Organizational Change

Organizational Change

Introductions • Marvin Washington • Undergraduate Industrial Engineering • Procter and Gamble manufacturing • PhD Organization Behavior / Sociology • Professor Management Texas Tech University • Consultant • Botswana Gov’t, USPS, Bonneville Power • Author / presenter articles on change • Board of Directors of The Performance Center • Taught at Anahuac • Mexico City and Xalapa • Presented to senior level Novartis managers

Great books to read • Built to last • Jim Collins and Jerry Porras • Good to great • Jim Collins • Managing with power • Jeffrey Pfeffer • Man Search for Meaning • Victor Frankl

Transformation Cornerstones InterpersonalMastery Self Mastery Value Exchange ChangeMethodology

Agenda • Understand the different types of change • Understand why change is hard to implement and accomplish • Understand the ingredients of change • Understand the relationship between leadership and change • Understand the relationship between teams and change

Day 1 What is organizational change Why is change difficult to accomplish What are the ingredients of successful organizational change Day 2 Role of leadership in change Role of teams in change Agenda

Quotes for the class • Not here to arouse the darkness but to light a candle. Winston Churchill • No problem can be solved from the same consciousness that created it. Albert Einstein • From error to error, one discovers the entire truth. Sigmund Freud • Our world to view is determined by our world view. Joseph C. Pearce Crack in the Cosmic Egg

Quotes for the class • God, who gave us minds for thinking and bodies for working, would defeat his own purpose if he permitted us to obtain through prayer what may come through work and intelligence. Prayer is a marvelous and necessary supplement of our feeble efforts, but it is a dangerous substitute. Martin Luther King, Jr. • All life is interrelated, and all men are interdependent. And yet we continue to travel a road paved with the slippery cement of inordinate selfishness Martin Luther King, Jr.

Organizations are Transforming Worldwide • Information Revolution • Information readily available • Technology • Perform tasks with equipment, materials, knowledge, and experience • Increasing rate of change and diffusion • Globalization • Marketplace • Competitors

The case for change •Information revolution •Technological advances and breakthroughs •Globalization Critical Success Factors • Ability to embrace change • Creativity and innovation capabilities • Being a world-class organization Implications • Continual turbulence and change • Reduced need for physical assets • Vanishing distance • Compressed time

RESULTS RESULTS RESULTS TIME TIME TIME Types of change Continuous Improvement Breakthrough Improvement Standardization

Organizational Work Innovation Breakthrough Top Management Kaizen Continuous Improvement Middle Management Maintenance Standardization Supervisors Workers KAIZEN: The Key to Japan’s Competitive Advantage Masaaki Imai, 1986, Random House, Inc.

Lessons about change: Built to last • Tried to understand why superior companies are better than peer companies which are better than most companies • $1 invested in stock market in 1926 yields • $415 in all other companies • $955 in peer companies • $6356 in superior (visionary) companies

Visionary 3M Boeing GE IBM Motorola Nordstrom P&G Sony Wal-mart Peer companies Norton McDonnell Douglass Westinghouse Burroughs Zenith Melville Colgate Kenwood Ames Who are these companies

So what did they find? • What they didn’t find • Need to start a company with a great idea • Need charismatic, visionary leaders • “correct values” • Always changing • Great places to work for • You can’t have you your cake and eat it too

So what did they find? • Great companies had BHAG • Big Hairy Audacious Goals • What ever your values are “stick with it” • Deal with the AND, not the OR • Seek Alignment (internally)

Problems with Change • Error #1: No sense of urgency • People need a burning platform • Too many managers, no leaders • Error #2: Not a powerful enough coalition • Change is a political process • Not technical, HR, Strategic • Some one needs to organize • There are choices of change programs

Problems with Change • Error #3: No vision • Without it, change can become strategic planning. • Vision needs to make followers understand and interested in organization. • Error #4: Under-communicate the vision • Define everything in terms of the vision • Error #5: Not removing obstacles to the new vision

Problems with Change • Error #6: No planning for and creating short-term wins • Success in 30 days, 12 months to build momentum for a 2-3 year change effort • Error #7: Declaring victory to soon • Both sides on change want it to be over • Use small victories to go after even bigger problems

Problems with Change • Error #8: Not anchoring change in the corporate culture: • Show how new way is better • Talk up successes • Work with new management to institutionalize new process

Another problem with change • Key (often not recognized problem) • I do not understand the change • Often I understand the current situation (why things are bad) • And I understand where we want to go (the future) • But I don’t understand the change • What will I do different?

Jack Welch’s ideas on change • Clear mission statement • #1 or #2 in every business • Commitment from all • Work-out process • Issue of Will and Skill • Commitment to all • Change pay structure to fit incentives

Plan for change • Five things required for successful change • Vision • Leadership • Political Will to make it happen • Strategic Plan • Burning Platform

Plan for change • Five things required for successful change • Burning Platform • Vision • Leadership • Political Will to make it happen • Strategic Plan

Burning Platform • Why leave your current situation? • The “hotter the fire” the quicker you will move

Notes on developing a Vision • What is a vision? • A statement of where you want to go • If a burning platform is what compels an organization to move, the vision must be what the organization wants to move toward • Collins and Porras • Audacious Goal • Vivid Description

Creating a vision • Visions are leader initiated, yet co-created • Key people need to be involved to help with issues of communication and implementation • Start with what is possible, then go to what is desirable, and then deal with what is actionable • Need to spend as much time on communicating the vision as you spend on creating the vision • Vision need to be created in conversations, not through “wallet-cards” and memos

Elements of a great vision Use the mission statementas a starting point Develop a strategic visionthat spells out a course to pursue Communicate the vision in a clearandexciting manner

Microsoft Corporation Empower people through great software anytime, anyplace, and on any device.

American Red Cross The mission of the American Red Cross is to improve the quality of human life; to enhance self-reliance and concern for others; and to help people avoid, prepare for, and cope with emergencies.

Delta Airlines Vision • . . . . . . we want Delta to be the WORLDWIDE AIRLINE OF CHOICE. • WORLDWIDE, …offers access to the world at the highest standards of customer service… • AIRLINE,we intend to stay in the business we know best,air transportation and related services… • OF CHOICE, passengers …provide the best service and value. personnel…recognizes and appreciates contributions. shareholders…earn a consistent, superior financial return.

Communicating the vision • An exciting, inspirational vision • Challenges and motivates workforce • Arouses strong sense of organizational purpose • Induces employee buy-in • Galvanizes people to live the business

Value of a Well-Conceived Vision and Mission • Crystallizes long-term direction • Reduces riskof rudderless decision-making • Conveysorganizational purpose and identity • Keeps direction-related actions of lower-level managers on common path • Helps organization prepare for the future

Plan for change • Five things required for successful change • Vision • Leadership • Political Will to make it happen • Strategic Plan • Burning Platform

Building a power base • Power network • Who is on your side, who is neutral, who is against you • Five sources of power • Position power (I am the boss) • Personal power (charisma) • Expert power (I know something you don’t) • Opportunity power (I am what you need now) • Information power (networking)

How do you get power • Influence strategies • Involve the key people in the decision • Control the information • Engineer the situation • Rely (infrequently) on your position • Usual rational persuasion • Offer desired rewards • Generate hope of a better future • Increase your dependency on others

Influence strategies • With Superiors • How are your ideas helping them? • Listen • Be loyal • Peers • Look for common goals (alignment) • Form informal problem solving groups • Deal with problem peers • Subordinates • Get trust • Give credit, praise, feedback & training • Clarify your responsibility and theirs

How is power used to get things done? • How do you use power • Pick a goal • Determine (figure out) • Interdependencies • What people think of the idea • What are the power bases • Your power base and your foes • Choose how to act

Definition: Strategy • Strategy: Creation of a unique and valuable position involving a different set of activities • Key Aspects: risks, skills, competition, and learning

What is Strategy? • An organization’s strategy consists of the set of competitive moves and business approaches that management is employing to run the company • Strategy is management’s“game plan”to • Attract and please customers • Stake out a market position • Conduct operations • Compete successfully • Achieve organizational objectives

Strategy implementation and execution is an action-oriented, “make-it-happen” process involving people management, developing competencies and capabilities, budgeting, policy-making, motivating, culture-building, and leadership

Leaders vs. Managers (?) • Both leadership & management is needed in today’s organizations • Yet, the skills are radically different • Management is about coping with complexity (reducing complexity to simplicity) • Leadership is about coping with change

Leadership Setting Direction Aligning People Motivating People Artists Flexibility Creation Management Planning & Budgeting Organization & Staffing Controlling & Problem Solving Automobile Mechanics Problem solving Leadership & Management

Leadership • Some leadership skills are innate. . . Many are learned • When it comes to leadership skill development • Diversity and adversity beat repetition every time • Reflection is the key!

Leadership traits • Vision • Clarity of Goals / focused • Have a set of skills • communication, decision making, technical • Intelligent (know what don’t know) • Great person to be around • Kind, honest, integrity, value others • Teachers • Focuses inward and outward • Passion • Will and Humility – level 5 leadership

Notes on Passion • Leading is a heart conversation (empathy, emotion), managing is a head conversation. • Leading is a political action • Leaders work on their own “self-mastery” • Leader’s are first leading themselves • Need to be excited about what you are doing • Others see the excitement and want to follow

Values Spiritual Intellectual Vocational Physical Leading a Life of Meaning Purpose Vision Daily Tasks Operating Principles

Organizational Change