Change Management for Competitive Advantage - Managing People Group Presentation
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Change Management For Competitive Advantage
A Tale of Two Era
Agenda
Successful Change
ElementsiChange Conclusion
Change Management Background
Change Management Background
Successful Change
ElementsiChange Conclusion
Change Management Background
“Whosoever desires constant success must change his conduct
with the times”
Change Management – A Timeless Double Edged Sword
“There is nothing more difficult to take in hand, more perilous to conduct,
or more uncertain in its success, than to take the lead in the
introduction of a new order of things”
Nicollo Machiavelli (1469-1527)
Renaissance Philosopher
Kotter and Lewin
Establish A Sense Of Urgency
Form A Coalition
Create A New Vision
Communicate The Vision
Empower Others: Remove Barriers
Create & Reward Short Term Wins
Consolidate, Reassess & Adjust
Reinforce The Changes
Eight Steps Process(Kotter, 1995)
Three Steps Model
(Lewin, 1947)
Unfreeze
Change
Refreeze
WORLD POLITICStechnologyEconomic
SHOCKScompetitionSOCIAL TRENDSNature of Workforce
“More Than Half Of Organisations Attempting Transformation Programs
Failed”(Kotter, 1995)
We’ve Got The Concept!
“Change Management programs has a 70% Failure Rate”
(Kotter, 2012a; Keller & Aiken, 2008; Miller, 2002)Or Did
We??
“60% Change Project Fail to meet schedule,
budget and quality goals”(IBM, 2008)
Major Change Challenges
Changing mindsets and attitudes
Corporate culture
Complexity is underestimated
Shortage of resources
Lack of commitment of higher management
Lack of change know how
Lack of transparency because of missingor wrong informationLack of motivation of involved employees
Change of process
Change of IT systems
Technology barriers
Hard FactorsSoft Factors
MAJOR CHANGE CHALLENGES
58%
49%
35%
33%
32%
20%
18%
16%
15%
12%
8%
(Source: IBM, 2008 )
What Makes Change Successful
Top management sponsorship
Employee involvement
Honest and timely communication
Corporate culture that motivates and
Change agents (pioneers of change)
Change supported by culture
Efficient training programs
promotes change
Adjustment of performance measures
Efficient organisation structure
Monetary and non-monetary incentives
92%
72%
70%
65%
55%
48%
38%
36%
33%
19%
Hard FactorsSoft Factors
WHAT MAKES CHANGE SUCCESSFUL(Source: IBM, 2008 )
“Change Is Complex”Lewin assumes change is Linear where
in current environment its no more applicable
(Burnes, 1996; Higgs & Rowland, 2006)
What’s The Problem?
“Need For Speed”
GE Successfully Implemented Change, But It Took Them 5
Years! Is it fast enough today?
(Jick, 1995; Kotter, 2012b)
“Network Is In”Kotter’s 8 Steps is based on organisation with traditional
hierarchal structure (Kotter, 2012b) “Leadership Ability ”
..or the lack of it causes failure in change execution
(Merell, 2012; Higgs & Rowland, 2010;
Aiken et al., 2011; McKinsey, 2010; Miller, 2002)
Successful Change Elements
Successful Change
ElementsiChange Conclusion
Change Management Background
Is There A Solution?
1Change
Approach
2Leadershi
p Behaviour
3Change
AcceleratorsStatus Quo
Desired State
Element #1: Change Approach‘One Look’
Local Differentiation
Ch
an
ge Is
C
om
ple
x
Ch
an
ge I
s
Str
aig
htf
orw
ard
Master Change‘I Trust People To Solve Things With Us’
Emergent Change‘I Can Only Create Conditions For Change’
Directive Change‘I Can Manage Change’
Self-Assembly Change‘Launch Enough Initiatives & Something Will
Stick’
Change Approach
(Source: Higgs & Rowland, 2006 )
Element #1: Change Approach‘One Look’
Local Differentiation
Ch
an
ge Is
C
om
ple
x
Ch
an
ge I
s
Str
aig
htf
orw
ard
Emergent Change‘I Can Only Create Conditions For Change’
Directive Change‘I Can Manage Change’
Self-Assembly Change‘Launch Enough Initiatives & Something Will
Stick’
Change Approach
Master Change
(Source: Higgs & Rowland, 2006 )
Top Down But Open To AdjustmentsCommon Plans, Agreed ProjectsBuild Skills In Leading ChangeNetworks & Connections Established Across Organisations
Identify Important Change Personnel And Keep Them
Successful In Long Term, Continuous
Change
Element #1: Change Approach‘One Look’
Local Differentiation
Ch
an
ge Is
C
om
ple
x
Ch
an
ge I
s
Str
aig
htf
orw
ard
Master Change‘I Trust People To Solve Things With Us’
(Source: Higgs & Rowland, 2006 )
Directive Change‘I Can Manage Change’
Self-Assembly Change‘Launch Enough Initiatives & Something Will
Stick’
Change Approach
An Overall Purpose, Adjusted With Needs
Few Big Rules As GuideInitiatives Star Small & Build UpInformal Networks To Build Understanding & Energy
Step-by-Step, Not Whole Plan In Advance
Tackle Hot Spots
Emergent Change
Most Effective In High Magnitude, Complex
Change
Element #2: Leadership Behaviour
Shaping Behaviour‘Without Me Nothing
Will Happen’
Creating Capacity‘We Cannot Change
Unless We Learn & Grow’
Framing Change‘With Clear Boundaries, People Can Contribute’
LEADERSHIP
BEHAVIOUR
Works With Others To Create Vision & Direction
Helps Others To See Why Things Need Changing And Why There’s No Going Back
Shares Overall Plan Of What Needs To Be Done
Gives People Space To Do What’s Needed, Within Business Goals
Seeks To Change How Things Get Done Not Just What Gets Done
Develop People’s Skills In Implementing Change
Lets People Know How They Are Doing And Coaches Them To Improve
Gets People To Work Across Organisational Boundaries And Along Key Processes
Makes Sure The Organisation’s Processes And Systems Support Change
(Source: Higgs & Rowland, 2006 )
“Mover And Shaker” – Sets Pace For Others To Follow
Expects Others To Do What They Do
Personally Expressive And Persuasive
Holds Others Accountable For Delivering Task
Personally Controls What Gets Done
Element #2: Leadership Behaviour
Shaping Behaviour‘Without Me Nothing
Will Happen’
Unsuccessful In Implementing Change –
Works Against Implementation
Creating Capacity‘We Cannot Change
Unless We Learn & Grow’
Framing Change‘With Clear Boundaries, People Can Contribute’
LEADERSHIP
BEHAVIOUR
Most successful style in high magnitude and complex change that effects large
numbers of people within the organisation
Effective style in the long term change, particularly in
organisation facing continuous change
(Source: Higgs & Rowland, 2006 )
Element #3: Accelerate Change
(Source: Kotter, 2012 )
Build & Maintain Guiding Coalition
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Institutionalise Strategic
Changes In The Culture
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Ensure Network Removes Barriers
Celebrate Visible Significant Short
Term Wins
Never Let Up, Keep Learning
From Experience
Form Change Team From Trusted Volunteers
Select From Different Hierarchy Department, Level & Skills
No Internal Hierarchy Enables Ease Of Information Gathering & Processing
Kotter’s 8 Accelerators
Element #3 Accelerate Change
(Source: Kotter, 2012 )
Build & Maintain Guiding Coalition
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Institutionalise Strategic
Changes In The Culture
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Ensure Network Removes Barriers
Celebrate Visible Significant Short
Term Wins
Never Let Up, Keep Learning
From Experience
Form Change Team From Trusted Volunteers
Select From Different Hierarchy Department, Level & Skills
No Internal Hierarchy Enables Ease Of Information Gathering & Processing
Kotter’s 8 Accelerators
Element #3 Accelerate Change
(Source: Kotter, 2012 )
Build & Maintain Guiding Coalition
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Institutionalise Strategic
Changes In The Culture
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Ensure Network Removes Barriers
Celebrate Visible Significant Short
Term Wins
Never Let Up, Keep Learning
From Experience Feasible & Easy To Communicate
Emotionally Appealing & Strategic
Inspire Network Of Change Creation By Employee
Gives Objective, Information & Direction – Able To Make Decision On The Fly Without Need For Decision At Every Turn
Kotter’s 8 Accelerators
Element #3 Accelerate Change
(Source: Kotter, 2012 )
Build & Maintain Guiding Coalition
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Institutionalise Strategic
Changes In The Culture
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Ensure Network Removes Barriers
Celebrate Visible Significant Short
Term Wins
Never Let Up, Keep Learning
From Experience
Memorable & Authentic Vision Prompt Employees To Discuss
This Creates Voluntary Buy Ins, Increasing Change Agents
Organic Increase Of Network Promoting Speed Of Change
Kotter’s 8 Accelerators
Element #3 Accelerate Change
(Source: Kotter, 2012 )
Build & Maintain Guiding Coalition
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Institutionalise Strategic
Changes In The Culture
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Ensure Network Removes Barriers
Celebrate Visible Significant Short
Term Wins
Never Let Up, Keep Learning
From Experience
Guiding Coalition Can Create Solution Rapidly
Ensure No Barriers Between Departments To Support Cooperation
Solution Can Be Rapidly Duplicated Across Organisation With Team Mix
Kotter’s 8 Accelerators
Element #3 Accelerate Change
(Source: Kotter, 2012 )
Build & Maintain Guiding Coalition
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Institutionalise Strategic
Changes In The Culture
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Ensure Network Removes Barriers
Celebrate Visible Significant Short
Term Wins
Never Let Up, Keep Learning
From Experience
Kotter’s 8 Accelerators
Best Short-Term Wins Should Be Obvious, Unambiguous, & Clearly Related To The Vision
Buoys Existing Volunteer
Attract New VolunteersSuccess Breeds Success
Element #3 Accelerate Change
(Source: Kotter, 2012 )
Build & Maintain Guiding Coalition
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Institutionalise Strategic
Changes In The Culture
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Ensure Network Removes Barriers
Celebrate Visible Significant Short
Term Wins
Never Let Up, Keep Learning
From Experience
Kotter’s 8 Accelerators
Keep Up Urgency Else Volunteer Will Waiver, Change Slows Down Or Stops
Continue With Strategic Initiatives, Create New Ones
Enables Competitive Advantage With Shifting Business Environment
Element #3 Accelerate Change
(Source: Kotter, 2012 )
Build & Maintain Guiding Coalition
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Institutionalise Strategic
Changes In The Culture
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Ensure Network Removes Barriers
Celebrate Visible Significant Short
Term Wins
Never Let Up, Keep Learning
From Experience
Kotter’s 8 Accelerators
New Direction And Method Must Sink Into Organisation Culture
With Visible Results, Employees Will Want To Be Part Of This Culture
Long Run Becomes Ingrained, Creating Organic Change Agent Network
Elements Of Successful Change
Status Quo
Desired State
1Change
Approach
Emergent Change
Master Change
2Leadershi
p Behaviour
Framing Change
Creating Capacity
3Change
Accelerators
Kotter’s Eight Accelerators
iChange
Successful Change
ElementsiChange Conclusion
Change Management Background
John Sculley – The Marketing Genius
Macintosh, Apple main product,
continually faced
SALES DECLINE
1985
Net Sales Declined by
$20 Million
Jobs was forced to quit – Board of
Directors Wanted Change
1980Apple continues with Apple R A P I D G R O W T H
with Lisa and Macintosh
1983Jobs woo Pepsi’s
John Sculley:Pepsi Challenge
Genius
Apple gets
LISTED on NYSE
1976 Apple
Founded by Steve Jobs, Steve Wozniak & Ron Wayne197
8Apple Lisa, world’s first Graphical User
Interface computer launched
1986Project Newton
Sculley’s Big Opportunity to transform Apple’s
direction- Interoperability
- New Technology
John Sculley vs Change Accelerators
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
Onslaught of Microsoft with IBM PC partnership (1981), Graphical User Interface OS(1983) and Successful IPO (1986)
High-End Products were beginning to FAIL
NEWTON - the new Technological Breakthrough saviour
Build & Maintain Guiding Coalition
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Gathered a team of Experienced Engineers and housed them in abandoned warehouse
No inter-department involvement in Project Team that was formed
VISION
“World’s first Tablet Computer
with sophisticated
Artificial Intelligence at desktop Computer prices to replace
desktops”
Two High-Budget video to show envisioned product positioning & features
Video & strategy Communicated
to everyone and create excitement as the Future PDA
Institutionalise Strategic
Changes In The Culture
Never Let Up, Keep Learning
From Experience
Celebrate Visible Significant Short
Term Wins
Ensure Network Removes Barriers
John Sculley vs Change Accelerators
Sculley pooled talented engineers from different areas to enhance communication and development process with project permission directly from him
Experimented with free reign of decision Newton team allowed to research without telling Sculley
Sculley publically launched Newton
without recognition to
the team – it was all for product
marketing
Sales Growth drop sharply from
$2 Billion in 1987 to $10 Million in 1990
Microsoft sells 1 Million copies of Windows 95 in four days in 1995
Other projects followed the same
cycle with gap in 3 accelerators – company lost competitive
edge with every failure
Powerbook was the only new product
rolled out<-Not Properly Executed!->
John Sculley vs Change Approach‘One Look’
Local Differentiation
Ch
an
ge Is
C
om
ple
x
Ch
an
ge I
s
Str
aig
htf
orw
ard
Master Change‘I Trust People To Solve Things With Us’
Emergent Change‘I Can Only Create Conditions For Change’
Self-Assembly Change‘Launch Enough Initiatives & Something Will
Stick’
Change Approach
(Source: Higgs & Rowland, 2006 )
Inflexible, StiffP r e s c r i b e d S t e p s & R e c i p e s
Defensive Under Pressure, “Just Do It!”
Strong Controls
To p D o w n A p p r o a c h , N o F e e d b a c k
Bureaucratic Approach To Change
Directive Change“I Can
Manage Change”Higgs & Rowland
Study: Unsuccessful Approach
John Sculley vs Leadership Behaviour
Shaping Behaviour‘Without Me Nothing
Will Happen’
Creating Capacity‘We Cannot Change
Unless We Learn & Grow’
Framing Change‘With Clear Boundaries, People Can Contribute’
LEADERSHIP
BEHAVIOUR
(Source: Higgs & Rowland, 2006 )
Made himself CTO in 1990 and tightly controlled direction
Employee’s took him as an “Arrogant Person”
Stifled creation by enforcing tight SOP
Drives hard on his personal beliefs – sales & marketing insights ignored
Higgs & Rowland Study: Unsuccessful
Behaviour
John Sculley – A Dashboard View
Change Approach
Leadership Behaviour
Change Accelerators
Directive ChangeShaping
BehaviourFailed To Sustain Organic Buy-Ins
Sculley’s Newton centred change
project
Microsoft & IBM moved
ahead
Apple at the end of Sculley’s reign
Sales Growth Continues To
Fall
Low Product Innovation
Steve Jobs – The Creative Genius
1997 Steve Jobs
Reappointed CEO of Apple
20013 major launches
iTunes Store
2003
2007
iPod Shuffle
iPhone
MacBook Pro
1998iMac
2000
iPod was conceptualised
Mac OS X Launched
iTunes
Apple StoreiPod
2005
2006
iPad
2010
Jobs ResignsSales Increases to $28.5 Billion2nd Global Most Valuable Brand
2011
Steve Jobs vs Change Accelerators
CREATE SENSE OF URGENCY
AROUND SINGLE BIG
OPPORTUNITY
In 2000, Steve Jobs saw Huge Competitive Opportunity in Digital Music industry with popularity of MP3 and Napster - Project iPod was launched
Authorised $10Million buy all Toshiba’s tiny disk drive for Project iPod
Build & Maintain Guiding Coalition
Formulate strategic vision &
initiatives to capitalise on opportunity
Communicate Vision & Strategy
Formed a Project Team group from Various Horizontal Teams Hardware Engineering, Design Div., Copywriters, Marketing Team, Partnerships and Interface Designer and others around the Shared Vision of the Product
VISION
All-in-one package: Easy-to-use
jukebox software Elegant iPod Store for
downloading tunes seamlessly
“Whole Widget Goal”
Communicated his vision of iPod to the internal team, daily basis once prototype is there
Work with his team to lobby the vision to music executives – iTunes-iPod launched with 200,000 songs in stock
Institutionalise Strategic
Changes In The Culture
Never Let Up, Keep Learning
From Experience
Celebrate Visible Significant Short
Term Wins
Ensure Network Removes Barriers
Steve Jobs vs Change Accelerators
Jobs maintained the Project iPod team from different areas of the business to work together to capitalise on the opportunity with speed!
It took them 3 months to develop the Preliminary Version and 8 months final product
iPod was launched, all Apple employees were given an iPod
to celebrate the team’s success
Jobs successfully maintain the competitive culture and continues to develop more innovative products (9 major launches in a span of 10 years) - iPhone, iPad , OS X, MacBook Pro etc.
Apple has excelled at keeping pace with changes and successfully improve and refine the iPod product line to iPod Shuffle, iPod Nano, iPod Touch and iPod Classic
By 2006, 58 Million iPods were sold!
Steve Jobs – How iPod Changed the World
“The Biggest Apple project of 2001 which
showcased everything best about Steve Jobs”
“To date Apple holds over an 85% market share for electronic music and has sold over half a billion
tracks.”
“With Apple's iTunes and iPod, he revived the single, put
music libraries in fans' pockets and posed a challenge to brick-and-mortar record
stores and radio.”
“If there was ever a product that catalysed what’s Apple’s reason for being, it’s this.
Because it combines Apple’s incredible technology base with Apple’s legendary ease of
use with Apple’s awesome design.” (Source: 2001, quoted in Steven Levy’s Eulogy)
Steve Job’s Change Approach‘One Look’
Local Differentiation
Ch
an
ge Is
C
om
ple
x
Ch
an
ge I
s
Str
aig
htf
orw
ard
Emergent Change‘I Can Only Create Conditions For Change’
Directive Change‘I Can Manage Change’
Self-Assembly Change‘Launch Enough Initiatives & Something Will
Stick’
Change Approach
(Source: Higgs & Rowland, 2006 )
Master Change“I Trust People To Solve Things
With Us”
Higgs & Rowland Study: Successful
Approach
Drove Change EffortsD u p l i c a t e d S k i l l To O t h e r
P r o j e c t
Skills Required Were Hired, Trained Others
Created Vision, Team Refined
Kept Main Drivers Of iPod, involved in successful iPhone,
iPad etc
C r e a t e d N e t w o r k C o n n e c t i o n s V i a i P o d Te a m
Steve Job’s Leadership Behaviour
Shaping Behaviour‘Without Me Nothing
Will Happen’
Creating Capacity‘We Cannot Change
Unless We Learn & Grow’
Framing Change‘With Clear Boundaries, People Can Contribute’
LEADERSHIP
BEHAVIOUR
Provide Continuous Technical Skills Training And Encourage Employees To Propose Their Ideas To Be Considered
Works Closely With The iPod Team To Provide Constructive Feedback On Their Design
Breaks Down Barriers And Put Teams Across Functional Lines In The iPod Team
Create Cross Functional Operations Team – iTunes, Apple Store And iPod Team Worked Together For The Launch
Facilitates To Have Other Departments Processes , Example Purchasing Process, To Support The Project Success
(Source: Higgs & Rowland, 2006 )
Higgs & Rowland Study: Successful
Behaviour
Steve Jobs – A Dashboard View
Change Approach
Leadership Behaviour
Change Accelerators
Master ChangeCreating Capacity
Succeed In Sustaining
Change
Jobs’ iPod centred change project
2nd Global Most Valuable
Brand
Apple at the end of Jobs’ reign
Great Increase of Revenue and
Share Price
High Product Innovations
Macs sold (mm)
4
3
2
1
01997 2011
US PC Share
11%
8.25%
5.5%
2.75%
0%1997 2011
Revenue ($b)
$30
$15
$7.5
$01997 2011
Cash ($b)
$80
$60
$40
$20
$01997 2011
Share Price ($b)
$400
$300
$200
$100
$01997 2011
Steve Jobs Change Effects
$22.5
(Source: Frommer, 2011 )
Apple Stats
Conclusion
Successful Change
ElementsiChange Conclusion
Change Management Background
Challenges
Relevancy Across Country
Studies UK & US Based
Culture & Economic Status May Vary Effectiveness In Other Countries
Accelerated Structure
Can’t Change Overnight - New Structure Running Parallel
Reporting Line & Politics May Hinder Progress
Fit To Model Organisations May Not Fit Into Discussed Leadership & Approach Model
May Not Be Easy To Map & Transform To Proposed Model
CHANGE MANAGEMENT
Business Evolution
Affects Relevancy Of Frameworks
Continual Monitoring Of Effectiveness Of Change Program
Summary
• Change is complex• There is no “single recipe” for successful Change
Management• Major considerations needs to be given to:
– Change Approach– Leadership Behaviour– Change Accelerators
• While recognising challenges, organisations could use proposed models as a start and modify accordingly based on organisation context
• Even if company is having competitive advantage, should not have false sense of security and continue to change to remain a leader as seen in Apple’s case
Parting Words
“It’s not the strongest of the species who survive, nor the most intelligent,
but the ones most responsive to change”
Thank You!