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Transforming Organisations:- Why Organisations Fail?

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Transforming Organisations:- Why Organisations Fail?

  1. 1. TRANSFORMING ORGANIZATIONS: WHY FIRMS FAIL? DIXON D. PALETT (M-14-04) ISHAN PARASHAR (M-14- 06) FACULTY : DR . JAYA SRIVASTAVA
  2. 2. INTRODUCTION  Amount of significant, often traumatic, change in organizations increasing.  Trend of changes likely to continue.  To an extent downside of change is inevitable.  Significant amount of waste and anguish witnessed recently is avoidable
  3. 3. ERROR #1:- ALLOWING TOO MUCH COMPLACENCY
  4. 4. What causes complacency?  Too much past success  Lack of visible crises  Low performance standards  Insufficient feedback from external constituencies What causes this error?  Overestimation of one’s capability to change the organization  Underestimation of inertia of people in comfort zone  Not recognizing actions that can reinforce status quo  Lack of patience Example:- Adrien thought he could get the people in the company “induced, pushed or replaced” to implement change but saw a host of quality initiatives fail due this error.
  5. 5. ERROR #2:- FAILING TO CREATE A SUFFICIENTLY POWERFUL GUIDING COALITION
  6. 6. Why coalition is needed?  “One man army” doesn’t work.  Most successful cases, coalition is always powerful  Weak committee efforts and initiatives get undermined What causes this error?  Underestimating difficulties of changing.  Little history of transformation  Low knowledge about the influencers in an organization Example:- Claire was aware of the change needed and knew urgency needed but the initiatives faded into oblivion within two years as the task force selected wasn’t proper.
  7. 7. ERROR #3:- UNDERESTIMATING THE POWER OF VISION
  8. 8. Why is it needed?  Vision helps to direct, align and inspire action  Needed to stir up the right kind of energy needed  Behind scene manipulation and avoiding discussions lead to chaos and confusion What causes this error?  Underestimating the value of a proper vision  Insufficient communication of the vision  “Whenever you can’t describe it in 5 mins and get a reaction of understanding and interest, you’re in trouble” Example:- Conrad made and distributed 4 inch thick notebook detailing procedures, goals, methods and deadlines but without telling where it was leading and as result could neither rally them together nor inspire change.
  9. 9. ERROR #4:- UNDER COMMUNICATING THE VISION
  10. 10. Why is it important?  Short term sacrifices needed for change  No sacrifice till people know the end result and benefits thereof  Communication = word + deed What causes this error?  Good vision but only few meetings or memos  Many speeches by head but managers silent  Not adhering to “walk the talk” Example:- 1980 CEO earlier though communication done was plenty but realized later it was short by miles and many decisions appeared inconsistent with their communication (hypocritical jerks)
  11. 11. ERROR #5:- PERMITTING OBSTACLES TO BLOCK THE NEW VISION
  12. 12. Why is it important?  Implementation of change requires action from a large number of people  Avoiding obstacles , disempowers employees and undermine the change What causes this error?  Refusal to adapt to new circumstances  Demands that are inconsistent with transformation  Concern that one cannot blend in with the change and achieve expected operating results  Narrow job categories – undermines efforts to increase productivity  Compensation or performance appraisal s/m can force to choose b/w new vision and their self interest. Example:- Ralph – HR s/m ( inconsistent ) -Din’t believe in need for change -concerned he could produce change - Expected operating results
  13. 13. ERROR #6:- FAILING TO CREATE SHORT-TERM WINS
  14. 14. Why is it important?  Momentum of efforts to change is lost if there are no short term goals to meet and celebrate.  People expect evidence of results within 6 – 18 months  Urgency level drop – when knowing it takes long time  Might give up / join resistance What causes this error?  Assumption that good things will happen  focusing grand vision forgetting short-term Example:- Nelson – big ideas person + 2 colleagues Inventory control – to reduce inventory cost w/o stock outages Divisional controller – needed to see immediate result ( ans : time) IC model = new s/w + h/w
  15. 15. ERROR #7:- DECLARING VICTORY TOO SOON
  16. 16. Why is it important?  Risk until changes sink down deep into culture ( 3-10yrs)  Useful changes disappear  Premature victory celebration stops momentum What causes this error?  Urgency level is not intense enough  Guiding coalition is not powerful enough  Idealistic change initiators  Self serving change resisters  War is over and troops should be sent home (Once sent home , reluctant to return ) Reengineering theme – consultants were paid and thanked with first major project completion w/o checking if original goals were accomplished / acceptance by employees Example:-
  17. 17. ERROR #8:- NEGLECTING TO ANCHOR CHANGES FIRMLY IN THE CORPORATE CULTURE
  18. 18. Why is it important?  Change sticks only when it becomes “ the way we do things around here “  Root in as social norms and shared values  Degradation if pressure associated is removed  If employees are left on their own , inaccurate links are created What causes this error?  Linking performance improvements with flamboyant style instead of strategy  Choice of successors (less seasoned candidates)  Insensitivity / ignorance to culture  Economic orientation  Analytic orientation Example:- Charismatic Coleen’s lesson imbedded in cluture as “ value extroverted managers “ instead of “ love thy customer”
  19. 19. SUMMARY : COMMON ERRORS  Allowing too much complacency  Failing to create a powerful guiding coalition  Underestimating the power of vision  Under communicating the vision by a factor of 10 ( or 100 or even 1000)  Permitting obstacles to block the new vision  Failing to create short-term wins  Declaring victory too soon  Neglecting to anchor changes firmly in the
  20. 20. SUMMARY : CONSEQUENCES  New strategies aren’t implemented well  Acquisitions don’t achieve expected synergies  Reengineering takes too long and costs too much  Downsizing doesn’t get costs under control  Quality programs don’t deliver expected results  Frustration in employees  Slow down on implementation  Unnecessary resistance
  21. 21. CONCLUSION  Errors are not inevitable  Awareness and skill can avoid errors to a large extend  Understand why organizations resist needed change  Find appropriate multistage process to overcome destructive inertia  Leadership is required in a socially healthy way more than just good management.
  22. 22. REFERENCE  Reading material : Transforming Organizations : Why firms fail (John P. Kotter )
  23. 23. THANK YOU

Notes de l'éditeur

  • Plunging ahead without establishing a high enough sense of urgency in fellow managers and employees.
  • “Enough with the preliminaries let’s go with it.”
  • Individuals alone, no matter how competent or charismatic, never have all the assets needed to overcome tradition and inertia except in very small organizations.
  • Urgency and strong guiding team is necessary but none is more important than a sensible vision.
  • Urgency and strong guidance team are necessary but none is more important a sensible vision.
    List of confusing, incompatible and time consuming projects that goes nowhere at all.
    Mid-level British manufacturing firm SE gave 30 minutes lecture on vision but the basic direction/vision elements were buried in it.
  • People unhappy with current status quo won’t be willing to make sacrifices many a times unless the believe potential profits from change are attractive it is actually possible to be done.
  • Ralph didn’t reward ideas – for changing the vision

    He allowed HR systems to remain intact even when it was inconsistent with new ideas.

    He didn’t believe that his company needed this change

    [[Cynicism is an attitude or state of mind characterized by a general distrust of others' motives. ]]
  • Create short term goals

    Eg – pressure could’ve forced a few money saving course correction and speeded up partial implementation
  • -- Conscious attempt to show people how specific behaviors and attitude is required to improve performance

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