Tuesday, February 25, 2014

Internal and External Change Agents

When choosing between internal or external change agents, organizations should consider following advantages and disadvantages of each option:

Advantages of Internal CAs:
- Possess better knowledge of the organization and are more quickly available.
- Have more control and authority and require lower out-of-pocket costs.

Disadvantages of Internal CAs:
- May be too close to the problem and may hold biased views.
- May create additional resistance if viewed as part of the problem.
- Must be reassigned, so that they are not available for other work.

Advantages of External CAs:
- Have special experience in dealing with diverse problems.
- Have more objective views of the organization and its problems.
- Possess more technical knowledge, skills and competence.

Disadvantages of External CAs:
- Require out-of-pocket costs.
- Have less knowledge of the organization and require longer start-up time.

Wednesday, November 15, 2006

Cultural Change without Top Support


Does anyone have any comments or experience about how it is possible to change the culture within a department without support from the top. In fact the very top may actually be part, in no way all of, the cultural problem.

To explain further:

Cultural issues have been identified such as fear of top, lack of innovation, mistrust, low motivation, negativity

Managers and sample of staff are happy to try to work on this

Senior management who will sanction any action are seen to be part of the problem

The question is whether it is possible to effect any form of cultural change without support from the top?

If anyone has any comments to start this discussion I would be very grateful.

Sunday, April 02, 2006

Change Management Books

I asked the members of an OD list to name their favorite change management books. You can find the list at http://home.att.net/~nickols/change_biblio.pdf

Sunday, November 06, 2005

Kofi Annan takes steps to reform UN management

Pressing his campaign to improve United Nations management, Secretary-General Kofi Annan today named Rajat Kumar Gupta, Senior Partner Worldwide and former Managing Director of the global consulting firm McKinsey & Company as his special adviser. Mr. Gupta "will help to ensure that the overall management reform programme is in line with best global practice and provide focused, specialist assistance on key issues of concern," the spokesman said.

His senior management chief laid out an immediate two-track policy of whistle-blower protection and financial disclosure, including the establishment of an ethics office. Under the new system, the worth of gifts that UN officials will be required to disclose will drop from $10,000 to $250, and financial disclosure forms will be required from a far broader spectrum than the current range of assistant secretary-general and up.

These reforms, long in the making, have gained added momentum in light of the independent inquiry into charges of mismanagement and corruption in the UN-administered Iraq Oil-for-Food Programme.
Under the new system, the worth of gifts that UN officials will be required to disclose will drop from $10,000 to $250, and financial disclosure forms will be required from a far broader spectrum than the current range of assistant secretary-general and up.

The UN is seeking out a wide spectrum of views on the issue from the staff council, the global accounting and consulting firm Deloitte Consulting LLP, and the World Bank, which has gone through an even more lengthy process and review than the UN Secretariat, Christopher Burnham said. "I think it is very important that we share what they have learned and what best practices they have identified," he said. "The United Nations does not presently have a functioning whistle-blower protection system. We have an organizational culture whereby staff members do not come forward to report wrongdoing owing to fears that their careers will be on the line or some other retaliation." More

Friday, October 28, 2005

Change Management Cooking Class

95% of the population worries about change. The remaining 5% are managers who wish to implement change. Imagine your relief if there was such a thing as a recipe for successful change management. No more doubts, everyone would be motivated and production wouldn’t be at risk. The cooking class in this article may not guarantee you a Michelin star, but if applied properly, you will save yourself a lot of time and worries.

Click here to download the article (pdf format)

Thanks in advance for your feedback!

Thursday, June 02, 2005

The Cost Cutting Ritual

Does anyone recognise this????

The Cost Cutting Ritual (non-crisis)
(NB In a crisis this ritual can be bypassed and usually is)

Having been through this (painful) experience a few times it is apparent that there is a 3 step ritual that must be completed in sequence if one is to achieve real significant costs savings.

I describe the three steps as
1. Count the paper clips
2. Point the finger
3. Face reality

In "Count the paper clips" management attempts to save money by making what are essentially petty and ultimately ineffective gestures. Examples are move to recycled paper, use cheaper pens, cut out business class travel, stop company phones, etc.. These are picked because they are seen as easy, painless(?) changes, that do not threaten any significant power base.
These are ineffective for a number of reasons. The first is that when you look at the overall cost base they represent only a small percentage of total costs and even if major inroads can be made to them (and this is rarely the case) it will have only a small effect on the bottom line. Short term there may appear to be gains but these are usually quickly eroded. For example cutting out business class travel may well result in more overnight stays or higher costs for changing travel arrangements.

The second reason they are ineffective is because they alienate the core of the company, its staff. They see small things being taken from them and as a result often withdraw their goodwill, with a negative cost impact.

So having "Counted the paperclips" and not achieved the objective the stakes get raised and we move to "Pointing the finger". This phase is usually looking at what are seen as overheads and cross charges. In essence management looks to someone else to make the saving and thus charge the business less. Examples are looking at the cost of a Finance Department and deciding that something like expense processing is too high. So the central team is cut to a minimum and the work, that still needs doing, is distributed to team secretaries. This may mean some staff cuts but usually among junior, relatively inexpensive staff. The cost of Finance drops as to the allocated charges, but a business unit overtime will need more secretarial support, control of expenses is likely to be slacker and probably staff unhappier with the process.
There is often a stage where the basis of allocation is examined closely and changed, but in the end the same total cost has to be allocated across the set of business units, just maybe allocated differently.

There are many possible examples, but they all have they all have similar impact, a reduction in central costs and this allocated charges with a compensating increase in "local" costs. Net impact over the medium term is usually minimal and less than desired.

Finally we get to the crux of the matter and "Face reality". In this, having tried the easy(?) options and failed the business faces up to cutting the drivers of significant costs which constitute the key power bases of the company. In business like financial services with high human capital this means cutting big jobs, front office jobs, the roles that require support. Having worked in such environments there is often a multiplier effect and that is that the total cost of a business is some near-constant multiplier of front office salaries, albeit the multiplier is specific to that company. For example with a 2.5 multiplier cutting a £100k job will lead to £250k saving.

Other businesses will have other key drivers for example plant and property and it is these that need to be tackled at this stage.

These are not easy savings but are possible and sustainable and management only reaches this point by having tackled the previous two steps. in anything other than a crisis, when drastic steps are required, trying to jump straight to "Facing reality" is extremely hard as the other ineffective savings will be offered as a smoke screen in order to protect key power bases.

In summary

Count the Paper Clips

Typified by: Use of cheaper supplies/services

Results: Minimal saving after initial impact
Loss of goodwill and thus increased costs

Point the Finger

Typified by: Some reduction in central functions
Some reduction in allocated cost

Results : More local resource needed
Compensating local cost
Reduced service(?)

Face Reality

Typified by: Cuts in key drivers

Results: Reduction in local and associated costs
Attacks key power bases
Is sustainable

Wednesday, April 06, 2005

Change Management Survey

Different concepts of Change Management have been around for the last twenty years, and depending on background, practitioners, such as consultants and managers have applied different tools and methodologies to facilitate change in organizations, teams and individuals.

To find out what is the state of the art, in 2004 the Change Management Toolbook run a survey o­n the future and practice of Change Management.The survey which ran from August until September 2004, queried participants’ views o­n the application of Change Management, the competitive advantage of its different methodologies, its drawbacks and its prospects. In total there were 562 respondents, covering private business, public services, development agencies, NGOs, universities and consultants. Further, 45% of the survey’s responses come from outside North America and Europe, indicating that Change Management has no borders and is relevant throughout the world.

The central target of this survey was to get an idea on whether Change Management will still be talked about in 10 years and whether the concepts will become mainstream. There is good news! The Change Management sector will grow. The respondents believe in the validity of Change Management approaches; the results are striking. 99% of all respondents agree that in the future Change Management skills will be in higher demand than today. This is confirmed by 94% of all respondents who consequently disagree with the idea that Change Management is a fashion which will not survive for much longer.

Another outcome of this survey, came as a surprise to us because of its clarity. 89% of all respondents consider Change Management as a universal concept. Deep rooted in concepts of democracy at the workplace and the stakeholder participation, with large parts of the concept having been developed in the US and in Western Europe, it is not perceived as a Western paradigm. To our surprise, there isn’t a significant variation over geographical background, position or length of experience with Change Management approaches. Interesting though, that people from “Western cultures” (Europe, Australia, North America) are slightly, but not significantly, more critical of the universal applicability of Change Management concepts than respondents from “Eastern” or “Southern” cultures.

The report is available from http://www.change-management-toolbook.com/res/Reports.html

Tuesday, February 15, 2005

Nobody needs Continuity Champions

Thomas A. Stewart, the editor of Harvard Business Review, signals a new trend on the horizon: continuity champions. Although change is sexy, challenging and a job for heroes, it has also a way of swalowing a company's attention and resources. Still, it's more glamorous to be Napoleon (who gained and lost an empire in little more than a decade) than Hadrian (who gave the Roman empire a stability that endured for generations). Therefore, according to Stewart, continuity needs and deserves champions, too. They should:

  • Protect the image of core business,
  • Identify the forces of continuity,
  • Keep legacy business sound,
  • Maintain communication between new and legacy business, and
  • Define what lies outside the reach of change.

I would argue the standard vested interests supported by mankind's reluctance to change, particularly when not involved in the change, are strong enough to prevent change from occurring too fast.

Can you remember reading about a company adapting too fast to change?

Wednesday, December 29, 2004

Bestselling Books on Organizational Change

Tuesday, December 07, 2004

Values-Based CM

I've been thinking where I should create a review of the interview with IBM CEO Samuel J. Palmisano in the HBR of December 2004. I believe what Palmisano says is primarily his organizational CM vision so I've put it here. However the interview is equaly important for people having an interest in leadership, value based M., corporate responsibility and human capital M.

In the interview Palmisano describes how he dealt with the situation that he needed to change IBM in a period that business was (finally) doing well after the period in which Lou Gerstner brought the company back from the brink in the 80s.

It was necessary to get different parts of the organization working together so IBM could offer customers integrated solutions (hardware, software, services ands financing) at a single price on a global scale. Also Palmisano wanted to enable decision-making as deep as possible into Big Blue IBM and last but not least to revitalize the perception of IBM's workforce that working for IBM makes a difference.

Palmisano decided to put values in the center of his CM approach, which led to what he calls a Values-Based M. system. A crucial role in the entire process was played by a three-day discussion forum on IBM's intranet, which was called "ValuesJam", in which an estimated 50.000 of IBM's employees posted nearly 10.000 comments about the proposed draft values for IBM.

By thus empowering IBM's own workforce, Palmisano succesfully gained momentum and support for the changes he wanted to implement, ensuring people make the right decisions in the right way. An by 'right' he's not only talking about ethics and legal compliance, but also about strategy, brand and culture. Looking back, Palmisano thinks values inject balance in the company culture and M. system: balance between the short-term transaction and the long-term relationship, balance between the interest of shareholders, employees and clients.