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Positive Changein Organizations

An External Consultant’s Macro Viewpoint

• Customers

• Markets

• Competition

• Suppliers

• Our Culture

• Technology

• The Economy

• Government

THE BUSINESS

CUSTOM

ERS

COMPETITON

TECHNOLOGY

OUR CULT

URE

SUPPLIERS

MARKETS

Business Influencesas Drivers

THE ECONOMY GOVERNMENT

Influences apply varying pressure to the business

Effect of Business Influences

• Influences apply varying amounts of pressure on the business– Sometimes predictable

(e.g. seasonal market trends)– Sometimes unpredictable

(e.g. revolutionary new product developed by competition)

• The Business will be affected by the “pressure”– Successful businesses will respond and adapt– Unsuccessful businesses will be un-responsive and stagnate

Change Thinkingto Change Behavior

If you want a different outcome, you must change either the people, the process, the product, or all three.

The Corollary

If you always do what you have always done, you will get what you have always gotten!

The Law

Change Needs a Compelling Reason

• Without compelling reasons, CHANGE will NOT happen– Change must be connected to the Organization’s business

strategy– Change must have a positive impact on the business

influences– Change must be adopted by all stakeholders– Purpose, goal and reasons for CHANGE must be

communicated thoroughly and regularly– Environmental Factors supporting CHANGE MUST be

present

Change the Environment:Make it Positive!

Vision Skills WIIFM ResourcesAction Plan

Positive Change=

MissingVision

Skills WIIFM ResourcesAction Plan =

VisionMissingSkills

WIIFM ResourcesAction Plan =

Vision SkillsMissing WIIFM

ResourcesAction Plan =

Vision Skills WIIFMMissing

ResourcesAction Plan =

Vision Skills WIIFM ResourcesNo Action

Plan =

Confusion

Anxiety

GradualChange

Frustration

False Start

Strategy Must Become Measurable Action

Knowing (Thinking

)

Doing (Acting)

Integrated Positive Change Process: Converting Strategy to Operational Results

Execution

ExpertiseInitiatives Products

/ Services

Tools People

* After IPS Associates Model

STRATEGYSTRATEGY OPERATIONSOPERATIONSS

TR

UC

TU

RE

ST

RU

CT

UR

E

CU

LT

UR

EC

UL

TU

RE

PORTFOLIOPROJECTS

Goal: Continuous Flow in Every Process

CustomerDemand

DeliveredProduct / Service

Time

CustomerDemand

Delivered Product / Service

Current Practice in Most Businesses

Continuous Flow Environment (Produced thru Continual Improvement)

Interrupted Flow of Information and Material

Continuous Flow of Information and Material

Waste & Waste & VariationVariation

Waste or Waste or VariationVariation

• Overproduction• Waiting• Transportation*• Inventory**

• Defects• Motions (Unnecessary)

• Processing• Human Potential

* Transportation waste typically accounts for about 40% of the activity time in a traditional

manufacturing plant.

* Transportation waste typically accounts for about 40% of the activity time in a traditional

manufacturing plant.

* 30-40% of the floor space in a traditional manufacturing plant is taken by inventory (W.I.P. &

F.G.I.).

* 30-40% of the floor space in a traditional manufacturing plant is taken by inventory (W.I.P. &

F.G.I.).

Principle Types ofWaste / Variation

How Innovation(Change) is Adopted

0

20

40

60

80

100

INNOVATOR EARLY ADOPTER EARLY MAJORITY LATE MAJORITY LAGGARD

TYPE OF INNOVATION ADOPTER

PERC

ENT

OF

TOTA

L PO

PULA

TION

- (%

)

NORMAL (Rogers)

Is This Your Organization?

0

20

40

60

80

100

INNOVATOR EARLY ADOPTER EARLY MAJORITY LATE MAJORITY LAGGARD

TYPE OF INNOVATION ADOPTER

PERC

ENT

OF T

OTAL

PO

PULA

TION

- (%

)

SKEWED TO LAGGARD

Goal: Continual Renewal

0

20

40

60

80

100

INNOVATOR EARLY ADOPTER EARLY MAJORITY LATE MAJORITY LAGGARD

TYPE OF INNOVATION ADOPTER

PERC

ENT

OF

TOTA

L PO

PULA

TIO

N - (

%)

SKEWED TO LEARNINGORGANIZATION

Traits of a Learning Organization

• Visual Management (Highlighting Problems for rapid, robust resolution)– Status Boards– Colors– Right-Sized Product Bins– Andon Lights (Production Signaling)

• Standardized Work – Simple Documentation w/Pictures & Few Words– Provides Consistency, Quality– Improves Worker Flexibility through Training

Traits of a Learning Organization

• Flexible Workplace– Portable work stations– Overhead Power– Ability to changeover to meet changing demand

• Pull Production – Reacts to needs as material is consumed– Kanbans, Marked Floor Locations

• Quality at the Source– Minimizes Defects and Cost of Defects– Minimizes impact on production schedules

Performance Measures

• Balanced Scorecard Metrics linked to Customer Satisfaction

• Metrics used as decision-making tools– Reinforce desired behaviors– Must change as the transition from mass to lean

processes occurs– Examples:

Dock-to-Dock Time Call Response Time

Factors CausingFailed Change

• Acting, but not appropriately(reaction with no vision)

• Blinded by past success• Maintaining a rigid devotion to the current-state

(status quo)• Allow strengths to become weaknesses• Suffering from active inertia

Successful Change Factors

• Genuine commitment by all employees to the success of the company

• Acceptable work pace (sustainable, allowing for learning and improvement)

• Training at all levels of the business• Well-executed Continual Improvement

– Waste & Variation Elimination that leads to better process throughput everywhere in the organization

– Robust continuous improvement process (Plan, Do, Check, Act [PDCA], Define, Measure, Analyze, Improve, Control [DMAIC] or similar)

Successful Change Factors

• Understand the pressures, act appropriately• Invest in innovation and improvement whether times

are good or bad• Make process management and improvement a

priority• Recognize the need for change. . . .in advance• Allow organizational culture to evolve and change• Take appropriate risks, reward risk takers• Respect non-traditional or controversial thinking• MUST BE LEAD AND DRIVEN FROM THE TOP

Summary

• Positive Change is possible if– The Organization’s Vision supports change and risk-taking,

resulting in learning and continual improvement– People have the proper skills– It is seen as valuable by those being asked to change

(There is a “What’s In It For Me”)– Sufficient resources are made available– There is a plan (defined process) to affect the change