Chicago

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Discussion Document
Change Management Opportunities at Zicon
Chicago December 1, 2002
Marshall Associates
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We started this dialog in February for three main
reasons and agreed to undertake some initial
diagnostic work
Initial Actions
Background

• We are looking for opportunities to enhance our
  effectiveness in major transformations in this
  case Zicon
• We are looking for opportunities to build a
  change management capability internally
• We wanted to respond to client feedback about our
  team not providing adequate change management
  guidance

• Debra Jackson interviewed nine members of the
  Marshall senior team who were working with Zicon
  (we agreed it was premature to interview Zicon
  staff)
• Developed tentative conclusions about the need
  for change management at Zicon which were shared
  with a sub-set of the team

3
Our objectives with this conversation are
three-fold

• Crystallize the issues at hand both Zicon and
  Marshall issues
• Agree on the change management imperatives
• Agree on a feasible course of action (in the
  context of our emerging change management
  philosophy and approach)

4
To recap what we heard the teams view of the
situation and hypotheses as to the root cause
Observations about Zicon
Hypotheses

• There is no widely held view that Zicons
  survival is at risk
• Limited clarity of vision at senior levels,
  virtually none at lower levels
• No sense of a shared purpose few models of
  effective teaming
• No one is leading the charge COOs style is not
  one that inspires change, and the CEO is
  disengaged
• The way of running the company will have to
  change empowering employees with decision
  rights, making fact-based decisions etc.

• Zicon has high potential to go out of business
• Initial momentum of change program has slowed
• Many changes are incremental rather than
  fundamental
• Leadership reticent to take risks, very
  political, hierarchical
• The union burden is considerable and
  intractable

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To recap what we heard the clients view of the
situation and our hypotheses as to the root cause
Observations about Marshall
Hypotheses

• We dont really understand what change management
  entails and how we deliver it. That is, how do we
  capture the hearts and minds of our clients?
• We operate in silos with few opportunities to
  interact across teams

• From the client we are less effective at
  transferring our change management processes to
  Zicon

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We have drawn tentative conclusions based on the
data, but these should be tested with a more
thorough diagnostic
Conclusions
Implications

1. Zicon is in crisis but functioning

• Zicon is not a candidate for organization change
  at this moment. More has to be accomplished
  before the organization is ready for wholesale
  change e.g. plant closures, realigned roles etc.
  Right now, it is best to merely nudge the change

• Resistance to change is greater than the forces
  that drive change
• RC ? D x V x FS

• Need to work on the forces that drive change D x
  V x FS ? RC
• Dissatisfaction with the current state or outlook
  for future
• Vision for the future
• First steps toward that vision

1. Leadership and the change process are entwined

• Commence the change wherever you can find the
  zealots and leverage them by teaming with them or
  coaching them

1. The union problem will not be solved by taking a
   passive stance

• Find a way to address the union problem
  regardless of who owns the problem today

1. No strategy for focusing the organization on the
   mission critical

• Change teams started to take on the role of
  triaging, linking and focusing, but needs to be
  broader, deeper and non-optional

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How to Nudge Change at Zicon
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Our philosophy is that successful transformation
requires the optimization of technical and
behavioral dimensions of organizations
Dimensions of Successful Transformation
Leadership
Mission Strategy
Culture
Structure, Processes, Systems
Performance
Management System
Teamwork
Behavior
Measures Incentives
Relationships Soft-Wiring Behavioral Emotio
nal
Tasks Hard-Wiring Technical Rational
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The methodologies we apply to each dimension must
therefore work in tandem
An Integrated Methodology
Phase I
Phase II
Phase III
Diagnostic Definition
Design / Architecture
Delivery
Technical or Rational

• Identify major strategic issues and scale and
  scope of change required
• Develop vision and strategy

• Translate strategy into detailed operating model
  and blueprint for action

• Execute blueprint and roadmap to achieve results

Change Management Approach
Aligning Leadership Preparing for Change
Building Momentum Breaking Down Barriers
Mobilizing Workforce Institutionalizing Change
Behavioral or Emotional

• Assess Organizational Culture and test capacity
  and willingness to change
• Work with executives to create active sponsorship
  and develop change agenda

• Formalize change processes and create
  high-performing project teams and apostles of
  change

• Engage workforce and manage change process to
  ensure change sticks

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Each phase of the methodology involves executing
a series of targeted activities
Activities Underlying Integrated Methodology
Phase I
Phase II
Phase III
Phase 0/Phase I
Diagnostic
Definition
Design / Architecture
Delivery

• Articulate core problems
• Assess market and customer needs
• Build value proposition
• Identify and value strategic options
• Assess internal capabilities
• Define strategic agenda

• Interview internal and external stakeholders
• Articulate range of options for change
• Agree on appropriate scale and scope of change
  effort

• Establish teams
• Communicate program contents
• Coordinate implementation
• Monitor and report progress
• Make mid-course corrections when necessary

• Develop operating model (organization, processes,
  systems, incentives)
• Assess resources and capabilities required
• Build implementation plan
• Establish targets and program mgmt. structure

Technical or Rational
Change Management Activities
Aligning Leadership Preparing for Change
Building Momentum Breaking Down Barriers
Mobilizing Workforce Institutionalizing Change

• Assess and assemble leadership team
• Identify and work through areas of resistance
• Jointly agree on problem -- define case for
  change
• Fully assess how organization works and ID levers
  of change
• Set change agenda
• Communicate to and mobilize key stakeholders

• Interview and assess key stakeholders /
  constituencies
• Identify major enablers and roadblocks to change
• Develop hypotheses on approach to change

• Build human systems to reinforce change
• Incentives
• Roles and job descriptions
• Succession planning and development processes
• Roll out change program and touch the
  organization
• Communications
• Training
• Skills transfer

• Assess how various constituencies will respond to
  change
• Pick change leaders and create cross-functional
  teams
• Begin to communicate and mobilize middle
  management
• Employ teams to formalize plans for utilizing
  change levers and institutionalizing change

Behavioral or Emotional
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We have identified six elements that are
necessary to support an effective and
comprehensive change management program
CHANGE MANAGEMENT CAPABILITIES
Level of Importance by Phase
Capability Element
Description
Phase 1 Engage the Top
Phase 2 Cascade Down
Phase 3 Mobilize
1. Leadership Alignment

• CEO counseling and coaching
• Alignment of senior team around vision, strategic
  agenda, imperatives
• Senior leadership team effectiveness

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2
4
2. Philosophy and Approach

• Philosophy for dealing with change in the context
  of transformation
• Comprehensive approach to change management

4
4
2
3. Organization Mobilization

• Development of the change program infrastructure
  and process
• Change management interventions (e.g. group
  facilitation, overcoming resistance etc.) at a
  change program team level

4
1
4
4. Communications

• Effective communications program which serves to
  educate and involve employees in the change
• Delivery of communications

4
2
1
5. Skills and Values

• Development of new skills and modeling of values
  that are required/expected of employees in the
  new environment
• Typically involves interventions such as
  training, action learning experiences

4
2
0
6. Measures and Rewards

• Definition of metrics of program success
• Definition of leadership incentives that will
  drive program success
• Design of individual measurement and rewards to
  ensure desired behaviors skill development is
  reinforced

4
2
0
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These skills and capabilities complement those
Marshall has historically developed and applied
to its client engagements
Change Management Skills and Capabilities
Traditional Marshall Skills and Capabilities
V.

• Leadership alignment counseling and coaching,
  team effectiveness
• Philosophy and approach program design,
  organizational transformation
• Organization mobilization change architecture,
  interventions
• Communications communication planning and
  delivery
• Skills and values training and skill
  development, articulating and instilling values
• Measurements and rewards metric definition,
  incentive and compensation design

• Analysis customer segmentation, cost modeling,
  competitive landscape, etc.
• Thought leadership breakthrough thinking,
  digesting information and seeing whole picture
• Structural design designing New Operating
  Models, systems, processes
• Program management system design, task
  identification and integration
• Client-handling listening, delivering difficult
  messages, handling interpersonal issues
• Industry knowledge experience with markets,
  products, and customers

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Imperatives to nudge change and suggested
activities to accomplish these
Imperative
How

• Build true alignment across the executive team
• CEO/COO (e.g. around survival, role of the labor
  strategy)
• VPs and/or Executive Champions

• Coaching of COO through interactions with CEO
• Targeted coaching/team building with the
  Executive Champions

• Improve teaming and build a sense of shared
  purpose
• Change Management Teams (e.g. selected, or all)
• Broader organization

• Team building interventions around a pertinent
  business problem
• Identify the zealots and start to work with them
  to build a sense of shared purpose

• Clarify the vision and the roadmap to get there

• Broader, deeper communications effort
• Leverage the zealots

• Construct a labor strategy that gives Zicon some
  control and clout

• Consider bringing in an expert in labor
  negotiations

• Support the Marshall team to become more
  effective change agents

• Individual coaching
• Working session to build a sense of team and to
  provide some coaching on change management

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However first we must support our assertions
Imperative
How

• First, we need to support our assertions and make
  a case for doing anything

• Perform an organizational performance diagnostic
  with appropriate segments
• Executive Champions
• Change management team leads plus selected team
  members

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A five to six month plan should be considered,
commencing with a Zicon diagnostic and a focus on
Marshall
5 weeks
8-10 weeks
8-10 weeks
Step 1 Launch
Step 2 Create a Shared Purpose
Step 3 Build Effective Teams

• Organizational Performance Diagnostic 1
• The Effectiveness Institute (Jack Estes)
  conducting the diagnostic then analyzing the
  results
• Supporting Marshall
• 2-3 days of Jack Estes, working with Ari and Bob
• 2-3 days of Jack Eestes designing and conducting
  a workshop for the Marshall team

• Executive Team Building
• 6-8 days of Jack Estes
• 4 days of Zoe Dell
• Supporting Marshall
• 2-3 days of Jack Estes

• Executive Team Building
• 6-8 days of Jack Estes
• 4 days of

Additional Actions

• COO Coaching

• Labor Negotiations Expert
• Communications Utilizing the Zealots

1 Additional (or different) change management
interventions may be recommended beyond those
identified in this plan
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The necessary conditions for making this
successful
1.

• The right change management experts with the
  right tools
• Currently developing a small cadre of experts
• Estimate a 8-12 days per month level of effort
  for Jack Estes, 2 days per month for Zoe Dell,
  recognizing that there will be ebb and flow of
  activity
• The right Marshall resources, so that we can
  learn and improve
• Member(s) of the core team at 7-8 days per
  month level of effort
• Providing oversight and an institutional link
  to the change management experts
• Client commitment to change
• Client sponsor who is, or who can become a
  zealot
• Understands the importance of and difficulty of
  effecting behavioral change
• Vehicle to house the change program
• Team or workstream with clout
• Resources to support a change program

2.
3.
4.