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Non-Financial Measures for Effective Change Management

International Society for Performance Improvement Conference Wednesday, April 12 2000

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Change Management

The real challenge of change is not just to come up with a brilliant idea -

it’s to implement it.

Organizations worldwide are confronting more t u r b u l e n t markets, more

demanding

and more

discerning

customers.

shareholders,

Successful change programs begin with targeted results.

Your level of success is determined by your ability to deliberately alter business practices in a timely and cost effective manner.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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“ All Organizations now say routinely, ‘people are our greatest asset.’ Yet few practice what they preach, let alone truly believe it.” - Peter Drucker

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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The soft stuff is the hard stuff...

• Change is

hard

, personally • We all go through it • Change is never sequential • Some of us manage our transitions better than others • Change impacts different people differently

Consider the following...

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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What do all these questions have in common?

How will my job change?

Who will I report to?

What’s in it for me?

What decisions do I have to make?

How will my performance be measured?

Who will I work with?

When will the change impact me?

How will my co-workers be effected?

What new skills do I need?

Why should I care?

Will this change be as difficult as the last change?

They are of a very personal, individual nature.

During times of change, employees focus: 1st, personal implications of the change 2nd, organizational implications Employees may or may not ask these questions out loud, but more often than not they are thinking them.

The process for answering the questions is as important as the answers themselves.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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PAIN...

Is Weakness Leaving the Body.

The

Cost

of Failure...

When Change Initiatives Fail, There Are Tangible Impacts to the Business:

• • Desired changes are not realized Change occurs only after great expense, both financial and human • • • Future change efforts are compromised Destroyed shareholder value Uncontrolled loss of knowledgeable and valuable employees “It is a terrible thing to look over your shoulder when you are trying to lead. . . And find no one there.” -- Franklin D. Roosevelt Source: Arthur Andersen • • • • Prolonged, reduced productivity Lost opportunity in the marketplace Poor customer perceptions or worse Customer Attrition

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Detail

Who wants to manage change like a Millionaire!

According to a 1991 survey (AEA) of 300 electronics companies: What percentage (%) of companies with a total quality program had failed to improve quality defects by even as much as 10%?

A: 13 % C: 46 % B: 29 %

D: 63 %

According to a 1991 survey (AEA) of more than 300 electronics companies: What percentage (%) of companies with a total quality program had failed to improve quality defects by even as much as 10%?

A: 13 % C: 46 % B: 29 %

D: 63 %

According to a 1991 survey (AEA) of more than 300 electronics companies: What percentage (%) of companies with a total quality program had failed to improve quality defects by even as much as 10%?

A: 13 % C: 46 % B: 29 %

D: 63 %

Successful Transformations

© Christof Spieler “The most daunting problems with technology (changes) have nothing to do with technology. . . The biggest problem is the lack of widespread readiness to adopt solutions. The number one error made is failure to invest adequately in change management.

” -- Michael Hammer Source: Arthur Andersen

Change Management

“bridges the gap” between the technical and the human sides of change. It prepares the organization to accept and embrace change.

Successful transformations

can lead to:  Higher morale  Increased productivity  “Ownership” of new processes and systems  Accepted roles and responsibilities  Increased employee knowledge  Reduced re-training  Reduced “post change” support 

Consulting

Gary Sadavage -- [email protected]

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Recent Trends in E-Commerce (CRM)

• Integration of front and back office

– market --> place orders --> order fulfillment --> manufacturing --> logistics of delivery

• Phenomenal growth of CRM market

– $1.9B (1998) to $11B (2003) source: International Data Corp

• Mergers/Acquisitions

– Baun -- Aurum – PeopleSoft -- Vantive – J.D. Edwards -- Siebel

• Need for

speed

but also to get it right

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Case Study in Change Management

• •

Baan -- Aurum

1st ERP vendor to make a strong move into front-office arena (1997) Ran into financial difficulties & suffered management upheaval source: InformationWeek •

PeopleSoft -- Vantive

< 1Month after PeopleSoft bought Vantive, delivered! (2000) source: CNET Business Practices • Vision/Strategy Innovation Management • Partner Relationship Management • Process Innovation Management • Knowledge Capture

Yankee Ingenuity Consulting

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Critical Business Practices

(some examples) Vision/Strategy Innovation Management



Rate your organization’s capability to anticipate significant marketplace developments (before they impact business) & develop a strategy to capture these opportunities.

Partner Relationship Management



Rate your organization’s capability to engage in joint planning for the people policies, programs, and systems required by partnership arrangements.

Process Innovation Management



Rate your organization’s capability to quickly and efficiently execute coordinated changes to your core processes (e.g., marketing, financial, manufacturing, etc).

Knowledge Capture



Rate your organization’s capability to tap your workforce’s ideas and knowledge (from anywhere in your organization) and then act on this input.

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Change Proficiency Maturity Framework

Consider: Ability to partner with strategic ally to offer diverse products and services Example: Bann &Aurum vs PeopleSoft & Vantive

Stages Working Knowledge Metric Focus Capabilities Reactive Proactive 0 Accidental Examples Pass/Fail Lucky Lucky 1 Repeatable Concepts Time Safe Occasional 2 Defined Metrics Cost Confident Competitive 3 Managed Responsibilities Robust Sure Aggressive 4 Mastered Vision Scope Automatic Formidable

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Source: RKDove, Paradigm Shift International

Critical Business Practices

90 Second

Vision/Strategy Innovation Management

 Exercise

Rate your organization’s capability to anticipate significant marketplace developments (before they impact business) & develop a strategy to capture these opportunities.

Partner Relationship Management



Rate your organization’s capability to engage in joint planning for the people policies, programs, and systems required by partnership arrangements.

Process Innovation Management



Rate your organization’s capability to quickly and efficiently execute coordinated changes to your core processes (e.g., marketing, financial, manufacturing, etc).

Knowledge Capture



Rate your organization’s capability to tap your workforce’s ideas and knowledge (from anywhere in your organization) and then act on this input.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Change Management Critical Practices



Determine organizational readiness & build the business case for change.



Develop a compelling vision for change & create a sense of urgency



Create a strong guiding coalition of executives & generate stakeholder commitment



Establish pervasive communications



Align organizational design and performance management systems



Build individual and team capacity to change



Generate short terms wins, consolidate gains & produce more change



Align culture and change process

These practices should be considered imperatives for successfully realizing change objectives. And they should be planned out and executed as integrated and focused tactics in coordination with a larger plan.

Focusing on these practices can help accelerate the change process.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Determine organizational readiness and business case for change.

Develop a compelling vision for change & create a sense of urgency.

Create a strong guiding coalition of executives & generate stakeholder commitment.

Align organizational design and performance management systems.

Build individual and team capacity to change.

Generate short terms wins, consolidate gains & produce more change.

Align culture and change process.

Evaluate business environment.

Establish pervasive communications.

Change Process Model, © Gary Sadavage 2000 [email protected]

Determine organizational readiness & build business case for change.

D etermine org anizational readiness an d b usines s case for change.

D evelop a compelling vision fo r chan ge & create a s ense of urg ency.

Create a s tr ong guiding coalitio n o f executives & generate s takeholder commitmen t.

A lign o rganization al des ig n an d p erforman ce management sys tems.

Bu ild individual and team capacity to change.

G enerate s hort ter ms wins , cons olidate gains & pro duce more ch ange.

A lign culture and change pro ces s.

Evaluate b usines s environ ment.

Establish perv as ive commun ications .

Ch an ge P roces s M odel, © G ary S adavage 2000 gs [email protected] m

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Determine organizational readiness & build business case for change.

“More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopeless. The other, to total extinction. Let us pray we have the wisdom to choose correctly.

”

-- Woody Allen Techniques from today – Use a variety of tools to get varied perspectives You must make an explicit connection between action and outcome!

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Determine organizational readiness & build business case for change.

• • • •

The Four Questions

What’s changing or what needs to change in your organization?

90 Second Exercise What factors external to your organization are causing you to make these changes (e.g., lost market share, reduced product life, increased competition)?

What difficulties have you encountered in making changes?

What are your organization’s strengths and weaknesses (highly flexible, dedicated employees/legacy accounting system)?

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Develop a compelling vision for change & create a sense of urgency.

Deter mine organizational readiness and business case for change.

Develop a compelling vision f or change & create a sense of urgency.

Cr eate a strong guiding coalition of executives & generate stakeholder commitment.

Align organizational design and perf ormance management systems.

Build individual and team capacity to change.

Generate short terms wins, consolidate gains & pr oduce mor e change.

Align culture and change pr ocess.

Evaluate business environment.

Establish pervasive communications.

Change Pr ocess Model, © Gar y Sadavage 2000 [email protected]

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Sony’s Articulated 1950’s Vision

Core Ideology

– Being a pioneer, not following others, but doing the impossible.

– Experiencing the sheer joy of innovation and the application of technology for the benefit and pleasure of the general public.

Envisioned Future

– Become the company most known for changing the worldwide image of Japanese products as being of poor quality.

Made in Japan

will mean something fine and not shoddy.

– Create products that become pervasive around the world.

– Be the first Japanese company to go into an American market and distribute directly.

– Fifty years from now, our brand name will be as well known as any on Earth.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Sources of Complacency

The absence of a major and visible crisis Too much happy talk from senior management Too many visible resources Human nature, with its capacity for denial, especially if people are already busy or stressed

Complacency

A kill-the-messenger-of bad-news, low-candor, low-confrontation culture A lack of sufficient performance feedback from external sources

Low overall performance standards Organizational structures that focus employees on narrow functional goals Internal measurement systems that focus on the wrong performance indexes

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Develop a compelling vision for change & create a sense of urgency.

• To what extent have you been given compelling reasons for why significant change was necessary?

• To what extent did you feel a sense of urgency about the transition and that the status quo was unacceptable?

• To what extent did your fellow workers feel a sense of urgency about the transition and that the status quo was unacceptable?

• To what extent do your fellow employees understand the potential benefits of change?

• To what extent can you remember the vision coming up in casual conversation, issue discussion, or decision making in the last week?

• To what extent do managers discuss the linkage between daily activity and the new vision?

• To what extent does your manager generate energy and urgency in others to get things done?

• To what extent does your manager create a sense of pride and trust in working with him or her?

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Develop a compelling vision for change & create a sense of urgency.

• To what extent have you been trained to understand your organizations financial statement?

• To what extent are you provided with information about problems (e.g., profits up but market share down?

• To what extent are you provided with information about potential problems (e.g., a new competitor is showing signs of becoming more aggressive)?

• To what extent are you provided with information about potential opportunities (e.g., through technology or new markets)?

28 90 Second Exercise

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Develop a compelling vision for change & create a sense of urgency.

0 RATING SCALE

Absolutely Top-Notch...........Score 90-100 Does the Job.........................Score 50- 90 Needs Work..........................Score 0- 50

20 40 60 80

“Needs Work” range

100

“Does the Job” range “Absolutely Top-Notch” range 29

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Case Study: Organizational Profile

• Research based not-for-profit transitioning to for profit consulting organization.

• Flat organizational structure.

• Cross-functional teamed environment.

• Less than 100 employees.

• Many diverse strategic partner collaborations.

• Less than 10 years in operation.

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Gary Sadavage -- [email protected]

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What issues are important to you as you

continue

to build your organization?

• Organizational Concern Site champion motivated to distribute survey based upon concern for morale. Not sure what underlying issues are. • Desired State Noted that the organization is

undergoing a transition

from a publicly funded research organization to a commercially funded consulting group. Would like to focus direction [for people] and rally resources with minimal loss of productivity due to possible poor morale.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Shared Vision The vision, mission, and goals of your organization: a. ...are well defined for individuals.

0 20 40 60 80

CEO

b. ... are accepted by individuals and used to guide their daily priorities.

100 0 20 40 60

CEO

80 100

 Organizational understanding of the vision was not unified.

 Respondent Commentary:

Recent changes in strategy, make it difficult to know if organizational goals are being addressed and achieved.

 Internalization of the vision was below average.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Create a strong guiding coalition of executives & generate stakeholder commitment.

D etermine org anizational readiness an d b usines s case for change.

D evelop a compelling vision fo r chan ge & create a s ense of urg ency.

Create a s tr ong guiding coalitio n o f executives & generate s takeholder commitmen t.

A lign o rganization al des ig n an d p erforman ce management sys tems.

Bu ild individual and team capacity to change.

G enerate s hort ter ms wins , cons olidate gains & pro duce more ch ange.

A lign culture and change pro ces s.

Evaluate b usines s environ ment.

Establish perv as ive commun ications .

Ch an ge P roces s M odel, © G ary S adavage 2000 gs [email protected] m

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Create a strong guiding coalition of executives & generate stakeholder commitment.

Most resistance to change is a

precondition

for change.

“A critical mass of commitment will never be generated without conflict escalation – the airing of differences, divided opinions, good ideas, criticisms and the like .

” Paul Taffinder

Benefits of conflict

(Vliert, 1997)

• Generate motivation and energy to deal with underlying problems.

• Make underlying issues explicit.

• Sharpen people’s understanding of real goals and interests.

• Enhance mutual understanding between different groups.

• Stimulate a sense of urgency.

• Discouragement people to engage in avoidance behavior.

Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Create a strong guiding coalition of executives & generate stakeholder commitment.

• To what extent are your department’s monthly results evaluated in light of the new vision?

• To what extent are the workforce’s ideas and knowledge being tapped to question and test the validity of the proposed methods of operation?

• To what extent do you feel you have a real stake in improving your organization’s performance as opposed to just your narrow job responsibilities?

• To what extent do business unit leaders act on criticisms and suggestions for improvement?

• To what extent have you been involved in redesigning your new job?

• To what extent is your input valued for improving your job responsibilities during the transition?

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Create a strong guiding coalition of executives & generate stakeholder commitment.

• To what extent was provided training adequate preparation for the new realities of how you must now do your job?

• To what extent were you adequately trained on change management concepts and techniques?

• To what extent was information about the transition easily understood by every member of the workforce?

• To what extent does your manager act as if they believed the organization needed major change?

• To what extent does your manager constantly demand new ideas and perspectives?

• To what extent does your manager sustain pressure so that people achieve more than expected?

Yankee Ingenuity Consulting

90 Second Gary Sadavage -- [email protected]

Exercise

Establish pervasive communications.

D etermine org anizational readiness an d b usines s case for change.

D evelop a compelling vision fo r chan ge & create a s ense of urg ency.

Create a s tr ong guiding coalitio n o f executives & generate s takeholder commitmen t.

A lign o rganization al des ig n an d p erforman ce management sys tems.

Bu ild individual and team capacity to change.

G enerate s hort ter ms wins , cons olidate gains & pro duce more ch ange.

A lign culture and change pro ces s.

Evaluate b usines s environ ment.

Establish perv as ive commun ications .

Ch an ge P roces s M odel, © G ary S adavage 2000 gs [email protected] m

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Establish pervasive communications.

• • • •

Using every vehicle possible to constantly communicate the new vision and strategies When communicating major change to employees, keep it simple and avoid mission statements and management proclamations – most important, give them the facts; be straight.

Introduce the planned change face to face, not through videos, publications or vast, impersonal public meetings.

Target supervisors: get senior managers who are involved in the change to brief small groups of supervisors face to face.

–

As a consultant, spend 80% of your time concentrating efforts on supervisors

–

Do briefings in two rounds – first, to explain the change and get supervisors’ reactions and recommendations, second, to explain any modifications of the planned change based on the supervisors’ feedback.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Establish pervasive communications.

• To what extent do you feel the organization communicates honestly and openly about the changes going on?

• To what extent does information about the status of the business flows freely throughout the organization with minimal filtering?

• To what extent does information (business, industry, production, etc.) flow to the right people, at the right time, in the most appropriate/effective medium throughout the organization, without barriers?

• To what extent do you have access to the information you needed (daily? in the long run?) • To what extent does useful knowledge and good ideas travel across the organization?

• To what extent do business units learn from one another (i.e., reinventing the wheel almost never happened)?

39 90 Second Exercise

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Seamless Communications a. Information about the status of the business flows freely throughout organization with minimal filtering.

0 20 40 60

CEO

80 100 b. Your organization’s leaders continuously display decisiveness, consistency, and approachability during times of transition.

0 20 40 60

CEO

80 100

 Lowest rated proficiency throughout the organization.  Respondent Commentary: “

The grapevine far supplants official channels for disseminating information”.

“

Information is perceived as sanitized and dumbed-down to avoid conflict and minimize dissension in the ranks”

 Organizational leaders were decisive and approachable but not consistent. This lack of

Consulting

consistency was cited as the source of leadership ineffectiveness during times of transition.

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Align organizational design & performance management systems.

D etermine org anizational readiness an d b usines s case for change.

D evelop a compelling vision fo r chan ge & create a s ense of urg ency.

Create a s tr ong guiding coalitio n o f executives & generate s takeholder commitmen t.

A lign o rganization al des ig n an d p erforman ce management sys tems.

Bu ild individual and team capacity to change.

G enerate s hort ter ms wins , cons olidate gains & pro duce more ch ange.

A lign culture and change pro ces s.

Evaluate b usines s environ ment.

Establish perv as ive commun ications .

Ch an ge P roces s M odel, © G ary S adavage 2000 gs [email protected] m

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Align organizational design & performance management systems.

• To what extent is the design of your job based on the tasks that need to be performed rather than on position descriptions, reporting relationships, and title changes?

• To what extent does your organization encourage individuals, regardless of job description, to search for innovation?

42 • To what extent where you briefed on how your job impacts the goals and targets of other department?

• To what extent are there lots of planned opportunities for talk with other departments and joint activities?

• To what extent do you feel you receive a sufficient amount of feedback from internal and external sources to help you improve what you do?

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Align organizational design & performance management systems.

• To what extent is your performance evaluation tied to the change initiative?

• To what extent does your current performance appraisal system support/promote the new way for doing work?

• To what extent does your current compensation system support/promote the new way for doing work?

• To what extent does your current promotion system support/promote the new way for doing work?

• To what extent do you understand what you must do to satisfy the customer’s needs?

• To what extent can you link your day-to-day work to satisfaction of the client’s needs?

43 90 Second Exercise

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

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Knows the Customer a. You can link your individual contributions to satisfaction of client’s needs.

0 20 40 60 80

CEO

b. Your organization seeks to partner with its clients on product and service conception, design, production, and evaluation.

100 0 20 40 60 80 100

CEO  Highest rated proficiency, valued throughout the organization.

 On-going relationships with internal and external clients were directly linked their feedback on “client delight”.

 The organization’s partnerships were cited as examples where the clients worked as a

concurrent

part of the project team.  Respondent commentary:

We have a long term track record of being called last minute

Yankee Ingenuity Consulting

and fulfilling these Herculean requests without fail.

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Build individual and team capacity to change.

D etermine org anizational readiness an d b usines s case for change.

D evelop a compelling vision fo r chan ge & create a s ense of urg ency.

Create a s tr ong guiding coalitio n o f executives & generate s takeholder commitmen t.

A lign o rganization al des ig n an d p erforman ce management sys tems.

Bu ild individual and team capacity to change.

G enerate s hort ter ms wins , cons olidate gains & pro duce more ch ange.

A lign culture and change pro ces s.

Evaluate b usines s environ ment.

Establish perv as ive commun ications .

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Build individual and team capacity to change.

• Getting rid of obstacles

– Skills (Technical, Management, Leadership)

• Changing systems or structures that undermine the change vision • Encouraging risk taking and nontraditional ideas, activities, and actions

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Build individual and team capacity to change.

• To what extent do you understand how your department’s performance is measured?

• To what extent is it the “norm” for you to look for problems and opportunities that might impact the success of the transition?

• To what extent is there sufficient motivation and rewards (policies, procedures, and methods) for encouraging people to contribute in ways that exceed their job/work descriptions?

• To what extent is the requirement for ongoing improvement built into each job and team assignment?

• To what extent does your organization provide ‘idea’ resources for innovation and improvement (industry journal, internet , competitors analysis)?

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Build individual and team capacity to change.

• To what extent is decision making driven down to the lowest level possible?

• To what extent is HR a key element in the success of the transformation?

• To what extent were there specific individuals named as change agents for your business unit?

• To what extent does the organization focus on the deliberate selection (hire or promotion) and development of people who can embrace and thrive in fast changing environments?

48 90 Second Exercise

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Generate short terms wins, consolidate gains & produce more change.

D etermine org anizational readiness an d b usines s case for change.

D evelop a compelling vision fo r chan ge & create a s ense of urg ency.

Create a s tr ong guiding coalitio n o f executives & generate s takeholder commitmen t.

A lign o rganization al des ig n an d p erforman ce management sys tems.

Bu ild individual and team capacity to change.

G enerate s hort ter ms wins , cons olidate gains & pro duce more ch ange.

A lign culture and change pro ces s.

Evaluate b usines s environ ment.

Establish perv as ive commun ications .

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Generate short terms wins, consolidate gains & produce more change.

Generating short-term wins

– Planning for visible improvements, or “wins” – Create those wins – Visibly recognize and reward people who made the wins possible

Consolidate gains and producing more change

– Using increased credibility to change all systems, structures, and policies that don’t fit together and don’t fit the transformation vision – Hire, promote, and develop people who can implement the change vision

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Generate short terms wins, consolidate gains & produce more change.

• To what extent are you kept abreast of day to day progress during the transition?

• To what extent are you able to use the vision to guide the decisions you make on a daily basis?

• To what extent are the workforce’s ideas and knowledge used to question and test the validity of how your department’s performance would be measured?

51 • To what extent are mechanisms in place to assure that new learning was rapidly captured and disseminated throughout the organization?

• To what extent do you share innovative ideas with other departments?

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Generate short terms wins, consolidate gains & produce more change.

• To what extent are the short-term goals achievable?

• To what extent is progress tracked against plans/goals and necessary adjustments made on a real-time basis?

• To what extent is organizational action based on real-time knowledge of the transition?

• To what extent does your department adapt to unexpected problems and identify workable solutions?

• To what extent does your organization acknowledge mistakes fast and attempt to fix them?

52 • To what extent are training and development activities custom fit to your specific needs vs. “out of the can”?

90 Second Exercise

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Just-In-Time Adaptability a. The organization is able to execute major and multiple actions quickly and efficiently.

0 20 40

CEO

60 80 100 b. Your organization supports the continuous development of individual adaptability skills (e.g., collaboration, communication, and continuous learning).

0 20 40 60 80 100

CEO  Consistently recognized as a strength and source of pride within the organization.  Respondent commentary: “

We have a good record of fire fighting.

”  The organization strongly encourages and supports personal development (in house training, tuition reimbursement, work release time, flexible hours).

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Align culture and change process.

D etermine org anizational readiness an d b usines s case for change.

D evelop a compelling vision fo r chan ge & create a s ense of urg ency.

Create a s tr ong guiding coalitio n o f executives & generate s takeholder commitmen t.

A lign o rganization al des ig n an d p erforman ce management sys tems.

Bu ild individual and team capacity to change.

G enerate s hort ter ms wins , cons olidate gains & pro duce more ch ange.

A lign culture and change pro ces s.

Evaluate b usines s environ ment.

Establish perv as ive commun ications .

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Align culture and change process.

• • •

Change sticks only when it becomes “the way we do things around here.” Culture is powerful for three primary reasons (John Kotter)

–

New employees are selected and indoctrinated through culture.

–

Culture exerts itself through the actions of hundreds or thousands of people.

–

All of this happens without much conscious intent and thus is difficult to challenge or even discuss.

Two approaches to anchoring changes in an organization’s culture.

–

Actively show people how specific behaviors and attitudes have helped improve performance.

–

Verify that promotion and performance criteria are fostering the next generation of management that personifies the new vision (this takes time).

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Generate short terms wins, consolidate gains & produce more change.

• To what extent is the right data tracked so that gains or improvements could be clearly shown?

• To what extent does your organization have a culture that seeks our ‘difference’ and embraces challenge and self-critique?

• To what extent will lessons learned from this implementation be able to be shared throughout the organization?

• To what extent did your organization clearly define how your performance would be measured throughout the transition? (What were those measures?) 56

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Generate short terms wins, consolidate gains & produce more change.

• To what extent are training and development activities keeping pace with the changes that took place?

57 • To what extent have new work habits replaced the old way for doing work for you?

• To what extent are

old work habits

confronted, coached, and monitored to ensure that new work habits were the only way for doing business?

• To what extent is

poor performance

confronted, coached, and monitored to instill appropriate behavior?

90 Second Exercise

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Evaluate business environment.

D etermine org anizational readiness an d b usines s case for change.

D evelop a compelling vision fo r chan ge & create a s ense of urg ency.

Create a s tr ong guiding coalitio n o f executives & generate s takeholder commitmen t.

A lign o rganization al des ig n an d p erforman ce management sys tems.

Bu ild individual and team capacity to change.

G enerate s hort ter ms wins , cons olidate gains & pro duce more ch ange.

A lign culture and change pro ces s.

Evaluate b usines s environ ment.

Establish perv as ive commun ications .

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!

Evaluate business environment.

1. Cost vs. Volume growth comparison over the last 3 years - plot total costs ($) vs. total product volume (units, lbs, etc.). I would use a regression analysis to compute the rate of growth (slope) for each. Costs should not be going up as fast as volume. 2. I would separate manufacturing (materials, labor, etc) costs from non-manufacturing (marketing, distribution, legal, etc) costs and perform the same analysis for the last 3 years. Looking to see how the functions (value vs. non-value adding) are accounting for costs in the enterprise.

3. Product cost trend vs. Volume growth analysis for last 3 years. Perform similar analysis to Step 1 for each product line. Need to identify which costs are shared to make comparisons meaningful.

4. I would separate manufacturing (materials, labor, etc) costs from non-manufacturing (marketing, distribution, legal, etc) costs and perform the same analysis for the last 3 years as in step 3.

5. Cost structure vs. total cost for last 3 years. Manufacturing and non-manufacturing costs will be plotted as a function of total costs.

6. Cost experience curve - for each product line, calculate unit product cost and chart by year and volume over last 3 years. Did unit product cost go down significantly as product volume went up? How did each product experience curve differ? What explains the differences? Did cost experience curves hold? Why or why not? What is the slope (hopefully downward)? Did the slopes decrease more rapidly as volume increased?

7. Cost variability analysis - use last 3 years to chart production costs by products. Did unit costs vary significantly from one production run to the next? Why? Which product exhibited the most variability in production costs? Why?

8. Value chain analysis, cost variance analysis, etc.

Yankee Ingenuity Consulting

Gary Sadavage -- [email protected]

Chalk it up to good old Yankee Ingenuity!