S04 HRM Change Management

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Change Management and Organization Transformation


Questions About Change Why What When Change vs. Not change Win/Lose Who Quantitative vs. Qualitative You change vs. I change Lead vs. Follow You change vs. I change Gradual vs. Radical Cost/benefit Success Measurement Short term vs. Long term Commitment What if How deep Purpose Knowing vs. Doing Continuous vs. Disruption Risk Confusion Resource


Different Types of Change Reactive/Proactive/Preventive Constructive/Destructive Continuous/Disruptive


Confusion Curiosity Results Unconsciousness Denial Certainty Righteousness Time True competence Practice & Feedback Experimentation* * Method of Experimentation Establish premise/hypothesis Design & conduct experiments Make observation & gather data Analyze data & reach conclusions Apply conclusions to real issues Discovery  Insights The Learning Curve


Paradigm Shifts and Continuous Renewal Process Success becomes the engine of failure Initiate change or force to change Deep change or slow death Results Time


The Organizational Challenges of a growth company Complexity of size, speed and sophistication Strategy: Focus Vs Diversification, Profit Vs Market Share, Build Vs Buy, New Products Vs New Markets, Old Vs New Business Models, Risk Vs Rewards, Aggressive Vs Conservative People: Attracting New Talents, Developing Existing People, Managing the Misfits, Owners Vs Managers, Founder’s syndrome, Leadership and Succession Structure: Hierarchy, Bureaucracy, Territory, Synergy Process: Complexity, Duplication, Internal-focused, Disconnection, Speed, Quality Resource: Competition, Wastage, Idle Culture: Keeping the core in fast dilution, Complacency, Inertia

The Path of Technological Development: 

The Path of Technological Development Abundant Scarce Product Functionality Creation Stage Transition Stage Commoditization Stage Region of High Vendor Power and Low Customer Power Dominant Design Emerges Region of High Customer Power and Low Vendor Power (except if a monopoly exists) Source: Shifting Cultural Gears in Technology-Driven Industries, Paul J. Kampas

The Innovation Mix Shifts as a Technology Matures: 

The Innovation Mix Shifts as a Technology Matures 100% 0% Innovation Mix Acceptance Dominant Design Emerges Early Adoption Mainstream Adoption Maturity Enabled by a Business-Innovation Cultural Bias Enabled by Both Cultural Biases Enabled by a Product-Innovation Cultural Bias Base-Process Innovation (such as design, procurement, manufacturing, distribution and service processes) Base-Product Innovation (such as performance, functionality, size/portability, reliability) Marketing Innovation Styling/ Packaging Innovation Human Factors Innovation Source: Shifting Cultural Gears in Technology-Driven Industries, Paul J. Kampas

The Cultural-Bias Landscape: 

The Cultural-Bias Landscape Source: Shifting Cultural Gears in Technology-Driven Industries, Paul J. Kampas Product-Innovation Cultural Bias

Why Good Companies Go Bad? : 

Why Good Companies Go Bad?


Reality: Trapped by commitments 陷入「承諾」的陷阱 The Traps of Previous Successes

Some Common Traps: 

Some Common Traps We are a great company with great history We are a happy family We did it, and we will do it again We have a super technology/product We know what is the best for the market Bigger is better - Market share ensure profitability Our competitors will never catch up Our competitors are our enemies Our ISO Certification ensure our quality


Relationships 關係 Culture 價值 Resources 資源 Success Formula Frames Processes Relationships Values Resources Source: Donald N. Sull, The Revival of the Fittest 关系桎梏


Success Breeds Failure Relationships 關係 Culture 價值 Resources 資源 Success Formula Blinders Routines Dogmas Milestones Active Inertia Frames Source: Donald N. Sull, The Revival of the Fittest Shackles Processes Resources Relationships Values Changed Environment


The 3 Steps of Transformation Source: Donald N. Sull, The Revival of the Fittest 1. Select the anchor 2. Secure it 3. Align the rest

TSMC Corporate Transformation: 

TSMC Corporate Transformation 1. Vision (Missionary) 2. Values 3. Processes 4. Fluid Organization 5. Customer Focus 6. Dynamic Management 7. Innovation 8. Initiatives Talent Attraction and Assimilation Talent Development Evaluation and Reward Systems Key Factors


Conditions for Change


Culture and Vales Systems and Policies Strategy and Structure Organization Transformation


IQ Intelligent Quotient 智商 Ability to learn, reason, think, and solve problems Right skills and knowledge Good common sense EQ Emotional Quotient 情緒智商 Passion, empathy, sensitivity Inspire others Building confidence & trust Integrity & personal leadership AQ Adversity Quotient 逆境商數 Perseverance Endurance Tenacity Positive mental attitude Purpose & Beliefs 目的與價值觀 Core Competencies for Change


Embracing & Managing Change Massive disruptive change New direction, new model, new games, new rules Capability & capacity for change Urgency for change Leader, early adapter, follower, road block or “dinosaur”


Definition of “Change Agent” Some one that adds value in the change process Identify issues & opportunity for change Visualize purpose & desired outcome Initiate and cause change Mobilize & organize change Support & facilitate change Execute & implement change The role of constructive diversity Invent, innovate, intervene, improvise


Who are Change Agents? Conscious Vs. Unconscious change agents Teachers Investors Writers Bankers Politicians Businessmen Governments Managers Scientists Doctors Religion workers Social workers Media workers Stars You & me


Be a “Conscious” Change Agent Change myself Change my job Change my life Change my profession Change my company Change my society Change my world 修身、齊家、治國、平天下

Good Managers vs. Real Change Leaders : 

Good Managers vs. Real Change Leaders Source: Real Change, The McKinsey Quarterly, 1996


Good Managers vs. Real Change Leaders Key issues Basic mindset “End-game” assumptions Leadership philosophy Sources of productivity and innovation Accountability measures Risk/reward tradeoffs Traditional GM view Analyze, leverage, optimize, delegate, organize, and control it - I know best Earnings per share Market share Resource advantage Personal promotions Always make the numbers Strategy driven Decide, delegate, monitor, and review Spend time on important matters Leverages his/her time A few good men will get it done for me Investment turnover Superior technology Process control Leverage the people People = exploitable resource Comprehensive measures across all areas Clear individual accountability I hold you accountable Avoid failure and mistakes at all cost Rely on proven approaches Limit career risks Analyze until sure I cannot afford to fail - or to leave Emerging RCL view Do it, fix it, change it, and do it all over again; no one person knows best Value to customers, employees, and owners Customer loyalty Core skill advantage Personal growth Satisfy customers and engage employees Aspiration driven Do real work Spend time on what matters to people Expand leadership capacity I must get the best out of all my people Productivity People Superiority Process innovation Develop the people People = creative resource A few key measures in the most critical areas Individual and mutual accountability We hold ourselves accountable Expect, learn from, and build on “failures” Try whatever appears promising Take career risks If in doubt, try and see Take risk, learn from failures. I can work everywhere if I am good. Source: Real Change, The McKinsey Quarterly, 1996


Extending the Comfort Zone


The Change Process Visioning Mobilization Diagnosis Design Plan Execute Break Build Measure Review nderstand lign ommit P - D - A


Steps for Change Awareness Urgency Diagnosis Take Accountability Be at cause Find how you can contribute Solutions Execution Reinforcement Forgiveness : Self and others  Freedom 四他: 面對他、接受他、處理他、放下他


Changing a Behavior Step out of the box Turn on the watcher Examine the cause the stimulant the behavior Make conscious choice of your behavior This takes efforts & attention Focus only one or two to work on From automatic old habit to automatic new habit AWARE that you can make a choice

Levers for Change: 

Levers for Change Felt need Specific goal and measurement Feedback from someone who you valued Social relationship Measurement and Commitment Process and Systems Accountability Skills Communications Individual Behavior Organizational Behavior


The Tipping Point Quantitative to Qualitative Change

Rome is not built in a day: 

Rome is not built in a day Chicken and egg The fly wheel


Transformation A butterfly is not a better or improved caterpillar, it looks and feels completely different, and has completely new capabilities The new capabilities liberate and free the creature from the world of the caterpillar to the “new”world of the butterfly

Managing Change: 

Managing Change Evolution vs. revolution Planned vs. unplanned events Change can get out of control Contingency planing Crisis management Change leader for one phase may become road block for the next phase Change at the right time, right place, with the right people Too early? Too late? Just in time?

Freedom and Discipline: 

Freedom and Discipline Freedom without discipline Instituting discipline at the expense of freedom Affordability of freedom when discipline is instituted Freedom with discipline


Managing Organizational Change Strategy Establish a transition team to ensure consistent communication and to tackle issues raised by the change Promote a clear vision to clarify the direction in which the organization needs to move Organization Leaders should ask tough questions and challenge the way the company does business Good management requires respect for employees and the organization and is responsible for shaping the new reality People Losing key employees may destabilize the organization; communicating the desire to retain these people, early in the process, is important Give priority to the "me" issues—personal opportunity, security and the quality of the work environment Communication Communication plans should address four considerations: audience, timing, mode and message Tips include: Communicating rapidly, honestly and frequently Ensuring consistency between messages Establishing multiple mechanisms to reach employees Repeating common themes Source: Corporate Leadership Council research

Eight Steps to Transform Your Organization: 

Eight Steps to Transform Your Organization Establishing a Sense of Urgency Examine market and competitive realities Identify and discuss crises, potential crises, or major opportunities Forming a Powerful Guiding Coalition Creating a Vision Communicating the Vision Empowering Others to Act on the Vision Planning for and Creating Short-Term Wins Consolidating Improvements and Producing Still More Change Institutionalizing New Approaches Assemble a group with enough power to lead the change effort Encourage the group to work together as a team Create a vision to help direct the change effort Develop strategies for achieving that vision Use possible vehicles to communicate the new vision and strategies Teach new behaviors by the example of the guiding coalition Get rid of obstacles to change Change systems or structures that seriously undermine the vision Encourage risk taking and nontraditional ideas, activities and actions Plan for visible performance improvements Create those improvements Recognize and reward employees involved in the improvements Use increased credibility to change systems, structures, and policies that won’t fit the vision Reinvigorate the process with new projects, themes, and change agents Articulate the connections between the new behaviors and corporate success Develop the means to ensure leadership development and succession John Kotter, Leading Change, Harvard Business Review


重大改革的八階段流程 建立危機意識 考察市場和競爭情勢 找出並討論危機、潛在危機或重要機會 成立有力的領導團隊 創造願景 溝通願景 授權員工共同參與願景行動 規劃創造短期成果 強化改善成果並再接再勵 讓新做法制度化 組成一個夠力的工作小組負責領導變革 鼓勵小組成員團隊合作 創造願景以協助引導變革的行動 擬定達成願景的相關策略 運用各種可能的管道,持續傳播新的願景及策略 擬定達成願景的相關策略 移除阻礙改變的障礙 修正會嚴重破壞變革的系統或結構 鼓勵冒險和創新的想法、活動和行動 規劃顯而易見的績效改善成果 創造上述成果 表彰、獎勵有功人員 運用公信力,改變所有不搭配/不符合願景的系統、結構以及政策 聘用、拔擢並培養能夠達成願景變革的員工 透過新方案、新主題和變革代理人,將變革的流程注入新的活力 明確指出新作為和組織成功之間的關聯 發展確保培養領導能力和接班人的辦法 John Kotter, Leading Change, Harvard Business Review

Common Mistakes: 

Common Mistakes Writing a memo instead of lighting a fire Talking too much and saying too little Declaring victory before the war is over Looking for villains in the wrong places. John Kotter, Winning at Change, Leader to Leader Managing multiple time lines—Change leaders should create short-term wins, but look to long-term success. Building coalitions—Change leaders should engage the right talent, grow the coalition and foster teamwork. Creating a vision—Change leaders must engage employees emotionally behind a vision of the future. Four Mistakes Three Tasks

Why Do Employees Resist Change: 

Why Do Employees Resist Change Human tendency to stay in existing comfort zone Lack of awareness or urgency for change Lack of clear understanding or alignment on purpose, vision, and process of the change Lack of trust on the leaders Fear of unknown/uncertainty/consequences Comfort with long standing habits Dependency on existing social dynamics Lack of sufficient resources for the change Overload of ongoing tasks and responsibilities What is the benefit for me to change?

Why Do Employees Resist Change: 

Why Do Employees Resist Change The organization's architecture is not aligned and integrated with a customer-focused business strategy The individual and/or group is affected negatively The organization does not communicate expectations clearly Employees perceive more work with fewer opportunities Change requires altering a long-standing habit Relationships harbor unresolved past sentiments Employees have fears of future competency/job security The organization lacks adequate rewards/punishments The organization has poor internal communication Change modifies existing social interactions The change was introduced poorly The organization lacks sufficient resources to support the change Ronald J. Recardo, “Overcoming Resistance to Change” National Productivity Review (22 March 1995)

Why Organization Transformation Fails: 

Why Organization Transformation Fails Unclear purpose, vision, and process Lack of commitment from the top Poor communication and engagement Middle management/employee resistance Focus only on results/process/people Delegated to “outsiders” Lack overall systemic alignment Lack of resources Lack follow through - Loud thunder but small rain Show Vs substance


Are we investing in the right things? Are we staying ahead of the competition? Are we leading and following where appropriate? Do we have the right skill mix and depth? Are we building the right strategic partnerships? Key Strategic Questions


Key Challenges Maintaining self motivation Gaining credibility, confidence, and trust Dealing with objection Acting with courage and virtue Acquiring new capability and capacity Mobilizing and allocating resources Building a real team Developing shared vision and common language Ensuring continuous renewal


The Road Less Traveled “Two roads diverged in a yellow wood, And sorry I could not travel both And be one traveler, long I stood And looked down one as far as I could To where it bent in the undergrowth; Then took the other, as just as fair, And having perhaps the better claim, Because it was grassy and wanted wear; Though as for that the passing there Had worn them really about the same, And both that morning equally lay In leaves no step had trodden black. Oh, I kept the first for another day! Yet knowing how way leads on to way, I doubted if I should ever come back. I shall be telling this with a sigh Somewhere ages and ages hence: Two roads diverged in a wood, and I- I took the one less traveled by, And that has made all the difference.“ - By Robert Frost

Don’t Get Lost: 

Don’t Get Lost Purpose Desired Outcome Actual Outcome


Conclusion The vision of change is always beautiful and exciting, but the change process is painful. It takes lots of courage, determination, wisdom, and passion. But the benefit and satisfaction of “Discovering a New World” makes all the effort and sacrifice worthwhile.

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