1
Non-Financial Measures for
Effective Change Management
International Society for Performance Improvement
Conference
Wednesday, April 12 2000
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
2
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
turbulent markets, more demanding shareholders,
and more discerning customers.
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
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Gary Sadavage -- gsadavage@aol.com
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3
“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
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Gary Sadavage -- gsadavage@aol.com
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4
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...
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Gary Sadavage -- gsadavage@aol.com
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5
What do all these questions have in common?
Who will I
report to?
What
decisions do I
have to
make?
How will my job
change?
During times of change, employees focus:
What’s
in it for
me?
?
Who
will I
work
with?
When will
the
change
impact
me?
How will my
co-workers be
effected?
They are of a very personal,
individual nature.
How will my
performance
be
measured?
What
new skills
do I
need?
?
Why
should I
care?
Will this change be
as difficult as the
last change?
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 -- gsadavage@aol.com
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PAIN...
Is
Weakness
Leaving
the Body.
Graphic courtesy of United
States Marines
www.marines.com
www.marines.com
Photo courtesy US Marines
7
The Cost of Failure...
When Change Initiatives Fail,
There Are Tangible Impacts to the Business:
“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
•
•
Desired changes are not realized
•
•
•
Future change efforts are compromised
•
•
•
•
Prolonged, reduced productivity
Change occurs only after great
expense, both financial and human
Destroyed shareholder value
Uncontrolled loss of knowledgeable and
valuable employees
Lost opportunity in the marketplace
Poor customer perceptions or worse
Customer Attrition
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Gary Sadavage -- gsadavage@aol.com
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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 %
B: 29 %
C: 46 %
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 %
B: 29 %
C: 46 %
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 %
B: 29 %
C: 46 %
D: 63 %
13
Successful Transformations
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
© 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
“Ownership” of new processes and
systems
 Accepted roles and responsibilities
 Increased employee knowledge
 Reduced re-training
 Reduced “post change” support
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 Realized efficiencies and objectives

Consulting
Source: Arthur Andersen
Gary Sadavage -- gsadavage@aol.com
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14
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
Yankee Ingenuity
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Gary Sadavage -- gsadavage@aol.com
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15
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
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Gary Sadavage -- gsadavage@aol.com
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16
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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Gary Sadavage -- gsadavage@aol.com
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17
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
0 Accidental
Examples
Pass/Fail
Lucky
Lucky
1 Repeatable
Concepts
Time
Safe
Occasional
2 Defined
Metrics
Cost
Confident Competitive
3 Managed
Responsibilities Robust
Sure
4 Mastered
Vision
Automatic Formidable
Scope
Capabilities
Reactive Proactive
Aggressive
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Source: RKDove, Paradigm Shift International
Gary Sadavage -- gsadavage@aol.com
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18
Critical Business Practices
Vision/Strategy Innovation Management
90 Second
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
19
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
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.
 Align organizational design and
performance management systems
 Build individual and team capacity to
change
 Generate short terms wins,
consolidate gains & produce more
change
Focusing on these practices can help
accelerate the change process.
 Align culture and change process
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
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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.
Establish
pervasive
communications.
Build individual and team capacity to change.
Generate short terms wins, consolidate gains & produce more change.
Align culture and change process.
Evaluate business environment.
Change Process Model, © Gary Sadavage 2000
gsadavage@aol.com
21
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.
Establish
perv as ive
commun ications .
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.
Ch an ge P roces s M odel, © G ary S adavage 2000
gs adavage@aol.co m
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
22
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
23
Determine organizational readiness
& build business case for change.
The Four Questions
•
•
•
•
90 Second
Exercise
What’s changing or what needs to change in your organization?
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
24
Develop a compelling vision for change
& create a sense of urgency.
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.
Establish
pervasive
communications.
Build individual and team capacity to change.
Generate short terms wins, consolidate gains & produce more change.
Align culture and change process.
Evaluate business environment.
Change Process Model, © Gary Sadavage 2000
gsadavage@aol.com
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
25
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 -- gsadavage@aol.com
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26
Sources of Complacency
Too much happy talk
from senior management
Human nature, with its
capacity for denial,
especially if people are
already busy or stressed
The absence
of a major and
visible crisis
Low overall
performance
standards
Complacency
A kill-the-messenger-ofbad-news, low-candor,
low-confrontation culture
A lack of sufficient
performance feedback
from external sources
Source: Leading Change © 1996 James P. Kotter
Too many visible
resources
Organizational
structures that focus
employees on narrow
functional goals
Internal measurement
systems that focus on the
wrong performance indexes
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
27
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?
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Gary Sadavage -- gsadavage@aol.com
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28
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)?
90 Second
Exercise
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Gary Sadavage -- gsadavage@aol.com
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29
Develop a compelling vision for change
& create a sense of urgency.
RATING SCALE
Absolutely Top-Notch...........Score 90-100
Does the Job.........................Score 50- 90
Needs Work..........................Score 0- 50
0
20
“Needs Work” range
40
60
80
“Does the Job” range
100
“Absolutely Top-Notch”
range
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Gary Sadavage -- gsadavage@aol.com
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30
Case Study: Organizational Profile
• Research based not-for-profit transitioning to forprofit 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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31
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.
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32
Shared Vision
The vision, mission, and goals of your organization:
a. ...are well defined for individuals.
0
20
40
60
80
100
CEO
b. ... are accepted by individuals and used to guide their daily priorities.
0
20
40
60
80
100
CEO
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
33
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.
Establish
perv as ive
commun ications .
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.
Ch an ge P roces s M odel, © G ary S adavage 2000
gs adavage@aol.co m
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
34
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.
• Prevent premature (and therefore dangerous) resolution of problems.
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
35
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
36
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?
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90 Second
Gary Sadavage -- gsadavage@aol.com
Chalk it up
to good old Yankee Ingenuity!
Exercise
37
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.
Establish
perv as ive
commun ications .
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.
Ch an ge P roces s M odel, © G ary S adavage 2000
gs adavage@aol.co m
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
38
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
39
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)?
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90 Second
Exercise
Consulting
Gary Sadavage -- gsadavage@aol.com
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40
Seamless Communications
a. Information about the status of the business flows freely throughout organization with minimal filtering.
0
20
40
60
80
100
CEO
b. Your organization’s leaders continuously display decisiveness, consistency, and approachability
during times of transition.
0
20
40
60
80
100
CEO
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. ThisYankee
lackIngenuity
of
Consulting
consistency was cited as the source of leadership ineffectiveness during times
of transition.
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
41
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.
Establish
perv as ive
commun ications .
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.
Ch an ge P roces s M odel, © G ary S adavage 2000
gs adavage@aol.co m
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
42
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?
• 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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
43
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?
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90 Second
Exercise
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
44
Knows the Customer
a. You can link your individual contributions to satisfaction of client’s needs.
0
20
40
60
80
100
CEO
b. Your organization seeks to partner with its clients on product and service
conception, design, production, and evaluation.
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:
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We have a long term track record of being called last minute
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and fulfilling these Herculean requests without fail.
Chalk it up to good old Yankee Ingenuity!
45
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.
Establish
perv as ive
commun ications .
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.
Ch an ge P roces s M odel, © G ary S adavage 2000
gs adavage@aol.co m
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
46
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
47
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
48
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?
90 Second
Exercise
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
49
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.
Establish
perv as ive
commun ications .
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.
Ch an ge P roces s M odel, © G ary S adavage 2000
gs adavage@aol.co m
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
50
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
51
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?
• 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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
52
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?
• 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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
53
Just-In-Time Adaptability
a. The organization is able to execute major and multiple actions quickly and efficiently.
0
20
40
60
80
100
CEO
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 (inhouse training, tuition reimbursement, work release time, flexible hours).
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
54
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.
Establish
perv as ive
commun ications .
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.
Ch an ge P roces s M odel, © G ary S adavage 2000
gs adavage@aol.co m
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
55
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
56
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?)
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
57
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?
• 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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
58
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.
Establish
perv as ive
commun ications .
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.
Ch an ge P roces s M odel, © G ary S adavage 2000
gs adavage@aol.co m
Yankee Ingenuity
Consulting
Gary Sadavage -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!
59
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 -- gsadavage@aol.com
Chalk it up to good old Yankee Ingenuity!