organizational change
TRANSCRIPT
Organizational Change Waseda Business School Global MBA 2015 Organizational Behavior Seminar Instructor: Prof. Norihiko Takeuchi Facilitator: William ( LIU, Shih-‐Wei )
The Adaptation in Nature
Source: Taiwan Mountain Magazine, issue 90
How Many Moths Are in the Picture?
Source: Taiwan Mountain Magazine, issue 90
“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change. “
—Charles Darwin, The Origin of Species, 1859
The Nature of Change
Source: CartoonStock
The DeXinition of Organizational Change
• Any alterations in the people, structure, or technology of an organization – Ex: Total Quality Management, Reengineering,
Rightsizing, Culture Change, Turnaround • Any change in an organization may have effects extending
beyond the actual area where the change takes place. – Ex: When Northrop Grumman installed a new
automated production system, employees’ training, compensation system, and recruitment criteria are also changed
Stephan Robbins, Mary Coulter, Management 9th ed. Ricky GrifXin, Fundamentals of management 5th ed.
Source: Northrop Grumman webpage <www.northropgrumman.com>
Automa'c Produc'on
Employee training
Compensa'on system
Recrui'ng criteria
Quality control
Forces For Change
Nature of the Workforce
• More cultural diversity • Increased immigration and outsourcing
Ex: Expatriate management
Technology • Mobile computers and handheld devices • Emergence and growth of social networking
sites
Ex: E-‐commerce
Economic Shocks
• Financial crisis • Global recession
Ex: Bankruptcy of GM
Competition • Global competitors • Mergers and consolidations
Ex: Merger of Daimler and Chrysler
Social Trends • Increased environmental awareness • Liberalization of attitudes toward GLBT
Ex: Rise of the same-‐sex marriage
World Politics • Rising health care costs • Opening of markets in China
Ex: NIKE outsource production to China
Stephan Robbins, Mary Coulter, Organizational Behavior 15th ed.
Planned Change or Reactive Change
• Things just happen • Planned Change – Activities that are intentional and goal oriented
• Goals of Planned Change – Improving the ability of the organization
– Changing the behavior of groups
Jeff Bezos, CEO of Amazon Source: Newscom.
Resistance to Change • The force resists the change and maintains the status quo. • Resistance to change can be positive if it leads to open discussion and debate.
“You've written a bold and innovative proposal. Unfortunately, it challenges the status quo and that can jeopardize my job.” Source: CartoonStock
SHRM Aging Workforce Survey
36%
20%
19%
13%
6%
5%
2%
Beginning to examine internal policies and management prac'ces to address this change
Have examined our workforce and determined that no changes in our policies and prac'ces are necessary
Just becoming aware of this poten'al change
Not aware of this poten'al change
Have implemented specific policies and management prac'ces
Have proposed specific policy and management prac'ce changes
Have agreed on a plan to change policies and management prac'ces
Source: SHRM Aging Workforce Survey: State of Older Workers in U.S. Organizations
Types of Resistance
Explicit Implicit Voicing complaints, engaging in job actions
Loss of employee loyalty and motivation, increased errors or mistakes, increased absenteeism
“The Xirst order of business is the problem of absenteeism.” “We like status quo.”
Source: CartoonStock
Source of Resistance to Change
• Uncertainty – Employees worry about their ability to meet new job demand, think job is insecure, and dislike ambiguity.
• Threatened Self-‐Interests – A change might diminish some managers’ power.
• Different Perceptions – Employee resist because they do not agree with top managers’ perception of the situation
Kraft’s Takeover of Cadbury
Cadbury Kraft Entrepreneurial company with great autonomy given to managers.
Did not keep the promise of keeping plants opened. A formal and hierarchical food Giant.
Source: Daily Mail, UK
Overcome the Resistance Education and Communication
Show those effected the logic behind the change
Ex: Caterpillar educates the change very often
Participation Participation in the decision process lessens resistance
Ex: 3M encourages employees to participate change events
Building Support and Commitment
Counseling, therapy, or new-‐skills training
Ex: GM provides relocation and retraining during plant closing
Develop Positive Relationships
People are more willing to change if they trust the managers
Ex: Frequent visiting the subordinate
Implementing Change Fairly
Be consistent and procedurally fair
Ex: Meet the promises
Manipulation and Cooptation
“Spinning” the message to gain cooperation
Ex: GM convinces Union by promising employee beneXits
Selecting people who accept change
Hire people who enjoy change in the Xirst place
Ex: GE replaced 12 out of 14 top managers during restructuring
Coercion Direct threats and force Ex: Power of persuasion
The Process of Change
Source: ServiceMaster, Newscom.
Lewin’s Three-‐Step Model
• Unfreezing the status quo • Changing to a new state • Refreezing to make the change permanent
Stephan Robbins, Mary Coulter, Organizational Behavior 15th ed.
Stephan Robbins, Mary Coulter, Management 9th ed.
John P. Kotter: Why Transformation Efforts Fail? Not establishing a great enough sense of urgency
Too many managers but no leaders Needs 75% of the managers be convinced
Not creating a powerful enough guideline coalition
Underestimate the difXiculties Oppositions can gather and stop the change
Lacking a vision Without a vision, a transformation effort can dissolved into confusion and misdirection
Under communicating the vision The change startle if no people understand
Not removing obstacles to the new vision
Organizational structure: Narrowed job design Individual interest: Compensation or appraisal
Not systematically planning for of creating short-‐term wins
Time make people loss momentum to change Shorten wins: 12-‐24 months
Declaring victory too soon Declare the war won too early is catastrophic
Not anchoring changes into culture Unless rooted, changes are easily degradable
John P. Kotter, Harvard Business Review, Jan. 2007
Declaring Victory Too Soon
Source: Troy (Movie), International Movie Database
Jim Kilts Made Change to Gillette Revise the appraisal system Setup appraisal system according to job description.
The evaluation should be run quarterly or annually. Flatten the organizational structure
Remove hierarchy to facilitate communication.
Communication Chairman’s page and video presentation distributed to all employees.
Participative management Weekly staff meetings and overseas visiting.
Refer to “Gillette Company (B): Leadership for Change” Jim Kilts, Former CEO of Gillette
• First day: – Operating committee staff meeting – Communicate his style, philosophy, expectations, and management process – Promising no lay-‐off but emphasize performance
• First week: – Communicate the Circle of Doom to rise the sense of urgency – Start one-‐on-‐one meeting with managers
• First Month: – Deliver video presentation and chairman's page – Setup short-‐term agenda and quarterly priorities – Change the organizational structure
Refer to “Gillette Company (B): Leadership for Change”
Kotter’s Eight-‐Step Plan Establish a sense of urgency Identify crisis, potential crisis,
or major opportunities Ex: Jim Kilts’ “Circle of Doom”
Form a powerful coalition Assemble a team with enough power to lead the change
Ex: Set “international operating ofXice”
Create a new vision Create a vision and set strategies for the vision
Ex: Jim Kilts’ “My Vision and My style”
Communicate the vision Using very vehicle possible Ex: Speech, meeting, video, and webpages
Empower others to act on the vision by removing obstacles
Remove barriers undermine the changing efforts
Ex: Removing layers and hierarchies
Plan for, create, and reward short-‐term “wins”
Visible performance improvements and reward it
Ex: Month-‐>Quarter -‐>Annual goal
Consolidate improvements and make adjustments
Reinvigorating the process with new goal
Reinforce the change Articulate the connection between new ways and success
John P. Kotter, Harvard Business Review, Jan. 2007; Gillette Compnay (B), Harvard Business School Case
Action Research • A change process • Based on the systematic collection of data • Selection of a change action based analysis
Diagnosis Change agent collect information, concerns, and needed changes from members
Analysis Make information into primary concerns, problems, and possible actions
Feedback Share with employees what has been found. Facility employees to develop action plans
Action Employees and change agents carry out actions
Evaluation Evaluate the effectiveness referring to the initial data
Stephan Robbins, Mary Coulter, Organizational Behavior 15th ed.
Organizational Development • Techniques and programs to change interpersonal work relationships
• A planned to increase organization’s effectiveness and health
OD Concerns Values Respect for people Individuals are respected and treat with dignity
Trust and support Need a trusting, authentic, open, and supportive climate
Power equalization
Eliminate hierarchies and control
Confrontation Problems should be openly confronted
Participation To make people commit to change Stephan Robbins, Mary Coulter, Organizational Behavior 15th ed.
Organizational Development Techniques Sensitivity Training
Members discuss themselves and their interactive processes in a free and open environment, facilitated by a behavioral scientist.
Ex: Benedictine University’s OD team help Abbott realign culture with mission and value
Survey Feedback Identifying discrepancies among member perceptions via surveys
Ex: KJ Associate help a school identify issues in education
Process Consultation (PC)
Process consultants observe group member's interaction and provide suggestions
Ex: Avid Work help client accelerate product development cycle
Team Building Using high-‐interaction group activities to increase trust and openness among members
Ex: Partnering Resources help to facilitate executive team develop new approaches
Intergroup Development
Increase cross-‐function or cross-‐group interaction and understanding
Ex: Communication between IT and other departments
Appreciative Inquiry (AI)
Emphasis group’s success, via discovery, dreaming, design, and destiny
Ex: WorldsView used AI to create shared value
Organization Development Network <http://www.odnetwork.org>
Change and Innovation
Source: Evan Williams (leO), founder of TwiSer, New York Time.
DeXinition of Innovation • A new idea applied to initiating or improving a product, process, or service
Invention Innovation The introduction of new product, process, or service
Improves or makes a signiXicant contribution to an existing product, process or service
Ex: Introduction of electrostatic cloth Ex: P&G used electrostatic cloth to make Swiffer mop
Source: P&G
Stimulate Innovation
• Structural variables – Organic structures – Long-‐tenured management – Slack resources – Internal communication
• Experimental Culture • Training and Development
Idea Champions Individuals who take an innovation and actively promote the idea
Jack Welch Made GE a Learning Organization
Bureaucracy and Centralized
Self-‐learning and Innovative
Leadership Strong commitment and team-‐leading capability
Followership Achievement driven and Agree to the standards
Human Resource Systems Strong recruitments, supportive training sessions, effective appraisal system
Source: GE: Two Decades Transformation, Harvard Business School Case
Jack Welch, Former CEO of GE
To Build a Learning Organization
Establish a Strategy
Make explicit its commitment to change
Ex: Hands-‐on appraisals and continuously releasing initiatives
Redesign the Organization’s Structure
Flatten the structure and use cross-‐functional systems
Ex: Eliminating layers and use workshop for cross-‐functional coordination
Reshape the Organization’s culture
Supportive Taking risks and admitting failure Unlock the real openness
Ex: Training sessions, reemphasize the openness, and frequently aligning people with the learning culture
Source: Based on P. M. Senge, The Fifth Discipline (New York: Doubleday, 1990).
Starbucks: Return to Its Roots
Starbucks Facing Fast Extension During 2006
• Starbucks went from just 11 stores in 1987 to 2,600 in the year 2000
• Howard Schultz: “An aura. A spirit was missing. The stores were lacking a certain soul.” “Take the culture back.”
• Afterward: Sales declined and bout 100 store openings being canceled and hundreds more stores being closed.
• A bold move: All 7,000 Starbucks stores were closed for a single afternoon as part of a training effort of 135,000 baristas.
Howard Schultz, chairman and CEO of Starbucks
Thank You for Listening!