Learning Effectiveness

1. Common Errors leading to Conflictual CBA’s2003 Am Cham HR SeminarJean Luc Scalabre – Premium Partners Korea LtdJeanluc_scalabre@hotmail.com

2. Learning Effectiveness Bad Experience Good Experience Simulations Learning Effectiveness Case Studies Discussions Lectures E-Learning ? Readings Degree of Involvement J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

3. Introduction • Korea is at the same time an “advanced society” and a “very traditional and complex society”: unique case • Korea is very different from most other countries for foreign companies: experience acquired elsewhere does not translate well • Newcomers or new organisations usually not well prepared for tough labor relations & CBA negotiations • Korean workers have inaccurate, unclear perception of working ethics & practices in MNC’s: high expectations • MNC Managers do not understand well enough…or too late Korean culture Management Culture Gap J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

4. Introduction • Conflictual CBA negotiations with extravagant requests are usually the result of a failed Change Management Process during which same errors are committed by many companies, across industries: • Failure to establish a constructive dialogue with Labor and their representatives, and • Failure to convince them of the necessity to Change and to moderate their expectations/requests • Insufficient preparation of the CBA process by the Management group • Experience and Academic Research show that same errors are committed over and over again by most organisations in spite of predictable behavior and reaction of Labor to Change Management efforts J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

5. Common Errors leading to Conflictual CBA’s • Under estimating the CBA challenge, lack of preparation • Failure to build a Management Team leading the Change • Not understanding the Culture & Negotiation Style. • Rushing the Changes & Failing to create a Transition Period. • Failure to raise awareness about the need to Change • Failure to establish Communication with Workers • Failure to set clear objectives and celebrate early success • Not removing Barriers and Obstacles • Failure to recognize “Labor representatives” J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

6. 1. Under estimating the challenge, lack of preparation • CBA negotiation is a very formal process and often the main (or only) forum for workers and their representatives: • to voice their concerns • to express their requests • CBA negotiations culminate months of preparation by organised labor: Labor comes prepared with a mandate & clear objectives • Due to workers’ high expectations and Cultural Gap, the Challenges to create a necessary “new business culture” often underestimated by all parties: management and workers "Hope for the best, but prepare for the worst." J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

7. 2. Failing to build a Management Team leading the required changes • Major changes are impossible without the active support and involvement of the organization head + the management group: • Leadership to create a new Vision • Management groups often heterogeneous: Expatriates + Koreans + new hires: • Team Building • Consensus & Shared objectives • Not involving middle management and supervisors, to reach front line workers: • Empowerment • Mobilization of Commitment J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

8. 3. Not understanding the Culture & negotiation style • Surveys and Experience show that Cultural factors remain main reasons for failed transformation efforts: over 50% failure rate • Mutual understanding of cultural background and business culture is required to prepare the ground for a new “Comfort Zone”, a new Business Culture • In the name of GLOBALIZATION, HQ Corporate Culture and Models cannot be “transplanted” without adaptation: high risk of “rejection” • Negotiation style very different: • Unrealistic demands, face saving, slow process, external influence…. • No WIN / WIN Concept J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

9. Cultural Clash Path Cultural Gap Comfort Zone Comfort Zone Managers Employees Cultural Scale Current New Co J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

10. Cultural Clash Path Cultural Gap Comfort Zone Comfort Zone Managers Employees Cultural Scale Current New Co Conflict Zone J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

11. 4. Rushing the Changes. Failure to create a Transition Period & to grieve the Past • Major transformation efforts require time to take place, with many people involved • Rushing Changes without addressing psychological issues and going through a Transition phase will stiffen employee resistance: • Unless a Transition occurs (in the mind) Change will not take place and work • Management has to Plan and Manage a Transition phase: • To let go the past, to mourn it, to unlearn the old way… J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

12. Transition Curve Neutral Zone Degree of Change Morale, productivity, Commitment New Beginings Endings Degree of Involvement / Time J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

13. 5. Failing to raise awareness about the need to Change • Many Managers: • Overestimate how much and how fast they can force big changes in organizations • Underestimate how hard it is to drive people out of their comfort zone • Mis-judge / overestimate the level of urgency they have created • Most change efforts fail at the start if a proper sense of urgency is not created, if complacency is too high • 50% of companies fail at that stage by not creating the conditions to convince people to adhere to the transformation effort and to convince them of its necessity J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

14. 6. Failing to Communicate with Labor • Communication with employees a major issue for most MNC: • Language barrier • Culture barrier • Insufficient and inconsistent communication, lack of support by management group, inadequate communication vehicles are most common errors • Managers often (wrongly) assume that a few meetings / memos / workshops will do the job and move on too quickly to the next step • Cascading down to the worker level, management objectives, guidelines, new policies remains a major issue and requires close monitoring & involvement by Top Management J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

15. Communicating Changes Tips • Specify the nature of the changes. Be specific, realistic. Explain why, how, when, how much…. • Let employee know the scope of a change even if it is bad news. Prevent false rumors. They travel fast and well. • Repeat, repeat and repeat again the purpose of the change and the actions planned. Avoid misunderstanding and false rumors. • Make sure communication is two-way (feedback) and use multi-channel communication • Target supervisors and influencers • Support change with new learning • Point to real progress to keep momentum and credibility • Model the changes yourself: “walk the talk”. J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

16. 7. Failing to set clear objectives and celebrate early success • Real transformation take time and require a lot of efforts by many people • Without short term wins linked to clear objectives, many people will give up, lose confidence or join the ranks of those actively resisting the Changes • Importance of these short term wins to keep momentum is underestimated • Create an active reward plan: Recognition, social events, promotion, money….. J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

17. 8. Not removing Barriers and Obstacles • In low confrontation cultures, rigid companies, obstacles & real issues are sometime difficult to identify • Doing nothing will seriously alter the change process • Obstacles must be removed to maintain the momentum and not derail the transformation process: • Structural barriers • Lack of appropriate skills • Systems and the Vision not aligned • Troublesome supervisors J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003

18. 9. Failure to recognize Labor Representatives • Employees’s representatives are expecting to be “visibly and officially” recognized by Management through: • Office facilities • Budget allowance to operate • Full time representatives • Unless recognition takes place, Union will not start negotiating and suspect Management of “lack of good faith and trust”. • Recognition by Management is first step by Labor Representatives to consolidate power and “force” Management to concede representation, even to a minority and hostile group J.L.Scalabre – Premium Partners International – AmCham HR Seminar 2003