A.I. and Change Management...hD Some Statistics 1. O´Reilly 2019 survey “AI Adoption” (1,388...
Transcript of A.I. and Change Management...hD Some Statistics 1. O´Reilly 2019 survey “AI Adoption” (1,388...
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Juan C
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A.I. and Change Management
Juan Carlos Pastor, PhDProfessor of Leadership
IE Business School
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Digital Revolution
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Some Statistics
1. O´Reilly 2019 survey “AI Adoption” (1,388 companies):
– 85% of respondent organizations are evaluating AI or using it in production.
– 51% identify as “mature” adopters of AI technologies.
2. Accenture 2019 survey “Reworking the Revolution” (200 C-suite executives):
– 75% say they are accelerating investments in AI right now.
– 72% say they are responding to a competitive forces.
3. McKinsey 2019 “Global AI Survey” (2,360 executives)
– 25% increase in AI adoption compared to 2019.
– 63% of executives report revenue increases and 44% important cost reductions.
– 75% of respondents plan to increase AI investment in the next 3 years.
4. Tata Consultancy 2017 Global Trend Study (835 Executives)
– 68% of Companies use AI for IT Functions, but.
– 70% Believe AI’s Greatest Impact by 2020 Will be in Functions Outside of IT such as
Marketing, Customer Service, Finance, and HR.
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MD Anderson Cancer Institute
• The MD Anderson cancer
institute tried a ‘moonshot’
program to deploy AI for the
detection and treatment of
certain cancers.
• After spending $62m, they
had to stop the program
because of a lack of results.
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Pfizer and IBM Watson
• Pfizer, the American multinational
pharmaceutical company wanted
to use the IBM Watson data
analytics processor to rapidly
identify new drug targets and
more efficiently select patients for
clinical trials.
• It didn’t work out and even IBM
announced it was ending sales of
Watson for Drug Discovery.
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Two Challenges in the Adoption of AI
Technical Capabilities Organizational Capabilities
1.- Hard• Physical Assets
• Computer Hardware
• Data
• Legacy Systems
2.- Intangible• Technical Knowledge
• IT Development
• Collaboration Strategy
with IT Dept.
1.- Strategy
• Adding Value
• Supporting the Strategy
2.- Culture
• Innovation &
• Risk taking
• Collaboration
3.- People
• Skills
• Attitudes
4.- Leadership Talent
• Support for Change
• Leadership Style
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What is the main bottleneck holding back further IE Adoption?
Source: O´Reilly, 2020
4. Data
5. Technical Infrastructure
6. Legal Concerns
1. Culture
2. Business Alignment
3. People
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Juan C
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hDFailure Rate in Change Initiatives
Kotter (1996). The failure rate in
change management programs is
about 70%.
Hammer and Champy (2009).
Between 50 and 70% of
reingeneering programs fail.
Cabrey y Haughey
(2014). Only 18% of
companies say they are
effective managing
change.72%
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Why would People Resist Change?
Substantial
Disagreements
Do not
Understand
Need for Respect Feel Incompetent &
Fear of Failure
Feel Rushed &
Pushed
Others?
Peer Pressure &
PoliticsLoss of
Control
Rewards (WIIFM)
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Ron Leeman “50 Reasons Why We Cannot Change”
Ron Leeman: https://www.linkedin.com/feed/update/urn:li:activity:6381381984496775168
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Juan C
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hDThe Kübler-Ross Change Curve
Perform
ance
Unsuccessful
Change
Successful
Change
Time
WHY?
Dip
Start
Change
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Feeling the Dip
• People might be at
different stages
during the change
process
• How do we lead
people in each group?
DENIAL
ANGER
RESISTANCE
DISORIENTATION
COMMITMENT
EXPERIMENTATION
ACCEPTANCE
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Juan C
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hDTwo Phases to Manage Change
Understanding
Envisioning
Strategy, Objectives
Organizational Design
Engagement
Communicate a
Sense of Urgency
Motivate changes
Consolidate changes
Motivate
Change
Consolidate
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Systems Thinking
Spanish
Opening
Berlin
Defense
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Intrategic Understanding of the Organization
Hard S´s
Soft S´s
McKinsey 7-S Model
Strategy
StyleSkills
Systems
Structure
Staff
Shared
Values
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La OrganizaciónThe High Performing AI Organization
Culture
People Communication
Leadership
HR SystemsIT / Technology
StructureStrategy
AI
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O’Reilly
AI Alignment with the Mission/Strategy
O’Reilly
Functional Area Industry
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AI Alignment with the Organizational Culture
Steep Pyramid
Formal Power
Low Span of Control
Slow Decision Making
Flat Organization
Personal Power
High Span of Control
Teamwork
Increase in Communication
Interpersonal Skills
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Flat Structures: From Teal and Halocracy Structures
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3M Principles to Promote Innovation
The 3 Principles of
William McKnight
1.You have to accept that mistakes
are made.
2.Do not micromanage your team.
3.Delegate.
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45% 11% 69% 27%
AI Alignment with People
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hDAI Alignment with Leadership Styles
1.- Building Trust & Integrity 2.- Encouraging Innovation
3. Inspirational Motivation 4.- Development - Coaching
Digital Savvy
The Digital Transformational Leader
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La OrganizaciónThe High Performing AI Organization
CultureOpen, Innovative
Sharing knowledge
PeopleCreative, Technology Savvy
Team players
Communication skills
CommunicationFluid and Intensive
Multidirectional
Honest Communication
LeadershipTransformational Leadership
Authentic, Inspirational
Innovative, Coaching
HR Systems1.- Selection: Competencies
2.- Training: Intensive, continuous
3.- PA: Teams, Performance
4.- Rewards: Team work,
Collaboration, Distributive.
IT / TechnologyUpdated Systems
Avoid Legacy Systems.
Strategic IT Department
Integrated in Social Network
StructureAgile, Dynamic,
Flat Structure, Teams
StrategyResearch, IT, Customer Service,
Marketing, Operations ….
AI
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Changing Ford: Inside Mulally´s Mind
Mulally´s vision:
“People working
together as a lean
global enterprise for
automotive
leadership”
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From the Solid and Realizable Organization…
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To the Agile Organization!!
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hDA Vision by itself is not enough
"A dream is just a dream.
A goal is a dream with a plan and
a deadline."
Harvey Mackay
“Action without vision is only
passing time,
vision without action is merely day
dreaming, but vision with action
can change the world.”
Nelson Mandela
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The Importance of execution
“ In the first waves of the
program, I spent 90 percent of
my time designing the program
and 10 percent communicating
it to people. And now I do
exactly the opposite: 10 percent
for the design and 90 percent
for involving people” Julio Linares Executive chairman
Telefonica S.A. (2005)
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Juan C
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hDTwo Phases to Manage Change
Understanding
Envisioning
Strategy, Objectives
Organizational Design
Systems Thinking
Engagement
Sense of Urgency
Communicate
Motivate changes
Consolidate changes
Motivate
Change
Consolidate
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Motivate
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Our historical advantage has been eroded by intense
competition and changing customer needs – if we change we
can regain our leadership position and become a great
company.
From Good to Great story
We’re performing below industry standard and must
change dramatically to survive. We can become a top
performer in our industry by exploiting our current
assets and earning the right to grow.
The Turnaround Story
The importance of having a story of change
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A Compelling story of change
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Impact on Society Impact on our Customers
Impact on the Working Team Impact on “ME” personally
Building a better
society
Developing your
community
Environmental
responsibility
Make their work
easier
Provide superior
service to our
customers
Achieve remarkable
goals together
Creating a caring/high
performing
environment
Learning and personal
development
Salary
Bonus
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NOKIA CEO Stephen Elop in 2011
Nokia Global –All Employees
...there is intense heat coming from our competitors, more rapidly than we ever expected…
…Apple disrupted the market by redefining the smartphone…
…Google has become a gravitational force, drawing much of the industry's innovation to its
core.”
We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market
fast enough.
We poured gasoline on our own burning platform. I believe we have lacked accountability and
leadership. We had a series of misses. We haven't been delivering innovation fast enough.
We're not collaborating internally. Nokia, our platform is burning.
Burning Platform
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Key Opinion Leaders
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Change
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Juan C
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Start Small and Make it Scalable
1. Pilot programs.
2. Revisable (can be reversed).
3. Divisible (carried out in phases).
4. Concrete (tangible).
5. Familiar (past experience).
6. Congruent (fits with organization's goals
and values).
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Consolidate
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Consolidate the Changes
Showcase SuccessRecruitment &
Promotion
Storytelling of
success stories
Rewards (WIIFM)
Continue to review
Monitoring &
FeedbackRealign Systems
Reconsider Goals if
environment changes
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Juan C
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