Leading change gsw

Leading Change
Gemini Skills Workshop

Gemini Consulting

January 1999

Purpose of this session

• To provide an overview of thinking about change:
–And how it is changing.

• To provide an overview of Gemini’s approach:
–History and direction for the future.

• To understand how we lead the change process and increase mobilisation
and learning within the client organisation

• To familiarise you with models, frameworks and vocabulary commonly used
within Gemini and client teams.

Gemini Consulting GmbH • Proprietary and Confidential -2-
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Content of this session

• Why and how to change:
– Business environments.

• The Roots of Gemini’s Approach to Change:
– Core principles and tools.

• Gemini’s Evolving Change Model:
– Capability framework.
– Value chain implications.
– Client examples.

• Change, Learning and Individuals:
– Psychological safety.
– Emotional cycle of loss.
– Anxiety and aspiration.
– Conditions for capability development.

Gemini Consulting GmbH • Proprietary and Confidential V-O - 3 -
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WHY AND HOW TO CHANGE

Truths about change—why it happens, where it happens

. . . requires . . . requires
External personal
organisational
change . . . change
change . . .
– Technology – Strategies – Role
– Economy – Structures/de-layering – Responsibilities
– Habits
– Government – Practices
– Thinking
– Society – Processes – Values
– Customer/competitors – Products – Behaviours

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Change requires individuals and organisations to think, act
and perform differently

• No matter how well motivated, an individual cannot make change alone.

• And yet, it is the rate of individual change which determines the rate of
organisational change.

• Business change results from a critical mass of individuals participating in a
change process together.

Gemini works with our clients to involve multiple parts of an organisation,
at different levels, to ensure sustainable change.

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Academics and practitioners are starting to apply thinking
from science about living systems to organisations

• The traditional view of organisations is largely derived from Newtonian
physics:
–Linear, rational, predictable.
–Machine model: made up of parts; parts have limited and controllable impact on the whole.
–Cultures of administration, planning, policy; values of control, hierarchy.
–Role of managers is to control the work of others.

• New thinking from physics is permeating other fields including business,
organisations and leadership:
–Non-linear, unpredictable, butterfly effect.
–Living systems model: interconnected parts; direction of the whole system can be influenced rather
than outcomes controlled.
–Cultures of entrepreneurialism, innovation, experimentation: values of openness, learning.
–Role of leaders is to amplify impact of events which create movement towards desired outcomes.

Gemini Consulting GmbH • Proprietary and Confidential B-U - 7 -
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Experimentation and learning are key to leading this
change, control and pressure are not!

Traditional Change Paradigm Evolving Change Paradigm
• Change can be managed with a Gantt • Change requires leadership of people,
chart not management of things

• Change can be planned and controlled • Change requires critical mass to emerge
—where, when and how cannot always
• The consultant or manager is the driver, be predicted; seeing and using
manager of the change process opportunities is key

• The consultant or manager is outside • The consultant or manager is part of the
the process context, involved in the learning
process:
• Control is the key value – Client and consultant are learning about different things

• Creativity is the key value

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The Roots of Gemini’s Approach
to Change

THE ROOTS OF GEMINI’S APPROACH TO CHANGE

Gemini’s change approach is grounded in the practical tools
developed from behavioural change insights by United Research

Behavioural Change Insights Tools
• Change starts with an individual • Central role of the Joint Team Member
• Change happens in relationships • Partnership between JTM and Gemini
consultant; coaching relationship; openness;
trust
• Small groups provide the means to accelerate • Natural Work Team; Joint Team; RAT
individual change
• Give people frameworks and vocabulary to help • Emotional cycle of loss; LIFO
them articulate and understand their experience:
then they can let go and move on
• Use structure to build security and confidence • Charters; milestones; deliverables
about the process
• Make the change tangible ad meaningful • Business case
• Provide ways of clarifying messy issues; • PSTB; Brown Papers; RACI
externalise them, make them visible
• Focus on the positive • Bs before Cs; opportunities not problems;
“and”—not “but”; IWIK, H2; celebrate successes

Gemini Consulting GmbH • Proprietary and Confidential - 10 -
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A Gemini change intervention takes place through a project
organisation

• The project is a joint team, made up of client people and Gemini people
working together.

• Gemini ways of working (processes, values, behaviour) provide role models
of a To-Be culture and ways of working.

• The project provides challenging work—an adventure zone—which requires
client people to work in different ways, to experiment with their approach, in
order to get the results required.

• The project provides a safe place in which to experiment—risks are reduced
through support from a Gemini consultant who has done this before,
through change tools which structure problems and processes.

• Content is used to provide safety, to give client people the confidence to
innovate for themselves, not to provide the answer.

• The vocabulary of the change tools reinforces positive orientation, can-do
attitudes role modelled by the Gemini team members.
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Our change approach is evolving to adapt to shifts in client
needs and to incorporate new insights about change

Issues

• H2 apply insights around the behaviour of complex, adaptive systems (such
as people, organisations) to the process of business change.

• H2 address change as a way of life: continuous change rather than a crisis
event.

• H2 address the “corporate big picture” rather than “the project and the joint
team”.

• H2 consult with clients on individual or organisational transformation, when
their main or initial focus is content expertise or strategic insight .

• H2 retain and spread learnings once joint teams dissolve, beyond the joint
team during an engagement.
Understanding “sustainable change” was chosen as an area of focus to
increase Gemini’s differentiation.

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Gemini’s Evolving Change Model

GEMINI’S EVOLVING CHANGE MODEL

The vision for our Change Model emerged from
three key drivers

• Changing environments of clients:
– Continuous change, driven by technology/market shifts.
– Sustainable change.
– Faster change.
– Increased client capability (analytics, programme design and management, BPR tools).

• Changes the consulting service market:
– Increasing maturity/sophistication of buyers.
– Highly imitative Big 6 players: increasing in size/skills: commoditising products (e.g. BPR).
– Product/service life cycles shortening.
– New specialist entrants in change management arena: visual identify, communications consultancies.
– People and IT emerging as key integrating factor.
– Lack of differentiation within general management consulting.
– Low awareness and reputation of Gemini.

• Sources of Gemini success with clients:
– “How we worked with people – up and down and across the organisations.”
– “The way we worked reflected the way work needed to be done in the future: empowered individuals and teams,
values driven, results oriented.”

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We are positioning Gemini by putting a stronger emphasis
on a capability-oriented approach to the change process

Traditional View Evolving View

Change as a process of loss and Change as continuously
acceptance, a crisis-oriented responding to and shaping a
adaptation to an imposed event, dynamic environment through
and resulting in achievement of a the on-going development of
new status quo. capability.

Unfreeze Refreeze Create
Aspiration

Move ... For superior
results
Develpo
Capitalize Capabilities
Capabilities

This view is based on an underlying business model of a “systems view”,
rather than a “machine view”, of organisations.

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GEMINI’S EVOLVING CHANGE MODELc

We view capability as the next generation of consulting and
we intend to get there faster than our competitors

+
Impact on Capability
the
Organisation
+
Results
+
Direction
Setting

Advice

1970s 1980s 1990s 2000s

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We view change as a continuous process of
translating aspirations into results . . .
Change as an on-going, capability focused process

Create
Aspiration

Client need:
Develop • Faster change
... for superior
Capabilities • Deeper change
Results
• Sustainable change
Capitalise
Capabilities

... through the development and capitalisation of capabilities.

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We believe that all living systems, including business
organisations, need an aspirational view on their future …
The process of change - The creation of aspiration

1
Envision the • “Reason why”
• energizing
desired future
• open
• driven by value
creation
2
Clarify the • “Strategic direction”
• “Stretched targets”
mid-term “To-Be” • attractive to financial community
• customer driven
• innovation focused
3 • explicit and measurable
• action focused
Understand the • “Development stretch”
impact on capability • To-Be vs. As-Is
• constraint based view
• in line with strategic
direction

Time horizon

… in order to continously adapt to or even shape their environment, and
achieve the fast, deep, and sustainable change required to survive and evolve.

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We are therefore developing our own definition of
capability, based on our experience with our clients

Definition of Capability

• The ability to adapt and respond creatively to unforeseen circumstances or
events to achieve a desired outcome.

Definition of Capability at the Organisational Level

• Organisational capability has five dimensions:
–Environmental intelligence.
–Asset management.
–Process.
–Alignment.
–Learning and innovation.

Capability is not competency, it is organisational, not individual:
Competency = individual skills, knowledge, behaviour

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The capabilities are defined generally - each
industry has different dimensions for each of the five

Environmental Intelligence • To observe your organisation and what is
in and outside the organisation.

• To understand who your customers are
and their needs (today’s and tomorrow’s
customers).

• To understand the borders of your
organisation in a dynamic way
(organisation as part of an ecology).

Asset Management
• To understand an organisation as a
portfolio of assets (HR, knowledge,
financial, physical, brands, customer
relationships, supplier relationships)
• Which assets are key to your strategy?
– How assets create value for whom (customer,
stakeholders, etc).
– How to allocate resources to assets.

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The capabilities are defined generally - each industry
has different dimensions for each of the five(cont.)
Process • To link actions to produce reasonable output and create
value.
• To understand critical processes across functions and
use these as key drivers for value.
• To focus on decision points within processes as a key
point of leverage.

Alignment • To build a unified, focused leadership cadre(s).
• To produce agreed sense of purpose and common
mission.
• To ensure that sense of purpose is lived to align
individual activities to the organisation’s goals.
• To align resource allocation, rewards, and performance
management with these goals.

Learning • To reflect, review, understand and act on implications; to
identify critical learning areas.
• To capture knowledge and connect it to value (for
customers, stakeholders).
• To create space for risk.
• To be open to challenge current assumptions and mindset.
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Capability can be found by identifying its component
elements

Com-
People Tools Process Systems Paradigms
petencies
Environmental
Intelligence
Asset
Management

Process

Alignment

Learning &
Innovation

Developing capability takes place through the interaction of people in
developing new competencies, designing and using new tools, processes
and systems and in absorbing new paradigms—people are the integrating
factor.

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Developing capabilities therefore takes place by
intervening at the individual, group or organisational level
The process of change - The development of capabilities

Environmental
Intelligence
Capability Dimensions

Asset
Management
Process
Delivery
Alignment
Learning/
Innovation
Individual Key Group Organisation

Development Levels

Capabilities can be developed and capitalised on individual, group
and/or organisational levels.

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Effective transfer of client learnings from their partnership
with Gemini enables clients to capitalise their capabilities
The process of change - The capitalization of capabilities

Related Client
Issues
Gemini Project

Environmental Results of the project:
Intelligence

Asset • Capture the return on
investment in
Dimensions

Management
Capability

capabilities in the
Process specific business area
Intelligence

• Apply capabilities to
Alignment related issues or
organisational units
Learning/
Innovation • Establish new base-line
for a next generation of
aspiration

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Market development activities will put a strong focus on
the value-added resulting from capability development
The process of change - The role of Market Development

Client need:
• Faster change
• Deeper change
• Sustainable change

Market Development Perspective MDE Profile
• Relationship driven • Strong on industry and content
• “Experience heavy”
• Industry and content focused
• Role model for positive approach
• Aspiration- rather than crisis-oriented to change
– Positioning change as a positive challenge – Aspirational thinking
rather than a “must achieve” or a “fix it” – Pragmatic and flexible
– Linking capability development to issue-based • Sound understanding of how change
problem solving and benefits realisation materialises in organisations, groups
and individuals

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An A&D will focus on the creation of aspiration, diagnosing
development needs and creating a developmental experience
The process of change—The role of A&D: Creation of aspiration
1

2

3

A&D Perspective A&D Consultant Profile
• Aspiration-driven rather than crisis-driven • Strong on industry and content
– Creating confidence in client people and • Strong intuition: “taste and judgement”
tapping into their desire to develop themselves
• Role model for positive approach
and their business
to change, learning and growth
• Focused on capability gaps –Strong tolerance for ambiguity
– … as well as process gaps
–Aspirational thinking
• Mobilising the organisation around aspiration –Pragmatic and flexible
– … in addition to “Quick Hits”/“Early Wins” –Open, not defensive
• Giving the organisation a taste of the capability • People-oriented
development experience
• “Experience heavy”

Leading interventions with a focus on aspiration requires a specific
project approach and consultant profile.

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The Change Model approach was used to effectively address the
capability issues of the client
Putting the Change Model into Practice - The logic of A&D
Key issues
Aspirational Picture
Capability- Capability Profile
Competitive Capability
Profiling* focused Workshops “Environmental
Interviews intelligence” 1 5
5
Asset- What
Management 1 5
capability issues
• Understand • Profile • Discuss
capability profile capabilities in hypothesis on Process- have to be
of key competitors relation to capability Intelligence 1 5
adressed?
competition profile with key
• Build first groups Alignment
1 5
hypotheses • Identify examples, Learning
issues, and best • Prioritise issues &
5
Innovation 1
practices
How do the • Outline next
Where are
• Fine tune steps
competitors future competitive
hypotheses
manage their advantages?
capabilities?

The resulting capability profile served as the basis for change strategy and RD design.

* Conducted by Shop/The Institute
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Results Delivery will develop sustainable capability quickly
The process of change - The role of RD: Development of capabilities
Environmental
Intelligence

Dimensions
Capability
Asset
Management

Process

Alignment Development
Learning/ Levels
Innovation

Indivi- Groups Organis-
duals ations

RD Perspective RD Consultant Profile
• Creating an experimental environment • Strong on industry and content
– Creating safety, enabling discovery • Deep understanding of how change
– “Hot Housing” materialises and able to play multiple
roles:
– “Rapid prototyping” – Coach and sounding board on the individual
– “Action Learning” development level
– Facilitator, content expert and sparring partner
on the group development level
• Focused on capability development
– Methodology expert on the organisational
– … in addition to problem solving and development level
benefits delivery
• Strong ability to get things done:
• “Leaving a legacy” do - reflect - improve (80:20 rule)
– “Pilot fast - learn fast - adapt fast” approach

. . . in addition to issue-based problem solving and benefits delivery.

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At Lidl & Schwartz, Gemini Consulting developed the core
capabilities to implement and run a completely new organisation
Putting the Change Model into Practice - The Lidl & Schwartz example

The Client Situation The Approach The Results

• Lidl & Schwartz is a • A capability-focused A&D • A new organisational
German, 30’000 employee, quickly discovered that structure was
DM 21B sales, hypermarket wide-scale organisational implemented
retailer change would be required – … based on a competency
centre model
• Their revenues had doubled • The RD delivered against
over five years, but there – … with a process-oriented
were worries whether they
three objectives: instead of a functional focus
would be able to stay on the – Build the appropriate systems • The new managers were
fast track and processes for rapid trained, coached, and
growth
educated on and off-the-job
• Therefore, their original – Realign the organisation and
interest (1996) was to get – … to successfully run the
develop the necessary
capabilities to excel in the business in the new
consulting support on competence centres
organisational design and changed organisation
alignment - areas they – Develop a growth platform • As much as possible
perceived as critical for leading edge Gemini retail
future success • The whole RD was based industry knowledge was
on an extremly close and transfered to the client
trusting client relationship

Changing the client by using a capability-driven approach created client enthusiam and let to a
m$ 10+ sale for Gemini.

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Individual Change and Learning

INDIVIDUAL CHANGE AND LEARNING

Successful change is a continuous people-focused process
. . . think of it as marketing to internal segments

• Understand the needs of different populations or segments in the
organisation

• Understand how to communicate and engage the attention of different
segments

• Lots of feedback on progress

• Positive reinforcement

• Repetition: try it, fix it, try it again

• Interim milestones

• Frequently celebrate successes

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Implementing change requires understanding the dynamics
of anxiety and the need for psychological safety

• The problem of organisational learning and
transformation is to overcome the negative effects of
past carrots and sticks.

• To make people feel safe in learning, they must
have a motive, a sense of direction and the
opportunity to try out new things without fear of
punishment.

Source: “The Dynamics of the Green Room”, E. Schein, Sloan Management Review, 1993.
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Change involves letting go in order to move on—this will
always be a personal choice, and is not easy to achieve

Rational

(c. f. Kurt Lewin)

Unfreeze Move Refreeze

Emotional - “Me”

(c. f. Bridges)

Endings Transitions Beginnings

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Our role is to help others through change...

• Clarify Endings
– Disengagement – Listening and accepting
– Disorientation – Focusing: ask questions to pinpoint real issues
– Disidentification – Restating: hearing it restated
by someone else can help a person
– Disenchantment to clarify their real interests

• Share Transition
– Explain – Signal shift-move the conversation on
– Confront/identify – Explain purpose of change
– Neutralise – Link to his/her concerns
– Transfer – Summarise: bottom line

• Engage Beginnings
– Vision & Plans – “Were my comments clear?”
– Communications – “What are your ideas for the future?”
– Symbols & ceremonies – “These are my ideas”
– New Starts – Agree to finite steps

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… and one step towards helping people in change is to give
them what they need in such situations

What people in change (usually) get: What people in change want:

• Autocratic Behaviour • Empathy
• Avoidance • Information
• “Rah rah” • Ideas
• Uncertainty • Certainty
• Insecurity • Security

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iNDIVIDUAL CHANGE AND LEARNING

People need Information and secuirty because they may
experience a sense of loss during change

• Security Control, knowledge of what the future holds and place
in the organisation

• Competence What to do, how to manage (can be embarrassing)

• Relationships Familiar contracts (customers, colleagues, managers,
group membership)

• Sense of direction Understanding of where you are going, why, how

• Territory Area that ‘belonged’ to you (work space,
responsibilities)

This sense of loss can generate an emotional cycle which may stall in a
number of unproductive phases before acceptance of a new direction is
complete.

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Needs and responses from people vary during different
emotional stages experienced in a changing environment

The Emotional Cycle of Organisational Change

Satisfaction
Certainty Confidence
Optimism

Hope
Time

Pessimism Doubt

This cycle traces the loss of hope, expectation and an envisioned future and the
acceptance of a different set of expectations.
Different people will be in different places at different times.

Source: Daryl Conner, adapted from Kubler-Ross’s Emotional Cycle of Loss: see “On Death and Dying”.
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Understanding the emotional cycle can help us deal with
the change process

Phase 1: • Honeymoon period
Uniformed optimism – • Ideas look great on paper
Certainty • All major obstacles appear to have been anticipated

Phase 2: • Problems surface, not all solutions are obvious
Informed pessimism – • Morale drops (“Why did I ever get involved in the first place?”)
Doubt

• A turning point occurs, a sense of accomplishment replaces a sense
Phase 3:
of pushing against problems
Hopeful realism –
Hope • Problems have not all disappeared, but people’s hopes are based on
realistic data

Phase 4:
• Optimism continues to develop
Informed optimism –
• A fresh burst of energy appears
Confidence

Phase 5: • Successful change has been made
Rewarding completion – • Official change effort is complete
Satisfaction • The outcome is frequently much different from that anticipated in
Phase 1

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We can help people to change by responding appropriately
to their current state
• People in contentment or denial are not frozen:
–Events will move them soon enough; little can be done to hasten the day; rational problem-solving will
delay it.
–Make presence felt and accepted by acting appropriately; support their right to stay there as long as
they wish.
• To mobilise energy, we need to work with people in confusion or renewal:
–Seeds of success are sown in confusion and sprout in renewal.
• To get past resistance, people have to express it out loud.
• Letting go of the past is a pre-condition for moving forward:
–Letting go happens in its own time.
• The urge to hold on is to protect sense of identity, certainty, meaning:
–No unfreezing techniques are likely to help.
–Realistic patience and a sense of an appropriate time.
–Scale must underlie and guide the change process itself
• Any task may shake people into denial; respond by keeping talking and
waiting it out.
• People need support when in anxiety, not admonitions to hurry up and
change faster.
Source: Marvin Weisbord: op cit.
GSW_Jan_v0.9

You cannot make
anybody change!

Leading change gsw

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