change management gihan

8/3/2019 Change Management Gihan

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Change management


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MANAGEMENTAGENDA

Definition

Types of Change

Who should Participate?

Why we need Change Management ?

Change management process

Methodology selection criteria

Key elements of successful organizational change

What did Jack Welsh do?


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Who should Participate?


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Change Management:

activities involved in(1) defining and instilling new values,

attitudes, norms, and behaviors within

an organization that support new waysof doing work and overcomeresistance to change;

(2) building consensus among customersand stakeholders on specific changesdesigned to better meet their needs;and

(3) planning, testing, and implementing allaspects of the transition from oneorganizational structure or businessprocess to another.

Definition


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Understanding how one personmakes a change successfully

Organizations dont change,

individuals do. No matterhow large of a project you are takingon, the success of

that project ultimately lies with eachemployee doingtheir work differently, multipliedacross all of theemployees impacted by the change.Effective changemanagement requires an

understanding for andappreciation of how one personmakes a changesuccessfully. Without an individualperspective, we areleft with activities but no idea of thegoal or outcomethat we are trying to achieve.

Understanding what tools we have tohelpindividuals make changessuccessfully

While change happens one person ata time, there are

processes and tools that can beused to facilitate thischange. Tools like communicationand training areoften the only activities when nostructured approach isapplied. When there is an

organizational changemanagement perspective, a processemerges for how toscale change management activitiesand how to use thecomplete set of tools available forproject leaders andbusiness managers.

Organizational changemanagement

Individual changemanagement


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When the rate of change outside exceeds the rate of changinginside, the end is insight

Jack Welch

Chairman & CEO

General Electric CO.

Employees who go through a change are:

More aware of what's changing and the all-important why of the change.More interested in participating in the change in order to achieve theobjectives of the change.

More knowledgeable about the change.More skilled in the new ways of doing business that the change isbringing.More comfortable with the change because they have the support ofsupervisors who provide positive feedback throughout the change.



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Change management process

The change management process is the sequence of steps oractivities that a change management team or project leaderwould follow to apply change management to a project orchange. the most effective and commonly applied change,most change management processes contain the followingthree phases:


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Phase 1- Preparing for change

(Preparation, assessment and strategydevelopment)

Phase 3 - Reinforcing change(Data gathering,corrective action and recognition)These phases result in the following approachas shown

Phase 2 - Managing change(Detailed planning and changemanagement implementation)


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Phase 1 - Preparing for changeThe first phase in methodology is aimed atgetting ready. Itanswers the question: how much change

management is needed forthis specific project? The first phase provides

the situationalawareness that is critical for effective changemanagement.

Outputs of Phase 1: Change characteristics profile Organizational attributes profile

Change management strategy Change management team structure Sponsor assessment, structure and roles


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Phase 2 - Managing changeThe second phase of process is focused on

creating theplans that are integrated into the projectactivities - what peopletypically think of when they talk aboutchange management. Basedon the process , there are five plans thatshould be created to

help individuals move through the ADKARModel.

Outputs of Phase 2: Communication plan Sponsor roadmap Training plan Coaching plan Resistance management plan


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Phase 3 - Reinforcing changeEqually critical but most often overlooked, the

third phase ofThe process helps project teams createspecific action plans forensuring that the change is sustained. In thisphase, project teamsdevelop measures and mechanisms to see ifthe change has taken

hold, to the see if employees are actually doingtheir jobs the newway and to celebrate success.

Outputs of Phase 3: Reinforcement mechanisms Compliance audit reports Corrective action plans Individual and group recognition approaches Success celebrations After action review


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Key elements of successful organizational change

1. Committed and active participation of leadership

2. Culture change3. Energetic involvement of an empowered and educated work force4. Effective communication and measurement5. Aligning human resources systems with the goals and objectives of change

Methodology selection criteria for ease of use:

Easy to implement Easy to understand Easy to communicate to others Simple Practical Structured and systematic Logical

Comprehensive and holistic


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What did Jack Welsh do?


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115 Year History (1892) - only remaining company from original Stock Market Market Capitalization - 560 Billion Dollars Most Admired Company for third straight year in Fortune

Worlds Most Respected Company for two years straight in Financial Times

Fact

s


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PowerSystems

CapitalAircraftEngines

ConsumerElectronics

Plastics

Org

aniz

ation

NBC

Medical

Appliances

GE

View from the CEO:

If youre not #1 or #2

in your industry

youre not long for GE


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The web/eBusiness:

DISBELIEF - Why jump into this business when nobody

makes money? Jurgen Hubbert, Daimler Chrysler Board

member.

DENIAL - The money will be made in the software on the

client - Microsoft

FEAR - I was afraid of it because I couldnt type - Jack

Welch

ItW

ont

Last

$

Why Join the Bandwagon?


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R

eaction

Log Plot of Internet Users vs. Time

1

10

100

1000

10000

100000

1000000

10000000

100000000

D-69

D-70

D-71

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D-95

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D-99

Date

#

ofNodes

on

Internet

GE "Gets It"

Microsoft "Gets It"

Heres Why!


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Schwab Results:

In June 1998, Schwab's Web site handled about 600,000secure transactions a day.

In November 1999, less than a year and a half later:

The site handled well over 7 million secure transactions a day

Two-thirds of their trades were conducted over the Web

Schwab managed 263 billion dollars in online assets versus 28

billion dollars for e*Trade

The company took in 4.7 million dollars a day in revenue versus

Amazon's 3.8 million dollars a day

Source: Fortune Magazine, 11/8/99

MoreRe

ality

Look at the potential outcome


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The Realization:

VISIONARY - The Network IS the computer - SUN

DREADWe are late to the game and are behind

Microsoft - December 7, 1995

UNEASY - If we dont embrace it and make it as

engrained as breathing - we may be taking our last

breath - Jack Welch - January 1999

ItsheretoSta

y

The Light Goes On!


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Conclusion of Jack Welchs Annual Address to shareholders April 26, 2000

So ... to conclude ... Id like to remind you once more that there is very little ... if

anything ... new in management today ... and that this "new economy" and "oldeconomy" which we hear about incessantly are just labels invented by pundits.

There is however . . . something new and something very real ... that is changing

the pace and scope of business as it has never been changed before. Anycompany ... old or new ... that does not see this technology[eCommerce] as literally as important as breathing ... could be onits last breath.

But for those of us ... including GE ... who are capturing it ... are energized by it ...and see it as the greatest opportunity in our history ... the excitement is like nothing

weve ever experienced ... and the rewards [of eCommerce] promise tobe greater than we can imagine.

The Internet truly makes the old ... young and the slow ... fast ... and what could bea better tonic than that?

This is a wonderful time to be part of GE ... Ive never been more confident that our

most exciting days lie ahead.GEg

etsreligio

n

GE Gets Religion


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In Jack Welchs 20 year tenure, only 5 Corporate Initiates have

emerged:

Workout Globalization - 1985

20% Revenues from abroad when initiated

41% Revenues from abroad now

Product Services - 1995 $8B from services when initiated

$17B from services now

Quality - Six Sigma - 1996

eBusiness - January 1999I

nitiatives

And this is a Big One!


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It Appears that this is not a Winner Take All Market?

There is enough room for multiple companies to prosper tosome extent

GE has typically been a Fast Follower

In this case GE was slow to recognize it, but is moving fastnow.

GE had to quickly muster support in order to get the

momentum of this dinosaur to turn on a dime

How did they do it?A

ppro

ach

Implement Corporate Change


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Q: Where does a 500 pound Gorilla Sit?

A: Anywhere it wants to!

S

trategy

The goal: to drive profit through leveraging technologies

execute quickly (eTime) - help keep the startups at

bay

provide better service

reduce cost = increase margin

eBusiness (the web) provides an opportunity to

seemingly integrate the diverse businesses of GE

What a large company lacks in agility it can make up withcapital.

GE has the resources and infrastructure tocompete with eBusiness


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Old Economy Comparisons -

Paradigm

Shift

New Economy Comparisons -

Best In Class

Lockheed Aircraft

Maytag Washers

Sony Televisions

BASF Plastics

Best In Class

Yahoo!

Amazon

AOL

"There's no such thing as an 'old economy' and a 'new economy.'

Commerce is the same as it was 500 years ago. People sell and people

buy--whether it's from a wagon or the Internet." - Jack Welch


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Focus on key emergent technologies

Like Java, J2EE and XML standards as they

solidify/integrate

Directory service and Content management tools

(database)

b2b connectivity tools and broadband!

Implementation

Corporate wide eBusiness Training - provide Internet

Mentors to business leaders

DestroyYourBusiness.com

Attract and retain the best staff - think outside the box

Instill Fear - do it or die ...

Educate the consumer

Leverage the GE Brand

Strategic Alliances (TradeOut.com)

eBusiness

Strate

gy

Put Your Money Where Your Mouth Is


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eBusiness has outgrown the label initiative at GE

Changing the company to the core

eBusiness has changed the DNA of GE forever by energizing and

revitalizing every corner of the company

eBusiness is not rocket science - it is simply the application of

fairly elementary technology - initially this was not understood and

this is why the dot.com companies led the charge instead of thehighly resourced companies like GE.

GE can leverage their 100+ year brand which is widely recognized

(and must be protected)

eBusiness is the final nail in the coffin of bureaucracy which is not

tolerated in the GE culture

Implementation

Its Become THE Way of Thinking


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Implementation

risk

vulnerability

exploit

Security

CustomerCentric

CommonArchitecture

Putting the Pieces together:

BrandLeverage

Three ClickRule

Privacy

ROI

Stickiness

RevenueGeneration


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How is GE doing on leveraging eBusiness?

Customer Service

Typical cost to service a phone interaction with the client $5.00

Typical cost to service a web interaction with the client $0.20.

GE Appliances had 20 Million calls last year! You do the math!

On-Line Auctions

Inside GE auction transactions amounted to $200 million in 1999 and

will reach $5 billion this year. Last year transactions cost GE $50 apiece;

online the cost is $5

Market Share

GE Power Systems capturing 20% more market share (70% total)

partly due to web-based integrated turbine performance monitoring

Perform

ance

Pretty Well!


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What Do You Think?

Will GE Prosper in the New Economy?

Vot

e (a) Total Domination (b) Success but Shared (c) Total Failure

(d) Too soon to tell

?


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Summ

ary

Can GE succeed in eBusiness?

Jack is a change implementer If anyone can change a corporate culture, its

Jack

Bureaucracy of larger companies tends to slow

change, but Jack addresses this in his plan The change is being driven for the right reasons

Cost, Quality, Speed

not just because its a wave

They are investing in the technology They have deep pockets.

If Any Dinosaur can change its spots, GE can!


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Failures

Most Critical Failure of Changes


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Most Critical Failure Point of Change

1. Resistance to change

Dealing with resistance:

Consider different people Work with values and beliefs Understand and relate to needs and

problems

Tailor your message to your audience


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Critical Failure Points Of Changecont.

2. Lack of Well articulated vision (supported by staff)

Clear communications

Executive sponsor and/or change coalition

3. Unrealistic expectations

Believing dictating an executive vision

translate into the new state!!!

4. Change complexity

5. Inadequate execution/project management skills

6. Declaring victory too soon


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Conclusion


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Conclusion

During his 20 years of leadership

at General Electric GM.Welch increased the value of

the company from $13 billion to severalhundred billion.

change management gihan

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