CHANGE IS THE ONLY THING

THAT WILL NEVER CHANGE.

SO LETS LEARN TO ADAPT IT
BY

CHANGE
MANAGEMENT

The discipline of change management deals primarily with the human aspect
of change, and is therefore related to pure and industrial psychology.
Objective: To maximize the collective benefits for all people involved in the
change and minimize the risk of failure of implementing the change.
Change management is the process of developing a planned approach to
change in an organization.
Change implies making an essential difference, often amounting to a loss of
original identity or a substitution of one thing for another.
Time compression: information and communication.
Interdependence: one economic world.
Technology advances: shorter product cycles.
Turbulence: political and social.

The manager has not communicated well the detailed aspects of the
change. People may only understand the change in broad terms and
not in practical terms.
Lack of
communication
Staff do not know how they should go about for change & they may
lack the knowledge, skills and experience to implement the proposed
change.
Procedure
Staff may not be convinced about the purpose of the change or they
may not see the benefits of the change.
Goal oriented
Too many parties involved in the change without a clear definition of
their roles will bring confusion and frustration.
Involvement of
parties
Commitment to change from the top is critical. Many well-planned
change programmes have failed as leaders who plan the change do
not follow up with the necessary support.
Proper support
Change programmes often fail not because of lack of skills but
because of absence of courage to implement the change.
Lack of courage
A clear and outright declaration on how people are going to be
rewarded if they achieve successful results from change would go a
long way.
Poor motivation
Why People resist change..???
Education and communication

Participation and involvement

Facilitation and support

Negotiation and agreement


Organization parts are sets of functional parts.
Management shifts, eliminates, changes the parts.
Driven from the top down
Examples: mergers, acquisitions, divestiture
Structural change (e.g., a
machine model of
organization)
Elimination of non-essential activities; squeezing cost
from operations
Cost cutting
Focus on how things are done
Process change (e.g.,
Business Process
Reengineering)
People-sided
From command-and -control toward participative
management
From product-push to customer-orientation
Cultural change
Types of Organizational Change Programs
Change drivers
Near-term economic improvement (or turn around)
Improvement in organizational capabilities
Termed Theory E or Theory O
(HBS Michael Beer and Nitin Nohria)
Theory E: Economic

Dramatically and quickly improve shareholder value
Measured by improved cash flow or share price
All implicit contracts between company and employees
are suspended; produce or you are gone; failure is
NOT an option
All organizational elements are like chess pieces on a
chessboard
Non value-add elements are especially valuable
Top-management and inner-circle driven
Examples: GE under J. Welsh; IBM under L. Gerstner
Goal is to change
Organizational culture to one supporting learning and high
performance
Committed, capable, relatively autonomous employee is
best asset.
Implicit contract can never be broken
May be incompatible with top-down direction
Highly participative from within the ranks
Examples: Schwab, Merck, 3 M, Intel, Microsoft
Theory E may lead to short-term gains but hurts long term
Look at the IBM example
And may backfire
1990s downsizing did not guarantee higher performance

Theory O is a huge, multi-year project
Hybrid approaches generally preferred
1. Mobilize energy and commitment through joint
identification of problems and solutions
2. Develop a shared vision
3. Identify the leadership
4. Focus on results, not on activities
5. Start at the periphery, then let it spread
6. Institutionalize success through policies and structures
7. Monitor and adjust as you go

People will quit, elements will fail, the setting may change

Create a project team dedicated to change
Communicate the vision and goals of this team
Monitor people/organizational issues
Determine change management processes/practices
Reorganize to support processes and practices
Implement processes and practices
Monitor completion of the plan; tasks and milestones
Communication feedback, revise processes and practices as
required.
Further the buy-in with continuous training/skills updating

While change
Repeat
Getting
started
Planning Implementing Sustaining
Establish
role &
governance
Understand
vision &
benefits

Manage
stakeholder
s
Implement
change
plan
Realize
benefits
Embed
system &
new ways of
working
Review &
improve
change plans
Quantify the
impacts
Go live
Review
Readiness
Identify
stakeholders
Assess
risks
Build
change
plans
Understand
implementation
schedule
Define
communication
strategy
Change Management Process
Form
Relationships
Innovate
Who Cares? Keep Pace
Market
Differentiating
Mission Critical
Low
High
Low High
Learn the basics, Pareto Principle states that 20% of the things
being done actually yield 80% of the total payoff.
1. EFFECTIVENESS - DOING THE
RIGHT THINGS
Thorough understanding of all the aspects & adjusting to new
standards of the new job or business activity.
2. EFFICIENCY - DOING
THINGS RIGHT
Level 3 change makes more effective, more efficient, more
productive & more value-adding - frequently with customer
input.

3. IMPROVING - DOING
THINGS BETTER
Involves analysis of core functions & applies the Pareto Principle
to focus on stopping doing things - cutting out the 80% of things
that only yield 20% of the value.
4. CUTTING - DOING AWAY
WITH THINGS
Marks the transition from incremental to fundamental change.
Copying, learning from, and "reverse engineering" can
dramatically boost innovation at significantly lower costs than
starting from scratch.
5. COPYING - DOING THINGS
OTHER PEOPLE ARE DOING
Transitions into degrees of novelty which not only move an
organization "out-of-the-box", they move the organization into
areas where nobody else is doing it.
6. DIFFERENT - DOING THINGS
NO ONE ELSE IS DOING
"What is today impossible, but if it were possible it would
fundamentally change the way you do business?" Joel Barker's
famous question reframes thinking extremely well for Level 7.
7. IMPOSSIBLE - DOING
THINGS THAT CAN'T BE DONE
The 7 Levels of Change:
A STRATEGY FOR CREATIVITY, INNOVATION & CONTINUOUS
IMPROVEMENT


ICICI Bank merger with Bank of Madura (December 2000)

What does it reveal ?

It reveals the importance of change management for the Bank
of Madura and how effective management of change could
bring out best results from the employees in the Bank of
Madura.





ICICI Bank Ltd. Bank of Madura (BoM)
ICICI was established by the
Government of India in 1955.
Established in 1943, in Madurai,
Tamilnadu. By 2000, it became
the no. 1 in Tamilnadu.
Three times to that of Bank of
Madura
One third the size of ICICI.
Staff strength was only 1,400. Staff strength was 2,500.
Departments into individual
profit centers.
Management concentrated on
the profitability of the overall
bank.
There were large differences in profiles, grades,
designations and salaries of personnel
There was uneasiness among the staff of BoM as they felt
that ICICI would push up the productivity per employee, to
match the levels of ICICI
BoM employees feared that their positions would come in
for a closer scrutiny.
They were not sure whether the rural branches would
continue or not as ICICI's business was largely urban-
oriented.

PERI OD EMPLOYEE BEHAVI OR
Day 1 Denial, fear, no improvement
After a month Sadness, slight improvement
After a Year Acceptance, significant
improvement
After 2 Years Relief, liking, enjoyment,
business development activities
Established clear communication channels
throughout.

Training programs were conducted which emphasized
on knowledge, skill, attitude and technology to
upgrade skills of the employees.

Direct dialogue with the employee unions of the BoM
to maintain good employee relations.

ICICI transferred around 450 BoM employees to ICICI Bank,
while 300 ICICI employees were shifted to BoM branches.

Promotion schemes for BoM employees were initiated and
around 800 BoM officers were found to be eligible for the
promotions.

End of the year, ICICI seemed to have successfully handled the
HR aspects of the BoM merger.

The win-win situation created

We do put people under stress by raising the bar constantly.
That is the only way to ensure that performers lead the change
process. K. V. Kamath, Ex- MD & CEO, ICICI

Noticing Small Changes early helps You Adapt To The Bigger
Changes That Are To Come

Change Happens, Anticipate Change, Monitor Change, Adapt
To Change Quickly.

Enjoy Change! Be Ready To Change Quickly And Enjoy It
Again

To IMPROVE is to
change, to be PERFECT is
to change often.

-Winston Churchill
THANK YOU