The Nine Illnesses of Organizational Change(and what to do about them) David Chaudron, PhD Managing partner, Organized Change © 2012 Organized Change 1

Buzzword Creato-matic © 2007 Organized Change 2

Nine Illnesses of Organizational Change Need-technique mismatch Not making systematic changes Overuse of teams Not making decisions up-front Caught between the square peg and NIH(not invented here) diseases Mass Training No top management support excuse Labelitis Not measuring results 3

So the primary question isn’t what, it’s when 4

So what to do 5

Criteria for Successful Change: Base the change on a thorough initial assessment Whatever change is necessary should fits the organization, and is the right change to make! Align it with the future, the business situation, and the stakeholders of the organization Provides a sequence of steps – a roadmap 6

The scope of change Where do I get started ? –shaping and anticipating the future (level 1) –defining what business(es) to be in (level 2) “core competencies”, vision, mission, goals – reengineering internal processes (level 3) –incrementally improving processes (level 4) 7 Greater Risk Greater change

How do I decide where to start? A larger the difference between the future and now, the more change must happen Think of the process as a circle, not a line If you want immediate, short-term results, start with level 4 (incrementally improving existing processes) If you want your company to survive, you must eventually use level 1 techniques 8

9 How severe and how widespread problems are suggests what level of change to use SEVERITY OF PROBLEM lowhigh EXTENT OF PROBLEM 1-2 people 1 group Several groups Whole company Multiple system, whole organization change Hire, train, fire ©2008 Organized Change. All rights reserved Level 3 changes Level 4 changes

Implementing Organizational Change

11 Creating SMART Plans Specific Measurable Agreed upon Realistic & Time-bound ©2008 Organized Change. All rights reserved

12 Equation for Success TM Plans are achieved by –Success = Measurement X Technique X Alignment X Control X Focused Persistence X Consensus –These factors can compensate for each other somewhat, but all must exist for success to happen ©2008 Organized Change. All rights reserved

13 How measures work together ©2008 Organized Change. All rights reserved HR systems Internal Business Operations Customer measuresFinancial measures

14 How measures work together ©2008 Organized Change. All rights reserved HR systems Internal Business Operations Customer measuresFinancial measures

15 Example of a SMART Plan We will expand our market share to 30% by April next year –By: Adding a 10% bonus to all employees salaries for every 10% increase in market share Moving to a completely asset- or area-based organizational structure Creating a team to eliminate non-value-added steps from the administrative and operations functions, so that only critically essential functions are kept. –The implementation plans for these steps are attached, including personnel assignments, workloads, budget assignments, sequence of implementation, etc. ©20012 Organized Change. All rights reserved

16 Example of a SMART Plan –We will reduce turnover costs between now and one year from now by 5% By –Creating a problem solving team that will come up with suggested improvements by November –Publicizing common-sense actions that all employees can take The implementation plans for these steps are attached, including personnel assignments, workloads, budget assignments, sequence of implementation, etc. ©2008 Organized Change. All rights reserved

17 Techniques Major techniques result in major changes (level 3) –Examples include restructuring, tying pay to measurements, putting added resources ($ and people), adding or changing customers or products, re- engineering processes, revamp IT, change of strategy Minor techniques result in small, incremental changes over time (level 4) –Motivational speeches, problem-solving teams focused on technical issues, displaying graphs to employees on bulletin boards, etc. ©2008 Organized Change. All rights reserved

18 How severe and how widespread problems are suggests what level of change to use lowhigh 1-2 people 1 group Several groups Whole company Multiple system, whole organization change Hire, train, fire ©2008 Organized Change. All rights reserved SEVERITY OF PROBLEM EXTENT OF PROBLEM Level 3 changes Level 4 changes

The control question 19©2008 Organized Change. All rights reserved

20 Kinds of actions Focus on type 1 and type 2 actions Attempt to compensate for type 3 actions ©2008 Organized Change. All rights reserved

21 Alignment ©2008 Organized Change. All rights reserved

22 Alignment The greater alignment between Business situation & goals Organizational change Organizational systems (structure, $, information, work process, selection & training) Plan of action The greater chance of success ©2008 Organized Change. All rights reserved

23 Other performance factors A good plan(focused persistence) –Specific tasks, specific assignments, beginning and end dates –Sufficient resources –Periodic evaluation to assess progress to plan and its effect on the strategy Involvement by stakeholders (consensus) –Communicate to them importance and status –As part of planning –Implementation of action –Suggestions for improvement (feedback) –Deal with their emotions and insecurities ©2008 Organized Change. All rights reserved

An example of a plan(Gantt chart) 24©2008 Organized Change. All rights reserved

25 Stakeholder consideration Identification of stakeholders –owners –governments –creditors –employees –customers –suppliers –competitors –the general public ©2008 Organized Change. All rights reserved

26 Understanding of stakeholders’ specific claims vis-à-vis the organization –Do the claims or demands of stakeholders have and impact on strategic decision makers? –How do these claims relate to the your mission? Stakeholder consideration ©2008 Organized Change. All rights reserved

27 Stakeholder consideration reconciliation and prioritization of stakeholder claims Directors Creditors Managers suppliers Employees Customers the general public ©2008 Organized Change. All rights reserved