changemanagement finalassignment
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FinalAssignmentTRANSCRIPT
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Change Management
Final Assignment
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Change Management Plan
Arulmani Balasubramanian
MBA
Hult, London Campus
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Executive Summary
This report recommends a change management plan for the change in
organisations structure executed in an Indian Subsidiary of an American
MNC Software Product Company. The Indian Subsidiary was changed
from a development organisation (cost center) to a service organisation
(revenue center).
This report has four parts, Introduction, Analysis, Change Management
Plan and Conclusions
The Introduction provides background of the Organisational Change and
lessons learnt from the change execution. The Analysis elaborates the
change management theories that could have been used, and
recommends an approach for the change execution. The Change
Management Plan details the activities, timeline, and key personnel for
the recommended approach.
Since I was part of the Indian subsidiary, the names of the individual and
company have been kept anonymous.
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Contents Introduction .............................................................................................. 4
Planning for the change ......................................................................... 4
Execution of the Change ........................................................................ 4
Lessons Learnt ..................................................................................... 5
Analysis .................................................................................................... 6
The Approach ....................................................................................... 6
Change Management Plan ........................................................................... 8
Scope & Purpose .................................................................................. 8
Kotters Eight step model Framework ................................................... 8
Mckinseys 7S Model ........................................................................... 10
Change Management Team (CMT) ........................................................ 12
Conclusions ............................................................................................. 13
References .............................................................................................. 14
Appendix 1 .............................................................................................. 15
Appendix II ............................................................................................. 16
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Introduction
The credit crunch in 2008 led to decrease in sales of software products, forcing
the American MNC company to look for other revenue avenues. This led to the
companys focus towards the service market of its software products.
The top managements vision was to maximise the service revenue of its
software products, within the least possible time and cost, by creating a new
service team.
Planning for the change
The top management identified the development centre in India for creating the
new service team. As it was a low cost center and had experiences of handling
many of its software products, the cost and time for change would be the
minimum.
A small team was created in US and Europe, to make the change management
plan. The team was instructed to completely transform the existing development
center in India to a Service center.
The small team from Europe and US changed the existing organisation structure
and identified new teams for every employee of the development center.
Execution of the Change
Upon finalising the new organisation structure, the small team along with top
management had a conference call with the local management of the Indian
subsidiary. In the conference call, the local management was directed to execute
the organisational change.
The local management then decided to send an email to all the employees of the
Indian subsidiary informing them about the organisational change. Every
employee was directed to contact his/her reporting manager to their new
positions.
After 2 days, the local management informed the top management about the
completion of the organisational change.
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Lessons Learnt
In the ground level, it took around 6 months for the employees of the Indian
subsidiary to acknowledge the new structure, position and job expectations. The
acceptance of the change was very low even after a year, since there was lack of
clarity from HR policies to decision making responsibility.
In short term, Indian subsidiary reached 50% utilisation of resources within first
4 months but after a year, the Indian subsidiary had issues in delivering better
quality service due to no effective internal process. Since after an initial phase,
lot of senior resources left the organisation and customer demand were
unpredictable.
Below are the some of the gaps identified from the above approach to change
management
1. Vision and strategy of top management was not shared with the
employees.
2. The local management was not involved in the planning stage.
3. The small team in Europe and US made the changes without skill set
mapping of the employees.
4. HRs role was minimal
5. Training requirements to develop skill as per new job expectations was
not done.
6. Buy in and motivation of the employees were not done
7. Local management did not have a communication plan to execute the
change implementation
8. Cultural impact was not considered during the planning process
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Analysis
Are there any change models and theories which could have been applied, to
ensure that the gaps are covered and execution of above change was more
successful?
This section is a detail the approach to apply some of the change management
models and theories to the above organisational change.
The goal of the approach is reduce the performance dip during implementation
of organisational change
Figure 01 Change curve (Sbaglia, R. (2012)
The Approach
To identify the applicable models for the organisational change, it is essential to
identify the metaphor of the organisation.
From the various metaphors explained in Gareth Morgans work (Cameron, E.,
Green, M. 2009) on organizational metaphors, this organisation resembles both
like a political system (since American MNC consists of 40 organisations which
were acquired) and like an organism since changes are made in response to an
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external change). Hence from the various models explained by Cameron, E.,
Green, M. (2009), the Nadler and Tushmans congruence model and the Kotters
eight steps model (Kotter, J P. 2007) are more applicable since the organisation
is political system and organism metaphor. But Nadlers and Tushmans
congruence model is a good tool to organise the change process rather than a
template for implementing the organisation change and it focuses on the
problem rather than the solution (Cameron, E., Green, M. 2009). Hence
Mckinseys 7S model is considered as an alternative for Nadlers and Tushmans
congruence model (Cameron, E., Green, M. 2009)
Apart for the Kotters Eight Step model, the framework of Project Management
Body of Knowledge (PMBOK), created by the Project Management Institute (PMI)
was also considered (SoftExpert Software for Performance Excellence, 2012).
But since in many organisations, the organisation change can be more complex
than a project and to ensure the framework is more generic, the Kotters Eight
Step model was choose.
Hence the approach to the organisational change is to have Kotters Eight step
model as the overall framework and use Mckinseys 7S model in the planning
process.
Figure 02: PMBOK Knowledge Areas and Respective PM Processes (SoftExpert Software for
Performance Excellence 2012)
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Change Management Plan
This change management plan identifies the scope of the organisation change,
key players, the process and the framework to be followed for execution of
organisation change for the Indian subsidiary of an American MNC company.
The Kotters Eight step model is used as the framework for this plan.
Scope & Purpose
The purpose of this change management plan is to ensure minimum dip in the
performance level of the Indian subsidiary during the organisational change.
The scope of this plan is from the acknowledgement of need of change due to
external changes (in this case the 2008 crisis) to the post implementation plan
for the Indian subsidiary.
Kotters Eight step model Framework
The below tables details the Eight steps of Kotters model, their significance,
recommended activities, responsibilities and the duration for the organisational
change
Table 01 Kotters Eight-Stage Process for Creating Major Change (Hemmes, C. 2009)
Stage Significance Remarks &
Recommended Activities Responsibility
Time period
Stage 1: Establishing a Sense of Urgency
Help others see the need for change and the importance of acting immediately Identify and discuss crises, potential crises or major opportunities
In this case, the change was external due to the 2008 financial crisis. Even though the Top management was late to react to the crisis, there was urgency within the Top management to act at the earliest.
Top Management team
Less than a week
Stage 2: Creating the Guiding Coalition (Change Management Team (CMT)
Make sure there is a powerful group guiding the change, one with leadership skills, bias for action, credibility, communication skills and authority and analytical skills Assemble a group powerful enough to lead & influence the
Instead of creating the small team only with Europe and US, the top management should include the local management. A credible leader should be projected as the sponsor of the whole organisation change project. There should be a buy in with the local management which would then be cascaded into the employees of the Indian
Top Management team
1 week
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change Getting the group to work together like a team
subsidiary. The team should also have an HR representative. Due to the urgency to act, the CMT may not have the time to develop as a high performing team. Hence the top management should ensure that right people are picked.
Stage 3: Developing a Vision and Strategy
Clarify how the future will be different from the past, and how you will make the future a reality Creating a vision to help direct the change effort
Start with a SWOT analysis of the Indian subsidiary to understand the bigger picture. Develop strategies for achieving the vision using the Mckinsey 7S model (detailed in the latter part). Strategy includes communication plan, Organisation needs, workforce planning and Key Performance Indices (KPI) to measure the effect of change.
CMT
4 weeks
Stage 4: Communicating the Change Vision
Make sure as many others as possible understand and accept the vision and the strategy
Communication plan and also identify the risk involved in the whole process. (detailed in the latter part) Communication includes HR policies, defined roles for individuals, training plan and organisation structure
CMT
Stage 5: Empowering Broad-Based Action
Enabling others to act on the vision by getting rid of obstacles, encourage risk taking Altering systems or structures that undermine the change vision
Remove obstacles, encourage risk taking and non-traditional ideas, activities, and actions. So the responsible personnel can execute their role as identified by CMT.
CMT
Stage 6: Generating Short-Term Wins
Planning for and generating short term wins / improvements in performance Recognising and rewarding those people who make wins possible
Create milestones in the timeline to ensure measurable short term wins. Bring out consistent HR polices for recognition and rewards.
CMT
Stage 7: Consolidating Gains and Producing
Press harder and faster after the first success Consolidate improvements and
Develop people who can sustain the new vision CMT should execute the succession process
CMT and local management
1 week
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More Change
sustain the momentum for change
Stage 8: Anchoring New Approaches in the Culture
Articulate the connections between new behaviours and organisational success
Institutionalise the new approaches and ensure induction / orientation programs reflect the new way of working. CMT should be dissolved and the local management should start flowing
CMT & Local management
1 week
The total duration for the organisation change to be executed is less than 8
weeks.
Mckinseys 7S Model
The planning for the change management is recommended to be done using the
Mckinseys 7S model.
Figure 03 Mckinsey 7S model (Papers4You.Com, 2009)
The seven S categories for this organisational change are:
Table 02 Mckinsey 7S model (Cameron, E., Green, M. 2009)
Category Description Activities CMT role
Staff Important categories of people
Mapping existing team with required team composition
Change manager, HR manager, respective local manager and
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related manager
Skills Distinctive capabilities of key people;
Derive a Training plan and estimate the cost of training (refer Appendix II)
Change manager, HR manager, respective local manager and related manager
Systems Routine processes Review HR systems and other support systems
HR manager and shared services managers
Style Management style and culture
Communication plan, Risk assessment
CMT
Shared values Guiding principles Converting a cost center to revenue center
CMT
Strategy Organizational goals and plan, use of resources
Bring out the vision for the new organisation and detail the workforce plan
CMT
Structure Organization chart. By understanding the strategy, develop the best structure for sustained performance
CMT
By executing the above activities for the 7S model, planning for change
management would be holistic, thereby increasing the success of the
organisation change.
To further simplify the output from the 7S model, all the required outputs can be
categories into Organisational Needs, Communication Plan and Workforce
Planning. This would facilitate better assignment roles and responsibilities for
execution.
ORGANISATIONAL NEEDS
Structure
Management Systems
Policies
Procedures
Protocols
Software
Assets
Resources
COMMUNICATION PLAN
Employee Meetings
Newsletters
Communication Peer Support Team
Staff integration meetings and workshops
WORKFORCE PLANNING
Capacity Audit
Clearly identified roles and responsibilities
Position Descriptions
Skills and Knowledge Register of current staff
Register of required skills and knowledge
Plans for addition or reduction of staff
Recruitment and retention strategies
Salaries, wages, and benefits benchmarks and review processes
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Change Management Team (CMT)
Creating the change management team is the step which defines the success of
the organisation change.
The Change management team should consists of
1. Change Manager
2. Local Management
3. Related Managers
4. HR Manager
5. Shared Services Manager
The Change manager is the face of the whole organisation change. A credible
leader whose main role is to ensure buy in from all stakeholders. For this
organisational change, it is recommended that the Change manger is the head of
the Indian subsidiary as this would also help is creating an ownership of the
organisational change among the local management.
The Local Management are the managers in the India subsidiary who understand
the capabilities of their team and can provide inputs on the mapping of the
individual according to the new organisation structure.
Related managers are the stakeholders across the organisation geographies. For
this organisational change, the related managers are the team in US and
Europe.
HR Manager should be part of the CMT to ensure that the policies and
procedures for the new organisations are in accordance to overall organisations
HR policies.
Shared Service manager is part of the CMT to ensure that the new organisations
process and systems are in accordance with the existing systems.
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Conclusions
The proposed framework and process will ensure clear communication of the
change; understanding the concerns of the employees; getting a buy in and
motivating each employee for a successful organisational change and thereby
would resolve the gaps identified (in the introduction section).
Even though the detailed change management plan is specific to the
organisational change discussed, the proposed framework and process are kept
generic to ensure applicability for change management in other organisations.
It should be considered that the proposed framework and process can be applied
to organisation with political system and organism metaphor only. For
organisations with other metaphors, it is recommended to analyse all other
applicable models before considering the proposed framework and processes.
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References
Cameron, E., Green, M. (2009). Making Sense of Change Management: A
Complete Guide to the Models Tools and Techniques of Organizational Change
(2nd ed). London: Kogan Page
Hemmes, C. (2009). Kotter Bridges Checklist. Available:
http://www.adelaide.edu.au/hr/strategic/kotter_bridges_chcklist.doc. Last
accessed 02nd July 2012.
Kotter, J P. (2007). Leading Change Why Transformation Efforts Fail. Harvard
Business Review. Jan 2007, p96 - 103.
Papers4You.Com . (2009). What is McKinsey 7S Model?. Available:
http://www.coursework4you.co.uk/essays-and-dissertations/mckinsey-7s-
framework.php. Last accessed 02nd July 2012.
Sbaglia, R. (2012). A Level Playing Field. Available:
http://www.globaleducationconference.com/profiles/blogs/a-level-playing-field.
Last accessed 02nd July 2012.
SoftExpert Software for Performance Excellence. (2012). PMBOK Guide to the
Project Management Body of Knowledge. Available:
http://www.softexpert.com/regulation-pmbok.php. Last accessed 02nd July
2012.
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Appendix 1 Short History of the Organisation
(replicated from the pre assignment submitted)
Merger and Acquisitions are very common in the software product industry. Due
to the dynamic changes in the technology field, companies opt for inorganic
growth to ensure sustainable growth. An American software company became a
big player through acquisitions of smaller companies thereby creating forty
organisations within it. Each organisation owned a software product and had its
own business units. To bring in commonality across the company, all the
organisations were merged together and made into three verticals, Development
center, Service center and Sales. The development centers were cost centers
(i.e resource allocation depends on R&D budget) and Service centers and Sales
were revenue centers (i.e. resource allocation depends on revenue generated).
The Indian subsidiary, which was created as a low cost development center
during the late 90s, had the experience of being acquired twice before it became
part of the American MNC in early 2000s. Soon after the acquisition, the
American MNC started to move more development work to the Indian subsidiary
to take advantage of the low cost. This increased the employee strength of
Indian subsidiary to more than 500 members.
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Appendix II Training Cost - Sample Analysis
Total no of employees in Indian Subsidiary = 500 employees
No of Training hours required for an employee = 40 hrs
Total hours of Training = 500 x 40 = 20,000 hrs
Cost of employee per hour = $ 50 (low cost center)
Opportunity cost of Training = 20,000 x 50 = $1,000,000
Average Cost of Training per employee = $ 15 (low cost center)
Cost of Training = 15 x 500 = $ 7,500
Hence Budget required for Training = $7,500