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Change ManagementOrganizational Change Management is “all of the actionsrequired for an organization to understand, prepare for,implement and take full advantage of significant change”.The goals of Change Management are:The successful design, implementation, measurement andmaintenance of an organization’s change initiativeEnhancement of their on-going capacity for managingchange.Enterprise Transformation is driven by an underlyingstrategy that organizes and energizes People tounderstand, embrace and make full use of new Processand Technology
Phases of ChangeCurrent Transition Future State State State 4
Current StateEmployees (including management and executives!)generally prefer the current state, because that is wherethey live Current Transition Future State State State The devil you know is better than the devil you don’t” 5
Future StateThe future state is unknown to the employee; will it be better,or worse?This is where Project teams “live” Current Transition Future State State State 6
Transition StateThe transition state creates stress and anxiety Current Transition Future State State State 7
Lean Transformation1. Stretch targets on key indicators2. Creating and maintaining Just-in-time conditions3. Developing employees by teaching them to solve problems allthe time and improve their own processes4. Improve operations, improve processes, improve productquality 9
Stretch TargetsIn two year s: - 0 accidents - 50% reduction in quality complaints - 100% customer service - 30% direct labor productivity - 50% inventory reduction 11
People- Transition to Lean is difficultsince a company must build aculture where learning andcontinuous improvement arethe norm.- Success of lean requires thefull commitment andinvolvement of all employeesand of the company’ssuppliers. 12
Lean Enterprise Implementation Change Culture Change System Fir st Fir st(Conventional way) (Lean Way) Where Do You Start - From Top or Bottom? 15
Becoming a Lean Culture- The concept of becoming lean requires a change in the cultureand mindset of its employees to encourage them to constantlylook for and submit ideas for improvement- In a lean culture, Lean tools can be used to leverage thecollective power of teams to solve persistent issues- Make sure that the material or information moves smoothlywithin your company to meet the customer demand withoutgetting stuck anywhere in the process
Becoming a Lean Culture- Continuous flow and pull require a perfect system that has thecapacity to meet the necessary demand- Continuous flow requires lines to be balanced so that allportions of the process are effectively utilized- Achieving continuous flow implies that the company has stablestandardized operations and can meet customer demand in theleast amount of time
Becoming a Lean Culture- Lean organizations are learning organizations, a culture,not a technique- Lean culture needs to be implemented as a “wholesystem” and sub systems of the work flow also include: Motivation and incentive systems Training systems Organization and management levels Improvement processes- Lean is a culture and all cultures are complex
Organizational ChangeIt is common for an organization to choose to conduct aproject that will have impact on the organization itself.Examples:- New Time and Attendance System- New email system- Transition from paper to electronic Requisitions- Introduction of a new technology- Distribution of workers in new office space
Organizational Change- Upper Management undertakes these projects because theybelieve that there is sufficient gain to the organization towarrant the expense.- And Upper Management usually moves forward on thebasis that since it is in everyone’s best interest, thoseindividuals affected will of course endorse the project andwork to make it a success.- And all too often Upper Management receives a rude shock.
Organizational Change- It can be very difficult to introduce change to anorganization. Failure to recognize and deal with this facthas been the cause of many project failures.- As the Management Team, you must be aware of the extentto which your projects may introduce organizationalchange, and then you must deal with this issue.- Nonetheless, Organizational Change Management can be ofserious concern to any organization whose projects willrequire change either in its customers or within theorganization itself.
Organizational ChangeWhat is Or ganizational Change?- It is generally considered to be an organization-widechange, as opposed to smaller changes such as adding anew person.- It includes the management of changes to the:organizational culture, business processes, physicalenvironment, job design / responsibilities, staff skills /knowledge and policies / procedures.- When the change is fundamental and radical, one mightcall it organizational transformation
Organizational ChangeTake a moment to think of an example of organizationalchange that you have experienced.Was it successful? Did it go smoothly?What wer e your feelings ear ly on? Later ?What did the people ar ound you say about it?
Change stagesOrganizations go through four stages on the way toachieving their strategic objective:- Denial- Resistance- Exploration- RenewalAs the Organization works its way through these stages,there can be a negative impact on Productivity. This isreferred to as the Productivity Dip and is portrayed on thenext slide.
Productivity Dip- Minimizing the size and duration of this ProductivityDip is dependent upon quickly creating acceptance tothe strategic plan and all that it entails.- But gaining that acceptance is often a difficult process,as some employees will, for various reasons, seek toblock the change
Org. Change factors- Efforts by employees to block the intended change isreferred to as Resistance to Change.- Resistance is a natural and inevitable reaction in anorganization. You can expect it- Resistance is sometimes hidden, so it may be necessaryto take active steps to find it- There are many reasons for resistance; it is important tounderstand it- We manage resistance by working with people, andhelping them deal with their concerns- There are many ways to build acceptance. It isimportant to be flexible. But persist!
Change factorsThe key to successful management of organizationalchange lies in the people:1- They are the agents for successful transformation ofthe organization.2- They determine the Return on Investment from thisprocessSo let’s have a look at where Resistance to Change comesfrom and how to best manage it
Resistance to Change Self-Interest Cultures that Lack of Trust and Value Tradition Understanding DifferentPerspectives and Uncertainty Goals
Rates of Change It is generally acknowledged that in an average organization, when the intention for change is announced: 15% of the wor kfor ce is eager to accept it 15% of the wor kfor ce is dead set against it70% is sitting on the fence, waiting to see what happens
Steps to ChangeHow can I best accomplish Organization-wide Change?Since our interest here is in Management ofOrganizational-wide Change, it can be helpful to re-define Resistance to Change as “employees are notwholeheartedly embracing a change that managementwants to implement" (Dent & Goldberg, 1999)This allows us to focus on gaining acceptance (a positive)rather than on breaking down resistance (a negative).
Steps to Change- Get senior management agreement (i.e. conflicting goalscan kill the project!)- Identify a champion who can articulate the reasons forand advantages of the change- Translate the vision for change into a realistic plan andthen carry out the plan- Involve people from every area of the organization- Communicate. Communicate. Educate. Educate.- Get organizational support to the change- Modify organizational structures so that they will sustainthe change