change management and survival in today’s complex marketplace · emerging social and digital...

the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.

Prepared for:

the clarion group REAL. CLEAR. INSIGHT.

Prepared for:

the clarion group REAL. CLEAR. INSIGHT.

Change Management and Survival in Today’s Complex Marketplace

HRACC

February 18, 2015 William G. McKendree,

Founding Partner


My Premise for This Session

1. Change navigation is a fluid process that is getting renewed interest. This is due to the fact that changes in the past have been able to be managed using one’s experience and knowledge.

2. In today’s market, however, change is dwelling in the domain of complexity, where one’s prior experience and knowledge no longer applies. This world of complexity is largely being driven by the emerging social and digital technologies that are fundamentally altering the ways in which consumers relate to vendors and to one another.

3. A new buyer psychology has made it very difficult for established businesses to transform their legacy business models to align with this new complex dynamic.

4. This session will examine the forces that are driving this change and what businesses, and their leaders, now need to be doing to survive.


What We Believe About Navigating Change

The purpose of change navigation is to shift strategy, structure and/or behavior to achieve new results.

The type of changes we typically see in organizations are multi-dimensional, in constant motion and non-linear, hence we speak about “navigating change.”

There are two macro sets of accountabilities for navigating change: navigating change and enabling change.

The primary focus of change navigation is to shift organizational and individual behaviors to a desired future state while helping people through the transition.

Change navigation is co-mingled with the work of designing and/or implementing a future state; it is not a separate process.

Organizations typically put in motion change that is evolutionary or revolutionary, but also may experience change that is cataclysmic; these types of change call for distinct approaches to navigating them.

the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.

The New Situation


At a deep level, business leaders are feeling very unsettled


Disruption Has Dramatically Increased Economic Churn


Mobile

Global

Our society has changed…we are:

Highly interconnected

Willing to share information

Independent

Technically capable

Diverse

Socially aware


“Our hyper-connected world impacts the speed and scale of everything and is driving radical changes in supply and demand.”

Facebook Map In 2013


Hierarchical 20th Century Organization

The 21st Century Leadership Challenge

Firm-Centric Mindset

Narrow Definition of Competence

Top-Down Command and Control

Inside-Out Customer Service and Delivery Focused

Some Cross-Functional Collaboration

Cash Flow Engine

Incremental Innovations of Products and Services

Focused on Efficiency Gains and Market Exploitation

Rigid Reporting-Focused Systems

Big Data Focused

Experience-Centric Mindset

Expanded Definition of Competence

Intense Cross-Functional Collaboration and Alignment

Outside-In Flat Organization

Enhanced Role of IT as Experience Enablers

Flexible and Scalable Technology Architecture

Outside-In and Inside-In Multi-Stakeholder Engagements

Can Operate as a Nodal Firm within an Ecosystem of Capabilities

Big Data and Little Data Enabled

Networked VCC Organization


Balance of Power

Shared Innovation “Value Co-Creation”

Clear

Operations Innovation “Process”

Business Model Innovation

“Transformation”

Research and Analytics

Scenarios

Unknown Non-Linear

Participant Explore

Known Linear

Recipient Exploit

Low Multiple Alternatives

High “And Epic”

DEGREE OF UNCERTAINTY

Vast “And Growing”

Many

Few VARI

ABL

ES TO

CO

NSI

DER

From Known to Complex – “Value Creation Frontier”


Business Model Transformation

Business model transformation driven by “stacking” Social, Mobile, Analytics and Cloud technologies

SMAC Stack

Company Infrastructure

Inbound Logistics

Technology Development

Outbound Logistics

HR

Procurement

Services

Mkting & Sales

Ops

Future

AfterBefore

Porter’s Value Chain

Source: Competitive Advantage. Creating and Sustaining Superior Performance by Michael E. Porter

Primary Activities

Supp

ort

Act

iviti

es

Source: Malcolm Frank, Cognizant, Don’t Get SMACked, Nov. 2012


How Companies Have Always Thought How Individuals Now Think Point of Dis-ease

Operating Performance

Growth

Innovation

Direct/Online

Competitive Advantage

Product Portfolio

Talent

Service Levels

Risk Management

Scale

Regulation

Functions

Hopes

Dreams

Desires

Aspirations

Peace of Mind

Family

Lifestyle

Work Style Needs

Stage of Life Activities

Communities

Word of Mouth

Expectations

Experience Source: C.K. Prahalad & Venkat Ramaswamy. The Co-Creation Connection, Strategy + Business (Apr. 2002)

The Competing Mindsets


Our Readiness to Respond



Building the New Capabilities for Co-Creating a Massive Change Effort

Readying leaders to conceive of things being something other than the legacy ways of operating

-3 -2 -1

1 2 4

-4

3

Sandbox Selection

Readiness Assessment

Define co-creation scope

Identify “experiments”

Select interaction environments

(physical/digital)

Identify and engage key stakeholders and

capability partners

Leadership

Culture

Technology

Risk

Building the co-creation sandbox through experimentation that eventually becomes the co-creation ecosystem

Personal Experiences


Reframing Leaders’ Mindset

A place to start to shift to this mindset is by tapping into your

(and others) personal experiences and then drawing the connections to broader co-

creation opportunities.

Value Co-Creation entails a fundamental expansion in mindset from focusing on creating products and services to enabling the experiences that people desire when they interact

with you.



Getting Started:

What hopes, aspirations, desires or needs were you thinking about when interacting with this enterprise (e.g., a doctor’s office, a commercial website, a check-out counter, etc.)?

How could a more valuable experience have been created for you, either at the time of the interaction or as a result of the interaction?

What was your actual experience? Did it meet your expectations? How did it affect your peace of mind?

What would be different if the person or site partnered with you differently so that your desires could be met?

1

2

3

4


Navigating the Change


The Clarion Group Methodology for “Operating Model” Change

Business Environment

Historical Perspective

Mission Vision

Strategic Choices

Hard Structure

Management System

Required Values & Core Beliefs

Required Behaviors

Climate Results (Measurement Architecture)

Lifecycle Stage

Critical Success Factors

Soft Structure

Process

Leadership Capability


Navigating change is embedded in the role of leadership along the entire continuum:

Evolutionary (Transition) Revolutionary Cataclysmic

Changes are intertwined with day-to-day operations of the business; change feels methodical and controllable. Example: Actions taken to meet quarterly revenue targets

Changes are tightly linked to strategic movement; change feels turbulent, yet purposeful. Example: Acquiring a company or a major restructuring

Changes disrupt fundamental assumptions about the business; change feels chaotic and directionless. Example: Regulations that fundamentally change the rules of an industry, e.g., security rules for air travel

Navigating Change Continuum


Distinctions Along the Continuum

Goal Execution/activity-based Strategically-based/directional change of intent Survival

Timeframe Ongoing Peaks and valleys Immediate

Leadership Orientation Planful, methodical, incremental

Adaptable, inspirational, seeing it through; introducing chaos

into order

Instinctive, seeking order out of chaos

Accountability Broad base of leaders are

equipped and empowered to execute

Strategically positioned leaders are equipped and empowered

to drive it

Organizational power gets turned over; new leaders

emerge

Management Process

Integrated into natural course of business

Distinct yet integral to existing management processes Emergency, triage-based

Evolutionary (Transition) Revolutionary Cataclysmic


1. Natural: Let it happen

2. Constant Improvement: Continuous & incremental

3. Flexibility: Open to big swings

and shifts

4. Tipping Point: Many small changes that

add up to big change

5. Experimental: Learning by doing

Orientations to Change and Co-Creation


Understanding the Implications

Identifying the implications of the change before moving ahead can help determine where attention will be needed, and provide a way to anticipate some of the behavioral, communication and education needs to come.

Implication A

Implication of Implication A

The Change


Building the Change Network

The following roles should be identified and/or will emerge over the course of the change effort. Sometimes the same people will play multiple roles:

The individual or groups who have the power to sanction or legitimize change.

The individual or groups who are responsible for actually making the change.

The individual or groups who want the change to occur, but lack the power to sanction it. They are also the early adopters of the change and if positioned well, can “tip” others to support it.

The individual or groups that will be directly affected by the change, and therefore, should be involved in some way in the process.

The individual or groups that are indirectly affected by the change, but are part of the larger system in which the change is taking place and therefore may need to be involved in some way.

Sponsor

Change Agents

Advocates and Tippers

Participants

Independents


What Makes a Good “Case for Change”?

Creates urgency

Timed right

Establishes noble purpose

Taps people’s fears

Shows magnitude

Shows relationships

Believability

Taps emotions

Personalized to the audience

Mutual need

Data and Facts

Others?


Change as Performance

With change, performance drops

Adapted from the work of Daryl Conner

However, the degree of drop can be minimized

Well of Resistance

Perfo

rman

ce/E

ngag

emen

t

Time

Before Change

During Change

After Change

Perfo

rman

ce/E

ngag

emen

t Time

Awareness

Trial Acceptance

Buy-in Conceptual Understanding

Commitment


Change as the Pathway

Unfreeze Mobilize Realize Reinforce Sustain PHASE

CONTENT

OUTCOMES

Set the direction

Create the desire and will to change

Communicate and build confidence

Secure widespread shift in behavior

Underpin with changes in structure, resources, people programs, processes, etc.

Strive for continuous performance improvement

Push the Limits

Embed New

Culture

Build the Energy

Break with the Past

Performance Lift-Off


Change as a Formula

Change Dissatisfactions Dissatisfactions that exist with the way

things are

Vision Vision or compelling word or picture that describes where we

believe we must get to, to survive

First steps The key initial

plans needed to move forward

Linkages The connections

required to assure the change, e.g., to

groups, other individuals or to the

system and infrastructures that

need to be aligned to support and enable

the change

Resistance The natural reaction

everyone has to changes around

them

C = L > D x V x F x R

the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.

Back to the Premise


The marketplace and consumer expectations have transformed.

A new leadership mindset is needed – company vs. individual consumer mindset.

This has imposed new complexity to how our businesses respond.

Our change navigation strategies will need to be much more sophisticated.

Leaders will struggle with this change.

For leaders to step into change of the magnitude described here, they will have had a personal experience that frustrated them.

For change to be navigated well, the right sponsors and support need to be in place and the right approach needs to be used.

Complexity of Complex Change Navigation

change management and survival in today’s complex marketplace · emerging social and digital...

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