Among the highlights:

Most CEOs consider themselves and their organizations to be executing change poorly

Achieving project success does not hinge primarily on technology – instead, success depends largely on people.

Nothing new there, really. But IBM then say

Four common factors helped these practitioners address their greatest project challenges and when used in combination, they provide a synergistic benefit that was even greater than the sum of their individual impacts.

So what are the four factors? According to IBM they are

• Real Insights, Real Actions. Strive for a full, realistic awareness and understanding of the upcoming challenges and complexities, then follow with actions to address them.
• Solid Methods, Solid Benefits. Use a systematic approach to change is focused on outcomes and closely aligned with formal project management methodology.
• Better Skills, Better Change. Leverage resources appropriately to demonstrate top management
  sponsorship, assign dedicated change managers and empower employees to enact change.
• Right Investment, Right Impact. Allocate the right amount for change management by understanding which types of investments can offer the best returns, in terms of greater project success.

Again, not much new. But remember – successful change management does not ignore the basics.

Consider what has happened so far: The U.S. economy is still grappling with the consequences of the worst financial crisis since the Great Depression…. And this disaster was entirely self-inflicted. This isn’t like the stagflation of the 1970s, which had a lot to do with soaring oil prices, which were, in turn, the result of political instability in the Middle East. This time we’re in trouble entirely thanks to the dysfunctional nature of our own financial system. Everyone understands this — everyone, it seems, except the financiers themselves.

There were two moments in Wednesday’s (Congressional) hearing that stood out. One was when Jamie Dimon of JPMorgan Chase declared that a financial crisis is something that “happens every five to seven years. We shouldn’t be surprised.” In short, stuff happens, and that’s just part of life. (…)

As an aside, it was also startling to hear Mr. Dimon admit that his bank never even considered the possibility of a large decline in home prices, despite widespread warnings that we were in the midst of a monstrous housing bubble.

Still, Mr. Dimon’s cluelessness paled beside that of Goldman Sachs’s Lloyd Blankfein, who compared the financial crisis to a hurricane nobody could have predicted. Phil Angelides, the commission’s chairman, was not amused: The financial crisis, he declared, wasn’t an act of God; it resulted from “acts of men and women.”

One thing that this makes clear is that predicting the future is very hard, yet that is something all businesses must try to do. We need to have an idea about what the economy will be like, what people will be interested in, and so on, and plan accordingly.

But when we realize we have got it wrong, we need to react quickly.

Of course, smart organizations are very aware of what is going on in their business world. In this Wall Street Journal article – In Chaos Lies Opportunity – the authors argue that companies can do well even in difficult times if they understand the environment.

For most industries, the optimal time to hit the brakes and downshift was months ago. The questions to be asking now are: Where is the apex of the curve, and how hard should we accelerate to take advantage of competitor mistakes? Who is in trouble and dumping valuable assets in order to survive? Can we add great people who are now available?

What does this mean in terms of organizational change management? It means that good managers scan the outer context of change, and then work out what they need to change within their company so that the company can do well even in in difficult times.

Three major issues that confront the industry: the rise of generic products, the difficulty in finding new treatments, and the large amount of spending on sales and marketing.

The first challenge is that in most countries, a drug company has a 17 to 20 year period when its product is protected by patent. However, this period does not start when the drug comes on the market, because patents are filed during the research phase. On average, a patented drug is on the market for around 12 years before the patent expires and generic competition arrives. Once the drugs have come off patent, their market share and price premium are significantly reduced, because the generic alternative is less expensive.

Second, there is a general feeling that all the ‘low hanging fruit’ of disease have been picked. The industry relies on blockbusters, which are drugs that bring in annual revenues of $1 billion or more. Evidence suggests that it is getting increasingly difficult – and more expensive – for companies to find new treatments. This has led to a significant change in the basic approach to research. Companies are moving from chemistry-based therapies to biology-based therapies, but since the major pharmaceutical companies tend to lack expertise in this area, they are either buying or forming partnerships with either smaller, more specialised outfits or are forming partnerships with larger drug companies.

The third challenge for all major pharmaceutical companies is that they spend a great deal on sales and marketing. Pharmaceutical companies position themselves as research-oriented organizations. In fact, the actual amount that they spend on research and development is less than the amount they spend on sales and marketing.

Reason 1 – I like the beer
Reason 2 – the managers showed a great deal of skill in adapting to the changing business environment (what we at Turris Consulting call the external change context).