerns to help co-design and co-plan the implementation of change.

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About the author

o9 Solutions The Digital Brain Platform

o9 Solutions

The Digital Brain Platform

o9 Solutions is a leading AI-powered platform for integrated business planning and decision-making for the enterprise. Whether it is driving demand, aligning demand and supply, or optimizing commercial initiatives, any planning process can be made faster and smarter with o9’s AI-powered digital solutions. o9 brings together technology innovations—such as graph-based enterprise modeling, big data analytics, advanced algorithms for scenario planning, collaborative portals, easy-to-use interfaces and cloud-based delivery—into one platform.

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