Leading Change & Organisational Transitions

1. Leading Change & Organisational Transitions Presentation for University of South Australia by Bill Synnot at August 30, 2007

2. Topics to be Covered • Background to change management • Framework as a road map to create a peak-performance, innovative & agile organisation • How to turn around an unsuccessful change process and/or keep a successful organisation on track

3. Topics cont. • Address the challenge of implanting the change process permanently into your organisation’s culture (including behavioural change) • Some useful change implementation tools

4. Peak-Performance, Innovative, Agile, Resilient and Robust Organisation (6 Characteristics) 1 Customer–focused 2 Concentrating more on leadership & less on management/administration 3 Entrepreneurial (based on innovation) 4 People–orientated 5 Tightly Focused on “decisive opportunities” 6 Resilient (for more details see article on web site: www.billsynnotandassociates.com.au)

5. Six Key Criteria for an Enduring and Successful Organisation(Based on 30 high profile & successful firms over 100 years old) 1 Consistent set of values 2 Willingness to change 3 People are the most important assets 4 Conservatism in financing 5 Actively fosters a learning environment 6 Organising for continuity, ie succession planning

6. Change means experiencing something different and/or doing something differently Usually with the basic aim of “…Increasing the organisation’s capability to adapt to and adopt new ways of doing business…”

7. QUOTES “…organisation today - has to be designed for change as the norm and to create change rather than react to it …” Peter Drucker, 2001 “…it is not the strongest of the species that survives, nor the most intelligent; it is the one that is the most adaptable to change…” Charles Darwin as quoted in Harvard Business Review, 1998 “. . .you can resist change and win one or more battles, but you will lose the war...” Noel Tichy, 1999

8. (quotes cont.) “…change does not come from a slogan or a speech. It happens because you put the right people in place to make it happen…” Jack Welch as quoted in Jack Welch et al, 2001 “…An organisation is a web of interconnections; a change in one area can throw a different part of the organisation off balance. Managing these ripple effects and the unexpected outcomes is the challenge of change…” Harvard Business Review, 1998

9. (quotes cont.) “…The real voyage of discovery consists not in seeking new lands, but in seeing with new eyes…” Marcel Proust as quoted by David Osborne in “Re-Inventing Government”, 1993 “…Given the choice between changing and proving that change is not necessary, most people will get busy on the proof…” John Kenneth Galbraith quoted in Australian Financial Review, 1999

10. (quotes cont.) “…When the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight …” Jack Welch, 2001 “…it has become a truism that the only constant is change; with one change overlapping with another, the time-frame to accomplish change is shortening…” Harvard Business Review, 1998

11. (quotes cont.) “…the question that faces the strategic decision-maker is not what his/her organization should be tomorrow. It is what do we have to do today to be ready for an uncertain tomorrow…” Peter Drucker as quoted in AFR Boss, 2000 “…Change programs often seem like they’re being shot out of cannons. They start with a bang, then quickly fall flat…” Harvard Business Review, 1998

12. (quotes cont.) “…Few goals are more challenging to achieve than significant change in adult human beings…” Howard Gardner, 2006 Change involves “… combining “inner shifts” in people’s values, aspirations and behaviours with “outer shifts” in processes, strategies, practices and systems…...It is not enough to change strategies, structures, and systems, unless the thinking that produced those strategies, structures and the systems also changes…” Peter Senge, 1999

13. Levels of Change Personal Group Organisational Environmental NB: There is overlap & interaction between the different levels

14. Stability is No Longer the Norm

15. Competition comes from “where you least expect it” In a survey it was found that “…industry newcomers – not the traditional competitors – had taken the best advantage of change over the past ten years...…by profoundly changing the rules of the game…” Gary Hamel, 1997 eg Murdoch, Branson, Gates, etc

16. SACRED COWS MAKE THE BEST BURGERS “…an outmoded belief, assumption, practice, policy, system or strategy, generally invisible, that inhibits change and prevents resources being used for new opportunities…” Robert Kriegel et al., 1996

17. Remember: “…Over 50% of technological breakthroughs that influence an industry or organisation come from outside that industry…” Peter Drucker, 2001

18. Point of Diminishing Returns This involves organisations: - trying to wring the last efficiency out of business models that have reached their use-by date; - whose strategies that are indistinguishable from their competitors

19. Why Do Some Organisational Transition Efforts Fail ? In many organisational transitions, the gap between expectations and achievements is very large

20. The J-Curve What We Expect Desired Status Quo What Actually Happens ChangeInitiative Organization’sPerformance VOD Time

21. Most Common Management Error “…generally social and behavioural causes frustrate change initiatives rather than technical problems…” Patrick Dawson, 2005 Each table to identify some common management errors

22. (most common management errors cont.) • Not understanding the organisational culture • Structural inertia and related organisational matters • Too many fiefdoms/silos/stovepipes/cocoons/ kingdoms allowed to exist/prevail • Lack of ownership or emotional “buy-in” or “co-creating” by staff at the start of the process

23. (most common management errors cont.) • Not psychologically ready, ie the importance of timing • Underestimating the importance of intuition (gut feeling) and story telling, while over-focusing on conventional measurement • Too much focus on symptoms rather than causes

24. (most common management errors cont.) • Not focusing on the correct issues, ie concentrating on the tangibles (hard options eg economic incentives, organisational structure, etc) while ignoring intangibles (soft options eg corporate culture, values, beliefs, relationships, personal journey, etc.) • Lacking the balance between - hard and soft approaches - present (short-term) and future (long-term) • Lack of a sense of urgency (not shared)

25. (most common management errors cont.) • Too much focus on “One Size Fits All/Silver Bullet/ Instant Coffee/Magic Wand/Cure-all Recipes/Quick Fixes/Management by Best Seller (the boom theory of change)” • Ignoring that change is a personal journey, ie human aspect of change (dealing with people) Lack of resources (time, money, etc.) • Not realising that change is a continuous process that needs regular reviews. It is not a one-off event

26. (most common management errors cont.) • Too much complacency (paying “lip service”, organisation too successful, not holistic approach, etc) • Change fatigue - too many/multiple change projects • Not appreciating the power of leverage, ripple effect, interdependence, time delays and holistic approach • Past not treated with respect

27. (most common management errors cont.) • A previous failed change effort is not acknowledged or addressed or learnt from • Technocratic approach to transitions, i.e. linear (cause and effect)

28. Current Situation The formula for success now is no guarantee of success in the future

29. The Hardest Organisation To Change is a Successful One(or one which perceives itself to be successful) ie why dabble with the formula for success?!! BUT “…over 40% of the businesses listed in the 1985 Fortune 500 are not in business today…” Karlson Hargroves et al, 2005

30. Active Inertia • Strategic frames become blinkers • Processes become routines • Relationships become shackles • Values become dogma Important question is“…what is hindering us?…” Definition of insanity!

31. Problem of Status Quo Thinking eg - happy the way we are (zone of comfort) - custodians of the traditions, etc The combination of cultures that resist change and managers who support the status quo is lethalfor any change process “…Status Quo: Isn’t that Latin for the mess we are in now?…” (AIM 2000)

32. C . A . V . E (Citizens Against Virtually Everything)

33. ATTITUDES TO CHANGE “…Change creates fear in established organisations and paranoia in the minds of executives hired to protect the status quo…” Gene Landrum, 1996 • Working harder and harder “…like driving a car and putting your foot down harder on the accelerator when you should instead change gears…” • Seen as a threat unless staff have ownership • Trust is one of the first casualties

34. (attitudes to change cont.) • Encountering change too often “…alternates between short bouts of radical surgery and long doses of studied inattention…” • Conflicting messages of change, ie staff are encouraged to realise their aspirations but basic needs such as job security are threatened • Code word for “something nasty” • Pushes people outside zone of comfort

35. (attitudes to change cont.) • People feel that they are not in control of what is happening (learned helplessness) • Indications of resistance – mistrust, resignations, transfers, absenteeism (includes phantom), lateness, lower productivity, loss of quality, slowdowns, wildcat-strikes, sullenness and quarreling • WIIFM, ie gains and losses • Creates conflict and chaos

36. (attitudes to change cont.) • Technocrats treat change as a technical problem only • Not treating the past with respect, ie need to build on the past • Have experienced a failed change project • “Say yes, but do no”

37. Most Models Over-Simplify the Situation • Change is very • contextual • situational • Most Models Are Like Supernova

38. Quotes “…All models are wrong – some models are useful…” Edward Deming (1980) “…The value of the model is not in its predictive power but in its power to catalyze reflective conversations…” Andrea Shariro (1999) “…There is no science of transformation, only an art…” Fortune Magazine (1996)

39. Limitations of Overseas Models for Australia Australia’s situation is different from other countries like USA, Europe and Japan.

40. Some Australian Cultural Differences • One of the most ethnically-diverse countries • Preference for strong, but not hard, leaders • Comfortable with consistent leaders • Preference for slow, incremental change • Preference for pattern and order; uncomfortable with crisis and chaos

41. (some Australian cultural differences cont.) • Workplace relationships more important than self-improvement • Reluctance to confront poor performance • Hypersensitive to hypocrisy and cant • Never forgive a tyrant • Slow to anger • Culture of mateship

42. Organisational Differences with USA Australian organisations are - more conservative & have a greater fear of making mistakes - less keen to be assessed - statements (vision & mission) are less indicative of success - greater focus on finding a cause rather than a challenge

43. (Organisational Differences with USA cont.) - workforce prefers work that is worthwhile rather than being challenged to reach stretch goals - winning is less about charismatic leaders, big breakthrough ideas or high pay levels and more about team performance

44. Seven Ingredients for Effectively Handling An Organisational Change (see hand-out) • Laying a foundation for new ways (includes building on the past) • Establishing a sense of urgency • Forming a transitional team • Creating alignment • Maximising connectedness • Creating short-term wins • Consolidating performance improvements There is overlap between the ingredients, and different degrees of emphasis needed in different situations

45. Resistance to Change • It is normal • People are concerned about loss (real & perceived) • Need to understand what is under-pinning the resistance • Minimise time in this areaby focusing most attention on supporters of the change

46. Communications • Communication Formula • Words (20%) • Body Language (40%) • Tone (40%) • Make communications receiver-friendly

47. Culture is Complex, Powerful, Deep & Stable • Change challenges current culture. It requires “unlearning” and “relearning” which can be very painful and slow • Three parts to culture i) behaviours, ie action, words, relationships, etc ii) symbols, ie physical environment, recognition concepts, etc iii) systems, ie reporting, performance management, etc

48. Change will not Last if Management is Hypocritical • Preaches teamwork but rewards individual contribution • Preaches customer service but rewards adherence to rules • Preaches risk-taking but rewards an absence of errors • Preaches feedback but rewards no criticism • Preaches entrepreneurial flair but rewards only narrow job perspectives • Preaches decentralised and/or delegated authority but congratulates “hands-on” management

49. Book (on sale here)Toolbox for Change: a practical approachby Bill Synnot & Rosie Fitzgerald • Are you feeling bewildered by the pace of change today’s world? • Do you want to understand and change behaviours and attitudes to improve relationships and productivity in your work/life/community? • Do you want to improve your handling of people, especially those who disagree with or misunderstand you?

50. (Book: Toolbox for Change cont.) • Do you want to improve your communications skills? • Do you want your group to function more effectively? • Do you suffer from unnecessary “busyness”? • Do you want to be more creative in your approach to challenges? • Do you want to be more competitive? • Do you want to harness more support for a new direction? If your answer is “yes” to any of these questions, you need this book!!!!!!!!