Contents

MODULE 1 Corporate culture in the age of radical change Navigating the course of change

MODULE 2

MODULE 3

Changing smart people

Contents
MODULE 4 Managing smart people

MODULE 5 Changing corporate strategies MODULE 6 Striving downturn

Contents
MODULE 7 change Institutional stability during

MODULE 8 Facilitate acceptance of what not be changed MODULE 9 Enable change

can

Contents
MODULE 10 Beware the fads and fix it

MODULE 11 and vision MODULE 12 and life

Mobilize people behind the values

Empower people to control their work

Contents
MODULE 13 Recognize individual and team contributions Articulate the cultural requirements for success Create a culture revolution

MODULE 14

MODULE 15

MODULE 1
CORPORATE CULTURE IN THE AGE OF RADICAL CHANGE

ITS ABOUT

CHANGE

CHANGE

CHANGE MANAGEMENT

AND

ORGANIZATION
TRANSFORMATION

Questions about change
Know t Ch i ng en Reso a v s. urc itm No vs nge m e Doing tc . om ha What C Co ng it nt i e nef ti v e nu be ntita t/ Qua vs. Dis vs. ous Gr Cos rup Purpose ive ad tio alitat u Q n Ra vs. ual di e Wh o W ca deep ang w in/ o h l u c s. Lo H Yo v nge se Why a I ch f ti Le Con ha vs a d fus W Fo . ion llo m w ter nge Suc t Yo u c h a cess horvs. m S vs . Meas r n urem g te hange he Ic ent Lon W
Ris k

Different types of change

• Reactive/Proactive/Preventive

• Constructive/Destructive

• Continuous/Disruptive

The learning curve
* Method of Experimentation

1 Establish premise/hypothesis 2 Design & conduct experiments 3 Make observation & gather data 4 Analyze data & reach conclusions 5 Apply conclusions to real issues

True competence

Practice & Feedback

Results

Discovery § Insights Unconsciousness • Denial • Certainty • Righteousness Curiosity Experimentation*

Time
Confusion

Paradigm shift and continuous renewal process
Results
• • • Success becomes the engine of failure Initiate change or force to change Deep change or slow death

Time

The organizational challenges for a growth company
•Strategy: Focus Vs Diversification, Profit Vs Market Share, Build Vs Buy, New Products Vs New Markets, Old Vs New Business Models, Risk Vs Rewards, Aggressive Vs Conservative • People: Attracting New Talents, Developing Existing People, Managing the Misfits, Owners Vs Managers, Founder’s syndrome, Leadership and Succession • Structure: Hierarchy, Bureaucracy, Synergy • Process: Complexity, Duplication, Internal-focused, Disconnection, Speed, Quality • Resource: Competition, Wastage, Idle • Culture: Keeping the core values at the top, Inertia

The path of technological development
Abundant

Product Functionality

Region of High Vendor Power and Low Customer Power

Region of High Customer Power and Low Vendor Power (except if a monopoly exists)

Scarce Creation Stage

Dominant Design Emerges

Transition Stage

Commoditization Stage

The innovation mix shifts as technology matures
100%

Base-Process Innovation
(such as design, procurement, manufacturing, distribution and service processes)

Enabled by a BusinessInnovation Cultural Bias

Marketing Innovation
Innovation Mix

Styling/ Packaging Innovation Human Factors Innovation Base-Product Innovation

Enabled by Both Cultural Biases

0% Acceptance

(such as performance, functionality, size/portability, reliability) Early Mainstream Adoption Dominant Adoption Design Emerges Maturity

Enabled by a ProductInnovation Cultural Bias

The cultural bias landscape
Strong
High-Tech Startups, Labs, Think Tanks, Artisans High-Value Product and Service Companies MORE INNOVATION, MORE CULTURAL TENSION
Dominant Design Emerges

ProductInnovation Cultural Bias

High-Volume Product and Service Companies, Upscale Retailers LESS INNOVATION, LESS CULTURAL TENSION

Distribution and Logistics Companies, Discount Retailers

Weak Weak BusinessInnovation Cultural Bias Strong

Why good companies go bad ?

THE TRAPS OF PREVIOUS SUCCESSES

Some common traps
We are a great company with great history We are a happy family We did it, and we will do it again We have a super technology/product We know what is the best for the market Our competitors will never catch up Our competitors are our enemies Our ISO Certification ensure our quality Bigger is better - Market share ensure profitability

Success formula
Frames

Processes

Resources Relationships 資源 關係 Resources Relationships

Culture 價值 Values

Success breeds failure
Success Formula
Frames Changed Environment

Active Inertia

Processe s

Resources 資源 Resources

Relationships Relation 關係

ships

Culture Values 價值

3 steps of transformation
1. Select the anchor 2. Secure it
Frame

3. Align the rest
Frame

New Frame

Processes

Resources Resources 資源

Relation ships

Resources Processes Resources 資源

Relation 關係 ships

Processes

Resources

Relation 關係 ships

Values

Values

Values

Corporate transformation Key Factors
Evaluation and Reward Systems

1. Vision 2. Values 3. Processes 4. Organization policy 5. Customer Focus 6. Dynamic Management 7. Innovation 8. Initiatives

Talent Attraction and Assimilation

Talent Development

Conditions for change
Mind Belief/Possibility

Body Desire/Want

Spirit Intention/Commitment

Organization transformation

Anatomical
Strategy and Structure

Physiological
Systems and Policies

Culture and Vales

Psychological

Core competencies for change
• Perseverance • Endurance • Tenacity • Positive mental attitude

AQ
Adversity Quotient

Purpose & Beliefs Purpose & Beliefs

IQ
Intelligent Quotient

EQ
Emotional Quotient

• Ability to learn, reason, think, and solve problems • Right skills and knowledge • Good common sense

• Passion, empathy, sensitivity • Inspire others • Building confidence & trust • Integrity & personal leadership

Embracing and managing change
• • • • Massive disruptive change New direction, new model, new games, new rules Capability & capacity for change Urgency for change

Definition of “change agent”
Some one that adds value in the change process
• Identify issues & opportunity for change • • • • • • Visualize purpose & desired outcome Initiate and cause change Mobilize & organize change Support & facilitate change Execute & implement change The role of constructive diversity

• Invent, innovate, intervene.

Who are change agents
Conscious Vs. Unconscious change agents
Teachers Writers Politicians Governments Scientists Religion workers Media workers Investors Bankers Businessmen Managers Doctors Social workers Stars You & me

Be a conscious change agent
• • • • • • • • Change myself Change my job Change my life Change my profession Change my company Change my society Change my world ………………………

The change process
• • • • • • Visioning Mobilization Diagnosis Design
no t av t o M i i
nderstand

Plan
no t aci nu mm C i o

• Break
• Build

ne m ga na M e no s e i M e s t l

Execute

ommit

lign

• •

Measure Review

Steps for change
• • • • Awareness Urgency Diagnosis Take Accountability • Be at cause • Find how you can contribute Solutions Execution Reinforcement Forgiveness : Self and others  Freedom

• • • •

Changing the behavior
• • •

Step out of the box Turn on the watcher Examine
• • •

the cause the stimulant the behavior This takes efforts & attention Focus only one or two to work on From automatic old habit to automatic new habit

Make conscious choice of your behavior
• •

AWARE that you can make a choice

Levers for change
Individual Behavior Organizational Behavior

• •

Felt need Specific goal and measurement Feedback from someone who you valued Social relationship

Measurement and Commitment Process and Systems Accountability Skills Communications

• • •

The tipping point, quantitative to qualitative change
Qualitative Transformation

The tipping point
Gaining Momentum

Initiation

80%

Early Adopters Pioneers

Fence Sitters/Followers

Rome is not built in a day

Transformation
A butterfly is not a better or improved caterpillar, it looks and feels completely different, and has completely new capabilities • The new capabilities liberate and free the creature from the world of the caterpillar to the “new”world of the butterfly

Managing change
• • • • • •

Evolution vs. revolution Planned vs. unplanned events Change can get out of control Contingency planing Crisis management Change leader for one phase may become road block for the next phase Change at the right time, right place, with the right people Too early? Too late? Just in time?

Freedom and discipline

Freedom without discipline

Instituting discipline at the expense of freedom

Affordability of freedom when discipline is instituted

Freedom with discipline

Managing organizational change
Strategy
• Establish a transition team to ensure consistent communication and to tackle issues raised by the change • Promote a clear vision to clarify the direction in which the organization needs to move

Organization
• Leaders should ask tough questions and challenge the way the company does business • Good management requires respect for employees and the organization and is responsible for shaping the new reality

People
• Losing key employees may destabilize the organization; communicating the desire to retain these people, early in the process, is important • Give priority to the "me" issues—personal opportunity, security and the quality of the work environment

Communication
• Communication plans should address four considerations: audience, timing, mode and message • Tips include: • Communicating rapidly, honestly and frequently • Ensuring consistency between messages • Establishing multiple mechanisms to reach employees • Repeating common themes

Eight steps to transform your organization
Establishing a Sense of Urgency Forming a Powerful Guiding Coalition Creating a Vision Communicating the Vision Empowering Others to Act on the Vision Planning for and Creating Short-Term Wins Consolidating Improvements and Producing Still More Change Institutionalizing New Approaches
• Examine market and competitive realities • Identify and discuss crises, potential crises, or major opportunities • Assemble a group with enough power to lead the change effort • Encourage the group to work together as a team • Create a vision to help direct the change effort • Develop strategies for achieving that vision • Use possible vehicles to communicate the new vision and strategies • Teach new behaviors by the example of the guiding coalition • Plan for visible performance improvements • Create those improvements • Recognize and reward employees involved in the improvements • Use increased credibility to change systems, structures, and policies that won’t fit the vision • Reinvigorate the process with new projects, themes, and change agents • Articulate the connections between the new behaviors and corporate success • Develop the means to ensure leadership development and succession

Common mistakes
• •

Writing a memo instead of lighting a fire Talking too much and saying too little Declaring victory before the war is over

Three Mistakes

Managing multiple time lines—Change leaders should create short-term wins, but look to long-term success. Building coalitions—Change leaders should engage the right talent, grow the coalition and foster teamwork. Creating a vision—Change leaders must engage employees emotionally behind a vision of the future.

Three Tasks

• •

Why do employees resist change
• • • • • • • • • •

Human tendency to stay in existing comfort zone Lack of awareness or urgency for change Lack of clear understanding or alignment on purpose, vision, and process of the change Lack of trust on the leaders Fear of unknown/uncertainty/consequences Comfort with long standing habits Dependency on existing social dynamics Lack of sufficient resources for the change Overload of ongoing tasks and responsibilities What is the benefit for me to change?

Why do employee resist challenges
• • • • • • •

The organization's architecture is not aligned and integrated with a customer-focused business strategy. The individual and/or group is affected negatively The organization does not communicate expectations clearly. Employees perceive more work with fewer opportunities. Change requires altering a long-standing habit. Relationships harbor unresolved past sentiments. Employees have fears of future competency/job security.

Why organization transformation fails
• • • • • • • •

Unclear purpose, vision, and process. Lack of commitment from the top. Poor communication and engagement. Middle management/employee resistance. Focus only on results/process/people. Delegated to “outsiders”. Lack overall systematic alignment. Lack of resources.

Key strategic questions
• • • • • Are we investing in the right things? Are we staying ahead of the competition? Are we leading and following appropriately? Do we have the right skill mix and depth? Are we building the right strategic partnerships?

• • • • • • • • •

Maintaining self motivation

Key challenges

Gaining credibility, confidence, and trust Dealing with objection Acting with courage and virtue Acquiring new capability and capacity Mobilizing and allocating resources Building a real team Developing shared vision and common language Ensuring continuous

The road less traveled
“Two roads diverged in a yellow wood, And sorry I could not travel both And be one traveler, long I stood And looked down one as far as I could To where it bent in the undergrowth; Then took the other, as just as fair, And having perhaps the better claim, Because it was grassy and wanted wear; Though as for that the passing there Had worn them really about the same, And both that morning equally lay In leaves no step had trodden black. Oh, I kept the first for another day! Yet knowing how way leads on to way, I doubted if I should ever come back. I shall be telling this with a sigh Somewhere ages and ages hence: Two roads diverged in a wood, and II took the one less traveled by, And that has made all the difference.“ - By Robert Frost

Don’t get lost
Purpose

Desired Outcome

Actual Outcome

Corporate Culture Change
What is Corporate Culture ?
• System of shared meaning • Governs the behavior of its members • Patterns of values, symbols, rituals and practices

Corporate Culture

Organization Culture Defined:

•Set of key behaviors, beliefs and shared understandings that are
shared by members of the organization.

•Defines basic organizational values and communicates to new
members •The correct way to think and act.

•Everyone participates in culture, but culture generally goes

unnoticed. •It is only when organizations attempt to implement new strategies or programs that go against cultural norms and values that they come face-to-face with culture.

•Each firm has a distinct culture.

Corporate Culture

Levels and Purpose of Culture:

Culture exists :

• At the surface are visible artifacts and observable behaviors – dress, actions, symbols, stories, and ceremonies that are shared. • Visible elements reflect deeper values such as underlying assumptions, beliefs, and thought processes or “true culture.” • Critical Functions: • Integrate members so they know how to relate to one another. • Members develop a collective identity and relationships to work together effectively. • Culture guides day-to-day working relationships and communication. • Help the firm adapt to the external environment.

Corporate Culture Change
Characteristics of Culture

Member Identity

• Group Emphasis • People Focus • Unit Integration • Control • Risk Tolerance • Reward Criteria • Conflict Tolerance • Means-ends Orientation • Open System Focus

Corporate Culture Change
"Culture must not remain a relic of the organization's past. It needs to evolve...adapt...help deliver a successful future." —Price Pritchett

Corporate Culture Change
Why Change ?
• The Global Village
The emerging economies are placing competitive pressures on companies as never before.

• Customer-Focused Relationships
The new challenge is to develop interdependent relationships with customers to provide tailored solutions for their specific problems.

Why Change ?
• Faster Pace

The increasing development in global village is creating fast-paced workflow with greater flexibility. Speed has become a major competitive factor.

Strategic Collaboration

Companies are shifting attitudes to more cooperative existence to build a better mousetrap than either could build separately.

Corporate Culture Change
The Need for Renewal
Organizations may face difficulty in recognizing and identifying • pressure of change • need for renewal

Corporate Culture
Cultural Change: Central Issue:
• Just one strategic change is impossible because any strategic change must be accompanied by accommodations from other strategic elements inside and outside the corporation. • General consensus regarding corporate culture • Organizations should have strong cultures. • A firm’s culture must fit its environment. • Culture must contain values supporting continuous change in order to adjust to new environmental conditions. Critical issue is to identify the appropriate culture for different types of business-level strategies. A strategy should be congruent with an organizations most important values, practices and beliefs.

MOUDULE 2

Navigating the Course of Change

Overview of the Change Process

remain the same was greater than the risk to change … It is, after all, the only hope for the cocoon to become the butterfly.”

“And the day came when the risk to

Types of Change
First Order Change Requires Transactional Leadership Second Order Change Requires Transformational Leadership

Why Is Change Difficult?

Personal Resistance
• • • •

Loss Challenge to Competence Confusion Conflict

Change we want in others is called “growth.” Change others want in us is called “loss.”

Why is Change Difficult?

Organizational Resistance

Culture of the firm Psychological security People grow more conservative with age Designed to maintain the status quo

Other Organizational or Personal Inhibitors

Readiness and resistance A mature faculty Midlife issues Mid-career issues

Leadership Assumptions
Newtonian Physics
The world is an ordered place, events have a cause and an effect, linear laws, everything can be understood provided enough information is available.

Quantum Physics
The world is composed of relationships, fields of influence, ideas and culture, open systems that continue to adapt to their environment.

Tasks of Change
Task
Unfreezing

Goal

Key Factors

Increase the fear of not Disconfirmation trying Appropriate anxiety Reduce the fear of and guilt trying Psychological traits Make change meaningful Continuity Time Personal Contact

Moving from loss to commitment

Moving from old competence to new competence

Develop new behaviors Training that is (skills), beliefs, and coherent, continuous, ways of thinking and personal Realign structures, functions, and roles

Tasks of Change
Task Goal Key Factors
Clarity regarding responsibility, authority, and decision making

Moving from Realign structures, confusion to coherence functions, and roles

Moving from conflict to consensus

Generate broad support for change

A critical mass Pressure Positive use of power

Continuum of Growth and Performance

High Growth

No Growth

Key Contributors:

Tools We Can Use
• •

Develop Purpose and Followership Consider Transactional and Transformational Leadership
• • • •

Bartering -- exchanging ideas Building – moral authority based upon values Bonding – ways to fulfill higher order needs Banking – “Servant Leadership” of followers

Leadership Imperatives
• •

Trust Authentic (True-to-

Yourself) Leadership • Firm personal ethical standards (Integrity) • Build on your core values • Bring your experiences to the job • Establish clarity and focus • Model • Use Top Down and Bottom Up • Gain optimal participation • Use recognition • Use some confrontation

Vaill’s Envelope of Optimal Realism
Ideal Region of instant gratification and “too much too soon”

Performance

Region of realistic progress; envelope of optimal realism
Region of “business as usual”, “gradualism” Now 5-10 years

Current

Time
Vaill Managing as a Performing Art

Personal and Organizational Myths

People act first in the best interests of the organization. People want to understand the what and why of organizational change. People engage in change because of the merits of the change. People opt to be architects of the change affecting them. Organizations are rationally functioning systems.

Personal and Organizational Myths

Organizations are wired to assimilate systemic change. Organizations operate from a value-driven orientation. Organizations can affect long-term, systemic change even with short-term leadership. Organizations can achieve systemic change without creating conflict in the system.

Realities about People
• •

Most people act first in their own self-interest, not in the interests of the organization. Most people don’t want to genuinely understand the what and why of organizational change. Most people engage in organizational change because of their own pain, not because of the merits of the change. Most people expect to be viewed as having good intentions, even though they view with suspicion the intentions of those initiating organizational change. Most people opt to be victims of change rather than architects of change.

Realities about Organizations
• •

Most organizations operate non-rationally rather than rationally. Most organizations are wired to protect the status quo. Most organizations initiate change with an eventdriven rather than valuedriven mentality. Most organizations engage in long-term change with short-term leadership. Most organizations expect the greatest amount of change with the least amount of conflict.

Realities about People and Organizations

Most people and organizations deny that the other ten realities are, in fact, their own realities. Most people and organizations do have the capacity to develop resilience (flexibility) in the face of the other 11 realities.

Outdated corporate cultures

Performance-degrading cultures have a negative financial impact on companies and inhabit their ability to adopt needed strategic and tactical changes. When companies are not able to change their cultures they cannot expect to be successful in responding to radically changing business conditions in the marketplace. They will fail. Because a company was once an industry leader does not make it immune to the impact of radical change.

Outdated corporate culture

Companies such as AT&T, Arthur Andersen, Compaq, Digital Equipment, Bethlehem Steel, Adelphia, Cray Computer, SmithKline owe their failures to their over reliance on outdated and failed corporate cultures.

The shock of radical change

Between World War II and the early 1980s, most companies found ways to stay in business in what was then a relatively stable market environment. People at the top did all the planning and expected those below to implement those plans without question or devotion.

Radical change and corporate culture

Companies with high performing cultures have the ability to anticipate change or respond effectively to change. Companies with underperforming cultures quickly lose market share and are the first to fail when confronted by radical change. The radical change of the 1980s and 1990s seems modest by comparison to the radical change of the twenty first century. Entirely new business cultures have to be conceived, built and managed for companies to ensure sustained success.

Types of Change

Strategic Change - A change in the firms
strategy Technological change
• Changing the way a company creates or markets its products and services

Product Change
• Changing types of products

Culture / People Change
• Changing key people can change the culture and visa versa

Structural Change
• Changing the organization’s structure

Strategic Change

Important to remember that strategic changes:

• •

Are often triggered by factors outside the company. Common in turnaround situations Necessary to growth or survival Can be highly risky Often cause major other changes

Do not make a strategic change unless you have a strong base business or your base business is hopeless.

Technological Change

These changes are usually process oriented. They are made to improve the process for how something is being done but not what is being done. Automating a production line would be a technological change.

Often done to reduce cost.

Product Change
• •

Most significant changes occur when entering new markets with new products. May require • New type of engineers • New sales and marketing • New production processes • New management

Structural Change
• •

Changing one or more aspects of the company’s organization structures. Reorganizing: changing the firm’s organization chart and structural elements.

• This can cause serious problems, like: • Losing good people • Disrupting established working processes • Only do after reviewing other alternatives.

Structural Change

The only legitimate reason for changing organizational structure is if the existing structure is preventing the business from meetings its objectives.*
Peter Ducker

Change, particularly organizational change, is disruptive and will be resisted Why?

Structural Change
How to determine if the existing structure is a problem? *
• •

Establish objectives (if you do not have them). Identify obstacles / barriers to meeting objectives. E.g. losing major orders Generate an organizational chart (if you do not have one). Identify the responsibilities and position requirements for each position. NO NAMES! Look for structural (not people or other) obstacles / barriers

* Peter Drucker

Culture / People Change
• •

Usually brought on by new senior management. Requires • Training and development programs. • Organizational Development (OD)

The hierarchy of business change forces

There are many change forces at work today and they tend to fall into three categories.

• • •

First-order change. Second-order change. Third-order change.

FIRST-ORDER CHANGE: Comes primarily from the business world itself, Regulatory Agencies, Global Competitive change forces, Domestic and Global economic trends. SECOND-ORDER CHANGE: Is generated in large part by exploding new Technology, Scientific breakthrough, Political and Social change forces.

Third order change
Arises from changing Demographics, Labor and Talent market shifts and the Consumer Markets.

First order change
First-order change include:
• • • •

Changing economic conditions, Industry consolidation, Increased regulation Globalization of markets.

Global competition like never before

Second order change
Second-order change include:

Scientific and Technological Change. Social and Political Change.

Scientific and technological change

Scientific and Technological breakthroughs have been a major force for driving change for the past twenty years and have spawned brand-new industries, not just new companies. These range new from software development to new communications devices. IBM, MICROSOFT and the APPLE are widely recognized as the progenitors of the age of computers.

Scientific and technological change

Biomedical breakthroughs have also created significant change and spawned entirely new industries in the fields of medical devices, bio-medicine and genetic engineering. These will be the new age industries of the twenty-first century that replace nineteenth-and twentieth-century manufacturing and distribution industries.

Social and political change
• • • •

Ever changing social and political currents have always had a profound impact on business. Changes in political parties at the local, state and federal levels impact business. Social change forces also have a impact on business. Specific industries exert tremendous influence on the state and federal government.

Third order change
Third-order change include:

Changing demographics. Consumers.

Model of Change Sequence of Events
Environmental Forces
Monitor global competition, customers, competitors, and other factors.

Need for Change
Evaluate problems and opportunities, define needed changes in technology, products, structure, and culture.

Initiate Change
Facilitate search, creativity, idea champions, and venture teams.

Implement Change
Use force field analysis, tactics for overcoming resistance.

Internal Forces
Consider plans, goals, company problems, and needs.

Types of Organizational Change More often than
not, one change causes at least one other.
Structure

Technology

Strategy

Products

Culture/People

Horizontal Linkage
Organization
Manufacturing Department New Technology Research Departmen t Marketing Departmen t

Customers, Market Conditions

Change in one department will likely cause change in another.

Organizational Development

Organizational Development (OD) • An approach to organizational change in which the employees themselves formulate the change--- that is required and implement it, usually with the aid of a trained consultant.

Organizational Development
Can help managers
address:
• •

Consist of:
• • •

Mergers organizational decline/revitalization. conflict management.

Team building Survey / feedback Large group intervention

Organizational Development
Organizational Development consists of many different types of programs. Some can be useful but most require a professional trained in a particular area of OD. There is a high risk of failure if you try to do it alone. The group manager must lead the way. Do not allow OD folks to run free.

Managing Change

How to overcome resistance to change:
• • •

• • •

Create a sense of urgency Decide what to change Choose the right lieutenants (exclude all Rats) Communicate a shared vision Generate short term wins Consolidate gains and make more changes Anchor (incorporate) into the corporate culture Monitor progress and adjust (not the vision or strategy unless absolutely required) Empower employees

Managing Organizational Change

Empowerment

The act of giving employees the authority, tools, and information they need to do their jobs with greater autonomy and confidence.

Managing Organizational Change
BEWARE!
When leading the charge of change – the threat from behind may far exceed the threat ahead.

Managing Organizational Change
Changing
people is one of the most difficult but necessary tasks of good managers.

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