How to Manage the Organizational Change Herman A. Zwirn CIRM LaMarsh & Associates, Inc

© 2002 LaMarsh & Associates, Inc.

K. J

udge

SurvivingERP

How to Manage the Organizational Change

Herman A. Zwirn CIRM

LaMarsh & Associates, Inc.

2© 2002 LaMarsh & Associates, Inc.

APICS Chicago Chapter 14

05/21/02

participants will ...

• Learn a working model of Change Management

• Determine how to use Change Management strategies and tactics in your ERP implementation


The Nature of Change

Mythology and Fact



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"We trained hard-but it seemed thatevery time we were beginning to form into teams, we would be reorganized. I was to learn later in life that we tend to meet any newsituation by reorganizing; and whata wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency anddemoralization."

Organizational change: and the beat goes on...

PETRONIOUS (1st Century Roman and advisor to Nero)



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Some myths orWhy we don’t need change management

• People will always adapt to change.

• Change happens, you don’t have to manage it.

• That’s what we pay our managers to do.

• The project will get done with or without change management.

• If you change the process, everything will change.

• ERP makes change happen.



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Failure is Possible

No Plan for Implementation

Fuzzy Definition of Desired

State

Failure to Integrate

all Changes

FAILURE



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Critical Success Factors

• User Involvement

• Executive Management Support

• Clear Statement of Requirements

• Proper Planning

• Realistic Expectations

• Smaller Project Milestones

• Competent Staff

• Ownership

• Clear Vision and Objectives

• Hard Working Focused Staff



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Change is about...

• Organizations• Individuals• Results



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Change is about...

• Structure• Process• Culture• People



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Stages of Change

Current State

WHY?WHY?

Delta State

HOW?HOW?

Desired State

Desired State

K. Judge

WHAT?WHAT?



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Layers of Desired State

Company’s Desired State

Department’s Desired State

Target’s Desired State



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Desired State

Structu

re

Proces

s

Culture People



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Dip in the Delta

Productivity

K. Judge



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Dip in the Delta

Productivity

K. Judge



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Why?

• “There are many ways to achieve it, but managing change is no longer a competitive discriminator – it is just part of the ante to get into the game. Competitive advantage goes to the company that can manage change and embrace innovation, proactively, while minimizing perturbation of existing operations.”

Based on Next Generation Manufacturing Project, The Agility Forum


The

Methodology

of

Change



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What is it?

• Change management is the methodology that integrates change and the ability of the organization and people to adopt it.

• It is an organized, systematic application of the knowledge, tools and resources of change that provides organizations with a key process to achieve their business strategy.

• It is a real tool to mitigate the risk and increase both the ownership and sustainability of change.



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What you need

• A consistent and scalable model of change that matches the change process

• A disciplined methodology to implement the model that can be integrated into the way work is done

• A learning system that embeds a change capability into the workforce



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Managed Change™ ModelExterna

l Change Drivers

Internal

Change

DriversPrepare to Change

ResistanceResistance

SponsorSponsor TargetTargetChange Agent

Change Agent

CultureCulture HistoryHistory

Identify the Change

DeltaDeltaCurrentCurrent DesiredDesired

Plan the Change

RewardRewardCommunicationCommunication LearningLearning

Implement the Change

Sustain the Change



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Methodology

Current State

Desired State

Fishbone Analysis

Dip in the Delta

Key Role Maps

Culture Analysis

History Assessment

Resistance Assessment

Statement of Work

Team Infrastructure

Change Headquarters

Communication Team

Communication Plan

Learning Team

Learning Plan

Communication Events

Learning Events

Reward Events

Feedback Reports

Deliverable Library

Reward Team

Reward Plan

Deliverables

Ownership Development Plan

Step FiveMonitor the Change

Step OneIdentify the Change

Step TwoPrepare the Change

Step ThreePlan the Change

Step FourImplement the Change

Project GovernanceSteps

Current State

Desired State

Fishbone Analysis

Dip in the Delta

Key Role Maps

Culture Analysis

History Assessment

Resistance Assessment

Statement of Work

Team Infrastructure

Change Headquarters

Communication Team

Communication Plan

Learning Team

Learning Plan

Communication Events

Learning Events

Reward Events

Feedback Reports

Deliverable Library

Reward Team

Reward Plan

Deliverables

Ownership Development Plan

Step FiveMonitor the Change

Step OneIdentify the Change

Step TwoPrepare the Change

Step ThreePlan the Change

Step FourImplement the Change

Project GovernanceSteps Step Five

Monitor the ChangeStep One

Identify the ChangeStep Two

Prepare the ChangeStep Three

Plan the ChangeStep Four

Implement the Change

Project GovernanceSteps

How?



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Company

Structure Proces

s

Culture People

•Link ERP to business strategy•Support an ERP Process Change Center of Excellence•Define internal connections to build sponsorship cascade•Define executive sponsor roles

•Apply a change model to the ERP implementation•Introduce a change methodology •Use the change methodology as a part of all aspects and levels of the ERP implementation

•Build organizational change learning capability•Process Orientation•Create sponsor level Learning

•Integrated Enterprise Thinking•Seeks change•Focused, disciplined and patient



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Departmental

Structure Proces

s

Culture People

•Apply a scalable change model•Apply a change methodology to implement the model•Embed the change methodology into other ERP methodologies

•Build Departmental Sponsor Cascade•Define ERP roles and responsibilities•Create key role charters•Define ERP performance measures

•Develop knowledge of ERP and organizational change•Know enterprise role of the department•Develop change agent skills•Develop ability to use the change methodology

•Change resilient•Knowledge based•Value driven•Cross-functional Partners•Process-driven•Customer focused



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Individual

Structur

e

Proces

s

CulturePeople

•Design jobs to include change management•Build in ERP role and measures•Build change agent measures into performance evaluation

•Design work flow and methodologies to include change management tasks.•Change management is a work habit

•Provide general change process knowledge•Process thinking capability•Apply change agent skills•Develop target skills

•Create tolerance for change•Knowledge driven•Value centered•People centered•Customer centered



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Data Gathering and AnalysisIdentify Risk/ Identify issues / responseEstablish SponsorshipBuild Team strength

Assess

Executive Kick-off

Prepareto

Change

Business Assessment Analysis

Develop

Planthe

Change

Configuration

Design andFinalizeCommunicationsLearning (Training)AndRewards

Launch and ExecuteSystem Events:• Communication• Learning• Rewards Event designs

Specific communications, learning and rewards events

Deploy

ImplementtheChange

Implement System/ Processes / Policies

Post-Audit

SustaintheChange

Own It

Go Live

Governance&

Identifythe

Change

Res

ult

s Build ProjectInfrastructure

Define goals andSet expectations

TurnoverResponsibility

Identify Next Steps:

KnowledgeTransfer

Plan

Change Communications

ERP Managed Change™Integration



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Elements of successful change

• Commit to making change management a key competency and part of the ERP strategy.

• Explain why the Current State is no longer viable.

• Clearly define the Desired State that will result from the ERP implementation.

• Build a systematic change-management methodology to implement your change during the ERP Delta State.

• Integrate that methodology into the heart of the ERP project and the organization.



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Discipline

• The ERP Desired State as requires the continuous, conscious process of applying a systematic change methodology to implement ERP and build a sustainable future that is owned by the greatest majority of people in the enterprise.



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Process technology

Process automation

Information System

Technical / task based skills

Information and business systems capabilities

Enterprise understanding

Inter-personal and collaborative behaviors

Ownership/Innovative Application

BENEFIT RELATIONSHIPS

60%

20%

20%

Why is this Important?



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It makes a difference

• It impacts 90% of project critical success factors

• It impacts 100% of the factors reported to cause projects to fail or be cancelled

• Benefits are obtained earlier

• Failure risks are reduced



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Critical Success Factors• User Involvement• Executive Management Support• Clear Statement of Requirements• Proper Planning• Realistic Expectations• Smaller Project Milestones• Competent Staff• Ownership• Clear Vision and Objectives• Hard Working Focused Staff

MC

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MC

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Your Turn• Questions

• Comments

• Concerns

• Ideas

Herman A. Zwirn [email protected]

Documents

How to Manage the Organizational Change Herman A. Zwirn CIRM LaMarsh & Associates, Inc