TRANSFORMING ORGANIZATIONS:
WHY FIRMS FAIL?
DIXON D. PALETT (M-14-04)ISHAN PARASHAR (M-14-06)
FACULTY : DR . JAYA SRIVASTAVA
INTRODUCTION Amount of significant, often traumatic, change in
organizations increasing.
Trend of changes likely to continue.
To an extent downside of change is inevitable.
Significant amount of waste and anguish witnessed recently is avoidable
ERROR #1:-ALLOWING TOO MUCH COMPLACENCY
What causes complacency? Too much past success
Lack of visible crises
Low performance standards
Insufficient feedback from external constituencies
What causes this error? Overestimation of one’s
capability to change the organization
Underestimation of inertia of people in comfort zone
Not recognizing actions that can reinforce status quo
Lack of patienceExample:-
Adrien thought he could get the people in the company “induced, pushed or replaced” to implement change but saw a host of quality initiatives fail due this error.
ERROR #2:-FAILING TO CREATE A SUFFICIENTLY POWERFUL GUIDING COALITION
Why coalition is needed? “One man army” doesn’t
work.
Most successful cases, coalition is always powerful
Weak committee efforts and initiatives get undermined
What causes this error? Underestimating difficulties
of changing.
Little history of transformation
Low knowledge about the influencers in an organization
Example:- Claire was aware of the change needed and knew
urgency needed but the initiatives faded into oblivion within two years as the task force selected wasn’t proper.
ERROR #3:-UNDERESTIMATING THE POWER OF VISION
Why is it needed? Vision helps to direct, align
and inspire action
Needed to stir up the right kind of energy needed
Behind scene manipulation and avoiding discussions lead to chaos and confusion
What causes this error? Underestimating the value
of a proper vision
Insufficient communication of the vision
“Whenever you can’t describe it in 5 mins and get a reaction of understanding and interest, you’re in trouble”
Example:- Conrad made and distributed 4 inch thick notebook
detailing procedures, goals, methods and deadlines but without telling where it was leading and as result could neither rally them together nor inspire change.
ERROR #4:-UNDER COMMUNICATING THE VISION
Why is it important? Short term sacrifices
needed for change
No sacrifice till people know the end result and benefits thereof
Communication = word + deed
What causes this error? Good vision but only few
meetings or memos
Many speeches by head but managers silent
Not adhering to “walk the talk”
Example:- 1980 CEO earlier though communication done was
plenty but realized later it was short by miles and many decisions appeared inconsistent with their communication (hypocritical jerks)
ERROR #5:-PERMITTING OBSTACLES TO BLOCK THE NEW VISION
Why is it important? Implementation of change
requires action from a large number of people
Avoiding obstacles , disempowers employees and undermine the change
What causes this error? Refusal to adapt to new
circumstances Demands that are
inconsistent with transformation
Concern that one cannot blend in with the change and achieve expected operating results
Narrow job categories – undermines efforts to increase productivity
Compensation or performance appraisal s/m can force to choose b/w new vision and their self interest.
Example:-
Ralph – HR s/m ( inconsistent )-Din’t believe in need for change-concerned he could produce change - Expected operating results
ERROR #6:-FAILING TO CREATE SHORT-TERM WINS
Why is it important? Momentum of efforts to
change is lost if there are no short term goals to meet and celebrate.
People expect evidence of results within 6 – 18 months
Urgency level drop – when knowing it takes long time
Might give up / join resistance
What causes this error? Assumption that good
things will happen focusing grand vision
forgetting short-term
Example:- Nelson – big ideas person + 2 colleagues Inventory control – to reduce inventory cost w/o stock outagesDivisional controller – needed to see immediate result ( ans : time)IC model = new s/w + h/w
ERROR #7:-DECLARING VICTORY TOO SOON
Why is it important? Risk until changes sink
down deep into culture ( 3-10yrs)
Useful changes disappear
Premature victory celebration stops momentum
What causes this error? Urgency level is not
intense enough Guiding coalition is not
powerful enough Idealistic change initiators Self serving change
resisters War is over and troops
should be sent home (Once sent home , reluctant to return )
Reengineering theme – consultants were paid and thanked with first major project completion w/o checking if original goals were accomplished / acceptance by employees
Example:-
ERROR #8:-NEGLECTING TO ANCHOR CHANGES FIRMLY IN THE CORPORATE CULTURE
Why is it important? Change sticks only when it
becomes “ the way we do things around here “
Root in as social norms and shared values
Degradation if pressure associated is removed
If employees are left on their own , inaccurate links are created
What causes this error? Linking performance
improvements with flamboyant style instead of strategy
Choice of successors (less seasoned candidates)
Insensitivity / ignorance to culture
Economic orientation Analytic orientation
Example:-Charismatic Coleen’s lesson imbedded in cluture as “
value extroverted managers “ instead of “ love thy customer”
Retiring CEOs – Change leaders are required
SUMMARY : COMMON ERRORS Allowing too much complacency Failing to create a powerful guiding
coalition Underestimating the power of vision Under communicating the vision by a
factor of 10 ( or 100 or even 1000) Permitting obstacles to block the new
vision Failing to create short-term wins Declaring victory too soon Neglecting to anchor changes firmly in
the corporate culture
SUMMARY : CONSEQUENCES New strategies aren’t implemented well Acquisitions don’t achieve expected
synergies Reengineering takes too long and costs
too much Downsizing doesn’t get costs under
control Quality programs don’t deliver expected
results Frustration in employees Slow down on implementation Unnecessary resistance
CONCLUSION Errors are not inevitable Awareness and skill can avoid errors to a
large extend Understand why organizations resist
needed change Find appropriate multistage process to
overcome destructive inertia Leadership is required in a socially
healthy way more than just good management.
REFERENCE Reading material : Transforming Organizations : Why
firms fail (John P. Kotter )
THANK YOU