Organizational Change ManagementGanesh Botcha, Ajoy Chatterjee21 Sep ’15, Monday
Agenda – Organizational Change Management #TopicSpeakerMinutes Basic Reasons for Org Changes Ganesh B 2 Typical Org Changes Ganesh B 3 What happens during an Org Change Ganesh B 2 Kotter’s 8 Steps Model for OCM Ganesh B 5 Steps 1 thru 6 Ganesh B 10 Steps 7 thru 8 Ajoy C 5 Benefits of OCM Ajoy C 5 Change Fatigue Ajoy C 15 Reframing OCM Ajoy C 3 References Q&A Ajoy C, Ganesh B 10
Change is the key The rate at which our world is changing is increasing but our ability to keep up with it is not .. Dr. John Kotter
Basic Needs/Reasons for an Organizational Change Reduce Operational Costs Increase Revenues and Profits Improve Efficiency and Effectiveness Increase Speed of Delivery
Typical Changes in an Organization .. Process Changes Org Structure Changes Technology Changes Current State Future State Regulatory Changes Business Globalization Change Many Other Changes - New Business Strategies, etc.,
What happens during an Org Change? Performance Dip Lengthy Duration for Change Adoption
Why Performance Dips? Active Resistance Passive Resistance Neutral Acceptance Enthusiastic Support
Organizational Change Management in a Nutshell Courtesy: Gavin Wedell
Solution - Kotter’s 8 Steps for OCM/Transformation Organizational change management (OCM) is a solution framework for managing the effect on people due to implementing a new business process, technology or orgstructure in an enterprise. It addresses the people side of change management. Phase – III Implement and Sustain the Change Institute Change 8 Sustain Acceleration 7 Generate Short-Term Wins 6 Phase – II Engage and Enable the Organization BIG OPPORTUNITY Enable Action by Removing Barriers 5 Enlist a Volunteer Army 4 Form a Strategic Vision and Initiatives 3 Phase - I Create a Climate for Change Build a Guiding Coalition 2 Create a Sense of Urgency 1
Step 1 - Create a Sense of Urgency (Phase I : Create a Climate for Change) • If you see even glimmer of a Big Opportunity, it's important to engage and mobilize around it as quickly as possible to be ahead of competitors. • Companies with engaged employees have 5 times more Shareholder Returns. • Leadership must describe the opportunity (What are the stakes if we succeed, Consequences if we do not act up onit quickly, etc., ) such that it will appeal to the employees’ heads and hearts and they sign up for the change instantly .. • 71% workforce is actively disengaged. This costs USA annually 300 Billion.
Step 2 - Build a Guiding Coalition (Phase I : Create a Climate for Change) Establish a guiding coalition with group of Leaders, Managers, SMEs that bring expertise, energy, and perspective to institute the change and most importantly to sustain that change. Avoid resisters from this coalition. Real collaboration is about stepping outside of traditional institutional structures to focus on results. In fact, there is an 81% correlation between collaboration and innovation. 81%
Step 3 - Form a Strategic Vision and Initiatives (Phase I : Create a Climate for Change) Shape a vision to help steer the change effort and develop strategic initiatives to achieve that vision. Business Week attributes 30% higher return on several key measures for the companies with well-crafted mission statements describing why the business exists and its optimal desired future state.
Step 4 - Enlist a Volunteer Army (Phase II : Engage and Enable the Organization) Large-scale changes can occur only when significant number of employees work for a common opportunity and driven in the same direction. Raise a large force of volunteers from various levels of organization who are ready and willing to drive the change. Organizations with a high number of actively engaged employees have an average of 147% higher Earnings Per Share (EPS) than the norm.
Step 5 - Enable Action by Removing Barriers (Phase II : Engage and Enable the Organization) Remove barriers of hierarchies, processes that pose threat to achievement of vision and provide necessary freedom to employees to work across boundaries and create real impact. 44% of leaders agree that their own management strategies are too bureaucratic and are a nuisance. “Innovation is less about generating brand-new ideas and more about knocking down barriers to making those ideas a reality.” - John Kotter
Step 6 - Generate Short-Term Wins (Phase II : Engage and Enable the Organization) Consistently produce, track, evaluate and celebrate volumes of small and large accomplishments – and correlate them to results. Wins are the molecules of results. They must be collected, categorized, and communicated — early and often — to track progress and energize your volunteers to drive change.
Step 7 - Sustain Acceleration (Phase III : Implement and Sustain the Change) Change leaders must adapt quickly in order to maintain their speed. Whether it's a new way of finding talent or removing misaligned processes, they must determine what can be done — every day — to stay the course towards the vision. • Identify and resolve issues with org structure, culture that may impede upon the change execution. • Ensure that policies, procedures and systems align with the change vision. • Hire, promote, develop and reward employees to implement change vision. • Reinvigorate the process with new projects, themes and volunteers. Agile firms see a 37% increase in revenue when they employ leaders who strategically adapt to any situation.
Step 8 - Institute Change (Phase III : Implement and Sustain the Change) To ensure new behaviors are repeated over the long-term, it is important that you define and communicate the connections between these behaviors and the organization's success. Big Opportunity Volunteer Army Results
Organizational Change Fatigue • A passive resistance from the organization toward change • Can be individual or team in nature • Studies show, 70% of organizational changes fail in their purpose due to change fatigue • Changes executed in a wrong way, or too many changes at the same time lead to fatigue • Exhausts the employees • Employees don’t see a value for themselves • How to overcome fatigue: • Reiterate again and again, what not changing would impact to the future of the organization • Device ways to show them the value of changing • Make people love the change as people will embrace it only if they love it
Benefits of implementing OCM Successful implementation of OCM will decrease the Performance Dip and shortens the duration of Change Adoption.
References • The 8-Step Process for Leading Change • http://www.kotterinternational.com/the-8-step-process-for-leading-change/ • Transition Process • http://www.businessballs.com/ • Forbes Study - Why Change Management Fails - And How To (Perhaps) Succeed • http://www.forbes.com/sites#/sites/victorlipman/2013/09/04/new-study-explores-why-change-management-fails-and-how-to-perhaps-succeed/ • Perspective on Leading Strategic Change • http://orgreadiness.com/ • Kotter, J. P., & Schlesinger, L.A. (1979). Choosing strategies for change. Harvard Business Review 106-114. Bridges, W. (1991). Managing transitions: making the most of change. Reading, MA: Wesley Publishing Company. • Dent, E. & Goldberg, S. (1999, March). Challenging "resistance to change." Journal of Applied Behavioral Science 25-41. • Kegan, R. & Lahey, L. (200 1, Nov). The real reason people won't change. Harvard Business Review 85-92.