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the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Prepared for:
the clarion group REAL. CLEAR. INSIGHT.
Prepared for:
the clarion group REAL. CLEAR. INSIGHT.
Change Management and Survival in Today’s Complex Marketplace
HRACC
February 18, 2015 William G. McKendree,
Founding Partner
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
My Premise for This Session
1. Change navigation is a fluid process that is getting renewed interest. This is due to the fact that changes in the past have been able to be managed using one’s experience and knowledge.
2. In today’s market, however, change is dwelling in the domain of complexity, where one’s prior experience and knowledge no longer applies. This world of complexity is largely being driven by the emerging social and digital technologies that are fundamentally altering the ways in which consumers relate to vendors and to one another.
3. A new buyer psychology has made it very difficult for established businesses to transform their legacy business models to align with this new complex dynamic.
4. This session will examine the forces that are driving this change and what businesses, and their leaders, now need to be doing to survive.
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
What We Believe About Navigating Change
The purpose of change navigation is to shift strategy, structure and/or behavior to achieve new results.
The type of changes we typically see in organizations are multi-dimensional, in constant motion and non-linear, hence we speak about “navigating change.”
There are two macro sets of accountabilities for navigating change: navigating change and enabling change.
The primary focus of change navigation is to shift organizational and individual behaviors to a desired future state while helping people through the transition.
Change navigation is co-mingled with the work of designing and/or implementing a future state; it is not a separate process.
Organizations typically put in motion change that is evolutionary or revolutionary, but also may experience change that is cataclysmic; these types of change call for distinct approaches to navigating them.
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
The New Situation
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
At a deep level, business leaders are feeling very unsettled
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Disruption Has Dramatically Increased Economic Churn
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Mobile
Global
Our society has changed…we are:
Highly interconnected
Willing to share information
Independent
Technically capable
Diverse
Socially aware
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
“Our hyper-connected world impacts the speed and scale of everything and is driving radical changes in supply and demand.”
Facebook Map In 2013
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Hierarchical 20th Century Organization
The 21st Century Leadership Challenge
Firm-Centric Mindset
Narrow Definition of Competence
Top-Down Command and Control
Inside-Out Customer Service and Delivery Focused
Some Cross-Functional Collaboration
Cash Flow Engine
Incremental Innovations of Products and Services
Focused on Efficiency Gains and Market Exploitation
Rigid Reporting-Focused Systems
Big Data Focused
Experience-Centric Mindset
Expanded Definition of Competence
Intense Cross-Functional Collaboration and Alignment
Outside-In Flat Organization
Enhanced Role of IT as Experience Enablers
Flexible and Scalable Technology Architecture
Outside-In and Inside-In Multi-Stakeholder Engagements
Can Operate as a Nodal Firm within an Ecosystem of Capabilities
Big Data and Little Data Enabled
Networked VCC Organization
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Balance of Power
Shared Innovation “Value Co-Creation”
Clear
Operations Innovation “Process”
Business Model Innovation
“Transformation”
Research and Analytics
Scenarios
Unknown Non-Linear
Participant Explore
Known Linear
Recipient Exploit
Low Multiple Alternatives
High “And Epic”
DEGREE OF UNCERTAINTY
Vast “And Growing”
Many
Few VARI
ABL
ES TO
CO
NSI
DER
From Known to Complex – “Value Creation Frontier”
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Business Model Transformation
Business model transformation driven by “stacking” Social, Mobile, Analytics and Cloud technologies
SMAC Stack
Company Infrastructure
Inbound Logistics
Technology Development
Outbound Logistics
HR
Procurement
Services
Mkting & Sales
Ops
Future
AfterBefore
Porter’s Value Chain
Source: Competitive Advantage. Creating and Sustaining Superior Performance by Michael E. Porter
Primary Activities
Supp
ort
Act
iviti
es
Source: Malcolm Frank, Cognizant, Don’t Get SMACked, Nov. 2012
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
How Companies Have Always Thought How Individuals Now Think Point of Dis-ease
Operating Performance
Growth
Innovation
Direct/Online
Competitive Advantage
Product Portfolio
Talent
Service Levels
Risk Management
Scale
Regulation
Functions
Hopes
Dreams
Desires
Aspirations
Peace of Mind
Family
Lifestyle
Work Style Needs
Stage of Life Activities
Communities
Word of Mouth
Expectations
Experience Source: C.K. Prahalad & Venkat Ramaswamy. The Co-Creation Connection, Strategy + Business (Apr. 2002)
The Competing Mindsets
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Our Readiness to Respond
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the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Building the New Capabilities for Co-Creating a Massive Change Effort
Readying leaders to conceive of things being something other than the legacy ways of operating
-3 -2 -1
1 2 4
-4
3
Sandbox Selection
Readiness Assessment
Define co-creation scope
Identify “experiments”
Select interaction environments
(physical/digital)
Identify and engage key stakeholders and
capability partners
Leadership
Culture
Technology
Risk
Building the co-creation sandbox through experimentation that eventually becomes the co-creation ecosystem
Personal Experiences
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Reframing Leaders’ Mindset
A place to start to shift to this mindset is by tapping into your
(and others) personal experiences and then drawing the connections to broader co-
creation opportunities.
Value Co-Creation entails a fundamental expansion in mindset from focusing on creating products and services to enabling the experiences that people desire when they interact
with you.
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Getting Started:
What hopes, aspirations, desires or needs were you thinking about when interacting with this enterprise (e.g., a doctor’s office, a commercial website, a check-out counter, etc.)?
How could a more valuable experience have been created for you, either at the time of the interaction or as a result of the interaction?
What was your actual experience? Did it meet your expectations? How did it affect your peace of mind?
What would be different if the person or site partnered with you differently so that your desires could be met?
1
2
3
4
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Navigating the Change
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The Clarion Group Methodology for “Operating Model” Change
Business Environment
Historical Perspective
Mission Vision
Strategic Choices
Hard Structure
Management System
Required Values & Core Beliefs
Required Behaviors
Climate Results (Measurement Architecture)
Lifecycle Stage
Critical Success Factors
Soft Structure
Process
Leadership Capability
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Navigating change is embedded in the role of leadership along the entire continuum:
Evolutionary (Transition) Revolutionary Cataclysmic
Changes are intertwined with day-to-day operations of the business; change feels methodical and controllable. Example: Actions taken to meet quarterly revenue targets
Changes are tightly linked to strategic movement; change feels turbulent, yet purposeful. Example: Acquiring a company or a major restructuring
Changes disrupt fundamental assumptions about the business; change feels chaotic and directionless. Example: Regulations that fundamentally change the rules of an industry, e.g., security rules for air travel
Navigating Change Continuum
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Distinctions Along the Continuum
Goal Execution/activity-based Strategically-based/directional change of intent Survival
Timeframe Ongoing Peaks and valleys Immediate
Leadership Orientation Planful, methodical, incremental
Adaptable, inspirational, seeing it through; introducing chaos
into order
Instinctive, seeking order out of chaos
Accountability Broad base of leaders are
equipped and empowered to execute
Strategically positioned leaders are equipped and empowered
to drive it
Organizational power gets turned over; new leaders
emerge
Management Process
Integrated into natural course of business
Distinct yet integral to existing management processes Emergency, triage-based
Evolutionary (Transition) Revolutionary Cataclysmic
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1. Natural: Let it happen
2. Constant Improvement: Continuous & incremental
3. Flexibility: Open to big swings
and shifts
4. Tipping Point: Many small changes that
add up to big change
5. Experimental: Learning by doing
Orientations to Change and Co-Creation
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Understanding the Implications
Identifying the implications of the change before moving ahead can help determine where attention will be needed, and provide a way to anticipate some of the behavioral, communication and education needs to come.
Implication A
Implication of Implication A
The Change
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Building the Change Network
The following roles should be identified and/or will emerge over the course of the change effort. Sometimes the same people will play multiple roles:
The individual or groups who have the power to sanction or legitimize change.
The individual or groups who are responsible for actually making the change.
The individual or groups who want the change to occur, but lack the power to sanction it. They are also the early adopters of the change and if positioned well, can “tip” others to support it.
The individual or groups that will be directly affected by the change, and therefore, should be involved in some way in the process.
The individual or groups that are indirectly affected by the change, but are part of the larger system in which the change is taking place and therefore may need to be involved in some way.
Sponsor
Change Agents
Advocates and Tippers
Participants
Independents
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
What Makes a Good “Case for Change”?
Creates urgency
Timed right
Establishes noble purpose
Taps people’s fears
Shows magnitude
Shows relationships
Believability
Taps emotions
Personalized to the audience
Mutual need
Data and Facts
Others?
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Change as Performance
With change, performance drops
Adapted from the work of Daryl Conner
However, the degree of drop can be minimized
Well of Resistance
Perfo
rman
ce/E
ngag
emen
t
Time
Before Change
During Change
After Change
Perfo
rman
ce/E
ngag
emen
t Time
Awareness
Trial Acceptance
Buy-in Conceptual Understanding
Commitment
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Change as the Pathway
Unfreeze Mobilize Realize Reinforce Sustain PHASE
CONTENT
OUTCOMES
Set the direction
Create the desire and will to change
Communicate and build confidence
Secure widespread shift in behavior
Underpin with changes in structure, resources, people programs, processes, etc.
Strive for continuous performance improvement
Push the Limits
Embed New
Culture
Build the Energy
Break with the Past
Performance Lift-Off
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Change as a Formula
Change Dissatisfactions Dissatisfactions that exist with the way
things are
Vision Vision or compelling word or picture that describes where we
believe we must get to, to survive
First steps The key initial
plans needed to move forward
Linkages The connections
required to assure the change, e.g., to
groups, other individuals or to the
system and infrastructures that
need to be aligned to support and enable
the change
Resistance The natural reaction
everyone has to changes around
them
C = L > D x V x F x R
the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT. the clarion group REAL. CLEAR. INSIGHT.
Back to the Premise
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The marketplace and consumer expectations have transformed.
A new leadership mindset is needed – company vs. individual consumer mindset.
This has imposed new complexity to how our businesses respond.
Our change navigation strategies will need to be much more sophisticated.
Leaders will struggle with this change.
For leaders to step into change of the magnitude described here, they will have had a personal experience that frustrated them.
For change to be navigated well, the right sponsors and support need to be in place and the right approach needs to be used.
Complexity of Complex Change Navigation