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Why transformation efforts_fail_final v0.1

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Why transformation efforts_fail_final v0.1

  1. 1. Leading Change WHY TRANSFORMATION EFFORTS FAIL By: Group 4
  2. 2. Outline The research Eight common mistakes Lessons to be learned
  3. 3. The research More than 100 companies with different characteristics have been studied. The efforts have gone under many names. The result of changes
  4. 4. The research In almost every case the basic goal was “To make fundamental changes in how business is conducted in order to help cope with a new, more challenging environment”
  5. 5. Error #1: Not establishing a great enough sense of urgency  How most successful changes begin.  Existing and impending crises, competition, changing trends and technologies or potential business opportunities.  Over 50% have failed in phase 1, because of:  Underestimating the need for motivating people.  Overestimating their success.  A lack of patience.  Demotivation effect due to downside possibilities.  Paralyzed senior management
  6. 6. Error #1: Not establishing a great enough sense of urgency The need for a leader, CEO or division manager to sense urgency. Bad results are both a blessing and curse in first phase. An almost universal tendency to shoot the bearer of bad news.
  7. 7. Manufacturing urgency In one case a CEO deliberately engineered the largest accounting loss in the company’s history, creating huge pressures from Wall Street in the process. This led to increased sense of urgency within the organization to bring about a change.
  8. 8. When is urgency enough? Urgency rate is high enough only when at least 75% of the company’s management is convinced that the current scenario is not sustainable any longer. Anything less may put the organization’s future in jeopardy.
  9. 9. Error#2: Not creating a powerful enough guiding coalition
  10. 10. Error#2: Not creating a powerful enough guiding coalition In most successful cases a coalition is always pretty powerful. Most of the senior management always forms the core of the group. More than a high sense of urgency is required like providing a full assessment of the company’s problems, off-side retreats etc. to build trust and effective communication.
  11. 11. Error#2: Not creating a powerful enough guiding coalition The guiding coalition members, are expected to work outside of formal boundaries and protocol. This may sound awkward, but is clearly necessary.
  12. 12. Error#2: Not creating a powerful enough guiding coalition Reasons for failing:  No history of teamwork at top.  Lack of conviction in the need for change process.  Lack of a strong line leadership.  Expecting the team to be led by a staff executive.
  13. 13. Error#3: lacking a vision
  14. 14. Error#3: lacking a vision In every successful cases the guiding coalition develops a picture of future. A vision says something that helps clarify the direction in which an organization needs to move. In failed transformations, you often find plenty of plans, directives, and programs but no vision.
  15. 15. Error#4: Undercommunicating the vision
  16. 16. Error#4: Undercommunicating the vision Three patterns with respect to communication:  Holding a single meeting or sending out a single communication.  Making speeches to group of employees.  Misbehaviour of senior management Walk the talk, nothing undermines change more than wrong behavior by important individuals. The net result is that cynicism among the employees goes up, while belief in the communication goes down.
  17. 17. Error#5: Not removing obstacles to the new vision
  18. 18. Error#5: Not removing obstacles to the new vision Emboldened employees to try new approaches. Obstacles for employees:  Narrow job definitions.  Organization Structure.  Compensation and appraisal systems. Action is essential both to empower others and to maintain the credibility of change effort.
  19. 19. Error#6: Not systematically planning for and creating short term wins
  20. 20. Error#6: Not systematically planning for and creating short term wins Most people go on a long march unless… In one or two years you should find:  Quality beginning to go up.  Statistically higher customer satisfaction rating.  Decline in net income stopping.  Product introduction.  Upward shift in market share. In successful cases managers actively plan to achieve objectives. They don’t hope for. Commitments to produce short-term wins helps keep urgency level up.
  21. 21. Error#7: Declaring victory too soon.
  22. 22. Error#7: Declaring victory too soon. New approaches are fragile and subject to regression. Ironically, it is often a combination of change initiators and change resistors that creates the premature victory. What, instead of declaring premature victory?
  23. 23. Error#8: Not anchoring changes in the corporation’s culture. change sticks when it becomes “ the way we do things around here” Two factor in institutionalizing change:  Toshow people, the effects of new approaches.  Make sure that next generation of top management will personify the new approach.
  24. 24. Lessons to be learned… Change process goes through a series of phases. Critical mistakes in any of the phases can have devastating impacts if not handled with care. What is needed: A simple vision to guide people. Effective communication. Short-term goals to keep the momentum up. Constant appraisal of the work done Not giving up till change becomes the norm. A fewer errors can spell the difference between success and failure.
  25. 25. Video Be-the-change-that-you-want-to-see-in-this-world
  26. 26. Reference John P. Kotter, “Leading Change, Why Transformation Efforts Fail”, HBR , April 1995. Thank You…

Notas del editor

  • Its very hard sometimes to shift people from their comfort zones and asking them to alter their ways. Overconfidence and over trying may lead to disasters. Not giving enough time to carefully planning the changes you want. Probably the senior management might have problems, marale may drop, loss in business and the blame for it all may land on them. Too many managers and lack of leaders.
  • >The first step in most cases will fail if its not a “new” leader and a change champion. >Blessing coz its easy to draw attention of the employees and management and curse coz then there is less resources to attempt changes with. >Thus it is easiest for the executives if the person announcing the bad news is someone from the outside.
  • >Self eg. : NJP failure to provide good services.
  • >For a successful transformation, the head of the org. should show an active support. >Not everyone is a part of the coalition initially but might come on board later on as the changes begin to shape for the better.
  • >These members are not part of the senior management. >Because if the current hierarchy was working then such a drastic change would not have been required in the first place.
  • >For a successful transformation, the head of the org. should show an active support. >Not everyone is a part of the coalition initially but might come on board later on as the changes begin to shape for the better.
  • Vision of LBSIM: “ To be a leader in providing excellent, accessible and value-based management education through innovation and research while building a symbiotic relationship with corporates and community”. If you can’t communicate the vision to someone in five minutes or less and get a reaction that signifies both understanding and interest, you are not yet done with this phase of the transformation process.
  • Particularly challenging in case of short term sacrifices. Transformation is impossible unless people are willing to help, often to the point of making short-term sacrifices. If the short-term sacrifices include job losses; gaining understanding and support is tough when downsizing is a part of the vision
  • Point 1: Employees are emboldened to try new approaches, to develop new ideas, and to provide leadership. But communication of the new direction isn’t enough for the change, it also requires removal of obstacles. Point 2: Narrow job definitions can undermine efforts to increase productivity. Compensation obstacles can make people chose between new vision and their own self interest. Last, organizational structure; there are people, bosses who refuse to change. Example: One company began it’s transformation process with a lot of publicity but the process halted midway as they officer of the largest division couldn’t change his behaviou or encourage his subordinates to do the same, didn’t reward unconventional ideas. Reasons maybe: He didn’t believe in the change, or felt personally threatened by all the change, The company had no history of confronting problems, the CEO didn’t want to lose the executive, some people were afraid of the officer, and therefore it turned out to be a disaster. Point 3: No org has momentum to get rid of all the obstacles but the big ones have to be tackled, action is necessary. In the said example the officer had to be confronted or say handled as not only his behavior was against change but it affected the company and the other people too. Therefore, action is essential both to empower others and also to maintain credibility of the change.
  • Point 1: Transformation takes time and therefore there is a risk of losing momentum in between. People will give up on the change if there are no short goals to be achieved and celebrated, they have to be constantly reminded of the effort otherwise slowly tradition will take over and change will stagnate. Point 2: In one or two years one should fine - …… speak from slide. Therefore in successful transformations, manager’s should plan to achieve objectives, reward the people involved with recognition, promotion. For example: Taking the point of the product introduction: A US manufacturing company, introduced a new product within 20 months of their renewal process, it was planned right at the beginning to the process i.e 6 months keeping in view of the change and the successful execution of the product boosted the credibility of the renewal process. Point 3: Commitments to produce short-term wins helps keep urgency level up and can help in clarifying or revising visions.
  • Point 1: At the first clear performance improvement, manager’s at times celebrate win, which is a mistake. Changes take time to sink into the organization’s culture and till that is achieved new approaches are fragile and subject to regression. Point 2: The problem starts early in the process, the vision isn’t clear enough and the premature victory bells kill momentum. Once the victory has been declared by change initiators, change resistors take over and signal that since the war is won one can go back to doing what was done before and no further change is required. Therefore, change comes to a halt and tradition creeps back in. Point3: Instead of declaring premature victory, leaders should use these short-term achievements as a tool to handle bigger problems such as organization structures and systems. This will not only help in tackling bigger problems which are inconsistent to change but will never let the process reach stagnation by signalling that the job is over.
  • Point 1: Until new behaviors are rooted in the social norm they can change as soon as pressure is removed. Point 2: Two factors that are important in institutionalizing change are: …………… 1) people when left on their own can make inaccurate assumptions, the need is to show them the links, to help them see the right connections which requires communication. Example: In one company there were frequent meeting to discuss why performance was increasing, they also ran an article in the company newspaper to show how changes helped. This helped the people to know what has changed and why which in turn prompted the people to work more towards the why factor. 2) One bad succession decision can change the whole process and undermine the work accomplished till then. It’s possible when the board of directors are not part of the renewal process. As shown by examples: In one case a retiring executive helped the company get a person less seasoned but better personified to the transformation and in another case the CEOs didn’t think the change in succession could hamper the renewal process but it did. These examples show that the person heading the organisation needs to be in sync with the process otherwise it can prove to be an obstacle in the efforts and can lead to failure of the transformation.