MOST Analysis

Mission Statement

The objective of organizational change management is to enable organization members and other stakeholders to adapt to a sponsor’s new vision, mission, and systems, as well as to identify sources of resistance to the changes and minimize resistance to them. Organizations are almost always in a state of change, whether the change is continuous or episodic. Change creates tension and strain in a sponsor’s social system that the sponsor must adapt to so that it can evolve. Transformational planning and organizational change is the coordinated management of change activities affecting users, as imposed by new or altered business processes, policies, or procedures and related systems implemented by the sponsor. The objectives are to effectively transfer knowledge and skills that enable users to adopt the sponsor’s new vision, mission, and systems and to identify and minimize sources of resistance to the sponsor’s changes.

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Objectives

01. Breakthrough Value: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Strategic Analysis; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Change Framework; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Navigating Change; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Transformation Strategies; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Transitional Plan; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. MBT Framework: departmental SWOT analysis; strategy research & development. 1 Month
08. Best Practices: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
09. Communication: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
10. Employee-Centered: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
11. Resistance: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
12. Leadership & Stakeholders: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month

 

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Strategies

01. Breakthrough Value: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Strategic Analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Change Framework: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Navigating Change: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Transformation Strategies: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Transitional Plan: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. MBT Framework: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Best Practices: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
09. Communication: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
10. Employee-Centered: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
11. Resistance: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
12. Leadership & Stakeholders: Each individual department head to undertake departmental SWOT analysis; strategy research & development.

 

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Tasks

01. Create a task on your calendar, to be completed within the next month, to analyse Breakthrough Value.
02. Create a task on your calendar, to be completed within the next month, to analyse Strategic Analysis.
03. Create a task on your calendar, to be completed within the next month, to analyse Change Framework.
04. Create a task on your calendar, to be completed within the next month, to analyse Navigating Change.
05. Create a task on your calendar, to be completed within the next month, to analyze Transformation Strategies.
06. Create a task on your calendar, to be completed within the next month, to analyse Transitional Plan.
07. Create a task on your calendar, to be completed within the next month, to analyse MBT Framework.
08. Create a task on your calendar, to be completed within the next month, to analyse Best Practices.
09. Create a task on your calendar, to be completed within the next month, to analyze Communication.
10. Create a task on your calendar, to be completed within the next month, to analyse Employee-Centered.
11. Create a task on your calendar, to be completed within the next month, to analyse Resistance.
12. Create a task on your calendar, to be completed within the next month, to analyse Leadership & Stakeholders.

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Introduction

Organizational Change And Transformation Planning

Definition: Transformation planning is the process of creating a [strategic] plan for changing an organization’s business processes by changing policies, procedures, and processes to shift it from a “as is” to a “to be” state.

Change Management is the process of gathering enterprise (or business) intelligence in order to perform transformation planning by assessing an organization’s people and cultures in order to determine how changes in business strategies, organizational design, organizational structures, processes, and technology systems will affect the enterprise.

Roles & Expectations: Leaders are expected to be able to assist in formulating the strategy and the plans for transforming a customer’s organization, structure, and processes, including support to that organization. They are expected to recommend interfaces and interactions with other organizations, lead change, collaborate, build consensus across the firm and other stakeholders for the transformation, and to assist in communicating the changes. To execute these roles and meet these expectations, leaders are expected to understand the complex, open-systems nature of how organizations change, and the importance of developing the workforce transformation strategies as a critical, fundamental, and essential activity in framing a project plan. They must understand the social processes and other factors (e.g., leadership, culture, structure, strategy, competencies, and psychological contracts) that affect the successful transformation of a complex organizational system.

Context

The objective of organizational change management is to enable organization members and other stakeholders to adapt to a sponsor’s new vision, mission, and systems, as well as to identify sources of resistance to the changes and minimize resistance to them. Organizations are almost always in a state of change, whether the change is continuous or episodic. Change creates tension and strain in a sponsor’s social system that the sponsor must adapt to so that it can evolve. Transformational planning and organizational change is the coordinated management of change activities affecting users, as imposed by new or altered business processes, policies, or procedures and related systems implemented by the sponsor. The objectives are to effectively transfer knowledge and skills that enable users to adopt the sponsor’s new vision, mission, and systems and to identify and minimize sources of resistance to the sponsor’s changes.

Best Practices and Lessons Learned

Implementation of a large-scale transformation project affects the entire organization. In a technology-based transformation project, an organization often focuses solely on acquiring and installing the right hardware and software. But the people who are going to use the new technologies—and the processes that will guide their use—are even more important. As critical as the new technologies may be, they are only tools for people to use in carrying out the agency’s work.

Figure 1. Organizational Transition Model

As shown in Figure 1, the discipline of organizational change management (OCM) is intended to help move an organization’s people, processes, and technology from the current “as is” state to a desired future “to be” state. To ensure effective, long-term, and sustainable results, there must be a transition during which the required changes are introduced, tested, understood, and accepted. People have to let go of existing behaviors and attitudes and move to new behaviors and attitudes that achieve and sustain the desired business outcomes. That is why OCM is a critical component of any enterprise transformation program: It provides a systematic approach that supports both the organization and the individuals within it as they plan, accept, implement, and transition from the present state to the future state.

Studies have found that the lack of effective OCM in an IT modernization project leads to a higher percentage of failure. According to a 2005 Gartner survey on “The User’s View of Why IT Projects Fail,” the findings pinned the failure in 31 percent of the cases on an OCM deficiency. This demonstrates the importance of integrating OCM principles into every aspect of an IT modernization or business transformation program.

Navigating the Change Process

Organization leaders need to assess change as a process and work in partnership with our sponsors to develop appraisals and recommendations to identify and resolve complex organizational issues. The change process depicted in Figure 2 is designed to help assess where an organization is in the change process and to determine what it needs to do as it moves through the process.

Figure 2. An Organizational Change Process

By defining and completing a change process, an organization can better define and document the activities that must be managed during the transition phase. Moving through these stages will help ensure effective, long-term, and sustainable results. These stages unfold as an organization moves through the transition phase in which the required transformational changes are introduced, tested, understood, and accepted in a manner that enables individuals to let go of their existing behaviors and attitudes and develop any new skills needed to sustain desired business outcomes.

It is very common for organizations to lose focus or create new initiatives without ever completing the change process for a specific program or project. It is critical to the success of a transformation program that the organization recognizes this fact and is prepared to continue through the process and not lose focus as the organizational change initiative is implemented. Commitment to completing the change process is vital to a successful outcome.

Framework for Change

In any enterprise transformation effort, there are a number of variables that exist simultaneously and affect the acceptance of change by an organization. These variables range from Congressional mandates to the organization’s culture and leadership to the attitude and behavior of the lowest-ranking employee. Social scientists use the Burke-Litwin Model of Organizational Performance and Change, or other approaches in line with the sponsor’s environment and culture, to assess readiness and plan to implement change. The Burke-Litwin Model identifies critical transformational and transactional factors that may impact the successful adoption of the planned change. In most government transformation efforts, the external environment (such as Congressional mandates), strategy, leadership, and culture can be the most powerful drivers for creating organizational change.

Transformation Strategies

Most organizations will ultimately follow one of three approaches to transformation. The type of approach is related to the culture and type of organization (e.g., loosely coupled [relaxed bureaucratic organizational cultures] or tightly coupled [strong bureaucratic organizational cultures]):

• Data-driven change strategies emphasize reasoning as a tactic for bringing about a change in a social system. Experts, either internal or external to the sponsor, are contracted to analyze the system with the goal of making it more efficient (leveling costs vs. benefits). Systems science theories are employed to view the social system from a wide-angle perspective and to account for inputs, outputs, and transformation processes.

The effectiveness of a sponsor’s data driven change strategy will be dependent upon (a) a well-researched analysis that the transformation is feasible, (b) a demonstration that illustrates how the transformation has been successful in similar situations, and (c) a clear description of the results of the transformation. People will adopt the transform when they understand the results of the transformation and the rationale behind it.

• Participative change strategies assume that change will occur if impacted units and individuals modify their perspective from old behavior patterns in favor of new behaviors and business/work practices. Participative change typically involves not just changes in rationales for action, but changes in the attitudes, values, skills, and percepts of the organization.

For this change strategy to be successful, it is dependent on all impacted organizational units and individuals participating both in the change (including system design, development, and implementation of the change) and their change “re-education.” The degree of success is dependent on the extent to which the organizational units, impacted users, and stakeholders are involved in the participative change transition plan.

• Compliance-based change strategies are based on the “leveraging” of power coming from the sponsor’s position within the organization to implement the change. The sponsor assumes that the unit or individual will change because they are dependent on those with authority. Typically, the change agent does not attempt to gain insight into possible resistance to the change and does not consult with impacted units or individuals. Change agents simply announce the change and specify what organizational units and impacted personnel must do to implement the change.

The effectiveness of a sponsor’s compliance-based change strategy is dependent on the discipline within the sponsor’s chain of command, processes, and culture and the capability of directly and indirectly impacted stakeholders to impact sponsor executives. Research demonstrates that compliance-based strategies are the least effective.

Regardless of the extent of the organizational change, it is critical that organizational impact and risk assessments be performed to allow sponsor executives to identify the resources necessary to successfully implement the change effort and to determine the impact of the change on the organization. Further information on change strategies and organizational assessments is found in the SEG article “Performing Organizational Assessments,” and in those listed above.

Leadership & Stakeholders

Leaders need to be cognizant of the distinction between sponsor executives, change agents/leaders, and stakeholders:

• Sponsor executives: Typically, sponsor executives are the individuals within an organization that are accountable to the government. Sponsor executives may or may not be change leaders.
• Change leaders: Typically, the change leader is the sponsor’s executive or committee of executives assigned to manage and implement the prescribed change. Change leaders must be empowered to make sponsor business process change decisions, to formulate and transmit the vision for the change, and to resolve resistance issues and concerns.
• Stakeholders: Typically, stakeholders are internal and external entities that may be directly (such as participants) or indirectly impacted by the change. A business unit’s dependence on a technology application to meet critical mission requirements is an example of a directly impacted stakeholder. An external (public/private, civil, or federal) entity’s dependence on a data interface without direct participation in the change is an example of an indirect stakeholder.

Note: Both directly and indirectly impacted stakeholders can be sources of resistance to a sponsor’s transformation plan.

Resistance

Resistance is a critical element of organizational change activities. Resistance may be a unifying organizational force that resolves the tension between conflicts that are occurring as the result of organizational change. Resistance feedback occurs in three dimensions:

• Cognitive resistance occurs as the unit or individual perceives how the change will affect its likelihood of voicing ideas about organizational change. Signals of cognitive resistance may include limited or no willingness to communicate about or participate in change activities (such as those involving planning, resources, or implementation).
• Emotional resistance occurs as the unit or individuals balance emotions during change. Emotions about change are entrenched in an organization’s values, beliefs, and symbols of culture. Emotional histories hinder change. Signals of emotional resistance include a low emotional commitment to change leading to inertia or a high emotional commitment leading to chaos.
• Behavior resistance is an integration of cognitive and emotional resistance that is manifested by less visible and more covert actions toward the organizational change. Signals of behavioral resistance are the development of rumors and other informal or routine forms of resistance by units or individuals.

Resistance is often seen as a negative force during transformation projects. However, properly understood, it is a positive and integrative force to be leveraged. It is the catalyst for resolving the converging and diverging currents between change leaders and respondents and creates agreement within an organizational system.

Creating the Organizational Transition Plan

As discussed in the beginning of this section (see Figure 1), successful support of individuals and organizations through a major transformation effort requires a transition from the current to the future state. Conducting an organizational assessment based on the Burke-Litwin Model provides strategic insights into the complexity of the impact of the change on the organization. Once the nature and the impact of the organizational transformation are understood, the transformation owner or champion will have the critical data needed to create an organizational transition plan.

Typically, the content or focus of the transition plan comes from the insights gained by conducting a “gap” analysis between the current state of the organization (based on the Burke-Litwin assessment) and the future state (defined through the strategy and vision for the transformation program). The transition plan should define how the organization will close the transformational and transactional gaps that are bound to occur during implementation of a transformation project. Change does not occur in a linear manner, but in a series of dynamic but predictable phases that require preparation and planning if they are to be navigated successfully. The transition plan provides the information and activities that allow the organization to manage this “non-linearity” in a timely manner.

It should be noted that large organizational change programs, which affect not only the headquarters location but also geographically dispersed sites, will require site-level transition plans. These plans take into account the specific needs and requirements of each site. Most importantly, they will help “mobilize” the organizational change team at the site and engage the local workforce and leaders in planning for the upcoming transition.

Strategic Organizational Change Communications

Figure 3. The Strategic Organizational Communications Process

A key component of the transition plan should address the strategic communications (see Figure 3) required to support the implementation of the transformation. Open and frequent communication is essential to effective change management. When impacted individuals receive the information (directly and indirectly) they need about the benefits and impact of the change, they will more readily accept and support it. The approach to communication planning needs to be integrated, multi-layered, and iterative.

Are You Certain You Have A Plan In Place?

Consider the following declarations of strategy gathered from genuine company documents and announcements:

“Our goal is to be the most cost-effective service.” “We’re pursuing a global approach”. “The company’s objective is to integrate a series of regional acquisitions”. “Unparalleled customer service is our strategy.” “Our strategy goal is to always be first to market.” “Our objective is to transition from defence to industrial applications,” .

What are the similarities and differences between these great declarations? The only difference is that none of them is a strategy. They are merely aspects of strategies, strategic strands. However, they are no more tactics than Dell Computer’s strategy of selling directly to customers, or Hannibal’s plan of crossing the Alps with elephants. And their use illustrates a growing trend: strategy fragmentation as a catchall term. Consultants and researchers have offered executives with a plethora of frameworks for understanding strategic problems after more than 30 years of rigorous thinking about strategy.

We now have five-forces analysis, core competencies, hypercompetition, a resource-based view of the organization, value chains, and a slew of other useful, if not always powerful, analytic tools.’ However, there has been little advice on what should be the end output of these tools—or what actually constitutes a plan. Indeed, the use of certain strategic instruments tends to lead to restricted, fragmented views of strategy, which correspond to the tools’ limited reach. Strategists who are drawn to Porter’s five-forces approach, for example, tend to think of strategy as a question of picking industries and sectors within them.

Executives who focus on “co-opetition” or other game-theoretic frameworks perceive their world as a series of decisions about how to interact with friends and foes. This issue of strategic fragmentation has gotten worse in recent years, as narrowly specialized academics and consultants have begun to practice strategy using their instruments. However, strategy is not the same as price. It isn’t a matter of capacity decisions. It is not responsible for determining R&D funding. These are strategy components that cannot be decided — or even considered — in isolation. Consider an aspiring painter who has been taught that the beauty of a painting is determined by its colors and hues. But, in reality, what can be done with such advice? After all, wonderful paintings necessitate much more than color selection: attention to shapes and figures, brush technique, and post-production processes. Above all, excellent paintings rely on the skillful integration of all of these aspects.

Some pairings are tried-and-true, while others are innovative and fresh. Many combinations, especially in avant-garde art, indicate disaster. Strategy has become a catchall term that can be used to imply anything. Regular portions of business journals are increasingly devoted to strategy, usually detailing how featured companies are coping with specific difficulties like customer service, joint ventures, branding, or e-commerce. Executives, in turn, discuss their “service plan,” “joint venture strategy,” “branding strategy,” or whatever other strategy is on their thoughts at the time. Executives then transmit these strategic threads to their enterprises, erroneously believing that this will assist managers in making difficult decisions.

However, how does understanding that their company is pursuing a “acquisition strategy” or a “first-mover strategy” assist the vast majority of managers in doing their jobs or setting priorities? How useful is it to have new initiatives publicized on a regular basis, with the word strategy thrown in for good measure? When executives refer to everything as a strategy and end up with a collection of strategies, they confuse the public and jeopardize their own credibility. They reveal, in particular, that they do not have a holistic view of the business. When executives refer to anything as a strategy, they create confusion and undercut their own credibility. Many readers of literature on the subject are aware that ‘strategy’ comes from the Greek ‘strategos’, which means “the art of the general.”

However, few people have given this essential origin much thought. What distinguishes the job of a general from that of a field commander, for example? Over time, the general is in charge of various units on multiple fronts and multiple conflicts. Orchestration and comprehensiveness are the general’s challenge—and the value-added of generalship. Great generals consider the big picture. They have a plan; it is made up of bits, or aspects, that come together to form a cohesive whole. Whether they are CEOs of established companies, division presidents, or entrepreneurs, business generals must have a strategy—a coherent, integrated, externally directed notion of how the company will achieve its goals.

Without a strategy, time and resources are easily wasted on ad hoc, unrelated operations; mid-level managers will fill the hole with their own, often parochial, interpretations of what the company should be doing; and the outcome will be a jumble of ineffective efforts. There are numerous examples of businesses that have suffered as a result of a lack of a cohesive strategy. Once a dominant power in the retail industry. Sears spent ten bleak years vacillating between a hard-goods and a soft-goods focus, dabbling in and out of ill-advised industries, unable to differentiate itself in any of them, and failing to develop a convincing economic logic.

Similarly, the formerly untouchable Xerox is attempting to resurrect itself, despite internal criticism that the corporation lacks a strategy. “I hear about asset sales, about refinancing, but I don’t hear anyone saying convincingly, ‘Here is your future.”- A strategy is a collection of choices, but it isn’t a catch-all for every essential decision an executive must make.

The company’s mission and objectives, for example, stand distinct from and govern strategy, as seen in Figure 1. As a result, we wouldn’t mention the New York Times’ dedication to being America’s newspaper of record as part of its strategy. GE’s strategy is driven by its goal of being number one or two in all of its markets, but it is not strategy in and of itself. A strategy would not include a goal of achieving a specific sales or earnings target. Similarly, while strategy is concerned with how a company intends to interact with its surroundings, internal organizational arrangements are not included. As a result, remuneration policies, information systems, and training programs should not be considered strategies. These are key decisions that should reinforce and support the strategy, but they do not constitute the strategy.

When everything significant is tossed into the strategy bucket, this crucial concept soon loses its meaning. We don’t want to portray strategy creation as a straightforward, sequential procedure. Figure 1 omits feedback arrows and other indicators that outstanding strategists think in repeating loops. The aim is to achieve a durable, reinforced consistency among the pieces of the strategy itself, rather than following a sequential approach.

The Building Blocks of Strategy

If a company must have a plan, that strategy must have components. What exactly are those components? A strategy, as shown in Figure 2, consists of five aspects that provide answers to real-world questions:

• Are there any arenas where we’ll be active?
• Transportation: how will we get there?
• Differentiators: What will make us stand out in the marketplace?
• Staging: What will our movement speed and sequence be?
• Logic of economics: how will we get our money back?

1. Arenas

The first question a company must answer on the Strategy Diamond is “where will we be active?” Organizations frequently make the mistake of being overly generic, such as when they state, “We want to be the number one consulting business.” However, rather than a strategy, this is a vision statement. To avoid falling into this trap, be as explicit as possible when describing arenas. You can do so by answering the questions below: Which product categories will we compete in?

• What channels are we going to use?
• Which market sectors are we going to focus on?
• Which geographical areas should we concentrate our efforts on?
• What essential technologies are we going to use?
• Which stages of value generation will we emphasize?

It is critical to underline the relevance of these domains when describing them. Assume your plan is to concentrate on a specific geography. You sell in other countries as well. However, you do so because it is logistically simple, and your fundamental goal is to concentrate on a single market.

2. Vehicles

Now that you know where you’ll be competing, you’ll need to figure out how you’ll get there. This is where we choose the vehicle that will take us from where we are to where we want to go. Here are some examples of responses:

• Partnerships
• Acquisitions
• Licensing
• Partnerships
• Franchising
• Create in-house

Once again, be as explicit as possible. Assume you’ve decided to branch out into a new product category. You should specify if you’ll purchase or construct this capacity in-house. Don’t make this decision on an ad-hoc basis. Instead, focus on developing a reasonable strategy. If you’ve only ever built in-house, then be honest, accept acquisition isn’t suitable for you.

3. Differentiators

What sets you apart from the competition? What are your products’ USPs (Unique Selling Propositions)? What is it about what you do that allows you to succeed in business?

Differentiation must be at the core of your plan. How can you win if you can’t find a method to set yourself apart? You can’t do it.

Differentiation can be done in a variety of ways, including:

• Price
• Quality
• Customization
• Reliability and Durability
• Time to market
• Time to upgrade products
• Customer service

It’s critical to identify your differentiators as soon as possible. This is due to the fact that differentiation does not arise by accident. If you want to provide the best customer service, you’ll have to invest time and money to do it. Similarly, if you want the best-designed goods, you’ll have to invest on that as well.

4. Staging

For a moment, let’s return to our general. A general does not move all forces on all fronts at the same time when fighting a war. Instead, some people go first, then others, and then still others. In business, staging is just as critical as it is in conflict. There are numerous examples of businesses that grew too quickly and before they were ready. The majority of these businesses are no longer in operation.

From one stage to the next, your plan must progress. You run the risk of getting ahead of yourself if you don’t. You run the risk of taking on more than you’re capable of. You’re in danger of going out of business.

During this step, ask yourself the following questions:

• What is the best sequence of steps to take?
• How quickly should we take these steps?

5. Economic Logic

The diamond’s last section brings everything together with one goal in mind: profit.

In a nutshell, this section is about deciding whether to compete on a low or high cost basis. Because you have economies of scale, you might be able to compete on price. Or because your replication costs are lower. Because you have a brilliant design or unique product features, you may be able to compete on price.

To demonstrate this, consider the following two examples of economic logic:

• Low-cost: Ryanair offers customers a cheaper cost per mile than any other European airline.
• Expensive: Apple may charge more because its customers are prepared to pay more for their distinctive design.

The five elements of the diamond must not only align, but also reinforce one another in order to have a solid plan. Let’s look at an example to help clarify this.

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Executive Summary

Chapter 1: Breakthrough Value

Breakthrough Value Is Unlocked Through Business Transformation
Every company comes to a point where it’s time to make a change. As a leader, you are the one who stands at the crossroads and must make a decision. Should you increase your size? Or take a step to the side? Is it possible to create new products or services? Or do you want to keep laser-focused on your best-selling book? T