Organizational Processes for TPP: Session 11

Organizational Change and Support Functions

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Session Design

• Introduction (5 min.) • Organizational Change (10-15 min.) • Dispute Resolution Systems (30-45 min.) • Systems Change Debates (30-45 min.) • Break (10 min.) • Negotiated Change (10-15 min.) • Cross-Functional Alignment (30-45 min.) • Skill Module(s) (30-45 min.)

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Organizational Change

• Large-scale system change initiatives: • Knowledge Management Systems • Team-Based Work Systems • Organizational Re-Design/Re-Structuring • Flow/Lean Manufacturing Systems • New Finance Systems • Joint Ventures and Strategic Alliances • Total quality initiatives • Work/Family Initiatives • Centralized Purchasing/Acquisition Reform • Dispute Resolution Systems

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

The Organizational Development (OD) Role – Selected Competencies

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

• Constructing shared visions • Strategic planning process • Joint implementation • Leadership development • Stakeholder alignment • Boundary spanning • Feedback and evaluation methods • Sustaining change • Systems thinking

• Change management• Organization design • Team effectiveness • Problem solving tools and techniques • Relationship building • Conflict resolution • Decision making processes• Mutual gains negotiations principles • Project management

A Spectrum of OD Roles

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Basic Skills Competent Expert Master

Facilitator . . . . . . . . . . . . . . . . . . . . . Process Expert

Trainer . . . . . . . . . . . . . . . . . . . . . .Trainer of Trainers

Mediator . . . . . . . . . . . . . Shuttle Diplomat

“Thermometer”. . . . . . . . Moral/Ethical Sounding Board

Strategic Planner . . . . . . . . . . . . . . . . . Strategic Visionary

Systems Thinker. . . . . . . . . . . . . . . . . . Systems Designer

Organizational Assessor . . . . . . Organizational Architect

Sample OD Wisdom

• Resistance to change is not irrational

• Training is not the solution to all problems

• Disconnects are data

• Leadership is necessary, but not sufficient

• The big 3: Strategy, Structure, Process

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Selected Aspects of Dispute Resolution Systems

• Informal resolution • Complaint systems • Open door policies • Survey and feedback systems • Training interventions • Affinity groups • Coaching and mentoring systems • Ombuds offices • Grievance procedures • Mediation • Arbitration • Adjudicatory processes

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Concurrent Layers of Conflict Resolution

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

External adjudication

The grievance procedure and other dispute resolution forums

Formal leadership efforts at all levels to anticipate and prevent difficult situations

Informal efforts by co-workers, supervisors, union representatives and others to address the issues in these difficult situations

Countless inappropriate, disrespectful, complicated, and conflictual situations

Functional and dysfunctional systems for dispute resolution

A Dysfunctional System A Functional System

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Power

Rights

Interests

Power

Rights

Interests

Source: Getting Disputes Resolved: Designing Systems to Cut the Costs of Conflict, by William Ury, Jeanne Brett and Stephen Goldberg (Jossey-Bass, 1988)

Contract Administration

Systems Change --Top Down

• Concept of “Re-engineering” – Many meanings, from a pretext for restructuring and downsizing to a systematic review of operations --if it’s not broke, break it

• Roots private and public sectors, including “re-inventing government”

• First driven by economic crisis, now seen as a process for system change

• GE “workout” process as a proto-type

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

System Change --Bottom Up

• Concept of “Kaizen”– Many meanings, from tangible improvement activities to an underlying philosophy and a way of life --you are never done improving

• Roots in post WWII Japan– First seen piecemeal --quality circles (QC), statistical process control (SPC), just-in-time (JIT) delivery – Increasingly seen from a systems perspective --Total Quality Management (TQM), Total Preventative Maintenance (TPM), Continuous Quality Improvement (CQI), Toyota Production System (TPS)

• Kaizen-teian systems --many small improvements build capability for system change

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Systems Change --Pilot/Diffusion

• Concept of “Pilot Experiments”– Many types of pilots

• Pilot teams, facilities, business units– Selecting where to pilot

• “If it will work here, it will work anywhere” • “Begin with small successes” • “Target bottleneck/priority areas”

– Plan for lessons from the pilot experiment to guide subsequent diffusion – Issue of managing multiple concurrent pilots

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Systems Change --Wall-to-Wall

• Concept of “Wall-to-Wall”– Requires unfreezing event or bold leadership – System-wide shifts in policy or fundamental changes in external context – Gradual diffusion is not an option – the entire organization must change – Requires substantial planning and resources

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

System Change Debates

• Two debates:– Direction of change: Kaizen versus re- engineering – Scope of change: Pilot/diffusion versus wall-to- wall

• Debate format:– Opening Statements (1 min.) • Within team consultation (1 minute)– Rebuttal (2 min.) • Within team consultation (1 minutes)– Closing Statements (1 min.)

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Bargaining Strategies

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Strategies for Negotiated Change

• Change strategies and negotiation blind sides – Top-down re-engineering

• Forcing process makes recovery afterwards difficult

– Bottom-up process improvement • Fostering process makes subsequent conflict difficult

– Pilot-experiment and diffusion • Diffusion depends on a combination of forcing and fostering

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Risky links between tactics with strategy

Hard Forcing Soft Fostering

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Claimingvalue

Assertive

Divide and conquer

Creatingvalue

Empathetic

InternalConsensus

Promising links between tactics and strategy

Robust Fostering and Restrained Forcing

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Empathy and Assertiveness

Creating value and Claiming Value

Appreciating internal differences

Analysis of Negotiation Blind Sides and Process Improvement Initiatives

• Discussion of forcing and fostering aspects of implementation • Identification of potential blind sides • Construction of mitigation plans • Reports to the full group and discussion

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Cross-Functional Alignment

• What are examples of misalignment across functions in an organization? • What are examples of alignment across functions in an organization? • What experience, if any, have you had with successful efforts to increase alignment across functions?

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Support-Function Exercise: Operating Facilities by Industry

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

• Utilities– Large electric

power plant

• Aerospace– Rocket engine test and assembly facility

• Pharmaceuticals– Pharmaceutical manufacturing plant

• IT/Telecom– Production facility for network switching components

• Automotive Group 1– Auto assembly plant

• Automotive Group 2– Fuel cell R&D lab

Support-Function Exercise: Roles

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

• In your industry cluster, form 5 sub-groups for the following support functions: – Human Resources – Finance – Materials/Purchasing – Quality –Maintenance/Engineering

• Assess what you understand to be the “current state” and the “desired state” for this support function in operating settings in this industry – for each the three roles listed in the following support material.

Support-Function Analysis

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

• Three Potential Roles

– Regulator/Enforcer • Policies, laws, contractual agreements

– Service Provider • Administration of programs and activities

– Change Agent • Systems change implementation and procedural fairness

Adapted from conceptual framework developed by Russ Eisenstat and further developed by Jan Klein.

Sample Activities/Competencies --HR

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Role

Regulator/Enforcer

Service Provider

Change Agent

Sample Activities

EEO, OSHA, ADA, Collective Bargaining Contract

Benefits, Recruiting, Compensation, Technical training

Champion for effective Work Groups, OD, Culture change

Sample Competencies

Legal/technical Detail oriented Risk adverse

Procedure oriented Consistent

Innovative/flexible Proactive Risk taking

Adapted from Jan Klein,“The Evolution of HR Professionals from Traditional Managers to Change Agents in Strategic Partnership for High Performance,”

Work In America Institute 1995

Sample Activities/Competencies --Finance

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Role

Regulator/Enforcer

Service Provider

Change Agent

Sample Activities

Budget compliance, tax and audit regulations

Payroll and information systems, financial reports

Champion for Total Cost, Linking ERP and process improvement, Work Group analysis of performance data

Sample Competencies

Legal/technical Detail oriented Risk adverse

Procedure oriented Consistent

Innovative/flexible Proactive Risk taking

Sample Activities/Competencies – Materials/Purchasing

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Role

Regulator/Enforcer

Service Provider

Change Agent

Sample Activities

Material storage rules and regulations, Global purchasing terms and condition

Delivery of parts and materials, Schedule management

Champion for Material Flow and Just-In- Time Delivery

Sample Competencies

Legal/technical Detail oriented Risk adverse

Procedure oriented Consistent

Innovative/flexible Proactive Risk taking

Sample Activities/Competencies --Quality

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Role

Regulator/Enforcer

Service Provider

Change Agent

Sample Activities

QS 9000 and other quality standards

Quality data; Training in quality skills and tools

Champion for total quality systems and related initiatives

Sample Competencies

Legal/technical Detail oriented Risk adverse

Procedure oriented Consistent

Innovative/flexible Proactive Risk taking

Sample Activities/Competencies – Maintenance/Engineering

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Role

Regulator/Enforcer

Service Provider

Change Agent

Sample Activities

Scheduled maintenance,ISO 14000

Equipment repair

Champion for total productive maintenance

Sample Competencies

Legal/technical Detail oriented Risk adverse

Procedure oriented Consistent

Innovative/flexible Proactive Risk taking

Functional Analysis Exercise

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Current State Daily Operations Activity Time/Resource

Allocation

Regulator/Enforcer ______ %

Service Provider ______ %

Change Agent ______ %

Total: 100%

Future State Daily Operations Activity Time/Resource

Allocation

Regulator/Enforcer ______ %

Service Provider ______ %

Change Agent ______ %

Total: 100%

Materials Developed by Joel Cutcher-Gershenfeld and Thomas Kochan (MIT) for use in ESD.140 “Organizational Processes”

Implications

• For Support Functions:– What are specific implications for support functions in your industry?– What are the system barriers that will make this difficult for

each support function? – What specific skill-building activities would be helpful in this

process? – How will you ensure continuity as leaders and staff change?

• For Line Management:– What are line management’s reciprocal responsibilities in

order for it to be a good “customer” for the support functions?

• For Policy Makers:– What are the implications for public policy in your industry?