Change Management

Making Things Better: A Primer and Case Study in Change Management

Presented by Doug Howardell

Agenda

Change Management Defined Change Management Concepts Strategies for Leadership Strategies for Users

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Definition of Change Mgt

The fostering and support of people who champion new technologies, new operating practices, and new products and services that will transform the organization maintaining its viability and improving its competitive position in step with the change in the business environment in which it functions. APICS Dictionary An organized, systematic application of the knowledge, tools, and resources of change that provides organizations with a key process to achieve their business strategy Jeanenne LaMarsh LaMarsh & Associates

Getting people to accept the what because they understand the why.
Doug Howardell

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Examples of Change

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Change Management is important

Top Ten Barriers to Success
Resistance to Change
Inadequate Sponsorship Unrealistic Expectations Poor Project Management Case for Change Not Compelling Project Team Lacked Skills Scope Expansion/Uncertainty No Change Management Program
46% 44% 44% 43% 41% 30% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 54% 65% 72% 82%

No Horizontal Process View

IT Perspective Not Integrated

Source: DC CIO Survey

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Reactions to Change
Individuals frequently react to change in a predictable manner
Unaware Denial Resistance Exploration Acceptance Commitment

Change Management must provide the tools and approaches to lead people through this process: Take a critical mass of the leadership down to commitment as fast as possible to provide direction Lead the other Stakeholders along this path in a phased and targeted manner Entrench and embed the change in the organization to provide the context and support for individual change

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Key Steps

Identify stakeholders and how they feel about the change Raise the level of discontent remind them of current problems Document the current process and its problems, waste, redundancies and non-value added activities

Identify what will be different or new Identify gaps and barriers Highlight the expected benefits Define the transition process Identify issues expected during transition

Surprises
Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Change Targets
Real, sustainable change involves changing every level of the organization:
Leadership Leadership must focus attention, build commitment, and create inspiration Users need to develop mindsets, skills and commitment to new ways and to develop qualities of change hardiness the ability to navigate through change.

Users

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Strategy for Leadership Strategy

The change leadership strategy focuses on establishing joint ownership by line management and the project team for the successful implementation of project Key Themes
Leaders equipped to face the same issues together

Joint ownership and accountability

Focus on the most valuable asset, our employees/ users

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Tools for Leadership

Organize to involve Process Reviews Stakeholder Analysis

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Change Management Organization

Steering Committee (~10) Business Process Owners (~20)

Business Readiness Groups (~300)

End Users (~4000)

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

BPO & BRG Responsibilities

Business Process Owner
Definition Senior Stakeholder of particular process area (reports to a V.P.) Ensures needs of process area are met Focus on cross-functional responsibility for the solution Responsibilities Represent needs of process areas across the business Assist in resolving issues regarding business / technical issues Demonstrate visible support for the project within the organization Assign resources Chair the BRG meetings

Business Readiness Group

Definition Key stakeholders within particular process area (reports to the BPO) Have advisory role in process solutions Focus on specific functional responsibility for the solution Responsibilities Assist with project communications and provide feedback Validate/Align organization with PRISM solution Support data cleansing and preparation Assess impact of solution on organizational structure Identify impacted end users and help assess their training needs Ensure readiness of functional areas to deploy the proposed solution

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

BPO/BRG Structure
Production Control
Contracts Sales Order Activation / Entry Bills of Material / Engineering Changes Master Scheduling MRP Controller Shop Floor Order Release / expedite

Quality
Quality, Incoming Inspection Quality, Supplier Quality / Source Inspection Quality, Shop Floor Inspection & Test

Customer
Customer

Procurement Purchasing
Major Sub-contracts Hazardous Waste (EH&S)

Plant Maintenance
Repairs Preventative Maintenance

Engineering
Reliability Design (Electrical, Mechanical. Optical) System / Config Mgt

Make
Mfg Eng (routings) Industrial Eng (standards) Quality, Shop Floor Inspection & Test Configuration Mgmt / As Built

Finance
Finance, Operations (Labor) Finance, Operations (Material) Finance, Program Business Mgmt Proposals & Estimating

Logistics
Goods, Receiving Goods, Material Stocking/Issue Freight, Pack & Ship Import/Export Material, inter/intra site movement

Program Office
Program Ops Program MPM Post Production Support & Performance Based Logistics
Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Alignment Workshops
Pre-Workshop Deliverables Deliverable: Sub Process Group Profile Deliverable: Sub Process Group Flow Deliverable: Simulation Deliverable: Design Attributes

Post Workshop Deliverables Deliverable: Workshop Notes Deliverable: Disposition Workshop Notes Deliverable: Update flows Deliverable: Confirm Business Process Master List Deliverable: Business Process Owner Review Deliverable: Change Implications

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Process Reviews

Objectives Review enterprise design with BPO/BRG Gather their inputs Identify change impacts BPO Role Approves attendees Assure attendance

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Process Reviews

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Stakeholder Analysis
Stakeholder Jon Colin George Emanuel Dick Fred Bob Dina Dan Susan Rick Ed Tom Nick Awareness Awareness Actual Influence Goal Supportive Mgt Level Frequency 10 7 5 10 10 Monthly 10 7 5 10 10 Monthly 10 7 7 7 9 Bi-monthly 10 7 7 10 9 Bi-monthly 10 7 7 10 9 Bi-monthly 10 7 7 5 9 Bi-monthly 10 7 2 10 9 Bi-monthly 10 7 2 7 9 Bi-monthly 10 7 5 10 8 Bi-monthly 8 5 2 7 9 Bi-monthly 7 5 5 10 9 Bi-monthly 7 5 2 5 9 Bi-monthly 7 5 2 8 9 Monthly 7 5 0 2 9 Monthly Meeting/ Communicator Exec Exec Exec Steering Exec Steering exec Steering Exec Steering Exec Steering Exec Steering forest Exec Steering Exec Steering Exec Steering Exec Exec Current Action

Talk to Sheri Lanpher Talk to Kelly & Linda about what she knows Talk to Andy & Bill L. Garey - to set up meeting with him Meet with in Aug Meet with in Aug

0 = No awarness, 2 = minimal awareness, 5 aware of the big picture, 7 = Aware of important Awareness details, 10 aware of the details and their implications and ramafications 0 = strongly opposed, 2 = weakly opposed, 5 = indifferent or undecided, 7 = weakly in Supportive favour, 10 = strongly in favour 0 = Can do nothing to influence outcomes or plans, 2 = Can do little to influence outcomes or plans, 5 = Can make it easy or difficult to achieve outcomes or plans, 7 = Can directly Copyright 2006 Doug Howardell 626-390-6935 Influence influence those who can veto, 10 = can veto, formally or informally, outcomes Dh@theacagroup.com or plans

Strategy for Users

Create and sustain awareness of strong change imperative (burning platform) Communicate what we know when we know (including the fact that we dont have all the answers yet) Communicate widely and broadly the vision and strategy and implications Involve our strategic users early in their sphere of competency

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Tools for Users

Raise level of discontent Alignment Workshops Communication Change Readiness Survey

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Raise Level of Discontent

Who Cares
Issue Duplicate efforts - How many times do we enter a part number in different systems from receipt of RFP to post production support? Problems with transition from engineering to production Separate procurements Mgt, Master Planners, Depot Mgt, Ops, Planners Mgt, buyers

No configuration / rev control in our current systems

No product cost in current systems Annual cost of systems reduces profit, depresses stock price

Engineers
Finance All employee stock holders

The competition is ahead of us

All employee stock holders

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Alignment Workshops
Pre-Workshop Deliverables Deliverable: Sub Process Group Profile Deliverable: Sub Process Group Flow Deliverable: Simulation Deliverable: Design Attributes

Post Workshop Deliverables Deliverable: Workshop Notes Deliverable: Disposition Workshop Notes Deliverable: Update flows Deliverable: Confirm Business Process Master List Deliverable: Business Process Owner Review Deliverable: Change Implications

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Alignment Workshops

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Alignment Workshops

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Communication & Involvement Model

Communicate at this level

Overall Strategy and Direction Strategic Technology and infrastructure Business Processes Workflow Job Design
Involve at this level

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Communication Flow
Communication Flow 1. Steering Team Status & Escalation of Issues & One-One with ea. Business President & Gen. Mgrs. 2. Lateral with the teams (CM Team, the entire Project Team, special groups) 3. Up & down with user communities (included the OCLs) Executive Sponsors Project Leaders Not Full Time

Full Time Project

Finance
Process Expert

SFC
Process Expert

MRP
Process Expert

Quality
Lead PO & BRG

Change Mgt Team Process Owners Ops

Lead PO & BRG

Operational Communication Lead

P&IC
Lead PO & BRG

End Users
Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Change Readiness Survey

Helps you determine the current state of change readiness

key disconnects, and major obstacles

Develop questions that assess readiness in each stage of the project Survey a valid sample size Track results over time
Early: survey for awareness Mid-range: survey for process knowledge Late: survey for transition plan

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

Recap

Definition-Getting people to accept the what because they understand the why Change Management is important

Individuals frequently react to change in a predictable manner Key steps assure No Surprises Leadership Strategies Organize to involve Process Reviews Stakeholder Analysis

User Strategies
Raise level of discontent Alignment Workshops Communication Change Readiness Suvrey

Copyright 2006 Doug Howardell 626-390-6935 Dh@theacagroup.com

For a copy of this presentation and for more information on change management, go to:

www.theacagroup.com