ACT (Accelerated Corporate Transformation) Process) is a business process designed to accelerate business transformation and generate breakthrough performance. The process integrates a simple and streamlined approach to general management into the core operations of a business. ACT consists of four major steps that create an annual cycle:

Confront Reality

Focus

Align & Engage

Execute

History and founders

ACT was originally distilled by Dr. Robert H. Miles while serving as chair of the innovative MOE (Management and Organizational Effectiveness) program at the Harvard Business School in the mid 1980s. In this program, CEOs and division presidents applied to the program by describing the most difficult challenge facing their organization. After several years in running the program, a pattern emerged where the top issue was clearly not that the executives could not figure out a strategy, but that they had trouble getting their full organization to execute a stated strategy effectively.

The process was refined through use over the next decade at companies like GE, Office Depot, National Semiconductor, and Rockwell. In 1996, Michael T. Kanazawa began collaborating with Dr. Miles in refining the ACT process to better integrate strategy and speed into the approach. As head of a corporate strategy team for a $10 billion telecommunications company, Kanazawa worked with Dr. Miles as an external consultant to architect a transformation plan for the company. Then, from 1997 to 2001 the two worked together on a series of corporate transformations, continually refining the speed and simplicity of the process to be more rapidly and effectively executed by leaders at all levels of companies.

The ACT process

The ACT process is built around two major phases, an accelerated launch phase and an execution phase that spans a full performance year. The process is also designed to repeat each year, going through a renew phase before launching the next annual performance cycle.

The launch phase includes three key steps:

Confront Reality: Based on the experience that too often companies lose connection with external and internal realities, the ACT process begins with a step of gathering information on markets, customer needs, competitors, and internal capabilities.

Focus: With a fact-based view of reality, leaders are better armed to make firm decisions about organization-wide priorities and areas of focus. The vision for the future, business model and top corporate initiatives are documented in a single-page view of the direction. The outcome of this step is the development of a maximum of 3-4 corporate initiatives. Each initiative is converted into operational terms which include goals, metrics, and specific commitments to action.

Align & Engage: Prior to finalizing all of the tactical plans, the process drives a high-engagement cascade process throughout the full organization. Leaders at every level work with their teams directly to understand the direction and then determine the best ways for their area to support the initiatives.

Execute: The execute phase is made up of quarterly checkpoints and a mid-course assessment.

Quarterly Checkpoints: There are quarterly performance checkpoints established to keep the focus and energy supported throughout the year. In each checkpoint the initiatives are reviewed for performance against the metrics, to share best practices across the organization, to find ways to accelerate gains and work around barriers. These checkpoints are replicated from the top of the organization through every level.

Mid-Course Assessment: After working through the launch phase and first two quarterly checkpoints, a mid-course assessment is conducted that focuses on the effectiveness of the process itself. This assessment is useful in identifying ways to improve the process going forward. It also serves to allow leaders to simultaneously commit to the process for another year while opening a dialogue about things that may not be working well currently.

Applications of ACT

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<ref>BIG Ideas to BIG Results: Remake and Recharge Your Company, Fast, FT Press/Pearson Hall, 2008</ref>

Office Depot

After a planned merger with the #2 competitor in the market was blocked, the new, internally promoted CEO of Office Depot faced a huge challenge—to revitalize the company’s sagging retail operations in a single year. The company’s leaders resolved to once again make Office Depot the industry’s most compelling place to invest, shop, and work. Indeed, these became the major initiatives upon which the company’s revitalization was launched. They succeeded. In a year, Office Depot’s share price jumped by 156%, customer complaints fell by 50%, and employee retention rates rose by 72%. The company also moved up from the bottom 10% of the Standard & Poor’s 500 to number two in terms of percentage increase in shareholder value. “The biggest surprise,” then-chief executive Bruce Nelson reflected, “was how quickly people in our company said, ‘Count me in. Let’s go.’ I knew it would happen; I
just didn’t think we’d get there this fast.”

Southern Company

Southern Company needed to transform its major production function, which consisted of fossil fuel and hydroelectric power plants spread over five geographically dispersed operating companies each with its own union, into a single, new-generation company (or GenCo) called Southern Power. Changing from a staff unit within a regulated public utility into a selfcontained, competitive business required Southern Power to learn a whole new way of thinking and acting, all under the white-hot light of national prominence. Parent Southern Company, acclaimed as Fortune magazine’s “Most Admired” company in the utility industry, was the nation’s largest power company at the time, with annual net profit of more than $1 billion. The makeover involved 91 plants and 60,000 union based employees reporting to five separate subsidiaries, and the feat was accomplished in the middle of a CEO transition. After the repositioning, Southern’s costs plunged by more than $100 million in a year, and over $300 million in three years, while accidents were cut by 30% and union grievances fell by 72%. Employee morale soared as well.

Symantec

Symantec, once a vibrant Silicon Valley software maker, had stopped growing. Sales were stagnant at about $400 million per year—largely because its past strategy of acquiring companies for growth had run its full course. In fact, all of the best targets in the market had been acquired and future growth would require a different strategy based on internal innovations. With strong leadership and a simple process, Symantec managed to fold its disconnected subsidiaries into one smoothly integrated business focused on customer needs. The new customer focus and highly engaged team revived innovation, inspired new products, and triggered steady sales growth worldwide. In the first year alone, Symantec improved morale, slashing employee turnover by 41%. Meanwhile, Symantec’s stock price rose by 53%, its revenue jumped by 24%, and its profitability soared by 290%.

References

Leading Corporate Transformation: A Blueprint for Business Renewal, Josey-Bass, 1997

Corporate Comeback, the story of renewal and comeback at National Semiconductor, Josey-Bass, 1997