1. Workshop Competencies for Competitiveness June 2007 1 ITU/BDT Workshop Competencies for Competitiveness CAIRO (Egypt), 25-28 June 2007 Lecture 2: Understanding and Leading Change in a corporate environment

2. Workshop Competencies for Competitiveness June 2007 2 1 / CHANGE IN ORGANIZATIONS ( lecture 2) 2 / Role of HR in Managing and Leading Changes( lecture 3 ) 3 / Dynamic Management of JOB POSITIONS and COMPETENCIES (lecture 4) 4 / Leveraging the HR function into a business partner ( lecture 6) 5 / Role of Line Managers in Career Orientation ( lecture 7) 6 / Creating and management job mobility ( lecture 9) Change management and HR strategy

3. Workshop Competencies for Competitiveness June 2007 3 1- CHANGE IN ORGANIZATIONS Lecture 2 : understanding and leading change in a corpororate environnement

4. Workshop Competencies for Competitiveness June 2007 4 Summary : lecture 2 understanding and leading change in a corporate environment 1.Introduction : a paradoxical example ( 5 to 9) 2. Understanding change in a corporate environment : - some benchmarks (10&11) - how to understand a change situation (12to15) 3. Leading change in a corporate environment : (16) - to have a new look upon change :global approach (17to23) - how to lead a change in terms of posture : operational management of change (24to39)

5. Workshop Competencies for Competitiveness June 2007 5 Introduction : a paradoxical example Before introducing HR role and missions, lets talk about the notion itself of change, the concept of change trough an example especially if we are confronted to a cultural change; the following text “the customer and the bureaucrat“ is a good introduction to what it is a change or not ( so please read this text and try to answer the following questions; we will have a discussion about it after )

6. Workshop Competencies for Competitiveness June 2007 6 “The customer and the bureaucrat” How to not listen … “To facilitate our understanding, let us imagine the case of a given customer. This customer is a “professional”, and has been noted as such by the company, which has identified particular needs for that market segment and dedicated specific agencies to it. The customer has been informed by letter of the opening of “his” agency (the possessive pronoun is intended to create a personal link), and he telephones the agency immediately in order to have an extra line installed, for a fax. The manner in which he is greeted makes it clear that the agent on the other end of the line has received full training in “customer relations”. The agent explains that the company takes no orders by telephone. Our customer is somewhat surprised by this lack of trust on the part of the support service which the company has in fact offered him, but nevertheless asks what the best option is for placing his order. He is told that he should send a letter – no doubt, he thinks, to generate traffic for former colleagues in the postal services. Our “professional” sends his letter and about 10 days later receives a letter back – a truly personal letter, allocating him a “correspondent” whose full name and extension number appear at the top of the page. The letter also informs him that the line he requires will be installed that same day, and indicates a two-hour time slot in order to avoid any waiting around.

7. Workshop Competencies for Competitiveness June 2007 7 “The customer and the bureaucrat” How to not listen - continued - Our customer has to be out of his office that day, precisely because he is a “professional”, and therefore phones the agency and asks to speak to his new correspondent. The person who answers the phone expresses surprise, and informs our customer that “correspondent” simply refers to the person who entered the customer’s request in the computerized customer management software. Our customer is passed on to another agent, whom he informs that he will not be in his office; the agent expresses regret, while noting that the customer’s absence was unforeseeable. Our customer says he is surprised that he wasn’t simply called to make an appointment, and is informed that he was called, but was not in his office (he is a professional). Hence the letter, as a last resort. At the suggestion that a message should have been left on the answerphone, which is always switched on, the employee ignores the customer’s comment that the answerphone was purchased from the same agency and informs the customer that it is against company policy to leave messages on answer phones. Finally, when the “professional” suggests that he could be called in the evening, the agent answers back that the company is not yet in the position of having to work at night.”

8. Workshop Competencies for Competitiveness June 2007 8 Question 1 What are the objectives of the change? What relationships exist between the objectives? –Explicit …………………………… –Implicit …………………………… “The customer and the bureaucrat” How to not listen - continued -

9. Workshop Competencies for Competitiveness June 2007 9 “The customer and the bureaucrat” How to not listen - continued - Question 2 What do you consider to be the risks of implementing the new system? Question 3 What accompanying measures do you recommend to go with the implementation? Assessment

10. Workshop Competencies for Competitiveness June 2007 10 CHANGE IN ORGANIZATIONS AND HR FUNCTION A few points of reference: - Definition of change implemented (what was changed?) - The objective(s) pursued - Who established the objectives and how? - Description of initial situation and of target situation - Players concerned within the company/organization - Means of implementation: role of senior management, management, unions, HR, communication, accompanying measures (training, various arrangements), etc. Understanding change in a corporate environment : some benchmarks

11. Workshop Competencies for Competitiveness June 2007 11 CHANGE IN ORGANIZATIONS AND HR FUNCTION A few points of reference (continued): - Difficulties encountered: resistance, lack of understanding - Negotiations: content, results - Were the objectives achieved: Fully? Partially? - Actions under way: ongoing project, project stopped, etc. - A little benchmarking on the HR practices: what should they have done? Why? How? Conclusion: What improvements could be made? Understanding change in a corporate environment : some benchmarks

12. Workshop Competencies for Competitiveness June 2007 12 Understanding change in a corporate environment Part 1: UNDERSTANDING A SITUATION OF CHANGE A major change affects the distribution of authority within a group, the definition and distribution of roles or the values of individuals A major change implies a paradigm shift (all opinions, recognized values and methods common to the members of a given group) A major change is multidimensional and affects the organization, staff, communication, corporate strategy and technology

13. Workshop Competencies for Competitiveness June 2007 13 Understanding change in a corporate environment Part 1: UNDERSTANDING A SITUATION OF CHANGE (continued) Major change calls into question established practices, ways of thinking and internal know-how, and thus any established paradigm Cultural aspects of change of formalized procedures, the introduction of broader competition and a new chain of command Examples of change: - shift from user (captive) to customer (has choice) - shift from market-based structure (residential, professionals, businesses) to product-based organization - service- and department-based organization to horizontal project- based management (matrix organization) - centralization/decentralization of responsibilities and decisions with greater autonomy

14. Workshop Competencies for Competitiveness June 2007 14 Understanding change in a corporate environment Definition of a change Major change = multidimensional change method staff organization strategy Calling into question of paradigm

15. Workshop Competencies for Competitiveness June 2007 15 Understanding change in a corporate environment Change and negotiation - the decisive factor of behaviour = the game of power and autonomy played by people in order to exist in the organization - everyone will legitimately resist any imbalance that does not maintain the same scope for autonomy - people do not resist the change, but negotiate their scope for negotiation within the organization Change and individual or group negotiation become synonymous

16. Workshop Competencies for Competitiveness June 2007 16 Leading change in a corporate environment: global approach Managing change = adopting a new attitude Managing change means: - abandoning the theory that the future can be grasped and foreseen - adopting a new approach to structure and human beings (*HR mission) - seeing how individuals seize opportunities to realize their projects (*HR mission) - identifying the organization’s resources and capacities for controlling its inconsistencies and power relationships (*HR mission)

17. Workshop Competencies for Competitiveness June 2007 17 Leading change in a corporate environment: global approach Managing the change = adopting a new attitude 1. Analysis of stakes and risks 2. Identification or clarification of the objectives of the change 3. Identification of partners in the change process 4. Understanding of the environment in which the change will take place in order to establish the possibilities for negotiation 5. Preparation of the dynamics for adaptation 6. Organizing the steering of the operation

18. Workshop Competencies for Competitiveness June 2007 18 Leading change in a corporate environment: global approach Managing the change = adopting a new attitude 1. Analysis of stakes and risks Why change? - analysis of events, facts or situations that gave rise to the idea to undertake change - analysis of common reasons for change and their relationships - actual scope of project - risk that will be run or caused to be run - aces to be played

19. Workshop Competencies for Competitiveness June 2007 19 Leading change in a corporate environment: global approach Managing the change = adopting a new attitude 2. Defining or clarifying the objectives of the change - the real objectives are collective “constructs” - they are rarely operational from the outset - analysis of objectives during each sequence - recasting of objectives (explicit and implicit) - list of most common characteristics of goals pursued in the change operation

20. Workshop Competencies for Competitiveness June 2007 20 Leading change in a corporate environment: global approach Managing the change = adopting a new attitude 3. Defining the partners in the change process Who is concerned by the change? Analysis of players involved, introducing them to the objectives Detection of prevailing forces and thereby determining the means to identify the individuals, groups and units affected by the operation; the roles expected or fears experienced by those concerned

21. Workshop Competencies for Competitiveness June 2007 21 Leading change in a corporate environment: global approach Managing the change = adopting a new attitude 4. Understanding the environment in which the change will take place in order to establish the possibilities for negotiation - need for genuine negotiating spaces in order to ensure acceptance - prepare these spaces at the time of and within the project - negotiation = a component of the project (not a residue) Therefore - draw up a chart of the sociological currents within the environments concerned - assess the changes that can be negotiated with the environments concerned (+ identification of that which is “non- negotiable”)

22. Workshop Competencies for Competitiveness June 2007 22 Leading change in a corporate environment: global approach Managing the change = adopting a new attitude 5. Preparing the dynamics for adaptation - informing those involved = absolutely essential to the dynamism of the change process - study the problems that will or may be posed by the change: analysis of forces, resistances and negotiation capacities - ascertain from the preparatory work who should be informed and in what terms

23. Workshop Competencies for Competitiveness June 2007 23 Leading change in a corporate environment: global approach Managing the change = adopting a new attitude 6. Organizing the leadership of the operation Emergence of a social and collective learning process in regard to negotiation “Change is not natural, but has above all to do with creation, invention, discovery and human accomplishment” Michel CROZIER Challenge the vision of those who bring rationality to bear and those who resist change Avoid any dichotomy between the project and its secondary or human aspects

24. Workshop Competencies for Competitiveness June 2007 24 ANALYSING A SITUATION OF CHANGE Analyse the 12 key variables Analyse the 12 key variables 1 Promotion of the idea and how to go about it? 2 Objectives 3 Approach 4 Matching objectives/means 5 Investment 6 Players 7 Steering Committee 8 Time 9 Analysis of possible consequences 10 Piloting tools 11 Potential or secondary effects 12 Resistance

25. Workshop Competencies for Competitiveness June 2007 25 ABILITY TO ANALYSE A SITUATION OF CHANGE 1 - Promotion of the idea or how to go about it? - Choice and source of subject - Mobilizing aspect of subject - Test of idea - Training unit and/or Executive Board = who is the instigator? - Tradition of practising participatory management - Composition of strategic core - Steering committee = ? Executive Board - How the idea is to be spread Risks: - Failure to promote the idea - Ad hoc steering, generating fear reactions - Low commitment, headlong flight

26. Workshop Competencies for Competitiveness June 2007 26 ABILITY TO ANALYSE A SITUATION OF CHANGE Analyse the 12 key variables 1 - Promotion of the idea or how to go about it? (continued) Context and history - The kind of stakes involved in the change: survival, development - What happens if it fails? - Sensitivity to customer/provider relationship - Company focused on itself or open to the outside - Experience of company in managing a major change - Labour relations climate - Company’s ability to disseminate information - Feasibility study - Situation of the company within its market and future possibilities Risk: Failure to analyse the context: Overconfidence in own strengths, attitude that the change will take care of itself

27. Workshop Competencies for Competitiveness June 2007 27 ABILITY TO ANALYSE A SITUATION OF CHANGE Analyse the 12 key variables 2 - Objectives - Explanation of objectives - Level of objective: vision, goal, means - Legitimacy vis-à-vis the company’s general policy - Realism vis-à-vis the company’s mobilization capabilities Risk: Failure to adequately clarify the objectives - Laisser-faire and strategic submission - Executive Board and training unit not working on the same subjects - Over-hasty entry into action - Existence of two camps: those truly involved and those waiting to see what happens

28. Workshop Competencies for Competitiveness June 2007 28 ABILITY TO ANALYSE A SITUATION OF CHANGE Analyse the 12 key variables 3 - Approach - External assistance or in-company - Prior analysis already conducted - Project management mode: collective approach, idea for solution - Approach conceived as programme or process - Clarification of roles of the main protagonists - Specific role of line management - Method or frame of mind - Existence of moral guarantor Risk: The approach proves lacking - Insufficient flexibility - Roles not clarified - Inappropriate approach/culture

29. Workshop Competencies for Competitiveness June 2007 29 ABILITY TO ANALYSE A SITUATION OF CHANGE 4 - Matching of objectives/resources - Matching resources/objectives/context/stakes - Existence of simultaneous projects or priorities - Human Resources: level of qualification and training - Material resources - Financial resources Risk: Unrealistic objectives - Progressive discouragement - Identification of scapegoat - Details blocking the project

30. Workshop Competencies for Competitiveness June 2007 30 ABILITY TO ANALYSE A SITUATION OF CHANGE 5 - Investment Geographical, hierarchical, technical and human scope of project Social, legal, technical, cultural and organizational implications of project Prerequisites of project Cultural changes brought about by the change. Degree of commitment of players concerned/internal lobby Identification of milestones and points of no return Risk: Underestimation of investment Abandonment of project Do more for the same amount

31. Workshop Competencies for Competitiveness June 2007 31 ABILITY TO ANALYSE A SITUATION OF CHANGE 6 - Players Involvement of key individuals Choice of project bearers Association of individuals or groups opposed to the project Prior information for players on the objectives and approach Respective interests of the different players Resistance to the change: from groups or individuals Contradictory values/project Support for the objective by players concerned Compensation to be provided vis-à-vis the change Capacity to effectively implement the resources required to achieve the objectives

32. Workshop Competencies for Competitiveness June 2007 32 ABILITY TO ANALYSE A SITUATION OF CHANGE 6 - Players (continued) Risk: No or poor analysis regarding the players the project progressively runs out of steam emergence of by-products irony and frustration

33. Workshop Competencies for Competitiveness June 2007 33 ABILITY TO ANALYSE A SITUATION OF CHANGE 7 - Executive Board - degree of unity of Executive Board/conflicts of power and areas of authority - existence and position of leader - dominant management styles of the Executive Board/potential risks - strong cultural differences with the middle management - management focused on the results or the procedures Risk: Lack of unity in Executive Board - lack of strong political will, the project runs out of steam - everyone plays his/her own game and makes that clear to the other players

34. Workshop Competencies for Competitiveness June 2007 34 ABILITY TO ANALYSE A SITUATION OF CHANGE 8 - Time Realistic evaluation of overall time and intermediate stages Existence of indicators and scorecard for the different stages Pace of change Availability of training unit and Executive Board Negotiations and arbitration Risk: Underestimation of time Discouragement of players Reinforcement of existing beliefs Negotiations transformed into power relations

35. Workshop Competencies for Competitiveness June 2007 35 ABILITY TO ANALYSE A SITUATION OF CHANGE 9 - Analysis of possible consequences - intra- and inter-service cooperation - matching of jobs/equipment/competencies - weight of the change mechanism - information and communication on the project - evaluation of contribution made by players - cultural implications: loss of prestige, of conviviality - comfort zones lost Risk: Failure to analyse possible repercussions - management of events as they come up - rationalization and rejection of unexpected behaviour

36. Workshop Competencies for Competitiveness June 2007 36 ABILITY TO ANALYSE A SITUATION OF CHANGE 10 - Steering tools Existence of rules of the game known to the players Existence of assessment tools: indicators, scoreboard Specific rewards: bonuses, change of contract Partial and final assessment Method for involving the players in the assessment processes Risk: Lack of steering tools Impressions replace factual data Impossibility of analysing situations and making corrections in time

37. Workshop Competencies for Competitiveness June 2007 37 ABILITY TO ANALYSE A SITUATION OF CHANGE 11 - Potential or secondary effects Unforeseen costs: economic, social and human Loss of credibility and loss of prestige New distribution of authority New areas of uncertainty Risk: Failure to grasp the secondary effects Scapegoat target Definitive withdrawal or killing off the project

38. Workshop Competencies for Competitiveness June 2007 38 ABILITY TO ANALYSE A SITUATION OF CHANGE 12 - Resistance Understanding the different forms of resistance to change The sources of resistance Risk: