transforming organizational change
TRANSCRIPT
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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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Managing Change
Business Scenario in 1980s - 1990s..
Effectivemanagement of
uncertainty
1980s Scenario 1990s Scenario
Introduction - Why Change ?
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Managing Change
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
Introduction - Why Change ?
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Managing Change
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
Introduction - Why Change ?
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Managing Change
How to run & win the race ?
Consistent IMPROVEMENT by
understanding the OPPORTUNITY
makes the difference
CHANGE
Introduction - Why Change ?
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Managing Change
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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Managing Change
Types of change Structural Change
Cost Cutting Change
Process Change
Cultural Change
Source: Managing Change & Transition , Harvard Business Essentials
What is Change Management?
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Managing Change
Approaches to Change
Theory E Change Aims at maximizingshareholder value
Theory O Change Aims at developingorganizational capabilities
Source: Managing Change & Transition , Harvard Business Essentials
What is Change Management?
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Managing Change
Key Factors in Theory E and Theory O Change
Source: Michael Beer and Nitin Nohria, Cracking the code of Change, Harvard Business Review
What is Change Management?
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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Managing Change
Types of transformation
What is Change Management?
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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Managing Change
Market-driven, competitive environment
Winners and losers - ability to respond to the pace ofchange
Change happens - it just happens
Why transformation
What is Change Management?
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Managing Change
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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Managing Change
4 MAJOR CULTURAL MODELS
I.The Functional Culture
1.Technology & Engineering
2.Reliability and quality
3.Customer needs
4.Flexibility and agility
Cultural Dimensions of Change
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Managing Change
CEO
Head ofMarketing
Head ofR&D
Head ofOperations
Head ofHR
Head ofFinance
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4 MAJOR CULTURAL MODELS
II.The Process Culture
1. Customer Needs
2. Reliability and quality
3. Technology & Engineering
4. Flexibility and agility
Cultural Dimensions of Change
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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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Managing Change
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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Managing Change
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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Managing Change
4 MAJOR CULTURAL MODELS
III.The Time-Based Culture
1. Flexibility and agility
2. Technology & Engineering
3. Customer needs
4. Reliability and quality
Cultural Dimensions of Change
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Managing Change
4 MAJOR CULTURAL MODELS
IV.The Network Culture
1. Flexibility and agility
2. Customer needs
3. Technology & Engineering
4. Reliability and quality
Cultural Dimensions of Change
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C l l D f Ch
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Managing Change
Change Management
Cultural Dimensions of Change
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C l l Di i f Ch
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Managing Change
Performance
Time
CurrentValley of despair
Change
Objective
Change CurveChange Management
Cultural Dimensions of Change
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Managing Change
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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Typical forms of Teams in Change
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Managing Change
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
Typical forms of Teams in ChangeManagement
Functional Skills Process SkillsProject relatedSkills
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Typical forms of Teams in Change
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Managing Change
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
Typical forms of Teams in ChangeManagement
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Managing Change
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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Managing Change
(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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M i Ch
Managing Change Implementation
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Managing Change
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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M i Ch
Managing Change Implementation
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Managing Change
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.
Managing Change - Implementation
Steps
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Managing Change
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Managing Change
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.
Managing Change - Implementation
Steps
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Managing Change
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
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.
Managing Change Implementation
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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Managing Change
CONCLUSION
1. Organisational Learning2. Continuous Improvement Process
3. Competitive Culture
Creation of an organisation which has the elements of :
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Managing Change
For listening..
We believe in communicating & mutuallearning.