Change Drivers: The effects of large scale changes on organizations

1. Change Drivers: The effects of large scale changes on organizations

2. The way it used to be… How has the workplace changed since your grandparents and parents?

3. They way it used to be… • 1- 4 employers • 1- 2 careers • 42-year working life • lifetime job security …and now • 6- 10 employers • 3- 5 careers • 50-year working life • new psychological contract

4. The “old psychological contract” • Employer: I will provide secure employment (unless you really screw up) • Worker: I will provide consistent & loyal work • The “new psychological contract” • Employer: I will provide you with an opportunity to bring value to the organization– and keep you so long as you continue to bring value • Worker: I will stay so long as I am provided what I need & don’t find something better

5. Worker Impact • lifelong learning • adaptability/flexibility • networking • self-loyalty • Change Drivers • environment • globalism • demographics • technology • information • economics • politics • complexity • Organizational Response: • paradigm shift • new psychological contract • decentralizing • downsizing • telecommuting • virtual organization • reengineering • teamwork • Learning Organization • mergers/acquisitions • strategic alliances • target marketing • out-sourcing • temps • innovation • Demands • timeliness (JIT) • efficiency • speed • quality • customization • adaptability Competition !

6. Environmental change drivers– limited resources & environmental degradation • only .5% of world’s available water is fresh & accessible • 54% of available freshwater is currently being used by 6.1 billion people • half the population lives in unsanitary conditions • since 1950, the amount of irrigated land has tripled • 70% of worlds drylands have soil degradation (over cultivated, over-grazed, improperly irrigated, erosion, monoculture, deforestation) • decreased space for trash (200 million tons/day in US); 29 million T of hazardous waste each year • ocean pollution (60 million gallons oil; Mississippi R has 4000 Sq. miles of “dead water” around LA and TX; toxic bacteria levels) • 70% of worlds oceans are overexploited (90% reduction in tuna) • global warming & flooding (1-3.5 C by 2100) • decrease in biodiversity (by 2040 2/3 of all species extinct– EPA)

7. The Technology change driver • What the takes the average person 1 day to do now, took 3 days in 1950, 1 month in 1800, lifetime in 1600 • In 1900 85% of workers were in agriculture (now 3%), in 1950 73% were in manufacturing (15%), now service & knowledge workers • Moore’s Law: chip capacity double every 6 months while price stays the same • current annual growth rate of Internet is 100% • artificial intelligence is expected to affect 60-90% of jobs, augmenting, displacing or eliminating workers • in the next five years people in the industrial world will be doing jobs differently from the past 50 years • with innovation, “everything goes back to zero”

8. Buy American-Owned Alka Seltzer Alpo Dogfood Aim Toothpaste Baskin Robbins Icecream Bactine Antiseptic Ball Park Franks Bayer Aspirin Pic Pens, Lighter, Razor Burger King Capitol Records CBS Records Chesterfield Cigarettes Christian Brothers wine Diamond Stick Matches Dove Soap Dunlop Tires EverReady Batteries Eureka Vacuum Cleaners Firestone Tires Four Roses Whisky French’s Mustard Frigidaire Appliances Friskies & Might Dog food Glidden Paint Goodyear Tire & Rubber Good Humor Icecream Green Giant Vegetables Humpty Dumpty Magazine Hires Root Beer Hills Brothers Coffee Hungry Jack Pancakes Imperial Margerine Instant Potato Mix Indian Head Textiles Jeno’s Pizza Kelvinator Appliances Knox Gelatine Kool Cigarettes Keebler Cookies Libby’s Fruits Lifebuoy Soap Magnavox Massey-Ferguson Tractors Maxell Tapes Michelin Tires Mr. Coffee Norelco Appliances Nescafe Coffee New Yorker Hotel Ovaltine Drink Mix One-A-Day Vitamins Panasonic Pearle Vision Center Pepsodent Toothpaste Pillsbury Cake Mix Nestle Quik Chocolate Mix Quasar Television Ray-O-Vac Batteries Rona Barret’s magazine Seven Seas Salad Dressing Shell Oil Standard Oil Stouffer Frozen Foods Tappan Appliances Valium Tranquilizers Zig-Zag Cigarette Papers

9. Globalization– the new marketplace • US has 280 million consumers, 330 in EC, ½ billion in China • Of the top 50 world banks, only three US banks hold 13-15th place • 20-40% unsuccessful repatriation • Increasing workforce diversification: one LA company conducted orientation in 17 languages • African American purchasing power will increase 55% in each of next two decades • Cultural diversity demonstrates many ways to work and manage

10. Unemployment rates– opportunities for outsourcing • 1 billion workers are un- (150m) or underemployed worldwide • by 2010 Asia will account for 60% of the world’s population • 1999-2050 US adds about ½ million workers each year

11. The changing workforce • 20-30% of the elite skilled workforce changes jobs every year • 69% believe it is acceptable to change jobs every 5 years • 40% believe that for under age 30 should change jobs every 2-3 years • 14% are proud of their company & only 30% remain loyal • Working Woman identifies 32 desired family-friendly benefits • Increased preference for flex, family and personal time and independence (alt scheduling by 25% employers) • Southwestern Air receives 3,000 online resume a month Institute of Personnel and Development, April 2000

12. Demographic change drivers • 60-70% of Boomers plans to work past age 65 (and 20+ hours/week in retirement) • by 2050 18-31 million will be older than 85 • 25% of Americans 35-54 have saved <$5000 for retirement • Generation X may get from 2% to –4% from Social Security • Eurodescendants are declining globally, while Asian, Hispanic & African are increasing (90% of total growth) • by 2020 mental illness will be the world’s most debilitating affliction • People over 50 are fastest growing, have the greatest purchasing power, control half of our disposable income, and 75% of financial assets • by 2050 21% of Americans will be post-1991 immigrants and their children • 32 m Americans speak languages other than English • between 1990-2020 people aged 65-74 will increase 74%

13. Growth of the “Knowledge Worker” “The ability to learn faster than your competitors may be the only sustainable competitive advantage --Arie de Geus, Head of Planning, Royal Dutch Shell • The weekly edition of the NY Times has more information than a person would come across in a lifetime in 17th Century England • There has been more information produced in the last 30 years than the preceding 5,000 • It takes 3-5 years for 50% of worker skills to become obsolete • Japanese students receive 240 days/year compared with 180 US • Japanese workers get 6x the training as US workers (300 hrs/6 mo) • All information doubled about every 5 years; in some fields 6 months • More Americans work in biotechnology than in the entire machine tool industry • About 75% of a product’s cost is determined at the conceptual stage • Developed countries spend 28-30% of GNP on knowledge

14. Complexity– the number of elements, their interrelationships, and degree of change in either • Revenge effects: the best intended quick solutions often create more or worse problems long term • Forecasting: strategic planning based on the past are probably useless in a turbulent and complex future • Personality: some people are more creative, tolerant of ambiguity & risk, and adaptive to change • Butterfly effect: small changes can have large and unexpected effects • Computer simulations using systems theory are more capable of modeling complex systems • Reengineering: increased role complexity, ambiguity, & overload, multitasking • Constant change, growth, reorganization

15. It’s complex enough just considering any one of the above change drivers, let alone how they likely combine to impact organizations. Think about how such change drivers impact your organization– what changes must your organization respond to and how are they doing it? END

16. Team discussion: Systems map of change drivers & impact • Impact on workforce • Organizational Response (initiatives) • Change drivers • Organizational Impact