The Fundamentals of Enterprise-Wide Change
Enterprise-Wide Change (EWC) has a major impact on the entire organization and is usually strategic, large-scale, chaotic, complex, and/or radical in nature.
Examples of Enterprise-Wide Change initiatives and activities include
Installing an Enterprise Resource Planning system (ERP)
Creating a new high-performance culture
Focusing on business and operational excellence
Conducting mergers, acquisitions, joint ventures, and alliances
Installing major new technologies
Executing strategic and business plans
Becoming more customer-focused
Becoming a global company
Improving customer service
Desiring major growth and expansion
Downsizing, outsourcing, and major cutbacks
Restructuring and redesigning the organization
Improving Six Sigma and quality
Changing supply-chain management
Developing and deploying major new products
Transforming an entire enterprise
Significantly increasing creativity and innovation
Creating new businesses
The Systems Thinking Approach
A system is a set of components that work together for the overall benefit of the whole.
Systems Thinking is
A way of seeing the whole as primary, the parts as secondary
A higher-level way to view, filter, and mentally frame what we see in the world
A worldview that considers the whole entity or enterprise, along with its fit and relationships to and with the environment
A tool for finding patterns and relationships among subsystems and learning to reinforce or change these patterns to achieve specific outcomes
A shift from seeing elements, functions, and events to seeing processes, structures, relationships, and outcomes
The Uniqueness of Enterprise-Wide Change
Six distinct characteristics of EWC separate it from less comprehensive change initiatives:
1. Major structural and fundamental impact—EWC has a major structural and fundamental impact on the entire organization or business unit in which change is to occur. Energetic leadership is required at multiple levels to succeed.
2. Strategic in scope—The change to be effected is strategic. It links to the business’s unique positioning in a dynamic and highly competitive marketplace (including the public sector marketplace).
3. Complex, chaotic, and/or radical—The change is complex and chaotic in nature, or may constitute a radical departure from the current state—even to the point that desired outcomes and approaches to achieve them may be unclear.
4. Large-scale and transformational—The scale of desired change is large and will result in a significantly different enterprise. It will be transformed.
5. Longer timeframe—The desired change will require years of focused attention with multiple phases and stages.
6. Cultural change—The rules of the game change: the norms, guideposts, policies, values, and guides to behavior.
Any large-scale Enterprise-Wide Change will entail at least some of the following characteristics:
Multiple transitions
Incomplete transitions
Uncertain future state(s)
Multiple changes over long periods of time
Changing priorities
Conflicting demands
Changing players
Resistance to change
Loss of focus
Inadequate resources
False starts
Derailments
Delayed payoffs
Ambiguity/awkwardness
The Secret of Constant Growth
The secret of constant growth means that executives and managers have two full-time jobs:
1. Serving today’s business in a stressful, dynamic, consumer-oriented world where more demanding customers are driving products and services toward commodity pricing
2. Creating future business amidst the pressure of the daily business for current results
The secret of constant growth is simple:
Work IN the business and you feed yourself today
Work ON the business and you feed yourself next year
75 Percent of All Major Changes Do Not Succeed
Fragmented Reengineering Fads
A number of popular management/business books advocate incomplete and fragmented tactics that make change sound simple and easy. Business process reengineering, to take just one example, was popularized in Michael Hammer and James Champy’s 1993 book Reengineering the Corporation: A Manifesto for Business Revolution.
For most enterprises that attempted reengineering, the effort did not work out as intended. CFOs (rather than someone with a more natural customer and sales focus) often led reengineering projects; consequently, reengineering too often simply became a massive cost-reduction program that destroyed capabilities, core competencies, and customer value.
Lack of Customer Orientation
Despite common sense and the abundance of research on its value, far too few companies achieve a customer orientation. Organizations are often driven instead by (1) regulatory decisions, (2) operational efficiencies, (3) anything to make a profit, or (4) product orientation.
The Gallup organization, located in Washington, D.C., has found that, while many organization leaders talk a good game about the customer being king, more than 70 percent of all managers feel performance is driven more by internal operating measures than by any kind of external, customer-focused ones.
Silver-Bullet Change Consulting: Fads
Management consultants and authors who tout their method as the sole path and silver bullet to corporate salvation often compound existing problems. The one-best-way approach promulgated by leading management authors and gurus has resulted in fad after fad. Every year, each new fad goes through the same inevitable lifecycle:
Introduction of new ideas
Early adoption of new ideas
High acceptance and widespread dissemination of new ideas
Misuse of or lip service to the ideas
Criticism and decline of the approach
Search for the next Holy Grail
Resistance to Change
Gallup polls have shown that more than two-thirds of business leaders resist change. Understandably, like most of us, they have a vested interest in protecting the status quo, do not like to lose control, and may not feel comfortable about what to do about the needed changes.
The stock market, of course, drives publicly held companies to be quarterly and short-term oriented. As a result, company executives are often rewarded for maintaining a consistent small increase in earnings, as seen, for example, in the Freddie Mac scandal in 2003.
Inadequate Change Frameworks
In our research on thirteen popular organizational change models, we found
Only four focused on the customer
Few had a focus on outputs and goals, as opposed to process alone
Many did not focus on the need for cross-functional teams as vehicles for integrated change
Less than one-third included strategic thinking or planning as a guide for the change effort
Fewer than half dealt with organizational culture as a key variable
Many did not look at the values and beliefs of the organization
In general, these change models were technical, operational, or mechanistic in nature. They usually did not deal with the issue of people’s hearts and minds being in tune with the desired changes. Only one of the thirteen included adequate feedback mechanisms, and only one out of thirteen used a system and processes to manage change strategically. The results can be found in Reinventing Strategic Planning for the 21st Century (2002).
The “Big Three” Enterprise-Wide Failure Issues
1. A Piecemeal Approach to a Systems Problem
This involves a variety of multiple mindsets, holistic frameworks, and consultants employing different models, concepts, and silver bullets instead of applying a single mindset based on an organization as a living system.
2. A Primary Focus on the Economic Alignment of Delivery
This approach focuses on productivity, processes, and bottom-line economics without attending to the cultural attunement issues. Both elements are needed.
3. A Primary Focus on the Cultural Attunement of People
This approach focuses on egalitarian, participative people processes without incorporating the economic alignment issues. Combining both elements is critical to success.
Full Success—A Totally Integrated Systems Solution
An Enterprise-Wide, Systems Thinking Approach to business excellence that combines economic alignment, cultural attunement, and a single holistic mental map to assess and guide the change that achieves superior results (profits–growth–customer–culture–sustainability)
For more Information:
Change Management Resources
Change Management Excellence, Change Management Masterclass, Managing Change and Transition, The Change Handbook
Enterprise-Wide Change (EWC) has a major impact on the entire organization and is usually strategic, large-scale, chaotic, complex, and/or radical in nature.
Examples of Enterprise-Wide Change initiatives and activities include
Installing an Enterprise Resource Planning system (ERP)
Creating a new high-performance culture
Focusing on business and operational excellence
Conducting mergers, acquisitions, joint ventures, and alliances
Installing major new technologies
Executing strategic and business plans
Becoming more customer-focused
Becoming a global company
Improving customer service
Desiring major growth and expansion
Downsizing, outsourcing, and major cutbacks
Restructuring and redesigning the organization
Improving Six Sigma and quality
Changing supply-chain management
Developing and deploying major new products
Transforming an entire enterprise
Significantly increasing creativity and innovation
Creating new businesses
The Systems Thinking Approach
A system is a set of components that work together for the overall benefit of the whole.
Systems Thinking is
A way of seeing the whole as primary, the parts as secondary
A higher-level way to view, filter, and mentally frame what we see in the world
A worldview that considers the whole entity or enterprise, along with its fit and relationships to and with the environment
A tool for finding patterns and relationships among subsystems and learning to reinforce or change these patterns to achieve specific outcomes
A shift from seeing elements, functions, and events to seeing processes, structures, relationships, and outcomes
The Uniqueness of Enterprise-Wide Change
Six distinct characteristics of EWC separate it from less comprehensive change initiatives:
1. Major structural and fundamental impact—EWC has a major structural and fundamental impact on the entire organization or business unit in which change is to occur. Energetic leadership is required at multiple levels to succeed.
2. Strategic in scope—The change to be effected is strategic. It links to the business’s unique positioning in a dynamic and highly competitive marketplace (including the public sector marketplace).
3. Complex, chaotic, and/or radical—The change is complex and chaotic in nature, or may constitute a radical departure from the current state—even to the point that desired outcomes and approaches to achieve them may be unclear.
4. Large-scale and transformational—The scale of desired change is large and will result in a significantly different enterprise. It will be transformed.
5. Longer timeframe—The desired change will require years of focused attention with multiple phases and stages.
6. Cultural change—The rules of the game change: the norms, guideposts, policies, values, and guides to behavior.
Any large-scale Enterprise-Wide Change will entail at least some of the following characteristics:
Multiple transitions
Incomplete transitions
Uncertain future state(s)
Multiple changes over long periods of time
Changing priorities
Conflicting demands
Changing players
Resistance to change
Loss of focus
Inadequate resources
False starts
Derailments
Delayed payoffs
Ambiguity/awkwardness
The Secret of Constant Growth
The secret of constant growth means that executives and managers have two full-time jobs:
1. Serving today’s business in a stressful, dynamic, consumer-oriented world where more demanding customers are driving products and services toward commodity pricing
2. Creating future business amidst the pressure of the daily business for current results
The secret of constant growth is simple:
Work IN the business and you feed yourself today
Work ON the business and you feed yourself next year
75 Percent of All Major Changes Do Not Succeed
Fragmented Reengineering Fads
A number of popular management/business books advocate incomplete and fragmented tactics that make change sound simple and easy. Business process reengineering, to take just one example, was popularized in Michael Hammer and James Champy’s 1993 book Reengineering the Corporation: A Manifesto for Business Revolution.
For most enterprises that attempted reengineering, the effort did not work out as intended. CFOs (rather than someone with a more natural customer and sales focus) often led reengineering projects; consequently, reengineering too often simply became a massive cost-reduction program that destroyed capabilities, core competencies, and customer value.
Lack of Customer Orientation
Despite common sense and the abundance of research on its value, far too few companies achieve a customer orientation. Organizations are often driven instead by (1) regulatory decisions, (2) operational efficiencies, (3) anything to make a profit, or (4) product orientation.
The Gallup organization, located in Washington, D.C., has found that, while many organization leaders talk a good game about the customer being king, more than 70 percent of all managers feel performance is driven more by internal operating measures than by any kind of external, customer-focused ones.
Silver-Bullet Change Consulting: Fads
Management consultants and authors who tout their method as the sole path and silver bullet to corporate salvation often compound existing problems. The one-best-way approach promulgated by leading management authors and gurus has resulted in fad after fad. Every year, each new fad goes through the same inevitable lifecycle:
Introduction of new ideas
Early adoption of new ideas
High acceptance and widespread dissemination of new ideas
Misuse of or lip service to the ideas
Criticism and decline of the approach
Search for the next Holy Grail
Resistance to Change
Gallup polls have shown that more than two-thirds of business leaders resist change. Understandably, like most of us, they have a vested interest in protecting the status quo, do not like to lose control, and may not feel comfortable about what to do about the needed changes.
The stock market, of course, drives publicly held companies to be quarterly and short-term oriented. As a result, company executives are often rewarded for maintaining a consistent small increase in earnings, as seen, for example, in the Freddie Mac scandal in 2003.
Inadequate Change Frameworks
In our research on thirteen popular organizational change models, we found
Only four focused on the customer
Few had a focus on outputs and goals, as opposed to process alone
Many did not focus on the need for cross-functional teams as vehicles for integrated change
Less than one-third included strategic thinking or planning as a guide for the change effort
Fewer than half dealt with organizational culture as a key variable
Many did not look at the values and beliefs of the organization
In general, these change models were technical, operational, or mechanistic in nature. They usually did not deal with the issue of people’s hearts and minds being in tune with the desired changes. Only one of the thirteen included adequate feedback mechanisms, and only one out of thirteen used a system and processes to manage change strategically. The results can be found in Reinventing Strategic Planning for the 21st Century (2002).
The “Big Three” Enterprise-Wide Failure Issues
1. A Piecemeal Approach to a Systems Problem
This involves a variety of multiple mindsets, holistic frameworks, and consultants employing different models, concepts, and silver bullets instead of applying a single mindset based on an organization as a living system.
2. A Primary Focus on the Economic Alignment of Delivery
This approach focuses on productivity, processes, and bottom-line economics without attending to the cultural attunement issues. Both elements are needed.
3. A Primary Focus on the Cultural Attunement of People
This approach focuses on egalitarian, participative people processes without incorporating the economic alignment issues. Combining both elements is critical to success.
Full Success—A Totally Integrated Systems Solution
An Enterprise-Wide, Systems Thinking Approach to business excellence that combines economic alignment, cultural attunement, and a single holistic mental map to assess and guide the change that achieves superior results (profits–growth–customer–culture–sustainability)
For more Information:
Change Management Resources
Change Management Excellence, Change Management Masterclass, Managing Change and Transition, The Change Handbook
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