1. 0 Copyright © 2012 Corvus International Inc Systems, Psychology and Software LEADING CHANGE FROM THE INSIDE OUT CQAA October 30, 2012

2. 1 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Presenters  Susan Slater Ph.D. - Industrial Psychologist with over 27 years of consulting experience in US, Europe and Asia – focusing on leadership development and change management - Previous presenter and key note at Quest Conferences - Recent focus on change initiatives at American Airlines and American Eagle  Stephen Mooney - Leader of AE divesture team - Human resource expert with experience in facilitation, curriculum design, HR Policy and virtual learning - Currently serve as managing director of Flight service with FAA responsibility for 1700 crewmembers 1

3. 2 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Overview Why Manage Change? Change Events vs. Personal Transition. Why is Change So Difficult? Internal leadership structures needed for successful change 2

4. 3 Copyright © 2012 Corvus International Inc Systems, Psychology and Software American Eagle Airlines  HDQ – Fort Worth, Texas  12,000 employees  8.5 million revenue passenger miles  1500 Daily flights with over 170 destinations  Largest number of departures at ORD  A/C types – EMB135, 140, 145; CRJ; ATR72 3

5. 4 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Why Is It Necessary to ‘Manage’ Change? Minimize disruptions to productivity. Linking the change to improving stakeholders’ performance and identity as professionals. Quickly move people to ‘future state’ to avoid prolonged attachment to current processes. Ensure communication consistency across impacted areas. Reset expectations of what people should do/not do during the change and after the change. Assisting with employee transition and new employee acquisition and on boarding. 4

6. 5 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Event vs. Personal Transition Transition: Transition: How we react & adjust to the change. We tend to forget the ‘people’ impacts. Event: Event: Change to system, job, process, etc. We naturally focus on this as the priority. Future State Change Event Personal Transition Current State 5

7. 6 Copyright © 2012 Corvus International Inc Systems, Psychology and Software …IT’S HARDWIRED ….. Why do people resist change? 6

8. 7 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Adaptability Levels Most people’s adaptability is low to moderate… Most people have a Low to Moderate ability to change Only about one in five people have a High adaptability Taken from a nationwide sample of 450 companies, 400 leaders, and 1,000 change initiatives 7

9. 8 Copyright © 2012 Corvus International Inc Systems, Psychology and Software When we start learning to drive the road appears very complex. As we acquire the “maps” of what is important to look for, it appears simpler When we start learning to drive the road appears very complex. As we acquire the “maps” of what is important to look for, it appears simpler Once we have learned to read, we can do so simply by glancing over the first couple of letters or the “shape” of the word—the brain fills in the rest. Arocdnicg to rsceaceh at Cmbairgde Uinervrtisy, it denos’t mtater in waht oredr the ltteers in a wrod are, the msot iprmoatnt tihng is taht the frist and lsat ltteer are in the rghit pcale. The rset can be a toatl mses and you can sitll raed it wouthit pbeolrm. Tihs is buseace teh barin deos not raed ervey lteter by istlef, byt tle wrod as a wlohe. The human brain has 100 billion neurons. Each may have 100,000 dendrites. = 300 trillion constantly changing connections The human brain has 100 billion neurons. Each may have 100,000 dendrites. = 300 trillion constantly changing connections We develop mental maps to handle the information The Brain and Mental Maps Adapted from: Rock, David Your Brain at Work, HarperBusiness 2009 8

10. 9 Copyright © 2012 Corvus International Inc Systems, Psychology and Software If you pay enough attention to these connections—they become mental maps and the processing becomes easier and “instinctive”. When we are faced with change, it is significantly easier to create new mental maps than to change the old ones. This is accelerated by positive reinforcement. Building New Mental Maps Adapted from: Rock, David Your Brain at Work, HarperBusiness 2009 9

11. 10 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Overall Guiding Principle Minimize Danger Maximize Reward Good = Approach Bad = Avoid Adapted from: Rock, David Your Brain at Work, HarperBusiness 2009 10

12. 11 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Overall Guiding Principle When danger is perceived, the brain automatically shifts resources from the prefrontal cortex and the limbic system takes over Even small stressors can become large stressors really quickly and can feel unmanageable. The away response is stronger, faster and more long lasting Positive emotions increase dopamine levels. This allows people to actually create more solutions to complex problems. Fear inhibits this. Adapted from: Rock, David Your Brain at Work, HarperBusiness 2009 11

13. 12 Copyright © 2012 Corvus International Inc Systems, Psychology and Software The SCARF Model Used as a guideline to keep people in a positive and open state Status.........Feeling better than another person Certainty......Feeling sure about the near future Autonomy..... Perception of having choices Relatedness... A sense of belonging Fairness....... Consistent and evenhanded application of policy 12 Source: Rock, David Your Brain at Work, HarperBusiness 2009

14. 13 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Organizational Transition Process 13

15. 14 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Why Change Efforts Fail Engaging Planning Sustaining Executing People often think of change management as a linear process Implementation Phases 14

16. 15 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Why Change Efforts Fail Engaging Planning Sustaining Executing Implementation Phases Emotional Phases Denial Anger Resistance Acceptance The Gap The highest organizational need occurs at the lowest emotional point 15

17. 16 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Late Majority >50% Engaging Planning Sustaining Executing Implementation Phases Buy-in Phases Early Adopters (16%)Early Majority (34%) To negotiate each phase, you must win over a certain portion of the population Why Change Efforts Fail 16

18. 17 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Early Adopter Profile Doers/Innovators – take on complex challenges Adjust easily to ambiguity and change Rebound readily from minor annoyances, the unexpected, and true adversity Seen as credible with peers – strong commitment integrity Able to draw on a seemingly endless supply of personal energy Likes to develop and construct new initiatives Likes to be out front – paving the way for others to follow Acts with confidence, determination and courage Produces results 17

19. 18 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Thoughts, Insights and Questions 18

20. 19 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Leadership Core Team and Task Forces 19 Operational Leadership Support Training Communication Strategy Resource Planning Super Users Task Force Change Leadership Core Team Senior Leaders Involvement

21. 20 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Leadership Core Team Key Responsibilities - Group of cross-functional leaders or key stakeholders who represent the key functions that will be experiencing the change. - Delegated authority to shape the outcomes and the change process. - Course correcting change efforts when they deviate from plan. - Facilitates the process of defining, planning and course correcting the change strategy and change process. - Responsible for clarifying the scope, outcomes, pace, conditions for success, constraints, and infrastructure. - Oversee communication and information generation. 20 Change Leadership Core Team

22. 21 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Strategy Approach Operational Approach A New Approach 21 Question Real-time Answer Question Individual Thought and Reflection Team Dialogue Collaborative Solution

23. 22 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Build team commitment and rapport: - Assess individual leadership styles and how they can help or hinder the team’s functioning. - Define success for the team and individuals. - Review time commitment needed. - Identify the critical challenges that the team will face. - Set expectations for participation of team members. 22 Change Leadership Core Team: Key Tasks Change Leadership Core Team

24. 23 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Leadership Core Team: Key Tasks Create the Change Vision for the team to implement. Determine measurements of success. - Define what the Change Leadership Core Team will define as success and how to measure it before, during and after cutover. Determine the most effective strategy for reward and reinforcement for the key stakeholders. - Recognize the small achievements to encourage continued practice and experimentation with the system. 23 Change Leadership Core Team

25. 24 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Leadership Core Team: Key Tasks Clarification of team members roles and responsibilities which includes: - Key Deliverables. - Decisions they will make individually and as a team. - Resources needed to support their deliverables. - Areas of greatest challenge. - Methodology: team members create their individual roles and responsibilities as well what they perceive others team member’s role and responsibilities are to minimize overlap and avoid unnecessary conflict. Develop ground rules for how the CLCT will operate as a team: - Code of Conduct for the team. - Partnership Agreements: –Shared expectations for the partnership. –Determine how to build and sustain trust. –Shared concerns. 24 Change Leadership Core Team

26. 25 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Leadership Core Team: Key Tasks Establish overall timeline and place key change strategy components: - Training Stakeholder Strategies: –Side by side review of the tool. –Feature open houses. - Communication strategies: –What to communicate, to whom and when. - Analysis of concurrent changes effecting stakeholders and mitigation of change overload and stress. –Mapped on the overall project timeline. –Reviewed on an ongoing basis. 25 Change Leadership Core Team

27. 26 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Leadership Core Team: Key Tasks Stakeholder Analysis - Determination of key stakeholders: - Assess impact of change on stakeholders. - Determine influence strategy to minimize resistance and build commitment. - Establish feedback channels and course correction process: –Lessons learned process. - Develop a communication strategy for each stakeholder group. - Integrate stakeholder strategy into overall timeline. 26 Change Leadership Core Team

28. 27 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Change Leadership Core Team: Key Tasks Create the task force structure to support the vision, timelines and project goals. For each task force team: - Determine project membership and leader. - Finalize Key tasks and goals. - Determine CLCT sponsor for the team. - Map their deliverables on the timeline. - Determine measures of success. 27 Change Leadership Core Team

29. 28 Copyright © 2012 Corvus International Inc Systems, Psychology and Software Thoughts, Insights and Questions 28