MANAGING CHANGE

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MANAGING CHANGE
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The Three Cs of Change

• Customers take charge
• Competition intensifies
• Change becomes constant

3
The Quest for Business Effectiveness is . . .

• a continuous challenge as customer expectations
  change and can sometimes
  change faster than
  organizations can respond

4
Challenges Associated with Change Management
Programs

• Companywide change programs often represent the
  greatest obstacle to the revitalization of a
  company
• Most change programs do not work because the
  theory of change is basically flawed

5
Making Change Management Programs Work

• Change theory is based on the belief that the
  place to begin is with the knowledge and
  attitudes of individuals
• The most effective way to change behavior is to
  place people in new organizational contexts,
  therefore providing new roles, new
  responsibilities, and new relationships

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Change in Organizations

• Drastic Action
• Discontinuous
• Forced
• Mandated by top management
• Evolutionary
• Incremental
• Decentralized
• Results in broad/ lasting shifts

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Change in Organizations

• Disruptive Self-Expression
• - slowly changes work atmosphere
• - people notice, talk, imitate

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Change in Organizations

• Verbal Jujitsu
• react to negatives and turn them into
  opportunities for change others will notice

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Change in Organizations

• Variable Term Opportunism
• Capitalize on serendipity
• Be alert

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Change in Organizations

• Strategic Alliance Building
• Sense of legitimacy
• Access to resources/ contacts
• Technical and task assistance
• Emotional support
• advice

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Why Change Does Not Work (Two Sales Related
Examples)
Pay-for-Performance System
Managers Differentiate Between Better and Poorer
Performers

• Are new performance standards defined and
  communicated? (coordination)
• Do managers become better judges of sales
  performance? (competency)
• Do managers deal more effectively with
  performance problems? (competency)
• Is the cultural context which people need to
  develop new competencies provided? (commitment)

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Why Change Does Not Work (Two Sales Related
Examples)
Sales Training Program
Improve Salesperson Competencies

• Are company coordination patterns changed?
  (coordination)
• Does excitement lead to frustration as newly
  learned skills are not used? (competency)
• What else has changed in the organization?
  (coordination)
• Do salespeople view training as a waste of time?
  (commitment)
• Do salespeople easily commit to programs they
  view as a waste of time? Commitment)

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Five Key Themes That Are Prevalent in Successful
Organizations

• Open inquiry
• Morale
• Humility
• Learning
• Sustainability

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Five Indicators of Failure

• Low morale
• Declining unit performance
• Discrepancies in performance
• Increased cost of human resources
• Inadequacy of short term benefits

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Six Reasons Why Activity-Centered Improvement
Programs Do Not Work

• They are not keyed to specific results
• They are too large scale and diffused
• Results is a four-letter word
• Delusional measurements
• Staff and Consultant Driven
• Bias to Orthodoxy not Empiricism

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Clicks and Bricks(articles by Hwang)

• What is best retail use of the Internet?
• - selling (e-commerce)?
• - combining Web presence with a
  familiar brand?
• Most consumers feel that pure on-line company can
  satisfy all needs

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Clicks and Bricks(article by Hwang)

• 1/2 of the top 50 visited web sites are on-line
  company additions to established companies
• The largest growth rates came from new on-line
  efforts by established stores

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Clicks and Bricks(article by Hwang)

• Internet
• - not truly relevant to most Americans
• - vast majority with Internet access barely go
  on-line
• - 1/2 Internet users go on-line once per month
• - 1/2 on-line sessions last less than 10 minutes
• - 1/6 on-line sessions last less than 60 seconds

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Clicks and Bricks(article by Hwang)

• Simplifiers (29 of users) - focus on a few
  sites
• - spend 3/4 time of average user
• Surfers - less likely to buy than simplifiers
• Connectors (36 of users) - newcomers
• - they gravitate to brands they know

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Get Ready For More Reengineering(Champy Article)

• Old ways of doing business will not cut it
  anymore
• Reengineering results
  
• Growth in productivity
• Products developed faster
• Orders filled faster
• service provided faster

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Get Ready For More Reengineering(Champy Article)

• We have not realized the full effects of
  information technology
• Issues of speed of delivery
• Inventory management issues
• How much to know about customers
• Brand image and equity - What do you stand for?
• Multiple divisions selling to same customer

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Reengineering vs. Barriers

• Reengineering
• radical, discontinuous thinking about how to
  solve problems and take advantage of
  opportunities
• rejects sacred assumptions
• reinvention, not improvement

• Barriers
• rejects tried and true methods
• traditional managers do not respect this kind of
  thinking
• traditional managers are afraid of the morning
  after syndrome

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Reengineering the Organization(Article by
Williams)

• What are the fundamental questions about how
  companies operate?
• What do we do?
• Why do we do it?
• Why do we do it the way we do it?
• Radical design means disregarding existing
  structures and procedures and inventing a
  completely new way of accomplishing work.
• Reengineering is about dramatic leaps in
  performance.
• Reengineering is about processes not tasks, or
  jobs, or people, or structures.

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Reengineering the Organization

• Several jobs are combined into one
• Workers make decisions
• The steps in the process are performed in the
  natural order
• Processes have multiple versions
• Work is performed when it makes the most sense
• Checks and controls are reduced
• Reconciliation is minimized
• A case manager provides a single point of contact
• Hybrid centralized / decentralized operations are
  prevalent

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The New World of Work

• Peoples roles change - from controlled to
  empowered
• Job preparation changes - from training to
  education
• Focus of performance measures and compensation
  shifts - from activities to results
• Advancement criteria change - from protective to
  productive
• Managers change - from supervisors to coaches
• Organization structures change - from
  hierarchical to flat
• Executives change - from scorekeepers to leaders

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Fifteen Practices for Managing People

• Cross-utilization and cross-training
• Symbolic egalitarianism
• Taking the long view
• Employment security
• Information sharing
• Training and skill development
• Promotion from within

• High wages
• Wage compression
• Incentive pay
• Selectivity in recruiting
• Employee ownership
• Participation and empowerment
• Measurement of practices
• Self-managed teams

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Operational Effectiveness Strategy

• Operational effectiveness means performing
  similar activities better than competitors can
  perform them
• Strategic positioning requires the performance of
  different activities or the performance of
  similar activities in different ways

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TQM Initiatives Rest on Three Quality Principles

• Customer focus
• Process improvement
• Total involvement

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Why TQM Initiatives Fail (9)

• A focus on internal processes rather than
  external results
• A focus on minimum standards
• The development of a TQM bureaucracy
• The delegation of quality to quality czars and
  experts
• The lack of demand for truly radical
  organizational reform

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Why TQM Initiatives Fail (9)

• The lack of demand for changes in management
  compensation
• The appeal to faddism, egotism, and quickfixism
• A drain on entrepreneurship and innovation from
  the organization culture
• No place for love

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Background Slides

• You will be responsible for this material on the
  test

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Four Basic Principles of Capabilities-Based
Competition

• The building blocks of corporate strategy are not
  products and markets but business processes
• Competitive success depends on transforming a
  companys key processes into strategic
  capabilities that consistently provide superior
  value to the customer
• Companies create these capabilities by making
  strategic investments in a support infrastructure
  that links together and transcends traditional
  strategic business units and functions
• The champion of a capabilities-based strategy is
  the CEO

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Symptoms of Sales Force Becoming Obsolete

• The use of salespeople to educate customers about
  products seems to have eroded
• Trade magazines, trade shows, and targeted
  database mailing systems often beat the
  salesperson to the customer with information
  about product developments
• Buyers are likely to be more receptive to indepth
  specifics and custom design possibilities for
  specific applications
• Many buyers no longer require salespeople to
  place orders or to provide general information

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Symptoms of Sales Force Becoming Obsolete

• Increasingly, much of what customers buy takes on
  the characteristics of commodities that are
  readily available from many suppliers
• The cost of in-person sales calls has grown
  dramatically such that many companies are
  allowing customers to self-serve
• Many large customers have reduced their
  perceived value of salespeople
• Many customers claim that they are seeing more
  salespeople than ever

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Nine Recommendations For Change Initiatives

• Consider all cost-reduction alternatives
• Front-end-load any sizable layoffs
• Spread the pain
• Leverage human development
• Create-and reward-shared wins
• Let everyone know what the score is
• Beware of fetishes
• Identify and integrate multiple perspectives
• Take time out to reflect