Managing Transformation and Change in Organization

RSankarCountryHeadManagingTransformationandChangeinOrganizationsThePeopleProgramme-IIMay2,2003NewDelhi2MercerHumanResourceConsultingAgendaTheRealityaboutChangeandTransformationStoriesfromthe“Frontlines”TheKeystoSuccessTheRealityaboutChangeandTransformation4MercerHumanResourceConsultingChangemakesyoubetter,transformationmakesyoudifferentChangeis:–Incremental–Focusedonimprovingperformanceofexistingbusiness–‘Catchingup’–Aboutbottom-linemanagementExamplesofchangeprocesses:–Reengineering–Restructuring–Benchmarking5MercerHumanResourceConsultingChangemakesyoubetter,transformationmakesyoudifferentTransformationisabout:–Creatingauniquefuture–Changingtherulesofengagement–ToplinemanagementExamples:–Dell–Canon–Microsoft6MercerHumanResourceConsultingCommoncharacteristicsofthechangeandtransformationprocessesAclear,compellingandsharedvisionofthefuture‘Fixityofpurposeandconstancyofeffort’AroadmapAcquisitionandcreationofnewcompetenciesSensitivitytopeopleissues7MercerHumanResourceConsultingTheChangemaynotbeplanned…butourreactionstoitcanbeAnticipatoryReactiveIncrementalDiscontinuousTuningReorientationAdaptationRe-creation8MercerHumanResourceConsultingHowsuccessfularechangeeffortsinorganizations?NotVerySuccessfulVerySuccessfulModeratelySuccessfulToosoontotellUnsure33%27%27%9%4%Researchamong200globalorganizationswhichwentthroughsomeformoflargetomediumscalechangeintheleastfewyearsisnotveryencouraging…Source:SaratogaInstitute,20009MercerHumanResourceConsultingWhydoTransformationorChangeeffortsfail?ResistancetoChange20%40%60%80%100%Source:InformationWeek,2001LimitationsofExistingSystemsLackofExecutiveCommitmentLackofExecutiveChampionUnrealisticExpectationsLackofCross-FunctionalTeamInadequateTeamandUserSkillsTechnologyUsersNotInvolvedProjectCharterTooNarrow%ageofrespondentscitingtheprimaryfactor10MercerHumanResourceConsultingAhardlookathowthechangeprocessworksDegreeofSupportforChangeOwnershipPhaseBuy-inPhaseInternalizationInstitutionalizationAdoptionTry-outSelf-ConcernUnderstandingAwarenessPhaseUnawarenessPhaseTime…ittakestimeandaconsidered,deliberateapproach11MercerHumanResourceConsultingTheReality…commonerrorsmadebyorganizationsNotestablishingaGreatEnoughSenseofUrgencyNotCreatingaPowerfulEnoughGuidingCoalitionLackingaVisionUndercommunicatingtheVisionNotRemovingObstaclesfortheNewVisionNotPlanningforShort-termWinsDeclaringVictoryTooSoonNotAnchoringChangesintheCorporateCultureStoriesfromthe“FrontLines”13MercerHumanResourceConsulting“Organizationvitalityandgrowthdependontheleadership’sabilitytocraftsustainablestrategies,effectivelycommunicatetheseandbuildinternalcapacity(andindoingsobalanceincrementalanddiscontinuouschange)”-DrDavidNadlerPartner,MercerThedifferencebetweenwinnersandlosers14MercerHumanResourceConsultingImplementinganewPerformanceManagementFrameworkMultinationalPharmacompanywishedtointroduceanewcompetencybasedperformancemanagementsystemManagementfelttherewasaperceivedlackoftechnicalskillsdevelopmentbutwasskepticalofsuccessSituationCaseExample#1“Peoplewillnotacceptthis.Wehavetriedsomanythingsinthepast.Nothingchanged!!”-CFO15MercerHumanResourceConsultingInternalChangeChampionsThebestwaytoreduceresistanceCommunicationworkshopswithinternalfunctionalteamof“Experts”DevelopmentofthetechnicalcompetencymodelthroughExpertpanelprocessDetailedandcomprehensivetrainingandbrainstormingsessionsinternalfunctionalteamsontheapplicationsofthecompetenciesandimplementationissues–Intense–Involved–Somelastedforover10hoursA“dialogue”wascreatedinsidethe“Informal”organizationbythemembersoftheinternalfunctionalteamsCaseExample#1Newsystemunderimplementation.CFObecamefirsttoacceptrecommendationsashewaspartofthefunctionalteam16MercerHumanResourceConsultingRestructuringandDownsizingIndianmediaorganizationhadgonethroughaphaseofrapidexpansionOrganizationstructureandstaffinglevelsneededtobestreamlinedSituationCaseExample#2“ThisisanHRinitiative.WhatrolecanIpossiblyplay?Youarethespecialists”-CEO17MercerHumanResourceConsultingLeadershipSupportBringscredibilitytothechangeprocessJointprojectteamwithCEOasTeamLeaderDetailedanalysisandresearchbackedbycontinuouscommunicationtoallemployeesVisiblesupportforprojectinunambiguoustermsbytheCEOatpublic/companyforums“BurningPlatform”created–threatfrommajorcompetitorCaseExample#2OwnersandManagementCommitteesacceptedallrecommendations.Phasedimplementationgoingon.Noattritionofhighperformingseniormanagers18MercerHumanResourceConsultingConsolidationandAlignmentMobileTelephonyservicesproviderwhichhadexpandedrapidlytomultiplelocationsNewCEObroughtintoconsolidateandbringaboutsynergiesintheoperationsSituationCaseExample#3“Thelevelofintegrationhereisdismal.IwenttooneofthelocationstoannounceanemployeeawardforRs.2000andtheRegionalHeadhadalreadypromisedRs.3000.Whatnextifwecannotdosimplethingsright?”-CEO19MercerHumanResourceConsultingRemovingobstaclestochangeprocessEnsurescommunicationofseriousintentCreateaunifiedorganizationthrough:AunifyingthemeCommonprocessesCrossgeography/entityteamtoaddresskey