Title: ANAGEMENT
1C
HANGE
M
ANAGEMENT
CUSTOMER COMPETITIVE INTELLIGENCE FOR PRODUCT,
PROCESS, SYSTEMS ENTERPRISE EXCELLENCE
DEPARTMENT OF STATISTICS
REDGEMAN_at_UIDAHO.EDU
OFFICE 1-208-885-4410
DR. RICK EDGEMAN, PROFESSOR CHAIR SIX SIGMA
BLACK BELT
2Q
UALITY
M
ANAGEMENT
CHANGE MANAGEMENT
DEPARTMENT OF STATISTICS
REDGEMAN_at_UIDAHO.EDU
OFFICE 1-208-885-4410
DR. RICK EDGEMAN, PROFESSOR CHAIR SIX SIGMA
BLACK BELT
3 CAP The Change Acceleration Process
4ARMI Model
5ARMI Model
6In/Out of the Frame
- Not as complex as SIPOC, but useful when you feel
there are many boundary issues facing the team
(differences of opinion as to what is and isnt
in the scope of work).
7IN/OUT of the FRAME
- Steps
- Draw the frame on a flip chart, or use tape to
define borders on a large wall. - Have team members make sticky notes on the frame
in locations in/out /on the border for the
project. - Seek agreement through discussion.
- Seek agreement with the Champion.
8Threat vs. Opportunity Matrix
Building the case for change is one of the first
and most important tasks of the team. This simple
tool helps the team discover how to frame the
need for change more broadly and perhaps break
some old habits about change only as it applies
to a short-term threat.
9G.R.P.I. Check List
An excellent organizing tool for newly-formed
teams or for teams that have been underway for a
while, but who have never taken time to look at
their teamwork. Ideally, this tool should be used
at one of the first team meetings. It can and
should be updated as the project unfolds.
10G.R.P.I. Check List
- Steps
- Distribute copies of the check list to all team
members prior to a team meeting. Invite team
members to add details/examples on each of the
four dimensions of the check list. Ask each team
member to bring his/her completed check list to
the team meeting. - At the team meeting discuss and resolve issues
related to the check list. - Share certain aspects with the Champion/Functional
Leader if appropriate. - OPTION When there is considerable disagreement
or tension within the team environment, team
members can choose to complete the questionnaire
individually and turn it in to a neutral party
who will collate the data and give it back to the
team in an aggregate fashion (thus protecting the
anonymity of individual team members).
11G.R.P.I. Check List
Goals
Roles
How would you rate the degree to which your team
presently has CLARITY, AGREEMENT, and
EFFECTIVENESS on the following GRPI-related
elements?
12G.R.P.I. Check List
Processes
Inter- Personal
13Stakeholder Analysis
14Change Management Best Practices for
Transforming Your Organization
15Enablers Results of Better Change
- Better Change is integral to and focused on your
organizations strategy. - It leads to high performance, dramatically
improved results, and measurable differences. - Better Change is fueled by the brightest energy
and most creative ideas of the people in the
organization. - Better Change is supported by properly empowered
motivated employees and is driven by customer
needs. - It is guided by a limited set of balanced
performance measures and builds revenue -- that
is, it is not solely obsessed with cost. - Better change is institutionalized in a culture
that values continuous improvement.
162
The Transformational Challenge
- The key entrepreneurial challenge of our
generation is to envision and implement
large-scale change that generates dramatically
better performance levels. - The Big Idea is often a network of small but
powerful ideas that have been lingering, untried,
for an extended period.
Performance Gap Cost Quality
Time Inventory
Potential
Constraints to Change
Level of Performance
Actual
Time
17Guiding Principles for Better Change
- Confront Reality The products and services of
successful organizations, the processes and
technologies that support them are not reality by
tomorrows standards. - Focus on Strategic Contexts Change is driven by
global competition and technology innovations.
Opportunities for change will be endless, but
capital and energy are not. Knowing where to
invest in change - where to seek improved
performance - will separate the victors from the
vanquished. - Summon a Strong Mandate This is generally
provided by top management, but should be
amplified by the voice of the customer. Without a
strong and consistent mandate the cost of change
may double while the impact is halved.
18Guiding Principles for Better ChangeSummoning a
Strong Mandate for Change
- Every successful change project has a sponsor
whose position becomes entwined with the success
of the effort. The change team leader builds the
case for the effort, sells it, marshals the
necessary resources, sets goals and establishes
milestones. - The change team leader becomes identified with
the program in the peoples minds. - Evaluate change effort leadership via these basic
questions - Who is driving change into and through the
organization? - Is this person fully committed, even impassioned
about the possibilities and about making them
real? - Is this person genuinely in a position to
influence others - or is more senior executive
support needed? - The potential for success lies within the answers
to these questions.
19Guiding Principles for Better Change
- 4. Achieve High-Impact Solutions by Setting Your
Scope Intelligently Focus on measurably
improving performance in areas most important to
the organization and its key stakeholders.
Overreaching the change sponsors broadest
possible sphere of influence can doom the change
project - but scope that is too narrow can lead
to change with an unimportant level of success. - Two Important Questions for Change Teams Senior
Executive Sponsors - What is the scope of the project?
- How many levers of change may the team actually
access and alter? - Setting scope and securing freedom of action
appropriate to that scope are not simple matters.
One-dimensional change typically generates
either modest improvement in the bottom line or
outright failure. Better Change is Always
Multi-dimensional !!!
20Guiding Principles for Better ChangeSetting
Scope Intelligently for High-Impact Solutions
- If you ask people for better performance - you
must improve their work processes - give them
access to the right information and tools - give
them authority to make decisions, measure
performance in new ways, and reward them for
higher performance. - If you restructure your organization - you must
also rethink processes and the line of command,
ensure that the systems and technology
infrastructure supports the new configuration,
and revise performance evaluation and
compensation to motivate adherence to the new
structure.
21Guiding Principles for Better ChangeSetting
Scope Intelligently for High-Impact Solutions
- If you redesign processes - you must also
redesign jobs and procedures, change the systems
and technologies that support these processes,
train people to perform new or different tasks,
and remove barriers to change. - If you invest in technologies such as information
systems - you must also consider whether they
support customer-critical processes and integrate
with technologies now in place that you do not
intend to upgrade. Further, you must prepare
people to use the new technologies in their new
or different jobs.
22Guiding Principles for Better ChangeSetting
Scope Intelligently for High-Impact Solutions
- High-performance organizations address change in
all of its dimensions. They involve parties not
only throughout the organization, but beyond its
boundaries. - Forward-looking management teams recognize that
the arena of change lies both within the company
and outside in their key relationships with
suppliers and distributors. - An integrated solution will lower costs across
the entire system of material supply,
manufacture, and eventual distribution to the
customer. - This is working all the levers of change to good
purpose.
23Levers of Change
24Lever of ChangeMarkets Customers
- Your vision of present and future may include
differences in the way your organization will -
or should - view and segment its markets and
customer base.
25Lever of ChangeProducts Services
- The refined market focus that you envision may be
accompanied by changes in the scope and variety
of products services your organization seeks to
bring to market. - Perhaps you sense a need to establish strategic
alliances and partnerships with key customers and
suppliers.
26Lever of ChangeBusiness Processes
- There will probably be a gap in the way your
organizations business processes operate now and
the way the will need to operate in the future to
bring competitive products and services to
market. - You may already perceive the need to introduce a
new set of pointedly relevant performance
measures at the corporate and business unit
levels.
27Lever of ChangePeople Reward Systems
- Your vision may include differences in the kinds
of people you will need, systems and measures for
rewarding them, and the culture that sends them
daily signals concerning how we do business and
what we are all about as an organization.
28Lever of ChangeStructure and Facilities
- There is probably a gap between the
organizations structure today and its best
future configuration. - New facilities may also show up in your vision of
the kind of future worth having.
29Lever of Change Technologies
- Finally, your vision may reveal a gap between the
information-based technologies in place today and
those needed to remain competitive in the future.
30Guiding Principles for Better Change
- 5. Build a Powerful Case for Change
- You cannot assume that others are prepared for
change - build a powerful case, work relentlessly
to generate consensus - start with executive
management and radiate down across the
organization. - This is a reasoned yet powerfully persuasive
justification for the changes targeted by the
change effort -- it should be - Brief Clear
- Well-articulated Logical
- Well-documented Compelling
- Qualitative and quantitative
31Guiding Principles for Better Change Building a
Powerful Case
- Do not assume that the case for change speaks for
itself. - Segment your stakeholders.
- Be creative in building your case and help your
organization visualize change - literally. - Motivate people in the organization by clearly
showing them how they can be positive agents for
change. - Tell the truth.
- Provide direction - the best case for change is
built on two values - Direction - establishes a destination and a plan
for getting there. - Discovery - is the explicit invitation to
stakeholders to participate as creative agents in
the change process rather than to apply the
brakes or position themselves as victims.
32Guiding Principles for Better Change
- 6. Let the Customer Drive Change
- The customer is your reason for existence and
their carefully examined needs should drive
change. - Absence of the customers voice is among the most
common drivers of change project failure. - The customer is typically a consistent voice and
votes for what is valued each time that goods or
services are purchased. The concept of
systematically listening to the voice of the
customer is central to Americas Malcolm Baldrige
National Quality Award Criteria for Performance
Excellence.
33Guiding Principles for Better ChangeLetting the
Customer Drive Change
- The voice of the customer is not heard.
- Change is a competition between the need for
change and the barriers that resist it. - Winning in a change project requires belief that
barriers can be overcome and the end result will
be worth the price. - This belief must be widespread.
34Guiding Principles for Better Change
- 7. Know Your Stakeholders Powerful individuals
and groups have stakes in the contemplated
changes. The needs and motives of these
stakeholders must be segmented, understood and
prioritized. - Segment the Stakeholders Tune Your Case to Key
Stakeholders Key stakeholders will commonly
expect early, tangible results and non-delivery
is a primary reason for change program crash and
burn.
HIGH
Impact of Contemplated
Changes LOW
HIGH
LOW
Support for Contemplated Changes
Motivated stakeholders can have a multiplier
effect on the change initiative. Communicated to
the rest of the organization, their optimism and
assurance will encourage fellow stakeholders to
persevere during chaotic or painful periods in
the change effort.
35Guiding Principles for Better ChangeKnowledge
Consideration of Stakeholders
- Generally there are four kinds of stakeholders,
as seen in the proceeding graphic. Of these, two
will ordinarily dominate - Those supporting change
- Those not motivated to change.
- Stakeholders require a great deal of maintenance
and you will spend much time eliciting their
views and bringing them into consensus - or
attempting to do so - but this will remove or
reduce sources of doubt that might otherwise
spread throughout the organization. Convincing
some of your adversaries of the merits of your
change effort will be important.
36Summarize and Track Key Stakeholder Positions via
a Change-Readiness Matrix
Change
Requirements
Customers
Suppliers
TARGET GROUP
POSITION
Intellectual Emotional Required
Required
Constituency Commitment
Commitment Skills Support
Senior Executives N/A
Through Directors
Plant Management
Plant Employees
Key Definitions Follow
37Change Readiness Matrix
- Committed and ready
- Committed, but not ready
- Uncommitted and not ready
- Intellectual Commitment the belief that change
is necessary and the proposed changes are
appropriate. - Emotional Commitment the willingness to carry
out the planned change and weather the storm. - Required Skills the skills required to carry out
change and operate effectively in the new
environment. - Required Support the support from others
necessary to carry out change and operate
effectively in the new environment.
38Stakeholder Position Summary
- Clarifying issues, fears, and opportunities
through stakeholder meetings can move some key
players beyond self-concern to the point of
imagining and mentally trying out the changes you
are sponsoring. Identify these co-workers /
stakeholders as potential change agents. - Using a Change Readiness Matrix may help and you
may want to update this matrix at regular
intervals as change readiness is a process,
subject to change -- but with a desired direction
and destination. - While a change readiness matrix is useful, it
does not replace detailed plans for securing the
commitment to change that is needed for each
group or individual. - It is wise to summarize the position for each key
stakeholder addressing such areas as Area of
Change, Impact Level, Stakeholder,
Anticipated Issues and Reactions, and
Communication Strategy and Planned Response.
39- 8. Communicate Continuously Measure Readiness
- Clear, succinct messages will be understood and
honest messages will be believed. - A good communications plan will identify
- identity of stakeholders and communications
objectives for each - communications actions for each and messages to
be sent - tone of messages and media to be used
- expected outcomes and
- spokesperson(s) and optimal frequency of
messages. - Measuring stakeholders readiness for change is
straight-forward -- interview and survey them --
ask questions. Readiness for change can be
conceptualized by the Change Resistance Curve
and the goal is move the stakeholder up the curve.
Guiding Principles for Better Change
40Pull Stakeholders up the Change-Resistance Curve
Mental Tryout Hands-on Acceptance
Self-Concern
Point of No Return Transition to Acceptance Begins
Awareness
- Pre-awareness a sense exists that something
needs to be done, but not a sense of what, how,
or why. - Awareness thoughts about what changes are
needed, where we want to be, and how to get there
are coming into focus but are not yet defined.
41Pull Stakeholders up the Change Resistance Curve
- Self-Concern The desired environment and
possibly some elements of the projects are known
in detail, whereupon the concern How will this
impact me? comes to the fore. At some point
between self-concern and mental tryout, the
transition to acceptance begins. - Mental Tryout Changes are beginning to be viewed
as inevitable, attitudes shift to How do I make
this work for me? - Hands-on Simulation of the new environment in
the form of pilot projects, prototypes, or
training is formalized. The point of no return is
reached somewhere between hands-on and
acceptance, when the momentum for the change and
near-acceptance of change have increased to the
point that turning back is unlikely. - Acceptance Changed order of things is reality.
The new environment becomes the status quo.
Status Quo Latin for the mess were in!
42Guiding Principles for Better Change5 Cs of
Communication
- Be Candid Always tell the truth (You will know
the Truth and the Truth will set you free. John
832). Employees will probably know when the
truth is not told. - Be Contextual Provide stakeholders with the big
picture as you explain the relevance of the
project to the company. - Be Constructive Guard against counterproductive
comments that work against team and stakeholder
unity. - Be Consistent Ensure that verbal, written, and
nonverbal forms of communication are consistent
from message to message, and that your actions
support your messages. - Be Continuous Provide ongoing reinforcement of
your commitment to the change initiative.
43Vital Communication
- Communication is the shadow behind everything you
do in the transformation process. - It is not the first thing on anyones mind, but
you cant accomplish anything without it. - Communication is fundamental to creating change.
- The foundation of effective communication is
credibility. Trust is impossible to sustain when
misleading information corrupts the case for
change.
44Guiding Principles for Better Change 9. Reshape
Your Measures
- Driving change and causing people to act anew
will require careful examination of
organizational performance measures. First build
your vision then design new measures consistent
with its strategies and goals. Take the time to
reevaluate and, if necessary, dismantle old
measures. - In creating a balanced set of internally and
externally focused measures for your business
take an inventory of your companys portfolio of
performance measures. Map them to your corporate
strategies and take a tough attitude in judging
whether each measure is truly supportive of the
companys vision and mission. Often, a
significant proportion of these measures will
conflict with or fail to support these
strategies.
45Performance Measures
46Reshape Performance Measures
- Performance measures are a primary strategy
deployment tool and it is vital to link these to
strategy to ensure that the right signals are
being sent by senior management. - Performance measures are also a strong force in
shaping organizational culture. The underlying
values of an organization are often influenced
by, and are a direct reflection of, key
performance measures. - What gets measured gets done! If performance
measures are not appropriately adjusted, change
can be made virtually impossible.
47Reshape Performance Measures
- Generally there should be no more than 40 to 60
organizational performance measures. - Choosing Measures - Performance measures should
be - Relevant does it have a significant,
demonstrable relation to strategy and objectives? - Reliable will the measure help identify the
strengths and weaknesses of one or more business
processes? - Clarity of Naming System is its purpose readily
understandable by its name alone? - Availability of Data are the data necessary for
computing this measure available at a reasonable
cost?
48Reshape Performance Measures
- Principles for Selecting Performance Measures
- A. Reevaluate Existing Measures - guard against
the influence of any of the following - Fear Ownership What-if
- Rewards Estimates
- B. Measure Important Business Processes - Not
Just Results! - If you improve core business processes then
customer and shareholder satisfaction will also
improve. - Revised measurement systems have two purposes to
provide information about the effectiveness of
business processes and to measure the ultimate
results of these processes. - C. Measures Should Foster Goal-Driven Teamwork.
49- D. Measures Should be an Integrated Set.
- To be effective, a measurement system must be
designed as an integrated set derived from
company strategy. - E. Measures Should have an External Focus When
Possible. - A system of performance measures with an
intelligent internal perspective linked to a view
of the outside world might be - Internal
- Revenue Operating Income Cash Flow Asset
Utilization - External
- Detailed Part Cost Comparison vs. Competitors
- Capital Redeployment Techniques Used by Others
- Items in Business Press About Competitors
- Thought Pieces Concerning Innovative Approaches
to Product Distribution - Measurements of Customer Complaints.
Reshape Performance Measures
50Guiding Principles for Better Change
- 10. Use All the Levers of Change Levers of
Change are key points of application in your
organization that will repay your efforts.
Large-scale change can be achieved only when all
of these levers are brought to bear in a
coordinated manner. - 11. Think Big Draw Positive Innovations from
people throughout the organization. Small
thinking dominates many projects, with
predictably inadequate improvement results.
51- It is difficult to think out of the box -- we
built the box - excellent in its time - which is
probably past. Unparalleled opportunity for
innovative thinking awaits us as increasing
internationalization, numbers of women, and
minorities enter organizations. These minds and
perspectives help to shake the old paradigms and
- where necessary - replace them. - Team make-up will involve diverse disciplines,
functions, and personal capacities - Technology Process Redesign HRD
- Communications Training Development Project
Planning - Interviewing Information Gathering Leadership
- Change Facilitation Implementation
- Negotiation Conflict Resolution
- Operation of Business Processes
- Organizational Restructuring
Guiding Principles for Better Change 12.
Leverage Diversity
52Guiding Principles for Better ChangeLeveraging
Diversity
- The majority of team members should be respected
individuals from your organization. All should
be shakers and movers - viewed by other
employees as trustworthy, thoughtful leaders. - While team members will be diverse in skill and
style, they should share the following - That they have earned respect legitimately in
your organization where legitimately means that
however forceful and energetic they may be, they
are also sensitive to other peoples needs and
ideas.
53Guiding Principles for Better Change13. Build
Skills
- Over-invest in human capital. Build skills in
people at all levels. - Broaden the technical, problem-solving,
decision-making and leadership skills of those
who are in the trenches. - Strengthen the facilitation, managerial,
listening, delegation, communication, and
diversity skills of those at the top. - Make skill-building a key performance measure for
all employees.
54- 14. Plan To drive change you must develop a
documented and detailed action plan for change.
It must cover all major actions required,
including changes in processes, systems, people,
organizational culture, the physical plant, the
organizational structure, and training needs.
Hold the Gain
Act (implement)
Do
Study
Plan Standardize
ESTABLISH BASELINE RESULTS
Guiding Principles for Better ChangeA
Modification of Demings S-PDSA Cycle
55Guiding Principles for Better Change15.
Integrate Your Initiatives by Connecting the Dots
- Change programs of various types continuously
surface in high-performance organizations.
Insightful executives strive to balance the
entrepreneurship of high-initiative managers with
the need to adhere to a focused strategy. - As change programs emerge, define their
objectives, and consume resources, it is critical
to maintain a consistent, integrated rationale
for the whole pattern of change. An unplanned
patchwork of change initiatives will promote
bitter competition for resources, confuse
employees, and reduce the positive impact of any
one initiative. - An organization cannot excel if assignments are
made primarily on the basis of muscle and FCFS
rather than on the basis of an integrated picture
that centrally displays the companys highest
goals.
56CONNECTING the DOTS
57Initiative Integration Connecting the Dots
- What is driving organizations to change? A
Harvard Business School Conference on Managing
Business Transformation provided the following
insights. - Pressure to cut costs
- Pressure to hold down prices
- More competitors, often on a global basis
- Opportunities to benefit from new information
technology.
58Initiative Integration Connecting the Dots
- Participating organizations reported an average
of Five concurrent change projects in their
organization. The two leading programs were - Customer Service and Continuous Improvement
- Next followed
- TQM Focus on Core Competencies
- Time-Based Competition Pay for Performance
- Strategic Alliances Downsizing / Right-Sizing
- Establishing a Learning Organization
- Reengineering / Business Process Redesign
- Autonomous or Self-Directed Work Teams
- Establishing a Network Organization.
- SINCE THIS STUDY, SIX SIGMA HAS EMERGED
59Initiative Integration Connecting the Dots
- What is the optimal integration of all of the
organizations change projects and how should
integration occur? - The challenge is to evaluate and achieve program
congruity - Do the programs, taken as a whole, powerfully
reinforce a common vision, or are there
initiatives that pull the organization off-track,
off-strategy?
60Initiative Integration Connecting the Dots
- 1. Understand Each Program
- A. Meet with the program sponsor - listen first,
make judgments later. - B. List and reconcile each concurrent programs
key rationale - identify the following for each
program - Sponsor Life-cycle stage or time frame
- Methodology Key objectives
- Impact on customers Change drivers (the why?)
- Organization(s) / process(es) targeted for
improvement - Impact on the levers of change,
- C. Look for similarities before searching for
differences. - Connecting the dots is often as simple as
highlighting the congruence of whats going on -
what are the commonalities?
61Initiative Integration Connecting the Dots
- 2. Make Choices.
- A. Consider Integrating Teams. Ask project
sponsors to share the best people, vision,
effort, and results. Realize that this may
require concessions in leadership, project name,
and other lesser issues. - B. Consider Discontinuing Activities that have
inadvertently or deliberately kept related
initiatives apart. - C. Consider Killing One or More Initiatives that
simply do not support the organizations goals.
In any group of competitors, there are bound to
be a few that just dont make it.
62Initiative Integration Connecting the Dots
- 3. Bury the Dead, But Not the Wounded.
- 4. Resolve Overlaps or Conflicts.
- 5. Connect the Dots. Most programs are likely to
survive and you may not be able to integrate all
of these into one grand initiative -- the task is
to connect -- not merge the dots. - A. Create the Big Picture for Your Audience.
Focus on the common themes in each program. Build
a legitimate story of common change drivers,
common objectives, similar tactics. Each program
has its objective impact on the levers of change
- use this to show how the parts fit the whole --
build the common vision around customers. - B. Draw a Road Map of Yesterday and Tomorrow.
Show the picture visually - making the
sensibility of what is being done clear to
everyone from the board of directors to
entry-level professionals. - C. Communicate the Big Picture Plainly
Effectively.
63- Rate each from 1 to 5 with
- 1 very low, 2 low, 3 medium, 4 high, 5
very high. - Totals 15 - 34 points Watch Out!
- 35 - 55 points Keep a Close Eye on Things.
- 56 - 75 points You/ Your Organization are
Very Likely to Successfully Implement the
Change Program. - Risk Factor 1 Adequacy of Risk Management
Process - Risk Factor 2 Adequacy of Change Program
Definition - Risk Factor 3 Effectiveness of Change Management
Process - Risk Factor 4 Adequacy of Sponsorship and
Resources - Risk Factor 5 Adequacy of Communication and
Involvement - Risk Factor 6 Range of Linked / Consequential
Actions Identified - Risk Factor 7 Coherence in the Sequencing of
Linked Actions
Change Readiness Diagnostic Risk Assessment
64Change Readiness Diagnostic Risk Assessment
- Rate of Return Factor 1 Extent and Timing of
Benefits - Rate of Return Factor 2 Change Program Budgets
Economy - Rate of Return Factor 3 Extent to which Project
Time, Specifications and Costs are Managed - Rate of Return Factor 4 Degree of Focus on
Business Results - Latent Opportunity Factor 1 Program Scope
- Latent Opportunity Factor 2 Linking Change
Drivers Through Actions to Performance - Latent Opportunity Factor 3 Appropriateness of
Benchmark Targets - Latent Opportunity Factor 4 Quality of the
Benchmarking Process
65C
HANGE
M
ANAGEMENT
End of Session
DEPARTMENT OF STATISTICS