managing change group presentation

8/8/2019 Managing Change Group Presentation

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Agenda

Changing the Smell of the place

The Company as a University

Building an Entrepreneurial Organization New Management Roles and Tasks

Building Shared Destiny Relationships


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Changing the Smell of the

Place

HDFC case study


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Ineffective Internal Structure

Traditional Structure-

Constraint

Control

Compliance

Contract


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Ineffective Internal Structure

Contemporary Structure-

Stretch

Support

Discipline

Trust


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The HDFC case

Premier housing finance company and themost competitive institutions

Provide efficient services and courteousemployees

Timely and quick services

People forego higher returns to deposit inHDFC


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Discouraged hiring stars-hired people

from next tier institutions-more subduedpersonality

Pioneered housing finance market-createdopportunity for middle class Indians to owna house


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HDFC-Behaviour

Commitment-Incident of fire in the main office

Discipline-Reduced the cycle time for loanapproval from four weeks to across the table

Passion-Motivated by a social cause-providehome to the middle class

Principles-Principle centric organization-formed

immutable and unchangeable core of action


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At HDFC

Informal atmosphere-No dress code. Anyonecan answer the phone etc.

Concern for people-Open door policy

Equity-Information was shared freely through aregular and active communication program

Ownership-Employees saw themselves asemployers and not as employees

Personal Development-Ample opportunitieswere present for personal development-twoprofessional qualifications were allowed


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Company As a University


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The Idea

Learning innate to human nature

Seeds for Creativity and innovation

Imperative for sustained, superior performance

Competitive Advantage accrues from Skill Enhancement Much beyond Classroom Learning

The challenge: To reshape Working Methods,Information Flows and Management Processes

Creating a Continuous Learning Environment


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Continuing Education

Training not a Luxury or a Diversion

Expense vs. Investment

A Symbol of Modernity?

Essential Aspects Should be a Continuous Process

Built around People, not Programmes

Pre-determined Objectives

Should cater to Individual as well as OrganizationalDevelopment

Courses designed around Business Situations

Off-the-shelf lectures should be an exception rather than rule


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Education as an Imperative: Case

ofI

ntel Corporation Intel corporation is the worlds largest and mostprofitable semiconductor company

Intel is usually the innovator in any chip technology

Without very large investments in education, thecompany cannot hope to succeed

The company has its own university with a variety ofcourses, has tie-ups with institutions and provides timeto employees for education continuance

Continuing education is a core competence for thecompany


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Continuing Education: Socializing

Process at HLL - PhaseI

Initial two-and-a-half weeks

course at IIMA

Shadowing asalesman for

a week

Working as asalesman for 4

weeks

Shadowing asales officer for

a week

Four weeks as

Field SalesOfficer

A week at a

Branch Office

A month on a

SpecialAssignmentSTAGE I

STAGE II

A Six Week stay at the Integrated Rural Development Center at Etah

Each trainee lives with a village elder and works on projects such asbuilding roads, developing smokeless cooking stoves, negotiating withgovernment on development assistance, and so on

Key Learnings exposing the trainees with urban background to rural life

in India and help developing a perspective on Product Development,

Project Execution, etc.


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Continuing Education: Socializing

Process at HLL - PhaseII

New recruits are moved into open positions in a specific functional areasuch as manufacturing, supply chain management, marketing or sales

They are given subordinate charge for a period 12 months

Closely counselled by Senior OfficerAt the end of this phase, subject to satisfactory performance in aconfirmation interview, they are absorbed in the ranks of HLLsmanagement

This is just the beginning. Once accepted, HLL executives receive regular

guidance from Seniors and are regularly nominated to attend relevantmanagement programmes in India and abroad as an integral part of their

careers in the company.


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Redesigning Work

Predictability and Control Economies of Specialization

Adam Smiths pinhead factory

Recognizing losses from deskilling

Essential prerequisites Management commitment andimagination


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Redesigning Work: Rockwell Golde

Gilfhorns Pathfinder System Rockwell Golde Gilfhorn is a supplier of 3000 sunroof systems a dayon a JIT basis to Volkswagen

The factory is an assembly line operation and the Challenge for hemanagement is to keep the employees motivated in thisenvironment

The solution: The Pathfinder System Purpose: to enhance the skill set of each worker and turn him into a

passionate collector of skills and qualifications, as a way to reducehis boredom and to enhance his employment security

The system lists the skills that are associated with different jobs inthe factory.

These skills are structured into a hierarchy On the days of high demand, workers work on their specialized area On the days of low demand, workers work on the next skill in their

hierarchy list


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Democratizing Information

Information as raw material for learning process To discuss subjects freely, it is necessary to

share information

Information Asymmetry stifles Creativity Trade-off between improved learning andcreativity and information leakages

Information equating power and influence Important prerequisites an environment of trust

and support An important point in revitalizing the company as

a learning institution


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Senior Managers As Faculty

Redesigning day-to-day tasks

Analytical andConceptual

Understanding

Reshaping StrategicAnd Administrative

Processes

Quality of Thinkingand Judgement

CreatingImplementors

CreatingLeaders

All-RoundDevelopment of

Employees


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Senior Managers As Faculty

Strategic thinking and qualitative judgment not preservesof top management

Formal, systems-driven Management Process has its

own limitations Constant interaction required to pass on capabilities to

junior employees

Creating opportunities for direct interaction can only flowthrough direct relationships

Personal mentoring and coaching imperative


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Senior Managers As Faculty: Caseof Kao Corporation

At Kao, No one owns an idea

Culture of Zoawase a common perspective or view

The top management floor the decision space - isessentially all open space, with one large conference table

and two smaller ones, with blackboards, chairs and OHPsstrewn around

Anyone passing, could sit down on an ongoing discussion andbe involved on any topic.


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Senior Managers As Faculty: Caseof Reliance Industries

Developing people as a necessity case of Hazira andJamnagar complexes

No tie-wallah golf culture forIndia. You need leaders thatdrive the company to be a strong knowledge-based achiever

Mukesh Ambani A host of Corporate and functional heads report to the

Ambanis

Decisions are taken through direct interaction between themanagers and the family entrepreneurs

This resulted into faster project execution and quick decisionmaking

Hardwaring of entrepreneurial orientation


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Building an EntrepreneurialOrganization


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Two views of the organization.

From top Chairman or MDsees order, symmetryand uniformity.

From bottom hapless front-line employees see acloud of controllers.


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The result, in colorful language of GEs Jack Welch, is acompany that has its face towards the chief executive and

its back toward the consumer.

With the end of twentieth century comes the end ofHierarchical and Bureaucratic organization.

The rise of Entrepreneurial organization like the rise of

hierarchical organization at the end of nineteenthcentury.

Westinghouse in 1989 sold a part of its troubled powertransmission and distribution business to ABB.

Under ABBs ownership by 1992 the activity haddeveloped through a radical restructuring and doubled itsoperating profits while export sales had increased from12 to 20% of revenues.


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The statement of Don Jans, the units general manager

I am a much broader manager today than I was in

westinghouse. Here we are constantly challenged to lookat the world as a market, as a source of expertise, andas a standard of performance. It is tough anddemanding, but it can also be invigorating and fun. Wefeel we are rediscovering management.

Two factors of difference

Attempted to find quick-fit solutions. Like kodak andcaterpillar created new venture units.

Create independent units to protect specific projects

from routine bureaucracy and corporate interventions.

Each of these claimed initial successes but in only fewcases they provide the broad-based long-term solutions.


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The new management roles which define theentrepreneurial model for managing large organization.

Building the entrepreneurial process. The threeorganizational characteristics shared by the companiessucceeded in developing an effective entrepreneurialprocess at the core of their operations.

They create small and disaggregated performance units

and make them the primary building blocks of theirorganization.

Performance in these are driven through a few simple,flexible but highly disciplined planning, control, and

resource allocation system. Their strategic mission and operations are very much

clear for each unit through unambiguous organizationalnorms and performance standards.


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Thermaxs boiler business was supported by its knowledge of heattransfer processes.

Its R&D team adapted husk as the fuel of boiler after a small

investment. The profit generated from the sale of these boiler wereused to adapt the technology so that coal can be used as the fuel.

And further the team slowly built a sophisticated and broadcapability in the area of fluidized bed combustion systems.

Over a period of fifteen years Thermax has lead to the business

evolution which was led by the entrepreneurial instincts of its R&Dteam.

A profound shift of social values.

The closing year of twentieth century have triggered a fundamental shift

in social values. The basic ideologies that underlie these twoorganizational forms are swapping places. The idea bureaucracyhas lost its claim and entrepreneur is emerging as the hero in thedrama of creative destruction.


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New Management Roles andTasks


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New Management Roles and Tasks.

Primarily dealing with organisations with anentrepreneurial orientation.

The roles and tasks to be performed by managers

at different levels in such an organisation.Contrast between traditional structure and systemsand a radically different way of managing largecomplex organisations.

Ultimately concentrating on what managers actuallydo which actually drives action in companies.


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The contrast

Top level managersacting as grandstartegists

Front line managers

playing the role ofimplementers

Senior managersplaying the role of

administrativecontrollers

They ensure that theirorganisations areadequately directed.

Builders of the

companys business. Akin to coaches who

build on the strength ofa players skills with the

authority to changeplayers.


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Transformation at ABB

The need to organise in clear profit centreswith individual accountability

Structured as separate legal entities

responsible for profits/lossess, B/S. Each company retains 1/3rd of profits

Only one level of management between

corporate exec. Committee and heads of1200 companies.


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ABACUS

Connects computers in 4500 centres in120 countries.

Gathers and monitors performance datawith regard to

1. Orders received , revenues , grossmargins,period costs,net earnings andheadcount.

Helps in generating standard reports The only reporting channel

On a deadline and in a format.

People do not report twice.


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Building Shared DestinyRelationships


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Power-based Relationships: Case of

General MotorsJose Ignacio Lopez saved around $4billion -$10 million for GM in 10 months

Centralization of purchaseDemanded price cuts of up to 50 per cent

Win-lose game

Transactional negotiationsProblems with supplier relationships


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The Shared Destiny Relationship WithSuppliers: Case of Unipart Group

A heavily unionized workforce crossed with atraditional and autocratic management at thetime of its founding

CEO John Neill saw the need for shared destinyrelationships as not altruism, but essential forcommercial self- interest.

Ten(d)-to Zero programme- measurement ofjoint Unipart-supplier performance across ten

criteria ranging from transaction costs and leadtime to defect rates and delivery errors Relationship with Tungstone


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Power-based Relationships vs Shareddestiny Relationships

Win-lose Win-Win

Transactional Relationship based

Short-term Long term

Your problem Our problem

My Benefit Our benefit

Maximize Maximize

autonomy interdependence


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The Shared Destiny Relationship WithEmployees: Case of Hastings Jute Mill

Frequent Conflicts between unions andmanagement.

Kajaria brothers acquisition of Mill in 1994

Cooperation with labor to increase productivity.

Regularization of 700 Ghost workers.

Regular monthly meeting.

Solution to other problems like gratuity cost atretirement.

Mutual benefit to both Mill as well as to workers.


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The Shared Destiny Relationship WithCompetitors: Case of Komatsu and HDFC

Komatsus narrow objective initially,concentrated only on competitor Caterpillar.

Less focus on Customers, opportunities and

having more innovative ways. HDFCs mission: Contribute in solving the

housing problems in India by providing housingloans.

As market is huge, so helping new entrants byproviding training and strategies.


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Hero Honda Motors

Hondas Strategic Alliances with Firodia andHero group

Success story of Hero Honda

- joint benefits of two partners- links beyond commercial needs- affinity across generational barriers- support as well as checks and balances for

dealers- educating dealers- appointing family and friends as vendors e.g.

Sunbeam Castings

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