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From astonishment to change!
By Dr Jaap van Ede, industrial journalist and founder business-improvement.eu. The first version of this article was published in
the Dutch specialist journal PT Industrial Management, sept. '08. All photo’s were made by Went Photography .
Faced with hyper-competition, companies carry-out many change projects, however with no effect. “It takes all the running they can do, to stay at the same place’, would the Red Queen from Alice In Wonderland say! And it becomes even worse: Due to so much focus on efficiency, companies become increasingly less agile, they age! Fortunately, there is hope for these oldies: It is also possible to invert this process and change in the right direction, to make your company young and flexible again.
But how do you do that, when change projects often resemble trains thundering from IST to SOLL, while the shop floor follows its own agenda? Six Dutch management scientists give tips. It all starts with astonishment: Observe your own company like a surprised garden gnome!
Jaap Boonstra, professor organizational change at the University of Amsterdam, has good news for Dutch drivers who are often stuck in traffic.
‘To strengthen the power to change in the Netherlands, I and seventeen other experts recorded our vision on a Dutch-language CD, to which you can listen in your car. The result is a CD-box which sketches a complete picture of change management, from making the diagnosis until the implementation of the new business processes ’, says Boonstra.
Boonstra speaks at a change management day1 in the St John church in Utrecht.
The location is well chosen, cause this church is dedicated to John the Baptist, a change manager from the very beginning.
The meeting attracts a great deal of attention, the basilica is completely filled with people. And interestingly, the majority of these people are not consultants.
There are a lot of people from government agencies and from health care institutes, and about 10% of the audience works in production. ‘An increasingly amount of change projects is carried out by people from within organizations’, Boonstra explains.
This increasing internal involvement does not have to reduce the chance of success.
At least if you assume that the work of a change manager resembles the work of a psychotherapist. ‘An inexperienced therapist is often just as successful’, says Yvonne Burger, professor at the VU University in Amsterdam. ‘What matters most are his or her personal skills, and the chemistry with the persons to change.’
‘Change begins with a correct diagnosis’, argues dr Ron van Es, organizational philosopher at the VU University in Amsterdam. ‘This requires that you start to observe your company like a surprised garden gnome, from different angles.’
Astonishment alone is however not enough. ‘It is important to bring order in your findings. After that, you can start to search for patterns of causes and effects.’
Van Es uses the metaphor of a film producer, who films a company from different perspectives. ‘It is important that a change manager knows what is taking place, which movie is on.’
By zooming out, one is able to see what the environment of the company looks like. ‘Examples of external factors are the competitors and the exchange rate of the dollar.’
By zooming in again, future plots can be imagined. ‘Think about what to change and why. It is important that an organization clearly improves. Especially within government agencies you sometimes see posturing.’
Some close-ups are needed to complete the diagnosis. ‘For example, examine if your diagnosis fits with the vision of the top management’.
Finally, the camera should be pointed at yourself. ‘That might be the hardest part. Evaluate if you are suited to lead this project. Do you have the right chemistry with key persons in the organization, is your diagnosis perhaps colored?’
Besides what the camera sees, invisible things are just as important. ‘Besides a conscious and rational upper current, in each company there is an unconscious and emotional under current.’
Erik van de Loo, professor leadership and behaviour, tells what impact such a hidden emotional agenda can have.
‘Once I was involved in a merger, which fall through at the last moment. Of course that can happen, but in this case it occurred for the fourth time.'
It turned out that the organization was caught in a conflict. 'On one hand they had the wish to grow autonomously, but on the other hand they didn’t dare to do that.'
A classic case of ambivalence. 'Then, if you approach one wish, the merger, the opposite desire, staying independent, becomes stronger. Only when you are conscious of such a deadlock, it is possible to free yourself from it.’
According to Van de Loo, every change basically arouses fear. ‘It seems like your immune system is triggered, to make sure that everything stays the way it is.’
A man who consulted Van de Loo, said that he contributed to little during board meetings.
‘This could be traced back to his youth. To make sure that he was allowed to cycle along with a group of children to school, he always kept himself as quiet as possible. During the meetings this old fear to jeopardize his position, conflicted with his new desire to be more assertive. That stopped him from coming forward.’
Fears can sometimes be reduced by providing a transitional space. ‘Compare this with toddlers who need a little toy monkey or rabbit to get used to the idea that their parents are not always present. Another example is the table which always had to be there, even at different locations, during the formation of the Dutch cabinet in 2007.'
' During a change project, fixed meeting times can for example contribute to the transitional space. In addition, it is important that everybody speaks the same language, so that experiences can be shared better. Within Shell, at the start of a change project everybody used to receive the book Managing Transitions, by William Bridges.’
The question “what to change?”, will be answered more and more by “we need to become more innovative and thus more flexible”. This is stated by Henk Volbeda, professor strategic management at the Erasmus University of Rotterdam.
The fact that in particular older companies seem not little flexible enough, is not only caused by well-known issues like increasing worldwide competition, decreasing product life cycles and customers who want tailor-made products. ‘Another reason is the natural lifecycle of a company’, says Volbeda.
‘During the start-up phase the organizational structure is chaotic, with plenty of room for new ideas and innovation. Later, when competition increases, the focus shifts towards exploitation. In other words: doing one thing more and more efficient.’
In the end, to much focus on efficiency makes a company rigid. 'Then it is unable to respond fast enough when market needs change.’
An image of a young and agile gazelle, which grows up to become an old and ponderous dinosaur forces itself.
‘The strive for perfection ultimately becomes the cause for failure. Take for example IBM, which completely missed the rise of the market for personal computers.Or Van Berkel, who used to produce such great scales. The couldn’t make the switch to the digital age. Fuji Film is at the moment struggling in the same way.’
The cycle from chaotic start-up to a rigid dinosaur used to take about 30 years, but knowadays this cycle sometimes is already complete within 12,5 years.
Customer of tomorrow
In the beginning there can be conflicting market signals, so that the risk of becoming to rigid is overseen.
‘Within Fuji the turnover still increased, but that was because competitors already stopped with the production of films. Therefore my advise is: don’t listen to much to the customer of today. Focus on the customer of tomorrow. Where do I want stand in 2030, that is what matters most!’
When companies are confronted with hyper-competition, they often respond in the wrong way, which makes them only age faster.
‘They are starting to hyperventilate, that’s what I call it’, says Volbeda. ‘Instead of making more room for innovation, they only accelerate their methodic change management approach. Doing that only makes an organization only more rigid.’
According to Volbeda, many companies follow this wrong strategy. ‘Try harder, that’s what they do. More benchmarking, outsourcing, empowerment etcetera.’
This results in the Red Queen effect, named after the Red Queen from Alice in Wonderland. In this story, Alice wants to promote from pawn to chess queen. Running is however not a good approach to accomplish that. “It takes all the running you can do, to stay at the same place’, says the Red Queen.
To overcome this deadlock, companies should rejuvenate themselves. They should revert to a more chaotic organization.
Unfortunately, there is no pat solution to do that. One of the options is to simply prevent aging, by outsourcing all routine activities. This is the strategy followed by Nike.
Another option is splitting up a company into efficient business units on one side and more innovative units on the other. ‘KLM is for example successful with this approach. While KLM Passengers continued to focus on efficiency, KLM Cargo was transformed to a coordinator of supply chains. To make that possible, everybody was asked to apply again for a job.’
A third example of a company which rejuvenated itself successfully is (ex-Philips) NXP Semiconductors. ‘After the introduction of cheap plastic diodes by their competitors, they run into trouble. To make NXP more innovative, the company was transformed to an organization with self-managing teams.'
To make that possible, they had to overcome resistance by the middle management. 'These managers objected that the operators only were educated at a Junior Technical School level.’
Rejuvenation means the re-introduction of more chaos, but beware: to much is not good. ‘A bad example is the GasUnie, this is the company which is responsible for the management and operation of the gas transmission grid in the Netherlands. They went over the top in stimulating innovation, because they had no framework to judge the sometimes strange suggestions from R&D, like a gas-fired dishwasher. As a result, the development division was driven in all kind of directions by their internal and external customers.’
In conclusion: According to Volbeda, companies should try to find a balance between being ‘efficient but rigid’ and being ‘innovative but chaotic’. To find that balance should be the goal of change management projects!
Who’s afraid of yellow and blue?
However, this is not the complete story, because when you know what to change, the next question is how!
MSc Hans Vermaak argues that at that stage we should not be afraid to choose between red, yellow, blue, green and white! ‘There are several change management strategies, for which I use a color coding’, he says. ‘Which color suits best, depends on the problem and the kind of organization. Different colors can be conflicting, therefore it is important that you know the principles of each strategy.’
Predominant in management books is the blue model: think and plan first, then act. Matching acronyms are Activity Based Costing (ABC), Business Process Redesign (BPR), Plan-Do-Check-Act (PDCA), and the use of business jargon like milestones and progress monitored with dashboards.
‘However, when you hear phrases like grassroots support or mandates, then you ended up in a yellow change project’, Vermaak adds. ‘In that case, the underlying assumption is that the most important players should give their support. Yellow is the color of politics.’
Red is the color of change management based on motivation. ‘Here it is assumed that a prerequisite is to warm up people for change, a matching strategy is management by walking around’.
Green is the color which fits a learning organization. ‘Coaching, games, and action learning then are typical activities which are done to get the change process started.’
Unless you have a lot of experience, Vermaak think it is best to apply only one color at a time. Otherwise there is a big risk of a battle between the strategies. ‘In that case yellow and blue will always win.’
Once you have made your diagnosis, it is tempting to launch a comprehensive change plan. ‘I do not recommend that, because it will lead to conflicting actions. It is far better to select a few improvement points, which can have a multiplier effect. To address these points, all color strategies should be considered, and the best chosen for the moment being. This can be confronting, because that color might not match with yourself. If that is the case, it is perhaps better to hand the change project over to someone else. The fact is, that persons do have a personal color. A typical yellow change manager, to exaggerate it a bit, is for example a bit obese man with grey hair and a lot of experience.’
A change color that was not mentioned thus far, is white. ‘In that case it is assumed that change will only happen when the time is ripe. So, there should be room for spontaneity.’ This sounds vague, but it could turn out better then expected. Ever heard someone saying ‘give operators room to express innovative ideas themselves?’
A new question however arises: When is a job floor ready for change? Thijs Homan, professor change and implementation at the Open University in the Netherlands, tries to model and predict this by using chaos theory. Homan hit upon that idea when he attented a workshop called “new sores”.
‘In that company they thought that they had handled all the old sores, that explains this title. However, when I visited the toilet I heard what the employees really were thinking about the change project: “go to hell, what a bullshit."'
The train to SOLL
Homan shows a slide with people who quietly continue shopping, while above their heads trains are thundering. ‘Regarding change management, how high is the train-level within your organization, you think?’, says Homan. ‘A big chance that just another train is moving from IST to SOLL, while the job floor doesn’t take the slightest notice of it!.’
Behaviour is namely not dictated by bosses or managers, it is what the people in the organization make of it!
On his next slide, Homan presents a flock of starlings. ‘These birds definitely are not following a Prince II trajectory. It is a network, in which the animals send signals to each other. As a result, in the end the group moves into one direction.’
According to Homan, a job floor behaves similar to such a flock of starlings. It can be modeled by dividing it in many Petri dishes. ‘Every dish is then filled with three or four people, whit strong bonds between them, and who think about the same.’
It is not difficult to image such a Petri Dish as a people who always have lunch together in the canteen. ‘However, like the starlings, the Petri Dishes also exchange information, and that leads to the formation of meaning clouds in the organization. The biggest cloud represents the prevailing opinion. In addition, every cloud is watched over by so-called regime-guards, these are people who have a lot of informal power. These people will give negative feedback, when change is suggested.’
Transverse flute player
It is not a good idea to focus on those regime-guards. ‘When we are just about to leave, my daughter sometimes starts to play on her flute’, says Homan. ‘When you give extra attention to such a transverse flute player, she only will start to play louder.’
So, what is then a right strategy? ‘In every organization there are also smaller clouds of people, who think different. You should try to reinforce these clouds, until a turning point is reached. For example by stimulation information exchange between the Petri Dishes and by providing extra information, such as what your customers think of your organization and what the current market position is.’
This may sound a bit woolly, especially in the ears of people who think rather technically about implementing change. But I personally think that the way Homan thinks is not as strange as it might seem. I met a lot of change managers, who carried-out Lean, Six Sigma or TPM change projects. Superficially these are all plan-do-check-act methods, thus very rational or blue, as Hans Vermaak would say. However, the most successful managers on a deeper level also applied a white strategy . This is proven by remarks as “Operators themselves know best what to improve” or “All I do is provide information. That way, I act as a catalyst for change.’ Remember the Petri Dishes?
12 tips to stimulate change, to create a culture of continuous improvement
The Dutch companies Zeelandia, Neopost en FrieslandCampina gave the following tips to stimulate change, especially regarding the introduction of Total Productive Maintenance, Lean and/or Six Sigma:
- Describe the current situation as a burning platform, it should be clear to everyone that it is no option to carry out no changes.
- Explain clearly what the goal is, and when this goal should be achieved.
- Start on time, when your company still is financial healthy.
- Be open and honest, and stay communicating.
- Provide a measuring system, to make it possible to monitor progress.
- The ideal change manager is a charismatic leader, who not only stands besides the employees having his sleeves rolled up, but who also determines the direction and holds a clear course.
- When the change projects ends, don’t promote this man or woman to another department!
- Involve as many people as possible.
- Investigate who are the key figures in your organization, they should be won for the change project first. This could not only be people at high management positions, but also employees who have a big controlling influence by nature.
- Provide enough training, so that people become familiar with the new approach.
- Start with the introduction of simple things, which are not a direct threat to the personal working environment. 5S and SMED, the latter is a method to reduce change-over times, are good examples.
- Celebrate each success and show that you care for involved people.
1) The change management day took place on june 11th 2008, and was organized by Reed Elsevier. This article is based on lectures given that day. In addition, some of the speakers sended me a preview of the text which is now present on their CD in the (Dutch) change management CD-box. This box can be ordered at managementboek.nl.
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