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Business Transformation Cultural ChallengesChange Management
Akhil Munjal
Organizational Change SuccessHow can we improve chances of a successful change implementation
2* Business Process Management Journal, Bradford 2001** The Social Economy, McKinsey & Company, 2012
70% of all Change Initiatives fail to get implemented *
A recent survey of senior executives in 14 industries confirmed that the benefits of a major change initiative had been substantially delayed and/or negated due to:• Lack of buy-in that change is necessary
64%• Lack of adequate skills or experience
44%• No senior management champion
44%• Turf battles
44%• Lack of congruent reward system
36%• Inability or unwillingness to downsize
31%
A study of financial services firms get as little as 20% of the promised payoff after having completed 80% of the work. The remaining 80% of the benefits comes from dealing with people issues
Phase I Phase II
Envisionthe Future
AssessCurrent
Situation
DevelopChange
Plan
Implementation
DevelopOptions
Implement
• Senior management aspirations
• Project team aspirations
• Project team collects data internally and externally
• Create a parallel organization (move into the house before it’s complete)
• Make use of focus groups/ workshops to engage employees
• Extensive piloting activity• Rotate new participants into project team• Develop and report quantitative and qualitative
results• Develop a culture of change-readiness through
adoption of Organizational Learning methodologies
Avoid Failure
Culture ChangeSponsorship
• Identify decision makers, opinion leaders and other stakeholders
• Engage them by defining the distinct part they each play in making the change happen (i.e., terms of reference)
• Facilitate alignment among decision makers to create consistent sponsorship “voice”
• Support their sponsorship (e.g., communications rollout)
• Establish linkages and networks with all the stakeholders
Initiating sponsors• authorize the change• have passion for the
change effortSustaining sponsors• lead by working through
their change issues first (and often)
• promote the change throughout their organizations
• actively model desired changes
• deploy appropriate resources needed to implement the change
Initiating Sponsors
Sustaining Sponsors
Discipline and Building Sponsorship Sponsorship Alignment is Key
Organizational ChangeChoice of the correct approach is crucial for success
4
The answers to these questions guide the process of change management
Clarion CallMobilize commitment from the top down
Burning PlatformMobilize compliance from the top down
Concerted ActionMobilize commitment by delegating responsibility
Long MarchDrive for long-term value change
SpeedHow important is speed to accomplishing the objectives of the change effort?
ConformanceHow closely must we conform to a specific process or outcome to achieve our goals?
CommitmentWhich is more important to achieving our goals: compliance or commitment?
Approach to Change
Management
Conformance
Comm
itment
Speed
High High High Clarion Call
High High Low Burning Platform
High Low High Concerted Action
Low High High Long March
Choice of Four Types of Approach Attributes of Each Approach
Change ManagementCampaign Strategy is determined by the Change Management Approach
• Unequivocal message about current situation and dire implications of inaction
• Need for strong direction to survive
• Centralized vision• Detailed advance
planning with small trusted cadre
• Disciplined roll-out
• “Big bang” opening• Experience of pain• Unambiguous direction• Common threat
• Set clear quantitative targets and reward performance
• Anticipate resistance• Give “field promotions” to
opinion leaders
• Establish clear milestones, benchmarks
• Be prepared to penalize those who deviate
• Prepare recovery plans• Report positive results
• Attractive, inspirational vision
• Common values• Opportunities for
greatness• Evolving strategic story
• Disciplined experimentation
• Centralized visioning• Sub-unit responsibility• Emphasis on incremental
change
• “Rising tide” opening• “Rolling wave” as time
goes on• Simple, robust themes
• Selectively recruit to the center of influence
• Honor as a key virtue• Emphasize benefits for
future generations
• Establish broad outlines of future state and then intermediate measures of progress
• Report positive and negative results to sustain commitment
• Unequivocal message about current situation and dire implications of inaction
• Stress inspirational message
• Strategic story
• Detailed advance planning with key power brokers and thought leaders
• Minimum critical specification
• Outcome orientation
• “Big bang” opening followed by rolling wave
• Strong emphasis on customizing the message to sub-units
• Frequent reminder messages
• Set combination of quantitative and quantitative targets and reward performance
• Give resources to subunits to reward performance
• Establish clear milestones, benchmarks
• Be prepared to penalize those who deviate
• Regular surveys• Report positive results
quickly
• Unequivocal message about current situation and dire implications of inaction
• Need for collaboration to survive
• Centralized visioning• Clear sub-unit
goals/processes• Selective decentralization
• “Big bang” opening• Experience of pain• Strong emphasis on
customizing the message to sub-units
• Target opinion leaders and reward them for duty above and beyond the call
• Rapid set-up of focus groups to mobilize commitment
• Establish clear milestones, benchmarks
• Prepare recovery plans• Focus groups establish local
performance measures• Report positive results
Clar
ion
Call
Burn
ing
Plat
form
Conc
erte
d Ac
tion
Long
Mar
ch
Content Coordination Communication Commitment Continuous ImprovementClarion Call
Burning Platform
Concerted Action
Long March
Content
Coordination
Continuous improvement
Comm
unicationCom
mitm
ent
Campaign Strategy
for Change
Change ManagementChange Checklist
1. Leading change (who is responsible) Do we have a leader …• Who owns and champions the change?• Who demonstrates public commitment to making it happen?• Who will garner resources to sustain it?• Who will invest personal time and attention to following it through?
2. Creating a shared need (why do it) Do employees …• See the reason for change?• Understand why the change is important?• See how it will help them and/or the business in the short and the long term?
3. Shaping a vision (what will it look like when we are done?) Do employees …• See the outcomes of the change in behavioral terms (I.e., what they will do differently as a result
of the change)?• Get excited about these outcomes?• Understand how the change will benefit customers and other stakeholders?
4. Mobilizing commitment (who else needs to be involved) Do the sponsors of the change…• Recognize who else needs to be committed to the change for it to happen?• Know how to build a coalition of support for the change?• Have the ability to enlist the support of key individuals in the organization?• Have the ability to build a responsibility matrix to make the change happen?
5. Building enabling systems (how will it be institutionalized) Do the sponsors of the change…• Understand how to sustain change through modifying people systems?• Recognize the technology investment required to implement the change?• Have access to financial resources to sustain the change?
6. Monitoring and demonstrating progress Do the sponsors of the change…• Have a means of measuring the success of the change?• Plan to benchmark progress on both the results of the change and the implementation process?
7. Making it last (how will it be initiated and sustained?) Do the sponsors of the change…• Recognize the first steps needed to get started?• Have a short and long term plan to keep attention focused on the change?• Have a plan for adapting the change over time to shifting circumstances?
Change ManagementChange is not easy….
• Allowing too much complacency• Failing to create a powerful guiding
coalition• Underestimating the power of
vision• Under-communicating the vision by
a factor of 10• Permitting obstacles to block the
new vision• Failing to create short-term wins• Declaring victory too soon• Neglecting to anchor changes
firmly in the corporate culture
• Establish a sense of urgency• Create the guiding coalition• Developing a vision and
strategy• Communicating the change
vision• Empowering broad-based
action• Generating short term wins• Consolidating gains and
producing more change• Anchoring new approaches in
the culture
Problems Solutions
Source: Leading Change, Harvard Business School Press, 1996.
Culture ChangeTen tips for Culture Change
focus on the vision diagnosis is key obtain and nurture sponsorship culture change is not an isolated program create demand for culture change support the employees incorporate quick wins encourage open communications make culture change measurable be persistent