managing change: scenario planning and other tools author: steve fitzgerald, vice president -- hr,...

Managing Change: Scenario Planning and Other Tools

Author: Steve Fitzgerald, Vice President -- HR, Fairlane Credit,

Ford Motor Company

Copyright 2000 - South-Western College Publishing Module 4 - 2

Building a Change-Ready Organization Pace and scope of change Predicting change increasingly

difficult Smart organizations focus on

being good at changing


Building a Change-Ready Organization Managing Change

Microsoft example Other examples?


Building a Change-Ready Organization Sustainable competitive advantage

is no longer possible for firms that lack the ability to manage change.


Building a Change-Ready Organization

Relative Importance of Various H.R. Roles

1996 20011. H.R. policy setting 1. Change Agent2. Functional H.R. Expert 2. H.R. Strategist3. Consultant/Confidant 3. Strategic think(er)(Human Resources Institute 1996)

Major Issues Impacting People Management:

“The role of change agent is becoming more important for H.R. professionals. H.R.I.'s research shows that in the future, H.R.professionals will be expected to play a much larger role in the continual transformation of the business to enhance its globalcompetitiveness. It is no wonder that this role is becoming so important. In today's business environment, significantorganizational change is no longer an infrequent, special event. Today and even more so in the future, organizations mustcontinually change and adapt to the competitive environment.” (H.R.I. 1998)


Building a Change-Ready Organization When asked about future roles for H.R., operating

managers rarely mentioned strategic thinking, strategist, or change agent. (Human Resources Institute)

“There's a reason that more and more new H.R. executives come to the post with backgrounds in line management or consulting rather than from H.R.'s own ranks...(M)any people doing the work now can't cut it in the H.R. of the future. Clearly, companies need a place to think about the skills they need and will need, about executive development, about a way to focus on human capital. This is precisely why they should ask the do-or-die question of their human resource departments. The prospect of hanging, as Dr. Johnson said, is a sure way of concentrating the mind.” (Stewart 1996)


Building a Change-Ready Organization The barriers to achieving the HR partnership model

include:

H.R. professionals who can differentiate the strategic from the more operational and reactive aspects of H.R. jobs.

An understanding for, and role in, planning the growth of the business. The competencies that enable one to excel at contract negotiations or compensation and benefits administration do not necessarily prepare an H.R. professional to solve business problems.

A shift in focus from reacting to problems to improving operational effectiveness in the business (H.R.I. 1998).


Everyone’s calling for HR to be “more strategic” What does that mean? How can it be achieved?

Building a Change-Ready Organization


H.R.’s Role in the Execution of Strategy Many well-conceived strategies are

poorly executed Southwest Airlines Vs. Western

Pacific, ValueJet, People’s Express


The Components of Strategy Implementation

Building an OrganizationCapable of Executing the

Strategy

Establishing a Strategy-Supportive Budget

Installing InternalAdministrative Support

Systems Creating a strategy-

supportive organizationstructure.

Developing the skills andcore competencies neededto execute the strategysuccessfully.

Selecting people for keypositions.

Seeing that eachorganizational unit has abig enough budget to carryout its part of the strategicplan.

Ensuring that resources areused efficiently to get "thebiggest bang for the buck."

Establishing andadministering strategy-facilitating policies andprocedures.

Developing administrativeand operating systems togive the organizationstrategy-criticalcapabilities.

Generating the rightstrategic information on atimely basis.

Devising Rewards andIncentives That Are Tightly

Linked to Objectives andStrategy

Shaping the CorporateCulture to Fit the Strategy

Exercising StrategicLeadership

Motivating organizationalunits and individuals to dotheir best to make thestrategy work.

Designing rewards andincentives that induceemployees to do the verythings needed for successfulstrategy execution.

Promoting a resultsorientation.

Establishing shared values. Setting ethical standards. Creating a strategy-

supportive workenvironment.

Building a spirit of highperformance into theculture.

Leading the process ofshaping values, moldingculture, and energizingstrategy accomplishment.

Keeping the organizationinnovative, responsive, andopportunistic.

Dealing with the politics ofstrategy, coping with powerstruggles, and buildingconsensus.

Enforcing ethical standardsand behavior.

Initiating corrective actionsto improve strategyexecution.

Thompson and Strickland, Strategy Formulation and Implementation, 1992, p. 218. Italics added.


H.R.’s Role in the Execution of Strategy A large part of reason why organizations

struggle to effectively execute their strategies is because of the failure to align their people processes with strategic intent.

Too often, H.R. leaders don’t know the “why”, just the “what.”

This is a systemic "disconnect" that causes many firms to struggle to implement their strategies.


H.R.’s Role in the Execution of Strategy In order to align H.R. tools and

processes with organizational objectives, H.R. professionals need to understand the strategic intent of the organization.

Accomplishing this objective will require greater involvement in the process of strategic planning.


H.R.’s Role in the Execution of Strategy “First, H.R. should become a partner with senior and

line managers in strategy execution, helping to move planning from the conference room to the marketplace.

“Second, it should become an expert in the way work is organized and executed, delivering administrative efficiency to ensure that costs are reduced while quality is maintained.

“Third, it should become a champion for employees.…

“And finally, H.R. should become an agent of continuous transformation, shaping processes and a culture that together improve an organization's capacity for change.” (Ulrich 1998)


Making Better Strategies

The discipline of scenario planning



The discipline of scenario planning “Those who pretend to know the

future lie, even if they accidentally speak truth.” (Arabian proverb)





Planning for change





Planning for change Building the organizational

capability to change

To prepare for the future,imagine it.


SCENARIOS ARE... Stories about the future that are

never completely right or wrong. A way to learn what we should do if

a given future occurs. Intended to challenge paradigms

(mental models) and prepare us for action -- not predict the future.

Challenge the conventional wisdom


For Example... Royal Dutch/Shell in early 1970’s.

Price of oil steady since WWII, however:

U.S. oil reserves almost gone Western demand steadily

increasing OPEC maturing politically

• Mostly Islamic states

Western support of Israel during Six-Day War (1967)


Where Scenarios Come in... RD/S: “Even though we don’t really

think it will happen, what if the price of oil exploded?” What would our world look like? What would we do? What things would we do

regardless of the price of oil?


No -- But RD/Shell was prepared for it.

Responded swiftly Improved competitive position in a sustainable way

Did RD/Shell avoid the punch delivered by OPEC?


Scenarios: A Context for Exploring Combinations of Trends & Issues

Trend/Issue Forecast Implication Action

SOURCE: The Futures Group


Scenarios: A Context for Exploring Combinations of Trends & Issues

Trend/Issue Forecast Implication Action

Trend

Issue

Trend

Issue

Trend

Issue

Scenarios

Action

Action

ActionImplication

Implication

Implication

Implication

Implication

Implication

SOURCE: The Futures Group


WHY DO IT?

Develop Change-Readiness Develop and re-assess business

strategies Lead into the future


Scenarios: “Not a tool for helping managers predict what will happen, but a means to explore what we should do if it happens.”

-- Brian Marsh, RD/Shell


SCENARIOS WILL IDENTIFY: Risks

Consider solutions before need arises

Opportunities Move to take advantage

Shape the future


INTANGIBLE PRODUCTS

“Change-Readiness” Broader mental models Daily decisions reflect

Strategic direction Awareness of future possibilities


“The last buffalo to the pond has to drink muddy water.”

-- Vietnamese proverb


Be first to the pond Increase Change-readiness

To meet business objectives Anticipate/respond to change

Shape the future Generate desirable change

Bottom Line:


Class Project

This is not a research project, it’s an “imagination project”

Read the scenario -- carefully Imagine living in that world

Brainstorm implications Best if done collectively


Class Project

Analyze people-management implications of the scenario.

What should the HR function do about them? What are the threats and

opportunities? What should the strategy be?


Class Project

Bring groups together. What strategies make sense in most or all of the scenarios? These are the robust strategies we

want to pursue. These are the strategies that

“transcend” scenarios.

managing change: scenario planning and other tools author: steve fitzgerald, vice president -- hr,...

Documents

n everyones

changing slide

execution of strategy

change u microsoft example

strategic u

peoples express slide

s role

strategic thinking