Managing & Mastering Organizational Change Sirota Science Webinar Series

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1 June 4, 2013 Managing & Mastering Organizational Change Sirota Science Webinar Series

2 Setting the Stage: The Change Imperative In today s competitive and uncertain business environment, organizations cannot sustain excellent performance unless they are capable of changing. But Decades of Research Show Change Efforts Often Fail Porras & Robertson (1983) Beer, Eisenstat, & Spector (1990) Burke and Biggart (1997) McKinsey Quarterly (2010) Less than 40% of change initiatives produced positive results One-third of change efforts made situation worse 75% of mergers and acquisitions fail Report on the effectiveness of change efforts every five years 1995: 30% 2000: 30% 2005: 30% 2010: 30% 2

3 Welcome to Our 2013 Sirota Science Webinar Series SirotaScience Webinar Series Regular review of current workforce trends Purpose: explore topics, share insights, and exchange ideas Discuss data, academic research, and your observations from the field Format 30 to 45 minute presentation followed by open discussion Please hold questions until open discussion Looking ahead to July Big Data 3

4 Today s Agenda Understanding Organizational Change Business Trends Normative Trends Old and New Approaches to Change Driving Transformational Change with Rapid Results Overview Steps Case Recommendations for Managing Change Building a Roadmap for Leading 21 st Century Change 4

5 Today s Presenters Patrick Hyland, PhD Director of R&D Wes Siegal, PhD Senior Partner 5

6 About Sirota Our Mission For the past 40 years, our mission has been to improve the lives of employees and enable organizations to achieve sustained business success by creating strong and productive relationships. Our Expertise Assessment Analysis Action Our Clients Sample of our Client Partnerships 6

7 Change: The New Constant Unprecedented Number of Layoffs Uptick in M&A s M&A activity has more than doubled in US so far this year Q1 2013: $219 Billion Q1 2012: $85 Billion Projections: Most M&As since 2000 Disruptive Innovation Innovation is the hottest word in business, but most of the discussion centers on products and services. The more profound challenge for most companies now is imagining a new business model, a new answer to the fundamental question, How do we make money? Geoff Colvin, Fortune, Feb 25, 2012 Need for Resilient Dynamism We are increasingly confronted by major adaptive challenges as well as profound transformational opportunities. This new leadership context requires successful organizations to master strategic agility and to build risk resilience World Economic Forum 7

8 Putting Things In Context: The Story To Date Our job is to adapt and to be held accountable, but it's a hard pill to swallow when not given the chance to improve or change. This stress and pressure can be felt throughout the company. I feel that we are in a state of change and need to define our goals for the future. There needs to be some openness to new ideas and new ways of considering business opportunities. Ambiguity Volatility Complexity Uncertainty Doing more with less is needed when the economy is bad, but I hope when the company is back on track that they will not require me to constantly work 12 or 14 days in a row. We're very, very busy and stressed so we often are forced to balance our work for the very short term. Anxious employees and overwhelmed leaders 8

9 Good News: Our Latest Norms Suggest Companies are Rebounding Sirota Normative Results My Company Responds Effectively to Changes in Bus. Environment My Company Responds Quickly to Changing Needs of Customer Confidence in My Company s Future Company is a Well Run Organization

10 But There are Still Opportunities for Improvement Sirota Normative Results When Changes are Made, Communications are Well Handled My Company Emphasizes Continuous Change My Company has an Effective Organizational Structure Senior leaders give clear picture of future

11 Understanding Organizational Change Change Literature Has Moved through Three Stages Systems Approach (1940s to 1960s) Individual Differences (1990s to Today) Team Level Factors (1970s and 1980s) 11

12 Traditional Models of Change Lewin s Three Step Model of Change Unfreeze Change Refreeze Disconfirm status quo Induce guilt/create gap Create safety Retrain & reframe Identify new leaders & ideas Scan the environment Practice Provide Feedback Reward Schein s Recommendations Beckhard & Harris (1977) C = (ABD) > X C: Change A: Dissatisfaction with status quo B: Clear understanding of future D: Practical first step* X: Cost of Change Kotter s Eight Steps (1996) 1. Create urgency 2. Guiding coalition 3. Change vision 4. Communicate change vision 5. Empower broad-based action 6. Short term wins 7. Consolidate wins 8. Anchor new approaches 12

13 New Approaches Dispositional Resistance (Oreg, 2003) Neuroscientific Approach to Change (David Rock) 1. I generally consider changes to be a negative thing. 2. I ll take a routine day over a day full of unexpected events any time. 3. I like to do the same old things rather than try new and different ones. 4. Whenever my life forms a stable routine, I look for ways to change it. 5. I d rather be bored than surprised. Appreciative Inquiry Positive Deviance Analysis Discovery Workload Deliver Dream Design Engagement 13

14 In Sum So Far Change is the new constant 21 st century organizations must master the art of change But change is hard, and change efforts often fail Normative trends show that while companies are getting better at change, there is still room for improvement Theorists and practitioners have moved from macro to micro, negative to positive, extrinsic to intrinsic 14

15 Schaffer Consulting Over 50 years experience helping organizations navigate major transitions and realize strategic objectives Unrelenting focus on results, not process Distinctive approaches to improve performance and grow capabilities Thought leaders: eight books, over 200 articles, 13 in HBR Transformational impact around the world Schaffer Consulting 2013 Page 15

16 Evolving Views of Change From: Unfreeze Change Refreeze To: Continuous Change Common errors Change efforts lack urgency added to the pile of initiatives Disconnected from day to day work Dis-integrated plans driven through organizational silos Long term Milestones but no clear accountability for results Schaffer Consulting 2013 Page 16

17 Change Management as an Organizational Competency Communication Help all employees understand the strategic and business case for change. What will change, what won t, and when. Engagement Provide opportunities for people to create their future and experience success. Leadership Keep leaders and managers ahead of the curve so they can support and engage others. Conventional View Minimize the depth and duration of performance disruption caused by planned change. Schaffer View Create the conditions where people are the authors, not the objects, of change in their environments. Schaffer Consulting

18 Conventional Approaches to Change: Strategy, Problem, Solution Change Management treated as a side activity to be managed separately and by someone other than the line leader accountable for performance. Schaffer Consulting 2013 Page 18

19 Activities Integration Risk Conventional Change Leadership Faces Multiple Risks Execution Risk White Space Risk Time Strategic Goals Schaffer Consulting 2013 Page 19

20 Activities Rapid Results Mitigates Change Risks Time Strategic Goals Inventory in One Region Time to ship xyz orders etc. Schaffer Consulting 2013 Page 20

21 Results-Driven Change Leaders Focus on Challenges, Not Solutions Change is inflicted on us from above. We know we have to change so we co-create the future. Schaffer Consulting 2013 Page 21

22 Rapid Results Approach Breaks Through Barriers to Change Typical Change Management: Lacks urgency one more initiative Disconnected from day to day work Dis-integrated plans driven through silos Long term Milestones but no results accountability Pre-determined assigned activities Rapid Results Projects: Important and Urgent Existing or adjacent opportunities Cross-functional/cross-divisional 100-day deadline Razor-sharp results goal Iterative work plan Schaffer Consulting 2013

23 Rapid Results Success Factors Urgency quick results needed A personal challenge Success is clearly defined, easy to recognize High stakes and visibility for success or failure Excitement and novelty People collaborate a new team spirit People experiment and try new things People tap their full energy and creativity Schaffer Consulting 2013 Page 23

24 Guiding Successful Organizational Transitions Experience the organization s future and develop new capabilities Evidence-based adjustments to structure, systems, and processes Leading Indicators on Strategy and Execution Schaffer Consulting 2013

25 Implications and Applications Recommendations for Leading Organizational Change 25

26 Four Guiding Principles for 21 st Century Change Multi-level Time Bound Organization Change Evolve Individual Team Unfreeze Clear Goals Core Element Profit & Performance Purpose Plan Personal Growth Team Effectiveness Passion Performance Org Effectiveness 26

27 Creating Deep Change in 100 Days: A Five Step Roadmap Set the Stage Day 1 to 15 Day 16 to 85 Day 85 to 100 Scale Rapidly Set the Stage Launch Rapid Results Effort Build Momentum Through Action Secure Early Wins Adjust & Accelerate Define future state Build change plan Identify executable challenges in key result areas Set Breakthrough Results Goal Build Work Plan Develop pipeline of innovations Act, Learn, Adapt Reinforce right behavior at reviews Identify & remove barriers Reflect on learning Assess alignments & synergies Build Sustain & Scale plan Scale progress with rapid results Introduce organizational changes to sustain early wins Evaluate strategy and overall change effort Assess at Critical Attitudinal Milestones Baseline Assessment Readiness for Change Confidence Clarity Concerns Mid-Point Check in Progress Challenges Changes Successes Post Change Evaluation Impact/Performance Learning & Growth Successes Opportunities Schaffer Consulting 2013

28 Roadmap is Built on Four Foundational Cornerstones Articulate Future Aspirations Performance Goals Change Plan Adjust Act Use Pulse Surveys to Assess critical attitudinal milestones Assess Use Rapid Results to Accelerate Behavior Attitudes Values Schaffer Consulting 2013

29 In Sum We are living in an era of Big Change The world of work is becoming increasingly dynamic, complex, and competitive The pace of change is only going to increase in most industries We have an opportunity to help our organizations become better at change As business leaders and HR professionals, we can help our organizations get better at change by framing these as personal and organizational development opportunities Well designed change efforts can produce powerful results Short, time-bound, goal-specific, learning rich change efforts can build personal and organizational adaptability and resilience 29

30 Thank You Questions, Comments, and Observations For additional information, please contact: Patrick Hyland, PhD Director of R&D Wes Siegal, PhD Senior Partner 30

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