Yardstick International College. Instructor: Lemi Tesfa Wakshum (Ph.D.) Assistant Professor

Transcription

1 Yardstick International College Course: Change and Innovation Management Instructor: Lemi Tesfa Wakshum (Ph.D.) Assistant Professor 4/22/2021 Lemi Tesfa (Ph.D.) 1

2 Chapter One The Environment and the Need for Change 4/22/2021 Lemi Tesfa (Ph.D.) 2

3 Introduction Everyone says that change is difficult. Difficult to conceive because one must inevitably deal with people issues and an uncertain future. 4/22/2021 Lemi Tesfa (Ph.D.) 3

4 Introduction Organizational change is the movement of an organization from one state of affairs to another.... It may involve a change in a company's structure, strategy, policies, procedures, technology, or culture. The change may be planned years in advance or may be forced on an organization because of a shift in the environment. 4/22/2021 Lemi Tesfa (Ph.D.) 4

5 Introduction Some of the most common examples when change management is necessary to successfully implement changes within organizations include: Implementation of a new technology. Mergers & acquisitions. Change in leadership. Change in organizational culture. Times of a crisis. 4/22/2021 Lemi Tesfa (Ph.D.) 5

6 Purpose of Change The purpose of the Change Management process is to control the lifecycle of all changes, enabling beneficial changes to be made with minimum disruption. 4/22/2021 Lemi Tesfa (Ph.D.) 6

7 Purpose of Change The Ever-Changing World of Technology Customer Needs Are Constantly Evolving The Changing Global Economy Change Means Growth Opportunities Challenging the Status Quo 4/22/2021 Lemi Tesfa (Ph.D.) 7

8 Factors that cause change What Causes Change in an Organization? Change in governmental policies. Change in market demand. Changed technology. Social changes. Failure. Competitive innovation. Cost Cutting. Merger and acquisition. 4/22/2021 Lemi Tesfa (Ph.D.) 8

9 Pressures for Change Aspirations Life-Cycle Forces Technological Advances Introduction or Removal of Government Regulations Changes in Societal Values Pressure for Change Shifting Political Dynamics Growing International Interdependence Changes in Demographics Adapted from Exhibit 14-1: Internal and External Pressures for Organizational Change

10 Types of Organizational Change A. PLANNED(PROACTIVE)CHANGE) Planned change is change resulting from a deliberate decision to alter the organization. Example: Budget, strategic plan 10

11 UNPLANNED (REACTIVE) CHANGE Unplanned change is imposed on the organization and is often unforeseen. Example: Inflation, deflation, loss 11

12 Forces behind Unplanned Change Shifting employee demographics Performance gaps Government regulation Global competition Changing economic conditions Advances in technology 12

13 Orders of change First-Order Change: Change that is continuous in nature and involves no major shifts in the way an organization operates. Second-Order Change: Radical change; major shifts involving many different levels of the organization and many different aspects of business. 13

14 What is changed? Targets: Organizational structure Technology People 14

15 Evolutionary( incremental) Change Taking small steps towards the changes. Small improvements are made in the existing work process. Incremental change (10%) It is less threatening and less stressful In evolutionary change, a leader still orchestrates/coordinate the change. 15

16 Revolutionary(Quantum) Change The organization breaks out its existing ways and moves towards a totally different systems and structure. Dramatic change(10x) It is costly getting employees to learn completely different roles. In revolutionary change, one person coordinates change, from the top. Revolutionary change tends to continue to be driven by one individual surrounded by a small group The change process itself becomes reliant on the 16

17 Business Process Reengineering/BPR The concept of Business Process Reengineering (BPR) was successfully popularized by two consultants: Hammer and Champy(1993) and Daven Port(1993) It is a revolutionary kind of change Challenging the status quo, starting over, and fresh start. It does not mean trying to repair or improve the existing system so that they work better. Dramatic change, not incremental change(10x, not 10%) 17

18 Reengineering Reengineering is defined as the fundamental rethinking and radical redesign of business process to achieve dramatic improvement in critical, contemporary measures of performance, such as cost, quality, service, and speed. ( Hammer,1993) The definition contains four key words: Fundamental, radical, dramatic, and process.18

19 If process reengineering is to work, a business s priorities must change in the following ways: From boss to customer focus; From controlled workers to empowered From activity-based work to a results orientation; From scorekeeping to leading and teaching From functional (vertical) to process (horizontal or cross functional) orientation; From serial to concurrent operations; From complex to simple, streamlined processes; 19

20 Why organizations reengineer their business? To re-invent the way they do work to satisfy their customers; To be competitive; To cure systemic process and behavioral problems; To enhance their capability to expand to other industries; To accommodate an era of change; To satisfy their customers, employees, and other stakeholders To survive and be successful in the long term; and To invent the rules of the game. 20

21 Requirements for successful Process Reengineering Initiation from the top Leadership that drives rapid, dramatic process redesign A fundamental re-thinking of the way people perform Enhanced information dissemination Training and involvement of individuals and teams 21

22 WHY PROCESS REENGINEERING FAILS? Not focusing on critical processes first Trying to gradually fix a process instead of dramatically re-inventing it Neglecting values and culture needed to support process reengineering Settling for small successes instead of requiring dramatic results Trying to implement reengineering from the bottom up instead of top down 22

23 Other kinds of Change 1. Developmental Change 2. Transitional Change 3. Transformational Change 23

24 Developmental Change It represents the improvement of an existing skill, method, performance standard, or condition that for some reason does not measure up to current or future needs Deals with enhancement of old state than radical change It is the simplest one 24

25 The improvement process of Development change Training (both technical and personal Team building; Problem solving; Improving communication; Conflict resolution; Increasing sales or production; Meeting management; Role negotiation; Survey feedback efforts; Job enrichment; and Expanding existing market outreach. 25

26 Transitional Change Transitional change is more complex. It is the required response to more significant shifts in environmental forces or marketplace requirements for success. Rather than simply improve what is, transitional change replaces what is with something entirely different. 26

27 Examples of Transitional Change Reorganizations; Simple merger or consolidations; Dévestitures Installation and integration of computers Creation of new products, services, systems, processes, policies, or procedures that replace old ones 27

28 Transformational Change Is the least understood and most complex type of change facing organizations today. Simply said, transformation is the radical shift from one state of being to another, so significant that it requires a shift of culture, behavior, and mindset to implement successfully and sustain over time. 28

29 Thank You! 4/22/2021 Lemi Tesfa (Ph.D.) 29