Significant organizational change occurs, for example, when an organization changes its overall strategy for success, adds or removes a major section or practice, and/or wants to change the very nature by which it operates. It also occurs when an organization evolves through various life cycles, just like people must successfully evolve through life cycles. For organizations to develop, they often must undergo significant change at various points in their development. That's why the topic of organizational change and development has become widespread in communications about business, organizations, leadership and management.
Leaders and managers continually make efforts to accomplish successful and significant change -- it's inherent in their jobs. Some are very good at this effort (probably more than we realize), while others continually struggle and fail. That's often the difference between people who thrive in their roles and those that get shuttled around from job to job, ultimately settling into a role where they're frustrated and ineffective. There are many schools with educational programs about organizations, business, leadership and management. Unfortunately, there still are not enough schools with programs about how to analyze organizations, identify critically important priorities to address (such as systemic problems or exciting visions for change) and then undertake successful and significant change to address those priorities. This Library topic aims to improve that situation.
(http://managementhelp.org/org_chng/org_chng.htm)
To really understand organizational change and begin guiding successful change efforts, the change agent should have at least a broad understanding of the context of the change effort. This includes understanding the basic systems and structures in organizations, including their typical terms and roles. This requirement applies to the understanding of leadership and management of the organizations, as well. That is why graduate courses in business often initially include a course or some discussion on organizational theory. This topic includes several links to help you gain this broad understanding.
Here is the article I have chosen to read:
"Begin at the beginning in organizational change
David Chaudron, PhD
Perhaps the most asked but least answered question in business today is “What can we do to make our business survive and grow?” The world is rapidly changing into something too hard to easily predict, with a hundred opportunities and pitfalls passing by every moment.
To add to this confusion, there are hundreds, if not thousands of techniques, solutions and methods that claim to help business improve productivity, quality and customer satisfaction. A company President, CEO or business owner has so many choices in these buzzwords, whether they be called Total Quality Management, Customer Satisfaction, Re-engineering or Teambuilding. They are like new shoppers in a giant grocery store: They are hungry, but there are so many brands, sizes and varieties you don’t know what to buy.
In response to this confusion, many do nothing, often afraid of making the wrong choices. Others change the techniques they use every few months, using the “program du’jeur” method of organizational change, otherwise known as MBS (Management by Best Seller). Neither of these responses help the organization in the long run. Changing nothing will produce nothing. Implementing a different buzzword (Total Quality, Just in Time, Re-engineering, etc.) every few months often creates a “whipsaw” effect that causes mass confusion among your employees. These buzzwords are often a hammer in search of a nail, techniques applied with no clear focus as to the why, expected results or return on investment.
One of the organizations we consulted with started on this path. Senior management proclaimed in a memo that Total Quality should be a way of life. One senior vice president declared that he wanted 25% of his organization using Total Quality tools within a year. This caused tremendous excitement in the organization, However, the follow-through was delayed, occasionally inappropriate and sometimes not there. Many employee became discouraged with the process and considered it just another management fad. With the next business downturn, virtually all training had stopped and little enthusiasm was left.
Other organizations clearly focus on technical problems and on improving what they had. They are initially successful, but become victims of their own success. I call this an improved, planned incremental approach. Their initial quality improvement teams may be so successful they rapidly create more teams, without the qualitative organization-wide changes (re-engineering) necessary to sustain a permanent effort.
One organization we worked with had over 70 quality improvement teams in a plan with only 300 employees. They had shown little results after their first successes, and asked us what their next steps should be. We suggested the union’s leadership in their efforts, look at restructuring their organization along more product-focused lines, and possibly start profit sharing. They were not interested in taking any of these actions. A few months later, its parent company shut down the site, partly because of its poor productivity.
Organizations need to move beyond the buzzwords into deciding what actions they need to perform that will help them grow and develop. In response to this problem, this article will provide you a framework for coping with organizational change independent of buzzwords or the latest management fad. Organizations must first decide on the framework their organizational change long before they choose a buzzword to implement.
The major decisions
Instead of grasping for the latest technique, I suggest instead that organizations should go through a formal decision-making process that has four major components:
bullet Levels, goals and strategies
bullet Measurement system
bullet Sequence of steps
bullet Implementation and organizational change
The levels of organizational change
Perhaps the most difficult decision to make is at what "level" to start. There are four levels of organizational change:
First let's describe these levels, and then under what circumstances a business should use them.
Level 1- shaping and anticipating the future
At this level, organizations start out with few assumptions about the business itself, what it is "good" at, and what the future will be like.
Management generates alternate "scenarios" of the future, defines opportunities based on these possible futures, assesses its strengths and weaknesses in these scenarios changes its mission, measurement system etc. More information on this is in the next article, "Moving from the Future to your Strategy."
Level 2 - defining what business(es) to be in and their "Core Competencies
Many attempts at strategic planning start at this level, either assuming that 1) the future will be like the past or at least predictable; 2) the future is embodied in the CEO's "vision for the future"; or 3) management doesn't know where else to start; 4) management is too afraid to start at level 1 because of the changes needed to really meet future requirements; or 5) the only mandate they have is to refine what mission already exists.
After a mission has been defined and a SWOT (strengths, weaknesses, opportunities and threats) analysis is completed, an organization can then define its measures, goals, strategies, etc. More information on this is in the next article, "Moving from the Future to your Strategy."
Level 3 - Reengineering (Structurally Changing) Your Processes
Either as an aftermath or consequence of level one or two work or as an independent action, level three work focuses on fundamentally changing how work is accomplished. Rather than focus on modest improvements, reengineering focuses on making major structural changes to everyday with the goal of substantially improving productivity, efficiency, quality or customer satisfaction. To read more about level 3 organizational changes, please see "A Tale of Three Villages."
Level 4 - Incrementally Changing your Processes
Level 4 organizational changes are focusing in making many small changes to existing work processes. Oftentimes organizations put in considerable effort into getting every employee focused on making these small changes, often with considerable effect. Unfortunately, making improvements on how a buggy whip for horse-drawn carriages is made will rarely come up with the idea that buggy whips are no longer necessary because cars have been invented. To read more about level 4 organizational changes and how it compares to level 3, please see "A Tale of Three Villages."
One organization we consulted with has had a more positive experience with the incremental approach. We trained an internal facilitator, helped them deliver training in a just-in-time fashion, and had them focus on specific technical problems. The teams management formed reduced initial quality defects by 48%.
The disadvantages of such an incremental approach include avoiding structural, system-wide problems, and assumes existing processes need modest improvement. In addition, using incremental approaches can be frustrating to employees and management if (pick a buzzword) does not catch on in the organization. As a result of these disadvantages, many organizations experience a high risk of failure in the long run.
What level do I choose?
These levels have much of the same goals: increasing customer satisfaction, doing things right the first time, greater employee productivity, etc. Despite these similarities, they differ substantially in the methods they use to achieve these goals.
Levels one through three, on one hand, focuses on "big picture" elements such as analysis of the marketplace, out-sourcing, purchase/sale of subsidiaries, truly out-of-the box" thinking and substantial change in the management and support systems of the company . In my experience, companies that use these methods tend to have a high need for change, risk-tolerant management, relatively few constraints and have substantial consensus among its management on what to do. Types of industries include those whose environment requires rapid adaptation to fast-moving events: electronics, information systems and telecommunication industries, for example.
Companies using mostly incremental tools (level 4) have management that perceives only a modest need for change, is relatively risk-avoidant, has many constraints on its actions and only has a modest consensus among themselves on what to do. Instead of focusing on new opportunities, they wish to hone and clarify what they already do. Types of industries that often use these methods include the military, aerospace, and until recently, health care organizations. Those organizations whose strategic planning solely focuses on refining an existing mission statement and communicating the paragraph also fall into using incremental (level 4) methods.
When discussing the continuum of structural vs. incremental change, its important to realize that what labels companies use are not important here. One must carefully observe their actions. Many companies have slogans, "glitter" recognition programs and large budgets to provide "awareness" training in the buzzword they are attempting to implement. The key, however, is to note what changes they are really making. If management is mostly filling training slots with disinterested workers and forming a few process improvement teams, they are using level three methods. If they are considering changes in business lines, re-organizing by customer instead of by function, or making major changes in how the everyday employee is being paid, they are using level 3 methods.
Unfortunately, all of this discussion hinges in management's belief about how much change is necessary. This belief often hinges on their often unassessed beliefs of 1) how well the organization performs compared to other organizations (a lack of benchmarking); and 2) what the future will be.
As a result, my recommendation is that organizations conduct scenario/strategic planning exercises (level 1) anyway, even if they have already decided that level 4 (incremental) methods will suffice to solve their problems. This way management can be aware of the limitations of the lower-level methods they are using and realize when it is best to abandon these lower-level methods for something more substantive.
Based on this exercise, comparison of existing internal processes with world-class examples (benchmarking) and market analysis, management may come to realize how much change is necessary. The greater the gap between what the organization needs to be and how it currently operations and what businesses it is in, the more it suggests that greater change is necessary, and greater restructuring is necessary.
This decision is very important. IBM in the mid 1980’s felt that the future would be much like the past and a result didn't have to change much. They did not realize how much microcomputers would replace the functions of their bread-and-butter business, the mainframe. The net result was tens of thousands of people were laid off, with the company suffering the first losses in its history.
Goals
Based on whatever level work you are doing, the opportunities that are found need to be evaluated to determine which of them best suit the existing and future capabilities of the organization and provide the most "bang for the buck" in terms of improvement in your measures of success. In addition, goals need to have the resources and management determination to see to their success.
Goals also need to be SMART, that is:
Specific - concrete action, step-by-step actions needed to make the goal succeed
Measurable - observable results from the goal's accomplishment
Attainable - The goal is both possible and is done at the right time with sufficient attention and resources
Realistic- The probability of success is good, given the resources and attention given it.
Time-bound- The goal is achieved within a specified period of time in a way that takes advantage of the opportunity before it passes you by.
Some examples include:
bullet “We will expand into the polystyrene market within the next five years and achieve 20% market share”
bullet We will decrease the time from research to customer delivery by 50% within two years
bullet We will increase the quality of our largest product by 20% in three years.
Strategies
Where goals focus on what, strategies focus on how. Some examples include:
bullet “We will re-engineer our research and development process”
bullet “We will evaluate and improve our sales and marketing department”
bullet We will conduct a SWOT analysis and then define our core competencies
Additional examples of strategies are included in the "Moving from the Future to your Strategy" chapter.
Wait a second. Aren't goals and strategies really the same. They are in one sense as they both need to be SMART. As what you might guess, the goals of a level are achieved by creating strategies at the lower levels.
The Measurement System
Without measures of success, the organization does not know if it has succeeded in its efforts. Someone once said, “What gets measured gets improved.” Someone else said, “If you don’t know where you are going, any road will get you there.”
For more information on measurement systems and their place in organizational change, please see the "Balanced Scorecard" article, along with a number of articles where employee surveys are used.
Implementation and Organizational Change
The success of any organizational change effort can be summed into an equation:
Success = Measurement X Method X Control X Focused Persistence X Consensus
Like any equation with multiplication, a high value of one variable can compensate for lower levels on other variables. Also like any equation with multiplication, if one variable equals 0, the result is zero.
On employee involvement
Some organizations involve employees right from the start, where they have significant influence in the strategic plan of the organization. This kind of involvement tends to reduce employees’ resistance, which is always a very important factor in the success of any organizational change. Such organizations as Eaton, Eastman Chemical and Rohm and Haas have used such an approach.
Such employee involvement, however, might also be threatening to management’s traditional power. Some organizations decide employee involvement will be limited to implementing the strategic decisions management makes, or further limit involvement to purely task-focused teams working on technical problems. Many aerospace organizations have used this approach.
Focused persistence, good project management and the sequence of implementation
The sequence of implementation is also an important factor. There are four basic options, with many variations of them. The first involves the entire organization from the start, with the whole organization intensively working at once on making the change. Ford Motor Company is currently restructuring its entire organization, moving from planning to implementation in nine months.
Another option is a more relaxed approach, in which divisions or business units of the organization go at their own pace. This option can often become an incremental approach like the first or second village. Many conglomerates or other companies with diverse operations try this approach.
A third option is similar to the previous one, with the focus being on individual business units doing the implementation. In this case, however, business units implement roughly the same things in roughly the same time schedule. Unisys, the computer company, is using this method on some of its organizational change efforts.
A fourth option is to create a pilot project in one division or business unit, learn from its mistakes, and then apply those lessons to the rest of the organization. Examples of this option include the Saturn car facility at General Motors and the Enfield plant of Digital Equipment Corporation. It’s important to note here that creating pilot projects is a high-risk business. In both cases, the lessons learned from these pilot projects have not gained widespread acceptance in their parent companies due to their heavily ingrained cultures."
(http://www.organizedchange.com/decide.htm)
Spectrum of Organization Change
Costs and Benefits:
Tangible benefits
Increased productivity - It increases the production of services or products
Low operating cost - It is cheap or less expensive,when it comes to doing the project or change
Reduced work force - It will need a less or lesser people or employee
Lower computer expenses - It only needs a minimum maintainance
Lower vendor cost - It would be cheaper ot is less expensive when it comes to selling or ordering
Lower clerical/professional costs - There will be no need of people that are excellent on the job
Reduced growth of expenses - It will cause the firm to release a lesser amount of money
There is more to the value of an information system than just the tangible, evident benefits. These should be presented to the senior management as well.
Automation: Using technology to perform tasks efficiently/effectively
Automation is the use of control systems (such as numerical control, programmable logic control, and other industrial control systems), in concert with other applications of information technology (such as computer-aided technologies [CAD, CAM, CAx]), to control industrial machinery and processes, reducing the need for human intervention. In the scope of industrialization, automation is a step beyond mechanization. Whereas mechanization provided human operators with machinery to assist them with the muscular requirements of work, automation greatly reduces the need for human sensory and mental requirements as well. Processes and systems can also be automated.
Automation plays an increasingly important role in the global economy and in daily experience. Engineers strive to combine automated devices with mathematical and organizational tools to create complex systems for a rapidly expanding range of applications and human activities.
Many roles for humans in industrial processes presently lie beyond the scope of automation. Human-level pattern recognition, language recognition, and language production ability are well beyond the capabilities of modern mechanical and computer systems. Tasks requiring subjective assessment or synthesis of complex sensory data, such as scents and sounds, as well as high-level tasks such as strategic planning, currently require human expertise. In many cases, the use of humans is more cost-effective than mechanical approaches even where automation of industrial tasks is possible.
Specialized hardened computers, referred to as programmable logic controllers (PLCs), are frequently used to synchronize the flow of inputs from (physical) sensors and events with the flow of outputs to actuators and events. This leads to precisely controlled actions that permit a tight control of almost any industrial process.
Human-machine interfaces (HMI) or computer human interfaces (CHI), formerly known as man-machine interfaces, are usually employed to communicate with PLCs and other computers, such as entering and monitoring temperatures or pressures for further automated control or emergency response. Service personnel who monitor and control these interfaces are often referred to as stationary engineers.
Automation has had a notable impact in a wide range of highly visible industries beyond manufacturing. Once-ubiquitous telephone operators have been replaced largely by automated telephone switchboards and answering machines. Medical processes such as primary screening in electrocardiography or radiography and laboratory analysis of human genes, sera, cells, and tissues are carried out at much greater speed and accuracy by automated systems. Automated teller machines have reduced the need for bank visits to obtain cash and carry out transactions. In general, automation has been responsible for the shift in the world economy from agrarian to industrial in the 19th century and from industrial to services in the 20th century.[3]
The widespread impact of industrial automation raises social issues, among them its impact on employment. Historical concerns about the effects of automation date back to the beginning of the industrial revolution, when a social movement of English textile machine operators in the early 1800s known as the Luddites protested against Jacquard's automated weaving looms[4] — often by destroying such textile machines— that they felt threatened their jobs. One author made the following case. When automation was first introduced, it caused widespread fear. It was thought that the displacement of human operators by computerized systems would lead to severe unemployment.
Critics of automation contend that increased industrial automation causes increased unemployment; this was a pressing concern during the 1980s. One argument claims that this has happened invisibly in recent years, as the fact that many manufacturing jobs left the United States during the early 1990s was offset by a one-time massive increase in IT jobs at the same time. Some authors argue that the opposite has often been true, and that automation has led to higher employment. Under this point of view, the freeing up of the labor force has allowed more people to enter higher skilled managerial as well as specialized consultant/contractor jobs (like cryptographers), which are typically higher paying. One odd side effect of this shift is that "unskilled labor" is in higher demand in many first-world nations, because fewer people are available to fill such jobs.
At first glance, automation might appear to devalue labor through its replacement with less-expensive machines; however, the overall effect of this on the workforce as a whole remains unclear.[citation needed] Today automation of the workforce is quite advanced, and continues to advance increasingly more rapidly throughout the world and is encroaching on ever more skilled jobs, yet during the same period the general well-being and quality of life of most people in the world (where political factors have not muddied the picture) have improved dramatically. What role automation has played in these changes has not been well studied.
Advantages:
* Replacing human operators in tedious tasks.
* Replacing humans in tasks that should be done in dangerous environments (i.e. fire, space, volcanoes, nuclear facilities, under the water, etc)
* Making tasks that are beyond the human capabilities such as handling too heavy loads, too large objects, too hot or too cold substances or the requirement to make things too fast or too slow.
* Economy improvement. Sometimes and some kinds of automation implies improves in economy of enterprises, society or most of humankind. For example, when an enterprise that has invested in automation technology recovers its investment; when a state or country increases its income due to automation like Germany or Japan in the 20th Century or when the humankind can use the internet which in turn use satellites and other automated engines.
Disadvantages:
* Technology limits. Current technology is unable to automate all the desired tasks.
* Unpredictable development costs. The research and development cost of automating a process is difficult to predict accurately beforehand. Since this cost can have a large impact on profitability, it's possible to finish automating a process only to discover that there's no economic advantage in doing so.
* Initial costs are relatively high. The automation of a new product required a huge initial investment in comparison with the unit cost of the product, although the cost of automation is spread in many product batches. The automation of a plant required a great initial investment too, although this cost is spread in the products to be produced.
(http://en.wikipedia.org/wiki/Automation)
Rationalization of Procedures: Streamline SOPs and eliminate bottlenecks
Business Reengineering: Radical redesign of processes to improve cost, quality, service and maximize benefits of technology
This develops the business vision and process its objectives, which are
Paradigm Shift: A new perspective on things
Paradigm is a complete mental model of how complex a system functions. It involves rethinking the nature of the business, the organization. It is a complete reconception or change of how the system should work.
Information systems are of strategic importance of any company. They are constantly developed, redesigned, modernized. This should be a controlled process managed by top management, deployed by those that know the technologies. IT specailists’ opportunity to advance in a company or in any organization.
(http://www.zturk.com/edu/zagreb/podiplomski/slides/02-1-short-IT-strategies.pdf)
Leaders and managers continually make efforts to accomplish successful and significant change -- it's inherent in their jobs. Some are very good at this effort (probably more than we realize), while others continually struggle and fail. That's often the difference between people who thrive in their roles and those that get shuttled around from job to job, ultimately settling into a role where they're frustrated and ineffective. There are many schools with educational programs about organizations, business, leadership and management. Unfortunately, there still are not enough schools with programs about how to analyze organizations, identify critically important priorities to address (such as systemic problems or exciting visions for change) and then undertake successful and significant change to address those priorities. This Library topic aims to improve that situation.
(http://managementhelp.org/org_chng/org_chng.htm)
To really understand organizational change and begin guiding successful change efforts, the change agent should have at least a broad understanding of the context of the change effort. This includes understanding the basic systems and structures in organizations, including their typical terms and roles. This requirement applies to the understanding of leadership and management of the organizations, as well. That is why graduate courses in business often initially include a course or some discussion on organizational theory. This topic includes several links to help you gain this broad understanding.
Here is the article I have chosen to read:
"Begin at the beginning in organizational change
David Chaudron, PhD
Perhaps the most asked but least answered question in business today is “What can we do to make our business survive and grow?” The world is rapidly changing into something too hard to easily predict, with a hundred opportunities and pitfalls passing by every moment.
To add to this confusion, there are hundreds, if not thousands of techniques, solutions and methods that claim to help business improve productivity, quality and customer satisfaction. A company President, CEO or business owner has so many choices in these buzzwords, whether they be called Total Quality Management, Customer Satisfaction, Re-engineering or Teambuilding. They are like new shoppers in a giant grocery store: They are hungry, but there are so many brands, sizes and varieties you don’t know what to buy.
In response to this confusion, many do nothing, often afraid of making the wrong choices. Others change the techniques they use every few months, using the “program du’jeur” method of organizational change, otherwise known as MBS (Management by Best Seller). Neither of these responses help the organization in the long run. Changing nothing will produce nothing. Implementing a different buzzword (Total Quality, Just in Time, Re-engineering, etc.) every few months often creates a “whipsaw” effect that causes mass confusion among your employees. These buzzwords are often a hammer in search of a nail, techniques applied with no clear focus as to the why, expected results or return on investment.
One of the organizations we consulted with started on this path. Senior management proclaimed in a memo that Total Quality should be a way of life. One senior vice president declared that he wanted 25% of his organization using Total Quality tools within a year. This caused tremendous excitement in the organization, However, the follow-through was delayed, occasionally inappropriate and sometimes not there. Many employee became discouraged with the process and considered it just another management fad. With the next business downturn, virtually all training had stopped and little enthusiasm was left.
Other organizations clearly focus on technical problems and on improving what they had. They are initially successful, but become victims of their own success. I call this an improved, planned incremental approach. Their initial quality improvement teams may be so successful they rapidly create more teams, without the qualitative organization-wide changes (re-engineering) necessary to sustain a permanent effort.
One organization we worked with had over 70 quality improvement teams in a plan with only 300 employees. They had shown little results after their first successes, and asked us what their next steps should be. We suggested the union’s leadership in their efforts, look at restructuring their organization along more product-focused lines, and possibly start profit sharing. They were not interested in taking any of these actions. A few months later, its parent company shut down the site, partly because of its poor productivity.
Organizations need to move beyond the buzzwords into deciding what actions they need to perform that will help them grow and develop. In response to this problem, this article will provide you a framework for coping with organizational change independent of buzzwords or the latest management fad. Organizations must first decide on the framework their organizational change long before they choose a buzzword to implement.
The major decisions
Instead of grasping for the latest technique, I suggest instead that organizations should go through a formal decision-making process that has four major components:
bullet Levels, goals and strategies
bullet Measurement system
bullet Sequence of steps
bullet Implementation and organizational change
The levels of organizational change
Perhaps the most difficult decision to make is at what "level" to start. There are four levels of organizational change:
- shaping and anticipating the future (level 1)
- defining what business(es) to be in and their "core competencies” (level 2)
- reengineering processes (level 3)
- incrementally improving processes (level 4)
First let's describe these levels, and then under what circumstances a business should use them.
Level 1- shaping and anticipating the future
At this level, organizations start out with few assumptions about the business itself, what it is "good" at, and what the future will be like.
Management generates alternate "scenarios" of the future, defines opportunities based on these possible futures, assesses its strengths and weaknesses in these scenarios changes its mission, measurement system etc. More information on this is in the next article, "Moving from the Future to your Strategy."
Level 2 - defining what business(es) to be in and their "Core Competencies
Many attempts at strategic planning start at this level, either assuming that 1) the future will be like the past or at least predictable; 2) the future is embodied in the CEO's "vision for the future"; or 3) management doesn't know where else to start; 4) management is too afraid to start at level 1 because of the changes needed to really meet future requirements; or 5) the only mandate they have is to refine what mission already exists.
After a mission has been defined and a SWOT (strengths, weaknesses, opportunities and threats) analysis is completed, an organization can then define its measures, goals, strategies, etc. More information on this is in the next article, "Moving from the Future to your Strategy."
Level 3 - Reengineering (Structurally Changing) Your Processes
Either as an aftermath or consequence of level one or two work or as an independent action, level three work focuses on fundamentally changing how work is accomplished. Rather than focus on modest improvements, reengineering focuses on making major structural changes to everyday with the goal of substantially improving productivity, efficiency, quality or customer satisfaction. To read more about level 3 organizational changes, please see "A Tale of Three Villages."
Level 4 - Incrementally Changing your Processes
Level 4 organizational changes are focusing in making many small changes to existing work processes. Oftentimes organizations put in considerable effort into getting every employee focused on making these small changes, often with considerable effect. Unfortunately, making improvements on how a buggy whip for horse-drawn carriages is made will rarely come up with the idea that buggy whips are no longer necessary because cars have been invented. To read more about level 4 organizational changes and how it compares to level 3, please see "A Tale of Three Villages."
One organization we consulted with has had a more positive experience with the incremental approach. We trained an internal facilitator, helped them deliver training in a just-in-time fashion, and had them focus on specific technical problems. The teams management formed reduced initial quality defects by 48%.
The disadvantages of such an incremental approach include avoiding structural, system-wide problems, and assumes existing processes need modest improvement. In addition, using incremental approaches can be frustrating to employees and management if (pick a buzzword) does not catch on in the organization. As a result of these disadvantages, many organizations experience a high risk of failure in the long run.
What level do I choose?
These levels have much of the same goals: increasing customer satisfaction, doing things right the first time, greater employee productivity, etc. Despite these similarities, they differ substantially in the methods they use to achieve these goals.
Levels one through three, on one hand, focuses on "big picture" elements such as analysis of the marketplace, out-sourcing, purchase/sale of subsidiaries, truly out-of-the box" thinking and substantial change in the management and support systems of the company . In my experience, companies that use these methods tend to have a high need for change, risk-tolerant management, relatively few constraints and have substantial consensus among its management on what to do. Types of industries include those whose environment requires rapid adaptation to fast-moving events: electronics, information systems and telecommunication industries, for example.
Companies using mostly incremental tools (level 4) have management that perceives only a modest need for change, is relatively risk-avoidant, has many constraints on its actions and only has a modest consensus among themselves on what to do. Instead of focusing on new opportunities, they wish to hone and clarify what they already do. Types of industries that often use these methods include the military, aerospace, and until recently, health care organizations. Those organizations whose strategic planning solely focuses on refining an existing mission statement and communicating the paragraph also fall into using incremental (level 4) methods.
When discussing the continuum of structural vs. incremental change, its important to realize that what labels companies use are not important here. One must carefully observe their actions. Many companies have slogans, "glitter" recognition programs and large budgets to provide "awareness" training in the buzzword they are attempting to implement. The key, however, is to note what changes they are really making. If management is mostly filling training slots with disinterested workers and forming a few process improvement teams, they are using level three methods. If they are considering changes in business lines, re-organizing by customer instead of by function, or making major changes in how the everyday employee is being paid, they are using level 3 methods.
Unfortunately, all of this discussion hinges in management's belief about how much change is necessary. This belief often hinges on their often unassessed beliefs of 1) how well the organization performs compared to other organizations (a lack of benchmarking); and 2) what the future will be.
As a result, my recommendation is that organizations conduct scenario/strategic planning exercises (level 1) anyway, even if they have already decided that level 4 (incremental) methods will suffice to solve their problems. This way management can be aware of the limitations of the lower-level methods they are using and realize when it is best to abandon these lower-level methods for something more substantive.
Based on this exercise, comparison of existing internal processes with world-class examples (benchmarking) and market analysis, management may come to realize how much change is necessary. The greater the gap between what the organization needs to be and how it currently operations and what businesses it is in, the more it suggests that greater change is necessary, and greater restructuring is necessary.
This decision is very important. IBM in the mid 1980’s felt that the future would be much like the past and a result didn't have to change much. They did not realize how much microcomputers would replace the functions of their bread-and-butter business, the mainframe. The net result was tens of thousands of people were laid off, with the company suffering the first losses in its history.
Goals
Based on whatever level work you are doing, the opportunities that are found need to be evaluated to determine which of them best suit the existing and future capabilities of the organization and provide the most "bang for the buck" in terms of improvement in your measures of success. In addition, goals need to have the resources and management determination to see to their success.
Goals also need to be SMART, that is:
Specific - concrete action, step-by-step actions needed to make the goal succeed
Measurable - observable results from the goal's accomplishment
Attainable - The goal is both possible and is done at the right time with sufficient attention and resources
Realistic- The probability of success is good, given the resources and attention given it.
Time-bound- The goal is achieved within a specified period of time in a way that takes advantage of the opportunity before it passes you by.
Some examples include:
bullet “We will expand into the polystyrene market within the next five years and achieve 20% market share”
bullet We will decrease the time from research to customer delivery by 50% within two years
bullet We will increase the quality of our largest product by 20% in three years.
Strategies
Where goals focus on what, strategies focus on how. Some examples include:
bullet “We will re-engineer our research and development process”
bullet “We will evaluate and improve our sales and marketing department”
bullet We will conduct a SWOT analysis and then define our core competencies
Additional examples of strategies are included in the "Moving from the Future to your Strategy" chapter.
Wait a second. Aren't goals and strategies really the same. They are in one sense as they both need to be SMART. As what you might guess, the goals of a level are achieved by creating strategies at the lower levels.
The Measurement System
Without measures of success, the organization does not know if it has succeeded in its efforts. Someone once said, “What gets measured gets improved.” Someone else said, “If you don’t know where you are going, any road will get you there.”
For more information on measurement systems and their place in organizational change, please see the "Balanced Scorecard" article, along with a number of articles where employee surveys are used.
Implementation and Organizational Change
The success of any organizational change effort can be summed into an equation:
Success = Measurement X Method X Control X Focused Persistence X Consensus
Like any equation with multiplication, a high value of one variable can compensate for lower levels on other variables. Also like any equation with multiplication, if one variable equals 0, the result is zero.
On employee involvement
Some organizations involve employees right from the start, where they have significant influence in the strategic plan of the organization. This kind of involvement tends to reduce employees’ resistance, which is always a very important factor in the success of any organizational change. Such organizations as Eaton, Eastman Chemical and Rohm and Haas have used such an approach.
Such employee involvement, however, might also be threatening to management’s traditional power. Some organizations decide employee involvement will be limited to implementing the strategic decisions management makes, or further limit involvement to purely task-focused teams working on technical problems. Many aerospace organizations have used this approach.
Focused persistence, good project management and the sequence of implementation
The sequence of implementation is also an important factor. There are four basic options, with many variations of them. The first involves the entire organization from the start, with the whole organization intensively working at once on making the change. Ford Motor Company is currently restructuring its entire organization, moving from planning to implementation in nine months.
Another option is a more relaxed approach, in which divisions or business units of the organization go at their own pace. This option can often become an incremental approach like the first or second village. Many conglomerates or other companies with diverse operations try this approach.
A third option is similar to the previous one, with the focus being on individual business units doing the implementation. In this case, however, business units implement roughly the same things in roughly the same time schedule. Unisys, the computer company, is using this method on some of its organizational change efforts.
A fourth option is to create a pilot project in one division or business unit, learn from its mistakes, and then apply those lessons to the rest of the organization. Examples of this option include the Saturn car facility at General Motors and the Enfield plant of Digital Equipment Corporation. It’s important to note here that creating pilot projects is a high-risk business. In both cases, the lessons learned from these pilot projects have not gained widespread acceptance in their parent companies due to their heavily ingrained cultures."
(http://www.organizedchange.com/decide.htm)
Spectrum of Organization Change
Costs and Benefits:
Tangible benefits
Increased productivity - It increases the production of services or products
Low operating cost - It is cheap or less expensive,when it comes to doing the project or change
Reduced work force - It will need a less or lesser people or employee
Lower computer expenses - It only needs a minimum maintainance
Lower vendor cost - It would be cheaper ot is less expensive when it comes to selling or ordering
Lower clerical/professional costs - There will be no need of people that are excellent on the job
Reduced growth of expenses - It will cause the firm to release a lesser amount of money
There is more to the value of an information system than just the tangible, evident benefits. These should be presented to the senior management as well.
Automation: Using technology to perform tasks efficiently/effectively
Automation is the use of control systems (such as numerical control, programmable logic control, and other industrial control systems), in concert with other applications of information technology (such as computer-aided technologies [CAD, CAM, CAx]), to control industrial machinery and processes, reducing the need for human intervention. In the scope of industrialization, automation is a step beyond mechanization. Whereas mechanization provided human operators with machinery to assist them with the muscular requirements of work, automation greatly reduces the need for human sensory and mental requirements as well. Processes and systems can also be automated.
Automation plays an increasingly important role in the global economy and in daily experience. Engineers strive to combine automated devices with mathematical and organizational tools to create complex systems for a rapidly expanding range of applications and human activities.
Many roles for humans in industrial processes presently lie beyond the scope of automation. Human-level pattern recognition, language recognition, and language production ability are well beyond the capabilities of modern mechanical and computer systems. Tasks requiring subjective assessment or synthesis of complex sensory data, such as scents and sounds, as well as high-level tasks such as strategic planning, currently require human expertise. In many cases, the use of humans is more cost-effective than mechanical approaches even where automation of industrial tasks is possible.
Specialized hardened computers, referred to as programmable logic controllers (PLCs), are frequently used to synchronize the flow of inputs from (physical) sensors and events with the flow of outputs to actuators and events. This leads to precisely controlled actions that permit a tight control of almost any industrial process.
Human-machine interfaces (HMI) or computer human interfaces (CHI), formerly known as man-machine interfaces, are usually employed to communicate with PLCs and other computers, such as entering and monitoring temperatures or pressures for further automated control or emergency response. Service personnel who monitor and control these interfaces are often referred to as stationary engineers.
Automation has had a notable impact in a wide range of highly visible industries beyond manufacturing. Once-ubiquitous telephone operators have been replaced largely by automated telephone switchboards and answering machines. Medical processes such as primary screening in electrocardiography or radiography and laboratory analysis of human genes, sera, cells, and tissues are carried out at much greater speed and accuracy by automated systems. Automated teller machines have reduced the need for bank visits to obtain cash and carry out transactions. In general, automation has been responsible for the shift in the world economy from agrarian to industrial in the 19th century and from industrial to services in the 20th century.[3]
The widespread impact of industrial automation raises social issues, among them its impact on employment. Historical concerns about the effects of automation date back to the beginning of the industrial revolution, when a social movement of English textile machine operators in the early 1800s known as the Luddites protested against Jacquard's automated weaving looms[4] — often by destroying such textile machines— that they felt threatened their jobs. One author made the following case. When automation was first introduced, it caused widespread fear. It was thought that the displacement of human operators by computerized systems would lead to severe unemployment.
Critics of automation contend that increased industrial automation causes increased unemployment; this was a pressing concern during the 1980s. One argument claims that this has happened invisibly in recent years, as the fact that many manufacturing jobs left the United States during the early 1990s was offset by a one-time massive increase in IT jobs at the same time. Some authors argue that the opposite has often been true, and that automation has led to higher employment. Under this point of view, the freeing up of the labor force has allowed more people to enter higher skilled managerial as well as specialized consultant/contractor jobs (like cryptographers), which are typically higher paying. One odd side effect of this shift is that "unskilled labor" is in higher demand in many first-world nations, because fewer people are available to fill such jobs.
At first glance, automation might appear to devalue labor through its replacement with less-expensive machines; however, the overall effect of this on the workforce as a whole remains unclear.[citation needed] Today automation of the workforce is quite advanced, and continues to advance increasingly more rapidly throughout the world and is encroaching on ever more skilled jobs, yet during the same period the general well-being and quality of life of most people in the world (where political factors have not muddied the picture) have improved dramatically. What role automation has played in these changes has not been well studied.
Advantages:
* Replacing human operators in tedious tasks.
* Replacing humans in tasks that should be done in dangerous environments (i.e. fire, space, volcanoes, nuclear facilities, under the water, etc)
* Making tasks that are beyond the human capabilities such as handling too heavy loads, too large objects, too hot or too cold substances or the requirement to make things too fast or too slow.
* Economy improvement. Sometimes and some kinds of automation implies improves in economy of enterprises, society or most of humankind. For example, when an enterprise that has invested in automation technology recovers its investment; when a state or country increases its income due to automation like Germany or Japan in the 20th Century or when the humankind can use the internet which in turn use satellites and other automated engines.
Disadvantages:
* Technology limits. Current technology is unable to automate all the desired tasks.
* Unpredictable development costs. The research and development cost of automating a process is difficult to predict accurately beforehand. Since this cost can have a large impact on profitability, it's possible to finish automating a process only to discover that there's no economic advantage in doing so.
* Initial costs are relatively high. The automation of a new product required a huge initial investment in comparison with the unit cost of the product, although the cost of automation is spread in many product batches. The automation of a plant required a great initial investment too, although this cost is spread in the products to be produced.
(http://en.wikipedia.org/wiki/Automation)
Rationalization of Procedures: Streamline SOPs and eliminate bottlenecks
Business Reengineering: Radical redesign of processes to improve cost, quality, service and maximize benefits of technology
This develops the business vision and process its objectives, which are
- Identify process to be redesigned - looking for the systems that should changed or modify
- Understand, measure performance of existing processes - Study the capacity of each existing systems
- Identify opportunities for applying information technology - Find ways on how to implement information system in order to provide good outcome for the firm or organization
- Build prototype of new process
Paradigm Shift: A new perspective on things
Paradigm is a complete mental model of how complex a system functions. It involves rethinking the nature of the business, the organization. It is a complete reconception or change of how the system should work.
Information systems are of strategic importance of any company. They are constantly developed, redesigned, modernized. This should be a controlled process managed by top management, deployed by those that know the technologies. IT specailists’ opportunity to advance in a company or in any organization.
(http://www.zturk.com/edu/zagreb/podiplomski/slides/02-1-short-IT-strategies.pdf)
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