transforming organizational change

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Managing Change

TransformingOrganizational Change

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Managing Change

Presentation Coverage

IntroductionWhy Change ?

What is change Management ?

Types of Change

Cultural Dimensions of Change

Typical forms of Teams in Change

Management

Competencies important in the future

IT to Manage Change

Managing ChangeImplementation Steps

Conclusion

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Business Scenario in 1980s - 1990s..

Effectivemanagement of

uncertainty

1980s Scenario 1990s Scenario

Introduction - Why Change ?

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The pressures of todays business

We call these pressures the 3 Cs :

Customer, Competition,Change

Constant Change

Customer takescharge

Competition

Intensifies

(Political,Social (habits &

preferences),Economic,

Technological etc.)

Technology

Product Variety

/Quality / Reliabilty

Delivery of products

and services

After Sales Service

Customers Response

Cost / Price

Creating Pressure on

organisations to

change and bring

continuous process

improvements in


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Restructuring - Radical and Drastic

Strategic Alliance/ JVs

Mergers and Acquisitions

Bankruptcy

And yet there are companies which have emerged winners ...

Business pressures

PROFIT

CASH

Customer Requirement

Fast Response

Product Variety / Quality/

Reliability

Low Cost

Dependable Delivery

After Sales Service

Other Pressures

Import Restrictions Lifted

Taxes and Duties

Global Competition

Product Alternatives

Leading to


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How to run & win the race ?

Consistent IMPROVEMENT by

understanding the OPPORTUNITY

makes the difference

CHANGE


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Change Management

Change management is the continuous process of aligning an organisationwith its market place and doing it more responsively and effectively thancompetitors.

Alignment is the continuous synchronization of four key management leversstrategy, operations,culture, and reward.

The organisation must accept the fact that change is going to happen andrecur frequently. Its a reality.

Change management must adapt a culture of Continuous ImprovementProcess (CIP) in terms of Cost,Quality & Delivery.

Change Management should improve response time to customer for deliveryof Product or service or complaint handling.

What is Change Management?

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Types of change Structural Change

Cost Cutting Change

Process Change

Cultural Change

Source: Managing Change & Transition , Harvard Business Essentials


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Approaches to Change

Theory E Change Aims at maximizingshareholder value

Theory O Change Aims at developingorganizational capabilities

Source: Managing Change & Transition , Harvard Business Essentials


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Key Factors in Theory E and Theory O Change

Source: Michael Beer and Nitin Nohria, Cracking the code of Change, Harvard Business Review


Dimensions of

Change

Theory E Theory O Theories E and O Combined

Goals Maximize shareholdervalue

Develop organizationalcapabilities

Embrace the paradox betweeneconomic value andorganizational capability

Leadership Manage change from thetop

Encourage participationfrom the bottom up

Set direction from the top andengage the people below

Focus Emphasize structure andsystems

Build up corporate culture:employees behavior andattitudes

Focus simultaneously on the hard(structures and systems) and thesoft (corporate culture)

Process Plan and establishprograms

Experiment and evolve Plan for spontaneity

Reward System Motivate through

financial incentives

Motivate thru

commitment use pay asfair exchange

Use incentives to reinforce change

but not to drive it

Use of consultants Consultants analyzeproblems and shapesolutions

Consultants supportmanagement in shapingtheir own solutions

Consultants are expert resourceswho empower employees

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Types of transformation


Planned Unplanned

Internal Changes in products orservices

Changing employeedemographics

Changes in administrativesystem

Performance gaps

External Introduction of newtechnologies

Government regulations

Advances in information

processing andcommunication

External Competition

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Market-driven, competitive environment

Winners and losers - ability to respond to the pace ofchange

Change happens - it just happens

Why transformation


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Shared Vision

Design anddevelop

Structure

Develop Strategy

DevelopSystems for

infrastructure

Define Style

Develop andacquire Skills

Mckinsey 7s model for Strategic Management

Staffing

1

2

7 3

4

5

6

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4 MAJOR CULTURAL MODELS

The HAY CONSULTING GROUP has after substantial research in this area

identified 4 major "cultural models" operating in organisations today.

These include the traditional, functional culture along with 3 newer evolving cultures: process, time-based and

network. These cultures are driven and shaped by the 4 primary areas that organisations emphasize in order to

achieve their desired results- Reliability, Customers, Flexibility and Technology.

Note: Few organisations are however "culturally pure" . In most organisations there are variations and hybrids, suchas a process/time-based culture OR a time-based/network culture. 14


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I.The Functional Culture

1.Technology & Engineering

2.Reliability and quality

3.Customer needs

4.Flexibility and agility


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CEO

Head ofMarketing

Head ofR&D

Head ofOperations

Head ofHR

Head ofFinance

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II.The Process Culture

1. Customer Needs

2. Reliability and quality

3. Technology & Engineering

4. Flexibility and agility


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PROCESS BASED ORGANISATION


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PROCESS BASED ORGANISATION

( Process Matrix )

CUSTOMERS

CORPORATE GOALS

ORDER OBTAINMENT

GROUP

ORDER

FULFILMENT

NEW PRODUCT

DEVELOPMENT GROUP

(Marketing) (Supply Chain Group) (R&D)

PRODUCT MANAGEMENT GROUP

( 4 Ps Plus Interface with R&D, Field Sales Force, Production, QC, Processing,

Packing & Distribution)

PEOPLE DEVELOPMENT PROCESS / PROGRAM

(Performance Management System, Compensation System, Reward RecognitionSystem, Training & Development System, Talent Management, Competence

Building, Leadership Development etc.)

FINANCE / ACCOUNTING

( Budgeting, Costing, Cash Flow,P & L, Balance Sheet, Taxation )

IT/ ERP( MIS ,planning system, Order Processing, Inventory tracking system, delivery system )18


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Existing

OrganizationHierarchy

Team Elements

Process

Action

Teams

(PATs)

Corporatecouncil

Support

Services

Directors / VPs /GMs

Managers

Workforce / staff

PAT / CFT

Typical forms of Teams in ChangeManagement

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TOP

MIDDLE

SHOP FLOOR

Management

FACT BASE

EFFECTIVE UTILISATION OF PEOPLE POWER

Mission Strategic Planning New Products Quality systems Task Force CFT/SIT QCC Facilitation DRAM QC Circles TEIAN 5S

Total Employee Involvement

EffectiveCommunication is

the key

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III.The Time-Based Culture



3. Customer needs



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IV.The Network Culture


2. Customer needs




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C l l D f Ch


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Change Management


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C l l Di i f Ch


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Performance

Time

CurrentValley of despair

Change

Objective

Change CurveChange Management


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Maximising Customer Satisfaction

Continuously improving operations

Responding to customer feedback

Acquiring cross-functional knowledge and skills

Pushing decision-making to the lowest levels

Encouraging creativity and innovation

Encouraging training and learning (learning organization )

Treating employees fairly and consistently

Encouraging Teamwork and two-way communication

Providing secure employment thru performance and accountabilityetc.

Some KEY elements of Work Culture

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Work CultureFunctional

Process Time based

Team Type

Attribute

Commitment

Duration

Process

Outcome

Direction

Skills

Parallel Process Project

Part-time

Short / Long-term

Individual

Individual

Diverse

Full- time

Permanent

Collective

Shared

Consolidate

Full- time

Long-term

Collaborative

Shared

Diverse

Team-type characteristicsQuality

First


Functional Skills Process SkillsProject relatedSkills

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0%

10%

20%

30%

40%

50%

60%

70%

80%

Customer Satisfaction Product / Service Quality Productivity Staffing Flexibility Employee Satisfaction /

Morale

%ofRespondents

Why teams?

To Improve


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COMPETENCIES IMPORTANT IN THE FUTURE

For Senior Management

Strategic thinking. The ability to understand rapidly changingenvironmental trends, market opportunities, competitive threats,and strengths and weaknesses of their own organizations, and to

identify the optimum strategic responses. Change leadership. The ability to communicate a compelling vision

of the firms strategy that makes adaptive responses tostakeholders

Relationship management. The ability to establish relationshipswith and influence complex networks of people who can be regardedas coequals or are internal or external business associates. Thecooperation is needed for the organization to succeed.

Competencies Important In theFuture

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M i Ch IT to Manage Change


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(I) HUMAN RESOURCES INFORMATION SYSTEM (HRIS)

Employee

Database

In the PAST

Employee profile

Manpower Planning andRecruitment/ selectionsystems

Training and Developmentsystems

Payroll systems etc etc.

Comprising

of

Why this?

Benefits to the organisation

To attract and retain talent

Creation of invisible Assets for the organisation ( Eg. Cycle time

reduction,Robust supply chain management, JIT etc etc.

Flexibility in operations

Creation of knowledge and skill based learning organisation

Attainment of company goals

Competitive advantage in

business through peopleand processes

(For integration of HR systems) TODAY... Performance management systems

Compensation management systems

Skill inventory and development

Management Development Systems(Career and Succession Planningsystems )

Benchmarking best practices inindustry

EVA / ESOP modules

Self-learning Desk (through CompanyIntranet for knowledge creation )

Focused

on

*

*

IT to Manage Change

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Managing Change Implementation


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BASIC GUIDELINES DURING CHANGE

Following are eight guidelines for changing a corporate or team culture.

1. Have a good reason for making the change

Culture changes are usually not fun. Take them seriously. Make sure you

understand why you are making the change and that it is necessary.

2. Involve people in the change

People who are involved are less likely to resist. Being a part of the

planning and transition process gives people a sense control. Ask for

opinions about how they would do it. Consider conducting surveys, focus

groups and polls.3. Put a respected person in charge of the process

Each change needs a leader. Select someone who is seen in a positive

light by the group.

Managing Change - Implementation

Steps

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BASIC GUIDELINES DURING CHANGE4. Create transition management teams

You need a cross-section of your group to plan,

anticipate,troubleshoot, coordinate and focus the change efforts.

You cant do it alone.

5. Provide training in new values, skills and behaviors

People need guidance in understanding what the new way consistsof and why it is more desirable. Training brings groups together; it

allows them to express their concerns and reinforce newly skills.

6. Bring in outside help

For some reason, there is often more power in what an outsider saysthan in the same suggestions coming from inside. Use this power to

reinforce the direction in which you want to go. Outsiders bring

important information and a fresh perspective.


Steps

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BASIC GUIDELINES DURING CHANGE

7. Establish symbols of change

Encourage the development of newsletters, new logos or slogans and /

or recognition events to help celebrate and reflect the change.

8. Acknowledge and reward people

As change beings to work, take time to recognize and recall the

achievements of the people who made it happen. Acknowledge the

struggle and sacrifices people have made.


Steps

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Facilitating Organizational change

Sensitivity Training: Developing personal insight

Survey feedback: Change by sharing information

Team building: Creating effective Work Groups

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Managing Change Managing Change - Implementation


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So how do we manage change effectively ?A. Redefining organisational strategy and goals.

B. Re-engineering of core business processes

New Product Development process ( NPD)

Order obtainment and fulfillment process (SCM)

People development process ( through right work culture / methods ,

competency building, employee development initiatives , compensation

and rewards etc.) (PDP)

Proper Integration of core processes through appropriate IT /ERP

systems etc ( to create a database for on-line decision making. )

RESULTS IN

Increased efficiency in

operations ( in terms of

Cost,Quality and Deliveryof product and services )

Increased Economies of

scale (EOS) in operation

Improved productivity of assets

( Man,Machine,Material and

Money )

.. And thereby WINNING in the market place

Examples of Effective change managers : TVS Suzuki , GE, Sundaram Fasteners, Britannia etc.


Steps

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HumanResourcesSystem

How people areselected /Nurtured /

Developed

Organisational

purpose

How work isdesigned

How people arerewarded

How performance

is planned/Managed /Reviewed /Monitored

Integrated IT system

Re-engineered HR System : A Conceptual Framework

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CONCLUSION

1. Organisational Learning2. Continuous Improvement Process

3. Competitive Culture

Creation of an organisation which has the elements of :

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For listening..

We believe in communicating & mutuallearning.

transforming organizational change

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