Change Management by Rex Gatto, Ph.D. Gatto Associates, LLC 750 Washington Road Suite 14 Pittsburgh, PA 15228 412-344-2277 Fax 412-344-3828 Email rex@rexgatto.com Website www.rexgatto.com
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TABLE OF CONTENTS Leadership Change Process... 1 Iceberg Effect... 5 Change Leaders Need to be People of Vision... 6 Phases of Personal Change... 8 Organizational Change... 9 To Create Change, Work Backwards... 11 Change
CHANGE PROCESS Leading change is a process of identifying potential crises with opportunity, and guiding a team to pilot the change. To do this, one must: Establish a target or a destination, Communicate where and how to get there, Take appropriate risks, Reward constructive action and Create a new organization. Leading a change process is paramount to taking a journey through a new country to a place not yet seen. Leadership is a set of processes that creates organizations in the first place or adapts them to significantly changing circumstances. Leadership defines what the future should look like, aligns people with that vision, and inspires them to make it happen despite the obstacles. John Kotter, 1996 Organized Abandonment At the outset, don t rely on yesterday as the answer for tomorrow. Abandonment is the examination, evaluation, and possible discard of a product, service or business process if it proves to be of little value to the organization. Holding on to a poor performance product or service just because it is part of one s history is a mistake. An example of this abandonment/change is that of GE moving from an appliance company to a successful financial company. Change 1
Organized Improvement Improvement is the examination of a product, service, business processes, marketing or training and development that needs to be improved. The definition of performance needs to be clear and rewarded once it is implemented. Ask What needs to be improved? How will it be improved? What are the results to be achieved through improvement? How will the improvement process be implemented? What are the ramifications for the improvement? The outcome of implementing improvement is business innovation leading to change as part of the cycle. Change 2
Analyzing Success Adaptation and Innovation Change Leaders Expand upon success. Success needs to be analyzed as to what are you doing right and how can you implement it everywhere. Over the years, the focus has been on analyzing problems, not on analyzing success. Time is used to focus on what went wrong vs. what went right. Organizations going through successful change need to focus on opportunities. These organizations abandon the problems and create the opportunities for successful change. The old adages do what you do best and, put your best foot forward also mean that you should continue to define (redefine) what it is that you do best. Successful change means creating the opportunity to put forth your ability through the desire to create a changing business opportunity. Adaptation and innovation are two ways to create change within an organization. Adapting is to enhance a product or service that you presently offer. Innovation is to create something new that you presently do not have. Change leaders take advantage of their own talents and the talents of the people with whom they surround themselves. Change leaders look for and redefine opportunities for themselves and others to use their abilities and desire to guide the change process. Avoid going after opportunities in which you are not able to exploit your strengths. Such opportunities are change for the sake of change or doing something because a competitor does it. Do not try to make change fit; do not put a size 16 foot in a size 9 shoe; if it doesn t fit, it shouldn t be forced. Success can be our greatest failure if it is not analyzed for improvement. As leaders in your organization, it is imperative that you analyze what you do right to build on it and don t over analyze failure. Change 3
The more you know yourself, the more you will trust yourself and have confidence in your abilities. You should not accept change without questioning and assessing the ramifications of such a change. By using your insights, strengths, and expertise you can show others that change can be an important element to the future success of individuals and the organization. The dogmas of the quiet past are inadequate to the stormy present. As our case is new, so we must think anew and act anew. Abraham Lincoln Any organization, however, which actually believes that management and entrepreneurship are different, let alone incompatible, will soon find itself out of business. Peter Drucker, 1999 Change 4
Iceberg Effect Social Projection Actions (Above Surface) Personality Communication Teamwork Interaction (Below Surface) Resentment Emotional Projection Values Equality Beliefs Prejudice Favoritism Bias An iceberg, in its frozen state, is structured and ridged. If the iceberg melts, it becomes a liquid state, and can reshape or mold itself to new environments. You and your organization at times need to be rigid, but at other times need to be able to be fluid, to redirect your energies in a rapidly changing environment. Take Notes Change 5
V ISION Team members mentally prepare themselves for change, yet they are grounded in the traditions of organizational success. They create organizational stability and a sense of continuity rather than change for the sake of change. Change Leaders Realize Followers Need to Know Realize and need to know: Where they are headed What business they are in With whom they will work What is coming and the new feature attractions What is expected of them What will be valued Changes in procedure and process and how they will be measured How their performance will be measured How the leaders themselves will model and accept change There are two foundations to the building of organizational change: continuity and change. Even though they appear to be diametrically opposed, they can, in fact, be complementary of each other. Change 6
The key to balancing continuity and change requires exceptional communication flow, like a rushing river. One way to achieve this flow is as simple as a heads-up meeting, which is a brief 10 to 15 minute meeting designed to put out information. These can be formal meetings at a designated time and place each week, or can be as informal as employees standing and gathering around the leaders. Formal or informal, these heads-up meetings should be held at least once a week to inform, reassure and support followers. Information should be over shared to show trust and keep people in the communication loop. The grapevine should NOT be permitted to become stronger than the formal lines of communication. Management Planning and budgeting Step-by-step approach to achieve results Vs. Leadership Establishing direction, desired future results, visionèdestination Develop strategies to achieve the vision Organizing staff Aligning people, communicating the direction, take action Monitoring results Motivating and inspiring, overcoming obstacles Problem solving Changing the organization to meet the future vision Change 7
PHASES OF PERSONAL CHANGE The purpose of leading change is to create an organization that moves toward a common goal. As an organization goes through a change process, so do the people who are leading, managing and following the change process. Realizing knowing change will occur or change is needed Letting Go separating from the past Transforming moving through the change process Achieving Change but realizing change is ongoing Skills to Achieve Personal Change Being flexible Blessed are the flexible for they shall not be bent out of shape. Being a multiple service provider. Working with the end in mind. Having a sense of humor. Asking the right questions. Listening first, talking second. Becoming comfortable with uncertainty. Looking for alternatives. Having the iceberg effect (solid versus liquid state). Organizations are individual people 1 + 1 + 1 + 1 + 1 + with commitment toward change. Personal change focused toward meeting corporate, divisional and departmental goals creates an energy flow for organizational change. Change 8
ORGANIZATIONAL CHANGE In order to achieve organizational change, an organization must do the following: Define Develop Identify Act Evaluate Reassess Define the present and prioritize what you want as future results. Develop a process strategy and a method of measurement to recognize achievement. Identify concepts of change and their effects on the organization and the target group(s). Take actions that will transform the present to the desired future results. Evaluate the commitment of the sponsors and their wherewithal and ability to succeed. Have the courage to continually and reassess. Think Do Vision without action is merely a daydream. Action without vision merely passes the time. What are the reasons to implement a change process rather than let it occur? Change 9
What Drives Change? Benefit to the customer Competition Economic stability Why should you continually assess benefits? What does this process produce? Continual Assessment of Benefit Produces Quality Enhanced profit/cost ratio Variety of service Speed/timeliness Convenience Improved morale Change Process People Change Advocates Sponsors Change Agents Target Group Change 10
TO CREATE CHANGE, WORK BACKWARDS The purpose of change tools and techniques is to guide the direction from the present to the future and close the gap between them. Work Backwards To begin the process: 1. Identify the future; 2. Understand the present; 3. Choose tools. To bridge the gap between present and future examine the Present/Future Model. To assist you in your understanding of the present, you will receive feedback from working associates. It is up to you to define desired future development and a strategy to achieve your future challenges. What Is Present Problem Present/Future Model Gap Use creativity tools Develop alternatives Ideas & strategies What Should Be Desired Future Creativity: Solution & Actions What Should Be Present Gap Future Take Notes Change 11
Four Criteria To begin the change process, use four criteria: 1. An issue for change needs to be identified. 2. There must be a perceived need or want. 3. A systematic or strategic implementation and measurement needs to be considered to close the gap between the present and desired future. 4. The skills and resources needed to close the gap must be realistic and attainable considering the present situation. Change is about business reinvention not improving or enhancing past practices; it is about identifying the root causes for change. Take Notes Change 12
ACTION PLAN What are your key points of learning about teamwork? What actions will you continue? What new actions do you want to take? What are the barriers? Key points of learning Actions you will continue New actions you want to take What barriers/obstacles do you feel confront your organization? Change 13