Transforming Organisations:- Why Organisations Fail?
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The document outlines 8 common errors that can cause organizational change efforts to fail: 1) allowing too much complacency, 2) failing to create a powerful guiding coalition, 3) underestimating the power of vision, 4) undercommunicating the vision, 5) permitting obstacles to block the new vision, 6) failing to create short-term wins, 7) declaring victory too soon, and 8) neglecting to anchor changes in the corporate culture. These errors can result in new strategies not being properly implemented, acquisitions not achieving expected synergies, reengineering taking too long and costing too much, and frustration among employees that slows down implementation progress and leads to unnecessary resistance.
Transforming Organisations:- Why Organisations Fail?
- 1. TRANSFORMING ORGANIZATIONS: WHY FIRMS FAIL? DIXON D. PALETT (M-14-04) ISHAN PARASHAR (M-14- 06) FACULTY : DR . JAYA SRIVASTAVA
- 2. INTRODUCTION Amount of significant, often traumatic, change in organizations increasing. Trend of changes likely to continue. To an extent downside of change is inevitable. Significant amount of waste and anguish witnessed recently is avoidable
- 3. ERROR #1:- ALLOWING TOO MUCH COMPLACENCY
- 4. What causes complacency? Too much past success Lack of visible crises Low performance standards Insufficient feedback from external constituencies What causes this error? Overestimation of one’s capability to change the organization Underestimation of inertia of people in comfort zone Not recognizing actions that can reinforce status quo Lack of patience Example:- Adrien thought he could get the people in the company “induced, pushed or replaced” to implement change but saw a host of quality initiatives fail due this error.
- 5. ERROR #2:- FAILING TO CREATE A SUFFICIENTLY POWERFUL GUIDING COALITION
- 6. Why coalition is needed? “One man army” doesn’t work. Most successful cases, coalition is always powerful Weak committee efforts and initiatives get undermined What causes this error? Underestimating difficulties of changing. Little history of transformation Low knowledge about the influencers in an organization Example:- Claire was aware of the change needed and knew urgency needed but the initiatives faded into oblivion within two years as the task force selected wasn’t proper.
- 7. ERROR #3:- UNDERESTIMATING THE POWER OF VISION
- 8. Why is it needed? Vision helps to direct, align and inspire action Needed to stir up the right kind of energy needed Behind scene manipulation and avoiding discussions lead to chaos and confusion What causes this error? Underestimating the value of a proper vision Insufficient communication of the vision “Whenever you can’t describe it in 5 mins and get a reaction of understanding and interest, you’re in trouble” Example:- Conrad made and distributed 4 inch thick notebook detailing procedures, goals, methods and deadlines but without telling where it was leading and as result could neither rally them together nor inspire change.
- 9. ERROR #4:- UNDER COMMUNICATING THE VISION
- 10. Why is it important? Short term sacrifices needed for change No sacrifice till people know the end result and benefits thereof Communication = word + deed What causes this error? Good vision but only few meetings or memos Many speeches by head but managers silent Not adhering to “walk the talk” Example:- 1980 CEO earlier though communication done was plenty but realized later it was short by miles and many decisions appeared inconsistent with their communication (hypocritical jerks)
- 11. ERROR #5:- PERMITTING OBSTACLES TO BLOCK THE NEW VISION
- 12. Why is it important? Implementation of change requires action from a large number of people Avoiding obstacles , disempowers employees and undermine the change What causes this error? Refusal to adapt to new circumstances Demands that are inconsistent with transformation Concern that one cannot blend in with the change and achieve expected operating results Narrow job categories – undermines efforts to increase productivity Compensation or performance appraisal s/m can force to choose b/w new vision and their self interest. Example:- Ralph – HR s/m ( inconsistent ) -Din’t believe in need for change -concerned he could produce change - Expected operating results
- 13. ERROR #6:- FAILING TO CREATE SHORT-TERM WINS
- 14. Why is it important? Momentum of efforts to change is lost if there are no short term goals to meet and celebrate. People expect evidence of results within 6 – 18 months Urgency level drop – when knowing it takes long time Might give up / join resistance What causes this error? Assumption that good things will happen focusing grand vision forgetting short-term Example:- Nelson – big ideas person + 2 colleagues Inventory control – to reduce inventory cost w/o stock outages Divisional controller – needed to see immediate result ( ans : time) IC model = new s/w + h/w
- 15. ERROR #7:- DECLARING VICTORY TOO SOON
- 16. Why is it important? Risk until changes sink down deep into culture ( 3-10yrs) Useful changes disappear Premature victory celebration stops momentum What causes this error? Urgency level is not intense enough Guiding coalition is not powerful enough Idealistic change initiators Self serving change resisters War is over and troops should be sent home (Once sent home , reluctant to return ) Reengineering theme – consultants were paid and thanked with first major project completion w/o checking if original goals were accomplished / acceptance by employees Example:-
- 17. ERROR #8:- NEGLECTING TO ANCHOR CHANGES FIRMLY IN THE CORPORATE CULTURE
- 18. Why is it important? Change sticks only when it becomes “ the way we do things around here “ Root in as social norms and shared values Degradation if pressure associated is removed If employees are left on their own , inaccurate links are created What causes this error? Linking performance improvements with flamboyant style instead of strategy Choice of successors (less seasoned candidates) Insensitivity / ignorance to culture Economic orientation Analytic orientation Example:- Charismatic Coleen’s lesson imbedded in cluture as “ value extroverted managers “ instead of “ love thy customer”
- 19. SUMMARY : COMMON ERRORS Allowing too much complacency Failing to create a powerful guiding coalition Underestimating the power of vision Under communicating the vision by a factor of 10 ( or 100 or even 1000) Permitting obstacles to block the new vision Failing to create short-term wins Declaring victory too soon Neglecting to anchor changes firmly in the
- 20. SUMMARY : CONSEQUENCES New strategies aren’t implemented well Acquisitions don’t achieve expected synergies Reengineering takes too long and costs too much Downsizing doesn’t get costs under control Quality programs don’t deliver expected results Frustration in employees Slow down on implementation Unnecessary resistance
- 21. CONCLUSION Errors are not inevitable Awareness and skill can avoid errors to a large extend Understand why organizations resist needed change Find appropriate multistage process to overcome destructive inertia Leadership is required in a socially healthy way more than just good management.
- 22. REFERENCE Reading material : Transforming Organizations : Why firms fail (John P. Kotter )
- 23. THANK YOU
Editor's Notes
- #4: Plunging ahead without establishing a high enough sense of urgency in fellow managers and employees.
- #5: “Enough with the preliminaries let’s go with it.”
- #7: Individuals alone, no matter how competent or charismatic, never have all the assets needed to overcome tradition and inertia except in very small organizations.
- #8: Urgency and strong guiding team is necessary but none is more important than a sensible vision.
- #9: Urgency and strong guidance team are necessary but none is more important a sensible vision. List of confusing, incompatible and time consuming projects that goes nowhere at all. Mid-level British manufacturing firm SE gave 30 minutes lecture on vision but the basic direction/vision elements were buried in it.
- #11: People unhappy with current status quo won’t be willing to make sacrifices many a times unless the believe potential profits from change are attractive it is actually possible to be done.
- #13: Ralph didn’t reward ideas – for changing the vision He allowed HR systems to remain intact even when it was inconsistent with new ideas. He didn’t believe that his company needed this change [[Cynicism is an attitude or state of mind characterized by a general distrust of others' motives. ]]
- #15: Create short term goals Eg – pressure could’ve forced a few money saving course correction and speeded up partial implementation
- #19: -- Conscious attempt to show people how specific behaviors and attitude is required to improve performance