SPIN Meeting Betty Black, VP HR Consulting

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Leading Organizational Change
SPIN MeetingBetty Black, VP HR Consulting
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What is Organizational Change Management?

• OCM is a structured approach to managing the
  complexities of organizational change.
• It is a two-pronged, structured approach that
  focuses upon the entire business system as well
  as personal change management.
• OCM can help everyone cope with continuous
  change.
• It can also lessen the magnitude and duration of
  any productivity dips.

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Change Management Research Productivity Curve

• Change in organizations is often made to enhance
  performance or productivity.
• When change is introduced, there is often a dip
  in performance/productivity.
• The depth and length of the dip and the magnitude
  of the ultimate performance/productivity increase
  can be positively affected by organizational and
  interpersonal change management work.

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Productivity Curve
Future Performance
Current Performance
Change Implemented
Productivity or Performance
Productivity Dip
Time
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Productivity Curve with OCM
Magnitude of Productivity Increase
Productivity or Performance
Duration
Depth
Time
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Productivity Curve without OCM
Productivity or Performance
Time
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McKinsey Consulting Change Management Study

• Analysis of OCM at 40 organizations (banks,
  hospitals, manufacturers, utilities)
• Findings
• Success or failure depends as much on how the
  change is made as on the project itself
• A little improvement goes a long way

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McKinsey Study Dimensions

• Difference between the expected value of a
  project (business case) and value achieved at end
  of project, and
• 12 factors for managing change effectively
• Senior managers commitment, communication,
  incentives, leadership and stretch targets
• Middle managers decision authority, skills in
  managing people and in managing projects
• Frontline staffs technical/functional skills,
  tools and motivation

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McKinsey Study Findings

• 58 of companies failed to meet their targets
• 20 captured only 1/3 or less of expected value
• 42 gained or exceeded expected returns,
  sometimes 200-300
• Companies with lowest returns had poor CM
  capabilities big returns had strong CM
  capabilities
• Strength in ANY ONE LEVEL of org. gave better
  chance of success no single level was more
  critical than any other.

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McKinsey Conclusions

• Effective change management pays
• Perfection isnt necessary to capture value
• For most successful companies, effective change
  management clicked at every level
• Senior and middle managers and frontline
  employees were all involved
• Responsibilities were clear
• Reasons for the change were understood throughout
  the organization
• Preparing the company for change by making any
  level better able to deal with it may be as
  important as the details of the project

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Change Management Art Science

• Many organizations focus upon how the work will
  be done differently and by whom (process and
  organizational structure)the science of OCM
• Few focus upon the softer side of changepeople
  and culturethe art of OCM
• When change is less-than-successful, it is often
  due more to art than science

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Current Realities

• When we change our IT processes, the changes
  impact
• the way we do all of our work
• roles and responsibilities of our entire
  workforce
• our policies and management practices, and
• our culture (values, attitudes and beliefs)

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A Picture is Worth A Thousand Words
Processes
Values, Attitudes Beliefs
Jobs Structure
Policies Practices
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