Change Management Gihan
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Transcript of Change Management Gihan
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MANAGEMENT
Change management
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MANAGEMENT
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MANAGEMENTAGENDA
Definition
Types of Change
Who should Participate?
Why we need Change Management ?
Change management process
Methodology selection criteria
Key elements of successful organizational change
What did Jack Welsh do?
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Who should Participate?
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Change Management:
activities involved in(1) defining and instilling new values,
attitudes, norms, and behaviors within
an organization that support new waysof doing work and overcomeresistance to change;
(2) building consensus among customersand stakeholders on specific changesdesigned to better meet their needs;and
(3) planning, testing, and implementing allaspects of the transition from oneorganizational structure or businessprocess to another.
Definition
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Understanding how one personmakes a change successfully
Organizations dont change,
individuals do. No matterhow large of a project you are takingon, the success of
that project ultimately lies with eachemployee doingtheir work differently, multipliedacross all of theemployees impacted by the change.Effective changemanagement requires an
understanding for andappreciation of how one personmakes a changesuccessfully. Without an individualperspective, we areleft with activities but no idea of thegoal or outcomethat we are trying to achieve.
Understanding what tools we have tohelpindividuals make changessuccessfully
While change happens one person ata time, there are
processes and tools that can beused to facilitate thischange. Tools like communicationand training areoften the only activities when nostructured approach isapplied. When there is an
organizational changemanagement perspective, a processemerges for how toscale change management activitiesand how to use thecomplete set of tools available forproject leaders andbusiness managers.
Organizational changemanagement
Individual changemanagement
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Why we need Change Management ?
When the rate of change outside exceeds the rate of changinginside, the end is insight
Jack Welch
Chairman & CEO
General Electric CO.
Employees who go through a change are:
More aware of what's changing and the all-important why of the change.More interested in participating in the change in order to achieve theobjectives of the change.
More knowledgeable about the change.More skilled in the new ways of doing business that the change isbringing.More comfortable with the change because they have the support ofsupervisors who provide positive feedback throughout the change.
Why we need Change Management ?
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Change management process
The change management process is the sequence of steps oractivities that a change management team or project leaderwould follow to apply change management to a project orchange. the most effective and commonly applied change,most change management processes contain the followingthree phases:
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Phase 1- Preparing for change
(Preparation, assessment and strategydevelopment)
Phase 3 - Reinforcing change(Data gathering,corrective action and recognition)These phases result in the following approachas shown
Phase 2 - Managing change(Detailed planning and changemanagement implementation)
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Phase 1 - Preparing for changeThe first phase in methodology is aimed atgetting ready. Itanswers the question: how much change
management is needed forthis specific project? The first phase provides
the situationalawareness that is critical for effective changemanagement.
Outputs of Phase 1: Change characteristics profile Organizational attributes profile
Change management strategy Change management team structure Sponsor assessment, structure and roles
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Phase 2 - Managing changeThe second phase of process is focused on
creating theplans that are integrated into the projectactivities - what peopletypically think of when they talk aboutchange management. Basedon the process , there are five plans thatshould be created to
help individuals move through the ADKARModel.
Outputs of Phase 2: Communication plan Sponsor roadmap Training plan Coaching plan Resistance management plan
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Phase 3 - Reinforcing changeEqually critical but most often overlooked, the
third phase ofThe process helps project teams createspecific action plans forensuring that the change is sustained. In thisphase, project teamsdevelop measures and mechanisms to see ifthe change has taken
hold, to the see if employees are actually doingtheir jobs the newway and to celebrate success.
Outputs of Phase 3: Reinforcement mechanisms Compliance audit reports Corrective action plans Individual and group recognition approaches Success celebrations After action review
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Key elements of successful organizational change
1. Committed and active participation of leadership
2. Culture change3. Energetic involvement of an empowered and educated work force4. Effective communication and measurement5. Aligning human resources systems with the goals and objectives of change
Methodology selection criteria for ease of use:
Easy to implement Easy to understand Easy to communicate to others Simple Practical Structured and systematic Logical
Comprehensive and holistic
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What did Jack Welsh do?
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115 Year History (1892) - only remaining company from original Stock Market Market Capitalization - 560 Billion Dollars Most Admired Company for third straight year in Fortune
Worlds Most Respected Company for two years straight in Financial Times
Fact
s
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PowerSystems
CapitalAircraftEngines
ConsumerElectronics
Plastics
Org
aniz
ation
NBC
Medical
Appliances
GE
View from the CEO:
If youre not #1 or #2
in your industry
youre not long for GE
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The web/eBusiness:
DISBELIEF - Why jump into this business when nobody
makes money? Jurgen Hubbert, Daimler Chrysler Board
member.
DENIAL - The money will be made in the software on the
client - Microsoft
FEAR - I was afraid of it because I couldnt type - Jack
Welch
ItW
ont
Last
$
Why Join the Bandwagon?
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R
eaction
Log Plot of Internet Users vs. Time
1
10
100
1000
10000
100000
1000000
10000000
100000000
D-69
D-70
D-71
D-72
D-73
D-74
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Date
#
ofNodes
on
Internet
GE "Gets It"
Microsoft "Gets It"
Heres Why!
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Schwab Results:
In June 1998, Schwab's Web site handled about 600,000secure transactions a day.
In November 1999, less than a year and a half later:
The site handled well over 7 million secure transactions a day
Two-thirds of their trades were conducted over the Web
Schwab managed 263 billion dollars in online assets versus 28
billion dollars for e*Trade
The company took in 4.7 million dollars a day in revenue versus
Amazon's 3.8 million dollars a day
Source: Fortune Magazine, 11/8/99
MoreRe
ality
Look at the potential outcome
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The Realization:
VISIONARY - The Network IS the computer - SUN
DREADWe are late to the game and are behind
Microsoft - December 7, 1995
UNEASY - If we dont embrace it and make it as
engrained as breathing - we may be taking our last
breath - Jack Welch - January 1999
ItsheretoSta
y
The Light Goes On!
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Conclusion of Jack Welchs Annual Address to shareholders April 26, 2000
So ... to conclude ... Id like to remind you once more that there is very little ... if
anything ... new in management today ... and that this "new economy" and "oldeconomy" which we hear about incessantly are just labels invented by pundits.
There is however . . . something new and something very real ... that is changing
the pace and scope of business as it has never been changed before. Anycompany ... old or new ... that does not see this technology[eCommerce] as literally as important as breathing ... could be onits last breath.
But for those of us ... including GE ... who are capturing it ... are energized by it ...and see it as the greatest opportunity in our history ... the excitement is like nothing
weve ever experienced ... and the rewards [of eCommerce] promise tobe greater than we can imagine.
The Internet truly makes the old ... young and the slow ... fast ... and what could bea better tonic than that?
This is a wonderful time to be part of GE ... Ive never been more confident that our
most exciting days lie ahead.GEg
etsreligio
n
GE Gets Religion
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In Jack Welchs 20 year tenure, only 5 Corporate Initiates have
emerged:
Workout Globalization - 1985
20% Revenues from abroad when initiated
41% Revenues from abroad now
Product Services - 1995 $8B from services when initiated
$17B from services now
Quality - Six Sigma - 1996
eBusiness - January 1999I
nitiatives
And this is a Big One!
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It Appears that this is not a Winner Take All Market?
There is enough room for multiple companies to prosper tosome extent
GE has typically been a Fast Follower
In this case GE was slow to recognize it, but is moving fastnow.
GE had to quickly muster support in order to get the
momentum of this dinosaur to turn on a dime
How did they do it?A
ppro
ach
Implement Corporate Change
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Q: Where does a 500 pound Gorilla Sit?
A: Anywhere it wants to!
S
trategy
The goal: to drive profit through leveraging technologies
execute quickly (eTime) - help keep the startups at
bay
provide better service
reduce cost = increase margin
eBusiness (the web) provides an opportunity to
seemingly integrate the diverse businesses of GE
What a large company lacks in agility it can make up withcapital.
GE has the resources and infrastructure tocompete with eBusiness
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Old Economy Comparisons -
Paradigm
Shift
New Economy Comparisons -
Best In Class
Lockheed Aircraft
Maytag Washers
Sony Televisions
BASF Plastics
Best In Class
Yahoo!
Amazon
AOL
"There's no such thing as an 'old economy' and a 'new economy.'
Commerce is the same as it was 500 years ago. People sell and people
buy--whether it's from a wagon or the Internet." - Jack Welch
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Focus on key emergent technologies
Like Java, J2EE and XML standards as they
solidify/integrate
Directory service and Content management tools
(database)
b2b connectivity tools and broadband!
Implementation
Corporate wide eBusiness Training - provide Internet
Mentors to business leaders
DestroyYourBusiness.com
Attract and retain the best staff - think outside the box
Instill Fear - do it or die ...
Educate the consumer
Leverage the GE Brand
Strategic Alliances (TradeOut.com)
eBusiness
Strate
gy
Put Your Money Where Your Mouth Is
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eBusiness has outgrown the label initiative at GE
Changing the company to the core
eBusiness has changed the DNA of GE forever by energizing and
revitalizing every corner of the company
eBusiness is not rocket science - it is simply the application of
fairly elementary technology - initially this was not understood and
this is why the dot.com companies led the charge instead of thehighly resourced companies like GE.
GE can leverage their 100+ year brand which is widely recognized
(and must be protected)
eBusiness is the final nail in the coffin of bureaucracy which is not
tolerated in the GE culture
Implementation
Its Become THE Way of Thinking
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Implementation
risk
vulnerability
exploit
Security
CustomerCentric
CommonArchitecture
Putting the Pieces together:
BrandLeverage
Three ClickRule
Privacy
ROI
Stickiness
RevenueGeneration
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How is GE doing on leveraging eBusiness?
Customer Service
Typical cost to service a phone interaction with the client $5.00
Typical cost to service a web interaction with the client $0.20.
GE Appliances had 20 Million calls last year! You do the math!
On-Line Auctions
Inside GE auction transactions amounted to $200 million in 1999 and
will reach $5 billion this year. Last year transactions cost GE $50 apiece;
online the cost is $5
Market Share
GE Power Systems capturing 20% more market share (70% total)
partly due to web-based integrated turbine performance monitoring
Perform
ance
Pretty Well!
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What Do You Think?
Will GE Prosper in the New Economy?
Vot
e (a) Total Domination (b) Success but Shared (c) Total Failure
(d) Too soon to tell
?
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Summ
ary
Can GE succeed in eBusiness?
Jack is a change implementer If anyone can change a corporate culture, its
Jack
Bureaucracy of larger companies tends to slow
change, but Jack addresses this in his plan The change is being driven for the right reasons
Cost, Quality, Speed
not just because its a wave
They are investing in the technology They have deep pockets.
If Any Dinosaur can change its spots, GE can!
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Failures
Most Critical Failure of Changes
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Most Critical Failure Point of Change
1. Resistance to change
Dealing with resistance:
Consider different people Work with values and beliefs Understand and relate to needs and
problems
Tailor your message to your audience
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Critical Failure Points Of Changecont.
2. Lack of Well articulated vision (supported by staff)
Clear communications
Executive sponsor and/or change coalition
3. Unrealistic expectations
Believing dictating an executive vision
translate into the new state!!!
4. Change complexity
5. Inadequate execution/project management skills
6. Declaring victory too soon
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Conclusion
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Conclusion
During his 20 years of leadership
at General Electric GM.Welch increased the value of
the company from $13 billion to severalhundred billion.