Change Management – A HR Perspective

Dr Ravikumar Stephen J

www.fablar.in

Good News …

• In 1910, the Life-span of human beings (Global average) was between 30-45 years

• In 2010, the Life-span of human beings (Global average) is between 67.2 to 75 now.

Longevity of Human beings have substantially improved.

Bad News …

• A full one-third of the companies listed in 1970 Fortune 500, had vanished in 1983.

• The average life expectancy of MNCs – Fortune 500 or its equivalent – is between 40 to 50 years.

Changes in the Market & Technology were the major reason for their premature death.

Should all the Fortune 500 & MNCs destined to die?

• The Answer is:

Absolutely NO• The companies that had the characteristics of a

“Living Company” have survived the onslaught of the time.

• The Royal Dutch/Shell, DuPont, The Hudson Bay Company, W.R. Grace, Kodak, Mitsui, Sumitomo, Daimaru, Ford Motors are more than a Century old.

There are companies that are Members of The Ter-centenarians (300 years old) Club.

Story of STORA of Sweden

• In the early 14th century, the kings in Europe were establishing Nationhood States, so was the King of Sweden, Eric of Pomerania.

• He created the Kalmar Union, which includes Sweden, Norway & Denmark.

• In his quest, he was nationalizing every inch of land under his control.

He was successful in his endeavor, except the mines owned by the Stora, at Dalecarlia, a province of Central

Sweden.

Story of STORA (Stora Esno) of Sweden

• Stora was just 270 years old mining company then, headed by Engelberkt Engelberktsson.

• Engelberkt mobilized the support of his employees, who took arms and fought with the armies of King of Sweden.

• He had the support of the peasants, who were living around the mines.

Stora, could retain its independent identity, till it got merged with Esno (www.storaesno.com) of Finland in 1998.

The Success of STORA:

• For the employees of Stora, loyalty to the company superseded the law of the land, and the word of the Master (employer), weighed heavier than that of the judge / ruler.

Products of Stora in 1288 AD

In recent times, we have witnessed a similar situation in the Toothukudi Plant of the Sterlite

Industries India Ltd (Vedanta Group).

Stora - Changes in 700 years

• Changes in Product line:Copper Mining - to

Forest Exploitation – to Iron Smelting – to Hydropower – to Paper & Wood Pulp – to Chemicals

• Changes in Technology:Steam – to Internal

Combustion – to Electricity – to Microchip

700 years of Business Success & CHANGEs were possible, at Stora, as the employees thought & acted

as if they own the company.

ROYAL DUTCH/SHELL, GENERAL MOTORS, ABB, ALSTOM & FORD MOTORS ADOPTED “CREATING A LEARNING ORGANIZATION” AS THEIR CHANGE MANAGEMENT STRATEGY …

Companies That Fail to Learn, Fail to Change as well. Hence,

The Companies that are surviving for longer period are the ones, which had the characteristics of a

‘Learning Organization’.

FN 74 Project ( Ford Lincoln Continental)The ‘LEARNING

LABORATORY’ of FN 74 Project made significant impact in:

•Internal Coordination

•Quality

•Productivity

•Cycle Time Reduction in Project

Ford Experience:

“If you want to improve Quality, help the Team Members to develop better personal relationship.”

-Fredric SimonProgram Manager, FN 74 Project

The Success of Learning Laboratory at the FN 74 Project, Made Ford Motors to adopt ‘Learning Organization’ as their Corporate

Strategy for Change Management.

Learning Organization for Change Management

Like Stora, FORD has demonstrated how Creating a Learning Organization had helped them to remain

stable in an ever-changing market.

Personal Mastery

• Learning to expand our personal capacity to create the results we most desire, and creating an Organizational environment which encourages all its members to develop themselves towards the goals and purpose they choose.

Mental Models

• Reflecting upon, continually clarifying, and improving our internal pictures of the world, and seeking how they shape our actions and decision.

Shared Vision

• Building a sense of commitment in a group, by developing shared images of the future, we seek to create and the principles and guiding practices by which we hope to get there.

Team Learning

• Transforming conversational and collective thinking skills, so that group of people can relatively develop intelligence and ability greater than the sum of individual members talents.

Systems Thinking

• A way of thinking about and a language for describing and understanding, the forces and interrelationships that shape the behavior of systems. This disciple helps us to see how to change systems more effectively, and to act more in tune with the larger process of the natural and economic world.

Learning Organization Initiative at Ford:

• The following Three Layered Learning was put in action:– Capstone– Leadership Initiative– Executive Partnering

This teaching initiatives have delivered $ 2 billion to Ford’s bottom-line, either in increased revenues or

decreased costs.

The Teacher-Leader Protégé ratio was 1:37.

Ford Curriculum

Ford Experience:

While shifting from ESCORT to FOCUS, Ford Motors required a Cultural Shift …

Escort Focus

•Ford realized that:•The Change had to be understood on the individual level.•Every Manager, Every Designer, Every Engineer & Every Person in the Plant had to change his / her way of thinking

Employees of FORD have delivered, because their Mind-sets have changed.

SOME MIND-SETS OF BUSINESS LEADERS

Breaking the Mind-set is pivotal to “Change Management

BELIEFS & ASSUMPTIONS ARE LIKE LIGHT SWITCHES THAT CAN BE TURNED ON AND OFF.

Mind-set of the CEOs - 1

Ladder of Inference

Without ‘Systems Thinking’ approach in HR Management, it is not possible to change the beliefs & assumptions of people.

TO BE EMPLOYABLE, THE INDIVIDUALS HAVE TO INVEST HIS PERSONAL TIME FOR LEARNING.

Mind-set of CEOs - 2

Employees will learn, something that may not align with your organizational goal and may rather learn something

that might be your competitor’s requirement.

VISION STATEMENT IS ONE WAY (TOP DOWN) AND & STATIC.

Mind-set of the CEOs - 3

Shared Vision involves the following Process:•Telling•Selling•Testing•Consulting•Co-creating

“You do not enroll others; people only enroll themselves.”

BEFORE YOU PUT A NEW WAY OF WORKING INTO PRACTICE, YOU HAVE TO CONVERT THE CHAIRPERSON

Mind-set of HR Heads - 1

Chairman’s Time is essentially need to be spent in developing Green Fields. Hence, START SMALL and based on the

success, seek the Chairperson’s intervention to make it a corporate strategy.

Learning Laboratory at FORD Motors was first experimented with FN 74 Project; so was the Cellular

Manufacturing at CDG Cell at ALSTOM.

TO CREATE “LEARNING ORGANIZATION”, YOU NEED COMPUTER-BASED ‘MANAGEMENT FLIGHT SIMULATORS’.

Mind-set of HR Head - 2

First start with Human Process Laboratory. Once authentic communication, between employees, transform existing resources

into Products and Services of greater worth, the CEO will come forward to invest more Learning Infrastructure.

At the Learning Laboratory of FN 74 Project, Non-computer Part of Learning Had Greater Impact.

TO START “TEAM LEARNING”, HIRE AN EVENT MANAGER TO ORGANIZE AN OUTDOOR EVENT.

Mind-set of HR Heads - 3

Any Team Learning that do not extend for a minimum of five days, with the number of participants per batch more than 20

and NOT under a professional Facilitator, is capable of generating only euphoria and not long-lasting impact.

At Perwaja Steel, Malaysia & at ALSTOM India (HEAVYWEIGHT TEAM of CDG Product Cell) a week-long Team Initiative turned around the company without any

capital investment.

Heavyweight Teams

RECRUIT ONLY FROM THE SAME VERTICAL.

Mind-set of the Knowledge-based Companies

Story of Darjeeling Tea

• In 1834 the then Governor General of British India Lord William Bentinck appointed a Tea Committee to advise on feasibility of commercial tea cultivation in India.

• In 1835, a scientific commission was constituted with Dr N Wallich, Dr W Griffith and Dr J McClelland to report on the Indian indigenous tea plants and to advise on the most favorable localities for starting experimental tea gardens.

Lord William Bentinck

Story of Darjeeling Tea

• Dr Wallich favored the Himalayan region while the other two favored Upper Assam where wild tea existed.

• In 1836 China tea seeds were imported & nurseries were raised in the government Botanical Gardens in Calcutta and the plants were sent to Upper Assam, Dehra Dhun, Kumaon & the Nilgiri hills.

Tea-seedlings planted in the Nilgiris survived.

Dr Nathaniel Wallich

Story of Darjeeling Tea• Many seedlings that were planted at Saikhowa in Upper

Assam (where wild tea already existed) died. • The seedlings planted in Bhimtal & Almora (Himalayan

regions) were successful.• Later on, experimental gardens were successfully

established in Kumaon, Garhwal & Kangra districts on the Himalayan foothills, with the tea-seedlings of Bhimtal & Almora.

• Dr Campbell brought tea seeds in 1841 from the Kumaon region & started growing tea on an experimental basis near his residence at Beechwood, Darjeeling.Dr Campbell’s experiment was successful & soon several tea

estates started operating commercially in Darjeeling & in Assam.

Point for Introspection:

Darjeeling Tea survived in the turbulent climates of Bengal & Kumaon region, so is the Professionals from Manufacturing Sector

•Professionals who are groomed by the IT sectors are like the tea-seedlings planted in Saikhowa, which failed to with-stand the climate of Upper Assam.

•Professionals who have moved from Manufacturing sectors to IT companies are like the tea-seedlings that survived at Bhem Tal & Almora and transferred from Kumaon regions to Darjeeling).

“Problems cannot be solved at the same level of awareness that created them.” - Einstein

Highly committed employees from other verticals, like Manufacturing sector might have “Creative Problem Solving Techniques “ for the

problems of IT sectors, during the turbulent times.

WHEN LESS NUMBER OF IT PROFESSIONALS IN SILICON VALLEY COULD DEVELOP NEW SOFTWARE, WHY DO THE LARGE NUMBER OF IT PROFESSIONALS IN BENGALURU ARE UNABLE TO DEVELOP?

The Million $ Question?

The Change Needed in IT Sectors !!!

As long as the concept of “Benching” is hanging like a dagger above their head of each IT professionals, they cannot be successful in their Creative Venture.

Be A Maverick, If you Need Real Change

•A Business establishment is tantamount to a living organism – Biological Corporation.•It is living , volitional beings – like people – complete body, mind & spirit, capable of extending the life-span.

Start our journey from Knowledge Management , so that we can Create “Biological Organization”

Thank You

Dr Ravikumar Stephen J

cfo@fablar.in

www.fablar.in

Suggested Books:1.The Living Company by De Geus2.Transforming the Organisation by Francis J Goullart & James N Kelly3.The Fifth Disciple Field Book by Peter Senge, Richard Ross, Art Kleiner, Bryan Smith & Charlotte Roberts

Q & A SESSIONKcommunity, Chennai Meeting – 15-11-2010