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Why Study Change?

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Why Study Change?

Change is relentless & accelerating producing winners & losers

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https://www.aei.org/carpe-diem/fortune-500-firms-1955-v-2017-only-12%-remain-thanks-to-the-creative-destruction-that-fuels-economic-prosperity/

S&P Dropouts 2018 to 2020

Nordstrom

Macy’s

Kohl’s

Tiffany & Co

Foot Locker

Mattel

Xerox

Harley Davidson

H&R Block

E*Trade

Raytheon (acquired)

Time Warner (acquired)

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https://www.innosight.com/insight/creative-destruction/

A market cap of $8.2 billion (as of Feb. 2019 guidance) its headquarters in the U.S. the value of its market capitalization trade annually at least a quarter-million of its shares trade in each of the previous six months most of its shares in the public’s hands at least a year since its initial public offering the sum of the previous four quarters of earnings must be positive as well as the most recent quarter.5

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https://www.innosight.com/insight/creative-destruction/

Train Video (9:48)

Watch the video and answer these questions

What was life like on the train at the start of the video?

Then, what happened?

What was the initial reaction?

Why were they unable to successfully change?

What is the moral of the story?

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Great Innovations

What country replaced Switzerland as the global manufacturer of watches (1970s)?

Who invented …

the digital camera?

the laser printer?

the personal computer

a graphical user interface (windows)

technology to network computers

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Worst Company Disasters! Video

Watch the video (16:25)

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The Success Paradox

Initial Success Leads to Success

BUT

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The Success Paradox

BUT

Sustained Success Leads to Failure

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The Success Syndrome (Nadler)

Sustained

Success

SUCCESS

SYNDROME

Establish rules

Internal focus

Insularity,

arrogance, &

complacency

Complexity

Conservatism

Stop learning

OUTCOMES

Decreased customer focus

Increased costs

Loss of speed

Less innovation

Capacity-to-act problems

Do More of

the same

Declining

Performance

Denial &

Defensive

Reactions

Industry

Disruptor

Death Spiral

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Why do successful companies fail over time?

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Failure to Anticipate

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Failure to Anticipate: Ms. Cleo Award

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Miss Cleo" has seen the future ... and it does not include her. The operators of her psychic hot line have agreed to cancel $500 million in customer bills, return all uncashed checks to customers and pay a $5 million fine.

Although Miss Cleo will be fading from the airwaves and, perhaps, from public view, the popular soothsayer shouldn't go hungry anytime soon. In three years, it's estimated her service billed $1 billion through 900 numbers and credit cards and collected about half of it.

Many customers were satisfied with the service.

https://www.consumeraffairs.com/news02/cleo_settle.html

Failure to Anticipate: Ms. Cleo Award

"The telephone has too many shortcomings to be seriously considered as a means of communication. The device is of no value to us.” (William Orton, Western Union)

The cinema is little more than a fad...what audiences really want to see is flesh and blood on the stage." (Charlie Chaplin)

“Who wants to hear actors talk? (H M Warner)

"The radio craze will die out in time." (Thomas Edison)

TV won't be able to hold on to any market...after the first six months. People will soon get tired of staring at a plywood box every night." (Darryl Zanuck)

“The world-wide market for computers is ______.” (Tom Watson, IBM)

“There is no need for anyone to have a computer in their home.” (Ken Olsen, Digital Computer)

“The internet is not of strategic importance to Microsoft.” (Bill Gates)

“The internet. Is that thing still around? “ (H. Simpson)

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Bad Decisions (Ouch!)

Western Union turned down the patent for the telephone for $100,000

IBM passed on “Liquid Paper” for $100,000 (Gillette paid $48 Million)

Decca Records passed on The Beatles

Victor Kiam (Remington) passed on buying the VELCRO patent for $25,000

20th Century Fox gave George Lucas all merchandising rights to Star Wars

Blockbuster refused offer to buy Netflix

Ross Perot (EDS) passed on Microsoft

Ronald Wayne sold 10% of Apple for $800.00

Excite failed to buy Google for $1 million and again said no when the price was lowered to $750,000

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How much would you invest in these guys?

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What About These Guys?

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And These?

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Crystal Evuleocha and Candice Fraser Cofounders of Kiira

Failure to Decide

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Five frogs are sitting on a log

One frog decides to jump off

How many frogs are sitting on the log?

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Strategic Decisions (Actions)

Time

Market

High Risk

Lower

Risk

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Strategic Marketing Uncertainty

Macro Uncertainty

Economic

Political

Demand Uncertainty

Will customers buy it?

Technological Uncertainty

Can we build it and make a profit?

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Time Frame is Shrinking

Time

Market

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Failure to Execute

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Failure to Execute

Leadership (Allocate resources)

Past Success

Mindset & Courage

Vision & Strategy

Organization

External Constraints

Workforce

Culture & Politics

Organizational Structure & Systems

Ineffective change effort

Human Resource Management Department

Why Study Change?

Change is relentless & accelerating producing winners & losers

Failure is due to the inability to anticipate the future, to act decisively & execute effectively

Human Resource Management Department

Why Study Change?

Change is relentless & accelerating producing winners & losers

Failure is due to the inability to anticipate the future, to act decisively & execute effectively

Individual change is hard; organizational change is harder

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Exercise: Your Experience with Change Efforts

	Personal Improvement	Organizational Change Effort
Positive Outcome
Negative Outcome

Share examples in each of the boxes

What generalities did you find for personal and organizational change? More successes or failures?

Why did the change efforts succeed or fail?

What are the consequences of failures?

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Individual Change Success Rates

______% of “Successful” dieters on Weight Watchers

______ % of class with unused exercise equipment/gym memberships

_______% of heart patients who made behavioral changes after surgery

_______ How large is the market for personal improvement programs? What areas do they target (e.g., weight)?

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Why Individual Change Fails

Failure to Recognize Difficulty of Change

Personality, Habits, Environment, Brain

Failure to Define & Commit to Success

Goals (Realistic/Stretch)

Commitment/Motivation

Failure of Change Process

Plan, Metrics, Capabilities, Motivation

Resources, Models, Social Support

Failure of Sustainability

Consequences/Rewards

New Goals/New Behaviors

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Organizational Change Success Rates

______ % of TQM projects that fail (McKinsey)

______ % of downsizing efforts resulting in improved productivity, cash flow or shareholder ROI (Tomasco)

______ % reengineering efforts that fail (Senge)

______ % of Top-management led changes that fail (Kotter)

______% of ERP programs that were abandoned

______ % of change efforts that had a positive ROI (Nohria)

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Organizational Change Success Rates

80% of TQM projects that fail (McKinsey)

<50% of downsizing efforts resulting in improved productivity, cash flow or shareholder ROI (Tomasco)

70% reengineering efforts that fail (Senge)

30% of Top-management led changes that fail (Kotter)

50 of ERP programs that were abandoned

27% of change efforts that had a positive ROI (Nohria)

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Why Organizational Change Fails (Ulrich)

Short-term perspective/Not tied to strategy

Seen as a fad or quick fix

Political realities undermine change

Grandiose expectations versus simple successes

Inflexible change designs

Lack of leadership about change

Lack of measurable, tangible results

Unable to mobilize commitment to sustain change

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Why Organizational Change Fails (Kotter)

Not establishing a great enough sense of urgency

Not creating a powerful enough guiding coalition

Lacking a vision

Under communicating the vision by a factor of ten

Not removing obstacles to the new vision

Not planning for & creating short-term wins

Failing to consolidate & leverage early success

Not anchoring changes in the corporate culture

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Why Organizational Change Fails (McCune)

Failure to adequately define success

Insufficient emphasis on individual change

Inadequate diagnosis (model)

Tactical vs strategic

Ineffective change effort (model)

Leadership & power

Consensus & coalition

Implementation procedure (Kotter)

Failure to evaluate, modify & sustain effort

Human Resource Management Department

Why Study Change?

Change is relentless & accelerating producing winners & losers

Failure is due to the inability to anticipate the future, to act decisively & execute effectively

Individual change is hard; organizational change is harder

Change Agent is a critical role for HR

Human Resource Management Department

HR Roles (Ulrich)

Role	Activity	Outcome


Employee Champion	Support strategic employees	Strategic employee engagement & capability
Systems Expert	Design & deliver efficient HR processes	Efficient HR infrastructure

Human Resource Management Department

HR Roles (Ulrich)

Role	Activity	Outcome
Strategic Partner	Align HR w/ business Organizational diagnosis	Execute strategy Business metrics
Change Agent	Manage transformations Ensure capacity for change	Renewed organization Strategic Agility
Employee Champion	Support strategic employees	Strategic employee engagement & capability
Systems Expert	Design & deliver efficient HR processes	Efficient HR infrastructure

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The Essential HR Consulting Skill

The ability to interact effectively with senior leadership, identify a problem worth solving (PWS) and propose a solution that will be accepted, adequately resourced and have a high probability of measurable business success.

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Recap: Why Study Change?

Change is relentless & accelerating producing winners & losers

Failure is due to the inability to anticipate the future, to act decisively & execute effectively

Individual change is hard; organizational change is harder

Change Agent is a critical role for HR

Human Resource Management Department

Global Population

1980 4.4 billion

2000 6.1 billion

2050 est. 9.7 billion

2100 ???????

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Change Perspective

Monitor appropriate indicators

Understand the why of change (causality)

Able to explain & predict

Verify hypotheses & evaluate change efforts using data

Use tested models (diagnostic & change)

Remain alert & agile

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Internal Forces

Organization

Life Cycle (growth/decline)

Coordination Adjustments (policy, structure)

Work Force

Competence, Engagement, Retention

Aging, Diversity, Work/Family Balance

Political

Succession

Political Behavior/Political Actions

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Firm Life Cycle Stages

Professional Growth

Turnaround

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External Forces

Economy/Globalization

Government Regulations

Demographics

Labor Force

Diversity, Aging, Skills

Customer Expectations

Political

Takeovers/Divergent Shareholders

Unions/Environmental Groups/Social Activists

Research & Technology

Competitors

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__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Understanding Trends

Driver or Consequence

Is the trend a driving force or a consequence of other forces?

Threat or Opportunity

What is the potential impact on your future success and that of your company?

Focus

How focused are you and your company on the forces impacting future success?

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Competitive Threats (Porter)

New Competitors

Substitutes

Suppliers

Company

Rivals

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East 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 20.399999999999999 27.4 90 20.399999999999999 West 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 30.6 38.6 34.6 31.6 North 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 45.9 46.9 45 43.9

Industry Critical Success Factors: Automobiles

Styling

Safety

Fuel Efficiency

Quality

Cost Control

Dealer Network

Supply Chain

Company Strategic Capabilities?

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NYC Taxi Industry

1937 NYC requires

a medallion for cabs

11,877 medallions

are issued

1947 average cost $2,500.

New medallions are not created

Medallions bought and sold at auctions

2012 some Medallions sell for $1,300,000.

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Disruptive Technology

is an innovation that helps create a new market & value network—displacing an earlier technology

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Disrupted

Sailing Ships

X-ray

Incandescent light

CRT TV

Paper maps

Film

Vinyl record

CCD video chip

Auto sales

Brick & Mortar Retail stores

??????

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“Out there in a garage is an entrepreneur who is forging a bullet with your company's name on it. You’ve got one option now--- to shoot first. You’ve got to out innovate the innovative entrepreneur.”

Gary Hamel

“Only the paranoid survive.”

Andy Grove

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Winners

Anticipate & Envision

Awareness of the major environmental drivers, how they will influence the future of business, and the ability to envision a future competitive advantage

Execute

The ability to act quickly and decisively to get to the future faster than competitors

Influence External Environment

Control external forces for competitive advantage

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Anticipate & Envision

Curious, open to diverse inputs

Externally focused

Understand industry drivers (Causality)

Able to explain & predict trends

Recognize (anticipate) need to change

Able to envision future competitive advantage

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Execution

Leadership Vision

Use diagnostic model to identify gaps

Use change model to increase commitment

Communicate (Consensus & Coalition)

Implement Action Plan (Pilot & Diffuse)

Monitor change to modify & improve

Pivot if Necessary

Institutionalize Agile Cultural Elements

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External Influence

Attempt to control or influence:

Supply (raw materials, patents, copyright)

Distribution, sales channels or ecosystem

Technology infrastructure, established protocols, operating systems, IOT

Customers through loyalty programs or switching costs

Focused marketing to align their brand with social cause

Establish a brand as a preferred employer

Lobby government to change regulations

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Attempt to control supply (raw materials, suppliers). The goal is to ensure future supply of critical commodities at a favorable price and limit competitors access to this supply or cost efficiency. For example companies can lock in suppliers with long-term, exclusive contracts. They can form alliances or integrate their supply chain with their suppliers in an exclusive arrangement. Obtaining exclusive rights to music, films, games is a major ongoing battle for Netflix, HBO Max, Disney+, Spotify, Apple Music and others. There will be winners and losers here

Attempt to control distribution, sales channels or other infrastructure. Examples, restricted sales channels (Sony), shelf space in supermarkets, Amazon product placement for products on Amazon.com

Attempt to control access to social media or focused marketing to align their brand with social cause (effective for start-up or niche company attacking an established company)

Attempt to control technology infrastructure (net neutrality, AWS) or establish protocols, operating systems ( apple vs android, Google vs Firefox, etc.)

Customers through loyalty programs or switching costs

Lobby government to change regulations (e.g., Kingsford charcoal, importing Canadian drugs)

Your new boss has asked you to spend a couple of weeks to assess the company and make recommendations for improvement.

Consider

How will you spend your time?

What will you look at or assess?

What data will you collect?

What will you look for?

What is the outcome of your diagnosis?

List the steps you would take (sequence is important)

Explain the structure, model or process that guided your actions

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At some point in your career, you will be asked to conduct a review of an organizational program (e.g., leadership development, incentive plan or restructuring effort), an organizational process (e.g., performance management), a change initiative, or the operations of a department or entire organizational unit.

In each of these examples you are being asked to 1. analyze the existing situation, 2 determine how effective it is and 3. recommend actions that will improve the situation with an explanation of the pros and cons (speed, cost, complexity) of each approach.

Regardless of what you are asked to assess (person, team, work process, organizational unit or company outcome) the process is the same. The specific diagnostic model, tool and process used will vary depending on the nature or the specific situation, but the overall diagnostic process is always the same.

Diagnostic Questions

What do you look at?

What do you look for?

How do you organize the data?

How do you sort, categorize or arrange the information that you collected?

What structure allows you to make sense of the data & recommend changes?

What is the outcome?

How do you evaluate your effort?

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Fundamental in all diagnoses is a structure that guides you in the data to collect, how you will organize it to determine key gaps or deficiencies that reduce effective or efficient functioning.

The outcome of a diagnosis should provide a framework to inform decisions on how to improve the efficiency and the functioning. More rigorous frameworks may provide additional guidance on which actions would be most efficient or effective which is useful in prioritizing recommendations and advising the decision makers on an appropriate course of action.

What Did You Look At?

People/Teams

Individual, Function, Department, Location

Processes

Operations, Customer, Innovation, Regulatory

Department/Function/Unit Outcomes

Effectiveness, Efficiency

Organizational Outcomes

Financial, Customer, Operations, Workforce

External Factors

Competitors, Customer, Labor Force

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What Did You Look For?

Problem

Effectiveness (goal completion)

Efficiency (use of resources)

Values (espoused vs actual)

Opportunity to Improve

Discrepancy

Change over time (trends)

Comparison with other (benchmarks)

Gap (Actual vs Expected)

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What Was the Outcome?

Identified a problem

Quantity, Scope, Location, Timing

Severity of Business Impact

Plan to verify problem

Hypothesis concerning cause

Process for verifying cause

Recommendations for improvement

Alternative Solutions (pros & cons)

Implementation Options (pilot, experiments)

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What Structure Did You Use?

Problem-Solving Process

Information Gathering

Troubleshooting Process

Diagnostic Tool

Diagnostic Model

Tactical

Audit, Structured Assessment

Strategic

Organizational Assessment

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Did You Add Value?

What is the deliverable?

Value to organization?

Inform decisions

Facilitate tasks

Measurable business impact

Speed, ROI

Beware SPOTs

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What is Diagnosis?

The assessment of the functioning, effectiveness or efficiency of a person, process or organization

Diagnosis is both a process and an outcome

“An investigation or analysis of the cause or nature of a condition, situation, or problem”

“A statement or conclusion from such an analysis”

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“An investigation or analysis of the cause or nature of a condition, situation, or problem

A statement or conclusion from such an analysis” (Merriam-Webster)

An assessment of the functioning, effectiveness or efficiency of a person, process or organization

The identification of the gaps limiting the successful completion of a decision, task or process

Diagnosis necessarily precedes all formal attempts to improve an existing situation or fix a problem.

Diagnosis (Continued)

A diagnosis can be

reactive or anticipative

tactical or strategic

Identifies the gaps limiting success of an individual, team, process or organization

Can produce a scorecard (evaluate) & a dashboard (monitor)

Must necessarily precede all formal attempts to improve an existing situation or fix a problem

Human Resource Management Department

“

Diagnostic Process

Begins with a specific perspective and a clear purpose (who I am, what I want to know & why I want to do this)

Might assess an outcome or a process

Defines a starting point, a process and an expected outcome (plan)

Guides what you look at, what you look for & how to look

Allows for a determination of success and what elements limits that success

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Diagnostic Approaches

Diagnostic Tools

Surveys, Benchmarking

Process Mapping, Fishbone

Troubleshooting Process

Decision Trees, Flow Charts

Process Models

Action Research Model (OD Process Model)

6-Sigma (DMAIC), The Goal (TOC)

Strategic Models

Organizational Assessment Models

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Organizational Data Collection Criteria

Quality of Data

Accuracy/Reliability/Validity

Completeness/Timeliness

Appropriateness of Sample

Political/resistance considerations

Practical Issues

Time, Costs, Obtrusiveness

Acceptance by Participants

Data collection begins the intervention & impacts future relations with all involved

Note: All data collection is an intervention

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Collecting data for a diagnosis in advance of any organization intervention is different that data collection for research purposes. Research requires a rigorous process to collect data scientifically standards of reliability and validity. While organizational research rarely provides the opportunity to collect data at that level, all data collection should produce data that is accurate and complete as possible given the time and costs involved. Organization data collection has additional requirements beyond psychometric concerns that need to addressed.

First, our data collection process must actively seek out from all relevant subgroups in an organization. This goes beyond typical demographic categories (gender, race) but include any other subgroup (i.e., function, level, business unit) that might be affected by the change initiative. For a change initiative to be successful those individual impacted must understand the reason for the change, feel they had a voice in determining the problem and hopefully some influence on the proposed solution or how the intervention will be implemented. How the diagnosis is performed as a major impact on the level of resistance to the changes that are recommended by the diagnosis. Clearly if some organizational subunit does not have input in the diagnosis, they will not feel any ownership in the “solution.”

I have had to conduct unnecessary, additional interviews or focus groups so that certain individuals could have their say in the proceedings. It is good practice because if they do not accept the result of the diagnosis; they will not participate in any subsequent change effort.

Diagnostic Tools

Surveys, Focus Groups & Data Mining

Measures the level of satisfaction with various organizational programs, processes or leaders

Benchmarking

Compares the level of functioning of a work process performed by different organizational units

Process Variability

Identifies sources of variability in a work process or the root cause of a failure (5 Whys, IS-IS NOT, Fishbone)

Work Process

Identifies inefficiencies in how a task or operation is complete (Time & Motion, Process Maps, Value Chain Mapping-Scientific Management, Lean, Reengineering)

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If the only tool you have is a hammer, then all problems look like nails

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Benchmarking

Measurement process that compares an existing process to similar processes (internal or external) to determine effectiveness & efficiency

Begins with clearly defined outcome measures, then rigorously assesses resources used to produce specific level of outcome

Targets

Business Processes (accounts receivable)

Support Functions (HR)

Organizational Performance (Finance, Market)

Products & Services

Features, Quality Level, Specifications

Reliability, Warranty, TCO

Business Strategy

Differentiation factors

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Troubleshooting Process

A sequence of steps intended to identify the source of a problem. Once identified, the cause of the problem can be remedied by using another process which identifies a way to fix the problem

Example: Automobile does not start

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TROBLESHOOTING

A troubleshooting process is a sequence of steps intended to identify the source of a problem. Once identified, the cause of the problem can be remedied by another troubleshooting process which should result in the resolution of the problem.

Example: Automobile does not start

Turn key and …

Cranking?

Spark?

Fuel?

Timing?

Compression?

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TROBLESHOOTING

Cardiopulmonary Resuscitation (CPR)

Old Approach (obstruction)

Airwave

Breaths

Compressions

New Approach (no obstruction)

Attempt to Wake

Compression (18)

Rescue Breaths (2)

Compression (18)

Rescue Breaths (2) Repeat

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Quality Tools

Pareto

5 Whys (root cause)

5 Ss (neat & efficient workplace)

7 Wastes (DOWNTIME)

Is-is Not

Fishbone

Voice of the Customer

Value Stream Mapping

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Waste, or muda in Japanese, is defined as the performance of unnecessary work as a result of errors, poor organization, or communication.

Quality professionals often debate whether or not there are seven or eight wastes of lean. The eighth waste of lean is unique from the original seven because its elimination can directly benefit the employees, as well as the employer.

The eight lean manufacturing mudas can be remembered using the acronym

DOWNTIME.

Defects

Overproduction

Waiting

Non-utilized talent

Transportation

Inventory

Motion

Extra-processing

IS/IS NOT Problem Analysis

	IS	IS NOT
WHAT	What is the deviation?	What similar objects could have the deviation, but does not?
WHERE	Where does the deviation occur?	Where else could the deviation occur, but is not?
WHEN	When does the deviation occur?	When else could the deviation occur, but does not?
EXTENT	How many objects have the deviation?	How many objects could have deviation, but do not?

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Root Cause Analysis (Fishbone)

Fishbone (Dr. Kaora Ishikawa)

Systematic Approach to Diagnosis

Identifies the Root Causes of a Problem

Illustrates Relationships

Used to determine source of variability

Process

SMEs Brainstorm All Possible Causes

Draw Fishbone

Prioritize Causes

Develop an Action Plan to Verify Causes

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Fishbone Example

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Process Maps

Identifies all the activities in an organizational process and the associated time and cost of each activity

Targets Customer’s Requirements & Work Unit Goals

Focuses on the Work Process Not on Functions or Departments

Captures the “Whole Picture”

Illustrates How Events are Linked

Useful in Identifying Work to Remove/Improve

Used in reengineering business processes

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Task: Time & Motion Studies

Determines “correct”

time to complete task

Establishes the best way

to perform a task

Simplify Task

Modify equipment

Standardize the Process

Focused Training

Strict Supervision

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Symptoms of Ineffective Processes

Slow Cycle Time

Excessive Overhead or Staff

“Silos”

Territorial Behavior

Internal Conflict

Sub-optimization of Organizational Goals

Dissatisfied Customers

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Versions of A Process

What You Think It Is... What It Really Is.. What It Should Be... What It Could Be...

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There are four major versions of a process map. First what individuals who touch the process think it is.

Second, reconciling what the process map is into what it really is, is a second version of the process. These first two versions of the process constitute what is referred to as the “as is” process map. A thorough “as is” process map is one of the short-term goals of good process mapping.

As the team moves forward and does process analysis and problem-solving, eventually they will move toward the third version of the process map – the “should be” map. At this point, a check must be made as to whether customer needs and requirements have been met or exceeded.

If they have not, the entire process must be reengineered (i.e., redone from scratch) which would result in what some call the “could be” process map.

Remove Non-Value-Added Work

RAMPP (reports, approvals, measures, polices & procedures)

Preparation/Set-Up

Control/Inspections

Unnecessary Steps/Delay

Reworks

Internal/External Failure

What is the customer willing to pay for?

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Diagnostic Framework

A structured process to guide what you look at, what you look for & how to look

What questions do you ask?

What data do you collect?

More importantly, how do you analyze this information to determine what is wrong and how to improve the situation?

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Diagnostic Frameworks

Diagnostic Tools

Surveys, Benchmarking

Process Mapping, Fishbone

Troubleshooting Process

Decision Trees, Flow Charts

Tactical Diagnostic Process Models

Action Research Model, The Goal (TOC)

SMPTE Model

Strategic Diagnostic Models

Organizational Assessment Models

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Consulting Project Model

Problem--Anything that disrupts the effectiveness, efficiency or quality of work

Impact--Business results (financial, operational, customer, workforce, values) affected by the problem

Cause(s)--Logical antecedents of the problem

Solution—Action plan to improve situation

Problem

Impact

Causes

Solutions

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Action Research Model

Consulting process for Organizational Development practitioners

Collaborative, data-based process in which a consultant works with a client to identify a problem, jointly implement a solution and evaluate the results

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Action Research Method (Lewin)

Client Identifies a Problem

Consultation with Change Agent

Data Gathering & Diagnosis (Joint)

Review of Results (joint)

Action (Joint)

Evaluation

Unsuccessful

Rediagnose Problem or Modify Action

Successful

Work on New Problem

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ARM Advantages

Focus on 1. diagnosis before action & 2. using data to evaluate action

Client & consultant work as partners

Joint actions build trust, improves communication, increases client commitment to the solution and allows for transfer of knowledge

Applicable in a wide variety of situations

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Example: Survey Guided Development

Client identifies problem or issue

Development of survey (Joint)

Survey administration

Feedback to client

Joint feedback to client group

Diagnosis (Joint)

Action planning (Joint)

Evaluation & follow up

Human Resource Management Department

Example: Alignment Assessment

Identify the goals espoused by the leader

Interview/survey descending levels of the organization or different units to determine:

Clarity and priority of goals (understand)

Acceptance of goals (agree/commitment)

Leader behavior impact (models/culture)

Obstacles preventing/resources & authority to implement the goals (able)

Incentives/disincentives (motivation)

Identify gaps & investigate why they exist

Recommend improvements

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Rationale for Diagnosis

Effective action cannot be taken if the directive is not received, understood or agreed with (communication process)

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AMO Model

Performance = A x M x O

Ability

Motivation

Opportunity

Human Resource Management Department

Rationale for Diagnosis

AMO Model suggests that effective action is impeded by

A---Inadequate knowledge or skills needed to perform effectively

M---Lack of motivation (rewards)

O---Insufficient opportunity to act

Obstacles or barriers

Resources of authority to act

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Mager & Pipe

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Six Sigma

A methodology (DMAIC) that uses data and statistical analysis to measure and improve operational performance, practices, and systems

Voice of the Customer is the critical to quality (CTQ) customer requirements and specifications.

Voice of the Process is your actual goods/service output measurement

Voice of the Business is the needs or requirements of the business or shareholders

Voice of the Employees is the needs of the employees working on the process

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DEFINE

MEASURE

ANALYZE

IMPROVE

CONTROL

Voice of the Customer (CTQs)?

Defective Output?

Problem Statement and Improvement Goal?

Identify Process Inputs and Outputs Process Baseline Performance? Determine Vital Few Variables

Sources of Variation (Root Causes)

Value/Non-Value Added Process Steps

Cost-Effective, Practical, Solutions

Plan Solution Implementation

Implement Solution on a Trial or Pilot basis

Establish Process Controls Monitor Output Metric to Sustain Change

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Vital Few: These are the few (20%) independent variables (X's) which contribute to maximum (80%) of the total variation. These are identified through Pareto Charts and Design of Experiments.

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The Goal

How did it define success?

Model

Diagnostic Process

Assumptions made in video

Impact on innovation

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Success = The Goal

Model (Systems Theory)

Resources working in combination

Monitor: throughput, costs, inventory (WIP)

Success Metric: Overall output (profit)

Diagnosis Process

Exploit, subordinate, elevate, repeat

Identify bottlenecks

Assumptions

Competent & committed employees

Positive relations with union & suppliers

Impact on Innovation

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The Moral of the Goal

“Sometimes you end up working so hard that you don’t ask yourself, is this getting us any closer to our goal?”

Thus, first define success and develop metrics to determine overall success (report card) and a process to monitor effectiveness of the process (dashboard)

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Diagnostic Frameworks

Diagnostic Tools

Surveys, Benchmarking

Process Mapping, Fishbone

Troubleshooting Process

Decision Trees, Flow Charts

Tactical Diagnostic Process Models

Action Research Model, The Goal (TOC)

SMPTE Model

Strategic Diagnostic Models

Organizational Assessment Models

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Medicine (Tactical)

Goal: --to treat sick people

Success: --make people well

Metrics: --efficacy, speed, costs

Process

Symptoms: -- temperature, pain, bleeding

Treatment: -- surgery, medicine, rest

Business Model: --fee-for-service

Improvement: --economy of scale, efficiency --limit fee or service

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Limitations of Tactical Framework

May not address system problems

Has narrow measure of success

Solutions may be short-term (“Quick Fixes”)

Solutions may create other problems

Not Strategic

Is typically reactive (problem based)

Past-focused not future-focused

Does not address “Ultimate” Stakeholder’s concerns

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SMPTE Consulting Process (McCune)

Define (Success) “effectiveness” and determine how to measure it

Select and use a Model that explains how to achieve effectiveness

Follow a structured Process consistent with the model

Use appropriate Tools to improve effectiveness

Evaluate the results & identify ways to improve the process & demonstrate value

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Strategic Diagnostic Models

Strategic (System-Based Causal Model)

Clearly defines organization success

More strategic & future-focused

Identifies the critical elements of the system

Explains (causally) how the elements & their interactions relate to success

Leading….Lagging Factors

Determines

1. Organizational Success Level

2. Gaps in System

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A diagnostic model begins with a clear definition of system or organizational effectiveness I.e., success). This may take a stakeholder perspective and provide prioritized organizational metrics. An organization’s mission and values should play an important role in defining success and prioritizing success metrics. The model should provide a clear process to measure organizational success.

A diagnostic model will also identify all of the critical elements within the (system) organization and explain how the elements combine to effect success. This is often depicted with a causal diagram showing the leading and lagging variables. The model should provide a structured approach to identify the organizational gaps effecting organizational success.

Thus, a diagnostic model relates to specific organizational “gaps” (e.g., alignment of system elements) to overall organizational effectiveness (i.e., success gap).

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Causal Model

An illustration of the elements within a system that depicts causal relations among the elements and their relationship to success metrics

Basic Model

Leading Lagging

Advanced Model

Antecedents Mediators Consequences

Moderators

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Strategic Diagnosis: Healthcare

Goal: -- future-focused & values-driven

Success -- strategic goal

Metrics: -- longer term

Causal Model

Leading Lagging

Strategic Action -- initiatives to improve future

Metrics -- dashboard to monitor progress

-- scorecard to measure success

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Healthcare (Strategic)

Goal: -- maintain health for all

Success --healthy population

Metrics: --life expectancy, quality of life, lifetime costs per patient

Model

Leading Lagging

Weight/BMI/Cholesterol Stroke/Heart Attack

PSA/Genetic Markers Diabetes/Cancer

Strategic (Preventative) Action

Diet/Exercise/Stress Reduction/Preemptive surgery

Control --healthcare spending for population

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Metrics: Life expectancy, quality of life, average cost per patient lifetime

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Strategic Diagnostic Model

Clear Definition & Measure of Organizational Success

Stakeholders, Mission, Values, Strategy

Diagnostic Framework

Identifies all critical elements within the (system) organization

Explain how the elements combine to effect success (leading…lagging variables)

Relates specific organizational “gaps” (e.g., fit, alignment, congruence) to organizational success (i.e., success gap)

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Who Defines Success?

Ultimate Client (Theoretical)

The independent, objective, external perspective representing the long-term interests of the organization

Dominant Coalition

Those few individuals who make the major organizational decisions

Various Stakeholders

Any group of people who are affected by the actions of the company

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Stakeholder Assessment

External

Owners, Shareholders, Investors

Customers

Government, Unions, Society, Social Activists

Internal

Board of Directors/ Senior Leadership

Division, Unit, Location, Function, Employees

Personal

Employee, Family, Friends

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Defining Success

Mission

What you do and for whom

Prioritized list of company values

Vision

Externally focused & market-oriented statement of organization’s goals

Strategy

The plan to create value for shareholders, customers and citizens

Metrics

Indicators of success (BSC+V)

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Mission

“A concise, internally focused statement of the reason for the organization’s existence, the basic purpose toward which its activities are directed, and the values that guide employees’ activities. The mission should also describe how the organization expects to compete and deliver value to customers”. (Kaplan & Norton, 2004)

Vision

“ A concise statement that defines the mid- to long-term (three to five year) goals of the organization. The vision should be external and market-oriented and should express – often in colorful or “visionary” terms – how the organization wants to be perceived by the world”. (Kaplan & Norton, 2004)

Strategy Map

Graphically illustrates the chain of cause-and-effect relationships among the four organizational outcomes (financial, customer, operations, & workforce)

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Balanced Scorecard (Kaplan & Norton)

Financial

Results

Customer

Value

Workforce

Work

Process

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Business Success Metrics (BSC-V)

Financial (Lagging---Ultimate Determination of Success)

Stock Price or Price/Earnings Ratio Compared to industry or market average (i.e., Dow, NASDAG) /RONA, ROE, ROCE Revenue/Earnings Growth, Operating Costs

Customer Metrics (Lagging for Operational & Workforce & Leading for Financial)

Satisfaction, loyalty, NPS, retention, share, social media

Reputation, market share, service error rate

Operational (Leading for Customer)

Productivity, quality, cycle time, speed to market, scrap, WIP

Workforce (Leading for Customer)

Retention, Preferred Employer, competencies, agility, engagement

Values prioritized by importance to company culture

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Company Reputation

Employer Brand

Culture & workplace

Commitment to DEI

Community Relations

Employment

Charitable Support

Social Justice

Environmental Sustainability

Carbon Footprint

Energy Usage

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The Man Who Said No to Wal-Mart

Every year, thousands of executives venture to Bentonville, Arkansas, hoping to get their products onto the shelves of the world's biggest retailer. But Jim Wier wanted Wal-Mart to stop selling his Snapper mowers.

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Major Values Failures

Yahoo Inc. was sued for gross negligence over a massive 2014 hacking in which information was stolen from at least 500 million accounts

Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011--the phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money

Sexual Harassment Charges (me-too movement) at the highest organizational levels in multiple firms in multiple industries

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Diagnostic Frameworks

Diagnostic Tools

Surveys, Benchmarking

Process Mapping, Fishbone

Troubleshooting Process

Decision Trees, Flow Charts

Tactical Diagnostic Process Models

Action Research Model, The Goal (TOC)

SMPTE Model

Strategic Diagnostic Models

Organizational Assessment Models

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SMPTE Consulting Process (McCune)

Define (Success) “effectiveness” and determine how to measure it

Select and use a Model that explains how to achieve effectiveness

Follow a structured Process consistent with the model

Use appropriate Tools to improve effectiveness

Evaluate the results & identify ways to improve the process & demonstrate value

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Strategic Diagnostic Model

Clear Definition & Measure of Organizational Success

Stakeholders, Mission, Values, Strategy

Diagnostic Framework

Identifies all critical elements within the (system) organization

Explain how the elements combine to effect success (leading…lagging variables)

Relates specific organizational “gaps” (e.g., fit, alignment, congruence) to organizational success (i.e., success gap)

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Organizational Assessment Models

Prescriptive Models

Likert Systems 4

Joyce 4+2

Contingency Models

BSC Model

Weisbord 6-Box

Galbraith Star Model/McKinsey 7-Ss

Nadler Congruence Model

Tichy Strategic Rope

Ulrich Architecture Model

Differentiated Workforce

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A prescriptive model assumes a specific measure of success that applies to all organizations and the necessary conditions for that success. It is a prescriptive model which suggests what should be done base on an established assumptions or a set of standards. The gaps that it identifies involve the difference between ”what is” and “ what should be.” The “should be” is determined by the model’s assumptions about what is the best way to manage an organizations.

For example, the Likert Model is a humanistic, organizational development model that assumes that organizations are most effective when employees are allowed to fully participate in the processes that affect their work life. The model distinguishes between the least effective approach (System 1) which is an autocratic organization with virtually no participation or power for employees in organization processes to the ideal (system 4) which employs a very progressive level of employee involvement in all of the major organizational processes.

A contingency model assumes that there is no one best way to manage an organization. Rather, the external and internal conditions facing an organization determine the best way to manage the organization at that time. For a contingency model to be effective it must include a clear measure of organizational success, a determination of all of the major elements of the system (organization) and a causal explanation of how these elements interact to produce organizational success.

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Likert System IV

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Success: Management system believed to be most effective (Human Relations Theory)

Assesses:

Goal Setting

Decision Making

Problem Solving

Communication

Participation

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The Evergreen Study

Two five-year studies begun in 1996 — focused on answering two key questions:

Why do some companies consistently outperform their competitors?

What factors explain success

Assessed 200 management

practices- found 4 + 2

factors explained success

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High

Time 1

Performance “Quads”

4 + 2 Model (Joyce)

Time 2

Low

Winners

Losers

Climbers

Tumblers

Success = outperformed (growth in profit) peer companies over 5-year period

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4 + 2 Formula: Primary Practices

Strategy

Clearly stated, focused & shared strategy

Execution

Flawless operational execution

Structure

Fast, flexible, flat organization

Culture

Performance-oriented culture

Adaptive & meaningful

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Secondary Practices

Talent

Attract & retain talented employees

Leadership

Leaders & directors are committed to the business

Innovation

Industry transforming innovations

Mergers & Acquisitions

Growth through M&As

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4+2 Differentiators on “Strategy”

Source: What Really Works, Joyce et. al., p. 72

Keep growing your core business; beware of the unfamiliar

Clear communicate your strategy internally and externally

Develop strategy from the outside in

Build a strategy around a clear value proposition for the customer

Maintain antennae to marketplace changes and fine-tine strategy

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Rated Poorly

Losers Winners Losers Winners Losers Winners Losers Winners Losers Winners 46 19 51 9 45 11 60 8 58 8 Rated Highly

Losers Winners Losers Winners Losers Winners Losers Winners Losers Winners 32 64 30 89 24 87 18 81 27 86

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Organizational Diagnostic Framework

Dominant

Coalition

Strategy/

Metrics

Customer &

Financial

Measures

Work Force

Mission

Values

Culture

Leadership

External Environment

Structure

Systems

Rewards

Time

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Balanced Scorecard (Kaplan & Norton)

Financial

Results

Customer

Value

Workforce

Work

Process

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Tool: Strategy Map

Graphically illustrates the chain of cause-and-effect relationships among the four organizational outcomes (financial, customer, operations, & workforce)

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Mission

Vision

Strategy Map

Graphically illustrates the chain of cause-and-effect relationships among the four organizational outcomes (financial, customer, operations, & workforce)

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Profit

Strategy Map

Financial

Customer

Workforce

Operations

Satisfaction

Operating

Costs

Revenue

Competence

Behaviors

Commitment

Quality

Efficient

Operations

Responsive Service

Loyalty

NPS

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Financial measures are a lag indicator and the ultimate determination of organizational success.

The financial metrics selected must be appropriate to incent behaviors aligned with long-term success of the company.

Customer measures (loyalty, NPS) for targeted customers are lagging indicators of a company's customer value proposition.

Internal processes (operations measures) create & deliver the value proposition for the customers and are leading indicators of subsequent improvement in customer and financial outcomes.

Workforce objectives describe how the people, technology and organizational climate combine to support strategy and are lead indicators for the other three outcomes.

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Overall Strategy Map at Big Pharma, Inc.

Improve Shareholder Value

Revenue Growth Strategy

Productivity Strategy

Enhance the Franchise

Enhance Customer Value

Improve Cost Structure

Improve Asset Utilization

Shareholder Value

ROCE

New Product Revenue

Customer Profitability

Cost per Unit

Asset Utilization

Financial Perspective

Customer Perspective

Internal Perspective

Learning & Growth Perspective

“Build the Franchise”

“Increase Customer Value”

“Operational Excellence”

“Good Neighbor”

(Innovation Processes)

(Customer Management Process)

(Operations & Logistics Process)

(Regulatory & Environmental Processes)

Customer Value Proposition

Customer Intimacy

Product Leadership

Customer Satisfaction

Customer Acquisition

Customer Retention

Price

Product/Service Attributes

Quality

Time

Function

Service

Relations

Brand

Op Excellence

Relationship

Image

A Motivated and Prepared Workforce

Awareness

Alignment

Incentives

Infrastructure

Applications

Skills

Knowledge Sharing

Strategic Competencies

Climate for Action

Strategic Technologies

Source: Kaplan & Norton

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Tool: Strategic Initiative Assessment Matrix

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Organizational Architecture

Strategic Intent

Strategy/Metrics

Strategic Capabilities/Strategic Positions

Leadership

Competence Pillar

Consequence Pillar

Governance Pillar

Improvement Pillar

Mindset

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Organizational Success

Effective

Work Force

Competent, Committed, Innovative

Talent

Consequences

Leadership

Culture

Governance

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Organizational Success

Gap between customer expectations of service and workforce performance objectives

Are employees trained, motivated and able to provide the level of service desired by the customers

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Defining Success

Customer Success

Financial Success

Business Process Success

BUSINESS SCORECARD

Workforce Success

Mindset/Culture

Competencies

Behavior

WORKFORCE SCORECARD

Workforce that:

Understands

Is Able

Does

Workforce Success

Specific business objectives leaders must deliver

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Competence

Recruiting

Hiring

Promotion

Succession

Outplacement

Training & Development

Alternatives to Labor

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Consequences

Measurement Systems

Performance Standards

Feedback Mechanisms

Appraisal Process

Rewards

Motivation

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Governance

Organizational Structure

Decision Process

Policies

Communication

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Improvement

Manage Work Processes

Reengineer

Facilitate Change

Leverage Learning

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Gap Analysis

Mindset

Leadership

Organizational Requirements

Competencies

Consequence

Governance

Improvement

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Gap Analysis

	Is Now	Needs to Be
Mindset
Leadership
Competence
Consequences
Governance
Improvement

Strategic Intent: ______________________________

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Weisbord Six-Box Model

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Nadler Congruence Model

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Organizational Fit

Individual- Organization

Individual-Task

Individual-Informal Organization

Task Organization

Task-Informal Organization

Organization-Informal Organization

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STAR Model

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Measures

Outcomes = Culture, Performance, Results

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Evaluating Strategic Assessment Model

1. Process for assessing success of organization (success gap)

Clear definition of success

Prioritized organizational success measures

2. Organizational assessment process (organization gaps)

Identification of system elements, their interactions & causal impact on success

Process for determining and prioritizing specific organizational gaps affecting success

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Harwood Study (Lewin)

Technological change to work caused lower production, grievances and turnover

Experimental Conditions

Information & Q&A

Information and representative

Discussion, recommendations and planning of change

Result

Production dropped 20% & did not recover

Required 2 weeks to recover pre-change rate

Increased production 15%

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The experiment on overcoming resistance to change stemmed from the problem of employees’ reluctance to changes. Workers were not satisfied with the job transfers. They had to constantly leave tasks at which they had just developed proficiency. As a result, the company was encountering lower output, grievances, and increased labor turnover. The more difficult the new job, the greater was the degree of frustration.[5] [7] That is why Coch and French established four experimental groups. In this research they were trying to address the two main questions:

Why do people resist change so strongly?

What can be done to overcome this resistance?[2] [7]

The first group was a control group. The new changes at work were announced to them in a usual manner and they were given a chance to ask questions. The second group was given more precise information about changes and was allowed to elect representatives who would participate in planning and setting the new production rates. Members of groups 3 and 4 were entirely involved in the discussion process with management about all aspects of the change. They could make a number of recommendations and help to plan the most efficient methods for doing the new job.[11] [12] The result of the experiment was that the level of productivity and the amount of aggression expressed against management varied inversely with the degree of participation in the changes.[7] Average production in the first group dropped 20 per cent and did not regain the pre-change level. The group which participated through representatives required two weeks to recover its pre-change output and, finally, groups 3 and 4 reached an increase of about 15% of the output their prechange productivity levels.[11]

Coch and French’s examination have indicated that behavior of employees can be influenced by their direct participation and involvement.[13]

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Change Model (Lewin)

Unfreeze

Assess readiness

Change

Transition

Refreeze

Establish new habits

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Force Field (Lewin)

Change

Driving

Resisting

motives, values, needs, moods, goals, anxieties, & ideals

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Lewin postulated that in any situation there are two types of forces, driving forces pushing for change and resisting forces that oppose the change or action.

An individual's "field" (Lewin used the term "life space") describes that person's motives, values, needs, moods, goals, anxieties, and ideals.

When the forces are equal, we have equilibrium or no change. At any point in time, an individual is in equilibrium because their habits, needs, expectations and personality strongly influences how they will act.

We are all perfectly designed to behave the way we do. When conditions change, we continue to behave as programmed unless the balance of forces change.

“Development (or regression) of an individual occurs when their "life space" has a "boundary zone" experience with external stimuli. Note, it is not merely the experience that causes change in the "life space", but the acceptance (internalization) of external stimuli.”

Using this model suggests that there are only two ways to bring about change (manipulate the external environment),

1) increase the driving forces or 2) reduce the resisting forces.

Which is best?

motives, values, needs, moods, goals, anxieties, and ideals

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Using Force Field

Determine desired state

Identify key players

Determine needed commitment level

Assess present commitment level

Determine commitment gaps

Identify driving & restraining forces

Determine leverage points

Act on key target person

Use target person to influence others

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Commitment Chart (Beckhard & Harris)

Key Players	Make It Fail	Let It Fail/ Happen	Help It Happen	Make It Happen
Mary		X		O
Kerri			X	O
Bart	X		O
Milhouse			XO
Lisa			O	X
Ralph		X	O
Nelson	X	O

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Cheese: Writings on the Wall

Change Happens

They Keep Moving the Cheese

Anticipate Change

Get Ready For The Cheese To Move

Monitor Change

Smell The Cheese Often So You

Know When It Is Getting Old

Adapt To Change Quickly

The Quicker You Let Go Of Old Cheese,

The Sooner You Can Enjoy New Cheese

Change

Move With The Cheese

Enjoy Change!

Savor The Adventure And

Enjoy The Taste Of New Cheese!

Be Ready To Quickly Change & Enjoy It, Again, And Again!

They Keep Moving The Cheese

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Tipping Point

Ideas and behaviors spread like epidemics

Law of the Few

Connectors—highly social people with diverse contact

Mavens—enthusiastic early adopters

Salesmen-charismatic people

who increase desire for idea

Stickiness Factor

Messages that are appealing,

understandable, memorable

Power of Context

Environment plays a major role

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Change Model (Lewin)

Unfreeze

Assess readiness

Change

Transition Phase

Refreeze

Establish new habits

Renewal

Create strategic agility

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Transitions (Bridges)

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Managing Transitions

Endings (unfreeze)

Listen, Help people let go, allow time

Acknowledge losses (symbols), Emphasize continuities

Neutral Zone (change)

Normalize it, Create temporary structures & roles

Encourage experiments, Protect from failure

Use checkpoints Get feedback

New Beginnings (refreeze)

Dramatize new identity, Provide support & training

Redesign structures & roles collaboratively

Look for quick wins, Celebrate success

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Kotter Change Model

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Source: Kotter

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Second level

Third level

Fourth level

Fifth level

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Ulrich Modified Model

How good is our firm at change? How good do we need to be?

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Keys and Processes for Making Change Happen

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Second level

Third level

Fourth level

Fifth level

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1. Who’s leading this change? Do you have the visible, active support of key leaders and other managers? (Leading Change)

2.Have you identified all stakeholders in the change (those who will have to do something different as a result of the change or who will feel the impact of the change)? (All)

3.Do all stakeholders understand the shared need for the change and know that the status quo is unacceptable? (Creating a Shared Need)

4.Can the stakeholders clearly state the vision of what the future state (after the change is implemented) will look like. (Shaping a Vision)

5.Do you have a strategy to gain “buy-in” for each stakeholder group. (Mobilizing Commitment)

Key Questions (CAM Model)

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6. Have you considered strategies and actions we can implement that will improve the chances the change will be sustained? (Making Change Last)

7. How will we drive accountability related to the change? (Making Change Last)

8. Have you identified key metrics related to the change – including baseline information. (Monitoring Progress)

9. Have you identified a key measure that we will monitor to determine if the change is being sustained? (Monitoring Progress)

10. Are there changes in the organization or department system and structures that are needed to support the change? (Changing Systems and Structures)

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Recognizing the Change Imperative (Nadler)

Recognition

Identify trends that will impact the business

Strategic Choice

Determine optimal strategy for future success

Organizational Redesign

Reshape organization to execute strategic plan

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Change Models

Lewin	Bridges	Kotter	Ulrich	GE CAP	Nadler	Unified Model (McCune)
					Recognizing the change imperative	Anticipation Success Gaps
Unfreeze	Endings	Create urgency Form coalition Create vision	Leading change Creating a shared need Shaping a Vision	Leading change Creating a shared need Shaping a Vision	Developing a shared direction	Planning Needed change Critical decision Needed resources Leading Change Vision Urgency
Change	Neutral Zone	Communicate vision Empower Action Quick wins	Engaging stakeholders Making decisions Measuring progress	Mobilizing commitment	Implementing change Consolidating change	Early actions Coalition Consensus Manage transition Consolidate Improvement Quick wins Build on success Evaluate & modify
Refreeze	New beginnings	Build on change Make it stick	Making it last	Making change last		Legitimize Change Celebrate success Codify new identity Revise org. elements Develop an Agile Culture

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Unified Change Model (McCune)

Anticipation/Diagnosis

Leading Change

Planning for Change

Early Actions

Consolidate Improvements

Legitimize Change

Establish a New Culture

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I. Anticipation

Define future success

Monitor external environment

Trends (threats/disruptors & opportunities)

Customer/Competitor/Regulatory

Regularly diagnose internal environment

Diagnose present state (Use model)

Strategic capabilities

Organizational diagnosis

Determine gaps

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II. Planning for Change

Determine change goals & metrics

Outcome measures (Balanced Scorecard)

Progress measures (milestones, mid-term goals)

Internal change assessments

Trust levels

Power shifts

Culture gap

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II. Planning for Change

Critical decisions

Pace

Scope & Depth

Who leads?

Break with past?

Modify change or modify culture?

Use existing personnel or re-staff?

Determine needed support

Training

Facilitation & consulting

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III. Leading Change

Crafting a vision (shared direction)

Determine desired future state (crowdsource)

Develop an appealing, understandable, memorable (sticky) message

Revise mission, values & success metrics

Establish a sense of urgency

Provide clear sense of reality

Create dissatisfaction with present state

Focus on crises or potential crises

Galvanizing event

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IV. Early Actions

Create coalition of support

Establish a steering committee with power

Engage stakeholders, power/opinion leaders

Neutralize dissidents, remove insurgents

Develop consensus around vision

Provide consistent clear message using multiple communication channels

Model appropriate behavior

Use advocates (mavens, connectors & sale people) to spread message

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IV. Early Actions (Continued)

Facilitate the transition

Minimize perception of change

Focus on points of stability/gain

Acknowledge losses (symbols)

Provide time to mourn/disengage past

Create a sense of security

Make decision process transparent

Create temporary structures/roles

Encourage experiments/Protect from failure

Link new behaviors with success criteria

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IV. Early Actions (Continued)

Implementation Actions

Establish goals, measures & milestones

Maintain sense of urgency

Assign roles & responsibilities

Plan for short-term wins

Recognize, support & reward success

Align systems & structures

Modify policies & procedures (remove obstacles)

Enable local participation (set scope of authority)

Human Resource Management Department

V. Consolidate Improvements

Build support

Develop change information/communication system

External--- customer reactions, competitive benchmarks

Internal--- employee reaction to change

Communicate (signals, symbols & consequences)

Share best practices, communicate successes

Leverage short-term wins

Hire, promote employees who fit change

Change systems, structures and policies that do not fit vision

Reinvigorate the process with bigger projects

178

Human Resource Management Department

179

VI. Legitimize Change

Celebrate success

Align performance management system

Modify reward system

Reward and punish

Revise systems, policies, procedures to support change

Align leader development, promotion & succession process

Human Resource Management Department

VII. Establish a New Culture

Dramatize new identity

Remove trappings of old way

Establish new norms/values/rituals

Create a culture of learning

Encourage risk taking

Value candor and assessment (postmortems)

Adapt & learn

Develop organizational change agility

180

Human Resource Management Department

Effect

People

Machines

Methods

Materials

Skill

Motivation

INITIATIVE MAPPING GRID

Current

Initiatives

Needed

Initiatives

PERSPECTIVE

SUCCESS METRICS

Process Improvement

Traveler

Calibration

Growth strategy

Offshoring

Div. A strategy

Div. B strategy

Executive pipeline

Mfg. Excellence

Channel Mgt.

Cons

umer

Insight

Acquisitions

Financial Success

Book value

Operating income return on total

assets employed



 



Cash flow



 

10% year-to-year increase in

operating income



 



Customer Success

Variable contribution by major

product line and by customer and

channel

   

  

Quality



Customer service

 

Operational

Success

Sales per employee

Net efficiency (ABC Division)



Hours per widget (XYZ Division)



Safety incident rate and severity



People Success

Gallup Q12

Leadership bench strength



Succession (SG6 and above)



Executive leadership development

status



“Ready-now” targets



Strategy  Metrics  Reward

INITIATIVE MAPPING GRID

Current Initiatives

Needed Initiatives

PERSPECTIVE

SUCCESS METRICS

Process Improvement

Traveler

Calibration

Growth strategy

Offshoring

Div. A strategy

Div. B strategy

Executive pipeline

Mfg. Excellence

Channel Mgt.

Consumer Insight

Acquisitions

Financial Success

Book value

Operating income return on total assets employed

(

Cash flow

(

10% year-to-year increase in operating income

(

Customer Success

Variable contribution by major product line and by customer and channel

(

Quality

(

Customer service

(

Operational Success

Sales per employee

Net efficiency (ABC Division)

(

Hours per widget (XYZ Division)

(

Safety incident rate and severity

(

People Success

Gallup Q12

Leadership bench strength

(

Succession (SG6 and above)

(

Executive leadership development status

(

“Ready-now” targets

(

Strategy ( Metrics ( Reward

1-8409w-09/25/21

Eight Steps to Transforming Your Organization

Establishing a Sense of Urgency

 Examining market and competitive realities

 Identifying and discussing crises, potential crises, or major opportunities



Forming a Powerful Guiding Coalition

 Assembling a group with enough power to lead the change effort

 Encouraging the group to work together as a team



Creating a Vision

 Creating a vision to help direct the change effort

 Developing strategies to achieve that vision



Communicating the Vision

 Using every vehicle possible to communicate the new vision and strategies

 Teaching new behaviors by the example of the guiding coalition



Empowering Others to Act on the Vision

 Getting rid of obstacles to change

 Changing systems or structures that seriously undermine the vision

 Encouraging risk taking and nontraditional ideas, a ctivities and actions



Planning for and Creating Short -Term Wins

 Planning for visible performance improvements

 Creating those improvements

 Recognizing and rewarding employees involved in the improvements



Consolidating improvements and Producing Still More Change

 Using increased credibility to change systems, structures, and policies that don ’t fit the vision

 Hiring, promoting, and developing employees who can implement this vision

 Reinvigorating the process with new projects, themes, and change agents



Institutionalizing New Approaches

 Articulating the connections between the new behaviors and corporate success

 Developing the means to ensure leadership development and succession



Eight Steps to Transforming Your Organization
1	Establishing a Sense of Urgency · Examining market and competitive realities · Identifying and discussing crises, potential crises, or major opportunities (
2	Forming a Powerful Guiding Coalition · Assembling a group with enough power to lead the change effort · Encouraging the group to work together as a team (
3	Creating a Vision · Creating a vision to help direct the change effort · Developing strategies to achieve that vision (
4	Communicating the Vision · Using every vehicle possible to communicate the new vision and strategies · Teaching new behaviors by the example of the guiding coalition (
5	Empowering Others to Act on the Vision · Getting rid of obstacles to change · Changing systems or structures that seriously undermine the vision · Encouraging risk taking and nontraditional ideas, activities and actions (
6	Planning for and Creating Short-Term Wins · Planning for visible performance improvements · Creating those improvements · Recognizing and rewarding employees involved in the improvements (
7	Consolidating improvements and Producing Still More Change · Using increased credibility to change systems, structures, and policies that don’t fit the vision · Hiring, promoting, and developing employees who can implement this vision · Reinvigorating the process with new projects, themes, and change agents (
8	Institutionalizing New Approaches · Articulating the connections between the new behaviors and corporate success · Developing the means to ensure leadership development and succession (

2-8922-1/30/2007

World Class

Abysmal

Leading

Change

Creating

Shared Need

Shaping a

Vision

Engaging

Stakeholders

Making

Decisions

Measuring

Progress

Making it Last

OUR CHANGE

IMPLEMENTATION EFFECTIVENESS

World Class


Abysmal
	Leading Change	Creating Shared Need	Shaping a Vision	Engaging Stakeholders	Making Decisions	Measuring Progress	Making it Last

OUR CHANGE �IMPLEMENTATION EFFECTIVENESS

1-7432wi-08/18/05

Key Success Factors for

Change

Questions for Assessing and Accomplishing Change

1. Leading change (who

is responsible)

Do we have a leader…

 who owns and champions the change?

 who demonstrates public commitment to making it happen?

 who will garner resources to sustain it?

 who will invest personal time and attention to following it through?

2. Creating a shared

need (why do it)

Do employees…

 see the reason for the change?

 understand why the change is important?

 see how it will help them and/or the business in the short and long term?

3. Shaping vision (what

will it look like when

we are done)

Do employees…

 see the outcomes of the change in behavioral terms (i.e., what they will do differently as a result of the change)?

 get excited about these outcomes?

 understand how the change will benefit customers and other stakeholders?

4. Engaging

stakeholders (who

else needs to be

involved)

Do the sponsors of the change…

 recognize who else needs to be committed to the change for it to happen?

 know how to build a coalition of support for the change?

 have the ability to enlist the support of key individuals in the organization?

 have the ability to build a responsibility matrix to make the change happen?

5. Decision making

(how will it be

institutionalized)

Do the sponsors of the change…

 understand how to sustain the change through modifying HR systems (e.g., staffing, training, appraisal, rewards,

structure, communication)?

 recognize the technology investment required to implement the chang e?

 have access to financial resources to sustain the change?

6. Measuring and

demonstrating

progress (how will it

be measured)

Do the sponsors of the change…

 have a means of measuring the success of the change?

 plan to benchmark progress on both the results of the change and the implementation process?

 have measurement systems in place to monitor progress of the change?

7. Making it last (how

will it be initiated and

sustained)

Do the sponsors of the change…

 have a plan to learn from others who have done simil ar changes inside and outside the company?

 have a plan to adapt other learnings into the business -specific conditions?

 have a plan to recognize, share and publicize successful processes and results?

Key Success Factors for Change	Questions for Assessing and Accomplishing Change
1. Leading change (who is responsible)	Do we have a leader… · who owns and champions the change? · who demonstrates public commitment to making it happen? · who will garner resources to sustain it? · who will invest personal time and attention to following it through?
2. Creating a shared need (why do it)	Do employees… · see the reason for the change? · understand why the change is important? · see how it will help them and/or the business in the short and long term?
3. Shaping vision (what will it look like when we are done)	Do employees… · see the outcomes of the change in behavioral terms (i.e., what they will do differently as a result of the change)? · get excited about these outcomes? · understand how the change will benefit customers and other stakeholders?
4. Engaging stakeholders (who else needs to be involved)	Do the sponsors of the change… · recognize who else needs to be committed to the change for it to happen? · know how to build a coalition of support for the change? · have the ability to enlist the support of key individuals in the organization? · have the ability to build a responsibility matrix to make the change happen?
5. Decision making (how will it be institutionalized)	Do the sponsors of the change… · understand how to sustain the change through modifying HR systems (e.g., staffing, training, appraisal, rewards, structure, communication)? · recognize the technology investment required to implement the change? · have access to financial resources to sustain the change?
6. Measuring and demonstrating progress (how will it be measured)	Do the sponsors of the change… · have a means of measuring the success of the change? · plan to benchmark progress on both the results of the change and the implementation process? · have measurement systems in place to monitor progress of the change?
7. Making it last (how will it be initiated and sustained)	Do the sponsors of the change… · have a plan to learn from others who have done similar changes inside and outside the company? · have a plan to adapt other learnings into the business-specific conditions? · have a plan to recognize, share and publicize successful processes and results?