Asian Productivity OrganizationAsian Productivity Organization

Study Meeting on Study Meeting on

Learning OrganizationsLearning Organizations

Seoul, March 18-21,2003 and adapted for Bangkok, Management in Asian Countries, March 24, 2005

11

Learning For Change: Learning For Change: Leadership Makes The Leadership Makes The

DifferenceDifference

- B L Maheshwari

Centre for Organization Development

Hyderabad, INDIA and expanded/adapted by

- J M Wachtel

Chulalongkorn University, Bangkok, Thailand 22

ChangeChange

To change or not to change is not the question

• Turbulence in environment

• Organization’s response

• Rate of change

• Rate of learning

33

Environment

Learning

Change

Performance

ComplacenceSuccess

Self confidence Success

Failure

LeadershipLeadership

44

Five Triggers of Organizational Change

•Globalization

•Technology

•Business Cycles:

•People

•Culture55

Asia Pacific to provide highest econAsia Pacific to provide highest economic growth of any global region thromic growth of any global region through 2007:ough 2007:   The Economist Intelligence Unit predicts

5.9 percent annual economic growth for the Asia Pacific ex Japan through 2007, making the region the fastest-growing globally. However this growth is not evenly spread, with China and India leading the charge, while other Asian economies struggle or show limited growth. (Aug 9) 

Competitiveness Rankings sees SoutCompetitiveness Rankings sees South East Asia on the rise:h East Asia on the rise:     Malaysia, Thailand and Singapore are the

rising stars of the IMD's World Competitiveness Scorecard for 2003 published in their yearbook last week. At the same time traditional lean and mean Scandinavian economies which have dominated the rankings since their inception, as well as the mature East Asian economies, seem to be losing their competitive advantage. (May 18) 

Impact of LPG

•Increased Competition•Customer has choice•Customer expects better, cheaper, faster.•Global Competitiveness needed even in domestic market•Learning for Competitiveness

66

Technology

•Impact on products / processesImpact on products / processes•Innovation Obsolescence•Investment in R&D /employee skills•New Opportunities - BPO

77

Business Cycles

•Boom and Bust Cycles - short duration•Herd Mentality or Collective Intuition•Churning Process - only strong survive, 80% die or disappear•Opportunity – core competence match

88

People

•Focus on human capital•Geeks vs Geezers•Young Employees•More Women•Employee to Entrepreneur•Enhancing effectiveness of knowledge workers

99

•Strategy + Culture = Excellence•Behaviour of Leaders - exhibited, rewarded or tolerated •“Mahajano yena gatha sa pantha”- the path on which great men traveled is the path to follow•Source of competitive advantage- shift from strategy / structure to culture,people, process and learning

CultureCulture

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Why Companies Fail?Why Companies Fail?

• Managerial Errors• Complacence from Success• Reluctance to Learn• Satisfactory Underperformance• Mismatch between Ambition and Ability• Third Generation Syndrome

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Six Silent Killers

Inadequate DownThe lane leadership

Skills and Development

Ineffective Top Team

Poor Coordination Across FunctionsAnd Businesses

Top Down orLaissez-faire

Senior Management Style

Unclear StrategyAnd Priorities

Poor VerticalCommunication

Quality of Direction

Quality of Implementation

Quality of Learning

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Learning Disabilities

•Reactive rather than Proactive•Short term orientation•Seeing no evil. The enemy is out there•Boiled frog (getting used to increasing problems)•Not invented here•Group think – No dissent

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Dealing With FailuresDealing With Failures

• Externalization

• Rationalization

• Ownership

1414

Processes of ChangeProcesses of Change

• Incremental – continuous improvements• Radical / Fundamental transformation• Two Aspects – Direction & Speed• Four Types of Changes on basis of two

dimensions:• Scope of change• Positioning of Change

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Four Types of ChangesFour Types of Changes

RecreationAdaptation

ReorientationTuning

Reactive

Anticipatory

Incremental Strategic

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Two ApproachesTwo Approaches

• Theory E – Near Term Economic Improvement

• Theory O – Improvement in Organizational Capabilities

• Sequential• Simultaneous

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Implementing ChangeImplementing Change

• Implementation is key to success• Begins with “felt need” for change• Focus on vital few• Short term results for demonstration effect• Accept that resistance to change is as natural

as change itself• Mindset change from “why things won’t

happen” to “how to make things happen”• Recognize limitations

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Six Rules of Jack WelchSix Rules of Jack Welch

• Control your destiny or someone else will• Face reality as it is, not as it was or as you

wish it were• Be candid with everyone• Don’t manage, lead• Change before you have to• If you don’t have a competitive advantage,

don’t compete

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Overcoming Resistance to Overcoming Resistance to ChangeChange

Tactics for dealing with resistance to change:

• Education and communication

• Participation

• Facilitation and support

• Negotiation

• Manipulation and cooptation

• Coercion

Tactics for dealing with resistance to change:

• Education and communication

• Participation

• Facilitation and support

• Negotiation

• Manipulation and cooptation

• Coercion

Overcoming Resistance to ChangeOvercoming Resistance to Change

• Police (Coercion)

• Media (Persuasion)

• School (Education)

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Focus of ChangeFocus of Change

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Lewin’s Three-Step Change Lewin’s Three-Step Change ModelModel

Unfreezing the Status QuoUnfreezing the Status Quo

Ineffective Leadership:: Invariably when I run Invariably when I run workshops on Strategy for leading Asian companies workshops on Strategy for leading Asian companies I ask the assembled throng to write down in 20 I ask the assembled throng to write down in 20 words or less what their company mission is.words or less what their company mission is.

Then I go around the table and ask each participant to read it out. Apart from very few companies which I know now are Asia's finest and appear regularly in surveys of Asia's most admired companies, the only uniformity in answers is in their divergence. How can a company expect to firstly engender loyalty and inspiration in their employees if even the top managers do not know, off by heart, the shared objectives, values and beliefs in a mission statement. Heaven help the middle managers and assembly workers.. let alone the poor customer... Barbara Eu http://www.apmforum.com/news/apmn175.htm

Effective Leadership

•Change begins at the top and Revolution at the bottom

•In the context of change, the leadership role:

Requires active, dynamic and visible leadershipHas to build leadership at every level in order to sustain changeHas to build the Mission and communicate the Vision

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•Attributes-Ambition-Ability-Adaptability - Humility to learn

Implementing Change, John KotterImplementing Change, John Kotter1. Establish a sense of urgency by creating a compelling reason

for why change is needed.

2. Form a coalition with enough power to lead the change.

3. Create a new vision to direct the change and strategies for achieving the vision.

4. Communicate the vision throughout the organization.

5. Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving.

6. Plan for, create, and reward short-term “wins” that move the organization toward the new vision.

7. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs.

8. Reinforce the changes by demonstrating the relationship between new behaviors and organizational success.

Source: Based on J. P. Kotter, Leading Change (Boston: Harvard Business School Press, 1996).

Leadership Roles

External Environment

Internal Environment

Past Future

Spokes person Direction setter

Coach Change agent

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• “Here lies a man who knows how to enlist in his service, better men than himself.”

- Andrew Carnegie’s tombstone

• Leaders inspire followers. • “A Leader is dealer in hope”

- Napoleon Bonaparte

• Leader as teacher

Leader as Talent ManagerLeader as Talent Manager

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New Age Leadership

Covert Leadership Orchestra Conductor

Controller FacilitatorPositional Leadership Intellectual LeadershipIndividual Leadership Team Leadership

• Expertise as the source of leader’s power• Direction and motivation by vision• Set challenging goals - show the path to achieve• Provide opportunities to perform• Develop leadership at all levels• Leader as Guru - teaching / learning organization

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Corporate Charisma: Key to Corporate Charisma: Key to business competitiveness in the new business competitiveness in the new Asia Asia Corporate success through Corporate Charisma,

is achieved by the following.. Vision and Mission Brand building and Corporate Mission Positioning and Differentiation Advertising and Promotion Culture and Employee Attraction Temporal and Alder, in Corporate Charisma: How

to achieve world-class recognition by maximising your company's image, brands and culture,

Key Characteristics of Charismatic LeadersKey Characteristics of Charismatic Leaders

E X H I B I T 12–3E X H I B I T 12–3

1. Vision and articulation. Has a vision—expressed as an idealized goal—that proposes a future better than the status quo; and is able to clarify the importance of the vision in terms that are understandable to others.

2. Personal risk. Willing to take on high personal risk, incur high costs and engage in self-sacrifice to achieve the vision.

3. Environmental sensitivity. Able to make realistic assessments of the environmental constraints and resources needed to bring about change.

4. Sensitivity to follower needs. Perceptive of others’ abilities and responsive to their needs and feelings.

5. Unconventional behavior. Engages in behaviors that are perceived as novel and counter to norms.

Source: Based on J. A. Conger and R. N. Kanungo, Charismatic Leadership in Organizations (Thousand Oaks, CA: Sage, 1998), p. 94.

Transformational LeadersTransformational Leaders

Leaders who provide individualized consideration and intellectual stimulation, and who possess charisma.

Learning is an instrument of change

A learning organization is an organization which facilitates learning of all its members and continually transforms itself

- Philip Sadler

Organizational Learning is the creation, adaptation or replication of knowledge by an organization to improve its performance

- Arun Maira and Peter Scott Morgan

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Creating a Learning OrganizationCreating a Learning Organization

Characteristics:Characteristics:

1.1. Discards old ways of Discards old ways of thinking.thinking.

2.2. Views organization as Views organization as system of relationships.system of relationships.

3.3. Holds a shared visionHolds a shared vision

4.4. Communicates openly.Communicates openly.

5.5. Works together to Works together to achieve shared vision.achieve shared vision.

Characteristics:Characteristics:

1.1. Discards old ways of Discards old ways of thinking.thinking.

2.2. Views organization as Views organization as system of relationships.system of relationships.

3.3. Holds a shared visionHolds a shared vision

4.4. Communicates openly.Communicates openly.

5.5. Works together to Works together to achieve shared vision.achieve shared vision.

Learning Organization

An organization that has developed the continuous capacity to adapt and change.

Source: Based on P. M. Senge, The Fifth Discipline (New York: Doubleday, 1990).

Three Important Processes of Learning

•Reflection and Strategic Response

•Benchmarking

•Knowledge Sharing (Tacit to tacit or

Explicit)

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Benchmarking

Types InternalExternal Best Practice

Process Stage I : PlanningStage II : AnalysisStage III : Action

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Learning by SharingLearning by Sharing• Knowledge sharing is a cultural issue• Technology cannot replace face to face

interaction• Create system of tangible and intangible rewards

for knowledge sharing• Create knowledge sharing structures• Leaders have responsibility to promote learning

culture• Invest in the training system• Mentoring of seniors by juniors

3030

ExperiencesExperiences

• Transformation of GE• Culture of Innovation at 3M• Learning Begins at the Top in SAIL• Leadership Development at WIPRO

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Transformation of GETransformation of GE

• 100 yrs old company in 1981 when Jack Welch took over

• 150 businesses; 4,40,000 employees; $20 billion assets, $ 27 billion sales; slow growth; low profit; market capitalization of $12 billion

• Surgical operations

– Concept of market leadership

– Downsizing and Delayering

3232

• Leadership Development, communication & corporate culture

• Quality programmes - Six Sigma

• Assets up four times; profits up five times; employee strength halved

Contd...Contd...

3333

Learning for Innovation at 3MLearning for Innovation at 3M

• Known as most innovative company• Emphasis on tacit to tacit management of

knowledge• Long term commitment of top management –

strategic thrust, supportive culture and resources• Foresight and clear understanding of core

competencies • Stretch goals and spell out innovation in

measurable terms

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• 30% of sales from products not in line four years ago

• 15% of employee time spent on innovative ideas

• Tolerance for mistakes and cross functional cooperation

• Recruitment, retention and investment in development of people

Contd...Contd...

3535

Learning Begins at the Top: SAILLearning Begins at the Top: SAIL

• Largest steel maker in India - Example of public sector inefficiency

• Appointment of new chairman with track record of success in 1985

• Diagnosed problem – Priorities for Action• Directors’ Workshop - Process of learning and

exploration amidst resistance

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• Major milestone in the process of organizational change

• Documentation – direction to company policy• Workshops and meetings to develop plans for

implementation • Unique feature is continuity of thought process • Transform mind set change – learning process

begins at the top• Leaders are role models

Contd...Contd...

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Leadership at WIPROLeadership at WIPRO

• Ranked as 21st among soft ware companies in the world

• Vision: To Become no 1 IT company in India and among top ten IT services companies globally

• Core values• First to achieve Level 5 under PCMM

3838

• Structured Leadership Development Programme

• Five levels - Entry level

- New Leaders- Wipro Leaders ( middle)- Business Leaders- Strategic Leaders

• HR tools for development of performance and potential of employees

Contd...Contd...

3939

WIPRO LEADER

Objective Setting

Competency based performance appraisal

WLQ – 360 degrees

CSS – customer inputs

Meet Your People Programme

TED Review and Planning

Early Opportunities

Life Cycle Leadership Prog ELP, NLP, WLP, SLP

4040

Summing UpSumming Up

• Turbulent environment demands organizational learning for change

• Continuous learning – important instrument for radical change

• Leadership crucial for change management• Leaders shape strategic responses• Prepare agenda for change• Develop implementation plan

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ContdContd……

• Successful management of change needs leadership at various levels

• Leaders influence goals, strategies, culture, behaviour and performance of organization

• Determine priorities by the questions they ask

• Question the fundamental assumptions that gave past success

• Create sense of urgency and dissatisfaction

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ContdContd……

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•Articulate vision of the future•Incorporate culture of learning into the system

•Lead by example - Credibility is the corner stone

•“Wisdom is the attitude of knowing what you know and knowing also what you don’t know”

- Plato