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The complete guide to change management

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This is a guide of why change so often fails. It also explains how to implement successful change. Most importantly is goes over the 5 major change methodologies. In effect each methodology is unique to the of change you want to implement

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The complete guide to change management

  1. 1. Change: Why It’s So Hard To Accomplish Sustainable Change? & The Basic Methodologies and Transformational Change Concepts Being Used Today ! Includes a Complete Guide to How to Effectively Approach Change. Organizational Change Concepts from Design of a a Team to Re-Engineering a Company This Course Includes: Change How To! Prosci-ADKAR, Kotter 8-Step Change Process, The Deloitte-EVD (Enterprise Value Delivery) Change Process, The Q-line Change Process & The New AIM (Accelerating Implementation Methodology for Change) Process 01/09/14 1
  2. 2. Change: Why Most People Hate It! A Follow-up to the 5 Dysfunctions of a Team Written & Presented By Rich Fierson HC-ROI Director of Change 01/09/14 2
  3. 3. It all begins with Change “ It is not the strongest of the species that survives, nor the most intelligent, but …. the one’s most responsive to change.” Charles Darwin Team + Ideas + Concepts = 01/09/14 POWER 3
  4. 4. SECTION 1 AGENDA 01/09/14 4
  5. 5. AGENDA The Big Picture Items and Large Topics PART 1 1. Why Does Transformational Change Fail 70% when companies try to create their own methods? 2. Transformational Change Blunders and Companies that Failed because they Could not see the Opportunities for Change, and those that could see the Opportunities! 3. Why Do Employees Resist Change (At all Levels) 4. How to Fix Change and The Resistance Issue 5. The Transformational Methodologies that Work Best, and an Overview of these Methodologies 01/09/14 5
  6. 6. AGENDA The Big Picture Items and Large Topics PART 2 8. The Best Proven Methodologies of change. 1. EVP- Enterprise Value Delivery Change System for ERP Transformations 2. The Prosci A.D.K.A.R. Model 3. The Kotter Model and Tools to help the other Methods succeed 4. The Q-Loop 5. The measurement and Assessment Phase for understanding where you are, and where you need to go 8. Support from the TOP = Success . 01/09/14 6
  7. 7. AGENDA At this program's conclusion, participants will be able to: 1. List reasons why people resist changes. 2. The Metrics and Tools for Assessment and Measuring Change 3. Describe how you will handle The ON-GOING Change in the future. 4. GAP, Assessments and Metric Analysis, Defining the REAL Goals 5. How to Begin implementing goals/plans created during this session 6. Understanding some of the Key Change Methodologies 01/09/14 7
  8. 8. Let’s Begin • • • • • Introduction Let’s have some Fun! Exercise 1 & 2 Today is all about CREATIVITY 01/09/14 8
  9. 9. How many squares do you see? 01/09/14 9
  10. 10. Solution # 1,That’s It ??? Sums up to: 17 ! Or are there More? 01/09/14 10
  11. 11. Solution # 2 This one you should have caught! Plus 4 sums up to: 21 ! IS THIS IT! 01/09/14 11
  12. 12. Solution # 3 OK This one took some work! Plus 4 sums up to: 25 ! IS THERE EVEN MORE? 01/09/14 12
  13. 13. Solution # 4. YOU ARE A CHAMPION OF SEEING THE ANGLES & POSSIBILITIES Plus 5 sums up to: 30 There is much more to Thinking & Change than it seems at First Glance! A good method helps you see all of the pieces sooner...before you get into trouble 01/09/14 This Exercise designed by Deloitte & Co 13
  14. 14. TEAM EXERCISE #1 The Personal History Exercise: • Each person must stand and answer the following questions: – Where did you Grow Up? – What was the most difficult or important Challenge of your Childhood or Teenage years? – What was your Worst Job, and what was your Best Job? – Name one thing that the others in the room may not know about you? 01/09/14 14 14
  15. 15. • SECTION 2 CHANGE RESISTANCE, FAILURES & OVERCOMING CHANGE RESISTANCE GE AN CH 01/09/14 CE AN IS T ES R 15
  16. 16. How Does Effect Me? We are constantly Making Change For the Sake of Change I have Goals to Meet, And This will Get In The Way This Here What We See ofWill Take Time I using Change Don’t Have This is another FLAVOR A OF THE MONTH an Ice-Berg U Why do We Need These Consultants? My People Know What To Do 01/09/14 Change That We Don’t Want to See 16
  17. 17. TOP, but Rather they hit the Ice below the Surface Change = Represents the Real Hidden Dangers, That We Don’t see 01/09/14 17
  18. 18. Below their personal surface (I call this - the Head…Bob…& Weave at the Management Meeting Table) The Total Picture This is another FLAVOR OF THE MONTH How Does Effect Me? I have Goals to meet, And This will Get In The Way We are constantly Making Change For the Sake of Change My People Know What To Do 01/09/14 Why do We Need These Consultants? Change That We Don’t Want to See This Will Take Time I Don’t Have 18
  19. 19. Change is Inevitable, Growth is Optional 01/09/14 19
  20. 20. The Unfortunate Truth “There is nothing more delicate to take in hand, nor more dangerous to conduct, nor more doubtful of success, than to step into the world of the introduction of changes and New Ideas As a leader in the company who believes his/her brain should not be left at the door upon entering the company For the person that innovates will have for his enemies all those who are well off under the existing order of things, and only lukewarm supporters in those who might be better off under the new.” Niccolò Machiavellihe Prince 1527 With some changes from Rich Fierson 01/09/14 20
  21. 21. The Unfortunate Truth • The First Step: – to enable a Change is to create, also happens to be the No. 1 element in ADKAR and also the No. 1 in the Kotter Methodology it • When a person is of the change And The nature of change, why it’s needed and the Risk Of Change Then your Chance to succeed is improved by 40 points on a chart I will show latter. 01/09/14 21
  22. 22. The Unfortunate Truth • The First Step: – to enable a Change is to create AWARENESS, it also happens to be the No. 1 element in ADKAR and also the No. 1 in the Kotter Methodology • When a person is AWARE of the change And UNDERSTANDS The nature of change, why it’s needed and the Risk Of Change Then your Chance to succeed is improved by 40 points on a chart I will show latter. 01/09/14 22
  23. 23. The Unfortunate Truth • 1. 2. 3. 4. Building Awareness of the need for change requires the following components: What is the nature of the change and how does align with the Vision of the Organization Why is the change being made, and what are the risks of not changing How will the change impact our group, dept, community, etc. What is in it for me (WIIFM) 01/09/14 23
  24. 24. CHANGE SLOW & STEADY THE POOR FROG THAT DID NOT NOTICE ANY CHANGE IN THE ACTUAL TEPERATURE…WHY Didn’t He/She? 01/09/14 24
  25. 25. Why Does Change Fail? • The hard truth is that most change initiatives are done “to” employees, not implemented “with” them or “by” them. • Although executives are pushing behavior change from the top and expecting it to cascade through the formal structure, an informal culture left to instinct and chance and they will likely dig in its heels 01/09/14 25
  26. 26. TEAM CHANGE ASSESSMENT EXERCISE • Turn to the next page in your book. You have 20 minutes to answer the following 15 questions DO NOT PUT YOUR NAME ON THE SHEET – You must be as honest as Possible. 01/09/14 26 26
  27. 27. TEAM CHANGE ASSESSMENT EXERCISE • You have 3 minutes to write this paragraph. The one who writes it the neatest and gets the most words down • wins 01/09/14 27
  28. 28. TEAM CHANGE ASSESSMENT EXERCISE Must be ledgeable and neat. They will be collected in 4 minutes – The one Who has the most words, with neatest handwriting (wins $) Challenging Complacency Many successful change programs grow out of crisis. Ford’s “change-or-die” story was repeated at Continental Airlines, HarleyDavidson, the Martin guitar company, IBM, and many others. This raises an important question: Does an organization have to wait For a crisis before change is possible? According to Harvard Business School professor Mike Beer, the answer is no. He believes that change leaders can raise concerns about a current problematic situation, and urge management to challenge the complacency that fosters it-----without resorting to “crisis mode” tactics. He offers the following four approaches for 28 accomplishing this goal: 01/09/14 28
  29. 29. The Way It Has Been Most of us have little input in CHANGE or a “Change Plan”…. With the exception of one very important THING ? 01/09/14 29 29
  30. 30. Why Does Change Fail? »Our Attitudes! 01/09/14 30
  31. 31. Why Does Change Fail? • Reason 1- FAILURE TO MAKE A COMPELLING AND URGENT CASE FOR CHANGE: • What is obvious to for some may not be so obvious to other pivotal players. • Some leaders mistake activity for real change action • How real and meaningful is the case for change for each of the pivotal groups? • Do they feel a sense of crisis, a “Burning Platform” Platform If not, how can you create it? 01/09/14 31
  32. 32. FAILURE TO MAKE A COMPELLING AND URGENT CASE FOR CHANGE: 01/09/14 32
  33. 33. Why Does Change Fail? • Driving and managing change will remain the number one priority for a leader. According to a recently published study the reality is that most change efforts fail. • The good news is that many of these failures can be traced to these common mistakes: 01/09/14 33
  34. 34. Why Does Change Fail? • Because we Fail to Communicate to All The People that are needed to be engaged! We always tell ours selves that we Need To Have Many Many… Meetings! • The problem is that meetings are NOT Necessarily Communications Events In FACT 01/09/14 34
  35. 35. Why Does Change Fail? • The single biggest problem in communication: is the illusion that it has taken place.” – George Bernard Shaw place 01/09/14 35
  36. 36. Why Does Change Fail? • Failure to create a strong sense of urgency causes a change movement to lose momentum before it gets a chance to start. • Establishing a true sense of urgency without creating an emergency is the first objective achieved to overcome the routine of daily business. (We will come back to this one) 01/09/14 36
  37. 37. Why Does Change Fail? NOT DEALING PROACTIVELY WITH RESISTANCE: Managing resistance to change is challenging and it’s not possible to be aware of all source Resistance to Change. Change Expecting that there will be resistance to change and being prepared to manage are not necessarily the same, and it requires is a proactive step. same 01/09/14 37
  38. 38. Why Does Change Fail? “People don’t resist change. They resist Being Changed!” – Peter Senge 01/09/14 38
  39. 39. Why Does Change Fail? • “What Moves men/women of genius, or rather what inspires their work, is not just the ability to formulate new ideas, but their obsession with the idea that has already been said is still not enough” - Eugene Delacroix • 70% of all Business Change Efforts Fail • WHY • Because the greatest challenge leaders have with change is their Inability to Generate Buy- In, and Urgency, for change across the organization! 01/09/14 39
  40. 40. Why Does Change Fail? • 70% of Almost All Business Change Efforts Fail • Here is an average Transformational Success Rate Chart Comparing the Leading Methodologies and Companies that develop their own methods 100% 89% 78% 80% 60% 40% 30% 20% 0% S U C C E S S ADKAR 01/09/14 F A I L S U C C E S S KOTTER F A I L S U C C E S S F A I L F A I L COMBO OF ADKAR & KOTTER = Success = Failed S U C Using non-Trained Change People & Your 40Own Methods
  41. 41. Why Does Change Fail? • Change fails because it takes too long! • This causes your people to lose interest • Most times you can’t create enough Shortterm Wins! • We have less people doing more work, and getting people the time away from their primary responsibility simply makes it too hard for many 01/09/14 41
  42. 42. Why Does Change Fail? • You were not able to overcome the inherent pervasive resistance that runs unchecked in yours, and all companies • You could not generate the intense amount of energy needed to drive transformational change • Your own Arrogance got in your way • Finally you could not translate your change agenda into a motivating agenda 01/09/14 42
  43. 43. Why Does Change Fail? • SELF-DIAGNOSTIC SURVEY 01/09/14 43
  44. 44. Companies That Could Not Change – The Failures? • Blockbuster – When Netflix came out Blockbuster who was sitting on $5 B in Cash was offered to purchase Netflix for $50 M, - NetFlix has two other new competitors RedBox and Hula • Sears & JC Penny – How did these two Brick and Mortar Stores not see Wal-Mart, Costco & Target coming? • Eastman Kodak – They invented the Digital Camera and did Nothing with it. Yes it was a new Paradigm. • When Forbes produces the list of most Valuables companies in 1917- only 15 still exist, and some are just hanging on~! 01/09/14 44
  45. 45. Why Does Change Fail? • Sony – Do you still do your morning run with your Walkman? The story may still be out on Sony • US Steel – Today it’s just 1/5 of the value they had when Forbes did their first published the Most Valuable Companies List in 1917 – Today only companies 15 still exist, and some are just hanging on~! • Barnes & Noble and Boarders – Tell me how they missed the internet, and Amazon? • “Remember It’s not the strongest of the species that survives, nor the most intelligent that survives. It’s the one most adaptable to Change” Charles Darwin 01/09/14 45
  46. 46. Why Does Change Fail? • Some Managers and companies believe that they know more then everyone else • Inertia (Will explain) • Fear of losing a job or power or control • Comfort with the status Quo • Not using Your full people/Human Capital • Could not see what was in it for themselves, peers, customers or company 01/09/14 46
  47. 47. How did They Fail 01/09/14 47
  48. 48. Why Does Change Fail? 01/09/14 48
  49. 49. Why Does Change Fail? 01/09/14 49
  50. 50. Why Does Change Fail? 01/09/14 50
  51. 51. So What Can We Do? • 1. 2. 3. 4. 5. The Challenge is to: Recognize the need for change and overcome the fear of change Be Scrupulously honest about your organization's current shortcomings Get everyone to buy-in to the change Offer the needed tools to deliver the change Successfully coax a Dinosaur company from where it is today to where it needs to be tomorrow 01/09/14 51
  52. 52. Companies that Made the Transformational Changes Needed to Compete and Succeed Apple - Well from Computers to ……But Here is the Challenge. What does Apple do without Steve Jobs as the Captain of the Ship? In other Words What the NEXT ACT FOR APPLE? Might Have Been 01/09/14 52
  53. 53. Companies that Made the Transformational Changes Needed to Compete and Succeed • G.E. went from $12 B in 1970 to $466 B today When Mr. Edison opened up GE he said “ I’d put my money on the sun and solar power, I hope we don’t have to wait to oil and coal run out. He said this in 1931 01/09/14 53
  54. 54. Companies that Made the Transformational Changes Needed to Compete and Succeed • Capital One – Every year Capital One tests over #50,000 new products and ideas!!!! • Netflix…. Red Box ---- Netflix knocked off Blockbuster. The question is When will; Red Box or another kick of NewtFlix? • The Whole Darn Internet • DuPont – Went from making gunpowder to Today they are a Teflon, Kevlar, Mylar, Nylon Lycra • Nokia - From paper to phones • Amazon 01/09/14 54
  55. 55. Why Do Employees Resist Change • Because usually No One asks them, (or when they do…they don’t listen for their opinion) - Which is more often the correct one. one • They don’t resist change…. They resist BEING CHANGED! • Most are worried that change is a tag-line for cutting jobs 01/09/14 55
  56. 56. John Kotter Quote on Why People Resist Change • “When people see it being done right, their fear level quite rationally goes down and their conviction grows that the plan can work...People do resist change because they're afraid. But they also resist change if they perceive that it's being done stupidly. If you can get them to understand how they can play a constructive part, sometimes it's amazing what happens." John Kotter happens 01/09/14 56
  57. 57. John Kotter Quote on Why People Resist Change • “The key piece of advice that Kotter offers is for organizational leaders to take the time to get themselves informed about what does and doesn't work - before launching into action with a change initiative. As he says: • "If you get that knowledge upfront, it can save you great grief and money later on 01/09/14 57
  58. 58. Why Do Employees Resist Change • Because no one leading the change understands that change happens not from strategy but from the actual tactical (getting your hands-around the change by getting your hands dirty! • Because the failure rate is 70%- It takes 100% Involvement to hit the 30% success rate 01/09/14 58
  59. 59. CREATIVITY SURVEY 01/09/14 59
  60. 60. Methods For Removing the Obstacles SECTION 3 - CREATING & UNDERSTANDING THE GOOD 01/09/14 60
  61. 61. Fixing the Problems Fixing the Problems Team Survey Team Survey 01/09/14 61
  62. 62. Methods For Removing the Resistance Obstacles • • • Prosci/ADKAR Using Kotter’s 8-Steps Using - EVD (Enterprise Value Delivery) – Using the Q-Loop • Using both the Tactile Change and the Emotional Change at the same time 01/09/14 62
  63. 63. Methods For Removing the Resistance Obstacles • Be able to Articulate a Clear Vision • Maximize the human Capital involved • Leadership must be fully versed on all details of the plan • Ensure alignment through one-on-one meetings, group discussions, data review, • Teaching the tools of data and change • Establish for all members of the organization appropriate expectations 01/09/14 63
  64. 64. Methods For Removing the Resistance Obstacles • Create a genuine enthusiasm for the change • Make it a Team Effort • Create an organizational energy, including a collective motivation, enthusiasm Create Passion • Establish and create both the behavioral and emotional components of change 01/09/14 64
  65. 65. Methods For Removing the Resistance Obstacles • Don’t just focus on the Tactical components, components but rather the Emotional Components as well Get in the trenches Change is not just Strategic, it’s Emotional & Tactical 01/09/14 65
  66. 66. Methods For Removing the Resistance Obstacles • The Five Factors – Factor 1- A person’s view of their current state – Factor 2- How a person Perceives problems – Factor 3-The credibility of the sender – Factor 4 - Circulation and containment of “misinformation or rumors – Factor 5- Contestability of the reasons for change 01/09/14 66
  67. 67. Methods For Removing the Resistance Obstacles • Build a culture of Innovation • Give People a Reason to Change • Trigger a sense of optimism around the change initiative • MAKE IT FUN • Expect and plan for resistance and opposition. opposition • Answer what’s in it for me? • Get 100% of the Human Capital Involved 01/09/14 67
  68. 68. Methods For Removing the Resistance Obstacles – The Organization must be able to adapt faster then ever – If your organization looks at the changing environment: as an opportunity instead of an impediment it’s in a stronger position then their competition – Culture is a Lagging, not a Leading indicator 01/09/14 68
  69. 69. Methods For Removing the Resistance Obstacles 1. Culture changes when people change, and how they relate to each other 2. Companies that maximize their full compliment of Human Capital normally succeed 2. When the people (including managers) oppose change, Leadership can and does have to overcome this issue. Working on tangible projects together from front-line to management ignites these changes. 01/09/14 69
  70. 70. Methods For Removing the Resistance Obstacles 4. Working on tangible projects together from front-line to management ignite these changes by; • Making the change MEANGINGFULL • Changing Leadership BEHAVIOR • Creating and sustaining URGENCY • Releasing organizational ENERGY • Holding everyone ACCOUNTABLE 01/09/14 70
  71. 71. Methods For Removing the Resistance Obstacles • What’s the Best Way to Have a Great Idea? • He best way to have a good idea is to 01/09/14 71
  72. 72. Methods For Removing the Resistance Obstacles • What’s the Best Way to Have a Great Idea? • He best way to have a good idea is to Have A Lot of Ideas 01/09/14 72
  73. 73. Readiness For Change Survey 01/09/14 73
  74. 74. The Major Change Methodologies That Work 01/09/14 74
  75. 75. The Major Change Methodologies That Work • Most employees learn quickly that bureaucracy, hierarchy, and silos create bottlenecks for new ideas. ideas • In Fact Tom Peters once said “that in most cases the log jam is at one place at the top of the bottle. The Top of The Bottle, he said- Is just like the Top of The Organization.” Organization • His answer meant the Top of the Bottle = Bottleneck = The Top of Organization! Which = Failure! 01/09/14 75
  76. 76. The Major Change Methodologies That Work • Fun Facts: “More new information has been produced in the last 30 years than in the first 5,000 and a weekday edition of the New York Times contains more information than the average person was likely to come across in a life time in 17 th Century England” Harvard Business Journal 01/09/14 76
  77. 77. Methodology Defined Methodology: Defined A body of practices, procedures, and rules used by those who work in a discipline or engage in an inquiry * From the American Heritage Dictionary Inquiry: How do we manage the people side of change? ? 01/09/14 77
  78. 78. Readiness For Change Survey 01/09/14 78
  79. 79. What is Change Readiness? • Change readiness is the ability to continuously initiate and • Respond to change in ways that create advantage, minimize risk, and sustain and increase performance in performance 01/09/14 79
  80. 80. USING THE TRANSFORMATIONAL CHANGE METHODOLOGIES ADKAR LEWIN & KOTTER ENTERPRISE VALUE DELIVERY The Q-LOOP 01/09/14 80
  81. 81. The Major Change Methodologies That Work • For The best overall strategy one should think of using Prosci/ADKAR Along with Kotter Tools The Kotter 8-Step Methodology • For the Tools to assist with ADKAR – You need Kotter’s 8-Steps • Kotter alone will Work as Well • For a Software or ERP Change - EVD (Enterprise Value Delivery) • The generally accepted change & tools of Assessment • The Q- Loop 01/09/14 81
  82. 82. The Building on the Kotter Change Revolution Prosci-ADKAR Methodology The five building blocks of successful change A.D.K.A.R. Awareness - of the need for change Desire - to participate and support the change Knowledge - on how to do change Ability - to implement required skills and behaviors Reinforcement - to sustain the change A D K A R 01/09/14 82
  83. 83. ADKAR OVERVIEW • Successful Change, at it core, is rooted in something much simpler then one wants to believe? – How to Facilitate Change-One Person at a Time – In The ADKAR Methodology Change is all About PEOPLE, ONE AT A TIME – Someone once said that “change would be easy, if it were not for the fact that people are involved!” involved! 01/09/14 83
  84. 84. ADKAR OVERVIEW • The elements of the ADKAR model falls into the natural order of how one person experiences Change • The Change lifecycle begins and ends with PEOPLE, and the 5 Factors we are now going to discuss 01/09/14 84
  85. 85. Phases of a Change Project ADKAR OVERVIEW PostImplementation SUCCESSFULL CHANGE Implementation Concept & Design Business Need 01/09/14 AWARNESS DESIRE KNOWLEDGE ABILITY REINFORCEMENT Phases of Change For Employees 85
  86. 86. ADKAR OVERVIEW • Successful Change is Realized When Two Goals are Achieved – As show in the previous Slide 1. First the Business Must Realize the Full Implementation of the Full Transformation Implementation, So That the Business Objectives are Met, and in place to Met Sustain The Change. 01/09/14 86
  87. 87. ADKAR OVERVIEW 2. Second the Organization MUST Migrate Through Each Elements of the ADKAR Model., So that the People are able to Implement the Change and Reinforcements are in place to Sustain The Change. 3. Hopefully utilizing the Kotter Tools 01/09/14 87
  88. 88. ADKAR OVERVIEW • The ADKAR Model is a Results-Oriented Model that provides a framework for how Change Management tactics and tools, all (Including: Communication, Sponsorship, Readiness, Assessments, Coaching, Training, and Resistance Management) come together to produce Change • The elements in ADKAR must happen in sequence, and they are cumulative. Basically each ADKAR cumulative element is a Building Block. That’s why in the slide Block with the Chart - Failure was so high for people that do Change using their own methodology 01/09/14 88
  89. 89. The 5 Building Blocks of ADKAR • A common mistake is that – Awareness is equal to Communications. Yet Sharing Communications information does not always produce Awareness • ENERGY COMPANY STORY • In a previous slide I put up the fact that employees at all levels Internalize Awareness 01/09/14 89
  90. 90. The 5 Building Blocks of ADKAR • Awareness comes down to People View: 1. 2. 3. 4. 5. 6. There view of the Current State How They Perceive Problems The Credibility of the message sender The Circulation of Misinformation of rumors The contestability of the reasons for change Their individual position and even job succession 01/09/14 90
  91. 91. The Energy Story Revisited • • • • Remember all the employees were given the same communication The first employee discredits the information while the last employee demonstrates a strong conviction for the need Building Awareness is a Process – The mistake so many companies make is that a single message or event will result in a uniformed Awareness Awareness is based not on the message SENT but rather the message RECEIVED! 01/09/14 91
  92. 92. Why Awareness Messages Fail to Reach the Goal • Here is where I get tough and see so much failure! • We discussed Change Management Tactics which include- Effective Communication , Effective Sponsorship • Coaching By Managers and Supervisors, and the ability and readiness to absorb Business Information (DANNON STORY) STORY 01/09/14 92
  93. 93. Why Awareness Messages Fail to Reach the Goal • Before these Change Management tactics can be applied it’s necessary to brainstorm an discuss the awareness message • The group responsible for developing and implementing the change must have a common understanding of : 01/09/14 93
  94. 94. Why Awareness Messages Fail to Reach the Goal • Before these Change Management tactics can be applied it’s necessary to brainstorm an discuss the awareness message • The group responsible for developing and implementing the change must have a common understanding of : The Company Goals 01/09/14 The Risk of Not Changing 94
  95. 95. Why Awareness Messages Fail to Reach the Goal 1. The Overall nature of the change, and how the change aligns with Vision of the company 2. Why the Change is Needed Now! 3. The Risk of Not Changing 4. Making sure we are utilizing all levels and all Human Capital Resources! 5. Who and How they will be Impacted by the Change 6. Never…Never… Make it up as you go along – People have excellent memories, and are not dumb! 01/09/14 95
  96. 96. ADKAR ELELEMNTS AWARNESS WHO? HOW? The Most Influential Players are The most Influential Activities Of the need For Change PRIMARY SPONSORS Sponsorship (Leadership) (Leadership (Business Leaders) & Communications & Coaching Direct Supervisors DESIRE Training & Coaching, Training & Coaching, Training & Coaching, Training & Coaching, Training & Coaching, Training & Coaching, System Experts, OD, Finance, HR etc. To support, Participate in the Change KNOWLEDGE Of how to change ABILITY To Implement Required Skills and Behaviors REINFORCEMENT PRIMARY SPONSORS Sponsorship & Coaching Direct Supervisors Sustain the Change 01/09/14 96
  97. 97. CHANGE MANAGEMENT TOOLS Change Management Tools Communications Sponsorship Training/OD ADKAR Phases of Change AWARNESS Employee Feedback DESIRE Supervisor Feedback/ Assessments KNOWKLEDGE Training Feedback Coaching ABILITY Resistance Management 01/09/14 Assessment Results (examples) Performance Feedback/Assessments REINFORCEMENT 97 Audits & Compliance
  98. 98. ADKAR OVERVIEW • 1. 2. 3. 4. 5. The Five Factors of People in Change A person’s view of the current state How a person perceives Change The Credibility of the Message Sender The ability to reduce the standard Misinformation or rumors Consistency for the reasons for Change 01/09/14 98
  99. 99. Change Requires A Unique Thinking - in Your Approach. Even with the ADKAR- first step “AWARENESS” • Just to build Awareness of Change - you need to consider A Persons' View of A Persons' View of the Current State the Current State How a person How a person perceives problems perceives problems AWARNESS OF THE NEED FOR CHANGE Credibility of Credibility of the Sender the Sender Contestability and Contestability and consistency consistency of the reasons for Change of the reasons for Change Calculation Calculation of rumors of rumors 01/09/14 99
  100. 100. Assessment Team & Individual fill out • ADKAR ASSESSMENT 01/09/14 100
  101. 101. Building Desire • Managers cannot dictate or control an employee's desire to change. Employees choose. However, that does not mean that managers are powerless to achieve this result with their employees. The enablers or elements that may create a desire to change include: 1. 2. 3. 4. Fear of job loss Discontent with the current state Imminent negative consequences Enhanced job security 01/09/14 101
  102. 102. Building Desire 1. 2. 3. 4. 5. 6. 7. Affiliation and sense of belonging Career advancement Acquisition of power or position Ownership for the future state Incentive or compensation Trust and respect for leadership Hope in future state 01/09/14 102
  103. 103. Personal context for change • These positive and negative motivating factors are evaluated by employees within the following personal context: • An employee's personal and family situation (health, financial position, stability, mobility, relationships, etc.) • An employee's professional career history and plans (successes, failures, promotions, aspirations, years left before retirement, 2nd career potential, etc.) • The degree that this change will affect them personally (in some cases even large changes can have only a minimal impact on some employees) 01/09/14 103
  104. 104. Organizational context for change • Employees also evaluate these positive and negative motivating factors based on: – An organization's history with change (past change success or failure, – the likelihood that this change will really happen, – consequences for employees that have resisted change in the past 01/09/14 104
  105. 105. THE A.D.K.A.R. APPROACH & THE KEY MISSING METHODOLOGY • How to Implement Successful Change in both our Personal Lives, and then in our Business Careers 01/09/14 105
  106. 106. ADKAR - The Individual comes First • A= AWARENES (of the/or) need for change) • D= DESIRE – A Need to see the Change Happen • K= The KNOWLEDGE OF “HOW TO” TO CHANGE • A= ABILITY -TO IMPLEMENT REQUIRED SKILLS& BEHAVIORS • R=THE-RE-INFOREMENT -TO SUSTAIN THE CHANGE 01/09/14 106
  107. 107. The 5 PHASES 1. Building warmness for Change is requires the following commencements 2. What is the Nature of the Change, and how does this align to the Vision of the company (especially if successful).? 3. What are the Risks of “NOT” changing? 4. How Will Change our community/culture? 5. More importantly, How will it AFFECT ME! (WIIFM)the ( Key which is the real world 01/09/14 107
  108. 108. The FIVE Factors 1. 2. 3. 4. 5. A person's view of the current state How a person perceives problems/issues The Credibility of the Sender The Circulation of misinformation Reason for Change Contestability of the change 01/09/14 108
  109. 109. The FIVE Factors 6. The focus for Results was the genesis for the ADKAR Model 7. The focus on RESULT is is the Key 8. The problem with Change… Change 9. Every time we talk about change I would ask “WHY”…WHY would you do that?, and what is your DESIRED OUTCOME? 01/09/14 109
  110. 110. Prosci's top-10 action steps for managers • Method 1 - Listen and understand objections • Method 2 - Focus on the "what" and let go of the "how“ • Caution: If any combination of the following characteristic is present, then this process is more difficult to implement: • The total number of employees is sufficiently large that they all cannot reasonably be involved in and take ownership of the design 01/09/14 110
  111. 111. Prosci's top-10 action steps for managers • Method 1 - Listen and understand objections • Method 2 - Focus on the "what" and let go of the "how“ • a change becomes significantly large such that cross-department coordination and design is required • The design of the future state is already predetermined and cannot be changed (WHY)? • The change is dramatic and is happening too quickly 01/09/14 111
  112. 112. Prosci's top-10 action steps for managers • • Method 3 - Remove barriers Method 4 - Provide simple, clear choices and consequences – Let people know what would happen and when. – Provide alternate routes and choices for commuting into the city you are in. – Share the consequences of taking certain routes at certain times, including providing ongoing information about the expected delays along each route. 01/09/14 112
  113. 113. Prosci's top-10 action steps for managers • Method 5 - Create hope • Method 6 - Show the benefits in a real and tangible way – Sharing case studies of other companies who have successfully completed a similar change (and the results they achieved). – Inviting guests to provide personal testimonials of how a similar type of change resulted in success for their organization. – Visibly demonstrating the success of pilot programs or trials within your own organization (share small wins and celebrate success publicly). publicly 01/09/14 113
  114. 114. Prosci's top-10 action steps for managers • Method 7 - Make a personal appeal – "I believe in this change." – "It is important to me." – "I want your support." – "If you go with me on this, I will make sure this works out." 01/09/14 114
  115. 115. Prosci's top-10 action steps for managers • Method 8 - Convert the strongest dissenters • Method 9 - Create a sacrifice –Proving: Proving • The Carrot & The Stick • They are serious about this change . • Resistance will not be tolerated . – The consequences for not moving ahead with the organization are real and severe. 01/09/14 115
  116. 116. Prosci's top-10 action steps for managers • Method 10 - Use money or power • The Carrot & The Stick – Increase their compensation or create a bonus program such that they are directly rewarded for the successful completion of the change. – Offer a promotion to a position they desire. 01/09/14 116
  117. 117. The Core Tenets of Prosci Change Theory 1 • All changes in an organization ultimately take place at the individual level 2 • Successful change can be modeled and Has to be repeatable 3 • Process, tools and principals (I.e. methodologies) exist to drive successful change 01/09/14 117
  118. 118. Effective change management requires two perspectives INDIVIDUAL INDIVIDUAL Perspective Perspective How does One Person make change Successful How many were at Lexington? and in Philadelphia? The marriage of individual and organizational change management is what differentiates Prosci’s methodology ORGANIZATION ORGANIZATION Perspective Perspective 01/09/14 What processes and tools exist to support individuals Through change? 118
  119. 119. ADKAR • ADKAR is a model for enabling change. • ADKAR provides a goal-oriented framework that helps companies realize their objectives more quickly and completely. • Applications for this model include: include + 01/09/14 = + 119
  120. 120. ADKAR APPLICATIONS • Learning tool for teaching management, especially when analyzing case studies of successful and failed companies and changes • A tool for Change management teams to assess the readiness of their Change management plans and guide activities • A coaching tool for managers and supervisors during Change 01/09/14 120
  121. 121. ADKAR APPLICATIONS • An assessment tool for diagnosing changes underway and identifying potential barrier points to change • A planning tool for Change • Simply stated ADKAR is a device for teaching Change Management 01/09/14 121
  122. 122. The ADKAR change model Phase 1 - Preparing for change The first phase in Prosci's methodology is aimed at Getting ready. It answers the ready question: "how much change management is needed for this specific project?" The first phase provides the situational awareness that is critical for effective change management. Outputs of Phase 1: • Change characteristics profile • • • 01/09/14 Organizational attributes profile Change management strategy Change management team structure • Sponsor assessment, structure and roles 122
  123. 123. The ADKAR change model Phase 2 - Managing change The second phase of Prosci's process is focused on creating the plans that are integrated into the project activities - what people typically think of when they talk about change management. Based on Prosci's research, there are five plans that should be created to help individuals move through the ADKAR Model. Outputs of Phase 2: • Communication plan • Sponsor roadmap • Training plan • Coaching plan • Resistance Management 01/09/14 • plan 123
  124. 124. The ADKAR Change Model Phase 3 - Reinforcing •Equally critical but most often overlooked, the third process helps project teams change phase of Prosci'splans for ensuring that the create specific action change is sustained. In this phase, project teams develop measures and mechanisms to see if the change has taken hold, to the see if employees are actually doing their jobs the new way 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 01/09/14 124
  125. 125. The ADKAR Change Model The Critical Linkage - People make up organizations, therefore people are the Key • The linkage between individual change management and organizational change management 01/09/14 125
  126. 126. The five levers of change management in the Prosci 3-Phase Change Management Process 1. 2. 3. 4. 5. Communications Sponsor roadmap Coaching Training Resistance management 01/09/14 A R 126 D K A
  127. 127. Phase 1: supporting structures • Goals & Results OLD MODEL TEAM STRUCTURE S =sponsor S Team Team Bottoms Up Approach Based On Who is Being Impacted By the Change Architect the “Right” Stricture and Prepare the Team CM 01/09/14 127
  128. 128. Phase 2 – Managing Main Activity – • Phase 2 Develop change management plans Take action and implement plans : Create plans – Communications plan – Sponsorship roadmap – Coaching plan – Training plan – Resistance management plan – Integrate into project plan – Execute plans Why? To create formal deliverables and plans that will move individuals through A, D, K, A and R 18 01/09/14 128
  129. 129. It all begins with Change! “ It is not the strongest of the species that survives, nor the most intelligent, but …. the one’s most responsive to change.” Charles Darwin Team + Ideas + Concepts = POWER 01/09/14 129
  130. 130. Successful change management requires both individual and organizational approaches • Organizational Actions and steps taken by the project teams, change mgmt practitioners, and leaders and managers throughout organization • Individual Moving each other to their own current sate to their own future state CURENT 01/09/14 TRANSITION FUTURE 130
  131. 131. ADKAR ASSESSMENT • To Be done in both Teams and Individual Basis Here 01/09/14 131
  132. 132. FUN FACT • Howard Schultz, founder of Starbucks, said "I believe life is a series of near misses. A lot of what we ascribe to luck is not luck at all. It's seizing the day and accepting responsibility for your future. It's seeing what other people don't see and pursuing that vision." 01/09/14 132
  133. 133. The Kotter Approach to Change • The KOTTER APPROACH & THE 8 STEPS 01/09/14 133
  134. 134. The Kotter Approach to Change • “What is the difference between “change management” and “change leadership,” leadership and whether it’s just a matter of semantics. • These terms are not interchangeable. The interchangeable distinction between the two is actually quite significant. Change management, which is management the term most everyone uses, refers to a set of basic tools or structures intended to keep any change effort under control. 01/09/14 134
  135. 135. The Kotter Approach to Change • All structures intended to keep any change effort under control. • The goal is often to minimize the distractions and impacts of the change. • Change leadership, on the other hand, concerns the driving forces, visions and processes that fuel large-scale transformation. In the video I am playing next Kotter delves a little deeper into the differences between the two concepts, and highlight why we need more change today • The ever (Blockbuster, Netflix, Red box) Story 01/09/14 135
  136. 136. The Kotter Approach to Change • Kotter Video ONE 01/09/14 136
  137. 137. The Kotter Approach to Change • Businesses hoping to survive over the long term will have to remake themselves into better competitors at least once along the way. These efforts have gone under many banners 1. 2. 3. 4. 5. 6. 7. 8. Total quality management, Reengineering Innovation Rightsizing Restructuring, Cultural change Six Sigma, Lean systems And turnarounds, to name a few 01/09/14 137
  138. 138. The Kotter Approach to Change • In 1995, completed a 10-year study of more than 100 companies that attempted such a transformation. • RESULTS of his observations, outlining the 9 of the largest errors that can doom these efforts and explaining the general lessons that encourage success. Unsuccessful transitions almost always founder during at least one of the following phases: 01/09/14 138
  139. 139. The Kotter Approach to Change 1. 2. 3. 4. 5. 6. 6. 8 9 The Reason for SUCCESS: Generating a sense of urgency, Establishing a powerful guiding coalition, Avoiding premature declarations of victory, developing a vision, Ability to communicate the vision clearly and often Leadership and Sponsors removing obstacles, obstacles Planning on, and creating short-term wins Avoiding premature declarations of victory Embedding changes in the corporate culture that are needed Realizing that change usually takes a long time 01/09/14 139
  140. 140. John Kotter and His 8-Steps Transformation Model • Dr. John Kotter from Harvard really after Kurt Lewin was the central figure in finding a doable day-in, and day-out repeatable & workable Transformation Change Model • Kotter looking at why Change Failures found that their were 8 Critical Steps that must be done and like ADKAR done in order. 01/09/14 140
  141. 141. Kurt Lewin three step change theory model – Unfreeze, Change, Freeze • Kurt Lewin three step model change theory • The Kurt Lewin change theory model is based around a 3-step process (Unfreeze-ChangeFreeze) that provides a high-level approach to change. • It gives a manager or other change agent a framework to implement a change effort, which is always very sensitive and must be made as seamless as possible. • It’s the basis for Dr. John Kotters 8 Steps 01/09/14 141
  142. 142. Kurt Lewin three step change theory model – Unfreeze, Change, Freeze • The Kurt Lewin model can help a leader do the following three steps: • Make a radical change • Minimize the disruption of the structure’s operations • Make sure that the change is adopted permanently 01/09/14 142
  143. 143. Kurt Lewin three step change theory model – Unfreeze, Change, Freeze What’s the Difference in each step? 01/09/14 143
  144. 144. John Kotter’s 8-Step Approach To Change 01/09/14 144
  145. 145. John Kotter and His Transformation Model • A Sense of Urgency Video Clip 01/09/14 145
  146. 146. John Kotter and His Transformation Model • PEOPLE – STRUCTURE – MANAGEMENT – Kotter Philosophy states that any change in one will have a geometric effect on at least one of the two others. PEOPLE STRCTURE STRATEGY CHANGE MANAGEMENT 01/09/14 146
  147. 147. John Kotter and His Transformation Model • PEOPLE – STRUCTURE – MANAGEMENT – Change Management is about believing that any change involves managing each one of these elements continually through, during and after any improvement, change – One Essential Skill of Change management Experts is the ability to manage all three elements together during a change 01/09/14 147
  148. 148. John Kotter and His Transformation Model “No business can survive over the longer term if it cannot continually reinvent self. But this is most difficult to do as it requires working across all layers of the firm. It’s essential and difficult, it is the ultimate test of leadership.” 01/09/14 148
  149. 149. John Kotter and His Transformation Model 01/09/14 149
  150. 150. 01/09/14 150
  151. 151. 8 Step Process By John Kotter & D. COHEN Creating A Climate For Change 1.Increase Urgency 2.Build Guiding Teams 3.Get The Vision Right Engaging & Enabling The Whole Team 4.Communication-For Buy In 5.Enable Action 6.Get Short Term Wins Implementing and Sustaining Change 01/09/14 7. Don’t Let Up 8. Make It Stick 151
  152. 152. John Kotter - 8 Critical Steps to Success “No business can survive over the longer term if it cannot continually reinvent self. But this is most difficult to do as it requires working across all layers of the firm. It’s essential and difficult, it is the ultimate test of leadership.” John Kotter 01/09/14 152
  153. 153. John Kotter - 8 Critical Steps to Success • 1. Establishing a Sense of Urgency During this first step it is essential to acquire the cooperation of many individuals and to ensure they are motivated to participate. Kotter writes in the article that well over 50% of the companies he watched failed in this first phase. • Begin by examining the firm's competitive realities, market trends, and the effects on financial performance. 01/09/14 153
  154. 154. John Kotter - 8 Critical Steps to Success • 1. Establishing a Sense of Urgency • Communicate this information dramatically in respect of the potential crises. • Convince at least 75% of a company's management that the current situation is totally unacceptable, and pursuing change is less risky than maintaining the status quo. Build motivation, involvement and support. 01/09/14 154
  155. 155. John Kotter - 8 Critical Steps to Success John Kotter Risk 1. Kotter refers to this risk of this first phase as: Not Establishing a Great Enough Sense of Urgency • When the urgency rate is not high enough to prevent very serious internal problems later on in the process. • Underestimating the complexities and potential struggles required to shift management and staff from their comfort zones. • Tendencies to become overwhelmed by the risk involved in retreating to the status quo . 01/09/14 155
  156. 156. John Kotter - 8 Critical Steps to Success • 2. Building a Guiding Coalition Managing Change is not enough – Change Has To Be Led. • Building the momentum for change requires a strong leadership and visible support from key people within your organization. The coalition will involve a wide organization representation of the formal and informal powerbase within the organization. 01/09/14 156
  157. 157. John Kotter - 8 Critical Steps to Success • 2. Building a Guiding Coalition By working as a team, the coalition helps to create more momentum and build the sense of urgency in relation to the need for change. change • John Kotter recognizes the importance of the emotional dimension and the energy that is generated by a “mastermind” group all working together 01/09/14 157
  158. 158. John Kotter - 8 Critical Steps to Success John Kotter Risk 2. Not Creating a Powerful Enough Guiding Coalition • Maintaining the existing hierarchy where if that were working well, there would be no need for a major transformation. • Coalition members having no history of teamwork at the top and therefore undervalue the coalitions importance. • Normally not lead by a strong line manager . 01/09/14 158
  159. 159. John Kotter - 8 Critical Steps to Success • • • John Kotter Videos Segments 1-6 Kotter ASSESSMENTS 01/09/14 159
  160. 160. John Kotter - 8 Critical Steps to Success 3. Develop a vision and strategy • A drive for change without a clear focus will rapidly fizzle out unless you develop a clear vision of the future that is accompanied with a clear description about how things will be different in the future. • The vision needs to defined in such a way that it is capable of expression in a short “vision speech” that conveys the heart of the change in less than 5 minutes. 01/09/14 160
  161. 161. John Kotter - 8 Critical Steps to Success 3. Develop a vision and strategy • This then needs to be encapsulated in a powerful one or two sentence summary. • All members of the coalition need to be fluent in both of these vision statements. • You need to work with the coalition to develop the strategies that will deliver the vision. 01/09/14 161
  162. 162. John Kotter - 8 Critical Steps to Success John Kotter Risk 3: Lacking a Vision • Plans, directives, and programs with no vision, but confused • staff. • List of confusing and incompatible projects and activities that can take the organization in the wrong direction or nowhere at all. • “ If you can't communicate the vision to someone in five minutes or less or get a reaction that signifies both understanding and interest, you are not done!” John Kotter 01/09/14 162
  163. 163. John Kotter - 8 Critical Steps to Success 4. Communicating The Vision: Communication is everything, and Kotter maintains that as change leader you need to use every means at your disposal to constantly communicate the new vision and key strategies that support that vision. • This goes beyond the “special announcement” meetings and involves frequent and informal face-to-face contact with your people - by you and by all individual members of the coalition. 01/09/14 163
  164. 164. John Kotter - 8 Critical Steps to Success • 4. Communicating The Vision: • Email is not the appropriate communication vehicle– except in support of prior face-to-face contact. – But it goes further than talking – you and the coalition have to “walk the talk” visibly and at all times be available and accessible to your people. • Be open and honest and address the emotional dimension of your people’s fears and concerns. 01/09/14 164
  165. 165. John Kotter - 8 Critical Steps to Success John Kotter Error 4: Under communicating the Vision by a Factor of Ten • A vision is developed, but only a single form of communication is used. Management not walking the talk. Deeds speak louder than words. Not enough communication to remind of the desired behaviors. 01/09/14 165
  166. 166. John Kotter - 8 Critical Steps to Success • 5. Empowering Others to Act on the Vision Or Enabling action and removal of obstacles • This is the stage where your change initiative moves beyond the planning and your change initiative moves beyond the planning and the talking, and into practical action as you put supportive structures in place and empower and encourage your people to take risks in pursuit of the vision. 01/09/14 166
  167. 167. John Kotter - 8 Critical Steps to Success • 5. Empowering Others to Act on the Vision • This is where you, as change leader, identify and remove obstacles and obstructions to change . These may arise in processes or structures that are getting in the way. • This may also involve addressing resistant individuals and/or groups and helping them to reorient themselves to the requirements of the new realities 01/09/14 167
  168. 168. John Kotter - 8 Critical Steps to Success • 5. Empowering Others to Act on the Vision • Action is essential in getting rid of obstacles to change and in time, the big ones must be confronted time and removed. This sometime means some people may have to leave the organization • Empower people to maintain the credibility of the change effort as a whole, to try new approaches, to develop new ideas, and to provide leadership . 01/09/14 168
  169. 169. John Kotter - 8 Critical Steps to Success • 5. Empowering Others to Act on the Vision • Change Systems and structures that seriously undermine the vision. • Encourage risk taking and nontraditional ideas, activities, and actions. 01/09/14 169
  170. 170. John Kotter - 8 Critical Steps to Success 5 John Kotter Not Removing Obstacles to the New Vision • Failing to remove powerful individuals who resist the change effort and who resist individual employees who want to help make it happen, and prevents them from acting • Organizational structures such as human resource systems that remain intact even when there are clearly inconsistent compensation or performance-appraisal structures. 01/09/14 170
  171. 171. John Kotter - 8 Critical Steps to Success 6. Planning for and Creating Short-Term Wins • Success breeds success. Kotter advises that an early taste of victory in the change process gives people a clear sight of what the realized vision will be like. • This is important as a counter to critics and negative influencers who may otherwise impede the progress of your initiative. • It is also important to recognize and reward all those people who make these early gains possible. • As change leader you need to be looking for - and creating – opportunities for these early wins. 01/09/14 171
  172. 172. John Kotter - 8 Critical Steps to Success 6. Planning for and Creating Short-Term Wins • • • Develop clear performance improvements goals and measurement systems and reward the people involved when they are achieved. Maintain commitments to achieve short term goals to help maintain a high urgency level and force deep thinking that can clarify visions. John Kotter Error 6: Not Systematically Planning for, and Creating, Short-Term Wins • Without short-term wins, too many people give up or actively join the ranks of those people who have been resisting change. • Absence of defined and measured short term goals - urgency levels can drop. Leaving results to chance. 01/09/14 172
  173. 173. John Kotter - 8 Critical Steps to Success 7. Consolidating Improvements and Producing Still More Change • • Hold the gains and build on change This is the time to increase the activity, and change all systems and structures and processes that don’t fit with the change initiative, and bring “new blood” into the coalition. • “This is now all about continuous improvement and each” John Kotter 01/09/14 173
  174. 174. John Kotter - 8 Critical Steps to Success John Kotter Error 7 Declaring Victory Too Soon • Allowing the powerful resistors associated with tradition take over. • “After a few years of hard work, Managers may be tempted to declare victory with the first clear performance improvement. While celebrating a win is fine, declaring the war won can be catastrophic” John Kotter 01/09/14 174
  175. 175. John Kotter - 8 Critical Steps to Success John Kotter Error 7 Declaring Victory Too Soon • Declaring victory before the changes and business improvements have sunk deeply into a company's culture. culture • Having premature victory celebrations that kill ongoing momentum. John Kotter 01/09/14 175
  176. 176. John Kotter - 8 Critical Steps to Success • Kotter says that for any change to be sustained, it needs to become embedded in the new “way we do things around here” – that is the culture. • A major part of this is for you, as change leader, to articulate the connections between new behaviors and organizational success. success 01/09/14 176
  177. 177. John Kotter - 8 Critical Steps to Success 8. Institutionalizing New Approaches • This is where you - and your coalition team - talk about progress every chance you get. • Tell success stories about the change process, and repeat other success stories that you hear. hear • As change leader, this is all about your continuous efforts to ensure that the change is seen in every aspect of your organization. organization 01/09/14 177
  178. 178. John Kotter - 8 Critical Steps to Success John Kotter Error 8: Not Anchoring Changes in the Corporation's Culture • New behaviors not rooted in social norms and shared values; they are subject to degradation as soon as the pressure for change is removed. • Not ensuring that the next generation of top management understand the transformation that has taken place and personify themselves, the new approach will fail • Poor succession decisions because employees at ALL LEVELS are not an integral part of the renewal effort. effort 01/09/14 178
  179. 179. John Kotter - 8 Critical Steps to Success • • • John Kotter Videos Segments 1-6 Kotter ASSESSMENTS 01/09/14 179
  180. 180. John Kotter - 8 Critical Steps to Success “In the final analysis, Change sticks when it becomes "the way we do things around here," here when it seeps into the bloodstream of the corporate body. Until new behaviors are rooted in social norms and shared values, they are subject to degradation as soon as the pressure for change is removed”. John P. Kotter 01/09/14 180
  181. 181. John Kotter - 8 Critical Steps to Success • Utilizing Kotter’s 8 Steps as the critical Tools to support the ADKAR Methodology equals the highest percentage of Transformational Success.( 82.4%) • Even if you are doing an SAP or Software Change and using EVD (Enterprise Value Delivery) for your Transformational Change System. The Kotter philosophy will act as an enabler to success! 01/09/14 181
  182. 182. Final Key Points on the Kotter Method • 3 key points emerge from their review of companies who have followed John Kotter's eight-step approach to change management and succeeded with their change initiatives 1. Great change leaders are great at telling visual stories with high emotional impact 2. The leader's example is a powerful method of communicating feeling and facilitating change 3. Organizations need heroes at every level 01/09/14 182
  183. 183. Final Key Points on the Kotter Method The text of multiple Kotter Speeches are in your Syllabus in the back section of References 01/09/14 183
  184. 184. Final Key Points on the Kotter Method • Many thought leaders in the world of change management and change leadership are now speaking vociferously about the importance of the emotional dimension of leadership. • Daniel Goleman and others have stressed the importance of the leader's ability to articulate a message that resonates with their followers' emotional reality and their sense of purpose, and thus motivate them to move in a specific direction. 01/09/14 184
  185. 185. Final Key Points on the Kotter Method • In "Making Change Real - The Heart of Change: Real-Life Stories of How People Change Their Organizations" • John Kotter, with the help of co-author Dan Cohen, a partner at Deloitte Consulting, illustrates how his eight-step approach to change management has worked in over 200 organizations from 25 to 250,000 people 01/09/14 185
  186. 186. Why Does Change Fail? • 70% of Almost All Business Change Efforts Fail • Here is an average Transformational Success Rate Chart Comparing the Leading Methodologies and Companies that develop their own methods 100% 89% 78% 80% 60% 40% 30% 20% 0% S U C C E S S ADKAR 01/09/14 F A I L S U C C E S S KOTTER F A I L S U C C E S S F A I L COMBO OF ADKAR & KOTTER F A I L = Success = Failed S U C Using non-Trained Change People & Your 186 Methods Own
  187. 187. The Kotter Methodology From a Consultants View • As change management consultants we review to see if PEOPLE are aligned in support to achieve the operations and corporate strategy? strategy • Change management strategies regarding the people element include reviewing data, and performing Assessments • Is the firm providing the training for people to be able to achieve the strategy and improve the structure? • Is the firm coaching people to develop the skills to continually change and improve? 01/09/14 187
  188. 188. The Kotter Methodology From a Consultants View • Does the firm have the right leadership traits necessary for a high performance industry leading business? business • Are all the right people involved, well informed and focused involved on the right things? • Which people communicate with each other, and how are they treated? • Further essential elements of the companies change management model and change management plans are reviewed and include considering Real DATA 01/09/14 188
  189. 189. Review of Key Objectives & Critical Success Factors • What makes our company unique • What makes our company successful • Shared vision, Integration of O.D./People Solutions, HR and Operations • Proven Design, Performance & Change Methodology 01/09/14 189
  190. 190. John Kotter - 8 Critical Steps to Success • • • John Kotter Videos Segments 1-6 Kotter ASSESSMENTS 01/09/14 190
  191. 191. A Developing & Implementing A Transformational Strategy for ERP Systems such as SAP, Oracle, or Medical Systems like NextGen, & Centricity • Deloitte’s EVD (Enterprise Value Delivery, Delivery which is the next System to Review 01/09/14 191
  192. 192. Deloitte’s EVD (Enterprise Value Delivery) 01/09/14 192
  193. 193. R Fierson, Human Capital-ROI D. Bennett SVP Finance MASCO & Deloitte Consulting in Cooperation Enterprise Value Delivery for Oracle 2.0 01/09/14 EVD Education for the MASCO-BCG Business Transformation Team Program Team August 2007-9 193
  194. 194. Deloitte’s EVD Overview: ERP Critical Success Factors Experience has shown that there are twelve critical success factors for creating, maximizing, and sustaining the benefits of an ERP-enabled transformation program 01/09/14 S ERP U C C E S S 194
  195. 195. Key EVD Questions to Answer Today • What type of method is EVD for ERP? • What are the anchor threads? • What are the exit criteria for each phase? • How are we applying EVD on this project? 01/09/14 195
  196. 196. Key Terms to Know • SCOPE • APPROACH • DELIVERABLE • METHODOLOGY • WORKPLAN 01/09/14 196
  197. 197. Content EVD Overview • Content – ERP Critical Success Factors • What is EVD? – What are the benefits of using EVD? EVD Concepts – – – – – – Phases Threads Modules Tasks, Cross-Thread Integration, and Deliverables Deliverable Samples and Templates Accelerators and Automated Tools Key Cross-Thread Integration Concepts – Design Approach • Requirements Traceability Model – BT2 Phase I Cross Thread Integration – Testing Types 01/09/14 197
  198. 198. Content Continued • BT2 Phase II Implementation Approach – – – – – Inputs and Considerations Design Build Deploy Operate Next Steps – EVD Training – Other Available EVD Information – EVD Help Q&A 01/09/14 198
  199. 199. EVD Overview: ERP Critical Success Factors Experience has shown that there are twelve critical success factors for creating, maximizing, and sustaining the benefits of an ERPenabled transformation program 1 Focus on capabilities and benefits, not just going live 2 Align the organization on the true destination 3 Achieve balanced people, process, and technology changes across all areas 4 5 6 Use the business case as a management tool Apply planning and program management practices throughout the program lifecycle Transition project roles to a way of life Successful large scale ERP-enabled transformation focuses on making certain that the critical success factors are addressed throughout the lifecycle starting with a cross-functional methodology. 01/09/14 199
  200. 200. EVD Overview: ERP Critical Success Factors 7 8 9 Build and leverage process expertise Extend capabilities beyond the ERP foundation Promote post-implementation commonality 10 Teach the organization to use new capabilities 11 Define metrics and manage to them 12 Assign clear ownership of benefits Successful large scale ERP-enabled transformation focuses on making certain that the critical success factors are addressed throughout the lifecycle starting with a cross-functional methodology. 01/09/14 200
  201. 201. EVD Overview: What is EVD for Oracle 2.0? Ns SAP 6 • EVD (Enterprise Value Delivery) for Oracle 2.0 is a business transformation method • The EVD method presents a robust collection of sample deliverables, detailed procedures, deliverable templates and accelerators, organized by project phase and thread • The three key components in the method are: –Deliverables – What is delivered on the project –Activities – How to create the deliverables –Accelerators (Tools) – An aid that expedites or simplifies the development of a deliverable (optional) The method will make the everyday project life easier for all of us! 01/09/14 201
  202. 202. EVD Overview: What is EVD for Oracle 2.0? Ns SAP 6 • EVD is supported by a rich collection of sample deliverables, detailed procedures, deliverable templates and accelerators, organized by project phase and thread • Project phases represent the progression of key groupings of activities in the project life cycle. Project threads relate to common themes of expertise that “cut across” each of the project phases. The method will make the everyday project life easier for all of us! 01/09/14 202
  203. 203. EVD Overview What are the benefits of using EVD? • Use the time-tested EVD method to: – Design a project plan that will facilitate project planning and execution with speed, quality, and thoroughness – Bring discipline, rigor, and order to the implementation of complex projects – Facilitate strong knowledge transfer EVD helps us collaborate with you and prepare you for a successful implementation! 01/09/14 203
  204. 204. EVD Concepts: Phases and Threads • The EVD method is a series of project phases and threads. Project phases are key groupings of activities that follow a progression through the project lifecycle. Project threads relate to common themes of Deloitte expertise that “cut across” each of the project phases. The nine EVD project threads are: The six EVD project phases are: • Vision • Plan • Design • Build • Deliver • Operate • Value (VL) 01/09/14 • People, Change and Learning (CL) • Process and Package (PP) • Business Intelligence (BI) • Information Technology (IT) • Security and Controls (SC) • Support (SU) • Tax (TX) • Project Management (PM) 204
  205. 205. EVD Concepts: Vision Phase Vision Plan Design Build Deliver Operate The purpose of this phase is to develop and document an understanding of the value of the project to the client 01/09/14 205
  206. 206. EVD Concepts: Plan Phase Vision Plan Design Build Deliver Operate The purpose of this phase is to initiate the project, identify the team, and develop a detailed project plan 01/09/14 206
  207. 207. EVD Concepts: Design Phase Vision Plan Design Build Deliver The purpose of this phase is to create the detailed design utilizing the outputs from requirements collection, design confirmation workshops and prototyping efforts 01/09/14 207 Operate
  208. 208. EVD Concepts: Build Phase Vision Plan Design Build Deliver The purpose of this phase is to configure and test the business and technical requirements established in the previous design phase 01/09/14 208 Operate
  209. 209. EVD Concepts: Deliver Phase Vision Plan Design Build Deliver Operate The purpose of this phase is to prepare the client for go-live by performing final system testing, user training, cut-over activities and creating or enhancing an internal help desk to support post go-live activities 01/09/14 209
  210. 210. EVD Concepts: Operate Phase Vision Plan Design Build Deliver Operate The purpose of this phase is to transition from a project environment to a day-to-day business operation 01/09/14 210
  211. 211. Enterprise Value Delivery: Project threads span the entire project lifecycle Vision Plan Design Build Deliver Operate Value – Focuses on helping an organization identify and realize the tangible and intangible benefits of an ERP software initiative so it can accurately evaluate the true business value and results. People, Change and Learning – Focuses on accelerating the client’s adoption of the changes and reducing the potential performance dip that accompanies a large-scale business transformation. The key components of this thread are: Change Leadership, Organization & Human Resources, and Learning. Process and Package – Applies Deloitte’s industry and implementation knowledge to implement enhanced or new business processes. The objective is to help an organization improve its business environment by identifying, designing, and implementing processes that correlate with its requirements. Business Intelligence – Focuses on organizing, tracking, developing, and delivering information, processes, and technology critical to business analysis and decision making. The goal of the BI thread is to ensure that the decision support solutions provide timely, dependable, logical, and flexible reporting and analytics to an organization. Information Technology – Focuses on creating the right technical environments to host the ERP software, including all legacy interfaces and support processes. The IT project team also defines the technical procedures and standards for all software applications and manages their development and implementation within the211 infrastructure.. client’s 01/09/14
  212. 212. Enterprise Value Delivery: Project threads span the entire project lifecycle Vision Plan Design Build Deliver Operate Securities and Controls – Focuses on the design and implementation of security and controls to ensure reliable financial reporting, operational efficiency and effectiveness, and compliance with laws and regulations. Tax – Focuses on the identification of tax requirements across the enterprise and development of integrated tax solutions.. Support – Focuses on achieving an optimal support solution for the client and emphasizes the analysis of post-go-live support needs, beginning with the earliest phases of the implementation. Many support models must be evaluated closely to determine the best fit, based on both immediate and long-term support needs.. Project Management – Focuses on providing the infrastructure and tools for planning, integrating, and managing the project. Another objective for this phase is to meet the client’s expectations within the approved scope, cost, and time.. 01/09/14 212
  213. 213. EVD Concepts: Modules • Modules are work packages that exist within phases and threads • Modules group related tasks and deliverables Vision Plan Design Build Deliver Operate • Each module describes the work approach and produces a series of related deliverables Value Value Develop Value Delivery Develop Value Delivery Roadmap Roadmap People, Change People, Change & Learning & Learning Implement Change Implement Change Management Strategy & Plan Management Strategy & Plan Develop Change Impact Develop Change Impact Assessment Approach Assessment Approach Process Process and Package and Package Define Overall Scope Define Overall Scope Components Components Identify Project Book Content Identify Project Book Content Business Business Intelligence Intelligence Assess Business Analytics Assess Business Analytics Information Information Technology Technology Define Technical Define Technical Infrastructure Requirements Infrastructure Requirements Security Security and Controls and Controls Develop Security and Controls Develop Security and Controls Approach Approach Tax Tax Redefine Tax Approach Redefine Tax Approach Support Support Project Project Management Management 01/09/14 Assess Support Organization Assess Support Organization Define Outsourcing Deal Define Outsourcing Deal • The modules for each thread are listed in this center section • This is an example of the modules in the Plan Phase Plan Project Plan Project 213
  214. 214. EVD Concepts: Module Map representation of the method that maps all modules by phase and by thread • Provides an overview of the method for content development and for sharing with the client • A Microsoft Excel file which can be downloaded and shared Example of the Module Map: • The Module Map should be read by phase – represented by the columns on the spreadsheet • The picture below represents the IT Thread Module Map • A visual 01/09/14 214
  215. 215. EVD Concepts: Module Map Thread Information Technology Vision Assess Applications Plan Design Build Deliver Define Technical Design Technical Support Non-Production Conduct Performance and Infrastructure Requirements Architecture Environments Stress Tests Assess Technical Define Conceptual Technical Build and Test Non- Build Software Development Build Technical Cutover Infrastructure Architecture Production Environments Programs Plans Example of the Module Map: Assess Data Conversion Procure Non-Production Install and Configure Bolt- Impact Environment Components On Tools Procure Bolt-On Tools Development Technical Develop Software Specifications Plan Software Development Define Configuration and Operation Strategies 01/09/14 Conduct Technical Tests Develop Operational and Monitoring Processes Design and Build Batch Deliver Production Schedule Environment Develop Technical Test Procure Production Approach Hardware Define Configuration and Support Operating Procedures Build and Test Production Environment 215 Operate
  216. 216. EVD Concepts: Tasks and Deliverables • Tasks – A task represents a single block of work and includes a step-by-step procedure for producing a task deliverable – A task is the basic unit of work and represents the third activity level in the method – Tasks includes these components: • Accelerators (Tools) – An aid that expedites or simplifies the development of a deliverable (optional) • sample deliverables and templates 01/09/14 216
  217. 217. EVD Concepts: Tasks and Deliverables • Tasks – Detailed Procedures – A set of steps that documents the process for completing a task (optional) • Roles – The types of individuals required to produce a task deliverable • Deliverables – Each task has an associated deliverable – Each deliverable may have a template and one or more samples that can be leveraged for its creation – EVD 2.0 contains sample deliverables and templates 01/09/14 217
  218. 218. EVD Concepts: Tasks and Deliverables Thread Phase Module Deliverable Module Samples, Templates Task 01/09/14 Task Deliverable 218
  219. 219. Enterprise Value Delivery Framework Identify tangible and intangible benefits of an ERP initiative Plan, integrate and manage the project Manage the project based on value Accurately evaluate, measure and track true business value and results Manage project scope, cost, and time Identify stage gates based on value Start with end in mind Evaluate, design and implement an optimal support solution Build organizational readiness and People, accelerate & Change adoption of the changes Project Management Learning Reduce potential performance dip due to a large scale business transformation Value Analyze post-go-live needs Transition from a project to a “way of life” Identify tax requirements across the enterprise Develop integrated tax solutions Leverage tax advantaged ERP and Supply Chain strategies Support Tax Business Process Transformation 360o Approach Process and Package Security and Controls Design and implement Imbed security & security and controls to controls into application Information ensure reliable financial deployment Technology reporting, operational efficiency, and regulatory compliance Design, Manage, operate, and support technical architecture 01/09/14 People, Change & Learning Business Intelligence Define the technical procedures and standards for all software applications Implement enhanced or new business process with ERP in mind Identify, design, and implement processes that correlate with the strategy Choose when you spend time & money Understand & govern critical data & information you need to run your business Organize, track, develop, and deliver critical information, processes and technology Ensure decision support solutions provide timely, dependable, logical and flexible reporting and analytics 219
  220. 220. Content EVD Overview – – – – – – – What is EVD? How does EVD differentiate us? What will EVD do for you? How is EVD different than ERP vendor methodologies? EVD History How is EVD 2.0 different than 1.0? When will EVD 2.0 Go-Live? EVD Concepts – – – – – – Phases Threads Modules Tasks, Cross-Thread Integration, and Deliverables Deliverable Samples and Templates Accelerators and Automated Tools 01/09/14 220
  221. 221. Content EVD Method Installation & Navigation Key Cross-Thread Integration Concepts – Design Approach and Requirements Traceability Model – Testing Types Next Steps – – – – – – – – EVD Training Expectations of You Submitting Sample Deliverables Providing Feedback Other Available EVD Information EVD Help EVD EA Deployment Champions EVD Thread Leads EVD Walkthrough – 01/09/14 221
  222. 222. EVD Installation Its time to install EVD on your laptop now! 01/09/14 222
  223. 223. EVD Method Navigation: Navigating the Phases, Threads, and Modules • To view the specific EVD phases, modules, and deliverables, click on the Modules link on the top right corner Phases are listed the top of the Module screen Modules are listed in the center of the screen Threads are listed on the left-hand side of the screen 01/09/14 223
  224. 224. EVD Method Navigation: EVD Phases • The EVD phases are listed at the top of the screen and allow you to view all modules, deliverables, accelerators, and detailed procedures for each phase To view the modules in the Vision Phase, click on the Vision box 01/09/14 224
  225. 225. EVD Method Navigation: EVD Threads • The EVD threads are listed at the left-hand of the screen and allow you to view modules, deliverables, accelerators, and detailed procedures within that thread by each phase To view the modules in the Value Thread and within the Vision Phase, click on the Value box 01/09/14 225
  226. 226. EVD Method Navigation: EVD Modules • The modules for a particular phase and thread are listed in the center of the screen To view a specific module in the Value Thread and within the Vision Phase, click on the module title The module objective and other details will appear at the bottom of the screen 01/09/14 226
  227. 227. EVD Method Navigation: EVD Tasks • Each module will have associated tasks which can be viewed by clicking on the Tasks link in the lower right-hand corner To view the tasks associated with a specific module, click on the Tasks link in the lower left-hand corner The associated tasks will appear in the bottom center of the screen 01/09/14 227
  228. 228. EVD Method Navigation: EVD CrossThread Integration • Within a module, the Module Information Flow link will provide the cross-thread integration, showing key inputs and output with other threads To view the inputs and outputs associated with a specific module, click on the Module Information Flow link in the lower left-hand corner The associated inputs and outputs will appear in the bottom center of the screen 01/09/14 228
  229. 229. EVD Method Navigation: Deliverables • Sample deliverables can be downloaded by navigating through the Deliverables link at the top of the screen. To view sample deliverables you must also click on the appropriate phase and thread To download a sample deliverable within the Vision Phase of the Value thread, click on: The sample deliverables will appear at the bottom left-hand corner of the screen. 01/09/14 1) 2) 3) 4) 5) Deliverables Vision Value The deliverable name Sample Deliverables 229
  230. 230. Content EVD Overview – – – – – – – What is EVD? How does EVD differentiate us? What will EVD do for you? How is EVD different than ERP vendor methodologies? EVD History How is EVD 2.0 different than 1.0? When will EVD 2.0 Go-Live? EVD Concepts – – – – – – Phases Threads Modules Tasks, Cross-Thread Integration, and Deliverables Deliverable Samples and Templates Accelerators and Automated Tools 01/09/14 230
  231. 231. Content EVD Method Installation & Navigation Key Cross-Thread Integration Concepts – Design Approach and Requirements Traceability Model – Testing Types Next Steps – – – – – – – – EVD Training Expectations of You Submitting Sample Deliverables Providing Feedback Other Available EVD Information EVD Help EVD EA Deployment Champions EVD Thread Leads EVD Walkthrough – 5PM 01/09/14 231
  232. 232. Design Approach Deloitte’s IndustryPrint™ for Oracle Deloitte’s IndustryPrint™ for Oracle incorporates the leading best practices as a starting point for BCG’s business transformation effort. O Perform Order Management IndustryPrint™ Benefits O-020 Capture Orders O-150 Manage Collections O-030 Process Orders O-100 Pack Orders O-160 Manage Rebates O-040 Calculate Order Price and Maintain Customer/Order Data O-110 Plan/Manage Shipping/Delivery O-170 Manage Chargebacks O-050 Manage Customer Credit Exposure O-120 Ship/Deliver Orders O-190 Manage Returns and Exchanges O-060 Manage and Track Orders O-130 Bill Revenue O-070 Manage Backorders Process O-090 Pick Orders O-140 Process Receipts  Business Process Models: – – – – – – – – Provide a visual description of the business process Provide Establish a common language for team members Establish a common language for team members Link processes and Oracle application functionality Link processes and Oracle application functionality Illustrate and support issue resolution Illustrate and support issue resolution  Industry Leading Practices: – Leverage our industry and process knowledge – Leverage our industry – Provide a repository of solutions – Provide  Document Templates: O-020 Capture Orders Receive Customer Planning and/or Shipping Schedule Create Subsequent Delivery Free of Charge (FOC) Order Create Inter-company Order Process Consignment Fill-up Determine/Confirm Customer Order Requirements Check/Create Schedule Line Agreement Create Swap or Exchange Order Create Cash Sale Order Determine Order Type Create Tooling/ Support Equipment Order Create Literature Order Create Third-party Order Create Prototype Order Create Sample Order Create Credit/Debit Memo Request Create Service Contract Order Create No-charge Order Create Stock Transfer Order – Support consistent project standards – Support – Facilitate maintenance and reuse – Facilitate maintenance and reuse Process Consignment Issue Create Standard Order Subprocess Create Customer Contract Order Process Consignment Pick-up Mapped Directly to Oracle Screens Activity Level 01/09/14 232
  233. 233. Design Approach Processes Mapped in Three Levels O P e r fo r m O r d e r M a n a g e m e n t P P r o c u r e M a t e r ia ls a n d S e r v ic e s O -0 2 0 C a p tu r e O rd e r s O -0 9 0 P ic k O r d e r s O -1 5 0 M a n a g e C o lle c t io n s P -0 1 0 D e v e lo p P r o c u r e m e n t S tra te g y P -0 7 0 C r e a te a n d M a in ta in P u r c h a s e R e q u is itio n s P -1 3 0 P e r fo rm I n c o m in g Q u a li t y A s s u r a n c e O -0 3 0 P ro c e s s O rd e rs O -1 0 0 P a c k O rd e rs O -1 6 0 M a n a g e R e b a te s P -0 2 0 Im p le m e n t P ro c u r e m e n t S tr a te g y P -0 8 0 P u r c h a s e M a t e r ia ls a n d S e r v ic e s P -1 4 0 D e t e r m in e D i s c r e p a n t M a te ria l D is p o s itio n O -0 4 0 C a lc u la t e O r d e r P r ic e a n d M a in ta in C u s to m e r /O r d e r D a t a O -1 1 0 P la n / M a n a g e S h ip p in g / D e liv e r y O -1 7 0 M a n a g e C h a rg e b a c k s P -0 3 0 D e v e l o p a n d M a in t a i n P r o c u r e m e n t P o lic ie s P -0 9 0 M o n it o r a n d M a n a g e S u p p lie r C o n tr a c ts P -1 5 0 E n a b le P a y m e n t O -0 5 0 M a n a g e C u s to m e r C re d it E x p o s u re O -1 2 0 S h ip / D e liv e r O r d e r s O -0 6 0 M a n a g e a n d T ra c k O rd e rs O -0 7 0 M a n a g e B a c k o rd e rs Process Level Process Level P -0 4 0 M a in ta in S u p p lie r C e r t if ic a t io n a n d M o n it o r P e r f o r m a n c e P -1 0 0 M a n a g e S u p p lie r C o n s ig n m e n t S t o c k P -0 5 0 M a n a g e P ro c u re m e n t C o n t ra c ts a n d R e q u e s ts fo r Q u o t a t io n P -1 1 0 P ro c u re S u b c o n tra c tin g P -1 7 0 M a n a g e S to r e s / M R O H a n d lin g O -1 4 0 P ro c e s s R e c e ip ts P -0 6 0 M a n a g e P ro c u re m e n t C o n t ra c ts a n d R e q u e s ts fo r Q u o t a t io n ( N o n P ro d u c t io n M a te r ia l) P -1 2 0 R e c e iv e M a t e r ia ls a n d S e r v ic e s process, and Activity. P -1 6 0 P ro c u re W a s te R e m o v a l S e r v ic e s O -1 3 0 B ill R e v e n u e Processes are mapped in three levels of detail: Process, Sub- O -1 9 0 M a n a g e R e tu r n s a n d E xchanges P -0 8 0 P u r c h a s e M a t e r ia l s a n d S e r v i c e s P -1 0 0 M a n a g e S u p p lie r C o n s ig n m e n t S to c k -0 7 0 re a te a n d a in t a in u rc h a s e e q u is itio n s C r e a t e P O M a n u a lly W i t h ’ T e x t M a t e r ia ls ’ P M P C R Q -0 5 0 anage ro c u re m e n t o n tra c ts a n d e q u e s ts fo r u o ta tio n R e le a s e S c h e d u lin g L i n e f r o m S c h e d u l in g A g re e m e n t P M P C R Q P M -0 6 0 anage ro c u re m e n t o n tra c ts a n d e q u e s ts fo r u o ta tio n ( N o n ro d u c tio n a t e r ia l ) C r e a t e a n d R e le a s e C o n tra c t O rd e r M M M O -0 5 0 anage a n u fa c tu rin g p e r a tio n s P C M P R -0 7 0 re a te a n d a in t a in u rc h a s e e q u is itio n s R e c e iv e O r d e r A c k n o w le d g m e n t P ro c e ss O rd e r A c k n o w le d g m e n t T r a n s m it O r d e r t o S u p p l ie r M o d if y P u r c h a s e O rd e r D e t e r m i n e A lt e r n a t e M a t e r ia ls a n d A p p ro a c h e s R e l e a s e S c h e d u li n g L i n e f r o m S c h e d u l in g A g re e m e n t P C M P R C r e a t e P O M a n u a l ly W ith ’T e x t M a te ria ls ’ R e c e iv e O r d e r A c k n o w le d g m e n t R e c e iv e A d v a n c e S h i p p i n g N o t i f i c a t io n (A S N ) S e l e c t N e w S u p p li e r P u r c h a s e U s in g P ro c u re m e n t C a rd D e f in e V e n d o r/M a te r ia l C o n s ig n m e n t P a ra m e te rs N o te V e n d o r fo r C onsum ed C o n s ig n m e n t G o o d s D e f in e C o n t r a c t f o r C o n s i g n m e n t R e c e ip t s C a l c u la t e C o n s u m e d C o n s ig n m e n t fo r P a y m e n t w /o In v o ic e Sub-process Level Sub-process Level P roc e s s A d va n ce d S h i p p i n g N o t i f i c a t io n (A S N ) V e r if y R e q u ir e m e n ts a n d T e r m s w it h N e w S u p p li e r C r e a t e R e le a s e O r d e r t o R e p l e n is h S t o c k s (b y C u s to m e r) M o n ito r O rd e r S ta tu s T r a n s m it R e m i n d e r L e tte r C a n c e l O r ig i n a l P u rc h a s e O rd e r C r e a t e R e le a s e O r d e r t o R e p l e n is h S t o c k s (b y V e n d o r) R e s o lv e O rd e r Is s u e s w it h S u p p l i e r T r a n s m it D u n n i n g L e tte r I d e n t if y R e q u i r e m e n t s A ll o w i n g P r o c u r e m e n t C a rd U s a g e R e c e i v e D e li v e r i e s i n t o In v e n to ry (N o t Y e t O w ned) C re a te a n d R e le a s e C o n tra c t O rd e r P ro c e s s O rd e r A c k n o w le d g m e n t C r e a t e P la n t - t o - P la n t T ra n s fe r O rd e r C re a te a n d P ro c e s s P u rc h a s e O r d e r Yes T ra n s m it O rd e r to S u p p l ie r Is O rd e r A c k n o w le d g e m e n t R e q ir e d ? No Is s u e Id e n t ifie d ? No M o n ito r O rd e r S t a tu s Yes C r e a t e P l a n t - t o - P la n t T r a n s fe r O rd e r Activity Level Activity Level R e s o lv e O rd e r Is s u e s w ith S u p p lie r M o d ify P u rc h a s e O rd e r Yes C a n T e rm s b e A lte re d ? No Is S u p p lie r M e e tin g C o m m it m e n ts ? No Y es C re a te a n d P ro c e s s P u rc h a s e O r d e r C o n t 'd . 01/09/14 BCG-Print C o n t 'd . C o n t'd . 233 R e c e i v e a n d B i ll In v o ic e W ith o u t G o o d s R e c e ip t o r P .O .

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