Change Management Lecture 5

Objectives Cultural Change IT Based process change

Cultural Change

IT Based process change

Cultural Change Introduction If you were asked to give a new recruit some words of encouragement on how to be successful within your organisation, what would you say? You might give some formal advice about carrying your ID at all times, but you might also make some of the following suggestions:

If you were asked to give a new recruit some words of encouragement on how to be successful within your organisation, what would you say?

You might give some formal advice about carrying your ID at all times, but you might also make some of the following suggestions:

Keep your head down It’s OK to make mistakes here, as long as you don’t repeat them The boss likes to see you working really hard at all times We work hard but play hard. The people who get on here work long hours but enjoy themselves in the pub afterwards. It doesn’t pay to ask too may questions You’ll find everyone pulls together here and will want to see you as part of the team

Keep your head down

It’s OK to make mistakes here, as long as you don’t repeat them

The boss likes to see you working really hard at all times

We work hard but play hard. The people who get on here work long hours but enjoy themselves in the pub afterwards.

It doesn’t pay to ask too may questions

You’ll find everyone pulls together here and will want to see you as part of the team

Summary With this helpful advice you begin to educate the person about the way things get done around the organisation. You also reveal what some of the required behaviours are, and thus you actively reinforce the prevailing culture.

With this helpful advice you begin to educate the person about the way things get done around the organisation.

You also reveal what some of the required behaviours are, and thus you actively reinforce the prevailing culture.

Culture Culture is vitally important for the organisation because of its impact on performance. Molennar et al (2002), quoting leading writers in the field, say:

Culture is vitally important for the organisation because of its impact on performance.

Molennar et al (2002), quoting leading writers in the field, say:

To truly understand corporate culture, its characteristics must also be understood. The following is a compilation of the most prevalent cultural characteristics: Corporate culture represents behaviours that new employees are encouraged to follow (Kotter and Heskett, 1992) It create norms of acceptable behaviour (Hai, 1986) Corporate culture reinforces ideas and feeling that are consistent with the corporation’s beliefs (Hampden-Turner, 1990) It influences the external relations of the corporation, as well as the internal relations of the employees (Hai, 1986) Culture can have a powerful effect on individuals and performance (Kotter and Heskett, 1992) It affects worker motivation and goals (Hai, 1986) Behaviours such as innovation, decision, making, communication, organising, measuring success and rewarding achievement are affected by corporate culture (Hai, 1986)

To truly understand corporate culture, its characteristics must also be understood.

The following is a compilation of the most prevalent cultural characteristics:

Corporate culture represents behaviours that new employees are encouraged to follow (Kotter and Heskett, 1992)

It create norms of acceptable behaviour (Hai, 1986)

Corporate culture reinforces ideas and feeling that are consistent with the corporation’s beliefs (Hampden-Turner, 1990)

It influences the external relations of the corporation, as well as the internal relations of the employees (Hai, 1986)

Culture can have a powerful effect on individuals and performance (Kotter and Heskett, 1992)

It affects worker motivation and goals (Hai, 1986)

Behaviours such as innovation, decision, making, communication, organising, measuring success and rewarding achievement are affected by corporate culture (Hai, 1986)

Is we want to learn about how to change culture, we need to understand how it is created. Schein (1999) suggests that there are six different ways in which culture evolves. Some of these can be influenced by leaders and some cannot:

Is we want to learn about how to change culture, we need to understand how it is created.

Schein (1999) suggests that there are six different ways in which culture evolves.

Some of these can be influenced by leaders and some cannot:

A general evolution in which the organisation naturally adapts to its environment A specific evolution of terms or sub-groups within the organisation to their different environments A guided evolution resulting from cultural ‘insights’ on the part of leaders. A guided evolution through encouraging teams to learn from each other, and empowering selected hybrids from sub-cultures that are better adapted to current realities A planned and managed culture change through creation of parallel systems of steering committees and projected-oriented task forces A partial or total cultural destruction through new leadership that eliminate the carriers of the former culture (turnarounds, bankruptcies)

A general evolution in which the organisation naturally adapts to its environment

A specific evolution of terms or sub-groups within the organisation to their different environments

A guided evolution resulting from cultural ‘insights’ on the part of leaders.

A guided evolution through encouraging teams to learn from each other, and empowering selected hybrids from sub-cultures that are better adapted to current realities

A planned and managed culture change through creation of parallel systems of steering committees and projected-oriented task forces

A partial or total cultural destruction through new leadership that eliminate the carriers of the former culture (turnarounds, bankruptcies)

Schein underscores the fact that organisations will not successfully change culture if they begin with that specific idea in mind. The starting point should always be the business issues that the organisation faces

Schein underscores the fact that organisations will not successfully change culture if they begin with that specific idea in mind.

The starting point should always be the business issues that the organisation faces

Brands Crosby and Johnson (2001) say: ‘ The strongest brands are those that elicit emotional attachment from customers. When interacting with your company, customers and prospects may have feelings of safety, pride, excitement, comfort, confidence, caring or trust. These interactions activate feelings and build strong brand commitment. … . It’s important not to overlook the effects of brand on the employees of the firm. Employees often have a large role to place in managing customer relationships and the brand can help guide their behaviour. In effect, the brand is a promise to customers of how they can expect to be treated by the company. To the extent employees understand the expectations being created by the brand, and are motivated and trained to live up to those expectations, then the firm can have a truly integrated customer relationship management strategy.’

Crosby and Johnson (2001) say:

‘ The strongest brands are those that elicit emotional attachment from customers. When interacting with your company, customers and prospects may have feelings of safety, pride, excitement, comfort, confidence, caring or trust. These interactions activate feelings and build strong brand commitment.

… . It’s important not to overlook the effects of brand on the employees of the firm. Employees often have a large role to place in managing customer relationships and the brand can help guide their behaviour. In effect, the brand is a promise to customers of how they can expect to be treated by the company. To the extent employees understand the expectations being created by the brand, and are motivated and trained to live up to those expectations, then the firm can have a truly integrated customer relationship management strategy.’

Guidelines for Achieving Successful Cultural Change Always link to organisational vision, mission and objectives Create a sense of urgency and continually reinforce the need to change Attend to stakeholder issues Remember that the how is as important as the what Build on the old, and step into the new Generate enabling mechanisms Act as role models Create a community of focused and flexible leaders Insist on collective ownership of the changes

Always link to organisational vision, mission and objectives

Create a sense of urgency and continually reinforce the need to change

Attend to stakeholder issues

Remember that the how is as important as the what

Build on the old, and step into the new

Generate enabling mechanisms

Act as role models

Create a community of focused and flexible leaders

Insist on collective ownership of the changes

Six Key Points Continually increasing customer and citizen focus Extending the council’s capacity for community and partnership working A visible and congruent leadership and management style Moving to a more consistent performance and enabling culture More effective ways of working Clarity and impact of core values and direction setting on service delivery

Six Employer Brand Values Value: Integrity Behaviours Expressing views and opinions in an open, honest and constructive way Consistently delivering on their promises and commitments Taking accountability for decisions and actions Value: Unity Behaviours Contributing enthusiastically to team goals, sharing and aligning own objectives with team(s) Supporting and encouraging players on their own team and other teams Building personal success on team success and contributing to other teams’ success

Value: Integrity

Behaviours

Expressing views and opinions in an open, honest and constructive way

Consistently delivering on their promises and commitments

Taking accountability for decisions and actions

Value: Unity

Behaviours

Contributing enthusiastically to team goals, sharing and aligning own objectives with team(s)

Supporting and encouraging players on their own team and other teams

Building personal success on team success and contributing to other teams’ success

Value: Diversity Behaviours Treating diverse views, cultures and communities with respect Learning from the variety of different cultures, countries, functions and teams within the organisation Acknowledging different approaches and seeking win-win solutions Value: Performance with Passion Behaviours Setting and exceeding stretching targets, individually and in teams. Demonstrating high levels of pace, energy and commitment in achieving goals. Finding new opportunities to improve their game and being courageous by trying them

Value: Diversity

Behaviours

Treating diverse views, cultures and communities with respect

Learning from the variety of different cultures, countries, functions and teams within the organisation

Acknowledging different approaches and seeking win-win solutions

Value: Performance with Passion

Behaviours

Setting and exceeding stretching targets, individually and in teams.

Demonstrating high levels of pace, energy and commitment in achieving goals.

Finding new opportunities to improve their game and being courageous by trying them

Value: Celebration Behaviours Sharing success, recognising and rewarding achievement of other players. Encouraging the celebration of success and building a ‘success leads to more success’ culture Having a can-do mentality and encouraging others to do the same Value: Learning Behaviours Being proactive in professional and personal development Sharing learning and supporting development of other players Going outside the ‘comfort-zone’, challenging the status quo, and learning from mistakes

Value: Celebration

Behaviours

Sharing success, recognising and rewarding achievement of other players.

Encouraging the celebration of success and building a ‘success leads to more success’ culture

Having a can-do mentality and encouraging others to do the same

Value: Learning

Behaviours

Being proactive in professional and personal development

Sharing learning and supporting development of other players

Going outside the ‘comfort-zone’, challenging the status quo, and learning from mistakes

IT-Based Process Change IT has become a significant part of every person’s working life. According to US economic analysis figures, companies are now spending an aberage of 30 percent of their capital expenditure on information technology compared with 5 percent in the 1960’s. It is viewed as a critical resource

IT has become a significant part of every person’s working life.

According to US economic analysis figures, companies are now spending an aberage of 30 percent of their capital expenditure on information technology compared with 5 percent in the 1960’s.

It is viewed as a critical resource

The potential gains of successfully implementing IT-based change are many and varied. Organisations are attracted by the idea that they will gain the capability to do a range of highly desirable things.

The potential gains of successfully implementing IT-based change are many and varied.

Organisations are attracted by the idea that they will gain the capability to do a range of highly desirable things.

Some of the potential gains concern innovation and development: To achieve flexible responsive production of customised goods To segment the market place in new ways through analysing information, and then create new products for those segments To serve customers in new ways by creating access via the Internet To create new forms of partnership and new types of organisation

Some of the potential gains concern innovation and development:

To achieve flexible responsive production of customised goods

To segment the market place in new ways through analysing information, and then create new products for those segments

To serve customers in new ways by creating access via the Internet

To create new forms of partnership and new types of organisation

But many of the potential gains concern achieving efficiencies to: Reduce the need for agents and intermediaries by providing employee or customer self-service facilities over the Internet or Intranet. Achieve sophisticated functionality at reasonable cost (for instance by introducing standard packages such as ERP) Allow globalisation of operations Enable choices to be made about how the company is structured while retaining the necessary level of central control Produce better information, with a greater level of detail than was possible before, and make it available faster to allow better decisions to be made.

But many of the potential gains concern achieving efficiencies to:

Reduce the need for agents and intermediaries by providing employee or customer self-service facilities over the Internet or Intranet.

Achieve sophisticated functionality at reasonable cost (for instance by introducing standard packages such as ERP)

Allow globalisation of operations

Enable choices to be made about how the company is structured while retaining the necessary level of central control

Produce better information, with a greater level of detail than was possible before, and make it available faster to allow better decisions to be made.

Enabling 24-hours working to maximise the ability to serve the globe and make best use of resources. Encourage greater staff involvement by making information available to more people in the company Increase the opportunity for flexible working on the read or at home Reduce staff costs Increase the value of skills and knowledge by sharing information well

Enabling 24-hours working to maximise the ability to serve the globe and make best use of resources.

Encourage greater staff involvement by making information available to more people in the company

Increase the opportunity for flexible working on the read or at home

Reduce staff costs

Increase the value of skills and knowledge by sharing information well

The Role of Management Business deployment External networks Line technology leadership Process adaptiveness IT planning IT infrastructure Data Centre Utility Managing outsourced services

Business deployment

External networks

Line technology leadership

Process adaptiveness

IT planning

IT infrastructure

Data Centre Utility

Managing outsourced services

IT Management Competencies Business Deployment Examination of the potential business value of new, emerging IT Utilisation of multi-disciplinary teams throughout the organisation Effective working relationships among line managers and IT staff Technology transfer, where appropriate, of successful IT applications, platforms and services Adequacy of IT-related knowledge of line managers throughout the organisation Visualising the value of IT investments throughout the organisation Appropriateness of IT policies Appropriateness of IT sourcing decisions Effectiveness of IT measurement systems

Business Deployment

Examination of the potential business value of new, emerging IT

Utilisation of multi-disciplinary teams throughout the organisation

Effective working relationships among line managers and IT staff

Technology transfer, where appropriate, of successful IT applications, platforms and services

Adequacy of IT-related knowledge of line managers throughout the organisation

Visualising the value of IT investments throughout the organisation

Appropriateness of IT policies

Appropriateness of IT sourcing decisions

Effectiveness of IT measurement systems

External Networks Existence of electronic links with the organisation’s customers Existence of electronic links with the organisation’s suppliers Collaborative alliances with external partners (vendors, systems integrators, competitors) to develop IT-based products and processes Line Technology Leadership Line managers’ ownership of IT projects within their domains of business responsibility Propensity of employees throughout the organisation to serve as ‘project champions’

External Networks

Existence of electronic links with the organisation’s customers

Existence of electronic links with the organisation’s suppliers

Collaborative alliances with external partners (vendors, systems integrators, competitors) to develop IT-based products and processes

Line Technology Leadership

Line managers’ ownership of IT projects within their domains of business responsibility

Propensity of employees throughout the organisation to serve as ‘project champions’

Process Adaptiveness Propensity of employees throughout the organisation to learn about and subsequently explore the functionality of installed IT tools and applications Restructuring of business processes, where appropriate, throughout the organisation Visualising organisational activities throughout the organisation IT Planning Integration of business strategic planning and IT strategic planning Clarity of vision regarding how IT contributes to business value Effectiveness of IT planning throughout the organisation Effectiveness of project management practices

Process Adaptiveness

Propensity of employees throughout the organisation to learn about and subsequently explore the functionality of installed IT tools and applications

Restructuring of business processes, where appropriate, throughout the organisation

Visualising organisational activities throughout the organisation

IT Planning

Integration of business strategic planning and IT strategic planning

Clarity of vision regarding how IT contributes to business value

Effectiveness of IT planning throughout the organisation

Effectiveness of project management practices

IT Infrastructure Restructuring of IT work processes, where appropriate Appropriateness of data architecture Appropriateness of network architecture Knowledge of and adequacy of the organisation’s IT skill base Consistency of object (data, process, rules) definitions Effectiveness of software development practices Data Centre Utility Appropriateness of processor architecture Adequacy of quality assurance and security controls Source: Sambamurthy and Zmud in Saur and Yetton (1997)

IT Infrastructure

Restructuring of IT work processes, where appropriate

Appropriateness of data architecture

Appropriateness of network architecture

Knowledge of and adequacy of the organisation’s IT skill base

Consistency of object (data, process, rules) definitions

Effectiveness of software development practices

Data Centre Utility

Appropriateness of processor architecture

Adequacy of quality assurance and security controls

Source: Sambamurthy and Zmud in Saur and Yetton (1997)