So You Want To Be A Change Agent

SO YOU WANT TO BE A CHANGE AGENT?
 LESSONS FROM THE TRENCHES-
WHAT IT TAKES TO SUCCESSFULLY

LEAD CHANGE IN ANY
ORGANIZATION
Lean Manufacturing Consortium

07/21/10 Dan Stoelb 1
 Learn why most organizations fail to achieve the
full benefits from their change programs, no matter
whether they are implementing Lean; 6 Sigma;
Demand Flow; Theory of Constraints or similar
programs.
 Understand what are the Critical Success Factors
(CSF’S) that are necessary to successfully lead and
implement organizational change (TQM; Lean: 6
Sigma; Demand Flow)
 Provide an overview of what it takes to be an
effective change agent.

 The material presented here is the result of
experience; trial and error and research of
successful implementation of change “in the
trenches”, in many types and sizes of
organizations, over the last 20 years.
 The principles and content presented are

applicable nor matter what the change
program is modeled after (Lean, 6 Sigma,
etc)

OVERVIEW –
Why Most Change Programs
Fail

 Being a Change Agent is one of the
most rewarding career positions that a
person can have.
 At the same time, it can be one of the

most challenging and frustrating
positions.

Many organizations choose an internal

Change Agent solely on the belief that
the concepts of Lean Manufacturing; 6
Sigma, Theory of Constraints; and
similar programs are “common sense”
and they can “figure it out” on their own.

Experience and research over the past 20

years has shown that choosing the
correct person to be the
organizational Change Agent is one
of the most critical factors that will
impact the failure or success of an
organizational change program.

 Experience and research have shown that there are many
commonalities between the various forms of “change” regarding
the tools, methodology and concepts, such as:
- Emphasis on formal problem-solving; problem

identification and problem resolution.
- Elimination of waste or obstacles to flow;
- Value-stream analysis, current-to-future state
- Getting the people who do the work to “buy-in” to the
change and be part of the process.
- Leadership.
- Commitment.
- Total Organization Change in all Functions.

 Experience and research have also shown that the three most
common causes for failure or lack of optimization of results from
the various change programs are:
- Underestimating the “people issues” involved in making the

change become part of the “organizational culture”.
- Lack of effective performance measurements that tie strategic

goals to the daily activities in the “trenches” that will
impact and change daily performance.
- Lack of accountability for results.

 While a Change Agent needs to be technically
competent, it is just as important that the Change
Agent possess excellent “ Soft “ or “People Skills”.
 It has been said that Change is about 60-70% people

related issues/skills and only about 30-40% technical
issues/skills.
So why do so many organizations still fail to

place appropriate importance on the “people”
aspect in their selection of a Change Agent or
underestimate the criticality of the
“People Side of Change”?
So much emphasis is placed on the “tools” of
implementation rather than the process of change which
causes many people to believe that change is more about
“implementing the tools” rather than the leading and managing
the process of change.
The change in organizational culture and people’s attitude

and their approach to work are more critical elements of the
process of change than are the “tools” that will determine
ultimate success
The world is full of technically competent people, but is sorely
lacking in people with effective people skills.
There is a saying that “95% of the people KNOW WHAT TO

DO, only 5% CAN MAKE IT HAPPEN.”
The technical knowledge of effective change has been known for
over 90 years but still less than 10% of the companies in the
world have ever attain Excellence in their results.
- Frederick Taylor (Scientific Analysis)

- Henry Ford (Flexible Manufacturing)
- Alan Morgenson (Work Simplification)
- Value Analysis (Industrial Engineering Perspective)
- Ohno and Shingo (Toyota System)
- Goldratt (Theory of Constraints)
- Womack (Lean)
- Motorola/GE (6 Sigma)

The following questions need to be asked:
 Can people tie their daily work actions to business system

performance problems/issues so that they focus on correcting root
causes for the problems they are responsible for?
 Are decisions made in the framework whether specific actions will

move people closer to the stated strategic goals and priorities or will
the specific actions move people further away?
 Is each department’s performance measures clearly linked to the

strategic objectives and goals of the company?

 Is the performance of the entire company actually more important than

local department performance? Is teamwork a cultural reality or do we
have functional silos and barriers?
Unless the activities and performance of all

people in an organization are focused on
achieving the strategic goals and vision as an
entire organization and not focused on merely
individual or departmental goals, any change
efforts undertaken will most likely fail or at least
fall short of expectations.

Even in this information age we live in, it is not

uncommon for a lack of clear communication of the
Business Operating System (BOS) strategies, goals and
priorities. But this situation sets the environment within
which most companies operate and get people “in the
trenches” frustrated when their behavior and
performance doesn’t achieve the strategic or stated
goals, even though the “right tools” are being used.

Gaining agreement on these priorities; strategies and goals

of the BOS must be obtained before attempting to go any
further. Until there is a clear and unified understanding of
direction and priorities throughout the organization and
more importantly at the “trench level; confusion and
division will rule within the organization.

Five major dilemmas often undermine successful
programs and their progress.
 - The first is that no matter how competent or motivated

leaders, managers and employees are, the day-to-day
activities usually cause them to focus on the short-term
needs of the moment and what is immediately happening in
their area instead of the long-term strategic goals of the
organization or the needs of their customer (internal and
external)
 - The second dilemma is the fundamental difference

between the nature of the business strategy and the day-to-
day operations.

 The third is lack of a “sense of urgency” within

the organization.
Unless people understand why it is critical for the

organization and themselves personally to embrace
the changes, and understand what the future will look
like, people will continue to “hold on for dear” life to
what they are accustomed too.

 The fourth is that performance measurements that “add up
all the benefits” that are being reaped from the implemented
changes often do not always easily capture or compute in
dollar and cents numbers.
Many changes involve indirect or “soft costs” that are more of a

accurate barometer of the successful changes that have taken
place than the traditional financial costs.
Examples: Change is attitudes; behavior; work ethic; customer

focus; improved leadership; teamwork; commitment.

 The fifth is lack of effective leadership and/or combined with
the WRONG Organizational Change Agent who was selected,
was selected for the following reasons:
- That strong technical skills are the major criterion for

successfully implementing change.
- That the change program should be an “engineering
skills” focus and that the Change Agent
should come from Engineering.
- That the Change Agent needs to come from the
Company’s Industry field.
- Believe that if you change the process, you will then change
people’s attitude (partly true).

One of the areas that is most often underestimated by managers
when implementing change is the law of physics that states, “An
object at rest tends to stay at rest, while an object in motion
tends to stay in motion”.
In other words, inertia towards change is natural and is a

force that can be changed only with strong, consistent and
focused efforts by a positive and visionary leadership. We
all understand that there will be resistance to change, but we
often fail to understand what “ people things” we need to do to
overcome this inertia or how long it will take to change the
inertia into self-propelling, forward motion.

Far-reaching changes call for significant alterations in how

the organization works as a TOTAL SYSTEM and how
INDIVIDUALS and DEPARTMENTS BEHAVE in the new
system.

Need to build a consensus for change based

upon a common understanding of how each area
and each person is contributing or not
contributing to the overall organizational success

 Performance measurements must be developed
so that information on performance is not
isolated fragments of information, but integrated
feedback that will provoke positive response in
achieving strategic goals.
 Most current measurements rely too heavily on

financial indicators that provide information too late
to allow for quick response or change to occur.

Peter Drucker has stated that the most

critical tool that is missing in most
organizations today is an effective
performance management system that
integrates all organizational resources and
functions to focus on the critical goals and
actions that are needed for success

 • There are several common causes for this results
shortfall, but the most critical one if you want to
change people’s actions, you must create an
effective performance management system that ties
the day-to-day activities to achieving customer and
organizational strategic goals.
 Performance Management is one of the most critical
and most misunderstood management tools
necessary to achieving the optimum results you are
looking for.

 The purpose of performance
management is to motivate behavior
changes leading to continuous
improvement over the current state
through individual and team self-
motivation in the areas of customer
service; flexibility and productivity.

 The National Association of Accountants showed that 60 percent
of financial and operating officers in US operations were
dissatisfied with their current performance measurement systems.
Even in Japan, 46 percent of the executives believe their
performance measurement systems leave something to be
desired.
 If you are relying on a traditional performance measurement system
you are probably not getting the answers you need or the behavior
changes you require to become more competitive and achieve the
dramatic results from your lean or change initiatives
 Until performance measurements are specifically tuned to the
game plan and objectives, they are probably yielding misleading
or irrelevant information, or worse, motivating people’s behavior
that undermines the very goals your are trying to achieve.

 Most performance information is provided
much later after the actions occur to
PREVENT OR CHANGE CURRENT
BEHAVIOR. By the time most
performance information is provided,
people cannot accurately pinpoint the root
cause and often ignore the information
since it “is in the past”.

When performance information is lacking, people will focus on
what they are doing now, and not be focusing on whether or not
they are helping the organization to succeed.”
The actual execution of most

organizational programs does not
occur at the senior or mid-
management level. Rather, it occurs
at the departmental/functional level
and at the front-line level.

 The drivers for all BOS systems should be
premised on the following:
- Customer focus (internal and
external customer needs)
- Quality(the total cost of poor quality
needs to be quantified)
- Delivery (Lead and Cycle Times);
 Waste(Non-Value added).

 These drivers can serve to focus everyone
throughout the organization on both external and
internal performance. Then by developing
feedback systems that are immediate and timely, any
deviation from the standard or goal can be readily
addressed to get the performance back on target.

 Simple visual information displays can provide
constant feedback on performance and be
established for any department or function in an
organization (Manufacturing; Accounting; HR;
Quality; Engineering; Procurement; Sales/Marketing).

 (1) Customer Satisfaction is first;
 (2) Productivity is second; and
 (3) Flexibility is third.
 The challenge for most companies is that they have to
play “catch-up” in all three areas and sometimes
misdirect their efforts by not building a coherent,
integrated common approach. Many companies do things
piecemeal, in no special order.
 Going after the ‘right stuff” in the “right order” is
crucial to success

 Critical Success Factors (CSF’s) are
those few critical areas where things
must go right for the business to
flourish and achieve its strategic
goals

- Foster learning by continually relating
actions to strategic objectives.
- Give added emphasis to the market-
driven side of the pyramid (market; customer
satisfaction; quality; delivery; flexibility).
- Set priorities and action agendas in the
day-to-day activities that are the “true
performance drivers’ for success.
 Evaluate day-to-day performance against the
four operational measurements

 A “cookie cutter” approach to performance measurement
will most likely result in failure. Be aware of approaches that
advocate if organization X did this, that it can be exactly copied
in your organization hook, line and sinker.
 One of the biggest mistakes that organizations make when
looking for tools and “best approaches:” is to copy 100%
what worked for another organization. While this may make
the structure and tools that are chosen easier, it fails to take
into account the unique aspects of your own organization,
specifically, the human systems within an organization.

 This system deals with how people are
organized for work; how they interact with
each other and between functions; attitudes;
and the culture within the organization. The
technical side of lean and other change
initiatives can be learned by anyone.
Effectively using those tools requires
leadership skills that are often ignored and
lacking, which negatively impacts the success
rate of the change/lean initiative.

 Another survey by the Forum Corporation found similar gaps between
actions (reality) and words (strategy). Although many companies
claim that customer satisfaction is important, less than one-third of the
employees surveyed said that customer satisfaction was one of their
organizations’ top three priorities.
 And this gap between what executives say drives the
organization and what takes place in reality, has changed very
much, over a decade later. Without a common understanding
of quality and customer’s expectations synchronized with
operations, there is little chance that the end results you
strive to achieve will actually occur!

At your next staff meeting or if you call a special meeting and
gather all department managers together, ask the following
questions and develop detailed understanding of the answers to these
questions. After you have analyzed the answers, develop a unified BOS
strategy, goals
 • Does our current performance measures foster an environment

of continuous improvement?
 • Are our current measurements mainly financial-oriented rather
than non-financial measures?
 • Are each department’s performance measures clearly linked
to the strategic objectives and goals of the company?
 • Does each department clearly understand the strategic
goals; objectives and priorities of the BOS? Does it drive team
members behavior as they go about their daily work actions?
 • Are decisions made in the framework whether specific actions
will move us closer to strategic goals and priorities or will the
specific actions move you further away?

 When someone enters a work cell or department is it clear as to the status
within the department or do you have to go around and ask several people
what is happening? Can someone tell an abnormal from a normal state?
 Is the performance of the entire company more important than local
department performance? Is teamwork a cultural reality or is there functional
silos and barriers?
 Does one measurement system take into account quality, delivery,
cycle time, waste and safety?
 Does the measurements focus everyone on reducing time in all
processes?
 Can people tie their daily work actions to business system
performance problems/issues so that they focus on correcting root causes
for the problems they are responsible for?
 Are customer expectations quickly translated and communicated into
operational actions?
 Are the measurements simple, relevant; consistent and used as a
catalyst for improved performance?

 In many organizations, at least 80% of the
responses to the questions result in a clear
misunderstanding within the organization as
to the vision; goals and priorities of the
organization. What else usually happens is
that it becomes clear that what is happening
at the value-adding points in the processes or
services, is out of sync with customer and
BOS goals.

 An exercise like this helps drive home the
common cause for the frustration
companies find in their change initiatives.
People’s behavior at the value-adding
points are not in sync with each other;
there is no consistency of focus or
priority; people’s behavior does not
support the direction the company must
move toward.

 Why do we continue to think that
everyone knows the basics of change,
leadership and performance, when the
evidence in our own organization’s
performance clearly illustrates that
misdirection; misunderstanding and
poor performance exist?”

Why are so many people selected as

Change Agents deficient in effective
people skills?

 “Soft Skills” are not something that is covered
effectively in training seminars or in Business
School’s curriculum.
 Most people in their personal lives do not
know how to effectively use people skills, so
they don’t effectively use them in their
professional lives either.
 Most training covers “by the numbers” and
“the tools” of change which is easier to teach
than are the “soft people skills”.

 Leadership.  Empathy.
 Communication.  Perception.
 Conflict Resolution.  Experience.
 Training.  Persistence.
 Flexibility.  Mentorship


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SO YOU WANT TO BE A CHANGE AGENT?

 LESSONS FROM THE TRENCHES-

WHAT IT TAKES TO SUCCESSFULLY

Lean Manufacturing Consortium

Lean Manufacturing Consortium

 The principles and content presented are

Lean Manufacturing Consortium

Lean Manufacturing Consortium

 At the same time, it can be one of the

Lean Manufacturing Consortium

Many organizations choose an internal

Lean Manufacturing Consortium

Experience and research over the past 20

Lean Manufacturing Consortium

- Emphasis on formal problem-solving; problem

Lean Manufacturing Consortium

- Underestimating the “people issues” involved in making the

- Lack of effective performance measurements that tie strategic

- Lack of accountability for results.

Lean Manufacturing Consortium

 It has been said that Change is about 60-70% people

So why do so many organizations still fail to

The change in organizational culture and people’s attitude

There is a saying that “95% of the people KNOW WHAT TO

- Frederick Taylor (Scientific Analysis)

Lean Manufacturing Consortium

 Can people tie their daily work actions to business system

 Are decisions made in the framework whether specific actions will

 Is each department’s performance measures clearly linked to the

Lean Manufacturing Consortium

 Is the performance of the entire company actually more important than

Unless the activities and performance of all

Lean Manufacturing Consortium

Even in this information age we live in, it is not

Lean Manufacturing Consortium

Gaining agreement on these priorities; strategies and goals

Lean Manufacturing Consortium

 - The first is that no matter how competent or motivated

 - The second dilemma is the fundamental difference

Lean Manufacturing Consortium

 The third is lack of a “sense of urgency” within

Unless people understand why it is critical for the

Lean Manufacturing Consortium

Many changes involve indirect or “soft costs” that are more of a

Examples: Change is attitudes; behavior; work ethic; customer

Lean Manufacturing Consortium

- That strong technical skills are the major criterion for

Lean Manufacturing Consortium

In other words, inertia towards change is natural and is a

Lean Manufacturing Consortium

Far-reaching changes call for significant alterations in how

Lean Manufacturing Consortium

Need to build a consensus for change based

Lean Manufacturing Consortium

 Most current measurements rely too heavily on

Lean Manufacturing Consortium

Peter Drucker has stated that the most

Lean Manufacturing Consortium

Lean Manufacturing Consortium

Lean Manufacturing Consortium

Lean Manufacturing Consortium

Lean Manufacturing Consortium

The actual execution of most