ORGANISATIONAL TRANSFORMATION

PRESENTED BY:- MANOJ

ORGANIZATIONAL TRANSFORMATIONRefers to drastic changes in how organization functions and relates to its environment. It is the creation and change of a whole new form, function or structure, culture, mission or vision. In other way, to create something new that has never existed before and could not be predicted from the past. Org. Transformation is a “change” in mindset. It is based on learning a system of profound knowledge and taking actions based on learning with knowledge and courage. OT may or may not be developmental. OT tends to use directive, not participative, approaches to change. top-management driven. Requires shared vision, willingness to clean house, restructure, tackle

many problems. OT tends to be shaped by use of power rather than collaborative

approaches.

Meaning of transformation• The Greek word “metanoia” captures the meaning of transformation

well. It literally means “beyond the mind.” It’s an idea of stretching or pushing beyond the boundaries with which we normally think and feel. It means-

a profound change in mind a radical revision a transformation of our whole mental process a paradigm shift. As one company leader commented, transformation is two words, a “mind transplant.”

Why Organizational Transformation ?

The world is moving and shifting fast; executives know it.

Companies have no choice but to change.

Trying to cope, they are applying their best thinking

to the structures, systems and processes they need

to compete. Another one reason is to to get some competitive edge in yhe market. Conventional wisdom says that the right

business structures, good culture will provide the efficiencies,

innovation and agility that organizations need to

succeed and sustain.

Why Transformation Fails

The aim of this section is to discuss the psychology of transformation and the frequent barriers to successful transformation. Transformation fails when there is a lack of leadership with profound knowledge, vision and courage. Transformation demands all of these elements. The personal journey of transformation can be both frightening and exhilarating. It demands energy and a deep commitment to learning and significant change

Elements For Successful Org. Transformation

Success = A x V x M x L x I Where

A= Awakening, V= Vision,

M= Method, L= Learning,

I = Integration.

When Transformation Occurs ??? Transformation occurs when leaders create a vision for transformation and

a system to continually question and challenge beliefs, assumptions, patterns, habits and paradigms with an aim of continually developing and applying management theory, through the lens of the system of profound knowledge. Transformation happens when people managing a system focus on creating a new future that has never existed before, and based on continual learning and a new mindset, take different actions than they would have taken in the past.

Transformation. Transformation is what happens when people see the world through a new lens of knowledge and are able to create an infrastructure, never before envisioned, to the future. Transformation is motivated by survival, by the realization that everything needs to change otherwise the organization will die; that a significant breakthrough in mindset is needed in order to pursue new opportunities.

Awakening:-Transformation begins with the awakening by individuals within the organization. It may come from the outside also. The awakening begins with a challenge, a question. It brings questions – not answers. It is not a new way to do business; it is a new way to develop thinking about how to think, manage and lead. It is the realization on the part of the individual that, in spite of best efforts, they could do better –something much better.

Intention:-Transformation occurs with intention. This intention provides purpose. Intention is the conscious choosing of a course of action. It is not something that happens to someone (or to an organization) without its knowledge and consent. It is commitment – deep and thoughtful commitment.

Learning must be continual :- that means it’s never ending process.

Characteristics of transformational changeThe distinguishing features of the revolutionary change efforts are: Change is Triggered by Environmental and Internal Disruptions. Change is Systematic and Revolutionary. Change Demands a New Organizing Paradigm. Change is Driven by Senior Executives and Line Management. Continuous Learning and Change.

Change is Triggered by Environmental and Internal Disruptions:- in most cases, organizations must experience or anticipate a severe threat to survival before they will be motivated to undertake transformational change. Such threats arise when environmental and internal changes render existing organizational strategies and designs obsolete. The changes threaten the very existence of the organization as it presently is constituted. Transformational change occurs in response to at least three kinds of disruption: 1. Industry discontinuities

—sharp changes in legal, political, economic, and technological conditions that shift the basis for competition within industries

2. Product life cycle shifts

—changes in product life cycle that require different business strategies

3. Internal company dynamics

—changes in size, corporate portfolio strategy, executive turnover, and the like. These disruptions severely jolt organizations and push them to alter business strategy and, in turn, their mission, values, structure, systems, and procedures.

Change is Systemic and Revolutionary:-Transformational change involves reshaping the organization's culture and design elements. These changes can be characterized as systemic and revolutionary because the entire nature of the organization is altered fundamentally. Typically driven by senior executives, change may occur rapidly such as structure, information systems, human resources practices.

Change is Driven by Senior Executives and Line Management:-A key feature of organization transformation is the active role of senior executives and line managers in all phases of the change process. They are responsible for the strategic direction and operation of the organization and actively lead the transformation. They decide when to initiate transformational change, what the change should be, how it should be implemented, and who should be responsible for directing.

Difference Between Org.Development & Org.Transformation

Transformation is expected to be system-wide, rather than being limited to one or two entities in the organization.

OD relies on Human resource type staff to implement the change process, where as transformation is driven by time management and preferably involves top management to ensure the necessary resources and commitment.

Transformation is ongoing and endless, where as OD ends with the accomplishment of the change programme.

Transformation involves , ideally , a change management team made up of inside and outside experts as well as line managers. Early OD may not use inside experts although the consultant client team idea is prevalent later.

0T is a response to environmental changes, where as OD was initially

motivated by will of management.Transformation is revolutionary than evolutionary as in OD. In the other

words , the new state is envisioned that fundamental different from the old one.

Transformation involves a qualitative step in the way people think, perceive and behave, and not just changes to documents rules, policies and so forth.

Examples of Organization transformationIBM

International Business Machines transformed itself from a company selling large mainframes as its primary product into a company that has a global reach and is considered vital to the functioning of millions of businesses. It did this by creating a better focus on client needs, differentiating itself in the marketplace and improving its handling of finances. This transformation took a decade, according to Chairman, President and Chief Executive Officer Samuel J. Palmisano. Transformational organizations such as IBM usually have a charismatic leader who can communicate a strong new vision.

Apple

Apple started as a transformational company, creating a fan base among consumers who felt that Apple computers offer more user-friendly features than PCs. The company has continued to transform itself and is in some ways leaving the old computer model behind with the iPad, the iPhone and the iPod. The company has transformed itself from a competitor trying to make laptops and desktop computers to a company that makes handheld devices. A transformational company often has to risk being a leader rather than becoming a better follower.

Southwest Airlines

After decades as the airline industry's example of growth and profitability, Southwest Airlines hit a rough spot in 2009. It had hedged against rising oil prices by buying reserves, then oil prices plummeted, leaving the company with losses in the hundreds of millions of dollars. The company responded by transforming itself into a business-class airline, teaming up with other airlines to offer low fares and expanding its service to include overseas flights. The company that once operated as a industry-wide growth organization transformed itself into a company focused on niche markets. Transformation can mean cutting back and refocusing.

Starbucks

Starbukcks did not transform itself -- it transformed an industry. Founder Howard Shultz was impressed with espresso bars in Milan and decided to create a shop where a sense of community was as important as the coffee. The resulting phenomenon of Starbucks is testament to the fact that influencing the customer's perception of your organization can be as important as what you sell. Many times, organizational transformation involves intangibles.

New Technology

Some companies, such as Nokia, have undergone transformational change by changing their core products or focus as new technology comes along. As of 2011, Nokia is one of the world's leading makers of cellular phones, yet the company began in 1865 as a paper mill. Following World War II, Nokia entered the telegraph and telephone business as a cable manufacturer, and in the 1980s Nokia was a television manufacturer. Nokia transformed itself into a manufacturer of cell phones during the Finnish recession of the 1990s, when the company streamlined its business to stay profitable. The publishing world is an example of an entire industry undergoing transformational change associated with new technology, as desktop publishing has allowed small publishers to thrive and has led to book publishers, newspapers and magazines selling content online.

Product Restructuring

Restructuring products is another way for companies to transform. One example of a company that achieved transformational change by altering its product line is Apple Computer. In 1996, Apple was losing money and had very little market share when it purchased former owner Steve Jobs' software company, NeXT. In 1997, Jobs become CEO of Apple and began restructuring the product line, placing greater emphasis on style and the use of proprietary operating systems, rather than systems it licensed from other designers. The transformation to focus on quality and innovation led to a return to prosperity. In 2011, Apple was the third most valuable company in America.

Market Repositioning

Some companies undergo transformational change in order to reposition themselves in the market, or to re-brand themselves. McDonald's is one example of this. In 2006, McDonald's suffered its first-ever quarterly loss, and the company was under fire from anti-obesity and anti-junk-food campaigners. Under direction from CEO John Skinner, McDonald's began transforming its culture, adding espresso drinks and healthier menu items and updating the look of its stores -- focusing on what its customers really wanted. By becoming more customer-focused, McDonald's built a culture of caring and empathy that brought it back into profit.

Transformational Leadership

A transformational leader is often responsible for challenging an organization's existing structure and inspiring employees to work harder and take the company forward. These leaders bring about transformational change through their vision and drive. One example is now-retired IBM CEO Lou Gerstner. In 1983, IBM had $8 billion in losses and was close to bankruptcy. Gerstner felt IBM had become too rigid and unable to change or adapt, and he set about changing the culture to one of teamwork, creativity and innovation. Gerstner fostered cooperation among employees and made the company more customer-focused. He did this by making tough decisions, sticking with them and modeling the behavior he wanted to see.

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