Food for thought

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Food for thought

• On the folly of rewarding A, while hoping for B
• Managers who complain about lack of motivation
  in their workers might do well to consider the
  possibility that the reward systems they have
  installed are paying off for behavior other than
  what they are seekingand this is what regularly
  frustrates societal efforts to bring about honest
  politicians and civic-minded managers.
• Steven Kerr (AME, 1995, p.13)

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Session 3Managing Change at the Individual Level
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Topics for Today

• Recap
• Theme 1 individuals as agents and recipients of
  change.
• Case study John Smithers.
• Discussion your own experience in a change
  process.
• Theme 2 The role of incentives for individual
  behavior.
• Debate Extrinsic or intrinsic motivation?
• Summary and takeaways

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• 5 targets in managing change in a loosely coupled
  system
• Sources Solution Strategy
• Presumptions of logic Doubt produces
  change Attention management
• Socialization processes Re-socialization
  produces Training programs
• change
• Differential participation Equalization
  produces Decision structure
• rates change
• Constant variables that Distraction
  produces Organizational slack
• disconnect units change
• Corruption of feedback Dependability
  produces Consultant, persistent
• loops change expert sources

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The Paradox of strategiesExploration versus
exploitationMarch 1991

• Exploitation or exploration The strategic
  choice
• Examples
• IBM in the 1980s PC or Mainframe?
• 3M competing through new niche or existing
  markets?
• The trade-off between the two strategies
• Exploitation the temptation
• Political
• Cultural
• The need for strategic visionthe trade-off
• Reinterpreting 3M and Motorola

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Theme 1.Individuals as agents and recipients of
change

• Changes start and end with individuals
• As strategists
• As implementers
• As recipients
• Need to understand the role of individuals in the
  change process
• The case of John Smithers
• Some observations
• The Silicon Valley phenomenon
• Sun Hydraulics
• Six Sigma Quality Program in Citibank
• Questions
• What motivates individuals to behave this or that
  way?
• What do you think John Smithers role in the
  change process?

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Case Study John Smithers
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Organizational chart at Sigtek
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The Context of Change

• The environment
• Economic recession
• Market competition
• Changes in parent company (Telwork)
• Need for change
• Organizational structure
• Tensions between engineering and operation
• Organizational culture
• Different managerial styles across departments
• The introduction of the change program (TQM)

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Background Total Quality Management

• Customer focus
• Emphasis on continuous improvement
• Problem solving processes with extensive
  tracking, measurement
• Empowerment
• Create fit between the social and the technical
  system
• Focus on crossover or hand-offs.
• Benchmarking, comparing with norms
• Ownership across boundaries of output

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John Smithers

• Describe the approach to change at Sigtek
• What was the situation Smithers faced in this
  assignment?
• barriers to change
• drivers to change
• Was Smithers effective?
• implementation steps
• why did things get wrong?
• What should he have done differently?
• What are the future prospects for this quality
  control initiative? Can TQM be revived?

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Consider Sigteks chronology of events

• April Smithers receives assignment paired with
  enemy Murphy
• May-June Murphy and Smithers (S/M) get 3 week
  TQM training
• July Senior managers attended 2 day seminar
• August S/M meet with TQM Team Patricof denies
  one week teaching delay
• September 25 employees trained excitement
  follow-up action frustrationaccounting
  rejects S charge back
• October Training continues
• November Request temporary recoup break denied
  Patricof promoted
• December Smithers asked to be relieved

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Change at Sigtek

• Barriers
• interdepartmental conflicts
• philosophical differences with partner Murphy and
  Patricof
• Inflated employee expectations
• Cultural resistance to change
• Imposed, dogmatic program
• Distraction of business demands
• Smithers own regular assignment

• Drivers
• Opportunity to build bridges and integrate
  multiple businesses
• Pent-up needs/problems
• Need to break old habits
• Excited, participative manager
• Highly acclaimed program widely known
• Opportunity to save the business

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Analysis from the three lenses
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The lens of Strategic design

• Strategic issues
• Timing of change
• Top-down or bottom-up
• Incremental or quantum changes?
• A systematic program for change?
• Alignments between personnel, incentives,
  structures
• Identifying problems in training program ?
  resolved at the workfloor.
• Mismatch between the parent company and Sigtek in
  the change program.

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The Political Lens

• Tensions between engineering and operation groups
• The failure of building a political coalition
• Support from top managers?
• Competition of interests and resources
• Multitasking
• Attention allocation
• Different interests versus a common cause for
  change?
• Managers use the six sigma quality program to
  pursue their own agenda.
• Why didnt Patricof allow a break in the training
  process?

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The cultural lens

• Empowerment as the key to TQM
• Autocratic, unresponsive to workers feedbacks
• Ill fitted for the Six Sigma Quality Program
• More on culture in the next session

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Involving the whole organization for change

• Three change constituencies
• strategists (declare the need for change, but no
  support or direction)
• the implementers (mandate a new way of doing
  without considering internal customers needs)
• the recipients (meeting felt needs)
• Sigtek problems
• limited parent support Patricof negative talking
  the talk
• Smithers self-righteousness and lack of EI
  alienates internal customers
• the recipients needs are disregarded, not aired

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Takeaways for Smithers

• Have emotional intelligence to register
  resistance to change and coopt adversaries. Do
  not dig your own (TQM) grave.
• Use group composition to build bridges between
  engineering-operation department.
• Develop some small successes Take some
  measurements. Grab the power that comes with
  empowerment!
• Build political capital manage Patricof and
  Bradley, even Telwork.

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Take aways for Telwork

• Signal support for TQM. Identify strategists,
  implementers and recipients
• Provide milestones and other support
• Empower people by giving them a sense of
  ownership
• Create incentives for TQM team. Create customer
  awareness
• Need to motivate change agents, need to
  understand their aspirations, goals, and needs.
• Need a systematic change program timinglayoffs,
  cutbacks, etc.

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Theme 2 On Motivating People

• Management is about managing people
• The mission of business school training
• The cases of Silicon Valley and Morgan Stanley
• Is incentive an indispensable managerial tool?
• What is incentive?
• Do people respond to incentives?
• The folly of rewarding A, while hoping for B
• What kinds of incentives?
• Incentive pay or intrinsic motivation?
• Individual-based or collective-based
• Short-term based or long-term based?
• Types of jobs (professional versus
  nonprofessional)

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Debate Extrinsic or Intrinsic Motivation?
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Extrinsic motivation

• For
• The bottom line economic rewards have to be
  competitive
• Economic rewards are indicators of achievement
  and status
• Incentive pay (to induce higher level of efforts)
• Labor costs versus labor investment.
• Against (Kohn)
• Induces only temporary compliance.
• Pay is not a motivator.
• Rewards punish.
• Rewards rupture relationships.
• Rewards ignore reasons.
• Rewards discourage risk-taking.
• Rewards undermine interest.

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Intrinsic Motivation

• For
• The Hawthorn experiment
• Individuals enjoy work, collective activities
• Individuals respond to peer pressures, social
  comparison
• Socialization, professional training shape
  behaviors
• Against (?)
• To what extent?
• Under what conditions?

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• In general, the more cognitive sophistication
  and open-ended thinking that was required, the
  worse people performed when working for a reward.
• Aflie Kohn (2000, p. 55)

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Summary and takeaways

• Motivation and incentive matter.
• Incentives take different forms
• Financial, social recognition
• Individual-based, collective-based
• Short-term, long-term
• Motivations vary with
• Work environments
• Different types of career lines
• Stages in the life course
• A key managerial task is to figure out what
  motivates your employees and design your
  incentive plan accordingly.