CHANGE MANAGEMENT

1. CHANGE MANAGEMENT NIGEL H. TOMLINSON CHIEF EXECUTIVE SHEFFIELD CHAMBER OF COMMERCE & INDUSTRY

3. Some Thoughts About Change “Things do not change; we change”.Henry David Thoreau “We must be the change we wish to see in the world”. Gandhi “There is a better way for everything. Find it!”. Thomas Edison “Everyone thinks of changing the world, but no-one thinks of changing himself”. Leo Tolstoy “We do not succeed in changing things according to our desire, but gradually our desire changes”.Proust “And if not now……when?Talmud “Treat people as if they were what they ought to be and you help them to become what they are capable of being”.Goethe

4. The Imperative of Change • “Expect nothing; be prepared for anything”Samurai saying • At this time there are six major external changes which influence organisations: • A bigger global market-place made smaller by technology and competition from abroad. • 2. A worldwide recognition of the environment as an influencing variable. • Health consciousness as a permanent trend amongst all age groups throughout the developed world. • 4. The demographic slump in the developed world means there are fewer young people to go round. • 5. The changing workplace and skills shortages create a need for non-traditional employees. • 6. Women in work and management is an ever increasing trend.

5. The Major Causes of Change • Think of changes that have occurred in your working life. • How often were the following causes of change involved in some way? • Changes in the level of technology used? • Changes in customer expectations or tastes? • Changes as a result of competitors’ activities? • Changes as a result of Government legislation? • Changes as a result of alterations in the economy? • The Result: You will change. • There is no alternative. • The organisation and employees can either be reactive or pro-active. Those that survive will be world class. • “The quality of people and their management is going to make a bigger difference than the quality of products or the quality of services” Rosabeth Moss Kanter

6. Examples of Environmental Influences Economic Factors and Restructuring e.g. re-united Germany 1990s Capital Markets e.g. corporate losses Labour Market e.g. drive to reduce costs, higher skills Competition e.g. increase in tendering organic and acquisitive Labour Policy & Industrial Relations Economic Forecasting Financial Policy Marketing Policy Demographics e.g. ageing population Demographic Lobbying Government e.g. national and trans-national budgets, interest rates, employment law The Enterprise The Enterprise Forecasting Representation Environmental Sensing R & D Policy Environmental Sensing R & D Policy Purchasing Policy Socio-Cultural e.g. quality of life, health, mobility Technology e.g. reduces product life cycle, investment costs increase Ecology e.g. environmental laws and protection Supplies e.g. raw materials scarcity, supply and demand

7. The Major Obstacles to Change • “I do not know the key to success, but the key to failure is trying to please everybody”Bill Cosby • People being too close to see what the problem is. • Those who are part of the problem. • Being unwilling to confront issues when status and remuneration are involved. • Those who are part of the power system being examined. • Those who are afraid to challenge the needs and demands of superiors. • Those who quite simply do not like change or having to think about something. • “Habit is either the best of servants or the worst of masters”.Nathaniel Emmons

8. The Sheffield/South Yorkshire ScenarioThe Past • Sheffield was the industrial and commercial powerhouse of its region. • Heavy dependence on, and dominance by, Steel, Heavy Engineering and Mining. • High proportion of small/medium/large family-owned companies operating a paternalistic management style. Exclusive reliance upon authority which only encouraged counter measures, minimal performance, even open rebellion. • Lack of innovation and acceptance of new ideas and/or technology whilst the competition embraced them. • Heavily Unionised with specific and rigid job demarcation, workforce with narrow skills base. • City/Town Councils and Government constantly at odds with one another. • Public and Private Sector saw no need to co-operate. • Highly reactive to external and internal issues and forces. Result: Uncompetitive, outdated, lack of investment and left in the political and business wilderness. We needed to move to be World Class.

10. Mines and steel mills closed - Rationalisation through technology improvements, changes in demand and competition.Thriving Medical, IT, Service Cultural and Sports related sectors.Over 70% of businesses are micros (1-10) or SMEs (10-199). Almost all of our large producers are owned by foreign companies.New entrepreneurial spirit has led to innovation, technologies and ideas to allow companies to compete.Job demarcation is giving way to transferability of skills, skills base being increased, flexible manufacturing systems being designed and adopted.Change of Government with a very different agenda. Sheffield City Council Executive working closely with business sector and beginning to revolutionise its own work practices.Public and Private Sector have come together in Sheffield First Partnership, South Yorkshire Forum to achieve Objective 1 status.Much more proactive approach across the region to secure inward investment, re-development, reduce social exclusion and promote change. The Sheffield/South Yorkshire ScenarioThe Present Result: We are still behind the pace setters but we have a better chance of catching up.

11. Where did we go wrong? We had highly mechanistic organisations characterised by: • Task differentiation and specialisation. • Hierarchy for co-ordination of tasks, control and communications. • Control of all communications from the top, information provided on a need-to-know basis. • Interaction and emphasis placed on vertical reporting lines. • Loyalty to the organisation and its officers. • Value placed on internal knowledge and experience. We needed to have organic organisations characterised by: • Continuous assessment of task allocation through interaction to utilise knowledge which • solves real problems. • The use of expertise power relationships and commitment to total task. Sharing of • responsibility. • Open and widely used communication patterns which incorporate horizontal and diagonal as • well as vertical channels. • Commitment to task accomplishment, development and growth of the organisation rather than • loyalty to officials. • Value placed on general and transferable skills which are relevant to the organisation.

12. What makes a Change Environment • There must be agreed requirements (Internal/External) - all employees develop willingness to provide service - establish needs. • 2. Customer requirements must be met first time, every time. • 3. Quality improvements to reduce waste and total costs - everyone uses their time effectively and more meaningfully. • 4. A focus on the prevention of problems, reduce “fire-fighting” manner - Preventative rather than reactive. • 5. Improvement can only result from initial management action, but everyone must be encouraged to participate in shaping the process. • 6. Every job must add value - Overall enhancement of quality of work and personal quality of life. • 7. Everybody must be involved from all levels and across all functions. • 8. A culture of continuous improvement must be established. • 9. An emphasis on measurement to assess and meet improvements in processes. • An emphasis must be placed on promoting creativity - the most valuable organisational resource is the human element NOT technology. Attitude is the key. • An understanding that there is NO finishing line.

13. Understanding processes of strategic change Diagnosing strategic change needs Managing the strategic change process Styles of managing change Changing organisational routines Symbolic activity Political activity Leadership and change agency A FRAMEWORK FOR MANAGING STRATEGIC CHANGE “Effective change management is a continuous process of confrontation, identification, evaluation and action” James McCalman & Robert Paton As designed by Kindercare Inc, USA

14. The Seven Dynamics of Change (i) 1      People will feel awkward, ill at ease and self conscious 2      People will think about what they have to give up 3      People will feel alone, even if everyone else is going through the change 4      People can handle only so much change 5      People are at different levels of readiness for change 6     People will be concerned that they don’t have enough resources (time, money, skills etc) 7      If you take the pressure off, people will then revert back to old behaviour

15. The Seven Dynamics of Change (ii) Strategies for dealing with each dynamic in a work related situation 1                People will feel awkward, ill at ease and self conscious Acknowledge it  2               People will think about what they have to give up Don’t just sell people the benefits. Legitimise the losses and time for people to mourn the loss  3               People will feel alone, even if everyone else is going through the change Structure activities which create involvement. Encourage the sharing of ideas and working together. Instil the idea of joint working and support  4               People can handle only so much change Set priorities and keep an eye on the outcome 5                People are at different levels of readiness for change Don’t label or ‘pick on’ people. Recognise that some people are risk takers and others take longer to feel secure 6                People will be concerned that they don’t have enough resources (time, money, skills etc) Encourage and support creative problem solving  7               If you take the pressure off, people will then revert back to old behaviour Keep a focus on maintaining the change and manage the journey as well as the outcome. Build in “slippage’

16. Style Means/Context Benefits Problems Circumstances of Effectiveness Educations and Communication Mutual trust/respect Small group briefings Overcoming lack of (or mis) information Time consuming Direction or progress may be unclear Incremental change or global change with long time horizon Participation Small group/task force involvement Increasing ownership of a decision or process May improve quality of decision Time consuming Solutions/outcomes within existing paradigm Intervention Change agents retains co-ordination/control, delegates aspects of change Process is guided/controlled but involvement takes place Risk of perceive manipulation Incremental or non-crisis global change Coercion/edict Exploit power through edict or imposition of change May be successful in crises or states of confusion Least successful unless crisis Crisis, rapid global change or change in established autocratic cultures STYLES OF MANAGING CHANGE Implementation:

17. Organisational Resistance to Change ”It is widely assumed that resistance to change is a common and natural phenomenon” A Huczynski ·           The strategic direction of an organisation builds up a MOMENTUM of its own which may be reinforced by ongoing success ·            The CULTURE of the organisation is likely to support this momentum of strategy. These two factors when linked may result in ORGANISATIONAL INERTIA when it comes to change ·          Faced with change there may be POLITICAL resistance within and around the organisation

18. Machiavelli on Change and the Political Process • “There is nothing more difficult than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and only lukewarm support is forthcoming from those who would prosper under the new. Their support is lukewarm partly from fear of their adversaries, who have the existing laws on their side, and partly because men are generally incredulous, never really trusting new things unless they have tested them by experience. • In consequence, whenever those who oppose the changes can do so, they attack vigorously, and the defense made by the others is only lukewarm. So both the innovator and his friends could come to grief” • Source: The Prince by Niccolo Machiavelli • Machiavelli’s 3 Principles: • Establish whether you are in the position, in case of need, to maintain • yourself alone, or whether you need the protection of others • Esteem your nobles (managers), but do not make yourself hated by the • populace (general staff) • Follow the example of Ferdinand, King of Aragon and Spain, who • “continually contrived great things which have kept his subjects’ minds • uncertain and astonished, and occupied in watching their result”

19. McClelland’s Motivation Model

20. Implementation:  “Unfreezing” & the Management of Change Gerry Johnson & Kevan Scholes – Corporate Strategy

21. What are you worth?“Whatever your age, your upbringing, or your education, what you are made of is mostly unused potential”George Leonard In simple terms ... • Enough fat to make 7 bars of soap • Enough iron to make one medium size nail • Enough sugar to sweeten 7 cups of tea • Enough lime to whitewash a chicken coop • Enough phosphorous to make 2,200 match tips • Enough magnesium to make a dose of salts • Enough potash to explode a toy car • Enough sulphur to clear a dog of fleas What are you really worth to the organisation? As an: innovative team playing reliable flexible disciplined results orientated person ... You are worth your weight in gold!!

22. Some Thoughts About Attitude “Your work is to discover your work, and then with all your heart, to give yourself to it”. Buddha “One of the most important factors, not only in military matters but in life as a whole, is the ability to direct one’s whole energies towards the fulfillment of a particular task”. Field Marshall E Rommel “Once you say you are going to settle for second, that’s what happens to you”. John F Kennedy “It’s your attitude, not your aptitude, which determines your altitude in life”. Anonymous “I’m a great believer in luck, and I find the harder I work, the more I have of it”. Thomas Jefferson “The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty”. Winston Churchill

23. KAIZEN - The “Ki” Principle KI (crisis) KI KEN DANGER = THREAT = DEAD END KI KAI GOOD CHANCE = OPPORTUNITY = SUCCESS IT IS ALL ABOUT ATTITUDE!!

24. KAIZEN - Cultural Differences The Western Perception Top Management - Middle Management Supervisors - Staff Results: Exclusion Top down dictatorship Poor morale Communication through the grapevine Innovation Maintenance The Japanese Perception Top Management - Middle Management Supervisors - Staff Results: Participation & involvement Enhanced morale Increasing communication Improvement in discipline Better time management Greater skills development Innovation Maintenance GENERAL IMPROVEMENTS IN ATTITUDE

25. KAIZEN - the Values KAIZEN Means: Improvement Ongoing improvement including everyone!! KAIZEN Philosophy: Simplicity - That our way of life be it working or social or home deserves to be constantly improved. KAIZEN’S Focus: Improvement through - Adaptability/Teamwork/Attention to detail People orientation/Open and shared information Cross functional orientation/Comprehensive feedback Building on existing technology/Systems KAIZEN’S Requirements: Inherent desire for quality A belief that it will pay in the long run Behavioural change Positive attitude to change and improvement Missionary zeal A clear understanding that there is No End It is Continuous

26. KAIZEN - What Does It Do? It demands continuous improvement in: • Customer orientation • Total Quality Control • Suggestions/Ideas • Productivity • Zero defects • Small group activity • Co-operative communications • Transferability of skills In order to eliminate: Muda (Waste) - Muri (Excess) - Mura (Uneveness) In: • Manpower • Technique • Method • Time • Facilities • Way of thinking • Output

27. KAIZEN - How? 1) Team Briefing 2) Training - Driven from the top-down and available to all 3) Objectives ie:S - Specific M - Measurable A - Agreed R - Realistic T - Timebound 4) Suggestionsi - Improvements in ones own work ii - Saving in energy, material and other resources iii - Improvements in the working environment iv - Improvements in systems v - Improvements in office work vi - Improvements in the quality of our products and services vii - Ideas for new products and services viii - Improvements in customer service and customer relations ix - Others

28. KAIZEN - How? ie: Consideration is given to any change/suggestion if it contributes to these goals: i - Making the job easier ii - Removing the drudgery from the job iii - Removing nuisance from the job iv - Making the job more productive v - Improving product and service quality vi - Saving time and cost No suggestions means - No need for improvement which means - You do not recognise the problem or - You are comfortable passing the buck to - Your colleagues and customers alike !! KAIZEN suggestions must be supported from the bottom up - WHY? - because the BEST solutions for IMPROVEMENT come from those closest to the PROBLEM!

29. KAIZEN - How? Who What Where Who does it? What to do? Where to do it? Who is doing it? What is being done? Where is it done? Who should be doing it? What should be done? Where should it be done? Who else can do it? What else can be done? Where else can it be done? Who else should do it? What else should be done? Where else should it be done? When Why How When to do it? Why does he do it? How to do it? When is it done? Why do it? How is it done? When should it be done? Why do it there? How should it be done? What other time can it Why do it then? How can this method be be done? used in other areas? What other time should Why do it that way? Is there any other way to do it? It be done? The overall result - a never ending programme of: Perceptiveness - Idea development - Decision making - Implementation - Effect

30. The S.P.E.A.K.E.R. Model Specific Positive Evidence Awareness Knowledge Ecology Responsibility

31. POWER taking SPEAKER further Any project or change can be taken through SPEAKER to check it out. You can then use the POWER model. By going through the POWER process first you have a lot of information that will help you to firm up your SPEAKER Outcome. P resent Situation O utcome W hy E ffects R esources

32. “Tell me and I will forget. Show me and I will remember. Involve me and I will understand” Confucius

33. Ten Key Factors in Effective Change Management 1. Change is all pervasive. 2. Effective change needs active senior management support. 3. Change is a multi-disciplinary activity. 4. Change is about people, pure and simple. 5. Change is about success. 6. Change is a perpetual process. 7. Effective change requires competent change agents. 8. In terms of methodology, there is no one best way. 9. Change is about ownership. 10. Change is about fun, challenge and opportunity. CONCLUSION: It must be a continuous process of: Confrontation Identification Evaluation Action.

34. 15 Key Competencies required for Effective Change Management “If you can imagine it you can achieve it, if you can dream it you can become it” William Arthur Ward • Goals • Sensitivity to changes in key personnel, top management perceptions and market conditions, and to the way in which these impact on the goals of the project • 2 Clarity in specifying goals, in defining the achievable • Flexibility in responding to changes, perhaps requiring major shifts in project goals and management style, and risk taking • Roles • 4 Team-building abilities, bringing together key stakeholders, establishing and maintaining appropriate contacts • 5 Networking skills in establishing and maintaining appropriate contacts • 6 Tolerance of ambiguity, to function comfortably, patiently and effectively in an uncertain environment • Communication • Communication skills to transmit effectively the need for change, project goals and individual • tasks/responsibilities •  8 Interpersonal skills particularly in identifying the concerns of others •  9 Personal enthusiasm, in expressing plans and ideas •  10 Stimulating motivation and commitment in others involved

35. 15 Key Competencies required for Effective Change Management (ii) Negotiation 11 Selling plans and ideas, by creating a desirable and challenging future vision 12 Negotiating with key players for resources, procedural changes and conflict resolution Managing Up 13 Potential awareness, in identifying potential coalitions and balancing conflicting goals and perceptions 14 Influencing skills, to gain commitment to project plans and ideas from potential sceptics and resisters  15 Overall perspectives, to stand back and take a broader view of priorities D Buchanan & D Boddy The Expertise of the Change Agent: Public Performance and Backstage Activity

36. WHAT ATTRIBUTES DOES A LEADER REQUIRE IN THE NEW MILLENNIUM? “Managers deal with complexities, Leaders deal with change” Richard Branson Attributes will always be moulded and dictated by the environment

37. 13 Fatal Errors Managers make • “If at first you don’t succeed, try, try and try again. Then quit. No use being a damn fool about it” • W. C. Fields • Refuse to accept personal change • Fail to develop people • Try to control results instead of influencing thinking • Join the wrong crowd • Manage everyone the same way • Forget the importance of profit • Concentrate on problems rather than objectives • Be a buddy, not a boss • Fail to set standards • Fail to train your people • Condone incompetence • Recognise only top performers • Try to manipulate people • Source: W Steven Brown, President of the Fortune Group

38. What Does Change Provide It provides an organisation with an opportunity to be a world class player through an environment of ... Excellence Persistence Belief Attitude Imagination Courage Teamwork Desire Goals It does not provide an organisation with a promise or a certainty of becoming a world class player. SOME FURTHER THOUGHTS “A mind that is stretched to a new idea never returns to its original dimension”Oliver Wendell Homes “There are precious few Einstein’s among us. Most brilliance arises from ordinary people working together in extraordinary ways”. Roger Von Oech “Don’t find fault, find a remedy”. Henry Ford “We will either find a way, or make one”. Hannibal “He who stops being better stops being good”.Oliver Cromwell “In every passionate pursuit, the pursuit counts more than the object being pursued”.Bruce Lee

39. Successful Change Management • A Perspective • “Jumping to conclusions, is the only exercise some people get” Anonymous • It is not about job cuts • It is about eliminating the work…..eliminating the job • It is not more for less…..but more often more for the same • It is about doing the job faster • It is a journey…..not a leap • It is largely incremental……not a leap • It is easy to say…..but hard to do • It is as much to do with culture…..as process • It results in everything being “at the elbow” • It will lead to: • Motivated and aligned employees • Accountability to deliver • Closing the skills gap • ……but today’s solutions are tomorrow’s problems • Allan Leighton, Chairman – The Royal Mail

40. It’s Not My Job This is a story about four people, named Everybody, Somebody, Anybody, and Nobody. There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that, because it was Everybody’s job. Everybody thought Anybody could do it but Nobody realised that Everybody wouldn’t do it. It ended up that Everybody blamed Somebody, when Nobody did what Anybody could have. “The success of a team depends upon how well the members play together and this means being willing to lose one’s identity for the sake of the team” Unknown

41. Conclusions  -    Those organisations that manage change effectively are more like “open learning systems”  -               Sensitivity to the external environment is part of the organisation’s culture  -               It is dangerous to think of change management as a prescribed set of activities. It differs by organisation and by market  -               Strategic change is inextricably linked with operational change  -              It is imperative that change is continued and incremental and becomes a way of life e.g. Kaizen  -              Human resource management must be an integral component of the change process

42. Above all: Consistency, Direction, Strategy, Feasibility, Clarify With one aim:Competitive Advantage “Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. As we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear. Our presence automatically liberates others” Nelson Mandella

43. Final Thoughts “In the traditional bureaucratic corporation, roles were so circumscribed that most relationships tended to be rather formal and impersonal. Narrowly defined jobs constricted by rules and procedures also tended to stifle initiatives and creativity, and the atmosphere was emotionally repressive. The post-entrepreneurial corporation, in contrast, with its stress on teamwork and co-operation….brings people closer together, making the personal dimension of relationships more important”  Rosabeth Moss Kanter “You firmly believe that sound management means executives on one side and workers on the other, on one side men who think and on the other men who can only work. For you, management is the art of smoothly transferring the executives’ ideas into the workers hands. We are beyond this; business as we know, is so complex and difficult, the survival of organisations so hazardous in an environment increasingly unpredictable, competitive and fraught with danger, that their continued existence depends on their ability to constantly change through the mobilisation of every ounce of intelligence”.  Konosuke Matsushita