WestpacTrust Case Wk 7

8/13/2019 WestpacTrust Case Wk 7

1/26


2/26

Overview

Review of change management literature

Prerequisites for successful change

Overcoming resistance to change

A new approach?

Case study Reflections and conclusions


3/26

Change Management:

Perspectives from the literature Vision

Culture

Communication

Leadership

Trust and Power Teamwork

Change processes


4/26

Resistance to Change

Feedback that change proposal is flawed

eg Kanter (1985): 10 factors causing resistance

due to losses, fears, unmet needs etc

Most view resistance as something to be

dealt with and overcome

Schermerhorn (1989): 6 approaches for dealingwith resistance to change, ranging from

education/communication to coercion


5/26

Waddell and Sohals view of

resistance to change Research from 60s and 70s

benefits of resistance

better than apathy

avoids group-think

helps focus on areas needing addressing

energy for change

largely ignored

... notable absence of management models that

incorporate the possibility of utility in resistance ...


6/26

Prerequisites for success

All these factors are important in planning

and carrying out change

present the big picture with clarity on goals

logical and compelling

communicated well

develop trust and teamwork

excellent leadership

overcoming/utilising resistance

But how do you achieve them?


7/26

Pascales Prescription

Much deeper inquiry

unfolding competitive situation

understanding of invisible patterns box

Conduct organisational audit

Dont avoid conflict: confront and resolve it

disagree without being disagreeable

tackle underlying assumptions and invisible

premises on which decisions are based


8/26

Theory of Constraints

(Goldratt, 1990 ) Not part of Change Management

literature but it

uses resistance to change explicitly and positivelyto develop change proposals

Focuses on 3 questions

What to change? To what to change

How to cause the change?


9/26

So what is TOC?

Systems methodology. including

Thinking Process framework and tool kit

which seeks to help people learn how to use the

psychological aspects to assist, rather than to

impair, the implementation of .. solutions

Provides practical guidelines to put into practicethe prescriptions for organisational change

2 C r rent Reali t Tree


10/26

1Copyright Avraham Y. Goldratt Institute, 2000

TP RoadmapTP Roadmap

What to Change?What to Change?

Identifying the ProblemIdentifying the Problem

AnalysisAnalysis1. Three-Cloud Process:What core conflict is

responsible for the UDEs?

UDE

Clouds

objective

UDE

UDEUDE

Core ConflictCore Conflict

Assumption/Assumption/InjectionInjection

2. Cur rent Reali ty Tree:

Is the core conflict reallyreally

the core conflict?

3. Evaporati ng Cloud:

What assumption(s) are wegoing to challenge?

DE

DE

DE

Great Idea

TO

TO

DE

To What to Change?To What to Change?

Constructing the SolutionConstructing the Solution

StrategyStrategy

4. Fu tur e Reali ty Tree: Ensures that the

starting injection will lead to all the DEs

without creating negative branches.

IO

TO TO

All TOs implemented

IO

IOIO

IOIO

IO

Obs

ObsObs

ObsObs Obs

How to Cause a Change?How to Cause a Change?

Designing the ImplementationDesigning the Implementation

TacticsTactics 5. PreRequisi te Tree: In what orderdo we implement the T.O.s and what

blocks their implementation?IO

Action

IO Action

6. T ransi tion Trees:

What actions must we

take to implement thePreRequisite Tree?


11/26

WestpacTrust Case Study

The merger (Westpac + Trust Bank)

largest financial institution in NZ

down-sizing mandated

displacement strategy channels (DSCs)

The Wanganui area project and our role

The problem diagnosis (Sept 97)

using CRT and CCC


12/26

Analysis 54 Customers areat risk of movingtheir business

from the bank

52 Staff

communicate

their unease to

customers

51 Customers

have developed

relationships with

staff

45

Customers develop a

negative image of

the organisation

44

DS Strategies

fail

35 In-branch

customer service

levels fall

25

Staff are unsettled

about their future

with the organisation

43

Some staff willnot sell the DS

products

30 There will be

more customers

though the

remaining branches

42

Managers are not

motivated to supply

leadership to branch

teams

41

Managers are not

motivated to

promote DS channels

34 Some staff

resent theincrease in

workload

33 Some staff feel

they are asked to

do more with less

resources

23 Staff feel that

they are losing

sales

opportunities

24 Sales targets

are a major part of

staff appraisal

system

13 Managers are

uncertain about

their future with

the organisation

20 Customers are

asked to complete

their banking

using DS channels

21 DS channels do

not require the

customer to come

into the branch

22 Fewer

customers come

into the branch

We wish to make

the merger

successful

WestpacTrust CRT Version2

Profits

fall

Merger

fails

Staff feel

threatened by

new strategies

We must keep our

existing customers

while reducing

branches and staff

It is hard to

get new

customers

The merger is based on

the understanding that

we will reduce branch

and staff numbers while

customer numbers remainthe same

Positive staff

attitudes are

especially important

in the serviceindustry

DSC's are the

only way to

achieve this aim

There is pressure

to make the

DSC's work

There is pressure

to prevent the

DSC's from

working

We must keep

an effective

workforce

There is

tension and

uncertainty

Staff feel

uncertain about

the best option

Some staff try

to sell the

DSC's

Some staff

resist selling

the DSC's

Customers

get confused


13/26

Core Conflict Cloud

Make the merger

successful

Staff feel

threatened by

new strategies

Keep our existing

customers while

reducing branchesand staff

It is hard to

get new

customersSuccess depends on

lower branch and

staff numbers for the

same customer base

Positive staff

attitudes are

especially important

in the service

industry

DSC's are the

only way to

achieve this aim

Make the DSC's work

Prevent the DSC's

from working

Keep an effective

workforce

We run a change

management

programme to

show why DSC's

are important


14/26

What next?

FRT- showing big picture of future

NBRs- dealing with Yes, but issues

PRTs- detailing obstacles and prerequisites

to implementation

TTs- detailed step-by-step action plans

Critical Chainproject and resource planning

see roadmap


15/26


16/26

Results - measurablePercentage of transactions that could have been performed through the DSCs.

Branch

Original Proportion of

displaceable

transactions

(%)

Proportion as at

December 1997

(%)

Reduction in

displaceable

transactions

(%)

Trust Bank Wanganui 71 41 30

Westpac Wanganui 74 38 36

Trust Bank Chartwell 60 43 23

Westpac Te Rapa 72 47 25


17/26

Qualitative Results

Westpac Branch

Clear understanding of

current situation and

need for DSCs from

TOC maps

Ownership of project

Unity betweenmanager and staff

Strong leadership

Trust Bank Branch

Lingering resentment

re merger

Lack of acceptance of

current situation

Tension between

manager and staff Lack of clear direction

and leadership


18/26

3 Requirements for change

(Dettmer 1998)1. Technically feasible

2. Economically feasible

3. Politically feasible

Any change effort that addresses the first twowithout the third is dead in the water!


19/26

Causes of resistance & TOC tools

Fear of the unknown CRT, FRT

Loss of control FRT

Loss of face CRT, CCC

Loss of competency FRT

Need for security FRT, NBR

Poor timing FRT, PRT, TT

Force of habit CRT, PRT, TT

Lack of support TT

Lack of confidence FRT, PRT, TT

Lingering resentment NBR, FRT, PRT


20/26

6 psychological barriers (Dettmer)

Who stands to LOSE from the change?

Who stands to GAIN from the change?

Whose STATUS might change? Whose AUTHORITY might change?

Whose SECURITY might be threatened?

Whose SATISFACTION might be compromised?

Dettmer recommends using Conf l ict Clouds to identi fy andresolve the various conf l icts under lying these barr iers,

enabling the ful l solution to be implemented.


21/26

Conclusions

TOC provides framework and tool kit to

help manage and lead change through: Vision, Leadership,Communication ...

Harnessing resistance

Surfacing assumptions

Confronting and resolving conflicts

Combining rigorous logic with psychological factors To aid analysis, strategic, and tactical planning and

implementation


22/26

Behavioural differences:

Leaders behaviours Managers behaviours

innovate administer

long range perspectives short term viewseye the horizon eye the bottom line

challenge the status quo accept the status quo

focus on people focus on structure

communicate command

originate imitate

do the right thing do things right

Source: Bennis (1997)

Leaders v Managers


23/26

Competence A demonstration that the leader can do the job

Openness A willingness to share relevant information

Supportiveness An acceptance of people as they are and tolerance for

disagreement

Reward systems Win -win reward systems where everyone benefits from a

persons or a departments success - or at least no one suffers

Source: Zand (1997)

Conditions leading to trust


24/26

Managers feel

certain about

their future

Staff must not

promote DSCs

Staff feel

settled

Customers

use DSCs

Staff promote

DSCs

Figure 3a: Conflict Cloud


25/26

Managers feel

certain about

their future

Staff must not

promote DSCs

Staff feel

settled

Customers

use DSCs

Staff promote

DSCs

So theyperform

well

New ways

make staff

feel unsettled

Staff are best

at convincing

customers

Cant doboth!

Figure 3b: Conflict Cloud Assumptions


26/26

WestpacTrust Case Wk 7

Documents

Transcript of WestpacTrust Case Wk 7