Change Management PowerPoints

CHANGE MANAGEMENT
A Systems Approach to Successful

Organization Change
February 27, 2023
©Lawrence M. Miller 1
SECTION 1:
INTRODUCTION
©Lawrence M. Miller February 27, 2023 2

SECTIONS OF THE COURSE
Introduction Definitions Research Models
Stage 2: Stage 3:
Stage 1: Leading Stakeholder Stakeholder
Principles
Change Analysis – Analysis –
External Internal
Stage 4: Social Conference

Assets and Cost/Benefit
System Analysis Model of
Liabilities Analysis
and Design Engagement
Stage 6:
Stage 5:
Implementation Reinforce &
Standardize

NOTES
• Why Change? Survival
• What is it?
• Sensing the environment, stakeholders.
• A Model for Understanding your environment SWOT
A Model, A process
Study research on CM
Share Past Models
Go through this model in depth
Who am I?

A SYSTEMS MODEL OF ORGANIZATION

MICRO AND MACRO
CHANGE PROCESSES

TYPES OF CHANGE
Whole-System Change Continuous Improvement
Building Strategic Capability Daily Management and Culture
1. Revolutionary/re-engineering 1. Evolutionary
2. Rethinking the whole system. 2. Change within an essentially

stable system.
3. Big and rapid change to create
major improvements. 3. On-going, small improvements.
4. Changes in both work system and 4. Changes in work process.

social system. 5. This should be the work of every
5. This requires involvement of senior management team.
managers.
CURRICULUM

OVERVIEW AND EXPERIENCE

SECTIONS OF THE
COURSE
1. Introduction
2. Research and Lessons Learned
3. Popular Models of Change
4. Principles of Effective Change Management
5. Leading Change Efforts
6. Stakeholder Analysis & Environmental Scan
7. Strategy and Capability Analysis
8. Design Future Technical System
9. Design Future Social System
10. Implement and Evaluate
11. The Continuous Improvement Method of Change

THE IMPERATIVE TO CHANGE
CONTINUALLY
• There is less resistance when employees understand that change is
a continuous process, not only in your company, but in every
company today.
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The Leader’s Mindset
Traditional Leader Lean Leader
Seeks Control Seeks Commitment & Creativity
Focus on Objects Focus on Knowledge
Gives Answers - Arrogance Asks Questions - Humble
Emphasis on Planning Emphasis on Experiments
Formal Education Gemba Learning
Blames People Improves the Process
Enjoys Power Enjoys Serving Others
Staffs Improve Process Line Managers & Teams Improve Process
Decisions made remotely with data Decisions made on the spot with facts
Individual Decision Making Team Decision Making
Go fast to go slow Go slow to go fast
Companies with Walls Interruption Free Flow
One Right Answer Continuous Improvement
Vertical Organization Focus Horizontal Organization Focus

HOW TO GET THE MOST FROM THIS
COURSE
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TWO TYPES OF LEARNING…
• Education = Knowledge
• Action Learning = Skill Building = Habits which = Culture
• A Kata is a practice routine that builds habit patterns.
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WHAT IS CHANGE MANAGEMENT?
A repeatable process to define needed
changes to an organization and its
performance by engaging those who know,
care, or must act, the stakeholders, in the
design, implementation and evaluation of
those changes in order to achieve the
desired results.

WHAT THE RESEARCH
TELLS US

• About three-quarters of change efforts either
fail to deliver the anticipated benefits or are
abandoned entirely.
• But poor execution is only part of the problem;
the authors’ four-year study of 62 corporate
transformations suggests that misdiagnosis is
equally to blame.
https://hbr.org/2017/11/what-everyone-gets-wrong-about-change-management

Executive teams need to figure out …
what to change
Strategy
—in particular, what to change first. They can do this by fully
understanding three things:
1. the catalyst for transformation, Stakeholder Analysis
2. the organization’s underlying quest (is it global presence,
customer focus, nimbleness, innovation, or
sustainability?), that will create value…and the
3. leadership capabilities needed to see it through. Leaders
who can innovate and execute

“As the shelf life of business strategies grows
shorter, a corporation’s transformation capability
becomes its only enduring advantage.”

• Data from more than 100 companies. the basic goal has been
the same: to make fundamental changes in how business is
conducted in order to help cope with a new, more challenging
market environment.
• https://hbr.org/1995/05/leading-change-why-
transformation-efforts-fail-2

1. The most general lesson to be learned from the
more successful cases is that the change process
goes through a series of phases that, in total,
usually require a considerable length of time.
Skipping steps creates only the illusion of speed
and never produces a satisfying result.
2. A second very general lesson is that critical

mistakes in any of the phases can have a
devastating impact, slowing momentum and
negating hard-won gains. Perhaps because we
have relatively little experience in renewing
organizations, even very capable people often
make at least one big error.
WHY CHANGE EFFORTS FAIL
1. Not Establishing a Great Enough Sense of Urgency (Need real
Change Champions!)
2. Not Creating a Powerful Enough Guiding Coalition
3. Lacking a Vision (Head and Heart)
4. Under communicating the Vision by a Factor of Ten
5. Not Removing Obstacles to the New Vision (dis-incentives)
6. Not Systematically Planning for, and Creating, Short-Term
Wins
7. Declaring Victory Too Soon
8. Not Anchoring Changes in the Corporation’s Culture (Culture is
“sticky”, change the social system)

”We defined “transformation” as a fundamental shift in
the way that an organization conducts business, resulting
in economic or social impact.”
1. Transformation is even harder than we thought. The

authors examined 128 global companies that had
undergone transformation between 2016 and 2020
and found that only 22% of companies in their sample
were successful
2. How companies engage their employees can be the

difference between success and failure. Successful
companies shared a common focus on initiatives that
prioritized employees, including DE&I programs and
support for women managers’ careers, in addition to
competitive pay and access to health care

When we looked more closely at the 28 most successful transformers,
we identified six attributes — most of which are related to employee
compensation and DE&I — that set them apart from the rest of the
pack:
• Employee Pay: These employees were compensated more highly
compared to those at companies of a similar size.
• Employee Stock Options: Employees at these companies receive
more stock options compared to those at companies of a similar size.
• Employee Satisfaction: Employees at these companies report higher
satisfaction at work.
• Diversity and Inclusivity: These companies employ hiring practices
with an eye toward equity.
• Women Managers: These companies employ more women in
managerial positions
• Women Employees: Women make up a higher share of employees at
these companies.

PEOPLE ARE THE CATALYSTS OF
SUCCESSFUL TRANSFORMATION
• The implications of our findings are clear: Companies have a
better chance at success if they focus on their people during
transformation.
• What’s more, the type of employee engagement made the
difference between top-tier performance and not. Companies
that prioritized attributes that are fundamentally related to
employee engagement, such as diversity & inclusion, in
addition to traditional benefits, such as compensation or
health care, saw stronger reputations and greater financial
returns than other organizations.

New research from leaders at Infosys indicates that across a variety
of industries, lasting, long-term change is most effective when it
occurs over a series of smaller micro changes. The authors identify
three strategies for successful microchange management:
1. Deconstruct big change into small

steps,
2. Change behavior through small
modifications to habits and routines,
3. Continuously measure, learn, and
evolve.
February 27, 2023 33
©Lawrence M. Miller
We call this approach micro change
management, or “micro is the new
mega.”

We found that a persistent set of small,
orchestrated changes is the best approach to
drive large and lasting change at an organization.
These small changes, when made continuously
over a period of time, have a compounding
effect that drives larger change and
transformation.

Micro change management is based on human
motivation and behavioral theory — Daily short
stand-up meetings ensure change initiatives stay in
sync with rapidly evolving needs, and require
smaller benchmarks to measure progress. The sum
of many micro changes brings about the larger
change, creating a cumulative effect that delivers
nonlinear improvements with greater likelihood of
overall success.

• “Executives use different approaches in different parts of the organization,
which compounds the turmoil that usually accompanies change.”
• In recent years, many change management gurus have focused on soft
issues, such as culture, leadership, and motivation. Such elements are
important for success, but managing these aspects alone isn’t sufficient to
implement transformation projects.
• What’s missing, we believe, is a focus on the not-so-fashionable aspects of
change management: the hard factors. If companies don’t pay attention to
the hard issues first, transformation programs will break down before the
soft elements come into play.
• https://hbr.org/2005/10/the-hard-side-of-change-management

HBR STUDY OF 225 CHANGE EFFORTS
When the authors studied change initiatives at 225 companies,
they found a consistent correlation between the outcomes of
change programs (success versus failure) and four hard factors,
which they called DICE: project *duration,* particularly the time
between project reviews; *integrity of performance,* or the
capabilities of project teams; the level of *commitment* of senior
executives and staff; and the additional *effort* required of
employees directly affected by the change.

• Duration, particularly the time between project
reviews;
• Integrity of performance, or the capabilities of
project teams;
• Commitment of senior executives and staff;
• Effort required of employees directly affected by
the change.

• https://hbr.org/2021/09/the-secret-behind-successful-corporate-
transformations
• https://hbr.org/2021/05/break-down-change-management-into-
small-steps
• https://hbr.org/1995/05/leading-change-why-transformation-
efforts-fail-2
• https://hbr.org/2017/11/what-everyone-gets-wrong-about-change-
management

SECTION 2
MODELS OF CHANGE

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LEWIN’S 3 PHASES
1958
Stage 1 - Unfreezing: This is the first stage of transition and one of
the most critical stages in the entire process of change management.
It involves improving the readiness as well as the willingness of
people to change by fostering a realization for moving from the
existing comfort zone to a transformed situation. It involves making
people aware of the need for change and improving their motivation
for accepting the new ways of working for better results.
Stage 2 - Change: This stage can also be regarded as the stage of Transition or
the stage of actual implementation of change. It involves the acceptance of the
new ways of doing things.
Stage 3 - Freeze (Refreezing): During this stage, the people move from the
stage of transition (change) to a much more stable state which we can regard
as the state of equilibrium. The stage of Refreezing is the ultimate stage in
which people accept or internalize the new ways of working or change, accept
it as a part of their life and establish new relationships.

WHAT “UNFREEZES?”
• Crisis – Creates Urgency
• Clarity of Future State Vision – Leadership
• Active Engagement in Current State Analysis
• Scanning the Environment and Listening to Stakeholders
• Participation in Design

CHANGE AND REFREEZING
• Lewin does not provide a detailed guide to design or implementation

of change.
• Refreezing is simply building new habits through behavioral

definitions, practice, feedback and reinforcement.

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MCKINSEY’S STRATEGY DEPLOYMENT
MODEL
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SOCIO-TECHNICAL SYSTEMS

THE DEVELOPMENT OF HIGH PERFORMANCE
TEAMS: FROM COAL MINES TO PROCTOR AND
GAMBLE, CORNING, AND DOZENS OF COMPANIES
ORGANIZING INTO NATURAL WORK TEAMS.

EVERY SYSTEM IS A SUB-SYSTEM
OF A LARGER SYSTEM
• Dis-aggregating whole-
systems leads to failure.
• Failing to understand the
adaptation to the
environment and alignment
of the sub-systems can lead
to death. A change in one
system requires alignment of
other systems.
©Lawrence M. Miller 55 February 27, 2023

PRINCIPLES OF STS DESIGN
• The work system, a functioning whole, now became the
basic unit of focus rather than single tasks and jobs.
• The work group was central rather than the individual
job-holder.
• Internal regulation of the work system by the work group
was possible and effective, rather than the external
regulation of individuals by supervisors.
• Work teams developed members who were multi-skilled,
therefore more flexible and capable of self-regulation.
• The discretionary, rather than the prescribed, aspect of
the work was valued.
• The team structure increased the variety of work done by
individuals, thereby increasing intrinsic motivation.
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SUSTAINABLE SYSTEMS…
• Are adaptive to their environment.
• Are aligned to the macro systems of which they are a sub-
system.
• Are aligned internally – reduced internal friction that consumes
energy (waste!).
• Sustainable systems reduce the consumption of energy, all
kinds, and are, therefore, lean.
• Sustainable systems meet the needs of all stakeholders
(reduce external friction) and are sustainable for the long term.

TRANSFORMATIONAL CHANGE MANAGEMENT
REQUIRES SYSTEMS THINKING
• It is about Systems Thinking

• It is about engaging ALL stakeholders in the creation of process
and organization to enable that process – Habit for Humanity
Principle.
• It is about a change process that results in successful
implementation because it is owned by those who do the work!
• It is about strategic change, not tools and tactics.
• It is about sustainability.
• It is about organizational capabilities.
• It is about Whole-System Architecture.

WHAT CONTROLS HUMAN PERFORMANCE - KNOWLEDGE AND
SKILLS; OR, SYSTEMS AND STRUCTURE?
• When we implement lean do we assume that training is the

answer, or do we consider the impact of systems and structure?

WHOLE-SYSTEM ARCHITECTURE IS ALL OF THESE
CHANGE MANAGEMENT METHODOLOGIES.
THE GOAL IS LEAN.
• Socio-technical system design. (Emery and Trist)

• Systems-thinking. (Senge, Ackoff)
• Idealized design. (Ackoff, Magidson)
• Interactive planning (Ackoff)
• Re-engineering (Hammer & Champy)
• Appreciative inquiry (Cooperrider)
• High-performance organization design (Lytle)

LEAN AND PROBLEM-
SOLVING MODELS

LEAN IS “INTEGRATIVE LEARNING”

THE EIGHT STEP TOYOTA
BUSINESS PROCESS
1. Clarify the Problem
2. Breakdown the Problem
3. Set the Target
4. Analyze the Root Cause
5. Develop Countermeasures
6. Implement Countermeasures
7. Monitor Results and Process
8. Standardize and Share Success
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PRINCIPLES OF
EFFECTIVE
CHANGE MANAGEMENT

KEY PRINCIPLES OF CHANGE MANAGEMENT
1.Champions Must Lead – Communicate

and Model
• Be The Change
2.Design to Strategy and Business Vision
• Build Business Capabilities
3.Design to Values & Cultural Principles
• Build Unity of Effort

4.Maximize Engagement in Analysis, Design
and Implementation
• Who Knows, Who Cares, Who Acts
• Practice Diversity and Inclusion
5.Design Adaptive, Open Systems

6.Align Social and Technical Systems

7. Get Beyond “Your Village” to Seek Design
Elements
8. Promote Self-Organizing (Walls, not Furniture)
9. Manage Implementation with Frequent Review,
Learning and Continuous Improvement

THE MILLER
WHOLE-SYSTEM CHANGE
PROCESS

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THE LEADERSHIP
CHALLENGE

CULTURAL CHARACTERISTICS OF
EMERGENCE AND DECLINE

WHAT ARE CAPABILITIES?
• The people, processes and technologies that
enable an organization to achieve its strategic
goals and meet customer requirements.
• The stuff that lies between strategic goals and
performance.
• The human competencies and the ways of doing
things that create unique advantage in your
market.
• Capabilities reside in the core processes and in
the core competencies of the organization.
WHAT ARE CAPABILITIES
Technical Social
• R&D processes • R&D Skills
• Engineering • Engineering Skills
• Manufacturing process: • Manufacturing knowledge and
• Low cost, low WIP inventory skilled workforce.
• Precision and reliability in • Skills and motivations of
manufacturing teamwork and continuous
• Computer systems for online improvement.
ordering, feedback, and rapid
delivery • Sales force skills and motivation
LINK BUSINESS MEASURES

WRITING THE
DESIGN CHARTER
THE MISSION OF THE DESIGN TEAM
• To conduct a stakeholder analysis, analyze

current state of the process and design
the future state to enhance organization
capabilities.
WHO IS ON THE DESIGN TEAM(S)
• Those who are respected by others
• Open-minded, flexible, and creative
• Assertive
• Good communication skills
• Team player
• Can handle ambiguity
• Willingness to learn
• Knowledgeable about one or more parts
of the company and/or processes
ASSIGNMENT: COMPLETE
AND PRESENT DESIGN
CHARTER

ENVIRONMENTAL SCAN
AND
STAKEHOLDER ANALYSIS
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©Lawrence M. Miller 105

WHAT CAN WE CHANGE?
WHERE CAN WE LOOK?

WHO SHOULD WE TALK TO?
• The Steering Team

• Other employees with specialized knowledge
• Customers, customers, customers!!!
• Competitors, suppliers, and others who may
have best practices
• Those who do similar processes
INFORMATION ABOUT THE THREE SUB-
SYSTEMS
• What do we need to know about the

technical system?
• The social system?
• The economic system?
WHAT IS A PROCESS MAP?
• Just like a map of highways and geography…
• It is a visual display of how things get done from input to output.
• It may be high level, with few details, or it may be very detailed with
every micro step illustrated.
• It flows chronologically, from left to right or top to bottom.
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THE FLOW OF THE WORK…
• Continuous Improvement is about the flow of the work, from

suppliers to customers, and creating the ideal flow that will create
the most value for your customers. The ideal process is so lacking in
interruptions that it feels natural - it flows.
• Think about the fast-break in basketball or the pit stop in auto
racing. These are processes that become “flow” for the participants.
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ASSIGNMENT
SUMMARIZE EXTERNAL
STAKEHOLDER INPUT
• You have examined the external forces that will inevitably
create change.
• You have interviewed external customers and experts.
• You have done a SWOT Analysis
• Now summarize and present your finding to the
leadership team.

CURRENT STATE
INTERNAL ANALYSIS
Current Capabilities vs Required Capabilities
Technical, Social and Economic

CAUSE AND EFFECT DIAGRAMS

PROCESS MAPPING AND
ANALYSIS

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MAPPING YOUR PROCESS

VARIANCE ANALYSIS
• Quality
• Cost
• Productivity
• Speed
• And from Our Principles

WHAT IS A VARIANCE?
A variance is the difference between how things are
done, or the results being achieved, and how things
should be done and the results we want to achieve.
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A Variance may be an unwanted statistical variation or
a variance from ideal.
• Variances may be quality defects.
• Variances may be from standard
operating performance.
• They may be variances from customer
satisfaction requirements.
• Variances in costs of production or
service delivery.
• They may be variances from our
principles.
• Variances in behavior or standard
work.
COSTS OF VARIATION: WHY DOES IT MATTER?
• Imagine that you drive to work, an average of 30 minutes. If you can

always get to work within 25 to 35 minutes. But, what changes occur
is sometimes it takes 20 minutes, but sometimes it takes 60
minutes? What is the cost of the increase in variability.
• Now apply this principle to your work process.
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BRAINSTORM CAUSES OF VARIATION
• Brainstorm causes of both common and special causes
in one of your core work processes.
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VARIATION FROM PRINCIPLES
• What does it mean to be “principle centered?”

• How do you “see” principles in operation in an organization?
• How do principles apply to process?
• What are some examples of this company’s principles as they are
applied to processes?
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PRIORITIZING YOU CHANGE

PRIORITIZING YOUR CHANGE EFFORTS

DESIGN CONFERENCES

DIFFERENT CONFERENCES
1. A Work Process Design conference to gain input from
customers, employees, and managers on the current
strengths and deficiencies of the current work process and to
define key elements of a future work process.
2. Social or Culture Design Conference: In this conference
you might present the basic structure of a future work
process and then present questions about the current culture
and gain their vision of the future culture or social system.
3. An Implementation Conference: In this conference you
would present the basic work process and social system
design and gain input and commitment to the
implementation of the design.

CHARACTERISTICS OF
SUCCESSFUL CONFERENCES
1. The whole-system is in the room
2. The focus is on the common ground and the future
3. You still need a steering team, charter, and design team.
4. There is high stakeholder involvement
5. People make commitments, not just complain

6. Conferences are well planned and carefully prepared
7. There is a great deal of structure.
8. It still takes time and commitment

ASSIGNMENT: SUMMARIZE AND PRESENT
INTERNAL STAKEHOLDER ANALYSIS AND
PRIORITIES
• Summarize and share data on internal culture characteristics and
needs for change.
• Share you map of the work process.
• Share your analysis of QPSC.
• Share Variance Analysis and Prioritization.

ANALYZING AND DESIGNING
THE SOCIAL SYSTEMS

CULTURE IS HABITUAL BEHAVIOR
• Overt Behavior Habits
• Emotional Habits
• Thinking Habits
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“As a rough rule of thumb, if you belong to no
groups but decide to join one, you cut your risk of
dying over the next year in half. If you smoke and
belong to no groups, it’s a toss-up statistically
whether you should stop smoking or start joining.”
Robert Putnum, Bowling Alone
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ASSIGNMENT: SOCIAL SYSTEM DESIGN
• Share your recommendations for team structure.

• Share your recommendations of the enabling systems that will
optimize the team structure.

FIVE FORMS OF CAPITAL
ANALYSIS

WHAT IS THE CAPITAL, THE WEALTH,
THAT WE ARE CREATING?
It Is Time to Redefine, Redesign, Capitalism!

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COST/FINANCIAL PLAN
• Estimate (they are always estimations) Costs and Benefits

CHANGE MANAGEMENT
IMPLEMENTATION
IMPLEMENTATION & ALIGNMENT

CONFERENCES
DESIGN CHECKLIST

KEYS TO SUCCESSFUL IMPLEMENTATION
• Senior Change Champion

• Weekly or bi-weekly implementation team meetings
to share progress, problems and learning.
• Communication Plan
• Develop an overall Gantt chart
• Engage those on leadership teams for impacted
areas
COMMUNICATION PLAN
• Share Current State Analysis

• Share your SWOT Analysis
• Show your new process and how it improves QPSC
• Share your new social system, organization, teams, skill building,
etc.
• Share business impact
• Who will be involved and how

COMPONENTS OF THE PLAN
• Develop technology plan
• Training plan (work process and team skills)
• Plan for changes in structure
• Develop a plan for motivation – the big challenge,
objectives, measures and recognition.
STAGE 6: REINFORCE
AND STANDARDIZE
©Lawrence M. Miller March 1, 2023 185

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CHANGE MANAGEMENT

A Systems Approach to Successful

©Lawrence M. Miller February 27, 2023 2

Stage 4: Social Conference

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2. Rethinking the whole system. 2. Change within an essentially

4. Changes in both work system and 4. Changes in work process.

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• A Kata is a practice routine that builds habit patterns.

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2. A second very general lesson is that critical

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1. Transformation is even harder than we thought. The

2. How companies engage their employees can be the

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1. Deconstruct big change into small

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• Lewin does not provide a detailed guide to design or implementation

• Refreezing is simply building new habits through behavioral

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• It is about Systems Thinking

©Lawrence M. Miller 58 February 27, 2023

• When we implement lean do we assume that training is the

©Lawrence M. Miller 59 February 27, 2023

• Socio-technical system design. (Emery and Trist)

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1.Champions Must Lead – Communicate