JWI 555 Organizational Change & Culture, Week10 course wrap up, 6/12/13
This is easily
one of the finest classes I have ever taken in my career. From the
learning I am already seeing profound impact on my thinking and
behavior.
After turning around IBM from a death spiral in 1993,
CEO Lou Gerstner said in his book, "culture is THE game in a company the
size of IBM" (Gerstner, 2002). Understanding what culture means and
learning change-leadership techniques to elevate a team's performance to
highest levels, I now feel very well prepared to face major business
challenges confidently.
Because change-leadership and culture
are passionate subjects of mine, especially after seeing IBM struggle so
badly with culture and change issues and making a miraculous come-back
from death, I have diligently taken copious notes to take forward.
What have you mastered about Organizational Change and Culture?
None.
"what
we know is the size of the fist, what we don't know is the size of the
world", said a South Indian Saint Avvaiyaar.
I do feel comfortable with
the following concepts that I have internalized them fully.
0. Why organizations should change and improve?
When orgs improve, many people win
Employees - enjoy satisfactions of success, productivity, creativity, better reputation, greater compensation
Consumers - get innovative products and services at better prices
Communities - prosper
1. It is the leader's job to look into the future
with industry leading thoughts, see around corners and steer the
direction of the firm to seize opportunities and avoid train wrecks.
2. Be a change agent - Change the Game
Forces driving change - Technology, Globalization, environment, financial crises
Forces resisting change - Culture, Calcification, Complexity
Explain rationale for change, Get right people on the team, get the resisters off the team, Seize every opportunity
3. Leading Change - Kotter framework
Establish sense of urgency
Create a guiding coalition
Develop a change vision
Communicate the change vision for buy-in
Empower employees for broad based action
Generate short term wins
Consolidate gains, produce more gains
Make it stick
Leadership skills & behaviors essential to driving change include
(i) Look forward to where change will be most urgently needed
(ii) create and communicate vision for change
(iii) mobilize support for change effort
(iv) make clear demands for results to be achieved, give honest performance feedback
(v) organize and direct people in ways that they can make change happen
(vi) communicate openly, honestly across org levels and boundaries
(vii) master at least one change methodology and use it widely to generate best results
(viii) overcome barriers and resistance
(ix) Continuously improve change-capability in the firm by improving your own skills as a leader and a manager.
4. Demand Better Performance & Get Better Results (Schaffer, 1991) & JWI 555 W3L2
Make the business case - Start with an urgent problem.
Select the goal and specify the minimum expectation of results.
5. Great leaders inspire action by starting with why (Simon Sinek)
Why - (what I believe) this is the emotional side
How & What are the logical side
6. I attained greater clarity about the concept of stakeholders.
I was able to rank them in the order of importance.
This gives me a valuable framework to be a more inclusive leader.
Those who focus only on shareholders and ignore key stakeholder segments could risk running the firm into troubled waters.
Stakeholder mapping technique allows a practical way to manage and drive change in the firm.
7. The discussion about Dos & Don'ts in making employees live and breathe the vision helped me see what levers to push
and what pitfalls to avoid while communicating a vision.
Setting
clear goals & Avoiding jargons, communicating to broad team &
not just the top leaders, modeling values with actions,
reinforcing vision with rewards & not assuming people will do what you expect, appeal to emotion also & not just logic
8. I also learned the importance of vision statement in focusing and motivating the organization.
The
expanded vision matrix metrics - strategic, financial, operational,
organizational - equip me with practical knobs to turn in making the
vision a reality.
Strategic: product/service focus, customer/market focus, unique positioning, differentiation
Financial: guiding financial-performance indicators; success metrics; significant financial commitments or decisions
Operational: essential manufacturing/service/delivery capabilities; technology priorities; key performance indicators
Organizational HR recruitment, selection, retention, development priorities, leadership decisions, structural considerations
9. Business Process Redesign - This five step framework is already valuable in helping me drive positive change through the organizations I work with. Best practices, VSM, employee empowerment, obstacles removal, Focus on Results.
Improving an organization's capability must first begin with reviewing what already works best ie the best practices. Second,
Value Stream Mapping (VSM) can be applied to methodically to identify
waste - time delays and increased expenses, redundancy, bottlenecks,
reworks and communication misses. Alternatively, fundamental
redesign of processes from a clean slate can also be attempted. Third,
employees need to be empowered to generate good ideas and act on
their wisdom. Fourth, dis-empowering obstacles such as obstructing
formal structures, misaligned middle-management bosses, skills
deficit, thankless compensation systems need to be addressed. Finally,
the change agents need to be focused on results, not activities.
10. Deliver Rapid Results through Quick Wins & Motivation Levers
- Learning the importance of quick wins helps me grow as a leader.
I understand that supporting a long vision by generating a series of quick short term wins is a key leadership technique.
This
is precious to me. I am already applying this principle at work now and
will deploy them in my non-profit mission quite gainfully.
- Drive Change with the Rapid Results Technique
Identify most current, high-impact problems
Generate ideas to fix them
Create a dedicated SWAT team to move quickly
Use Good project management - work plan, accountability
achieve goal - 30-90 days , energize
Expand effort to more challenging goal
- Spot resisters quickly, deal with them creatively eg. using motivation levers or let them go
Different people in a corporation are motivated by different things(Gerstner, 2002)
- money
- advancement
- recognition
- fear
- anger
- learning
- opportunity to make an impact, see efforts produce concrete results
- rouse with a threat of extinction
- inspire with a compelling vision of future
- being part of something bigger than you
11.
Work-Out & Six Sigma are two of the five most important change
leadership techniques that can lead to a LEANer organization.
Best
practices sharing, Process Redesign, Rapid Results are the other three
methods. Learning about these methods and having a conversation with
Jack Welch made a very special week.
Work-out
is a technique used to give everyone a voice and bring every brain in
the game to eliminate unnecessary work and bureaucracy (JWI 555, W7
L1). Planning & Teamwork, Townhall meeting, Implementation are the 3
key steps in Work-Out.
Six Sigma is a quality improvement
strategy and program that aims at transforming business processes to
reduce defects and drive down variation in products, services and
customer experience. It overhauls a company's internal processes so
that customers get what they want, when they expect it, every time.
DMAIC (Define Measure Analyze Improve Control) are the 5 steps of six
sigma
12. From Jack's WK8 video I learned the importance of communicating why change must happen, how change will be done,
what is in it for the people and repeating ad nauseum. This makes perfect sense.
13. From W8L1, I learned how to use the five tools for change leadership
- best practice sharing, process redesign, rapid results, work-out and six-sigma -
after
taking into account practical considerations such as speed, cost,
flexibility, range of problems they can tackle, technical rigor required
and produced.
14. W8L2 highlighted the 7 elements in effective change-communication:
simplicity,
metaphor, using multiple communication channels & forums, leading
by example, explaining inconsistencies, talking but also listening.
15. WK8 DQ1 gave me a chance to think and act like a CEO in a turn around situation, leading change from the forefront.
The BP assignment with TeamB helped to pull all the concepts together and apply in a real life example.
Working
with TeamB colleagues Alexandra, Michael & Shalonda helped me learn
how to work together with trust, respect for each other's diverse
constraints,
flexibility and leverage each member's unique strengths.
16. Complexity is the enemy of change (WK9L1).
Sources
of complexity include dysfunctional structures, product/service
proliferation, unplanned process evolution and unproductive managerial
behavior.
Too many steps, meetings, stakeholders, layers, products
Takes too long to make decisions.
Simple requests don't get action.
17.
Simplify using Customer-centered perspective, Five change tools,
Communication Clarity, Results focused demand making, Delayering,
moving from command & control style of management to empowering direct reports to make their own decisions.
18. Delayer the organization
Layers must be prevented as they insulate from reality, slow down decision making, distort information and smother initiative.
19. Be a change agent (Welch, podcast WK9)
- See the
future no one sees; Take intrinsic Authority, Don't wait; Have the guts
to bet your careerl; assemble followers to go for it;
exude
excitement to lead and be a part of a change initiative; be open to
change; forget yesterday's game and look at every day afresh
20. Management objective is not just to increase shareholder value but to gain trust of all stakeholders (McKinsey, 2009).
Key stakeholders should include employees, customers, suppliers, communities, the press, unions, governments, civil society.
Decision
making, compensation practices, performance management must shift from
shareholder-centric to multi-stakeholders centric focus.
What do you now understand but may want to learn more about?
I understand the following concepts but will need to practice them and learn more to internalize fully:
21. Manage People to lead change - Hire, Develop & Promote Talent; Fire under-performers and resisters
Hire and promote only true believers and get on with it types
Set standards of leadership behavior: Simplicity, Speed, Self-confidence; Values vs Achievement matrix
22.
Put a candid appraisal system in place first, then differentiate
20/70/10, then tell people where they stand & how to improve:
Top20 - they should know you love them, take care of them,pay em, reward em, let them know they are top20
Middle70 - tell them they are the valuable middle, give them reward, show them how to get to Top20
Bottom10 - tell em they are in bottom10; 70-80% will move on to another company - will go elsewhere, find a job and grow
23. Culture & Future - Two Responsibilities of the senior-most leaders
************************************************************************
- identify challenges and opportunities of the future; stay several steps ahead of everyone else
- manage and change organizational culture
24. Diagnose Culture in a firm
Know where to look. Evidence shows up in many places.
****************************************************
- is structure hierarchical or flat?
- Are decisions made by a single person, few senior managers, with participation from a broad group?
- boss's office more luxurious than workspaces of frontline people ?
- how quickly are decisions made ?
- which function ultimately runs the show - R&D, Sales, Accounting?
- Do people speak up with questions and concerns or is there superficial agreement and a lot of underground complaining?
- Are people rewarded for individual entrepreneurship or team work ?
- Who gets promoted?
- Who makes the most money ?
- Where has the company invested money, imagination, time?
- Who gets invited to meetings? What is discussed? How long do they take ?
- Are employees referred to as associates, resources or FTEs?
25. Culture traits that support change
Candor (ideas, speed, cost reduction)
Differentiation (performance recognitions, resource allocation)
Voice, Dignity
Flat stucture
26. Anchor change in culture
voice, candor => invite individual's best ideas
empowerment, accountability => translate ideas into effective action
Address toward end of change process when people see results of change from new behavior
27. Great leaders are a rare kind of change agents
- they don't just navigate orgs through a major change
they identify, lead, embed change after change after change
- have vision and courage to improve things
- have skills to see their vision through
- create an innovative, flexible, forward-looking organization that learns
- comfortable in a world of continuous transformation; drive one major change initiative after another
- at home with high levels of uncertainty
- restless, curious, always looking for ways to get better
- love a good challenge.
- show up with infectious enthusiasm, passion and conviction for each new wave of change
- continuously learn and grow at a rate associated with children; in a totally different league
They stay ahead of change as old behaviors and assumptions get outdated
follow their interests and passions even if unrelated to job
master new avenues for development and use these as lens to see business challenges and opportunities in new and creative ways
- multifaceted, variety of rich experiences, depth of judgment to face world's increasing complexity
28. To become a great change agent
(i) Become ridiculously well-informed about the business, environment
(ii) See things others don't see; think things others don't think
(iii) Cultivate and be open to follow you intuition
29. Lead change efforts as Business environment is shifting rapidly
Watch trends. Live the WSJ.
Look also at car wrecks - financial crises, bankruptcies, tragedies.
Seize every opportunity, even those wrought by adversity.
Become truly a great agent of change
What questions can you now articulate about Organizational Change and Culture based on what you have learned in this course?
The
quote by Gandhi, "be the change you want to see in the world", comes
alive to me now in ways I have never felt before. A lot of my questions
about culture and change leadership have been answered in this class. I
cannot wait to practice these skills and see what unique value I can add
to my work. I do have questions about the differentiation technique
when rounds of layoff has already cut out the fat from the organization.
The bottom 10% is now part of solid performers.
Fantastic learning experience. Awesome class !
Dr DP
Tuesday, June 11, 2013
Become Truly a Great Change Agent
JWI 555 Organizational Change & Culture, week10 notes, 6/10/13
I find the last week of learning about change leadership to be among the finest of the JWMI MBA program. They teach leaders how to think creatively, use intuition to complement analytics and become outstanding change agents. One gets a great deal of respect for Jack Welch for his willingness to teach these skills.
Clearly, Jack Welch is one of the finest teachers on the planet
Dr DP
I. Igniting Change JWI 555 Wk10 Podcast
****************************************
How can a low level employee initiate change from status quo in an org ?
************************************************************************
99% you can't. You'll get killed trying.
Companies want change in fast moving environment.
Low level employees have to face too many levels and people in the middle.
It just doesn't work.
Earn your stripes - Gain more responsibility, credibility, authority, ability to make a change.
Get to a position where you have your own team.
Then Run it the way you want then.
Work and Wait.
Or stop being frustrated and move on.
2. The new manager and candor (JWI 555, WK10, podcast)
******************************
Does candor work with old people - when direct reports are twice your age?
Everyone wants candor - some are afraid of it
Candor accelerates business - it is a viagra for business
It Drives business, gets it moving faster, stronger
Old or young - You want it straight; stop the BS
Done with generic ambiguity and platitudes
When first introduced, for a period, candor gets reaction of shock:
Head on fire screaming hysteria - whole new way of talking
Candor has to become a company value
************************************
Candor - say this is the way this company is going to operate
this is the way we are going to operate
we are going to measure, reward and promote those who have it
Like any other behavior
you get the behavior you want when you measure it and reward it
***************************************************************
you can get it !
Candor speeds up business, makes people know where they stand, creates an atmosphere
Rule#1 of business - if you are a manager, tell your people exactly where they stand
You owe it to them, it is your responsibility
Fruits of candor: more effective, shorter meetings, increased productivity
There is no substitute for the speed that candor gives you
3. Candid Appraisals (JWI 555, WK10, video)
********************************************
If people are candid
And people know where they stand (leader's obligation is to tell people all the time where they stand)
When a manager calls and says:
"Look Jack, things are not working out
Time to wrap it up
I say, "I know it, I did not deliver". "Because I have known what the ground rules were".
Less than 5% of people get straightforward candid appraisals.
Everybody winks. This is a winking corporate society - nice appraisals are written end of year.
Appraisals are daily events, monthly events - constantly giving feedback.
So everyone in team knows where they stand.
So when it is time they have to go, they know they did not deliver.
4. Differentiation (JWI 555, WK10, video)
******************************************
Differentiation is identifying the top people, valuable middle and getting rid of bottom weak performers
You told them where they are, told them how to improve, what to expect
4 times a year appraise - here is what I like about what you are doing, here is what you need to improve
12-18 months, come to an agreement, time to move on, what's the deal - work it out, soft landing, go somewhere else to work
Biggest gripe about business - no one should be a manager that have people working for them not knowing where they stand
It is an obligation of management- to tell people where they stand and not leave them guessing
None should work for a boss who has not told you where you stand
5. Knowing where you stand (JWI 555, wk10, video)
**************************************************
The idea that your people dont know where they stand because you are a kind manager - is the cruelest thing to do.
Top20 - they should know you love them, take care of them,pay em, reward em, let them know they are top20
Middle70 - tell them they are the valuable middle, give them reward, show them how to get to Top20
Bottom10 - tell em they are in bottom10; 70-80% will move on to another company - will go elsewhere, find a job and grow
Football & Baseball Teams - every year grade and upgrade the team; they tell people where they stand
rank and yank is cruel and stupid; differentiation before a candid appraisal system is in place is cruel and stupid
Put a candid appraisal system in place first, then differentiate 20/70/10, then tell people where they stand, how to improve
****************************************************************************************************************************
takes 2-3 years to put this system in place
Don't surprise people
6. Week10, Lecture1
********************
(i) Productive organizational change needs the energy & passion of a change leader
***********************************************************************************
- see opportunities and threats
- create a shared sense of urgency
- develop a vision
- commmunicate
- empower
- drive focused action
(ii) Culture & Future - Two Responsibilities of the senior-most leaders
************************************************************************
- identify challenges and opportunities of the future; stay several steps ahead of everyone else
- manage and change organizational culture
(iii) Culture
**************
- norms of behavior and shared values among a group of people in a company
valuing stability, hierarchical structure, resistance or punishment to change initiative
- woven into the fabric of the organization through
thousands of approval and disapproval
reward and censure
hirings, promotions, firings
coversations, symbols, language
clothing
formal and informal power structures
- exerts itself through subconscious actions of hundreds or thousands of people (Kotter)
- powerfully influences human behavior
- difficult to change
- nearly invisible: ubiquitoes like air people breathe, yet so integral that people dont see it anymore
- Some elements support change and some block change
- Change tools can be used to modulate it
(iv) How to Diagnose Culture in a firm
**************************************
Know where to look. Evidence shows up in many places.
****************************************************
- is structure hierarchical or flat?
eg. military is hierarchical with command and control => shows up in org structure, titles, decision making rules, uniforms
universities have flat structures => shows up in professor's independence, collegiality, research publications, academic excellence, conferences, cross-university partners, tenure
- Are decisions made by a single person, few senior managers, with participation from a broad group?
- boss's office more luxurious than workspaces of frontline people ?
- how quickly are decisions made ?
- which function ultimately runs the show - R&D, Sales, Accounting?
- Do people speak up with questions and concerns or is there superficial agreement and a lot of underground complaining?
- Are people rewarded for individual entrepreneurship or team work ?
- Who gets promoted?
- Who makes the most money ?
- Where has the company invested money, imagination, time?
- Who gets invited to meetings? What is discussed? How long do they take ?
- Are employees referred to as associates, resources or FTEs?
(v) Culture Traits that support change
***************************************
(a) Candor (ideas, speed, cost reduction)
**********
be willing to be open about what you think, speak up - an unnatural act
criticise without sugarcoating bad news
don't avoid conflict
Candor generates
- richer ideas (more people get into the conversation)
- speed (ideas are debated and acted upon more quickly)
- cost reduction (elimination of meaningless meetings and reports)
(b) Differentiation (performance recognition, resource allocation)
********************************************************************
Identify company's top businesses and top talent
Act on this distinction to invest in top performers
Rigorously identify top 20% - shower them with love, recognition, money, training, opportunities
Middle 70% - manage differently, focus on developing and motivating them
Bottom 10% - ask them to leave the company
Fill the company with top performers who can thrive in fast-changing environments.
Provide a structure for rewarding people who achieve results in the desired new ways.
Let go of people who cannot keep up.
(c) Voice
************
Get every brain in the game
If hiring was done correctly, then everyone in the room is smarter than you
You need their input
Hear all people's ideas, opinions, feelings
Work-Out gives every employee a voice.
(d) Dignity
*************
Respect everyone's work and effort
Having a voice and feeling respect for your effort encourages employees to give their best change effort.
(e) Flat structures
********************
Reinforces culture of personal empowerment and accountability.
voice, candor => invite individual's best ideas
empowerment, accountability => translate ideas into effective action
(vi) Anchor change in the culture
**********************************
(a) Futile to change culture independent of changing behavior
- layers of socialization and history oppose change
- cannot change culture magically at beginning of a change initiative
must be addressed toward the end of the change process after people see and feel the results of change and as they experience desired new behaviors
(b) Need deliberate ongoing efforts to anchor changes in culture
Else old ways of doing things will smother change and reassert their dominance
(c) needs patience & skill
(d) needs a lot of communication
(e) needs strategic hiring and promotion
(f) needs consistent effort
7. Week10 Lecture2
*******************
Change is Never Over
*********************
Change is a Continuous Process
*******************************
I. Why organizations should change and improve?
***********************************************
When orgs improve, many people win
Employees - enjoy satisfactions of success, productivity, creativity, better reputation, greater compensation
Consumers - get innovative products and services at better prices
Communities - prosper
II. Change agents make change possible
***************************************
Personal Qualities of Change Leaders
*************************************
Strong leaders
***************
- step up when required; give best effort for years
- help bring org through a big change event eg. restructuring, acquisition integration
Great leaders are a rarer kind of change agents
************************************************
- they don't just navigate orgs through a major change
they identify, lead, embed change after change after change
- have vision and courage to improve things
- have skills to see their vision through
- create an innovative, flexible, forward-looking organization that learns
- comfortable in a world of continuous transformation; drive one major change initiative after another
- at home with high levels of uncertainty
- restless, curious, always looking for ways to get better
- love a good challenge.
- show up with infectious enthusiasm, passion and conviction for each new wave of change
- continuously learn and grow at a rate associated with children; in a totally different league
They stay ahead of change as old behaviors and assumptions get outdated
follow their interests and passions even if unrelated to job
master new avenues for development and use these as lens to see business challenges and opportunities in new and creative ways
- multifaceted, variety of rich experiences, depth of judgment to face world's increasing complexity
"be the change you want to see in the world" Gandhi
III. How to Look Ahead to Stay Ahead
*************************************
Ability to see around corners is one of the most important characteristics of a leader
Every leader must have - Vision, ability to predict future
Good leaders - anticipate the radically unexpected
Best leaders - sixth sense for market changes in a brutally competitive environment, moves by competitors and new entrants
To develop this skill:
(i) Become ridiculously well-informed about the business, environment
*********************************************************************
Follow a wide range of emerging trends
Be passionately interested in the future
Talk and listen to all kinds of people
be a sponge; soak in knowledge, ideas
(ii) See things others don't see; think things others don't think
******************************************************************
think creatively - view a problem from a different angle
Discern patterns others have missed
this is how you develop the sixth sense
(iii) Cultivate and be open to follow you intuition
****************************************************
Analytic, fact-centric business environment
Complement this with intuition - recognize patterns
IV. Ten Trends Driving Change (Beinhocker et al, 2009 HBR, McKinsey)
******************************
Accelerating Trends
********************
(1) Loss of trust in business - boycotts, negative publicity, added regulation
(2) Bigger government - stimulus packages, regulatory reforms, direct and indirect decision making in business
(3) Consumption pattern shifts away from US to China, India and other emerging markets
(4) Industry restructuring - financial collapses, M&A
(5) Destabilizing price environments - deflation & inflation emerging as potential threats
Steady Trends
*************
(6) Global demand increases for oil, water; price increases, volatility, shortages
(7) Big Data - data driven decision making; mathematical models; computing power
(8) Asian economy grows
(9) Innovation in IT, BioTech, Clean Energy, Nanotech
Decelerating Trends
*******************
(10) Slowing globalization of goods, services, talent
Governments become restrictive and protective in face of threats to economic recoveries
IV. Participate in change efforts
**********************************
Business environment is shifting rapidly
Watch trends. Look also at car wrecks - financial crises, bankruptcies, tragedies.
Seize every opportunity, even those wrought by adversity.
Become truly a great agent of change
I find the last week of learning about change leadership to be among the finest of the JWMI MBA program. They teach leaders how to think creatively, use intuition to complement analytics and become outstanding change agents. One gets a great deal of respect for Jack Welch for his willingness to teach these skills.
Clearly, Jack Welch is one of the finest teachers on the planet
Dr DP
I. Igniting Change JWI 555 Wk10 Podcast
****************************************
How can a low level employee initiate change from status quo in an org ?
************************************************************************
99% you can't. You'll get killed trying.
Companies want change in fast moving environment.
Low level employees have to face too many levels and people in the middle.
It just doesn't work.
Earn your stripes - Gain more responsibility, credibility, authority, ability to make a change.
Get to a position where you have your own team.
Then Run it the way you want then.
Work and Wait.
Or stop being frustrated and move on.
2. The new manager and candor (JWI 555, WK10, podcast)
******************************
Does candor work with old people - when direct reports are twice your age?
Everyone wants candor - some are afraid of it
Candor accelerates business - it is a viagra for business
It Drives business, gets it moving faster, stronger
Old or young - You want it straight; stop the BS
Done with generic ambiguity and platitudes
When first introduced, for a period, candor gets reaction of shock:
Head on fire screaming hysteria - whole new way of talking
Candor has to become a company value
************************************
Candor - say this is the way this company is going to operate
this is the way we are going to operate
we are going to measure, reward and promote those who have it
Like any other behavior
you get the behavior you want when you measure it and reward it
***************************************************************
you can get it !
Candor speeds up business, makes people know where they stand, creates an atmosphere
Rule#1 of business - if you are a manager, tell your people exactly where they stand
You owe it to them, it is your responsibility
Fruits of candor: more effective, shorter meetings, increased productivity
There is no substitute for the speed that candor gives you
3. Candid Appraisals (JWI 555, WK10, video)
********************************************
If people are candid
And people know where they stand (leader's obligation is to tell people all the time where they stand)
When a manager calls and says:
"Look Jack, things are not working out
Time to wrap it up
I say, "I know it, I did not deliver". "Because I have known what the ground rules were".
Less than 5% of people get straightforward candid appraisals.
Everybody winks. This is a winking corporate society - nice appraisals are written end of year.
Appraisals are daily events, monthly events - constantly giving feedback.
So everyone in team knows where they stand.
So when it is time they have to go, they know they did not deliver.
4. Differentiation (JWI 555, WK10, video)
******************************************
Differentiation is identifying the top people, valuable middle and getting rid of bottom weak performers
You told them where they are, told them how to improve, what to expect
4 times a year appraise - here is what I like about what you are doing, here is what you need to improve
12-18 months, come to an agreement, time to move on, what's the deal - work it out, soft landing, go somewhere else to work
Biggest gripe about business - no one should be a manager that have people working for them not knowing where they stand
It is an obligation of management- to tell people where they stand and not leave them guessing
None should work for a boss who has not told you where you stand
5. Knowing where you stand (JWI 555, wk10, video)
**************************************************
The idea that your people dont know where they stand because you are a kind manager - is the cruelest thing to do.
Top20 - they should know you love them, take care of them,pay em, reward em, let them know they are top20
Middle70 - tell them they are the valuable middle, give them reward, show them how to get to Top20
Bottom10 - tell em they are in bottom10; 70-80% will move on to another company - will go elsewhere, find a job and grow
Football & Baseball Teams - every year grade and upgrade the team; they tell people where they stand
rank and yank is cruel and stupid; differentiation before a candid appraisal system is in place is cruel and stupid
Put a candid appraisal system in place first, then differentiate 20/70/10, then tell people where they stand, how to improve
****************************************************************************************************************************
takes 2-3 years to put this system in place
Don't surprise people
6. Week10, Lecture1
********************
(i) Productive organizational change needs the energy & passion of a change leader
***********************************************************************************
- see opportunities and threats
- create a shared sense of urgency
- develop a vision
- commmunicate
- empower
- drive focused action
(ii) Culture & Future - Two Responsibilities of the senior-most leaders
************************************************************************
- identify challenges and opportunities of the future; stay several steps ahead of everyone else
- manage and change organizational culture
(iii) Culture
**************
- norms of behavior and shared values among a group of people in a company
valuing stability, hierarchical structure, resistance or punishment to change initiative
- woven into the fabric of the organization through
thousands of approval and disapproval
reward and censure
hirings, promotions, firings
coversations, symbols, language
clothing
formal and informal power structures
- exerts itself through subconscious actions of hundreds or thousands of people (Kotter)
- powerfully influences human behavior
- difficult to change
- nearly invisible: ubiquitoes like air people breathe, yet so integral that people dont see it anymore
- Some elements support change and some block change
- Change tools can be used to modulate it
(iv) How to Diagnose Culture in a firm
**************************************
Know where to look. Evidence shows up in many places.
****************************************************
- is structure hierarchical or flat?
eg. military is hierarchical with command and control => shows up in org structure, titles, decision making rules, uniforms
universities have flat structures => shows up in professor's independence, collegiality, research publications, academic excellence, conferences, cross-university partners, tenure
- Are decisions made by a single person, few senior managers, with participation from a broad group?
- boss's office more luxurious than workspaces of frontline people ?
- how quickly are decisions made ?
- which function ultimately runs the show - R&D, Sales, Accounting?
- Do people speak up with questions and concerns or is there superficial agreement and a lot of underground complaining?
- Are people rewarded for individual entrepreneurship or team work ?
- Who gets promoted?
- Who makes the most money ?
- Where has the company invested money, imagination, time?
- Who gets invited to meetings? What is discussed? How long do they take ?
- Are employees referred to as associates, resources or FTEs?
(v) Culture Traits that support change
***************************************
(a) Candor (ideas, speed, cost reduction)
**********
be willing to be open about what you think, speak up - an unnatural act
criticise without sugarcoating bad news
don't avoid conflict
Candor generates
- richer ideas (more people get into the conversation)
- speed (ideas are debated and acted upon more quickly)
- cost reduction (elimination of meaningless meetings and reports)
(b) Differentiation (performance recognition, resource allocation)
********************************************************************
Identify company's top businesses and top talent
Act on this distinction to invest in top performers
Rigorously identify top 20% - shower them with love, recognition, money, training, opportunities
Middle 70% - manage differently, focus on developing and motivating them
Bottom 10% - ask them to leave the company
Fill the company with top performers who can thrive in fast-changing environments.
Provide a structure for rewarding people who achieve results in the desired new ways.
Let go of people who cannot keep up.
(c) Voice
************
Get every brain in the game
If hiring was done correctly, then everyone in the room is smarter than you
You need their input
Hear all people's ideas, opinions, feelings
Work-Out gives every employee a voice.
(d) Dignity
*************
Respect everyone's work and effort
Having a voice and feeling respect for your effort encourages employees to give their best change effort.
(e) Flat structures
********************
Reinforces culture of personal empowerment and accountability.
voice, candor => invite individual's best ideas
empowerment, accountability => translate ideas into effective action
(vi) Anchor change in the culture
**********************************
(a) Futile to change culture independent of changing behavior
- layers of socialization and history oppose change
- cannot change culture magically at beginning of a change initiative
must be addressed toward the end of the change process after people see and feel the results of change and as they experience desired new behaviors
(b) Need deliberate ongoing efforts to anchor changes in culture
Else old ways of doing things will smother change and reassert their dominance
(c) needs patience & skill
(d) needs a lot of communication
(e) needs strategic hiring and promotion
(f) needs consistent effort
7. Week10 Lecture2
*******************
Change is Never Over
*********************
Change is a Continuous Process
*******************************
I. Why organizations should change and improve?
***********************************************
When orgs improve, many people win
Employees - enjoy satisfactions of success, productivity, creativity, better reputation, greater compensation
Consumers - get innovative products and services at better prices
Communities - prosper
II. Change agents make change possible
***************************************
Personal Qualities of Change Leaders
*************************************
Strong leaders
***************
- step up when required; give best effort for years
- help bring org through a big change event eg. restructuring, acquisition integration
Great leaders are a rarer kind of change agents
************************************************
- they don't just navigate orgs through a major change
they identify, lead, embed change after change after change
- have vision and courage to improve things
- have skills to see their vision through
- create an innovative, flexible, forward-looking organization that learns
- comfortable in a world of continuous transformation; drive one major change initiative after another
- at home with high levels of uncertainty
- restless, curious, always looking for ways to get better
- love a good challenge.
- show up with infectious enthusiasm, passion and conviction for each new wave of change
- continuously learn and grow at a rate associated with children; in a totally different league
They stay ahead of change as old behaviors and assumptions get outdated
follow their interests and passions even if unrelated to job
master new avenues for development and use these as lens to see business challenges and opportunities in new and creative ways
- multifaceted, variety of rich experiences, depth of judgment to face world's increasing complexity
"be the change you want to see in the world" Gandhi
III. How to Look Ahead to Stay Ahead
*************************************
Ability to see around corners is one of the most important characteristics of a leader
Every leader must have - Vision, ability to predict future
Good leaders - anticipate the radically unexpected
Best leaders - sixth sense for market changes in a brutally competitive environment, moves by competitors and new entrants
To develop this skill:
(i) Become ridiculously well-informed about the business, environment
*********************************************************************
Follow a wide range of emerging trends
Be passionately interested in the future
Talk and listen to all kinds of people
be a sponge; soak in knowledge, ideas
(ii) See things others don't see; think things others don't think
******************************************************************
think creatively - view a problem from a different angle
Discern patterns others have missed
this is how you develop the sixth sense
(iii) Cultivate and be open to follow you intuition
****************************************************
Analytic, fact-centric business environment
Complement this with intuition - recognize patterns
IV. Ten Trends Driving Change (Beinhocker et al, 2009 HBR, McKinsey)
******************************
Accelerating Trends
********************
(1) Loss of trust in business - boycotts, negative publicity, added regulation
(2) Bigger government - stimulus packages, regulatory reforms, direct and indirect decision making in business
(3) Consumption pattern shifts away from US to China, India and other emerging markets
(4) Industry restructuring - financial collapses, M&A
(5) Destabilizing price environments - deflation & inflation emerging as potential threats
Steady Trends
*************
(6) Global demand increases for oil, water; price increases, volatility, shortages
(7) Big Data - data driven decision making; mathematical models; computing power
(8) Asian economy grows
(9) Innovation in IT, BioTech, Clean Energy, Nanotech
Decelerating Trends
*******************
(10) Slowing globalization of goods, services, talent
Governments become restrictive and protective in face of threats to economic recoveries
IV. Participate in change efforts
**********************************
Business environment is shifting rapidly
Watch trends. Look also at car wrecks - financial crises, bankruptcies, tragedies.
Seize every opportunity, even those wrought by adversity.
Become truly a great agent of change
Sunday, June 9, 2013
Become a Global Player - examine emerging market opportunities, adjust to risks
JWI 531 Financial Management II, week9 summary, 6/9/13
I have felt the force of globalization starting in the early 90s with the birth of the internet. But it was only through this week's learning that I understand the gravity of the situation. Knowing that China and India will shape world politics as major growth markets gives me greater clarity. Having spent half my life in India and half in US, I can see from both sides of the wall that separates growing markets and advanced markets. The five factors to watch for pitfalls & evaluate attractiveness of investment (JWI 531, WK9L2) prepare me to make informed choices as a business leader:
Respect for rule of law - strong rights of appeal, low levels of corruption
Political stability and a government makes up a small percentage of local economy
Stable currency
Invest-ability
Culture
Great training !
Dr DP
JWI 531 Financial Management II, week9 notes, 6/9/13
1. Markets are Going Global
****************************
Power shifting to Growth markets eg. BRICs, emerging markets; China & India will shape world politics.
Corporations are going abroad, transforming to Mega corporations
2. Evaluate global opportunities
*********************************
International investment has potential to spread like wildfire
With great potential comes great challenge
Five factors to watch for pitfalls & evaluate attractiveness of investment
***************************************************************************
Respect for rule of law - strong rights of appeal, low levels of corruption
Political stability and a government makes up a small percentage of local economy
Stable currency
Invest-ability
Culture
3. Become a global player
**********************
Examine exciting opportunities
Adjust to a variety of risks
Going global is well worth it
4. Emerging markets vs advanced markets - Differences
****************************************************
The key difference between a developing and developed country is economics and quality of life (Difference, 2012).
A developing country is in the process of industrialization, less affluence, lower education, high birth/death rates,
limited access to medicine/technology and unstable governments (Difference). A developed country, by contrast, has a post-industrial economy,
high affluence, strong education, strong transportation infrastructure, stable government, low birth/death rates,
abundant food supply and easy access to medicine and technology (JD)
There are several important differences that need to be considered:
1. Growth opportunity
**********************
Advanced and maturing markets grow at a slow rate while emerging markets offer higher demand and therefore superior growth opportunities. BRIC countries are therefore sought after by firms from advanced countries that are looking for ways to grow their revenues.
2. Lower Cost
**************
Manufacturing and labor costs are typically much lower in emerging markets. For instance, a PhD IBM engineer in Bangalore will make 1/4-1/3 the pay of his colleague in the US with similar qualifications. Shifting the workforce to such markets leads to lower costs and higher profits for the firm.
3. Innovation Hub
******************
Emerging markets can leap frog the advanced markets by seizing the opportunity to move to technologies even more advanced than those used in advanced markets. For instance, in India, cell phones have been embraced by even the most poorest of people - far outnumbering what we see in the US. Importantly, business model innovation is driving cost per minute for cellphone usage to drop precipitously in India - unlike what we see in the US.
4. Corruption
**************
Rule of Law is enforced better in the advanced markets (JWI 531, W9L2) while corruption is a significant part of business in developing markets. Legal systems are weaker in emerging markets and so risks are higher.
5. Political instability
************************
Advanced markets benefit from having a stable and bankable political system. Emerging markets face higher uncertainty from political turmoil and changing national policies.
6. Currency Fluctuation
***********************
While this can affect any nation, emerging markets could be at higher risk due to high pace of change and volatility in political and business environment.
7. Invest-ability
*****************
Some emerging markets may be closed for foreign direct investment.
8. Culture
**********
Cultural assumptions in advanced markets may not hold in emerging economies. Punctuality for instance is highly valued in the German culture but in India, the concept of time is more flexible and different. Hugging among colleagues of opposite sex to express warmth in relationships is considered normal in US while it may be frowned upon in conservative countries.
9. Infrastructure
******************
Advanced markets enjoy a superior infrastructure to get things done fast. Developing markets may face frustrating things like "power cuts" every 3-8 hours a day !!
5. Advantages & Disadvantages of emerging markets
*************************************************
Advantages of emerging markets are:
***************************************
First mover: Being the first to set-up and become the recognized brand.
Access to Capital: Capital in the region may be untouched and eager stakeholders may be anxious to oblige
High returns: Untapped or developing wealth is not shared amongst a large, competitively active group of companies potentially allowing a few businesses to capitalize on being a scare provider of the wants or needs of the market.
Disadvantages of emerging markets are:
**************************************
Corruption: There may be no political or cultural standard that protects companies intellectual property or from unscrupulous authorities leaving them vulnerable to corruption.
Cultural Risk: The methods and procedures of doing business in emerging markets may develop conflict between cultural expectations, rituals and product uses
Structures and Systems: The infra and micro-structure of the market may not support the operations of the businesses. Roads and power systems may be under-developed and stressed.
Taxes: Foreign companies, with their advanced market money, are likely to pay a higher share of taxes and levies to support the development efforts that local companies
can not finance.
The responsibility of a business manager and leader is shown in Exhibit I below (JWI 510).
To execute to those time-honored responsibilities, a business manager will need to consider the factors above carefully.
6. Exhibit I - Responsibilities of a Business Leader and a Business Manager
****************************************************************************
What a Business Leader Does (Welch, 2005):
******************************************
(1) Build great teams - The team with the best players wins and so relentlessly upgrade the team. Never be satisfied with the quality of a team. At every opportunity evaluate, coach and build self-confidence.
(2) Values - Ensure that people not only see the values but live and breathe it. Values must support a mission and must specify expectations for employees’ behaviors. Leaders define the culture and set a high bar for ethical action. Leaders cultivate emotional intelligence (EI).
(3) Optimism - Leaders get under the skin of their employees, exuding positive energy and optimism.
(4) Trust – Leaders build trust with candor, transparency and credit. With emphasis on candor, leaders engage every brain in the game, unclutter bureaucracy and drive up the speed of decision making.
(5) Courage – Leaders have the courage to make unpopular decisions through gut calls.
(6) Question – Leaders question and probe with curiosity, bordering on skepticism, making sure their questions are answered with actions.
(7) Inspire – Leaders inspire risk taking and learning by setting an example.
(8) Celebrate – Leaders celebrate accomplishments and never skip the fun part.
The role of a manager is to support the leader’s vision by taking care of details in complexity and execution. Specifically, Jack Welch points out that a manager has four major responsibilities:
(1) Planning & Budgeting – Managers are responsible for delivering results in a predictable manner, always on time and within budget
(2) People – Pick the right people for the right job. Set performance goals and measure behavior. Motivate, encourage, guide and counsel employees. Create individual development plans. Differentiate performance and decide on fair rewards. Create an environment where employees can excel and innovate. Encourage diversity, celebrate differences and play to people’s strengths.
(3) Performance – Track performance versus target and problem-solve by removing obstacles.
(4) Policies – Articulate clearly the business conduct guidelines, management policies & protocols.
I have felt the force of globalization starting in the early 90s with the birth of the internet. But it was only through this week's learning that I understand the gravity of the situation. Knowing that China and India will shape world politics as major growth markets gives me greater clarity. Having spent half my life in India and half in US, I can see from both sides of the wall that separates growing markets and advanced markets. The five factors to watch for pitfalls & evaluate attractiveness of investment (JWI 531, WK9L2) prepare me to make informed choices as a business leader:
Respect for rule of law - strong rights of appeal, low levels of corruption
Political stability and a government makes up a small percentage of local economy
Stable currency
Invest-ability
Culture
Great training !
Dr DP
JWI 531 Financial Management II, week9 notes, 6/9/13
1. Markets are Going Global
****************************
Power shifting to Growth markets eg. BRICs, emerging markets; China & India will shape world politics.
Corporations are going abroad, transforming to Mega corporations
2. Evaluate global opportunities
*********************************
International investment has potential to spread like wildfire
With great potential comes great challenge
Five factors to watch for pitfalls & evaluate attractiveness of investment
***************************************************************************
Respect for rule of law - strong rights of appeal, low levels of corruption
Political stability and a government makes up a small percentage of local economy
Stable currency
Invest-ability
Culture
3. Become a global player
**********************
Examine exciting opportunities
Adjust to a variety of risks
Going global is well worth it
4. Emerging markets vs advanced markets - Differences
****************************************************
The key difference between a developing and developed country is economics and quality of life (Difference, 2012).
A developing country is in the process of industrialization, less affluence, lower education, high birth/death rates,
limited access to medicine/technology and unstable governments (Difference). A developed country, by contrast, has a post-industrial economy,
high affluence, strong education, strong transportation infrastructure, stable government, low birth/death rates,
abundant food supply and easy access to medicine and technology (JD)
There are several important differences that need to be considered:
1. Growth opportunity
**********************
Advanced and maturing markets grow at a slow rate while emerging markets offer higher demand and therefore superior growth opportunities. BRIC countries are therefore sought after by firms from advanced countries that are looking for ways to grow their revenues.
2. Lower Cost
**************
Manufacturing and labor costs are typically much lower in emerging markets. For instance, a PhD IBM engineer in Bangalore will make 1/4-1/3 the pay of his colleague in the US with similar qualifications. Shifting the workforce to such markets leads to lower costs and higher profits for the firm.
3. Innovation Hub
******************
Emerging markets can leap frog the advanced markets by seizing the opportunity to move to technologies even more advanced than those used in advanced markets. For instance, in India, cell phones have been embraced by even the most poorest of people - far outnumbering what we see in the US. Importantly, business model innovation is driving cost per minute for cellphone usage to drop precipitously in India - unlike what we see in the US.
4. Corruption
**************
Rule of Law is enforced better in the advanced markets (JWI 531, W9L2) while corruption is a significant part of business in developing markets. Legal systems are weaker in emerging markets and so risks are higher.
5. Political instability
************************
Advanced markets benefit from having a stable and bankable political system. Emerging markets face higher uncertainty from political turmoil and changing national policies.
6. Currency Fluctuation
***********************
While this can affect any nation, emerging markets could be at higher risk due to high pace of change and volatility in political and business environment.
7. Invest-ability
*****************
Some emerging markets may be closed for foreign direct investment.
8. Culture
**********
Cultural assumptions in advanced markets may not hold in emerging economies. Punctuality for instance is highly valued in the German culture but in India, the concept of time is more flexible and different. Hugging among colleagues of opposite sex to express warmth in relationships is considered normal in US while it may be frowned upon in conservative countries.
9. Infrastructure
******************
Advanced markets enjoy a superior infrastructure to get things done fast. Developing markets may face frustrating things like "power cuts" every 3-8 hours a day !!
5. Advantages & Disadvantages of emerging markets
*************************************************
Advantages of emerging markets are:
***************************************
First mover: Being the first to set-up and become the recognized brand.
Access to Capital: Capital in the region may be untouched and eager stakeholders may be anxious to oblige
High returns: Untapped or developing wealth is not shared amongst a large, competitively active group of companies potentially allowing a few businesses to capitalize on being a scare provider of the wants or needs of the market.
Disadvantages of emerging markets are:
**************************************
Corruption: There may be no political or cultural standard that protects companies intellectual property or from unscrupulous authorities leaving them vulnerable to corruption.
Cultural Risk: The methods and procedures of doing business in emerging markets may develop conflict between cultural expectations, rituals and product uses
Structures and Systems: The infra and micro-structure of the market may not support the operations of the businesses. Roads and power systems may be under-developed and stressed.
Taxes: Foreign companies, with their advanced market money, are likely to pay a higher share of taxes and levies to support the development efforts that local companies
can not finance.
The responsibility of a business manager and leader is shown in Exhibit I below (JWI 510).
To execute to those time-honored responsibilities, a business manager will need to consider the factors above carefully.
6. Exhibit I - Responsibilities of a Business Leader and a Business Manager
****************************************************************************
What a Business Leader Does (Welch, 2005):
******************************************
(1) Build great teams - The team with the best players wins and so relentlessly upgrade the team. Never be satisfied with the quality of a team. At every opportunity evaluate, coach and build self-confidence.
(2) Values - Ensure that people not only see the values but live and breathe it. Values must support a mission and must specify expectations for employees’ behaviors. Leaders define the culture and set a high bar for ethical action. Leaders cultivate emotional intelligence (EI).
(3) Optimism - Leaders get under the skin of their employees, exuding positive energy and optimism.
(4) Trust – Leaders build trust with candor, transparency and credit. With emphasis on candor, leaders engage every brain in the game, unclutter bureaucracy and drive up the speed of decision making.
(5) Courage – Leaders have the courage to make unpopular decisions through gut calls.
(6) Question – Leaders question and probe with curiosity, bordering on skepticism, making sure their questions are answered with actions.
(7) Inspire – Leaders inspire risk taking and learning by setting an example.
(8) Celebrate – Leaders celebrate accomplishments and never skip the fun part.
The role of a manager is to support the leader’s vision by taking care of details in complexity and execution. Specifically, Jack Welch points out that a manager has four major responsibilities:
(1) Planning & Budgeting – Managers are responsible for delivering results in a predictable manner, always on time and within budget
(2) People – Pick the right people for the right job. Set performance goals and measure behavior. Motivate, encourage, guide and counsel employees. Create individual development plans. Differentiate performance and decide on fair rewards. Create an environment where employees can excel and innovate. Encourage diversity, celebrate differences and play to people’s strengths.
(3) Performance – Track performance versus target and problem-solve by removing obstacles.
(4) Policies – Articulate clearly the business conduct guidelines, management policies & protocols.
Be a change agent - broaden stakeholders view, delayer to simplify, manage through empowerment
JWI 555 Organizational Change & Culture, week9 summary, 6/9/13
Whew ! What a marathon this week was. I found this week to be among the most challenging to keep up, given the many materials to read, digest and synthesize. The end result is rewarding for sure as I gained whole new frameworks and perspectives on managing change & communication. Key insights I learned this week include:
(1) Complexity is the enemy of change. Sources of simplicity include dysfunctional structures, product/service proliferation, unplanned process evolution and unproductive managerial behavior.
(2) Antidotes include Customer-centered perspective, Five change tools, Communication Clarity, Results focused demand making, Delayering, moving from command & control style of management to empowering direct reports to make their own decisions.
(3) Layers must be prevented as they insulate from reality, slow down decision making, distort information and smother initiative.
(4) Be a change agent (Welch, podcast WK9) - See the future no one sees; Take intrinsic Authority, Don't wait; Have the guts to bet your careerl; assemble followers to go for it; exude excitement to lead and be a part of a change initiative; be open to change; forget yesterday's game and look at every day afresh
(5) Management objective is not just to increase shareholder value but to gain trust of all stakeholders (McKinsey, 2009). Key stakeholders should include employees, customers, suppliers, communities, the press, unions, governments, civil society. Decision making, compensation practices, performance management must shift from shareholder-centric to multi-stakeholders centric focus.
(6) Manage People to lead change - Hire, Develop & Promote Talent; Fire under-performers and resisters
(7) Leadership skills & behaviors essential to driving change include
(i) Look forward to where change will be most urgently needed
(ii) create and communicate vision for change
(iii) mobilize support for change effort
(iv) make clear demands for results to be achieved, give honest performance feedback
(v) organize and direct people in ways that they can make change happen
(vi) communicate openly, honestly across org levels and boundaries
(vii) master at least one change methodology and use it widely to generate best results
(viii) overcome barriers and resistance
Continuously improve change-capability in the firm by improving your own skills as a leader and a manager.
There are numerous applications of these valuable principles I foresee at work and in life. Simplification through de-layering is something I can apply immediately with instant results.
detailed takeaways below
Dr DP
JWI 555 Organizational Change & Culture, Week9, 6/9/13
******************************************************
I. Simplify Organizational Structure (WK9 L1)
**********************************************
To develop change capability into a true competitive advantage, go beyond change tools, and focus on
- simplification
- delayering
- spans of control
- people management (performance assessments, rewards, training & development)
Build change capability steadily much like building health and strength going to the gym
(A) Simplify
************
Complexity is the enemy of change - makes it harder and slower to get things done
Too many steps, meetings, stakeholders, layers, products
Takes too long to make decisions.
Simple requests don't get action.
when we amplify the complexity by adding unnecessary layers of management,
confused accountability, slow and unclear decisions, garbled communications,
and lack of focus, it's our own fault. Maybe we don't create ecological disasters,
but we do create small ones in our own organizations every day (Ron Ashkenas, 2010)
To keep the acquired management teams happy, each brand was allowed to run itself in a semiautonomous way.
As the number of brands grew, it became increasingly more difficult to pull together the financials
(which each brand was doing differently, using different systems and assumptions) at the end of every month and quarter.
Eventually, the company found that it had more finance people than sales people, since so much work was required to reconcile the numbers.
The company then spent several years and many millions of dollars to integrate systems that should have been put together as new brands came on board.
(Ron Ashkenas, 2011)
Sources of complexity
**********************
(i) Dysfunctional structures
****************************
- structures have too many levels, redundant functions, unclear roles, disconnected silos
- positions, levels, departments added in response to environmental shifts, acquisitions, professions & ego needs of key employees
- slow communications
Causes: focusing on structure before strategy; designing based on people & personalities; building mechanical rather than organic organizations
Simplify: differentiate between core and context; take customer perspective; consolidate similar functions & tasks; prune layers & increase spans of control
(ii) Product & Service proliferation
*************************************
- products, features, services added
without reducing overall portfolio of offerings, streamlining support requirements
- large inventories
Causes: Adding products, not subtracting; creating products without planning support; selling products that don't integrate with products in customer environment
Simplify: Analyze portfolio; rationalize and reduce products; partner with customers in designing products
(iii) Unplanned process evolution
**********************************
Build process with too many steps, loops, approvals, missing metrics
don't manage them as they evolve and grow
Causes: Local differences; multiplication of steps; informality of process; lack of cross-functional cross-unit transparency
Simplify: Identify best practices; map and redesign processes; use six sigma, rapid results, work-out
(iv) unproductive managerial behavior
*************************************
Causes: giving vague assignments, not holding people accountable, miscommunicating, choosing conflict avoidance over candor
Simplify: ask for feedback, cut unintentional complexity; get a coach/mentor; practice and test communications; beware complexity causing behaviors
Approaches to simplification include
*************************************
Customer oriented perspective
Five change tools
Effective Communication
Results focused demand making
Organizations evolving with Technological/managerial innovation
****************************************************************
moving from silo'd independence to interdependence
"cannot change anything without changing everything" John Kotter
Delayer the organization (layers of Sweaters put you out of touch with environment)
*************************
Function of a manager
*********************
traditional static view: controlling manager aggregates work of subordinates
************************
Optimal level of interaction, attention and control:
5-8 direct reports per manager
higher number means increase in cost, slow decision making, distorted information flow
modern dynamic view: shift from control to adding value
********************
reduce layers and increase direct reports up to 10-15; no more than 8 layers
Do not micromanage employees, relinquish control, empower subordinates
Look for other ways to add value - increase customer contact, develop strategy, make demands, communicate with clarity, improve process, coach, distribute accountability
Direct reports step up - take on greater accountability, show more initiative, make more of own decisions
Faster, more flexible, empowered organizations that are able to change
II. Layers must be prevented (Welch, video, JWI 555 Wk9)
*****************************
(1) Layers slow down everything such as decision making
*********************************************************
Speed is a competitive necessity in today's marketplace.
Layers work against speed of action - they slow things down.
More layers means more rubber stamps.
(2) Layers distort change communication
*****************************************
While communicating change:
Layers add spin, interpretation, buzz, distorting information.
(3) Layers smother and bury startups within large firms
********************************************************
Piles of bureaucrats, processes deprive entrpreneurial ventures that need oxygen and sunlight to survive
(4) Layers cause underutilization & meddling
**********************************************
When there are lots of layers, it may mean managers have too few people reporting to them.
Managers babysit their direct reports or do their job for them.
This kills morale and initiative
Managers should have 8-12 direct reports
Senior leaders should have more direct reports
(5) Layers pop up with growth but must be prevented where possible
******************************************************************
Even when there is no growth firms tend to add layers.
They give people an illusion of Promotions though without raises.
Think of every layer as a bad layer
Much like avoiding danger in a hurricane, if you see a layer coming, batten down the hatches and escape to higher ground.
III. What kind of person is a change agent? (JW podcast Wk9)
**************************************
They are different
10% of employees
everyone has an idea to change
very difficult for anyone to change anything without power
down in the org, big ideas face org inertia and authority structures that stand in the way
more and more employee engagement
hold authority - hire promote fire reward followers for buying into their change program
See a future that no one does
******************************
leaders see things others dont see
see what is better for org
see the need for change
see a discontinuity coming at them
they want to organize and get ahead of curve
to survive
paranoid nutcases
smell something a long way off
Have the guts
**************
courage to bet career, jobs
believes in bold action
willing to face consequences
messy
know in gut they are right
ambiguity ok
bias action
real guts
Assemble followers
*******************
chemistry that galvanizes
turns people on - want to be there, right thing to do, rewarding
love the direction - intensity, caring (not whip people over)
group of people who buy in
followers
change brings growth - survival, elixir, better jobs, oxygen to blood, more and better jobs, new products, global expansion, so much fun and excitement
growing company - has an electric atmosphere; flat or sinking firm - biz as usual, victory is hard to see, show up turn the crank go home
so exciting to lead and be a part of a change initiative
Take intrinsic Authority, Don't wait
See the future no one sees
Have the guts to bet your career
assemble followers to go for it
so exciting to lead a change initiative
IV. McKinsey (Beinhocker et al, 2009)
**********************************
A low-trust environment makes everything about doing business more difficult.
Loss of trust leads to higher costs, lower brand value, greater difficulty attracting, retaining and managing talent.
Regain trust of stakeholders and effectively manage relationships.
Management objective is not just to increase shareholder value but to gain trust of all stakeholders.
Key stakeholders should include employees, customers, suppliers, communities, the press, unions, governments, civil society.
Decision making, compensation practices, performance management must shift from shareholder-centric to multi-stakeholders centric focus.
seek ways to exploit the increasing amount of data and computing power.
Understand quantitative tools - function, assumptions, limitations
V. Create change (Welch, JWI 555 video, WK9)
******************
Be Totally open to change
dont live in the past
yesterday means nothing
successes of yesterday
today look at tomorrows game
blow up past
do your thing
way used to do it - resisters; dont spend too much time; see u later ; no place for u in this train
VI.Lead Change through people management (W9L2)
*****************************************
Manage People - Hire, Develop & Promote Talent, Fire underperformers
Performance Assessment & Rewards Drive Change
*********************************************
Performance assessment
- Identify a change leader
- Assess & reward people's performance during an organizational transformation
Hire and promote only true believers and get-on-with-it types
*************************************************************
change leaders make up 10% of the population
*********************************************
- brash, high-energy, paranoid about the future, invent change initiatives or want to lead them, curious, forward-looking
- they ask a lot of questions, "why don't we...?"
- courageous, fearlessness about the unknown
- thick-skinned about the unknown, risk
- make bold decisions without a lot of data
- ferret out and remove resisters
change followers happy to get on with it.
*****************************************
- do what they are measured on
- rewarded for desired new behaviors ie change capability
simlicity, speed, self-confidence (Welch)
**********************************
Identify standards for leadership behavior that drive change and use these as basis for high level promotion decisions
- managerial attributes
- 360 degree feedback
- questionnaires
GE Performance Matrix
*********************
Good leadership behavior & values, Achieved Results => Promote and Reward
Good leadership behavior & values, did not achieve results => provide leadership development, give chances
Bad leadership behavior & values, achieved results => Tough calls - fire if they cannot change
Bad leadership behavior & values, did not achieve results => Easy calls - no future with the firm
Achieve financial results
Exhibit GE values including Speed, Simplicity, Self-confidence
manage, promote, reward
fire resisters even if they achieved results:
- they do not accept change
- personality issue, entrenched emotionally, intellectually, politically
- they lower the morale of people who support change
Reward people for aligning with the vision for change
******************************************************
Soul & Wallet
*************
- money:Differentiated rewards for great work done - key for motivation and retentio
- recognition:Differentiated rewards for great work done - key for motivation and retention
- training: good people want to grow; love to learn and stretch; increased capability, confidence, ambition, achievement
Leadership skills & behaviors essential to driving change
*********************************************************
(i) Look forward to where change will be most urgently needed
(ii) create and communicate vision for change
(iii) mobilize support for change effort
(iv) make clear demands for results to be achieved, give honest performance feedback
(v) organize and direct people in ways that they can make change happen
(vi) communicate openly, honestly across org levels and boundaries
(vii) master at least one change methodology and use it widely to generate best results
(viii) overcome barriers and resistance
Org-wide change capability
***************************
- need common framework and language for change
- train as many people as possible with widespread capacity for action
Best large scale efforts
*************************
- orchestrated from the center
- they propel people into action to produce real results
- deliberately aim to produce measurable change in few months or less
- rolled out quickly across entire company , largely run by in-house people: this the new way we do things
- interactive and mind-bending: conveys information but influences behavior; stimulates real dialogue; spur people to question assumptions; encourage employees to experiment
- place high potentials in leadership roles, force them to stretch and grow: learning drives change
- provides many opportunities
VII. DQ1 - Organization layers impede communication and change
********
VIII. DQ2 - Which leadership skill you find most difficult to implement
*******
(1) Honest performance feedback is critical and would help improve productivity.
Reference: Shore, J. (2008). Four Types of People Who Can’t Hear Feedback.
http://www.thinkbusiness.com/pages/article_downloads/Four_Types_of_People_Who_Can't_Hear_Feedback.pdf
Performance Feedback - whom not to give to
*********************
Jean Shore (2008) described four types of people who may not want to hear “honest performance feedback”:
1) people who have been hurt by feedback and are living in fear that they will be hurt again;
2) people who think they know it all;
3) people who don’t value the opinions of others; and
4) people who are currently in personal crisis.
Providing Feedback - how to give and receive it
*******************
Observe behavior and determine if important feedback needs to be given.
Decide if the person is self-aware and mature enough to receive feedback.
Start with positive messages and then deliver the negative feedback.
If person is not mature enough to handle feedback and the truth, use other mitigation techniques to work around the problem.
(2) A view from a marine who retired and entered corporate life
****************************************************************
Disconnect between commitment to the mission & execs giving themselves bonuses while laying people off
Is there a better way for corporate leadership ?
Honor, Courage, and Commitment - Marine Corps Values (courtesy - FC)
*****************************************************
14 leadership traits, and 11 leadership principles (RP 0103 - Principles of Marine Corps Leadership).
***************************************************
(JJ-DID-TIE a BUCKLE)
Justice - Giving reward and punishment according to the merits of the case in question.
Judgment - The ability to weigh facts and possible courses of action in order to make sound decisions.
Dependability - The certainty of proper performance of duty.
Integrity - Uprightness of character and soundness of moral principles. The quality of truthfulness and honesty.
Decisiveness - Ability to make decisions promptly and to announce them in a clear, forceful manner.
Tact - The ability to deal with others in a manner that will maintain good relations and avoid offense.
Initiative - Taking action in the absence of orders.
Enthusiasm - The display of sincere interest and exuberance in the performance of duty
Bearing - Creating a favorable impression in carriage, appearance, and personal conduct at all times.
Unselfishness - Avoidance of providing for one’s own comfort and personal advancement at the expense of others.
Courage - Courage is a mental quality that recognizes fear of danger or criticism, but enables a Marine to proceed in the face of danger with calmness and firmness.
Knowledge - Understanding of a science or an art. The range of one’s information, including professional knowledge and understanding of your Marines.
Loyalty - The quality of faithfulness to country, Corps, unit, seniors, subordinates and peers.
Endurance - The mental and physical stamina measured by the ability to withstand pain, fatigue, stress, and hardship.
The 11 leadership principles are;
***********************************
Know Yourself and Seek Self Improvement
Be Technically and Tactically Proficient
Know Your People and Look Out For Their Welfare
Keep Your Personnel Informed
Set the Example
Ensure That the Task Is Understood, Supervised, and Accomplished
Train Your Marines and Sailors as a Team
Make Sound and Timely Decisions
Develop A Sense Of Responsibility Among Your Subordinates
Employ Your Command within its Capabilities
Seek Responsibilities and Take Responsibility
Whew ! What a marathon this week was. I found this week to be among the most challenging to keep up, given the many materials to read, digest and synthesize. The end result is rewarding for sure as I gained whole new frameworks and perspectives on managing change & communication. Key insights I learned this week include:
(1) Complexity is the enemy of change. Sources of simplicity include dysfunctional structures, product/service proliferation, unplanned process evolution and unproductive managerial behavior.
(2) Antidotes include Customer-centered perspective, Five change tools, Communication Clarity, Results focused demand making, Delayering, moving from command & control style of management to empowering direct reports to make their own decisions.
(3) Layers must be prevented as they insulate from reality, slow down decision making, distort information and smother initiative.
(4) Be a change agent (Welch, podcast WK9) - See the future no one sees; Take intrinsic Authority, Don't wait; Have the guts to bet your careerl; assemble followers to go for it; exude excitement to lead and be a part of a change initiative; be open to change; forget yesterday's game and look at every day afresh
(5) Management objective is not just to increase shareholder value but to gain trust of all stakeholders (McKinsey, 2009). Key stakeholders should include employees, customers, suppliers, communities, the press, unions, governments, civil society. Decision making, compensation practices, performance management must shift from shareholder-centric to multi-stakeholders centric focus.
(6) Manage People to lead change - Hire, Develop & Promote Talent; Fire under-performers and resisters
(7) Leadership skills & behaviors essential to driving change include
(i) Look forward to where change will be most urgently needed
(ii) create and communicate vision for change
(iii) mobilize support for change effort
(iv) make clear demands for results to be achieved, give honest performance feedback
(v) organize and direct people in ways that they can make change happen
(vi) communicate openly, honestly across org levels and boundaries
(vii) master at least one change methodology and use it widely to generate best results
(viii) overcome barriers and resistance
Continuously improve change-capability in the firm by improving your own skills as a leader and a manager.
There are numerous applications of these valuable principles I foresee at work and in life. Simplification through de-layering is something I can apply immediately with instant results.
detailed takeaways below
Dr DP
JWI 555 Organizational Change & Culture, Week9, 6/9/13
******************************************************
I. Simplify Organizational Structure (WK9 L1)
**********************************************
To develop change capability into a true competitive advantage, go beyond change tools, and focus on
- simplification
- delayering
- spans of control
- people management (performance assessments, rewards, training & development)
Build change capability steadily much like building health and strength going to the gym
(A) Simplify
************
Complexity is the enemy of change - makes it harder and slower to get things done
Too many steps, meetings, stakeholders, layers, products
Takes too long to make decisions.
Simple requests don't get action.
when we amplify the complexity by adding unnecessary layers of management,
confused accountability, slow and unclear decisions, garbled communications,
and lack of focus, it's our own fault. Maybe we don't create ecological disasters,
but we do create small ones in our own organizations every day (Ron Ashkenas, 2010)
To keep the acquired management teams happy, each brand was allowed to run itself in a semiautonomous way.
As the number of brands grew, it became increasingly more difficult to pull together the financials
(which each brand was doing differently, using different systems and assumptions) at the end of every month and quarter.
Eventually, the company found that it had more finance people than sales people, since so much work was required to reconcile the numbers.
The company then spent several years and many millions of dollars to integrate systems that should have been put together as new brands came on board.
(Ron Ashkenas, 2011)
Sources of complexity
**********************
(i) Dysfunctional structures
****************************
- structures have too many levels, redundant functions, unclear roles, disconnected silos
- positions, levels, departments added in response to environmental shifts, acquisitions, professions & ego needs of key employees
- slow communications
Causes: focusing on structure before strategy; designing based on people & personalities; building mechanical rather than organic organizations
Simplify: differentiate between core and context; take customer perspective; consolidate similar functions & tasks; prune layers & increase spans of control
(ii) Product & Service proliferation
*************************************
- products, features, services added
without reducing overall portfolio of offerings, streamlining support requirements
- large inventories
Causes: Adding products, not subtracting; creating products without planning support; selling products that don't integrate with products in customer environment
Simplify: Analyze portfolio; rationalize and reduce products; partner with customers in designing products
(iii) Unplanned process evolution
**********************************
Build process with too many steps, loops, approvals, missing metrics
don't manage them as they evolve and grow
Causes: Local differences; multiplication of steps; informality of process; lack of cross-functional cross-unit transparency
Simplify: Identify best practices; map and redesign processes; use six sigma, rapid results, work-out
(iv) unproductive managerial behavior
*************************************
Causes: giving vague assignments, not holding people accountable, miscommunicating, choosing conflict avoidance over candor
Simplify: ask for feedback, cut unintentional complexity; get a coach/mentor; practice and test communications; beware complexity causing behaviors
Approaches to simplification include
*************************************
Customer oriented perspective
Five change tools
Effective Communication
Results focused demand making
Organizations evolving with Technological/managerial innovation
****************************************************************
moving from silo'd independence to interdependence
"cannot change anything without changing everything" John Kotter
Delayer the organization (layers of Sweaters put you out of touch with environment)
*************************
Function of a manager
*********************
traditional static view: controlling manager aggregates work of subordinates
************************
Optimal level of interaction, attention and control:
5-8 direct reports per manager
higher number means increase in cost, slow decision making, distorted information flow
modern dynamic view: shift from control to adding value
********************
reduce layers and increase direct reports up to 10-15; no more than 8 layers
Do not micromanage employees, relinquish control, empower subordinates
Look for other ways to add value - increase customer contact, develop strategy, make demands, communicate with clarity, improve process, coach, distribute accountability
Direct reports step up - take on greater accountability, show more initiative, make more of own decisions
Faster, more flexible, empowered organizations that are able to change
II. Layers must be prevented (Welch, video, JWI 555 Wk9)
*****************************
(1) Layers slow down everything such as decision making
*********************************************************
Speed is a competitive necessity in today's marketplace.
Layers work against speed of action - they slow things down.
More layers means more rubber stamps.
(2) Layers distort change communication
*****************************************
While communicating change:
Layers add spin, interpretation, buzz, distorting information.
(3) Layers smother and bury startups within large firms
********************************************************
Piles of bureaucrats, processes deprive entrpreneurial ventures that need oxygen and sunlight to survive
(4) Layers cause underutilization & meddling
**********************************************
When there are lots of layers, it may mean managers have too few people reporting to them.
Managers babysit their direct reports or do their job for them.
This kills morale and initiative
Managers should have 8-12 direct reports
Senior leaders should have more direct reports
(5) Layers pop up with growth but must be prevented where possible
******************************************************************
Even when there is no growth firms tend to add layers.
They give people an illusion of Promotions though without raises.
Think of every layer as a bad layer
Much like avoiding danger in a hurricane, if you see a layer coming, batten down the hatches and escape to higher ground.
III. What kind of person is a change agent? (JW podcast Wk9)
**************************************
They are different
10% of employees
everyone has an idea to change
very difficult for anyone to change anything without power
down in the org, big ideas face org inertia and authority structures that stand in the way
more and more employee engagement
hold authority - hire promote fire reward followers for buying into their change program
See a future that no one does
******************************
leaders see things others dont see
see what is better for org
see the need for change
see a discontinuity coming at them
they want to organize and get ahead of curve
to survive
paranoid nutcases
smell something a long way off
Have the guts
**************
courage to bet career, jobs
believes in bold action
willing to face consequences
messy
know in gut they are right
ambiguity ok
bias action
real guts
Assemble followers
*******************
chemistry that galvanizes
turns people on - want to be there, right thing to do, rewarding
love the direction - intensity, caring (not whip people over)
group of people who buy in
followers
change brings growth - survival, elixir, better jobs, oxygen to blood, more and better jobs, new products, global expansion, so much fun and excitement
growing company - has an electric atmosphere; flat or sinking firm - biz as usual, victory is hard to see, show up turn the crank go home
so exciting to lead and be a part of a change initiative
Take intrinsic Authority, Don't wait
See the future no one sees
Have the guts to bet your career
assemble followers to go for it
so exciting to lead a change initiative
IV. McKinsey (Beinhocker et al, 2009)
**********************************
A low-trust environment makes everything about doing business more difficult.
Loss of trust leads to higher costs, lower brand value, greater difficulty attracting, retaining and managing talent.
Regain trust of stakeholders and effectively manage relationships.
Management objective is not just to increase shareholder value but to gain trust of all stakeholders.
Key stakeholders should include employees, customers, suppliers, communities, the press, unions, governments, civil society.
Decision making, compensation practices, performance management must shift from shareholder-centric to multi-stakeholders centric focus.
seek ways to exploit the increasing amount of data and computing power.
Understand quantitative tools - function, assumptions, limitations
V. Create change (Welch, JWI 555 video, WK9)
******************
Be Totally open to change
dont live in the past
yesterday means nothing
successes of yesterday
today look at tomorrows game
blow up past
do your thing
way used to do it - resisters; dont spend too much time; see u later ; no place for u in this train
VI.Lead Change through people management (W9L2)
*****************************************
Manage People - Hire, Develop & Promote Talent, Fire underperformers
Performance Assessment & Rewards Drive Change
*********************************************
Performance assessment
- Identify a change leader
- Assess & reward people's performance during an organizational transformation
Hire and promote only true believers and get-on-with-it types
*************************************************************
change leaders make up 10% of the population
*********************************************
- brash, high-energy, paranoid about the future, invent change initiatives or want to lead them, curious, forward-looking
- they ask a lot of questions, "why don't we...?"
- courageous, fearlessness about the unknown
- thick-skinned about the unknown, risk
- make bold decisions without a lot of data
- ferret out and remove resisters
change followers happy to get on with it.
*****************************************
- do what they are measured on
- rewarded for desired new behaviors ie change capability
simlicity, speed, self-confidence (Welch)
**********************************
Identify standards for leadership behavior that drive change and use these as basis for high level promotion decisions
- managerial attributes
- 360 degree feedback
- questionnaires
GE Performance Matrix
*********************
Good leadership behavior & values, Achieved Results => Promote and Reward
Good leadership behavior & values, did not achieve results => provide leadership development, give chances
Bad leadership behavior & values, achieved results => Tough calls - fire if they cannot change
Bad leadership behavior & values, did not achieve results => Easy calls - no future with the firm
Achieve financial results
Exhibit GE values including Speed, Simplicity, Self-confidence
manage, promote, reward
fire resisters even if they achieved results:
- they do not accept change
- personality issue, entrenched emotionally, intellectually, politically
- they lower the morale of people who support change
Reward people for aligning with the vision for change
******************************************************
Soul & Wallet
*************
- money:Differentiated rewards for great work done - key for motivation and retentio
- recognition:Differentiated rewards for great work done - key for motivation and retention
- training: good people want to grow; love to learn and stretch; increased capability, confidence, ambition, achievement
Leadership skills & behaviors essential to driving change
*********************************************************
(i) Look forward to where change will be most urgently needed
(ii) create and communicate vision for change
(iii) mobilize support for change effort
(iv) make clear demands for results to be achieved, give honest performance feedback
(v) organize and direct people in ways that they can make change happen
(vi) communicate openly, honestly across org levels and boundaries
(vii) master at least one change methodology and use it widely to generate best results
(viii) overcome barriers and resistance
Org-wide change capability
***************************
- need common framework and language for change
- train as many people as possible with widespread capacity for action
Best large scale efforts
*************************
- orchestrated from the center
- they propel people into action to produce real results
- deliberately aim to produce measurable change in few months or less
- rolled out quickly across entire company , largely run by in-house people: this the new way we do things
- interactive and mind-bending: conveys information but influences behavior; stimulates real dialogue; spur people to question assumptions; encourage employees to experiment
- place high potentials in leadership roles, force them to stretch and grow: learning drives change
- provides many opportunities
VII. DQ1 - Organization layers impede communication and change
********
VIII. DQ2 - Which leadership skill you find most difficult to implement
*******
(1) Honest performance feedback is critical and would help improve productivity.
Reference: Shore, J. (2008). Four Types of People Who Can’t Hear Feedback.
http://www.thinkbusiness.com/pages/article_downloads/Four_Types_of_People_Who_Can't_Hear_Feedback.pdf
Performance Feedback - whom not to give to
*********************
Jean Shore (2008) described four types of people who may not want to hear “honest performance feedback”:
1) people who have been hurt by feedback and are living in fear that they will be hurt again;
2) people who think they know it all;
3) people who don’t value the opinions of others; and
4) people who are currently in personal crisis.
Providing Feedback - how to give and receive it
*******************
Observe behavior and determine if important feedback needs to be given.
Decide if the person is self-aware and mature enough to receive feedback.
Start with positive messages and then deliver the negative feedback.
If person is not mature enough to handle feedback and the truth, use other mitigation techniques to work around the problem.
(2) A view from a marine who retired and entered corporate life
****************************************************************
Disconnect between commitment to the mission & execs giving themselves bonuses while laying people off
Is there a better way for corporate leadership ?
Honor, Courage, and Commitment - Marine Corps Values (courtesy - FC)
*****************************************************
14 leadership traits, and 11 leadership principles (RP 0103 - Principles of Marine Corps Leadership).
***************************************************
(JJ-DID-TIE a BUCKLE)
Justice - Giving reward and punishment according to the merits of the case in question.
Judgment - The ability to weigh facts and possible courses of action in order to make sound decisions.
Dependability - The certainty of proper performance of duty.
Integrity - Uprightness of character and soundness of moral principles. The quality of truthfulness and honesty.
Decisiveness - Ability to make decisions promptly and to announce them in a clear, forceful manner.
Tact - The ability to deal with others in a manner that will maintain good relations and avoid offense.
Initiative - Taking action in the absence of orders.
Enthusiasm - The display of sincere interest and exuberance in the performance of duty
Bearing - Creating a favorable impression in carriage, appearance, and personal conduct at all times.
Unselfishness - Avoidance of providing for one’s own comfort and personal advancement at the expense of others.
Courage - Courage is a mental quality that recognizes fear of danger or criticism, but enables a Marine to proceed in the face of danger with calmness and firmness.
Knowledge - Understanding of a science or an art. The range of one’s information, including professional knowledge and understanding of your Marines.
Loyalty - The quality of faithfulness to country, Corps, unit, seniors, subordinates and peers.
Endurance - The mental and physical stamina measured by the ability to withstand pain, fatigue, stress, and hardship.
The 11 leadership principles are;
***********************************
Know Yourself and Seek Self Improvement
Be Technically and Tactically Proficient
Know Your People and Look Out For Their Welfare
Keep Your Personnel Informed
Set the Example
Ensure That the Task Is Understood, Supervised, and Accomplished
Train Your Marines and Sailors as a Team
Make Sound and Timely Decisions
Develop A Sense Of Responsibility Among Your Subordinates
Employ Your Command within its Capabilities
Seek Responsibilities and Take Responsibility
Sunday, June 2, 2013
Understand role of Hedging & Diversification in limiting the down side & generating profit
JWI 531 Financial Management II, 5/30/13
WK8L1
*******
Operational success of firms is not merely a function of how well products sell or how well costs are managed - greater forces are at work
eg. currency movement ie Foreign exchange
Global currencies are constantly fluctuating in response to complex macroeconomic forces
Companies that increasingly sell products abroad have to deal with macroeconomic risks associated with international trade.
Think like a risk manager and manage Operational risk in a corporate environment
******************************************************
(i) Hedge currency risk in multinational businesses
(ii) limit risk associated with key costs and prices
Ask the right questions for your business
*****************************************
- get practical solutions
Turn Dollars into Sense
***********************
American businesses do $2.5 trillion worth of business outside US borders.
Europe - turbulence
China - yuan steadily risen in value against dollar
Example of complex global forces at work:
Spring 2010 Unilever shares fall 20% unexpectedly (Lipton, Slim-Fast, Dove, Vaseline etc)
Strong numbers in previous quarter, market stable
Some Unilever stocks traded in NYSE as American Depositary Receipts (ADRs)
Shares traded in US$
Proxies of principal shares listed in UK
Pound declined 11% vs dollar
Dollar denominated ADR shares should have falled similarly
Unilever reports financial results, sets dividend payout in euros
Euro tumbles vs Pound vs Dollar
Euro dollar pound Yuan Rupee Real
Hedging Currency Risk
*********************
This is a crucial part of corporate financial success of a business.
Firms Hedge currency exposure through financial derivatives.
Protect against impact of exchange rates.
Purchase cheap insurance against denominations.
Limit the negative effects of an unexpected event.
Currency effects can impact corporate earnings and valuation
Hedging Commodities and Supplies
********************************
Futures contracts: lock in prices with a type of of derivative
steel, oil, metal
without derivatives, they will be forced to deal with volatile price fluctuations.
Derivatives help provide security
When a company sees prices would be rising for crucial inputs such as sugar and cocoa, it takes actions to lock in prices early
Hershey diversified its dependence of cocoa supply
Not cornered
Mitigate risk by locking in predictable prices for crucial inputs, especially those exposed to serious volatility
Avoid exposing earnings to uncertain markets
Southwest Airlines: ingenious hedging strategy
Saw fuel prices rising and locked in oil prices for years => competitive advantage
This made SouthWest Airlines special and stand out => 17 straight years profits, unusual in the industry
Value of a derivative-based hedging: Allows businesses to take future uncertainty and turn it into a fixed, predictable cost.
There is value and risk.
Businesses most exposed to currency fluctuations
*************************************************
International, Multinationals - Revenues from products or services sold overseas; smaller importers/exporters businesses
European firms - Euro volatility
Global currencies are constantly fluctuating in response to complex macroeconomic forces.
Companies that increasingly sell products abroad have to deal with macroeconomic risks associated with international trade (JWI 531, W8L1)
II. DQ1
*******
I. What types of businesses are most exposed to currency fluctuations?
Global currencies are constantly fluctuating in response to complex macroeconomic forces. Companies that increasingly sell products abroad have to deal with macroeconomic risks associated with international trade (JWI 531, W8L1). Companies most at risk would include
(i) Multinational firms that have revenues in multiple currencies
(ii) Importers & Exporters whose cost/profit structure could be dramatically altered by currency fluctuation
(iii) Companies that have not made accurate forecasts and therefore have not successfully hedged against currency fluctuations. Successful firms protect against impact of exchange rates. They purchase cheap insurance against other denominations and limit the negative effects of an unexpected event.
II. What type of businesses are most exposed to fluctuations in the costs of supplies?
Commodities will be the most exposed to supply costs. When profit margins are very thin, any significant change in cost of supplies can be disastrous for the firms. Southwest Airlines hedged against rising fuel supply costs and won big time. But when they made a losing bet, they suffered a brutally tough period, ending their long streak of profitability (JWI 531, W8L1).
Unlike commodities, for firms offering products or services with higher value proposition, the margins are likely to be higher, and therefore they can better absorb variation in supply costs.
Additionally, firms that have not hedged against fluctuations in supply costs will be more exposed.
III. What type of firms are more exposed to fluctuations in the costs of the finished products?
(i) Firms that do not mitigate risk - associated with key costs and prices - by locking in fixed prices of components through derivatives. When a company correctly sees prices would be rising for crucial inputs, it should take actions to lock in prices early.
(ii) Firms that depend on a single source for supply eg. Chocolate firms that did not hedge against cocoa price like Hershey did suffered, forced to buy from a single source that cornered the market.
Hedging through derivatives & diversification can help limit the down side and "buy insurance" for the firm. Hedging can also carry with it high risk that can limit the upside profits for a firm or in the worst case, for those who dabble without understanding the fundamentals, lead a firm to closure or acquisition.
Dr DP
WK8L1
*******
Operational success of firms is not merely a function of how well products sell or how well costs are managed - greater forces are at work
eg. currency movement ie Foreign exchange
Global currencies are constantly fluctuating in response to complex macroeconomic forces
Companies that increasingly sell products abroad have to deal with macroeconomic risks associated with international trade.
Think like a risk manager and manage Operational risk in a corporate environment
******************************************************
(i) Hedge currency risk in multinational businesses
(ii) limit risk associated with key costs and prices
Ask the right questions for your business
*****************************************
- get practical solutions
Turn Dollars into Sense
***********************
American businesses do $2.5 trillion worth of business outside US borders.
Europe - turbulence
China - yuan steadily risen in value against dollar
Example of complex global forces at work:
Spring 2010 Unilever shares fall 20% unexpectedly (Lipton, Slim-Fast, Dove, Vaseline etc)
Strong numbers in previous quarter, market stable
Some Unilever stocks traded in NYSE as American Depositary Receipts (ADRs)
Shares traded in US$
Proxies of principal shares listed in UK
Pound declined 11% vs dollar
Dollar denominated ADR shares should have falled similarly
Unilever reports financial results, sets dividend payout in euros
Euro tumbles vs Pound vs Dollar
Euro dollar pound Yuan Rupee Real
Hedging Currency Risk
*********************
This is a crucial part of corporate financial success of a business.
Firms Hedge currency exposure through financial derivatives.
Protect against impact of exchange rates.
Purchase cheap insurance against denominations.
Limit the negative effects of an unexpected event.
Currency effects can impact corporate earnings and valuation
Hedging Commodities and Supplies
********************************
Futures contracts: lock in prices with a type of of derivative
steel, oil, metal
without derivatives, they will be forced to deal with volatile price fluctuations.
Derivatives help provide security
When a company sees prices would be rising for crucial inputs such as sugar and cocoa, it takes actions to lock in prices early
Hershey diversified its dependence of cocoa supply
Not cornered
Mitigate risk by locking in predictable prices for crucial inputs, especially those exposed to serious volatility
Avoid exposing earnings to uncertain markets
Southwest Airlines: ingenious hedging strategy
Saw fuel prices rising and locked in oil prices for years => competitive advantage
This made SouthWest Airlines special and stand out => 17 straight years profits, unusual in the industry
Value of a derivative-based hedging: Allows businesses to take future uncertainty and turn it into a fixed, predictable cost.
There is value and risk.
Businesses most exposed to currency fluctuations
*************************************************
International, Multinationals - Revenues from products or services sold overseas; smaller importers/exporters businesses
European firms - Euro volatility
Global currencies are constantly fluctuating in response to complex macroeconomic forces.
Companies that increasingly sell products abroad have to deal with macroeconomic risks associated with international trade (JWI 531, W8L1)
II. DQ1
*******
I. What types of businesses are most exposed to currency fluctuations?
Global currencies are constantly fluctuating in response to complex macroeconomic forces. Companies that increasingly sell products abroad have to deal with macroeconomic risks associated with international trade (JWI 531, W8L1). Companies most at risk would include
(i) Multinational firms that have revenues in multiple currencies
(ii) Importers & Exporters whose cost/profit structure could be dramatically altered by currency fluctuation
(iii) Companies that have not made accurate forecasts and therefore have not successfully hedged against currency fluctuations. Successful firms protect against impact of exchange rates. They purchase cheap insurance against other denominations and limit the negative effects of an unexpected event.
II. What type of businesses are most exposed to fluctuations in the costs of supplies?
Commodities will be the most exposed to supply costs. When profit margins are very thin, any significant change in cost of supplies can be disastrous for the firms. Southwest Airlines hedged against rising fuel supply costs and won big time. But when they made a losing bet, they suffered a brutally tough period, ending their long streak of profitability (JWI 531, W8L1).
Unlike commodities, for firms offering products or services with higher value proposition, the margins are likely to be higher, and therefore they can better absorb variation in supply costs.
Additionally, firms that have not hedged against fluctuations in supply costs will be more exposed.
III. What type of firms are more exposed to fluctuations in the costs of the finished products?
(i) Firms that do not mitigate risk - associated with key costs and prices - by locking in fixed prices of components through derivatives. When a company correctly sees prices would be rising for crucial inputs, it should take actions to lock in prices early.
(ii) Firms that depend on a single source for supply eg. Chocolate firms that did not hedge against cocoa price like Hershey did suffered, forced to buy from a single source that cornered the market.
Hedging through derivatives & diversification can help limit the down side and "buy insurance" for the firm. Hedging can also carry with it high risk that can limit the upside profits for a firm or in the worst case, for those who dabble without understanding the fundamentals, lead a firm to closure or acquisition.
Dr DP
Use the right Change Leadership Tools to Turnaround Organizations
JWI 555 Organizational Change & Culture, Week8 Summary, 6/2/13
This was a challenging week for me with several key concepts to be synthesized.
(1) From Jack's video I learned the importance of communicating why change must happen, how change will be done, what is in it for the people and repeating ad nauseum. This makes perfect sense.
(2) From W8L1, I learned how to use the five tools for change leadership - best practice sharing, process redesign, rapid results, work-out and six-sigma - after taking into account practical considerations such as speed, cost, flexibility, range of problems they can tackle, technical rigor required and produced.
(3) W8L2 highlighted the 7 elements in effective change-communication: simplicity, metaphor, using multiple communication channels & forums, leading by example, explaining inconsistencies, talking but also listening.
(4) DQ1 gave me a chance to think and act like a CEO in a turn around situation, leading change from the forefront.
(5) The BP assignment with TeamB helped to pull all the concepts together and apply in a real life example. Working with TeamB colleagues Alexandra, Michael & Shalonda helped me learn how to work together with flexibility and leverage each member's unique strengths.
This certainly feels much like returning from a gym after a tough "work out" ! I know the rewards will be felt for years to come.
Fantastic week !
Dr DP
JWI 555 Organizational Change & Culture, week8 Summary, 5/29/13
****************************************************************
Change Leadership
******************
As a Leader, use judgment about which tools to use and when in the context of
- specifics of the change to be undertaken
- current and desired culture of the organization
A. Communicate the Rationale for Change (W8 Jack Welch video)
****************************************
Jack Welch - Four steps of change leadership
*********************************************
I. WHY CHANGE ? Environment is different; change is necessary
*************** Rationale for the change is this - there is a new and Real purpose for the company & the people
Problems, concerns & needs of customers exist
Candidly talk about what is not working well and how to improve things
Competitive opportunities and challenges are real
II. HOW YOU ARE GOING TO DO IT ? Build and convey a sense of urgency
******************************* Structure forms of communication and Collaboration
Prioritize change work; endure disruptions
III. WHAT'S IN IT FOR THE PEOPLE ? why this change is good for you ? you can keep the job; get promoted
***********************************
IV. REPEAT OVER & OVER Be out there & repeat yourself a million times over and over with same message - till gagging
*********************** Don't change the message with a different flavor; the change has to mean something real and positive for the firm and the people
B. W8L1 - Apply the right tools for change
*******************************************
Five major change tools that fuel increasing urgency
(i) Best practices - learn from counterparts; force slow moving insular orgs to include more relevant data, honest discussion in decision making
Builds urgency around persistent problems that others have found ways to improve
(ii) Process redesign - requires people from diverse departments to quickly collaborate and honestly assess how things are best done.
(iii) Rapid Results - bring together diverse groups of people; set high goals for fixing important processes; in 100 days or less
(iv) Work-Out - ditto; build an emotional felt sense of urgency
(v) Six Sigma - intellectually understood urgency; improve inefficient processes with precise data
Kotter's Change Leadership Framework
************************************
(a) create urgency
(b) shape a vision
(c) create a guiding coalition to mobilize commitment
(d) generate short term wins
(e) Communicate
Compare change-leadership techniques using
*******************************************
Kotter's framework
Practical considerations
Culture
Create urgency - Fight complacency
**********************************
(i) Best practices - Share (ii) Process redesign - Cross functional team work (iii) Rapid Results (iv) Work-Out (v) Six Sigma - intellectually fight inefficiency
All tools work best when change leader has already started building and conveying a sense of urgency and a widely held belief that change is necessary.
Each tool helps build urgency through structured forms of communication and collaboration.
People learn about needs, concerns, problems of customers.
They talk candidly about what is not working well and how to improve things.
Competitive opportunities and challenges are made real.
Shape a vision - iteratively
*****************************
Think, Discuss => research & collect data => prioritize and refine ideas.
Best Practices, Rapid Results - simple, effective, excellent for vision development process
Best practices helps compare vs other orgs
Rapid Results provides fast, real insights into what it takes to achieve measurable change
Both tools create strategies that pass the tests for effective vision - are imaginable, desirable, feasible, focused, flexible, communicable (Kotter)
Fundamentally re-imagine processes through process redesign, Work-Out, Six sigma
Feed valuable insights into the vision creation process
Process Redesign, Rapid Results, Work-Out, Six Sigma - effective ways to carry out a vision once it is in place.
All four techniques are scalable. Six sigma is difficult to scale down.
Rapid Results, Work-Out, Six Sigma have a higher flexibility and scope than Process redesign.
Mobilize Commitment
*******************
Guiding coalition increases the effectiveness of all five change techniques.
Best practices and Rapid Results can be used effectively even without a broad coalition.
Process redesign, WorkOut and Six Sigma require strong and broad guiding coalition - cross functional nature, significant investment required
Rapid Results, WorkOut and Six Sigma are project based - key people can be tapped for team leadership or membership
Senior managers can sponsor a team in their area
TownHall Meeting of Work-Out makes it particularly effective in mobilizing commitment.
Dramatically lift engagement through
**************************************
Open, candid discussion with senior management,
compelling sight of on-the-spot decision making,
getting questions answered quickly,
good ideas getting rewards
Generate Short Term Wins
*************************
Rapid Results & Work-Out are designed to achieve results quickly
One of these should be a part of any change effort.
Process redesign can also be used to generate short term wins.
Rapid execution of the new process is key.
Short term wins contribute to ongoing feeling of urgency
- they keep change efforts and results at the forefront of people's attention
If 6-12 months are taken to see any change, sense or urgency decreases, undermining overall change initiative.
When people experience short term wins they see their efforts as worthwhile
This cements people's commitment to the change initiative
Communicate the change vision
******************************
Critically important in driving and supporting change
Each of the change methodologies fosters change-focused communication among people who may not otherwise be in contact.
Overall communication plan must take into account the approach you choose.
Change leaders should be actively involved in addressing, launching, sponsoring best-practice sharing and results-focused teams.
Results should be communicated widely throughout the organization in support of the change efforts.
Work-Out brings large and diverse groups together for in-depth discussions.
Town Meeting provides the opportunity for everyone - most junior to most senior - to engage in an unprecedented kind of open conversation.
Practical Considerations:
********************
Select a change-leadership technique after taking into account factors such as Speed, Cost, Flexibility, Range of problems tackled, technical rigor required and produced.
For high speed: Process redesign, rapid results, work-out (not best practices, six sigma)
For lower cost: Except six-sigma, other 4 techniques are suitable
For flexibility: use best practices sharing, rapid results, work-out (not process redesign, six sigma)
For technical rigor: use six sigma
Cultural implications
******************
1. To transform from inward focused and arrogant state to a future state open to new ideas and new approaches to learning, use best practices sharing
2. To create boundarylessness across silo'd organizations, use process redesign
3. To shift from top-down activities focus to results focus, use rapid results & process redesign. Breakthrough hidden barriers of change-resistance. Give voice and dignity to front line people. Recognize and empower them.
4. To eliminate non-value-add work and stifling bureaucracy, and lead to simpler and efficient organizations, use Work-Out (along with process redesign, launch of rapid results projects, six sigma acceleration). Empower people throughout the organization to focus on results. Promote openness and candor to bring transparency in decision making.
5. To transform a rigid bureaucracy with analytical rigor, use six sigma and process redesign. Use six sigma to deepen a work-out. Spark a great deal of energy in the organization and return the organization to customer focus and winning once again.
Jack Welch Quotes
****************
"I’ve always believed that when the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight.”
"Change before you have to.”
C. W8L2 - Communicating Change
*******************************
Communication is a key piece of up-front work + long-term change effort
************************************************************************
Of Kotter's 8 steps for leading change, communication effort is most likely to fall short (based on client debriefings post major acquisitions & transformations)
"the single biggest problem in communication is the illusion that it has occurred" George Bernard Shaw
Urgency => coalition=>vision=>communicate=>empower=>short term wins=>consolidate=>culture
UC - Urgency Coalition
VC - Vision Communicate
EW - Empower Wins
CC - Consolidate culture
(i) Establish sense of urgency
(ii) Create guiding coalition
(iii) Develop a change vision
(iv) Communicate the change vision => Lay the foundation for change
(v) Empower employees for broad based action
(vi) Generate short-term wins
(vii) Consolidate gains and produce more change
(viii) make it stick in the culture
Pitfalls in communicating change
*********************************
# people in Major change initiative means 100, 1000, 10000, 100000, 1000000 or more people:
- feel some urgency
- understand the change vision and how they will participate in it
- feel committed to it
- take new actions that are aligned with the vision
- learn as change unfolds
Guiding coalition - spends hundreds of hours to chew through data, assess alternatives, fine tune vision, grow in commitment
*****************
Rest of org is expected to understand and follow the change in a fraction of time, with a fraction of information.
What goes wrong in communicating effectively?
*********************************************
(i) Not enough communication (not enough charge)
****************************
simply not enough communication to create real understanding, change in behavior.
- A few big announcements and a series of newsletter articles are not enough.
- communication plentiful at senior levels, but never penetrates down into the org.
change-related information gets lost inside all the information that people must process.
(ii) Too much too soon, (overwhelmed)
***********************
Flood of information in communication channels at beginning of change effort, but the talk quickly trails off.
Creates impression that change initiative is no longer a priority.
(iii) It's all in the newsletter (reliance on one or two channels)
*********************************
Any medium of communication has strengths and weaknesses.
Using just one or two will leave change initiative exposed to weaknesses.
Newsletter may not answer questions or be effective in communication => does not secture committed action
(iv) Happy talk that is unclear (evasion, despite some who will lose)
********************************
Executives may not know which jobs will be lost or how lives may change.
Too often they conceal complexities under a blanket of happy talk.
On one hand they say "this is a merger of equals and everyone benefits".
On the other hand the actions they drive will mean some people will certainly be out of work in 6 months.
There are going to be winners and losers.
Effective organizational transformation requires leaders who are able/willing to share tough news.
Giving employees bad news helps them to be in a position to make plans.
Honest communication reduces time lost to anxiety, uncertainty, speculation.
(v) Mixed Messages (actions speak louder than words)
******************
- Different communicators are on different pages.
HR says one thing, sales says another and management yet another.
- Disconnect between words and actions of key leaders
who is being promoted?
where is the money going?
7 Elements of Good Change Communication in a change initiative (what it is not)
********************************************************************************
(i) Establish sense of urgency (urgency rate isn't high)
(ii) Create guiding coalition (not the right group)
(iii) Develop a change vision (bad idea, vision is too blurry)
(iv) Communicate the change vision & Lay the foundation for change (people don't listen carefully to information about new vision)
Element#1- simplicity, speed, self-confidence
**********************
no technobabble
convey complex patterns of change in a few evocative words
Element#2 - Metaphor, analogy, example
**************************************
make it memorable with emotional impact
visual, verbal images convey a great deal of information quickly
human brains are wired to understand pictures and stories
Element#3 - Multiple forums
***************************
use a wide variety of ways to communicate
share emotions to change behavior: personal, interactive, one-on-one discussions, informal meetings, work-outs
*********************************
share facts: email, newsletters, intranet, informal meetings, large events, project launches, work-outs
************
align channel with the message and purpose of communication
static one-way media: share information in a consistent way with many people
Element#4 -Repetition
**********************
Nobody gets the message the first time they hear it
Talk about the vision and direction constantly to the point of gagging
Element#5 - Leadership by example
**********************************
Build credibility in the change effort by having the entire guiding coalition and key managers walk the talk
Reward people who embody the new direction
If sacrifices are being asked of employees, senior management needs to make them too.
Decisions must consistently reflect the new direction even if they challenge old norms and positions
Element#6 - Explain seeming inconsistencies
********************************************
Recognize, Address and explain mixed signals
Be willing to share tough or bad news
Element#7 - Talk but also Listen
**********************************
Good communication flows both ways - give and take
two-way discussion key to build understanding and engagement
Talking & Conveying information is only one aspect
Equally important to listen to concerns, how change is going, how it could be improved
(v) Empower employees for broad based action
(vi) Generate short-term wins
(vii) Consolidate gains and produce more change
(viii) make it stick in the culture
Basic elements of a communication plan
***************************************
Change leader and guiding coalition deeply engaged in communication planning & execution
- identify messages, information, theme to be shared; pivotal events, roles of key leaders
- clarify stakeholders: internal, external
- say when communication will take place
- say how it is to be carried out, staged over a period of time
This was a challenging week for me with several key concepts to be synthesized.
(1) From Jack's video I learned the importance of communicating why change must happen, how change will be done, what is in it for the people and repeating ad nauseum. This makes perfect sense.
(2) From W8L1, I learned how to use the five tools for change leadership - best practice sharing, process redesign, rapid results, work-out and six-sigma - after taking into account practical considerations such as speed, cost, flexibility, range of problems they can tackle, technical rigor required and produced.
(3) W8L2 highlighted the 7 elements in effective change-communication: simplicity, metaphor, using multiple communication channels & forums, leading by example, explaining inconsistencies, talking but also listening.
(4) DQ1 gave me a chance to think and act like a CEO in a turn around situation, leading change from the forefront.
(5) The BP assignment with TeamB helped to pull all the concepts together and apply in a real life example. Working with TeamB colleagues Alexandra, Michael & Shalonda helped me learn how to work together with flexibility and leverage each member's unique strengths.
This certainly feels much like returning from a gym after a tough "work out" ! I know the rewards will be felt for years to come.
Fantastic week !
Dr DP
JWI 555 Organizational Change & Culture, week8 Summary, 5/29/13
****************************************************************
Change Leadership
******************
As a Leader, use judgment about which tools to use and when in the context of
- specifics of the change to be undertaken
- current and desired culture of the organization
A. Communicate the Rationale for Change (W8 Jack Welch video)
****************************************
Jack Welch - Four steps of change leadership
*********************************************
I. WHY CHANGE ? Environment is different; change is necessary
*************** Rationale for the change is this - there is a new and Real purpose for the company & the people
Problems, concerns & needs of customers exist
Candidly talk about what is not working well and how to improve things
Competitive opportunities and challenges are real
II. HOW YOU ARE GOING TO DO IT ? Build and convey a sense of urgency
******************************* Structure forms of communication and Collaboration
Prioritize change work; endure disruptions
III. WHAT'S IN IT FOR THE PEOPLE ? why this change is good for you ? you can keep the job; get promoted
***********************************
IV. REPEAT OVER & OVER Be out there & repeat yourself a million times over and over with same message - till gagging
*********************** Don't change the message with a different flavor; the change has to mean something real and positive for the firm and the people
B. W8L1 - Apply the right tools for change
*******************************************
Five major change tools that fuel increasing urgency
(i) Best practices - learn from counterparts; force slow moving insular orgs to include more relevant data, honest discussion in decision making
Builds urgency around persistent problems that others have found ways to improve
(ii) Process redesign - requires people from diverse departments to quickly collaborate and honestly assess how things are best done.
(iii) Rapid Results - bring together diverse groups of people; set high goals for fixing important processes; in 100 days or less
(iv) Work-Out - ditto; build an emotional felt sense of urgency
(v) Six Sigma - intellectually understood urgency; improve inefficient processes with precise data
Kotter's Change Leadership Framework
************************************
(a) create urgency
(b) shape a vision
(c) create a guiding coalition to mobilize commitment
(d) generate short term wins
(e) Communicate
Compare change-leadership techniques using
*******************************************
Kotter's framework
Practical considerations
Culture
Create urgency - Fight complacency
**********************************
(i) Best practices - Share (ii) Process redesign - Cross functional team work (iii) Rapid Results (iv) Work-Out (v) Six Sigma - intellectually fight inefficiency
All tools work best when change leader has already started building and conveying a sense of urgency and a widely held belief that change is necessary.
Each tool helps build urgency through structured forms of communication and collaboration.
People learn about needs, concerns, problems of customers.
They talk candidly about what is not working well and how to improve things.
Competitive opportunities and challenges are made real.
Shape a vision - iteratively
*****************************
Think, Discuss => research & collect data => prioritize and refine ideas.
Best Practices, Rapid Results - simple, effective, excellent for vision development process
Best practices helps compare vs other orgs
Rapid Results provides fast, real insights into what it takes to achieve measurable change
Both tools create strategies that pass the tests for effective vision - are imaginable, desirable, feasible, focused, flexible, communicable (Kotter)
Fundamentally re-imagine processes through process redesign, Work-Out, Six sigma
Feed valuable insights into the vision creation process
Process Redesign, Rapid Results, Work-Out, Six Sigma - effective ways to carry out a vision once it is in place.
All four techniques are scalable. Six sigma is difficult to scale down.
Rapid Results, Work-Out, Six Sigma have a higher flexibility and scope than Process redesign.
Mobilize Commitment
*******************
Guiding coalition increases the effectiveness of all five change techniques.
Best practices and Rapid Results can be used effectively even without a broad coalition.
Process redesign, WorkOut and Six Sigma require strong and broad guiding coalition - cross functional nature, significant investment required
Rapid Results, WorkOut and Six Sigma are project based - key people can be tapped for team leadership or membership
Senior managers can sponsor a team in their area
TownHall Meeting of Work-Out makes it particularly effective in mobilizing commitment.
Dramatically lift engagement through
**************************************
Open, candid discussion with senior management,
compelling sight of on-the-spot decision making,
getting questions answered quickly,
good ideas getting rewards
Generate Short Term Wins
*************************
Rapid Results & Work-Out are designed to achieve results quickly
One of these should be a part of any change effort.
Process redesign can also be used to generate short term wins.
Rapid execution of the new process is key.
Short term wins contribute to ongoing feeling of urgency
- they keep change efforts and results at the forefront of people's attention
If 6-12 months are taken to see any change, sense or urgency decreases, undermining overall change initiative.
When people experience short term wins they see their efforts as worthwhile
This cements people's commitment to the change initiative
Communicate the change vision
******************************
Critically important in driving and supporting change
Each of the change methodologies fosters change-focused communication among people who may not otherwise be in contact.
Overall communication plan must take into account the approach you choose.
Change leaders should be actively involved in addressing, launching, sponsoring best-practice sharing and results-focused teams.
Results should be communicated widely throughout the organization in support of the change efforts.
Work-Out brings large and diverse groups together for in-depth discussions.
Town Meeting provides the opportunity for everyone - most junior to most senior - to engage in an unprecedented kind of open conversation.
Practical Considerations:
********************
Select a change-leadership technique after taking into account factors such as Speed, Cost, Flexibility, Range of problems tackled, technical rigor required and produced.
For high speed: Process redesign, rapid results, work-out (not best practices, six sigma)
For lower cost: Except six-sigma, other 4 techniques are suitable
For flexibility: use best practices sharing, rapid results, work-out (not process redesign, six sigma)
For technical rigor: use six sigma
Cultural implications
******************
1. To transform from inward focused and arrogant state to a future state open to new ideas and new approaches to learning, use best practices sharing
2. To create boundarylessness across silo'd organizations, use process redesign
3. To shift from top-down activities focus to results focus, use rapid results & process redesign. Breakthrough hidden barriers of change-resistance. Give voice and dignity to front line people. Recognize and empower them.
4. To eliminate non-value-add work and stifling bureaucracy, and lead to simpler and efficient organizations, use Work-Out (along with process redesign, launch of rapid results projects, six sigma acceleration). Empower people throughout the organization to focus on results. Promote openness and candor to bring transparency in decision making.
5. To transform a rigid bureaucracy with analytical rigor, use six sigma and process redesign. Use six sigma to deepen a work-out. Spark a great deal of energy in the organization and return the organization to customer focus and winning once again.
Jack Welch Quotes
****************
"I’ve always believed that when the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight.”
"Change before you have to.”
C. W8L2 - Communicating Change
*******************************
Communication is a key piece of up-front work + long-term change effort
************************************************************************
Of Kotter's 8 steps for leading change, communication effort is most likely to fall short (based on client debriefings post major acquisitions & transformations)
"the single biggest problem in communication is the illusion that it has occurred" George Bernard Shaw
Urgency => coalition=>vision=>communicate=>empower=>short term wins=>consolidate=>culture
UC - Urgency Coalition
VC - Vision Communicate
EW - Empower Wins
CC - Consolidate culture
(i) Establish sense of urgency
(ii) Create guiding coalition
(iii) Develop a change vision
(iv) Communicate the change vision => Lay the foundation for change
(v) Empower employees for broad based action
(vi) Generate short-term wins
(vii) Consolidate gains and produce more change
(viii) make it stick in the culture
Pitfalls in communicating change
*********************************
# people in Major change initiative means 100, 1000, 10000, 100000, 1000000 or more people:
- feel some urgency
- understand the change vision and how they will participate in it
- feel committed to it
- take new actions that are aligned with the vision
- learn as change unfolds
Guiding coalition - spends hundreds of hours to chew through data, assess alternatives, fine tune vision, grow in commitment
*****************
Rest of org is expected to understand and follow the change in a fraction of time, with a fraction of information.
What goes wrong in communicating effectively?
*********************************************
(i) Not enough communication (not enough charge)
****************************
simply not enough communication to create real understanding, change in behavior.
- A few big announcements and a series of newsletter articles are not enough.
- communication plentiful at senior levels, but never penetrates down into the org.
change-related information gets lost inside all the information that people must process.
(ii) Too much too soon, (overwhelmed)
***********************
Flood of information in communication channels at beginning of change effort, but the talk quickly trails off.
Creates impression that change initiative is no longer a priority.
(iii) It's all in the newsletter (reliance on one or two channels)
*********************************
Any medium of communication has strengths and weaknesses.
Using just one or two will leave change initiative exposed to weaknesses.
Newsletter may not answer questions or be effective in communication => does not secture committed action
(iv) Happy talk that is unclear (evasion, despite some who will lose)
********************************
Executives may not know which jobs will be lost or how lives may change.
Too often they conceal complexities under a blanket of happy talk.
On one hand they say "this is a merger of equals and everyone benefits".
On the other hand the actions they drive will mean some people will certainly be out of work in 6 months.
There are going to be winners and losers.
Effective organizational transformation requires leaders who are able/willing to share tough news.
Giving employees bad news helps them to be in a position to make plans.
Honest communication reduces time lost to anxiety, uncertainty, speculation.
(v) Mixed Messages (actions speak louder than words)
******************
- Different communicators are on different pages.
HR says one thing, sales says another and management yet another.
- Disconnect between words and actions of key leaders
who is being promoted?
where is the money going?
7 Elements of Good Change Communication in a change initiative (what it is not)
********************************************************************************
(i) Establish sense of urgency (urgency rate isn't high)
(ii) Create guiding coalition (not the right group)
(iii) Develop a change vision (bad idea, vision is too blurry)
(iv) Communicate the change vision & Lay the foundation for change (people don't listen carefully to information about new vision)
Element#1- simplicity, speed, self-confidence
**********************
no technobabble
convey complex patterns of change in a few evocative words
Element#2 - Metaphor, analogy, example
**************************************
make it memorable with emotional impact
visual, verbal images convey a great deal of information quickly
human brains are wired to understand pictures and stories
Element#3 - Multiple forums
***************************
use a wide variety of ways to communicate
share emotions to change behavior: personal, interactive, one-on-one discussions, informal meetings, work-outs
*********************************
share facts: email, newsletters, intranet, informal meetings, large events, project launches, work-outs
************
align channel with the message and purpose of communication
static one-way media: share information in a consistent way with many people
Element#4 -Repetition
**********************
Nobody gets the message the first time they hear it
Talk about the vision and direction constantly to the point of gagging
Element#5 - Leadership by example
**********************************
Build credibility in the change effort by having the entire guiding coalition and key managers walk the talk
Reward people who embody the new direction
If sacrifices are being asked of employees, senior management needs to make them too.
Decisions must consistently reflect the new direction even if they challenge old norms and positions
Element#6 - Explain seeming inconsistencies
********************************************
Recognize, Address and explain mixed signals
Be willing to share tough or bad news
Element#7 - Talk but also Listen
**********************************
Good communication flows both ways - give and take
two-way discussion key to build understanding and engagement
Talking & Conveying information is only one aspect
Equally important to listen to concerns, how change is going, how it could be improved
(v) Empower employees for broad based action
(vi) Generate short-term wins
(vii) Consolidate gains and produce more change
(viii) make it stick in the culture
Basic elements of a communication plan
***************************************
Change leader and guiding coalition deeply engaged in communication planning & execution
- identify messages, information, theme to be shared; pivotal events, roles of key leaders
- clarify stakeholders: internal, external
- say when communication will take place
- say how it is to be carried out, staged over a period of time
Saturday, May 25, 2013
Create a LEANer organization with Work-Out & Six Sigma
JWI 555 Organizational Change & Culture, week7 notes (continued), 5/25/13
Analysis by columns below shows Work Out and Six Sigma techniques can be combined to make a LEANer organization.
Dr DP
Dr DP
Analysis by columns below shows Work Out and Six Sigma techniques can be combined to make a LEANer organization.
Dr DP
| Criteria | Work-Out | Six Sigma | LEAN |
| 1.Purpose | Give everyone a voice and bring every brain in the game to eliminate unncessary bureaucracy and promote good ideas | Reduce defects and drive down variation in products, services and customer experience | Eliminate Waste from supply chain |
| 2.Frequency & Cost | An event that may be held at most a few times in an organization; Relatively inexpensive to conduct | An ongoing daily process - a way of life in the organization; expensive and time-consuming | way of life |
| 3. Core values | candor, self-confidence, simplicity, speed | variation is evil; excel in production | variation is evil; excel in production |
|
4.Leadership improvement |
Leaders who can act in a transparent way, engage in real-time public discussion and decision making | analytical sophistication, common enterprise-wide approach to problems, fact-based data-driven decision making, commit to continuous improvement | analytical sophistication, common enterprise-wide approach to problems, fact-based data-driven decision making, commit to continuous improvement |
| 5. Type of Problems to Attack | Organizational & Cultural issues - people issues in particular; promote latent ideas with potential | Repetitive processes where variation creates errors, defects, excess costs - process improvement in manufacturing, product design, HR, sales, services | All kinds - people, organizational, technical |
| 6. Implementation | Planning, Teamwork, TownHall, Implement | DMAIC | Kano model - Dissatisfiers, Satisfiers, Delighters (especially
important in service industry); PDCA - Plan, Do, Check, Adjust; Six
Sigma DMAIC - Design, Measure, Analyze, Improve, Control ( with seven
tools: check sheets, scatter diagrams, Fishbone cause and effect
diagrams, pareto charts, flow charts, histograms, SPC); VSM - Value Stream Map to optimize business process; SIPOC - Suppliers, Inputs, Process, Output, Customer to enable business process transformation from status quo to desired state; 5S LEAN - identify all types of waste and get rid of them by sorting, straightening, shining, standardizing, sustaining; FMEA - Failure Mode and Effects Analysis; 8D - Eight disciplines of Structured Problem Solving (Prepare and Plan, Form Team, Problem statement, containment action, root cause analysis, Fix, Implement & validate, prevention, celebrate); Benchmarking - against best in class competition ; Kai Zen - Continuous improvement every day; Fool proofing - technique that prevents errors; Datamining - correlations; paretos; 4Ms for causes - Material, Machinery, Manpower, Methods; SPC - Statistical process control; Cpk control charts Source Inspection - to monitor and control the cause of variation |
| 6. End Result | Organizational culture focused on candor, self-confidence, simplicity, speed | 99.99967% parts defect free (only 3.4 defects per million), Improved operational efficiency, higher productivity, lower costs, Improved design processes, get products to market faster, build customer loyalty |
Low cost leadership; an organization built to survive tough economic conditions |
| NET | LEAN = Work-Out + Six Sigma |
Dr DP
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