Change Management for Competitive Advantage - Managing People Group Presentation

Change Management For Competitive Advantage

A Tale of Two Era

Agenda

Successful Change

ElementsiChange Conclusion

Change Management Background


Successful Change



“Whosoever desires constant success must change his conduct

with the times”

Change Management – A Timeless Double Edged Sword

“There is nothing more difficult to take in hand, more perilous to conduct,

or more uncertain in its success, than to take the lead in the

introduction of a new order of things”

Nicollo Machiavelli (1469-1527)

Renaissance Philosopher

Kotter and Lewin

Establish A Sense Of Urgency

Form A Coalition

Create A New Vision

Communicate The Vision

Empower Others: Remove Barriers

Create & Reward Short Term Wins

Consolidate, Reassess & Adjust

Reinforce The Changes

Eight Steps Process(Kotter, 1995)

Three Steps Model

(Lewin, 1947)

Unfreeze

Change

Refreeze

WORLD POLITICStechnologyEconomic

SHOCKScompetitionSOCIAL TRENDSNature of Workforce

“More Than Half Of Organisations Attempting Transformation Programs

Failed”(Kotter, 1995)

We’ve Got The Concept!

“Change Management programs has a 70% Failure Rate”

(Kotter, 2012a; Keller & Aiken, 2008; Miller, 2002)Or Did

We??

“60% Change Project Fail to meet schedule,

budget and quality goals”(IBM, 2008)

Major Change Challenges

Changing mindsets and attitudes

Corporate culture

Complexity is underestimated

Shortage of resources

Lack of commitment of higher management

Lack of change know how

Lack of transparency because of missingor wrong informationLack of motivation of involved employees

Change of process

Change of IT systems

Technology barriers

Hard FactorsSoft Factors

MAJOR CHANGE CHALLENGES

58%

49%

35%

33%

32%

20%

18%

16%

15%

12%

8%

(Source: IBM, 2008 )

What Makes Change Successful

Top management sponsorship

Employee involvement

Honest and timely communication

Corporate culture that motivates and

Change agents (pioneers of change)

Change supported by culture

Efficient training programs

promotes change

Adjustment of performance measures

Efficient organisation structure

Monetary and non-monetary incentives

92%

72%

70%

65%

55%

48%

38%

36%

33%

19%

Hard FactorsSoft Factors

WHAT MAKES CHANGE SUCCESSFUL(Source: IBM, 2008 )

“Change Is Complex”Lewin assumes change is Linear where

in current environment its no more applicable

(Burnes, 1996; Higgs & Rowland, 2006)

What’s The Problem?

“Need For Speed”

GE Successfully Implemented Change, But It Took Them 5

Years! Is it fast enough today?

(Jick, 1995; Kotter, 2012b)

“Network Is In”Kotter’s 8 Steps is based on organisation with traditional

hierarchal structure (Kotter, 2012b) “Leadership Ability ”

..or the lack of it causes failure in change execution

(Merell, 2012; Higgs & Rowland, 2010;

Aiken et al., 2011; McKinsey, 2010; Miller, 2002)

Successful Change Elements

Successful Change



Is There A Solution?

1Change

Approach

2Leadershi

p Behaviour

3Change

AcceleratorsStatus Quo

Desired State

Element #1: Change Approach‘One Look’

Local Differentiation

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Master Change‘I Trust People To Solve Things With Us’

Emergent Change‘I Can Only Create Conditions For Change’

Directive Change‘I Can Manage Change’

Self-Assembly Change‘Launch Enough Initiatives & Something Will

Stick’

Change Approach

(Source: Higgs & Rowland, 2006 )



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Stick’

Change Approach

Master Change


Top Down But Open To AdjustmentsCommon Plans, Agreed ProjectsBuild Skills In Leading ChangeNetworks & Connections Established Across Organisations

Identify Important Change Personnel And Keep Them

Successful In Long Term, Continuous

Change



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Stick’

Change Approach

An Overall Purpose, Adjusted With Needs

Few Big Rules As GuideInitiatives Star Small & Build UpInformal Networks To Build Understanding & Energy

Step-by-Step, Not Whole Plan In Advance

Tackle Hot Spots

Emergent Change

Most Effective In High Magnitude, Complex

Change

Element #2: Leadership Behaviour

Shaping Behaviour‘Without Me Nothing

Will Happen’

Creating Capacity‘We Cannot Change

Unless We Learn & Grow’

Framing Change‘With Clear Boundaries, People Can Contribute’

LEADERSHIP

BEHAVIOUR

Works With Others To Create Vision & Direction

Helps Others To See Why Things Need Changing And Why There’s No Going Back

Shares Overall Plan Of What Needs To Be Done

Gives People Space To Do What’s Needed, Within Business Goals

Seeks To Change How Things Get Done Not Just What Gets Done

Develop People’s Skills In Implementing Change

Lets People Know How They Are Doing And Coaches Them To Improve

Gets People To Work Across Organisational Boundaries And Along Key Processes

Makes Sure The Organisation’s Processes And Systems Support Change


“Mover And Shaker” – Sets Pace For Others To Follow

Expects Others To Do What They Do

Personally Expressive And Persuasive

Holds Others Accountable For Delivering Task

Personally Controls What Gets Done

Element #2: Leadership Behaviour


Will Happen’

Unsuccessful In Implementing Change –

Works Against Implementation




LEADERSHIP

BEHAVIOUR

Most successful style in high magnitude and complex change that effects large

numbers of people within the organisation

Effective style in the long term change, particularly in

organisation facing continuous change


Element #3: Accelerate Change

(Source: Kotter, 2012 )

Build & Maintain Guiding Coalition

CREATE SENSE OF URGENCY

AROUND SINGLE BIG

OPPORTUNITY

Institutionalise Strategic

Changes In The Culture

Formulate strategic vision &

initiatives to capitalise on opportunity

Communicate Vision & Strategy

Ensure Network Removes Barriers

Celebrate Visible Significant Short

Term Wins

Never Let Up, Keep Learning

From Experience

Form Change Team From Trusted Volunteers

Select From Different Hierarchy Department, Level & Skills

No Internal Hierarchy Enables Ease Of Information Gathering & Processing

Kotter’s 8 Accelerators

Element #3 Accelerate Change




AROUND SINGLE BIG

OPPORTUNITY








Term Wins


From Experience

Form Change Team From Trusted Volunteers

Select From Different Hierarchy Department, Level & Skills

No Internal Hierarchy Enables Ease Of Information Gathering & Processing






AROUND SINGLE BIG

OPPORTUNITY








Term Wins


From Experience Feasible & Easy To Communicate

Emotionally Appealing & Strategic

Inspire Network Of Change Creation By Employee

Gives Objective, Information & Direction – Able To Make Decision On The Fly Without Need For Decision At Every Turn






AROUND SINGLE BIG

OPPORTUNITY








Term Wins


From Experience

Memorable & Authentic Vision Prompt Employees To Discuss

This Creates Voluntary Buy Ins, Increasing Change Agents

Organic Increase Of Network Promoting Speed Of Change






AROUND SINGLE BIG

OPPORTUNITY








Term Wins


From Experience

Guiding Coalition Can Create Solution Rapidly

Ensure No Barriers Between Departments To Support Cooperation

Solution Can Be Rapidly Duplicated Across Organisation With Team Mix






AROUND SINGLE BIG

OPPORTUNITY








Term Wins


From Experience


Best Short-Term Wins Should Be Obvious, Unambiguous, & Clearly Related To The Vision

Buoys Existing Volunteer

Attract New VolunteersSuccess Breeds Success





AROUND SINGLE BIG

OPPORTUNITY








Term Wins


From Experience


Keep Up Urgency Else Volunteer Will Waiver, Change Slows Down Or Stops

Continue With Strategic Initiatives, Create New Ones

Enables Competitive Advantage With Shifting Business Environment





AROUND SINGLE BIG

OPPORTUNITY








Term Wins


From Experience


New Direction And Method Must Sink Into Organisation Culture

With Visible Results, Employees Will Want To Be Part Of This Culture

Long Run Becomes Ingrained, Creating Organic Change Agent Network

Elements Of Successful Change

Status Quo

Desired State

1Change

Approach

Emergent Change

Master Change

2Leadershi

p Behaviour

Framing Change

Creating Capacity

3Change

Accelerators

Kotter’s Eight Accelerators

iChange

Successful Change



John Sculley – The Marketing Genius

Macintosh, Apple main product,

continually faced

SALES DECLINE

1985

Net Sales Declined by

$20 Million

Jobs was forced to quit – Board of

Directors Wanted Change

1980Apple continues with Apple R A P I D G R O W T H

with Lisa and Macintosh

1983Jobs woo Pepsi’s

John Sculley:Pepsi Challenge

Genius

Apple gets

LISTED on NYSE

1976 Apple

Founded by Steve Jobs, Steve Wozniak & Ron Wayne197

8Apple Lisa, world’s first Graphical User

Interface computer launched

1986Project Newton

Sculley’s Big Opportunity to transform Apple’s

direction- Interoperability

- New Technology

John Sculley vs Change Accelerators


AROUND SINGLE BIG

OPPORTUNITY

Onslaught of Microsoft with IBM PC partnership (1981), Graphical User Interface OS(1983) and Successful IPO (1986)

High-End Products were beginning to FAIL

NEWTON - the new Technological Breakthrough saviour





Gathered a team of Experienced Engineers and housed them in abandoned warehouse

No inter-department involvement in Project Team that was formed

VISION

“World’s first Tablet Computer

with sophisticated

Artificial Intelligence at desktop Computer prices to replace

desktops”

Two High-Budget video to show envisioned product positioning & features

Video & strategy Communicated

to everyone and create excitement as the Future PDA




From Experience


Term Wins


John Sculley vs Change Accelerators

Sculley pooled talented engineers from different areas to enhance communication and development process with project permission directly from him

Experimented with free reign of decision Newton team allowed to research without telling Sculley

Sculley publically launched Newton

without recognition to

the team – it was all for product

marketing

Sales Growth drop sharply from

$2 Billion in 1987 to $10 Million in 1990

Microsoft sells 1 Million copies of Windows 95 in four days in 1995

Other projects followed the same

cycle with gap in 3 accelerators – company lost competitive

edge with every failure

Powerbook was the only new product

rolled out<-Not Properly Executed!->

John Sculley vs Change Approach‘One Look’


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Stick’

Change Approach


Inflexible, StiffP r e s c r i b e d S t e p s & R e c i p e s

Defensive Under Pressure, “Just Do It!”

Strong Controls

To p D o w n A p p r o a c h , N o F e e d b a c k

Bureaucratic Approach To Change

Directive Change“I Can

Manage Change”Higgs & Rowland

Study: Unsuccessful Approach

John Sculley vs Leadership Behaviour


Will Happen’




LEADERSHIP

BEHAVIOUR


Made himself CTO in 1990 and tightly controlled direction

Employee’s took him as an “Arrogant Person”

Stifled creation by enforcing tight SOP

Drives hard on his personal beliefs – sales & marketing insights ignored

Higgs & Rowland Study: Unsuccessful

Behaviour

John Sculley – A Dashboard View

Change Approach

Leadership Behaviour

Change Accelerators

Directive ChangeShaping

BehaviourFailed To Sustain Organic Buy-Ins

Sculley’s Newton centred change

project

Microsoft & IBM moved

ahead

Apple at the end of Sculley’s reign

Sales Growth Continues To

Fall

Low Product Innovation

Steve Jobs – The Creative Genius

1997 Steve Jobs

Reappointed CEO of Apple

20013 major launches

iTunes Store

2003

2007

iPod Shuffle

iPhone

MacBook Pro

1998iMac

2000

iPod was conceptualised

Mac OS X Launched

iTunes

Apple StoreiPod

2005

2006

iPad

2010

Jobs ResignsSales Increases to $28.5 Billion2nd Global Most Valuable Brand

2011

Steve Jobs vs Change Accelerators


AROUND SINGLE BIG

OPPORTUNITY

In 2000, Steve Jobs saw Huge Competitive Opportunity in Digital Music industry with popularity of MP3 and Napster - Project iPod was launched

Authorised $10Million buy all Toshiba’s tiny disk drive for Project iPod





Formed a Project Team group from Various Horizontal Teams Hardware Engineering, Design Div., Copywriters, Marketing Team, Partnerships and Interface Designer and others around the Shared Vision of the Product

VISION

All-in-one package: Easy-to-use

jukebox software Elegant iPod Store for

downloading tunes seamlessly

“Whole Widget Goal”

Communicated his vision of iPod to the internal team, daily basis once prototype is there

Work with his team to lobby the vision to music executives – iTunes-iPod launched with 200,000 songs in stock




From Experience


Term Wins


Steve Jobs vs Change Accelerators

Jobs maintained the Project iPod team from different areas of the business to work together to capitalise on the opportunity with speed!

It took them 3 months to develop the Preliminary Version and 8 months final product

iPod was launched, all Apple employees were given an iPod

to celebrate the team’s success

Jobs successfully maintain the competitive culture and continues to develop more innovative products (9 major launches in a span of 10 years) - iPhone, iPad , OS X, MacBook Pro etc.

Apple has excelled at keeping pace with changes and successfully improve and refine the iPod product line to iPod Shuffle, iPod Nano, iPod Touch and iPod Classic

By 2006, 58 Million iPods were sold!

Steve Jobs – How iPod Changed the World

“The Biggest Apple project of 2001 which

showcased everything best about Steve Jobs”

“To date Apple holds over an 85% market share for electronic music and has sold over half a billion

tracks.”

“With Apple's iTunes and iPod, he revived the single, put

music libraries in fans' pockets and posed a challenge to brick-and-mortar record

stores and radio.”

“If there was ever a product that catalysed what’s Apple’s reason for being, it’s this.

Because it combines Apple’s incredible technology base with Apple’s legendary ease of

use with Apple’s awesome design.” (Source: 2001, quoted in Steven Levy’s Eulogy)

Steve Job’s Change Approach‘One Look’


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Stick’

Change Approach


Master Change“I Trust People To Solve Things

With Us”

Higgs & Rowland Study: Successful

Approach

Drove Change EffortsD u p l i c a t e d S k i l l To O t h e r

P r o j e c t

Skills Required Were Hired, Trained Others

Created Vision, Team Refined

Kept Main Drivers Of iPod, involved in successful iPhone,

iPad etc

C r e a t e d N e t w o r k C o n n e c t i o n s V i a i P o d Te a m

Steve Job’s Leadership Behaviour


Will Happen’




LEADERSHIP

BEHAVIOUR

Provide Continuous Technical Skills Training And Encourage Employees To Propose Their Ideas To Be Considered

Works Closely With The iPod Team To Provide Constructive Feedback On Their Design

Breaks Down Barriers And Put Teams Across Functional Lines In The iPod Team

Create Cross Functional Operations Team – iTunes, Apple Store And iPod Team Worked Together For The Launch

Facilitates To Have Other Departments Processes , Example Purchasing Process, To Support The Project Success


Higgs & Rowland Study: Successful

Behaviour

Steve Jobs – A Dashboard View

Change Approach

Leadership Behaviour

Change Accelerators

Master ChangeCreating Capacity

Succeed In Sustaining

Change

Jobs’ iPod centred change project

2nd Global Most Valuable

Brand

Apple at the end of Jobs’ reign

Great Increase of Revenue and

Share Price

High Product Innovations

Macs sold (mm)

4

3

2

1

01997 2011

US PC Share

11%

8.25%

5.5%

2.75%

0%1997 2011

Revenue ($b)

$30

$15

$7.5

$01997 2011

Cash ($b)

$80

$60

$40

$20

$01997 2011

Share Price ($b)

$400

$300

$200

$100

$01997 2011

Steve Jobs Change Effects

$22.5

(Source: Frommer, 2011 )

Apple Stats

Conclusion

Successful Change



Challenges

Relevancy Across Country

Studies UK & US Based

Culture & Economic Status May Vary Effectiveness In Other Countries

Accelerated Structure

Can’t Change Overnight - New Structure Running Parallel

Reporting Line & Politics May Hinder Progress

Fit To Model Organisations May Not Fit Into Discussed Leadership & Approach Model

May Not Be Easy To Map & Transform To Proposed Model

CHANGE MANAGEMENT

Business Evolution

Affects Relevancy Of Frameworks

Continual Monitoring Of Effectiveness Of Change Program

Summary

• Change is complex• There is no “single recipe” for successful Change

Management• Major considerations needs to be given to:

– Change Approach– Leadership Behaviour– Change Accelerators

• While recognising challenges, organisations could use proposed models as a start and modify accordingly based on organisation context

• Even if company is having competitive advantage, should not have false sense of security and continue to change to remain a leader as seen in Apple’s case

Parting Words

“It’s not the strongest of the species who survive, nor the most intelligent,

but the ones most responsive to change”

Thank You!

Change Management for Competitive Advantage - Managing People Group Presentation

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Transcript of Change Management for Competitive Advantage - Managing People Group Presentation