| A Case Study on the Success Factors for Change - | | | | not occur and change will not take place. |
| A Tale of Two Companies | | | | Consider the key factors that prevented change from |
| It was the best of times; it was the worst of times. | | | | happening in the second case: |
| Two companies, one thriving and one fighting for its life. | | | | Factor #1: No Shared Vision for Business Improvement |
| It was a time where change fails time and time again | | | | The Vision was merely one of saving money. Although |
| and the other experiences success after success. | | | | this was linked to the overall business strategy, it was |
| This is the story foretelling the secrets of Long Lasting | | | | not an inspiring vision. The direction for the team was |
| Change. | | | | vague and the benefits were based on short term |
| How is it possible that two companies can deal with | | | | cost savings - they were not linked to delivering long |
| change so differently? One company can execute | | | | term value by working end to end on a value stream |
| change effectively but others attempt change only to | | | | and creating value in the processes. As a result of this |
| see the old ways creep back in? The following are | | | | lack of shared vision, the team struggled to get |
| two case studies outlining the differences we have | | | | meaningful projects. The best projects were heavily |
| seen. They outline the key factors that contribute to | | | | guarded by people in the business who did not want |
| the differences between success and failure. | | | | anyone to take their glory or see how much waste |
| Case One: It was the worst of times but the best of | | | | they were hiding. |
| times to change. | | | | No Burning Platform or Need for Change. Things were |
| This is the story of an insurance company that was | | | | so easy that people had no reason to disrupt the |
| bought by a very well known conglomerate. The buyer | | | | ways things had always been. Behavioural patterns |
| soon realized it was a poorly researched acquisition. | | | | were so entrenched that the vision was not strong |
| The company, in the Financial Services Sector soon, | | | | enough to get people inspired and out of their comfort |
| discovered that their book of business was under | | | | zone. |
| reserved by $100million. The business was in dire | | | | Factor #2: Lack of Accountability |
| straits and was identified by the Conglomerate CEO | | | | Neither the Sponsor nor the Process Owner of the |
| as "The Disaster in Denver." | | | | project fully understood the process the team was |
| The CEO of the Newly Acquired Division knew he had | | | | following. Hence they didn't support the project nor did |
| to become service -orientated and reduce costs to | | | | they break down barriers or give time to review and |
| survive. He also knew that the business was really | | | | steer the project. This problem was not just with |
| bad at doing both! He had to disrupt the order of the | | | | leadership but also with middle management, key |
| current system to save the business. The Division | | | | stakeholders and team members. People did not |
| CEO called the business together to announce the | | | | attend meetings - and there were no consequences! |
| reality of the situation. He announced that the business | | | | The success of the project was not a key metric that |
| was positioned to lose $100million over the next few | | | | they were scored on in their personal evaluation and |
| years and, to make matters worse, were losing | | | | bonus criteria. |
| customers fast. The business needed to focus on | | | | Factor #3: The right stakeholders were not always |
| fixing two key processes: Authorizing Claims and | | | | involved |
| Paying Claims. The need for change was felt by the | | | | Leaders driving and supporting the change are critical |
| entire business. He announced that they would use | | | | and this was often missing. Project managers were |
| Lean Six Sigma and an Internal Business Improvement | | | | being pushed for delivery and results, but the key |
| Team to stimulate the Organizational Change. | | | | stakeholders in the business were not available or |
| In this company, change was effective. Projects were | | | | interested. One of the critical factors in delivering |
| tracked and completed, and it was those very same | | | | effective projects is not only the involvement of |
| projects that changed the company. Project failure | | | | leaders, but also involvement of the very busy, |
| was permitted. Project managers were held | | | | always-in-demand middle managers and process |
| accountable to deliver their project promises and there | | | | owners. |
| were consequences for failure to do so. A team | | | | Factor #4: Not Equipping the Team with Tools and |
| failure was seen as a company failure. Project | | | | Skills |
| Leaders took pride in their work and Company | | | | The team focused heavily on the tools and skills and |
| Leaders supported them and rewarded them for their | | | | did a great job of equipping the project managers with |
| achievements. Successful projects spawned new | | | | the tools and skills to manage the technical aspects of |
| projects, leaders coached new leaders. Eventually | | | | the project. But the team members, process owners |
| project managers churned back into operational roles | | | | and sponsors often bore the brunt of poor |
| and converted Lean Six Sigma into 'the way things are | | | | communication and were left in the dark. |
| done around here.' | | | | Factor #5: Empowering Behavior |
| Through the following 8 years and many projects later, | | | | The Leaders encouraged the wrong behavior. The |
| the company revolutionized itself. Lean Six Sigma | | | | Project Managers were not enabled to disrupt the |
| became the central focus of the Leadership Team | | | | status quo to initiate the change. They could not |
| meetings. With this new language and through these | | | | change the processes, organization design or metrics |
| acts, the company saved itself from disaster. Eight | | | | to ensure that the change would last.. They were not |
| years later, the business reported an $8million profit. It | | | | rewarded or recognized. Phrases like "That won't |
| was held up as bastion of successful change that | | | | work here", "that is not our culture", "that is the way |
| stuck. | | | | things have always been done" are common place |
| Case Two: It was the best of times, but the worst of | | | | attitudes that are reinforced by the behavior of the |
| times to change | | | | organization. |
| This is the story of a highly profitable Fast Moving | | | | Factor #6: Changing Measures and Processes |
| Consumer Goods Company. They had been in | | | | The organization was organized into functional silos. |
| business for over 75 years and despite a significant | | | | This structure drives behavior of competitiveness of |
| amount of inefficiency in the business it was extremely | | | | divisions that are supposed to be customers to each |
| successful. | | | | other. Instead, working in isolation, no internal |
| Stuck in its old ways, ruled by internal politics and | | | | communication and lack of metrics is felt by the |
| steeped in a pecking order based on years of service, | | | | customer. Metrics needed to reflect a set of |
| the leaders were afraid to disrupt the order of things. In | | | | end-to-end value streams that represented the |
| this company, change was difficult. Projects took too | | | | customer experience. |
| long, and the changes rarely stuck. Many projects | | | | So what could be done in Case 2? Sometimes it |
| failed and were resurrected up to as many as five | | | | takes an external disruption to kick start change. It |
| times without consequence. This company set up a | | | | takes a strong leader to stand up and say enough is |
| separate business improvement team and brought in | | | | enough. |
| the best of the best consultants. Their first attempt | | | | In this case, the economic tide had turned. The |
| failed and the consultants were replaced. The second | | | | guaranteed billions were no longer there, the |
| attempt didn't work either and, once again, the | | | | competition was getting stronger and leaner, the |
| consultants were replaced. By the end of the year | | | | strategists had uncovered huge threats in the market |
| most of the team had resigned. They felt they weren't | | | | share, a down turn in demand, and the need to take |
| getting prioritized or well-scoped projects. The | | | | out waste. The issues went to their very core and if |
| sponsors wanted the projects done but did not | | | | they wanted the secret to everlasting change they |
| participate in helping to break down barriers. The team | | | | had to endure Disruptive Change!!! |
| members were not trained, not held accountable and | | | | 1) Shared Vision: Focus on a shared vision and |
| generally did not show up to meetings. Middle | | | | strategy that is communicated relentlessly throughout |
| Management was not engaged and the project | | | | the business. A few critical projects need to be |
| managers were overworked and unable to deliver. | | | | selected, where the need for change is clear and |
| Although the shortcomings are relatively obvious, let's | | | | leaders are unanimously in support of them. Projects |
| analyze the differences. | | | | must be prioritized, supported and consequence for |
| Jim Collins wrote in his book, Good to Great that | | | | non-delivery felt. |
| "Good is the enemy of Great!" We see in these two | | | | 2) Accountability: Hold sponsors, process owners, |
| cases that the road to Long Lasting Change starts | | | | project managers and team members accountable to |
| with Disruptive Change. When leadership is in a | | | | deadlines and deliverables. Set up the forums to |
| comfortable place, they are less inclined to take bold | | | | manage these key initiatives and give them the right |
| steps to embrace change. Without disrupting the | | | | support and attention. |
| current order, change will not occur. In the first Case | | | | 3) Right Stakeholders: Free up resources and ensure |
| you see a highly visible CEO with a burning desire for | | | | key stakeholders support the prioritised projects. |
| disruptive change. He had identified the significant | | | | Leaders and Sponsors must know and understand |
| barriers that the company had to overcome. Then he | | | | their role. They are available and committed. Middle |
| enabled the change to take place by focussing on the | | | | Managers and Process Owners need to lift their |
| following factors: | | | | heads up from their daily jobs and have reason to |
| Factor #1: Shared Vision | | | | participate. The project success should be on their |
| The Division CEO called all employees together, | | | | scorecards and they should be held accountable for its |
| announced the reality of the situation and explained the | | | | success. |
| course of action needed to get the business out of | | | | 4) Tools and Skills: Give project managers, process |
| trouble. He sent a strong message and the vision for | | | | owners, sponsors and team members the same tools |
| change was internalised by the entire business. | | | | and understanding of the approach. Spend time |
| Factor #2: Accountability | | | | educating people on the approach and the |
| People in the business were held accountable for | | | | expectations. Build the capability and understanding |
| assisting the teams to achieve their goals. The | | | | within the business. Once a critical mass has been built, |
| leadership set and upheld a rule that if team members | | | | it is easier and less intimidating to be involved and |
| didn't attend the initial training they were off the team. | | | | engaged. |
| Resistance was identified and pro-actively managed. If | | | | 5) Empowering Behavior: Leaders need to walk the |
| they didn't contribute, they were held accountable in | | | | talk. They need to reinforce the right behaviour, reward |
| their next performance review. Rewards and | | | | delivery, and implement consequence for non delivery |
| recognition were lavished on the teams who delivered. | | | | or co-operation. Ignoring repeated project failure is an |
| Factor #3: Stakeholder Involvement | | | | indication of negative reinforced and problems within |
| The Leadership Team backed the CEOs Strategy as | | | | the organisation are not being addressed. |
| well as the idea of the Business Improvement Team. | | | | 6) Processes and Metrics: Need to be aligned and |
| The leader of this team reported to the CEO and sat | | | | changed to lock in the new improvements and |
| on the Business Leadership team. They formed a | | | | institutionalize the change. If the team does all the work |
| powerful team to lead the changes in the business. | | | | and suggests an approach that changes organization |
| Together they set the vision and handpicked the Lean | | | | design, processes, job roles and ways that people are |
| Six Sigma practitioners and teams. | | | | measured. This change should be supported and |
| Factor #4: Equipping the Team with Tools and Skills | | | | embraced. It is only when you lock the changes into |
| The teams, the process owners and the champions | | | | existing systems and structures that change becomes |
| sponsors received the training, skills and tools to do the | | | | permanent. |
| job. They were challenged to create cutting-edge | | | | Disruptive Change and the secrets to everlasting |
| processes. The processes were measured and linked | | | | improvements |
| through from the business strategy. | | | | Good is the enemy of Great. It is really difficult to be |
| Factor #5: Empowering Behavior | | | | great when things are good and there is no need for |
| Each Lean Six Sigma team leader was empowered | | | | change. |
| to disrupt the order of things in their quest to achieve | | | | People rarely give up smoking until they have a major |
| their goals. They were given the freedom to leverage | | | | health issue. Companies really rarely take business |
| HR, Finance, Operations, IT and do whatever it took to | | | | improvements seriously until it threatens their survival. It |
| fix the fix the business. | | | | is therefore better to create the discomfort required to |
| The leaders reinforced the behavior needed by | | | | force change than to have it forced on you in a hostile |
| walking the talk. They attended training, Steering | | | | manner. |
| Committee meetings, Phase Exit Tollgate Reviews | | | | Change happens when the environment is disruptive. |
| and even project reviews - and by doing so they | | | | If we take a leaf out of Nature's book, some of the |
| were at the heart of the action to actively break down | | | | most destructive and disruptive events have given |
| barriers for the team. In addition, team members were | | | | birth to new life. Volcanoes destroy but over time they |
| recognized for quick wins while the project was in | | | | create new mountains, and landscapes. |
| progress, they were acknowledged publicly and | | | | For Change to happen you have to have disruption. |
| awarded bonuses when the project was successfully | | | | There needs to be a point where enough is enough |
| completed. | | | | and people are so dissatisfied with the status quo they |
| Factor #6: Changing Measures and Processes | | | | are prepared to endure the pain and stress of change |
| In any organizational transformation effort, Change | | | | and go through the process to enable change. |
| Teams encounter seemingly insurmountable barriers to | | | | The disruption doesn't stop there. Organizations need |
| process change. Rigid IT systems, lack of resources, | | | | to become change 'fit.' Once the change is in place the |
| government regulation, corporate mandates, and | | | | organization needs to be disrupted again to ensure the |
| departmental bureaucracy are all mere symptoms of | | | | change sticks. Old ways, patterns, processes, |
| underlying resistance. If the organizational leaders are | | | | measures all need to change to lock in the new into |
| unresponsive to the needs of the team, disruption will | | | | the existing systems and structures. |