To study the transformation of SAIC from B2C to C2B
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INFS6004-week4.pdf
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INFS6004 Business Transformation Projects Session 4 1/51
Business Transformation
Projects INFS6004
Marcus O’Connor & Steve Elliot
Session 4 - Relationships & Models for diagnosing
organizations Nascar stock cars / Volvo Cars wind tunnels Maryam Shahbazi (T) Karen Lee (T)
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1. Building (internal) relationships 2. Case study 3. Exercise 4. Review Assignment 1 5. Preview Assignment 2 6. Roles of models in diagnosing organizations 7. Indicative models 8. Characteristics of models 9. Introduction to diagnosis 10. Companies of the week 11. Next steps
Hayes 4th Ed. Chapters 6 & 7
Overview
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Change and relationships
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Transformations, Change, Politics and
relationships
2 case studies
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First Case Study……
Person Position Lunch Alliance
John CEO and Owner Y
Ron CTO with 30 years experience
Y **
Jim CFO with 30 years experience
Y and N **
Marcus CIO with no experience
Y
Bill COO with 35 years experience
N *
The problem…….
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OFFICE WAREHOUSE
FACTORY
COMPUTER DOCK
THE LAYOUT…….
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Analyse Marcus’ approach to introducing change…… › What did Marcus do wrong?
› What did John do wrong??
› How would you have done it differently?
› What ‘style’ of intervening would have been most appropriate?
› If you were John (CEO) what would you have done?
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Exercise
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
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Problems at J&J
› New Finance Director (CFO)
› Initial cue…….Too much investment in inventories of some finished goods and too little investment for other finished goods
› How would YOU go about solving this problem?
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A Systems Approach to Problem Solving….
› Define the problem
› Define the requirements to solve the problem
› Develop alternative solutions to solve the problem
› Select the best/most appropriate solution
› Design the detailed solution
› Implement the solution
› Evaluate the implementation of the solution
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Defining the Problem:
The CFO’s initial ideas…..
› Believed forecast error was terrible!!
› Believed no effort into the forecasting process?
› Convinced CEO of the need to assess the quality of the forecasting and budgeting process at J & J. Beginning with a Discovery Meeting.
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The Discovery Meeting…… › Attendees…….
- CEO
- Sales Manager
- CFO
- Marketing Director
- Production Manager
- Consultant (Marcus)
› Terms of Reference:
- Improve forecasting accuracy
- Optimum balance of market demands and production optimality
- A ‘third party’ to head up “pilot investigation’
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› Pilot investigation:
- “Very” economic production lots - Terrible forecasting accuracy - Missing data/ inaccurate data - Simple forecasting tool could substantially improve
forecast accuracy › Marcus recommended….
- Dedicated forecasting process - Forecast accuracy accountability - Examination of accountability for inventory holding
costs Were Marcus’ recommendations appropriate and systematically developed?
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› The reactions…..
- CEO
- Sales Manager
- CFO
- Marketing Director
- Forecasting clerk
› Production Manager - FURIOUS!!!
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› The negotiated outcome……
- Pilot the improved ‘system’ with a product category (feminine hygiene products)
- Monthly forecasting / planning meetings
- Marcus would chair the meeting!!!
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Implementing the Recommendations….
› The first meeting……..
- Product manager of new product
- Sales manager, production manager, finance manager
› DISASTER!!!!
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Outcomes and their evaluation…….
Q1. What do you think were the outcomes of the intervention?
Q2. How would you measure the outcomes & Why?
Q3. Does it matter what measure you select?
Q4. When should you decide the measure?:
- Before the project starts?
- Once the project is 50% completed so you know what is important?
- At the end of the project so you know what is the most appropriate measure for the company at that time?
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The eventual outcomes…..
› New forecasting process embedded into organisation
› Reduction in forecast error to around 25% overall.
› Stakeholders (mostly) happy:
- CEO
- Sales Manager
- CFO
- Marketing Director
- Production Manager
- Consultant (Marcus)
› Savings of $20m p.a. in reduced inventory costs
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Individual Research Assignment (UoS Outline)
“Select, analyse and submit a brief written description of a news item for a specific company relevant to the topic for a particular week in INFS6004 and analysis of the likely transformative impact of this news item
Note: Students are encouraged to focus their project on an industry and a company of interest to their future career”
Assignment 1
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Individual Problem-based Assignment (UoSO)
“Evaluation of business strategic intent, business models and transformative change in a selected company. Each student must select a different company* and obtain approval” Analyse and describe an example of transformative change Explain why and how it is transformative Determine and describe the firm’s strategic intent and Business Model Canvas (BMC) Evaluate the extent to which the strategic intent and business model(s) support or conflict with the change Select and apply current frameworks to identify and describe successful and unsuccessful change management and leadership practices and their sustainability in the firm Conclusions about management of change in the firm Recommend how the firm can improve their current practices * You make select & request approval for the same company as Assignment #1 IF the company meets ALL requirements. NOTE: Most students do not do so.
Assignment 2 - 2,500 words
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... involves gathering, analysing and interpreting information about how the organization is functioning
21THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Organizational diagnosis
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Main steps • Selecting a conceptual model for diagnosis • Clarifying information requirements • Gathering information • Analysis • Interpretation
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Organizational diagnosis
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We simplify the real world by developing models that focus attention on
a limited number of key elements
the way these elements interact with each other
the outputs produced by these interactions
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We use these models to : • guide the kind of information that we attend to • interpret what we see • decide how to act
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3d Edition, John Hayes, Palgrave, 2010
What are the major advantages and disadvantages of using diagnostic models?
Q:
The role of diagnostic models
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Selecting models for diagnosis
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Management Practices
Work unit climate
Motivation
Individual and Organizational performance
Structure Systems
(policies and procedures)
Tasks and individual
roles
Individual needs and
values
External Environment
LeadershipMission and
strategy Organization
culture
Component models look at particular aspects of organizational functioning
Component and holistic models
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Component models look at particular aspects of organizational functioning
Management Practices
Work unit climate
Motivation
Individual and Organizational performance
Structure Systems
(policies and procedures)
Tasks and individual roles
Individual needs and
values
External Environment
LeadershipMission and
strategy
Organization culture
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Component and holistic models
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The story of the six blind men feeling an elephant illustrates one of the problems that can arise when using component models for diagnosis
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Each one touched a different part of the elephant’s body. • The blind man who felt a leg said the elephant was like a pillar; • the one who felt its tail said it was like a rope; • the one who felt its trunk said it was like a tree branch; • the one who felt its ear said it was like a hand fan; • the one who felt its belly said it was like a wall; and the one who felt its tusk said it was like a spear
Looking only at specific components may not give a good impression of the whole
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Learning through telling stories
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One approach to diagnosis is to start by using component models to examine how the many different aspects of an organization are working
Management Practices
Work unit climate
Motivation
Structure
Systems (policies and procedures)
Tasks and individual
roles Individual needs and
values
LeadershipMission and
strategy
Organization culture
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Component models
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... and to combine these assessments to build a ‘big picture’ of how the organization functions as a whole
Management Practices
Work unit climate
Motivation
Structure
Systems (policies and procedures)
Tasks and individual
roles Individual needs and
values
Leadership Mission
and strategy
Organization culture
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Component models
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An alternative approach is to start by looking at the ‘big picture’ before drilling down to explore particular components in more detail
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Management Practices
Work unit climate
Motivation
Individual and Organizational performance
Structure
Systems (policies and procedures)
Tasks and individual roles
Individual needs and
values
External Environment
Leadership
Mission and
strategy
Organization culture
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Holistic models
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Management Practices
Work unit climate
Motivation
Individual and Organizational performance
Structure
Systems (policies and procedures)
Tasks and individual
roles
Individual needs and
values
External Environment
Leadership
Mission and
strategy
Organization culture
An important dynamic of the whole system concerns the nature of the interactions between the component parts
Source: Burke and Litwin, 1992: 528
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Holistic models
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Describe a situation where you would use:
1. A component model
2. A holistic model
3. Why?
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Group Discussion
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They are: Embedded within a larger system Able to avoid entropy, ie deterioration over time Regulated by feedback The same outputs can be produced even with a different configuration of systems Cyclical in their mode of functioning Equilibrium seeking Defined by boundaries
Organization transforms inputs
into outputs outputsinputs
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Organizations are open systems
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Systems theory predicts that changes to any one of the elements of an organization’s system can cause changes to the other elements http://en.wikipedia.org/wiki/Biosphere_2
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Open systems theory?
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Employees & other tangible
assets
Formal organisational arrangements
Social system
Technology
External environment
Dominant coalition
Source: J.P. Kotter, An integrative model of organisational dynamics, in Porter, Nadler & Cammin, Organizational Assessment, Wiley, 1980
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Source of potential behaviour & constraint Impact on
1. Kotter's integrative model of organisational dynamics
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Over the short term effective organizations are those that have key processes that are characterised by levels of decision making effectiveness and matter‐energy efficiency that help to ensure that resources are used efficiently
processes
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Organizational effectiveness ‐ short term
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Over the medium term effectiveness is determined by the state of alignment (quality of fit) between the structural elements
Examples of poor fit: Dominant coalition and task environment Employees and technology Employees and formal organisation
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Organizational effectiveness ‐ medium term
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Over the long term, effectiveness is determined by an organization’s ability to adapt in ways that will maintain internal and external alignment
› This adaptability is a function of the state of an organization’s structural elements
› These can range from highly constraining to not constraining
For example, an organization that has a single complex technology that is difficult to adapt (so change will require a massive capital investment in new technology) is more constrained than an organization that has a technology that can be used in different ways to produce a variety of goods and services and which can be modified incrementally over time
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Organizational effectiveness ‐ long term
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Some models focus on diagnosing the quality of an organisations alignment with the external environment
A simple example is SWOT
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Diagnosing external alignment
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SWOT is a diagnostic model for assessing external alignment and identifying what needs to be changed to improve organizational effectiveness
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
2. SWOT
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Some diagnostic models focus primarily on the quality of an organization’s internal alignment.
A good example is the Mckinsey 7S model
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Diagnosing internal alignment
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Source: Pascale & Athos, 1981, The Art of Japanese Management
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Inter-related internal factors that influence organisational effectiveness
3. McKinsey’s 7S model
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Some diagnostic models are more comprehensive and pay attention to both internal and external alignment
An example is the Burke-Litwin causal model of organizational performance and change
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Diagnosing internal & external alignment
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The Burke‐Litwin causal model of organizational performance and change
• internal & external alignment • relative weight of causal relationships
Management Practices
Work unit climate
Motivation
Individual and Organizational performance
Structure
Systems (policies and procedures)
Tasks and individual roles
Individual needs and values
External Environment
Leadership
Mission and
strategy
Organization culture
Source: Burke and Litwin, 1992: 528
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
4. Burke-Litwin causal model
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transformational elements Management
Practices
Work unit climate
Motivation
Individual and Organizational performance
Structure
Systems (policies and procedures)
Tasks and individual roles
Individual needs and
values
External Environment
Leadership
Mission and
strategy
Organization culture
Source: Burke and Litwin, 1992: 528
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Transformational change
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transactional elements Management
Practices
Work unit climate
Motivation
Individual and Organizational performance
Structure
Systems (policies and procedures)
Tasks and individual roles
Individual needs and
values
External Environment
Leadership
Mission and
strategy
Organization culture
Source: Burke and Litwin, 1992: 528
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Transactional change
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Life cycle models posit that organizations progress through a series of predictable stages of development and that each stage brings with it a set of alignment related issues that have to be managed An example is Greiner’s five phases of growth
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Life cycle models
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Crisis of LEADERSHIP
Crisis of AUTONOMY
Crisis of CONTROL
Crisis of RED TAPE
1. Growth through CREATIVITY
2. Growth through DIRECTION
3. Growth through DELEGATION
4. Growth through COORDINATION
Crisis of ?
5. Growth through COLLABORATION
time
Size
Source: Greiner, 1972, HBR, 50, 38.
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THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
5. Greiner’s five phases of growth
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1. Relevance to issues under consideration 2. Identifies elements and cause and effect
relationships that contribute to the problem or opportunity
3. Indicates which of the above have most weight
4. Highlights aspects of organizational functioning that the change agent can do something about
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Selecting a model for diagnosis
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How does the organization go about
matching its resources with
opportunities, and creating a competitive
advantage?
What are the formal and informal
arrangements for grouping and coordinating activities?
Source: Pascale & Athos, 1981, The Art of Japanese Management
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Clarifying information requirements
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Company of the Week
17th March 2014: Mary T. Barra, General Motors’ CEO, announced another round of wide-ranging recalls, a sign that the company was moving with a new sense of urgency on safety problems after it disclosed a decade- long failure to fix a defect tied to 31 accidents & 12 deaths
Q: Is this an example of transformation or change? Why?
The recalls, which cover 1.7 million vehicles worldwide for a variety of problems, come in addition to last month’s recall of 1.6m vehicles
In chronologies submitted to federal regulators, the company said it first knew of flaws in its ignition switches as far back as 2001 Ms. Barra said, “Our system of deciding and managing recalls is going to change.”
http://www.nytimes.com/2014/03/18/business/gm-chief-barra-releases-video-on-recalls.html?action=click&content Collection=Business%20Day&module=RelatedCoverage®ion=Marginalia&pgtype=article
General Motors a)
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22 March 2014: A Federal investigation into GM is to determine whether: 1. the automaker committed bankruptcy fraud by not disclosing defects that could lead to expensive future liabilities, and 2. the defects were not disclosed to safety regulators
The investigation is by the same FBI agents and federal prosecutors that built a fraud case against Toyota for concealing information about car defects that put lives at risk. The Toyota case was settled for $1.2 billion
The GM and Toyota cases hinge on the same issue: whether company officials failed to tell the government and the public something that it knew to be true. http://www.nytimes.com/2014/03/22/business/gms-bankruptcy-drawn-into-defect-inquiry.html?emc=edit_th_20140322&nl=todaysheadlines&nlid=37901816&_r=0
“At the new General Motors, we are passionate about designing, building and selling the world’s best vehicles. This vision unites us as a team each and every day and is the hallmark of our customer-driven culture” www.gm.company/aboutGM/ [21 March 2014]
Q: What changes are required? What models could you use? Why?
General Motors b)
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INFS6004 Business Transformation Projects Session 4 53/51 53
1. Determine objectives 2. Select appropriate conceptual model 3. Determine information scope & requirements 4. Determine information sources & techniques 5. Information collection 6. Analysis 7. Interpretation 8. Conclusions, outcomes 9. Implications 10.Review, revise, repeat as required
A diagnostic process
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1. So, what would you do? Where would you start? How to measure performance?
2. Select an appropriate conceptual model for diagnosis Three characteristics of a good model: a) Relevance to the issues under consideration b) Ability to identify critical cause and effect relationships c) Ability to focus attention on elements that change
managers can affect 3. Clarify information requirements 4. Collect information 5. Analyse the information 6. Interpret the findings 7. Political considerations, eg manipulating the measures
THE THEORY & PRACTICE OF CHANGE MANAGEMENT 3rd Edition, John Hayes, Palgrave, 2010
Summary
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Change and Stakeholder Management
INFS6004 - Session 4 Major Group Exercise
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Objectives of the exercise:
In this exercise students will learn that business change and transformation does not occur because of individual effort. It requires a team with a range of expertise.
This exercise helps students to think about stakeholders (internal and external) and their expectations. Students will practice how to meet stakeholders’ conflicting/competing expectations (such as customers with disabilities and panic buyers) in strategy settings process.
Students will learn about the role of “time” and “urgency” in decision-making and planning in business change and transformation. Also, they will need to consider the distinctions between change and transformation.
Finally, the exercise describes a real-life situation and hopefully after this exercise students would have better understanding of the epidemic and panic buying behaviour. As well as its impact on vulnerable groups in our society.
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The coronavirus outbreak has prompted people around the world to panic buy toilet paper
Fears over the novel coronavirus have prompted people around the world to clear supermarket shelves of daily necessities, especially toilet paper. Retailers in the US and Canada have started limiting the number of toilet paper packs customers can buy in one trip. Some supermarkets in the UK are sold out. Grocery stores in Australia have hired security guards to patrol customers. In Australia, the fight for toilet paper got heated. On March 6 a fight over toilet paper at a supermarket in Chullora, a Western- Sydney suburb, became so heated that police had to intervene.
However, toilet paper does not offer special protection against the virus. It's not considered a staple of impending emergencies, like milk and bread. Moreover, authorities and suppliers confirmed that toilet paper manufacturing had not been disrupted by the coronavirus at all. Supply chains are fine, and authorities called on people to stop panic buying. Experts say that panic buying could be a response to a feeling of lost control over the coronavirus, or a lack of clear direction from authorities.
Steven Taylor, a clinical psychologist and author of “The Psychology of Pandemics” told CNN that people are triggered to panic buy if the scale of the threat – a global epidemic – doesn’t seem to match up to the simplicity of the best deterrent, like hand-washing. Panic buying by one person also triggers panic buying, Taylor said – a theory similar to the self-fulfilling prophecy that Michalski, of Vinda International Holdings, bemoaned.
Frank Farley, a professor at Temple University, also told CNN it was natural for people to overprepare as the coronavirus engenders “a sort of survivalist psychology.” Meanwhile, Professor Baruch Fischhoff at Carnegie Mellon University said it was down to a lack of clear direction from authorities, CNN reported.
The current situation impacted giant supermarkets like Woolworths; the company needs strategies to prevent panic-buying affecting the elderly and people with a disability
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In groups of 4 to 6 as the Crisis Management Team, this task is to manage events and to ensure appropriate actions are carried out based on current events, potential risks and predicted impacts.
1. Suggest who (with what kind of expertise) should be a member of the Crisis Management Team;
2. Define the stakeholders and their expectations; 3. Suggest the best strategy to face the challenges and explain why it is
best; 4. Is the strategy for change or transformation? Why?
Prepare your submission with the answers and post on the Discussion Board for the INFS6004 Canvas site. We will provide feedback on your responses
To do …
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Submitted Assignment 1 Any issues? Next steps: Assignment 2: Select company Carefully compare the company details available with the assignment’s Requirements and Marking Guide If you are sure the company can meet the requirements then request its approval (A2 pending) You can select your same company as A1– unless its prohibited. No-one else can! Next week: Analysing information and processes
Next steps
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