Dear Seniors, Please guide me, What is called a good organizational culture and how to develop and Implement good Organisational Culture? Devansh
From India, Vadodara
7From India, Vadodara
DEVANSH,
ANY ORGANIZATION CULTURAL IMPLEMENTATION IS A CHANGE.
-DEFINE THE CULTURE VERY CLEARLY.
-BEFORE IMPLEMENTATION. INTRODUCE ''CHANGE MANAGEMENT''.
Merely saying '' GOOD CULTURE'' is a not good enough.
It can mean many things to many people.
GOOD CULTURE comes in many shapes like
-value based culture.
-competitive culture
-learning culture
-productive culture
etcetc.
ONCE YOU DEFINE THE CULTURE ''CLEARLY'',
IT BECOME VERY EASY TO IMPLEMENT IT.
============================================
HERE IS AN EXAMPLE OF ''implementing value based culture''.
YOU CAN MAKE YOUR OWN CHOICE FOR YOUR ORGANIZATION.
================================================== ======
Value based culture is the management approach that ensures corporations
are run consistently on value, such as
-maximising shareholders value
-adding values to the customers' service.
etc etc
THIS INCLUDES
-creating value in all actions/strategy
-managing for values
-measuring value with the help of metrics
etc etc
========================================
THE EMPLOYEES WHO LIVE BY THE VALUES OF THE ORGANIZATIONS
SHOW IT BY THEIR EFFORTS / PURPOSE/DIRECTION/SUPPORT.
-by aligning all their actions/programs with the organization vision.
-by aligning all their actions/programs with the organization mission.
-by aligning all their actions/programs with the organization objectives.
-by aligning all their actions/programs with the organization strategies.
-in maximization of value creation for customers
-in increasing value for company products for the market
-in aligning company activties with the interest of shareholders
-in maintaining quality communication internally/ externally
-in allocation of resources [ finance]
-in allocation of resources [ human resources ]
-in handling complexity in operation
-in handling uncertainty in operation
-in managing risks in operation.
-in planning / budgeting
========================================
-WATCH THE Work practices
Direction - management's style and attitude as it affects employees
Commitment - attitudes towards work and the organisation
Recognition - motivation and recognition of employees
Collaboration - cooperation and teamwork within groups and departments
-WATCH THE Cultural Values
:
Risk - attitudes toward risk taking, structure and ambiguity
Individuality - attitudes toward contribution and self reliance
Compliance - attitudes toward rules and exceptions
Dominance - attitudes towards hierarchy, power and equality
================================================== ===========
WHAT ROLE IS PLAYED BY TOP MANAGEMENT
IN CREATING VALUE BASED CULTURE SYSTEM?
THE TOP MANAGEMENT IN CREATING VALUE BASED
CULTURE SYSTEM PROVIDE
-value based corporate vision
-develop a value based mission statement
-provide a value based corporate OBJECTIVES
-provide a value based corporate STRATEGIES
-provide a value based corporate COMMUNICATION SYSTEM.
-provide a value based corporate GOVERNANCE
-provide a value based corporate CULTURE
-provide a value based corporate ORGANIZATION STRUCTURE
-provide a value based corporate MANAGEMENT STYLE
-provide a value based corporate DECISION MAKING PROCESS.
-provide a value based corporate PERFORMANCE MANAGEMENT SYSTEM
-provide a value based corporate REWARD PROCESS
-provide a value based corporate CLEAR MANAGEMENT PRIORITIES.
-provide a value based corporate BALANCE BETWEEN SHORT TERM/LONG TERM TRENDS.
-provide a value based corporate SHARED VALUES
-provide the required skills to the employees
etc etc
============================================
IN IMPLEMENTING CULTURAL CHANGE,
-DEFINE THE CULTURE VERY CLEARLY.
-''CHANGE MANAGEMENT'' IS MORE IMPORTANT THAN CULTURE ITSELF.
-What I have suggested is a blend of guidelines/ideas/concepts on the
process of managing the change of culture in an organization.
I must also emphasise that the culture change is always done with a purpose.
YOU MUST STATE THIS VERY CLEARLY UPFRONT.
PEOPLE ANCHOR THE PURPOSE FIRST, THEN CHANGE
THE BEHAVIOR.
ALL THESE STEPS WILL HELP YOU TO MANAGE YOUR
ORGANIZATION MORE EFFECTIVELY.
==================================================
ORGANIZATION CULTURE
HOW AN ORGANIZATION's CULTURE CAN BE KNOWN ?
Organization culture can be a set of key values , assumptions,
understandings and norms that is shared by members of an
organization.
Organization values are fundamental beliefs that an organization
considers to be important , that are relatively stable over time,
and they have an impact on employees behaviors and attitudes.
Organization Norms are shared standards that define what
behaviors are acceptable and desirable within organization.
Shared assumptions are about how things are done
in an organization.
Understandings are coping with internal / external problems
uniformly.
=================================================
LEVELS OF ORGANIZATION CULTURE
LEVEL 1---VISIBLE, that can be seen at the surface level
-dress codes
-office layout [ open office]
-symbols
-slogans
-ceremonies[ monthly / annual awards/long service/birthdays etc.
etc etc
LEVEL 2- INVISIBLE , that can be cannot be seen but only felt.
-stories about people performance
-symbols [ flag, trademark, logos, etc]
-corporate mission statements
-recruitment/selection [ methods used]
-fairness in treatment
-social equality
-risk taking in business deals
-formality in approach
-discipline
-autonomy for departments
-responsiveness to communication
-empowerment of staff.
etc etc.
===============================================
ORGANIZATION CULTURE/ CHANGE
Organizational culture ultimately determines whether or not any improvement initiatives/CHANGES will be successful. Culture defines the work environment. The organization can design the most efficient possible work processes, acquire the very best management information systems, and employ state-of-the-art high technology, but unless the culture is prepared for change, improvement efforts will fall short. Management teams that must reduce costs and improve performance are immediately confronted with a daunting challenge that they will ignore only at their peril: how does one go about changing the organization’s culture?
Understanding Change Management
It is axiomatic that constructive change cannot be imposed from the top. This change formula elegantly explains why this is true and points the way to successful change implementation.
The Change Formula:
C = V x D >R
Where:
C = Change
V = A positive vision for the future
D = Dissatisfaction with the status quo, and
R = Natural human resistance to change
If you have ever put forward a great idea only to have it rejected or ignored by the very people whom it would most benefit, you will appreciate the change formula. The formula says that constructive change will occur in an organization only when a positive vision for the future multiplied by dissatisfaction with the status quo (the relationship is not linear) is greater than the natural human resistance to change.
The organization ’s culture is defined by the beliefs of its CEO, executives, managers, staff and specialists; the assumptions upon which those beliefs are based; and the behaviors that rest upon those assumptions. Human beings are creatures of habit. Because established routines help us order our lives we naturally resist threats to those routines. By definition, cultural change requires large-scale modification of routine-based behavior. It may require re-evaluation of long held and deeply cherished beliefs. No matter how great an idea is, if the people who would be affected by it are reasonably satisfied with the current situation, they will not voluntarily change their routines. Conversely, no matter how dissatisfied people are with things as they are, unless and until they believe that change will materially improve their circumstances, they will not change either, preferring less than ideal conditions over the unknown.
---------------------------------------------------------------------------------------------------------
A Change Management Strategy
Below is the outline of a systematic change management strategy based on the factors described in the change formula. The outline has been necessarily simplified , but it does describe the main phases and component elements.
Ø The Unfreezing Phase: A positive vision for the future is systematically and consistently articulated from the top by governance and executive management. The organization establishes a well-defined statement of consensus-based values that will be managed to and hired for. Elements from a model statement are shown below.
o Managers will value the organization ’s interests over those of individual departments.
o Information sharing and interdepartmental cooperation will be valued over gate keeping and internal competition. Information silos will be eliminated.
o Critical outcome performance will be valued over convenience.
o Constructive innovation will be valued over bureaucratic maintenance.
Ø The Organizational Development Phase: The necessity for change is accepted organization-wide.
o Board education begins with a well-designed orientation and continues systematically through each member’s tenure.
o Continuing education and training in financial management, planning, staffing and scheduling, quantitative methods, and supervisory management is routinely provided to managers on a scheduled basis.
o Managers are routinely exposed to external information (benchmarking data, outside speakers, relevant management publications, etc.) to develop an understanding of new approaches.
Ø The Implementation Phase: The organization develops and implements systematic methods to identify, prioritize and resolve performance-inhibiting factors as part of the management process.
o Management and training responsibilities are established for all mission-critical systems and performance feedback reporting mechanisms are developed and implemented.
o Critical outcome area "management by exception" reporting systems are developed and implemented.
o An annual inventory of factors inhibiting optimum performance is established as a department-level responsibility. The inventory serves as a basis for immediate action and organizational management planning.
================================================== =======
HERE IS SOMETHING, YOU CAN AS AN OPTION, PREPARE
THE GROUND FOR CHANGE.
From experience and observation, there are seven essential steps to transform a culture through a changed organization:
Scanning the environment for the two or three trends that will have the greatest impact upon the organization in the future
Determining the implications of those trends for the organization
Revisiting the mission -- "What is our mission?" and examining our purpose and refining it until it is a short, powerful, compelling statement of why we do what we do
Banning the old hierarchy we all inherited and building flexible, fluid management structures and systems that unleash the energies and spirits of our people
Challenging the gospel of "the way we've always done it" questioning every policy, practice, procedure, and assumption, by abandoning those that have little use today or will in the future -- and keeping only those that reflect the desired future
Communicatingwith the few powerful, compelling messages that mobilize people around mission, goals, and values -- not with 50 messages that our people have trouble remembering
Dispersingthe responsibilities of leadership across the organization, so that we have not one leader but many CHAMPIONS at every level of the enterprise
And along the way, by initiating each of these challenging steps, LEADER/CHAMPIONS of the organization, in their behavior and language, embody the mission, values and principles. By working with others toward change, we create the desired result -- the inclusive, cohesive, productive organization reaching new levels of excellence in performance and significance.
That is the marriage of culture and organization, of belief and practice, that marks our best institutions. And in a wonderfully circular way, as the organization and its people grow and flourish, the culture reflects and resounds and delivers a message -- changing as the environment and the needs of our customers change.
In the end, it is a good thing that culture is not easily changed. A culture defines the heart of the organization, and a change of heart is not to be taken lightly. But the introspective and inclusive process by which an organization formulates its values and
revisits its situation.
================================================== ===========
HERE IS A SIMPLE APPROACH/GUIDELINE FOR Creating Change
1. Establish a sense of urgency
Communicate the business situation or reason for implementing the culture change —why is it necessary?
--------------------------------------------------------
2. Create the guiding coalition
Establish a team with the knowledge to initiate change and the power to make the change happen.
------------------------------------------------------------------
3. Develop a vision and strategy
Develop the organization ’s vision for the change and the strategies for implementation.
------------------------------------------------------------------------
4. Communicate the change vision
Share the vision and how it will affect the participants
-----------------------------------------------------------------------------
5. Empower broad-based action
Give the CHANGE team the authority to initiate the changes
----------------------------------------------------------------------------------
6. Generate short-term wins
Work with the practice groups that are mostly likely to
accept THE CHANGE and celebrate their achievements
---------------------------------------------------------------------------------------
7. Consolidate gains and produce more change
Use success to create more success.
-------------------------------------------------------------------------------------
8. Anchor new approaches in the culture
Make the CHANGE initiatives a part of the daily work process of the firm.
================================================== ==========
THE MOST IMPORTANT POINT TO NOTE IN CHANGING ''CULTURE''
IS THE ''TRANSITION'' .
WHY? because transition occurs in the course of every attempt at change.
Transition is the state that change puts people into.
The change is external (the different policy, practice, or structure that the leader is trying to bring about),
while transition is internal (a psychological reorientation that people have to go through before the change can work).
The trouble is, most leaders imagine that transition is automatic -- that it occurs simply because the change is happening. But it doesn't. Just because the computers are on everyone's desk doesn't mean that the new individually accessed customer database is transforming operations the way the consultants promised it would. And just because two companies are now fully "merged" doesn't mean that they operate as one or that the envisioned cost savings will be realized.
Even when a change is showing signs that it may work, there is the issue of timing, for transition happens much more slowly than change. That is why the ambitious timetable that the leader laid out to the board turns out to have been wildly optimistic: it was based on getting the change accomplished, not on getting the people through the transition.
Transition takes longer because it requires that people undergo three separate processes, and all of them are upsetting.
Saying Goodbye. The first requirement is that people have to let go of the way that things -- and, worse, the way that they themselves -- used to be. As the folk-wisdom puts it, "You can't steal second base with your foot on first." You have to leave where you are, and many people have spent their whole lives standing on first base. It isn't just a personal preference you are asking them to give up. You are asking them to let go of the way of engaging or accomplishing tasks that made them successful in the past. You are asking them to let go of what feels to them like their whole world of experience, their sense of identity, even "reality" itself.
On paper it may have been a logical shift to self-managed teams, but it turned out to require that people no longer rely on a supervisor to make all decisions (and to be blamed when things go wrong). Or it looked like a simple effort to merge two work-groups, but in practice it meant that people no longer worked with their friends or reported to people whose priorities they understood.
Shifting into Neutral. Even after people have let go of their old ways, they find themselves unable to start anew. They are entering the second difficult phase of transition. We call it the neutral zone, and that in-between state is so full of uncertainty and confusion that simply coping with it takes most of people's energy. The neutral zone is particularly difficult during mergers or acquisitions, when careers and policy decisions and the very "rules of the game" are left in limbo while the two leadership groups work out questions of power and decision making.
The neutral zone is uncomfortable, so people are driven to get out of it. Some people try to rush ahead into some (often any) new situation, while others try to back-pedal and retreat into the past. Successful transition, however, requires that an organization and its people spend some time in the neutral zone. This time in the neutral zone is not wasted, for that is where the creativity and energy of transition are found and the real transformation takes place.
Today, it won't take 40 years, but a shift to self-managed teams, for instance, is likely to leave people in the neutral zone for six months, and a major merger may take two years to emerge from the neutral zone. The change can continue forward on something close to its own schedule while the transition is being attended to, but if the transition is not dealt with, the change may collapse. People cannot do the new things that the new situation requires until they come to grips with what is being asked.
Moving Forward. Some people fail to get through transition because they do not let go of the old ways and make an ending; others fail because they become frightened and confused by the neutral zone and don't stay in it long enough for it to do its work on them. Some, however, do get through these first two phases of transition, but then freeze when they face the third phase, the new beginning. For that third phase requires people to begin behaving in a new way, and that can be disconcerting -- it puts one's sense of competence and value at risk. Especially in organizations that have a history of punishing mistakes, people hang back during the final phase of transition, waiting to see how others are going to handle the new beginning.
Most leaders come from backgrounds where technical, financial, or operational skills were paramount, and those skills provide little help when it comes to leading people through transition. Such leaders may be pushing the limits of their understanding of the future, and they need perspective and advice. That is where a trusted colleague, confidant, coach, or consultant can offer valuable counsel to the leader. This person's background or professional affiliation can vary widely; what matters is that she or he understands how to help people through transition. It is a role that is far more interpersonal and collaborative than is played by most consultants or trainers accustomed to teaching a skill or prescribing a solution.
No training program can prepare a leader for managing a transition. Yet no leader can effectively lead change -- which is what leadership is all about -- without understanding and, ultimately, experiencing -- the transition process. What leaders need, instead, is individualized assistance whereby they learn to
Create plans to bring their followers through the particular transition that they face -- not through generic "change." A trainer can teach leaders a generalized approach ("The Ten Steps..."), but a good coach can help the leaders to discover their own best approaches.
Work with their own goals, limitations, and concerns to create a development plan that prepares them for the future.
Times of transition are becoming the rule rather than the exception. Yet few leaders know how to prepare for the changes that lie ahead. Transition leadership skills must be congruent with, must capitalize and build on, the leader's own strengths and talents. They cannot be found in a set of theoretical leadership skills.
The transition adviser works collaboratively with each leader to assess the leader's place in the three-part transition process, the strengths the leader brings and how to leverage them, and what the current situation demands. It is a personal and completely customized process.
---------------------------------------------------------------------------------------------------
A Method to Managing Transition
Although the details of a transition management plan are unique to each situation, the adviser must help a leader with the following essential steps:
Learn to describe the change and why it must happen, and do so succinctly -- in one minute or less. It is amazing how many leaders cannot do that.
Be sure that the details of the change are planned carefully and that someone is responsible for each detail; that timelines for all the changes are established; and that a communications plan explaining the change is in place.
Understand (with the assistance of others closer to the change) just who is going to have to let go of what -- what is ending (and what is not) in people's work lives and careers -- and what people (including the leader) should let go of.
Make sure that steps are taken to help people respectfully let go of the past. These may include "boundary" actions (events that demonstrate that change has come), a constant stream of information, and understanding and acceptance of the symptoms of grieving, as well as efforts to protect people's interests while they are giving up the status quo.
Help people through the neutral zone with communication (rather than simple information) that emphasizes connections with and concern for the followers,. To keep reiterating the "4 P's" of transition communications:
The purpose: Why we have to do this
The picture: What it will look and feel like when we reach our goal
The plan: Step-by-step, how we will get there
The part: What you can (and need to) do to help us move forward.
Create temporary solutions to the temporary problems and the high levels of uncertainty found in the neutral zone. For example, one high-tech manufacturer, when announcing the closing of a plant, made interim changes in its usual reassignment procedures, bonus compensation plans, and employee communications processes to make sure that displaced employees suffered as little as possible, both financially and psychologically. Such efforts should include transition monitoring teams that can alert the leader to unforeseen problems -- and disband when the process is done.
Help people launch the new beginning by articulating the new attitudes and behaviors needed to make the change work -- and then modeling, providing practice in, and rewarding those behaviors and attitudes. For example, rather than announcing the grandiose goal of building a "world-class workforce," leaders of transition must define the skills and attitudes that such a workforce must have, and provide the necessary training and resources to develop them.
Since the ability to manage transition is tied to the realities of an actual leader in an actual situation, mutual trust between adviser and leader is essential. Only that way can leaders be honest enough to bring their fears and concerns to the surface quickly, hear what the situation is really "saying" rather than focusing on a program that a consultant is trying to sell, and gain the personal insight and awareness of the transition process that can be carried into the future.
Because this transition management relationship is a close and ongoing one, the adviser gets to know the leader's situation well and follows it as it changes. Understanding the dynamics of transition is far removed from the kind of leadership training most organizations provide. Traditional trainers and consultants seldom possess such intimate knowledge of their client. Whatever personal coaching they provide is usually subsumed to the teaching of a generic skill or body of knowledge. And because the relationship is time-limited, there is a natural pressure to produce quick, clear results.
However, because transition advisers work within the context of the situation at hand, their focus is not on how to "be a leader" or even how to "change an organization" but on how to provide the particular kind of leadership that an organization in transition demands. For that reason, the results of the relationship are very specific: the development of new skills and behaviors geared to the needs of the unique time and circumstances in which the person leads.
================================================
WHAT ARE THE MECHANISMS FOR CHANGING THE CULTURE?
Critical instrumental mechanisms for changing and managing culture include
-Strategic planning and the identification of necessarily cultural requisites
-Ensuring consistency of culture with mission, goals, strategies, structures and processes
-Creating formal statements of organizational philosophy and values
-Establishing consistent incentives, recognition systems, and performance measurement
-Maintaining appropriate error-detection and accountability systems
-Coaching, mentoring, informal and formal training, and identifying role models
-Embracing appropriate rites, rituals, symbols, and narratives
-Taking advantage of the growth of subcultures
-Managing and promoting strong communities of practice .
Several requisites for organizational success that organizational culture must
now take into account:
-The organization must be proactive, not just reactive.
-The organization must influence and manage the environment, not just adapt.
-The organization must be pragmatic, not idealistic.
-The organization must be future-oriented, not predominantly present/past oriented.
-The organization must embrace diversity, not uniformity.
-The organization must be relationship-oriented, not just task-oriented.
-The organization must embrace external connectivity, as well as promote internal
integration.
These fundamental assumptions are key to eliminating obstacles that will inhibit the kinds of
internal and external organizational adaptations necessary for future success. They are not,
however, sufficient. They must be reinforced by values, behavioral norms and patterns, artifacts
and symbols, as well as accompanied by a particular mission, set of goals, and strategies.
--------------------------------------------------------------
Four essential strengths of the organizational culture approach:
It focuses attention on the human side of organizational life, and finds significance and learning in even its most mundane aspects (for example, the setup in an empty meeting room).
It makes clear the importance of creating appropriate systems of shared meaning to help people work together toward desired outcomes.
It requires members—especially leaders—to acknowledge the impact of their behavior on the organization’s culture. People should ask themselves: "What impact am I having on the social construction of reality in my organization?" "What can I do to have a different and more positive impact?"
It encourages the view that the perceived relationship between an organization and its environment is also affected by the organization’s basic assumptions. Morgan says:
We choose and operate in environmental domains according to how we construct conceptions of who we are and what we are trying to do. . . . And we act in relation to those domains through the definitions we impose on them. . . . The beliefs and ideas that organizations hold about who they are, what they are trying to do, and what their environment is like have a much greater tendency to realize themselves than is usually believed.
================================================
THIS IS PART ONE.
PART TWO WILL FOLLOW.
From India, Mumbai
ANY ORGANIZATION CULTURAL IMPLEMENTATION IS A CHANGE.
-DEFINE THE CULTURE VERY CLEARLY.
-BEFORE IMPLEMENTATION. INTRODUCE ''CHANGE MANAGEMENT''.
Merely saying '' GOOD CULTURE'' is a not good enough.
It can mean many things to many people.
GOOD CULTURE comes in many shapes like
-value based culture.
-competitive culture
-learning culture
-productive culture
etcetc.
ONCE YOU DEFINE THE CULTURE ''CLEARLY'',
IT BECOME VERY EASY TO IMPLEMENT IT.
============================================
HERE IS AN EXAMPLE OF ''implementing value based culture''.
YOU CAN MAKE YOUR OWN CHOICE FOR YOUR ORGANIZATION.
================================================== ======
Value based culture is the management approach that ensures corporations
are run consistently on value, such as
-maximising shareholders value
-adding values to the customers' service.
etc etc
THIS INCLUDES
-creating value in all actions/strategy
-managing for values
-measuring value with the help of metrics
etc etc
========================================
THE EMPLOYEES WHO LIVE BY THE VALUES OF THE ORGANIZATIONS
SHOW IT BY THEIR EFFORTS / PURPOSE/DIRECTION/SUPPORT.
-by aligning all their actions/programs with the organization vision.
-by aligning all their actions/programs with the organization mission.
-by aligning all their actions/programs with the organization objectives.
-by aligning all their actions/programs with the organization strategies.
-in maximization of value creation for customers
-in increasing value for company products for the market
-in aligning company activties with the interest of shareholders
-in maintaining quality communication internally/ externally
-in allocation of resources [ finance]
-in allocation of resources [ human resources ]
-in handling complexity in operation
-in handling uncertainty in operation
-in managing risks in operation.
-in planning / budgeting
========================================
-WATCH THE Work practices
Direction - management's style and attitude as it affects employees
Commitment - attitudes towards work and the organisation
Recognition - motivation and recognition of employees
Collaboration - cooperation and teamwork within groups and departments
-WATCH THE Cultural Values
:
Risk - attitudes toward risk taking, structure and ambiguity
Individuality - attitudes toward contribution and self reliance
Compliance - attitudes toward rules and exceptions
Dominance - attitudes towards hierarchy, power and equality
================================================== ===========
WHAT ROLE IS PLAYED BY TOP MANAGEMENT
IN CREATING VALUE BASED CULTURE SYSTEM?
THE TOP MANAGEMENT IN CREATING VALUE BASED
CULTURE SYSTEM PROVIDE
-value based corporate vision
-develop a value based mission statement
-provide a value based corporate OBJECTIVES
-provide a value based corporate STRATEGIES
-provide a value based corporate COMMUNICATION SYSTEM.
-provide a value based corporate GOVERNANCE
-provide a value based corporate CULTURE
-provide a value based corporate ORGANIZATION STRUCTURE
-provide a value based corporate MANAGEMENT STYLE
-provide a value based corporate DECISION MAKING PROCESS.
-provide a value based corporate PERFORMANCE MANAGEMENT SYSTEM
-provide a value based corporate REWARD PROCESS
-provide a value based corporate CLEAR MANAGEMENT PRIORITIES.
-provide a value based corporate BALANCE BETWEEN SHORT TERM/LONG TERM TRENDS.
-provide a value based corporate SHARED VALUES
-provide the required skills to the employees
etc etc
============================================
IN IMPLEMENTING CULTURAL CHANGE,
-DEFINE THE CULTURE VERY CLEARLY.
-''CHANGE MANAGEMENT'' IS MORE IMPORTANT THAN CULTURE ITSELF.
-What I have suggested is a blend of guidelines/ideas/concepts on the
process of managing the change of culture in an organization.
I must also emphasise that the culture change is always done with a purpose.
YOU MUST STATE THIS VERY CLEARLY UPFRONT.
PEOPLE ANCHOR THE PURPOSE FIRST, THEN CHANGE
THE BEHAVIOR.
ALL THESE STEPS WILL HELP YOU TO MANAGE YOUR
ORGANIZATION MORE EFFECTIVELY.
==================================================
ORGANIZATION CULTURE
HOW AN ORGANIZATION's CULTURE CAN BE KNOWN ?
Organization culture can be a set of key values , assumptions,
understandings and norms that is shared by members of an
organization.
Organization values are fundamental beliefs that an organization
considers to be important , that are relatively stable over time,
and they have an impact on employees behaviors and attitudes.
Organization Norms are shared standards that define what
behaviors are acceptable and desirable within organization.
Shared assumptions are about how things are done
in an organization.
Understandings are coping with internal / external problems
uniformly.
=================================================
LEVELS OF ORGANIZATION CULTURE
LEVEL 1---VISIBLE, that can be seen at the surface level
-dress codes
-office layout [ open office]
-symbols
-slogans
-ceremonies[ monthly / annual awards/long service/birthdays etc.
etc etc
LEVEL 2- INVISIBLE , that can be cannot be seen but only felt.
-stories about people performance
-symbols [ flag, trademark, logos, etc]
-corporate mission statements
-recruitment/selection [ methods used]
-fairness in treatment
-social equality
-risk taking in business deals
-formality in approach
-discipline
-autonomy for departments
-responsiveness to communication
-empowerment of staff.
etc etc.
===============================================
ORGANIZATION CULTURE/ CHANGE
Organizational culture ultimately determines whether or not any improvement initiatives/CHANGES will be successful. Culture defines the work environment. The organization can design the most efficient possible work processes, acquire the very best management information systems, and employ state-of-the-art high technology, but unless the culture is prepared for change, improvement efforts will fall short. Management teams that must reduce costs and improve performance are immediately confronted with a daunting challenge that they will ignore only at their peril: how does one go about changing the organization’s culture?
Understanding Change Management
It is axiomatic that constructive change cannot be imposed from the top. This change formula elegantly explains why this is true and points the way to successful change implementation.
The Change Formula:
C = V x D >R
Where:
C = Change
V = A positive vision for the future
D = Dissatisfaction with the status quo, and
R = Natural human resistance to change
If you have ever put forward a great idea only to have it rejected or ignored by the very people whom it would most benefit, you will appreciate the change formula. The formula says that constructive change will occur in an organization only when a positive vision for the future multiplied by dissatisfaction with the status quo (the relationship is not linear) is greater than the natural human resistance to change.
The organization ’s culture is defined by the beliefs of its CEO, executives, managers, staff and specialists; the assumptions upon which those beliefs are based; and the behaviors that rest upon those assumptions. Human beings are creatures of habit. Because established routines help us order our lives we naturally resist threats to those routines. By definition, cultural change requires large-scale modification of routine-based behavior. It may require re-evaluation of long held and deeply cherished beliefs. No matter how great an idea is, if the people who would be affected by it are reasonably satisfied with the current situation, they will not voluntarily change their routines. Conversely, no matter how dissatisfied people are with things as they are, unless and until they believe that change will materially improve their circumstances, they will not change either, preferring less than ideal conditions over the unknown.
---------------------------------------------------------------------------------------------------------
A Change Management Strategy
Below is the outline of a systematic change management strategy based on the factors described in the change formula. The outline has been necessarily simplified , but it does describe the main phases and component elements.
Ø The Unfreezing Phase: A positive vision for the future is systematically and consistently articulated from the top by governance and executive management. The organization establishes a well-defined statement of consensus-based values that will be managed to and hired for. Elements from a model statement are shown below.
o Managers will value the organization ’s interests over those of individual departments.
o Information sharing and interdepartmental cooperation will be valued over gate keeping and internal competition. Information silos will be eliminated.
o Critical outcome performance will be valued over convenience.
o Constructive innovation will be valued over bureaucratic maintenance.
Ø The Organizational Development Phase: The necessity for change is accepted organization-wide.
o Board education begins with a well-designed orientation and continues systematically through each member’s tenure.
o Continuing education and training in financial management, planning, staffing and scheduling, quantitative methods, and supervisory management is routinely provided to managers on a scheduled basis.
o Managers are routinely exposed to external information (benchmarking data, outside speakers, relevant management publications, etc.) to develop an understanding of new approaches.
Ø The Implementation Phase: The organization develops and implements systematic methods to identify, prioritize and resolve performance-inhibiting factors as part of the management process.
o Management and training responsibilities are established for all mission-critical systems and performance feedback reporting mechanisms are developed and implemented.
o Critical outcome area "management by exception" reporting systems are developed and implemented.
o An annual inventory of factors inhibiting optimum performance is established as a department-level responsibility. The inventory serves as a basis for immediate action and organizational management planning.
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HERE IS SOMETHING, YOU CAN AS AN OPTION, PREPARE
THE GROUND FOR CHANGE.
From experience and observation, there are seven essential steps to transform a culture through a changed organization:
Scanning the environment for the two or three trends that will have the greatest impact upon the organization in the future
Determining the implications of those trends for the organization
Revisiting the mission -- "What is our mission?" and examining our purpose and refining it until it is a short, powerful, compelling statement of why we do what we do
Banning the old hierarchy we all inherited and building flexible, fluid management structures and systems that unleash the energies and spirits of our people
Challenging the gospel of "the way we've always done it" questioning every policy, practice, procedure, and assumption, by abandoning those that have little use today or will in the future -- and keeping only those that reflect the desired future
Communicatingwith the few powerful, compelling messages that mobilize people around mission, goals, and values -- not with 50 messages that our people have trouble remembering
Dispersingthe responsibilities of leadership across the organization, so that we have not one leader but many CHAMPIONS at every level of the enterprise
And along the way, by initiating each of these challenging steps, LEADER/CHAMPIONS of the organization, in their behavior and language, embody the mission, values and principles. By working with others toward change, we create the desired result -- the inclusive, cohesive, productive organization reaching new levels of excellence in performance and significance.
That is the marriage of culture and organization, of belief and practice, that marks our best institutions. And in a wonderfully circular way, as the organization and its people grow and flourish, the culture reflects and resounds and delivers a message -- changing as the environment and the needs of our customers change.
In the end, it is a good thing that culture is not easily changed. A culture defines the heart of the organization, and a change of heart is not to be taken lightly. But the introspective and inclusive process by which an organization formulates its values and
revisits its situation.
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HERE IS A SIMPLE APPROACH/GUIDELINE FOR Creating Change
1. Establish a sense of urgency
Communicate the business situation or reason for implementing the culture change —why is it necessary?
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2. Create the guiding coalition
Establish a team with the knowledge to initiate change and the power to make the change happen.
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3. Develop a vision and strategy
Develop the organization ’s vision for the change and the strategies for implementation.
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4. Communicate the change vision
Share the vision and how it will affect the participants
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5. Empower broad-based action
Give the CHANGE team the authority to initiate the changes
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6. Generate short-term wins
Work with the practice groups that are mostly likely to
accept THE CHANGE and celebrate their achievements
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7. Consolidate gains and produce more change
Use success to create more success.
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8. Anchor new approaches in the culture
Make the CHANGE initiatives a part of the daily work process of the firm.
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THE MOST IMPORTANT POINT TO NOTE IN CHANGING ''CULTURE''
IS THE ''TRANSITION'' .
WHY? because transition occurs in the course of every attempt at change.
Transition is the state that change puts people into.
The change is external (the different policy, practice, or structure that the leader is trying to bring about),
while transition is internal (a psychological reorientation that people have to go through before the change can work).
The trouble is, most leaders imagine that transition is automatic -- that it occurs simply because the change is happening. But it doesn't. Just because the computers are on everyone's desk doesn't mean that the new individually accessed customer database is transforming operations the way the consultants promised it would. And just because two companies are now fully "merged" doesn't mean that they operate as one or that the envisioned cost savings will be realized.
Even when a change is showing signs that it may work, there is the issue of timing, for transition happens much more slowly than change. That is why the ambitious timetable that the leader laid out to the board turns out to have been wildly optimistic: it was based on getting the change accomplished, not on getting the people through the transition.
Transition takes longer because it requires that people undergo three separate processes, and all of them are upsetting.
Saying Goodbye. The first requirement is that people have to let go of the way that things -- and, worse, the way that they themselves -- used to be. As the folk-wisdom puts it, "You can't steal second base with your foot on first." You have to leave where you are, and many people have spent their whole lives standing on first base. It isn't just a personal preference you are asking them to give up. You are asking them to let go of the way of engaging or accomplishing tasks that made them successful in the past. You are asking them to let go of what feels to them like their whole world of experience, their sense of identity, even "reality" itself.
On paper it may have been a logical shift to self-managed teams, but it turned out to require that people no longer rely on a supervisor to make all decisions (and to be blamed when things go wrong). Or it looked like a simple effort to merge two work-groups, but in practice it meant that people no longer worked with their friends or reported to people whose priorities they understood.
Shifting into Neutral. Even after people have let go of their old ways, they find themselves unable to start anew. They are entering the second difficult phase of transition. We call it the neutral zone, and that in-between state is so full of uncertainty and confusion that simply coping with it takes most of people's energy. The neutral zone is particularly difficult during mergers or acquisitions, when careers and policy decisions and the very "rules of the game" are left in limbo while the two leadership groups work out questions of power and decision making.
The neutral zone is uncomfortable, so people are driven to get out of it. Some people try to rush ahead into some (often any) new situation, while others try to back-pedal and retreat into the past. Successful transition, however, requires that an organization and its people spend some time in the neutral zone. This time in the neutral zone is not wasted, for that is where the creativity and energy of transition are found and the real transformation takes place.
Today, it won't take 40 years, but a shift to self-managed teams, for instance, is likely to leave people in the neutral zone for six months, and a major merger may take two years to emerge from the neutral zone. The change can continue forward on something close to its own schedule while the transition is being attended to, but if the transition is not dealt with, the change may collapse. People cannot do the new things that the new situation requires until they come to grips with what is being asked.
Moving Forward. Some people fail to get through transition because they do not let go of the old ways and make an ending; others fail because they become frightened and confused by the neutral zone and don't stay in it long enough for it to do its work on them. Some, however, do get through these first two phases of transition, but then freeze when they face the third phase, the new beginning. For that third phase requires people to begin behaving in a new way, and that can be disconcerting -- it puts one's sense of competence and value at risk. Especially in organizations that have a history of punishing mistakes, people hang back during the final phase of transition, waiting to see how others are going to handle the new beginning.
Most leaders come from backgrounds where technical, financial, or operational skills were paramount, and those skills provide little help when it comes to leading people through transition. Such leaders may be pushing the limits of their understanding of the future, and they need perspective and advice. That is where a trusted colleague, confidant, coach, or consultant can offer valuable counsel to the leader. This person's background or professional affiliation can vary widely; what matters is that she or he understands how to help people through transition. It is a role that is far more interpersonal and collaborative than is played by most consultants or trainers accustomed to teaching a skill or prescribing a solution.
No training program can prepare a leader for managing a transition. Yet no leader can effectively lead change -- which is what leadership is all about -- without understanding and, ultimately, experiencing -- the transition process. What leaders need, instead, is individualized assistance whereby they learn to
Create plans to bring their followers through the particular transition that they face -- not through generic "change." A trainer can teach leaders a generalized approach ("The Ten Steps..."), but a good coach can help the leaders to discover their own best approaches.
Work with their own goals, limitations, and concerns to create a development plan that prepares them for the future.
Times of transition are becoming the rule rather than the exception. Yet few leaders know how to prepare for the changes that lie ahead. Transition leadership skills must be congruent with, must capitalize and build on, the leader's own strengths and talents. They cannot be found in a set of theoretical leadership skills.
The transition adviser works collaboratively with each leader to assess the leader's place in the three-part transition process, the strengths the leader brings and how to leverage them, and what the current situation demands. It is a personal and completely customized process.
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A Method to Managing Transition
Although the details of a transition management plan are unique to each situation, the adviser must help a leader with the following essential steps:
Learn to describe the change and why it must happen, and do so succinctly -- in one minute or less. It is amazing how many leaders cannot do that.
Be sure that the details of the change are planned carefully and that someone is responsible for each detail; that timelines for all the changes are established; and that a communications plan explaining the change is in place.
Understand (with the assistance of others closer to the change) just who is going to have to let go of what -- what is ending (and what is not) in people's work lives and careers -- and what people (including the leader) should let go of.
Make sure that steps are taken to help people respectfully let go of the past. These may include "boundary" actions (events that demonstrate that change has come), a constant stream of information, and understanding and acceptance of the symptoms of grieving, as well as efforts to protect people's interests while they are giving up the status quo.
Help people through the neutral zone with communication (rather than simple information) that emphasizes connections with and concern for the followers,. To keep reiterating the "4 P's" of transition communications:
The purpose: Why we have to do this
The picture: What it will look and feel like when we reach our goal
The plan: Step-by-step, how we will get there
The part: What you can (and need to) do to help us move forward.
Create temporary solutions to the temporary problems and the high levels of uncertainty found in the neutral zone. For example, one high-tech manufacturer, when announcing the closing of a plant, made interim changes in its usual reassignment procedures, bonus compensation plans, and employee communications processes to make sure that displaced employees suffered as little as possible, both financially and psychologically. Such efforts should include transition monitoring teams that can alert the leader to unforeseen problems -- and disband when the process is done.
Help people launch the new beginning by articulating the new attitudes and behaviors needed to make the change work -- and then modeling, providing practice in, and rewarding those behaviors and attitudes. For example, rather than announcing the grandiose goal of building a "world-class workforce," leaders of transition must define the skills and attitudes that such a workforce must have, and provide the necessary training and resources to develop them.
Since the ability to manage transition is tied to the realities of an actual leader in an actual situation, mutual trust between adviser and leader is essential. Only that way can leaders be honest enough to bring their fears and concerns to the surface quickly, hear what the situation is really "saying" rather than focusing on a program that a consultant is trying to sell, and gain the personal insight and awareness of the transition process that can be carried into the future.
Because this transition management relationship is a close and ongoing one, the adviser gets to know the leader's situation well and follows it as it changes. Understanding the dynamics of transition is far removed from the kind of leadership training most organizations provide. Traditional trainers and consultants seldom possess such intimate knowledge of their client. Whatever personal coaching they provide is usually subsumed to the teaching of a generic skill or body of knowledge. And because the relationship is time-limited, there is a natural pressure to produce quick, clear results.
However, because transition advisers work within the context of the situation at hand, their focus is not on how to "be a leader" or even how to "change an organization" but on how to provide the particular kind of leadership that an organization in transition demands. For that reason, the results of the relationship are very specific: the development of new skills and behaviors geared to the needs of the unique time and circumstances in which the person leads.
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WHAT ARE THE MECHANISMS FOR CHANGING THE CULTURE?
Critical instrumental mechanisms for changing and managing culture include
-Strategic planning and the identification of necessarily cultural requisites
-Ensuring consistency of culture with mission, goals, strategies, structures and processes
-Creating formal statements of organizational philosophy and values
-Establishing consistent incentives, recognition systems, and performance measurement
-Maintaining appropriate error-detection and accountability systems
-Coaching, mentoring, informal and formal training, and identifying role models
-Embracing appropriate rites, rituals, symbols, and narratives
-Taking advantage of the growth of subcultures
-Managing and promoting strong communities of practice .
Several requisites for organizational success that organizational culture must
now take into account:
-The organization must be proactive, not just reactive.
-The organization must influence and manage the environment, not just adapt.
-The organization must be pragmatic, not idealistic.
-The organization must be future-oriented, not predominantly present/past oriented.
-The organization must embrace diversity, not uniformity.
-The organization must be relationship-oriented, not just task-oriented.
-The organization must embrace external connectivity, as well as promote internal
integration.
These fundamental assumptions are key to eliminating obstacles that will inhibit the kinds of
internal and external organizational adaptations necessary for future success. They are not,
however, sufficient. They must be reinforced by values, behavioral norms and patterns, artifacts
and symbols, as well as accompanied by a particular mission, set of goals, and strategies.
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Four essential strengths of the organizational culture approach:
It focuses attention on the human side of organizational life, and finds significance and learning in even its most mundane aspects (for example, the setup in an empty meeting room).
It makes clear the importance of creating appropriate systems of shared meaning to help people work together toward desired outcomes.
It requires members—especially leaders—to acknowledge the impact of their behavior on the organization’s culture. People should ask themselves: "What impact am I having on the social construction of reality in my organization?" "What can I do to have a different and more positive impact?"
It encourages the view that the perceived relationship between an organization and its environment is also affected by the organization’s basic assumptions. Morgan says:
We choose and operate in environmental domains according to how we construct conceptions of who we are and what we are trying to do. . . . And we act in relation to those domains through the definitions we impose on them. . . . The beliefs and ideas that organizations hold about who they are, what they are trying to do, and what their environment is like have a much greater tendency to realize themselves than is usually believed.
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THIS IS PART ONE.
PART TWO WILL FOLLOW.
From India, Mumbai
DEVANSH,
THIS IS THE CONTINUATION. PART TWO.
IMPLEMENTING THE CULTURE OF ''VALUE ''
Step One: Define Vision and Mission
A company must get buy-in from its management and its employees, before getting involved in the VALUE BASED journey.
Explanation of Step One - Defining Vision and Mission
The first step of the VALUE BASED journey is developing a company's vision and mission statements. With input from all employees, these two statements are used as guides for the rest of the VALUE BASED journey.
It is important to tie VALUE BASED into the overall company vision so that each department or area of the company realizes that VALUE BASED is important to the company.
Vision
A vision statement outlines what a company wants to be. It focuses on tomorrow; it is inspirational; it provides clear decision-making criteria; and it is timeless.
Mission
A mission statement outlines what the company is now. It focuses on today; it identifies the customer(s); it identifies the critical process(es); and it states the level of performance.
It has been said that a vision is something to be pursued, while a mission is something to be accomplished.
Developing guidance for the company is not that easy - it takes time to get it right. These visions, missions, and values must be aligned with the company or they are just rhetoric.
The overall objectives are achieved - they explain what the company is today; what it wants to be in the future; and the key factors that guide its decision making.
Tools and Assessments for Vision and Mission
Tools
The visioning process consists of eight steps:
1) Collect input - to be most effective, the vision should represent the ideals of the entire organization. The vision can be created most successfully by a representative group of five to seven people. Other people can be surveyed for their input by using the following types of questions:
What would be the perfect organizational culture?
What would the perfect organization do for its members' growth and development?
What products or services would the perfect organization provide to customers and the community?
What else would the perfect organization do or be?
2) Brainstorm - using the data collected, have the visioning group brainstorm ideas with the same questions used in step one. The goal is to record ideas and words to describe the perfect organization.
3) Shrink the mess - the large number of ideas generated must be shrunk down to a smaller, more manageable number without losing content by eliminating duplication, grouping ideas into suitable categories, and eliminating ideas that aren't appropriate or don't fit. With the ideas grouped, choose the word or words that best represent each group.
4) Develop a rough draft - work with the words (that represent the groups of ideas) and rough out a statement for each component: culture, people, and product or service.
5) Refine the statements - use words that create pictures. Consider content and style as well. This step deserves the appropriate time and energy.
6) Test the criteria - before taking the vision to the organization, test it against the following criteria: Is your vision timeless, inspirational, and does it provide decision-making criteria for employees faced with tough situations? If it passes, continue to the next step. If it doesn't pass, then work on improving only those parts that don't meet the criteria.
7) Obtain organization approval or modify - present the vision to the entire organization for approval. This step is essential if everyone is to "own", and commit to, the vision. When soliciting the approval of other employees, explain the process the team went through, explain the vision, and be open to modifications. All suggestions should be considered.
8) Communicate and celebrate - sometimes a vision will stand alone. If yours does, go out and celebrate. Usually, the vision will require some explanation, clarification, and application. Every word should have a purpose. To bring the vision from the idea world into the physical world, a flexible strategic plan is needed.
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Step Two - Document Processes
Now that the company knows what it is and where it wants to go, the next step in the VALUE BASED journey is to determine how it presently does its business. To accomplish this the company must focus on its processes. It must know how it presently does things and be able to measure its ability to be consistent in meeting customer requirements.
It has been said that customers remember a company's name under two conditions:
When the company provides extremely poor products or service.
When the company provides surprisingly good products or service.
In order to provide surprisingly good products or service (output), companies must look at what is involved in delivering that output. It is the business processes that deliver the output. Therefore, companies must focus on the process in order to keep customers coming back and staying loyal to the product or service.
To truly address the output, companies must start focusing on the processes that control the customer interfaces, rather than the organizational structure.
In Business Process Improvement, this comparison shows the difference between an organizational focus and a process focus.
Organizational Focus
Process Focus
Employees are the problem
The process is the problem
Employees
People
Doing my job
Help to get things done
Understanding my job
Knowing how my job fits into the total process
Measuring individuals
Measuring the process
Change the person
Change the process
Can always find a better employee
Can always improve the process
Motivate people
Remove Barriers
Controlling employees
Developing people
Don't trust anyone
We are all in this together
Who made the error?
What allowed the error to occur?
Correct errors
Reducing variation
Bottom line driven
Customer driven
Companies that focus on delivering surprisingly good output and building their reputations will be more successful than companies that just focus on the bottom line as the bottom line will not bring customers back. And the only way to determine how to consistently deliver this type of output is by focusing on processes within your company/business.
Explanation of Step Two - Documenting Processes
Every product/service (output) is the result of a process. A process can be defined as any activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer. The key elements of a process are: inputs, activities, outputs, customers, resources (materials, dollars and person/processing time), and cycle time (how long does it take). When documenting a process, all these key elements need to be identified.
A company must first document the current state - define what the company does, who does it and how and why it is done. A common approach is to draw a process picture (called process mapping), identify inputs, actions, decisions points as well as time and cost inputs. This process picture permits common understanding, enables measurement and develops a common language.
There are several ways to "map" a process. Some companies describe the flow of information and activities between departments in step form. Other companies use flowcharting tools.
A caution is worthy of note here - most companies organize themselves in a vertical format (for example, accounting department, shipping/receiving department and customer service department). However, processes tend to flow horizontally and connect more than one functioning group. This horizontal work flow combined with a vertical organization results in voids and overlaps and process problems.
Because of the difference in directional flow, it is important that all groups know how they interrelate and how the various outputs are used by others.
When starting to map a company's processes, some of the things to identify are the objectives of the process (performance targets, financial, quality, operational, behavioural), the inputs and outputs, and the measures (how will the progress be monitored, internally and externally).
A common concern about process mapping is determining where to start and what to map. If a process consists of several subprocesses then it may be easier to start mapping at the subprocess level. Depending on the detail required, activities can be mapped individually.
The next question might be, how is a process mapped? There are numerous ways to map a process and there are several tools available on the market (e.g., software programs). Flowcharting is the most popular and can be simple or complex.
==============================
Step Three - Establish Measurements
The next step in the VALUE BASED journey is to set standards and measures for each process, product and service.
Within the whole organization (production, sales, administration, shipping, agents) while moving down the VALUE BASED road, the focus must be on improving the customer's perception of the company, its products and services. To do this the company must measure customer satisfaction.
Companies need to determine precisely where they stand in their customer's eyes by engaging in ongoing information gathering activities to measure customer satisfaction. Listening to customer complaints, identifying and measuring critical processes that are responsible for generating poor service or products, and implementing corrective action are integral in developing a quality management philosophy.
The old sayings: What Gets Measured, Gets Managed and Never Assume You Know What The Customer Wants, sound like common sense, but many companies fail to develop even the most basic methods of gathering information and establishing performance measures.
Companies need to:
know on an ongoing basis what their customers are thinking,
analyze their own structures and processes to ensure that they do not hinder or interfere with customer satisfaction, and,
implement measures to monitor the effectiveness of all critical processes that impact customer satisfaction.
Explanation of Step Three - Establishing Measurements
The focus of standards and measures is to ensure that the processes are meeting requirements and that customers are satisfied.
Standards
Standards are yardsticks for measuring performance, quality, and duration. Normally companies are concerned with two types of standards: work standards that measure performance and customer service standards that measure the quality of service to the customers.
Standards must be realistic. Setting standard too low creates complacency but setting them too high may make them uneconomical to reach. If standards are set too high, resources may be diverted in order to achieve them and this might interfere with improvement in other areas. Standards are not set in stone, they must be adjusted to reflect changes in customer requirements or processes.
Examples of standards include:
When more than five people are in queue, another checkstand is to be opened immediately - operated by supervisory or management personnel, if necessary.
Process and post credit memos within 7 days of receiving them.
Post all adjustments within 7 days. All adjustments must be current at month's end.
Ship 98 percent of orders to A customers within 24 hours.
Maintain 99.5 percent accuracy on order entry and assembly.
Order turnaround: 93 percent of orders filled completely within 72 hours.
Measures
A company needs to determine what to measure and how to measure it in order to deliver the outputs the customer wants.
Here are some guidelines to use for establishing measurements:
Find out why the key customers (the ones that account for a large portion of the company's dollar sales) keep coming back instead of going to the competition. Find out how good the entire company must be - not just your products or services. Use surveys, interviews, point of sale/service and follow-up calls.
Determine the obstacles to excellent service for external and internal customers. Look at company structure, work flows, and evaluate personnel abilities/skills/knowledge. Use tools such as employee attitudinal surveys and exit interviews and develop formal/informal feedback mechanisms.
Determine which processes are critical to the delivery of products or services to the customers or the ones that affect the criteria that the customer uses to evaluate the company's performance.
Develop measurements that strike a balance between cost, quality and cycle time.
Use as many proactive measurements as possible because they provide immediate feedback and allow time for corrective action before problems have any impact on the customer.
Use some reactive measures to take advantage of feedback after the product or service has been purchased by the customer. Examples of these are warranty claims, customer complaints, and surveys.
Measure quality standards in both production and service.
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Step Four - Control Processes Using Measurements
The goal in this step of the VALUE BASED journey is to use the measurement results to fine tune processes and align them with the desired outcomes and standards. Processes, standards and measures need to be controlled and aligned to ensure that the company is serving its customers and supporting the people who are serving the customers or producing the products or services.
Measurement allows management to "Manage by Fact" rather than managing by intuition or judgment by providing facts about the operating environment and performance. Based on the vision and the objectives desired, management can use those facts for analysis and decision making.
There are two primary uses of "Management by Fact". They are:
Manage service quality - Manage the processes and the deliverables to make sure they meet customer requirements/specifications.
Manage process improvement - Identify opportunities for process improvement, and then implement them.
The obstacles of "Management by Fact" include:
Unreliable, invalid measures. If the measures are not reliable and are not valid, they are not believable and will not be used.
Measuring individuals instead of groups/teams or projects. When measurements are thought to be individual performance indicators, the tendency is to manipulate those measures to make personal performance look better.
Non-timely recording of manual measures. When people are asked to keep manual logs, they frequently do not keep them up to date, resulting in inaccurate data.
Misuse of measurement data by management. If data is used to punish employees rather than improve processes, the measurement concept will be undermined.
Statistical methods need to be used to ensure that the information used for decision making is statistically valid otherwise the decisions may not be good ones and may actually create more problems.
DATA collected during the measurement stage are used to control and align operational processes and systems to the company's values and vision.
Explanation of Step Four - Control and Alignment
The information collected during measurement is called "measurement data". It may be survey feedback, sales per month, number of deliveries made each shift, number of errors in billing, etc.
Measurement data can be used to:
Ensure that the outputs of a process meet the requirements.
Identify where a process needs to be adjusted to meet the customer requirements
Monitor the defined/desired standards. (As customer needs and requirements change, standards will have to be adjusted and the process may also have to be adjusted.)
When there is a large amount of data, it is helpful to display it using more than one method. The reason for this, is that trends and other issues, can be easily seen when data are shown as a graph or bar chart. These methods make data more user friendly.
Impact of Control and Alignment on the Company
Vertical Organization Affected
Process improvement will have an affect on systems. Systems are basically the vertical organization of a company such as human resources, shipping/receiving or distribution, customer complaints or customer relations, purchasing, and accounting. As processes are controlled, improved and aligned, other parts of the company will be effected and may need to change and realign to ensure that the company VISION, goals and objectives are met.
Firing on All Cylinders offers these examples of realignments that were needed to support continuous improvement principles.
[In summary, the new appraisal process consisted of a meeting of the employee and supervisor where they agreed on job responsibilities, priorities, opportunities and training needs; a review meeting for the employee to give an update on progress; feedback on employee's performance by other employees; review of feedback and development of the next year's plan.]
Continual Training and Use of Teams and Statistical Tools
Teams will need training in statistics and the various tools as needed to ensure that they are kept up-to-date with new methods. As well, teams will need training in team building, effective brainstorming and problem solving techniques.
Management Practices
Management must start to manage using facts such as using monthly summaries of data in management meetings to keep up-to-date with operational changes needed or impacting another part of the company.
As well, management needs to review measurements, process improvements and other realignments during STRATEGIC PLANNING meetings to ensure they support the overall goals and direction of the company.
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Step Five - Implement Continuous Improvement
In Step Five of the VALUES BASED , the company continues doing what it has been doing; that is mapping its processes, establishing standards and measures and then controlling the processes based on the measurement data. But in addition, the company starts expanding what is has been doing to all aspects of its business.
From this point on, the company needs to continue its focus on customer requirements and improving value to customers and improvement of the overall company performance and capabilities. But the company must also start learning from others and assessing its progress. Using benchmarking or comparing the company to competition standards are ways to assess the improvement progress.
Explanation of Step Five - Continuous Improvement
Successful companies that are truly world class and that demonstrate VALUES BASED principles possess common characteristics :
LEADERSHIP and management commitment: unrelenting constancy of purpose
Total customer delight: no ifs or buts
Long-range effort: no instant pudding
Teamwork and partnerships: with employees, suppliers, and customers
Employee involvement and satisfaction: diversity and empowerment
Ongoing training: from the chief executive officer to the lowest ranks
Statistical measurement of progress
CONTINUOUS IMPROVEMENT : an unending journey
BENCHMARKING against the best in class
Total, open communication with employees, suppliers, and customers
The company needs to continue using the basics to improve its business. This is the foundation that will allow the company to be successful at implementing and using other tools, techniques and programs. It is necessary to review :
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· Measurement tools because there may be better ones and internal/external <link outdated-removed> or requirements may change.
· New methods for controlling processes.
The VALUES BASED improvement process must be integrated into the normal day-to-day operations. Quality and business need to become one with a focus on total customer satisfaction.
Impact of Continuous Improvement on the Company
When a company truly commits to becoming world class and successful, all employees realize that this is it. If a change in culture has not already occurred, it will happen now.
Tools and Assessments for Continuous Improvement
The tools that were mentioned in the other steps apply here as well. Communication, statistical tools, training, ongoing assessment of customer satisfaction criteria, and teamwork are some of the tools that will help with the journey.
Benchmarking
Benchmarking is a management technique that improves business performance by showing where the company stands compared to others. Before benchmarking, ensure that you have defined the goals and objectives and that you have looked at your own process and made improvements to it. Next, get training and assistance to help in preparing for and following up on the benchmarking findings.
Criteria for VALUED BASED PERFORMANCE
Leadership
Strategic planning
Customer and market focus
Information and analysis
Human resource development and management
Process management
Business results
===============================================
REGARDS
LEO LINGHAM
#################################################
From India, Mumbai
THIS IS THE CONTINUATION. PART TWO.
IMPLEMENTING THE CULTURE OF ''VALUE ''
Step One: Define Vision and Mission
A company must get buy-in from its management and its employees, before getting involved in the VALUE BASED journey.
Explanation of Step One - Defining Vision and Mission
The first step of the VALUE BASED journey is developing a company's vision and mission statements. With input from all employees, these two statements are used as guides for the rest of the VALUE BASED journey.
It is important to tie VALUE BASED into the overall company vision so that each department or area of the company realizes that VALUE BASED is important to the company.
Vision
A vision statement outlines what a company wants to be. It focuses on tomorrow; it is inspirational; it provides clear decision-making criteria; and it is timeless.
Mission
A mission statement outlines what the company is now. It focuses on today; it identifies the customer(s); it identifies the critical process(es); and it states the level of performance.
It has been said that a vision is something to be pursued, while a mission is something to be accomplished.
Developing guidance for the company is not that easy - it takes time to get it right. These visions, missions, and values must be aligned with the company or they are just rhetoric.
The overall objectives are achieved - they explain what the company is today; what it wants to be in the future; and the key factors that guide its decision making.
Tools and Assessments for Vision and Mission
Tools
The visioning process consists of eight steps:
1) Collect input - to be most effective, the vision should represent the ideals of the entire organization. The vision can be created most successfully by a representative group of five to seven people. Other people can be surveyed for their input by using the following types of questions:
What would be the perfect organizational culture?
What would the perfect organization do for its members' growth and development?
What products or services would the perfect organization provide to customers and the community?
What else would the perfect organization do or be?
2) Brainstorm - using the data collected, have the visioning group brainstorm ideas with the same questions used in step one. The goal is to record ideas and words to describe the perfect organization.
3) Shrink the mess - the large number of ideas generated must be shrunk down to a smaller, more manageable number without losing content by eliminating duplication, grouping ideas into suitable categories, and eliminating ideas that aren't appropriate or don't fit. With the ideas grouped, choose the word or words that best represent each group.
4) Develop a rough draft - work with the words (that represent the groups of ideas) and rough out a statement for each component: culture, people, and product or service.
5) Refine the statements - use words that create pictures. Consider content and style as well. This step deserves the appropriate time and energy.
6) Test the criteria - before taking the vision to the organization, test it against the following criteria: Is your vision timeless, inspirational, and does it provide decision-making criteria for employees faced with tough situations? If it passes, continue to the next step. If it doesn't pass, then work on improving only those parts that don't meet the criteria.
7) Obtain organization approval or modify - present the vision to the entire organization for approval. This step is essential if everyone is to "own", and commit to, the vision. When soliciting the approval of other employees, explain the process the team went through, explain the vision, and be open to modifications. All suggestions should be considered.
8) Communicate and celebrate - sometimes a vision will stand alone. If yours does, go out and celebrate. Usually, the vision will require some explanation, clarification, and application. Every word should have a purpose. To bring the vision from the idea world into the physical world, a flexible strategic plan is needed.
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Step Two - Document Processes
Now that the company knows what it is and where it wants to go, the next step in the VALUE BASED journey is to determine how it presently does its business. To accomplish this the company must focus on its processes. It must know how it presently does things and be able to measure its ability to be consistent in meeting customer requirements.
It has been said that customers remember a company's name under two conditions:
When the company provides extremely poor products or service.
When the company provides surprisingly good products or service.
In order to provide surprisingly good products or service (output), companies must look at what is involved in delivering that output. It is the business processes that deliver the output. Therefore, companies must focus on the process in order to keep customers coming back and staying loyal to the product or service.
To truly address the output, companies must start focusing on the processes that control the customer interfaces, rather than the organizational structure.
In Business Process Improvement, this comparison shows the difference between an organizational focus and a process focus.
Organizational Focus
Process Focus
Employees are the problem
The process is the problem
Employees
People
Doing my job
Help to get things done
Understanding my job
Knowing how my job fits into the total process
Measuring individuals
Measuring the process
Change the person
Change the process
Can always find a better employee
Can always improve the process
Motivate people
Remove Barriers
Controlling employees
Developing people
Don't trust anyone
We are all in this together
Who made the error?
What allowed the error to occur?
Correct errors
Reducing variation
Bottom line driven
Customer driven
Companies that focus on delivering surprisingly good output and building their reputations will be more successful than companies that just focus on the bottom line as the bottom line will not bring customers back. And the only way to determine how to consistently deliver this type of output is by focusing on processes within your company/business.
Explanation of Step Two - Documenting Processes
Every product/service (output) is the result of a process. A process can be defined as any activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer. The key elements of a process are: inputs, activities, outputs, customers, resources (materials, dollars and person/processing time), and cycle time (how long does it take). When documenting a process, all these key elements need to be identified.
A company must first document the current state - define what the company does, who does it and how and why it is done. A common approach is to draw a process picture (called process mapping), identify inputs, actions, decisions points as well as time and cost inputs. This process picture permits common understanding, enables measurement and develops a common language.
There are several ways to "map" a process. Some companies describe the flow of information and activities between departments in step form. Other companies use flowcharting tools.
A caution is worthy of note here - most companies organize themselves in a vertical format (for example, accounting department, shipping/receiving department and customer service department). However, processes tend to flow horizontally and connect more than one functioning group. This horizontal work flow combined with a vertical organization results in voids and overlaps and process problems.
Because of the difference in directional flow, it is important that all groups know how they interrelate and how the various outputs are used by others.
When starting to map a company's processes, some of the things to identify are the objectives of the process (performance targets, financial, quality, operational, behavioural), the inputs and outputs, and the measures (how will the progress be monitored, internally and externally).
A common concern about process mapping is determining where to start and what to map. If a process consists of several subprocesses then it may be easier to start mapping at the subprocess level. Depending on the detail required, activities can be mapped individually.
The next question might be, how is a process mapped? There are numerous ways to map a process and there are several tools available on the market (e.g., software programs). Flowcharting is the most popular and can be simple or complex.
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Step Three - Establish Measurements
The next step in the VALUE BASED journey is to set standards and measures for each process, product and service.
Within the whole organization (production, sales, administration, shipping, agents) while moving down the VALUE BASED road, the focus must be on improving the customer's perception of the company, its products and services. To do this the company must measure customer satisfaction.
Companies need to determine precisely where they stand in their customer's eyes by engaging in ongoing information gathering activities to measure customer satisfaction. Listening to customer complaints, identifying and measuring critical processes that are responsible for generating poor service or products, and implementing corrective action are integral in developing a quality management philosophy.
The old sayings: What Gets Measured, Gets Managed and Never Assume You Know What The Customer Wants, sound like common sense, but many companies fail to develop even the most basic methods of gathering information and establishing performance measures.
Companies need to:
know on an ongoing basis what their customers are thinking,
analyze their own structures and processes to ensure that they do not hinder or interfere with customer satisfaction, and,
implement measures to monitor the effectiveness of all critical processes that impact customer satisfaction.
Explanation of Step Three - Establishing Measurements
The focus of standards and measures is to ensure that the processes are meeting requirements and that customers are satisfied.
Standards
Standards are yardsticks for measuring performance, quality, and duration. Normally companies are concerned with two types of standards: work standards that measure performance and customer service standards that measure the quality of service to the customers.
Standards must be realistic. Setting standard too low creates complacency but setting them too high may make them uneconomical to reach. If standards are set too high, resources may be diverted in order to achieve them and this might interfere with improvement in other areas. Standards are not set in stone, they must be adjusted to reflect changes in customer requirements or processes.
Examples of standards include:
When more than five people are in queue, another checkstand is to be opened immediately - operated by supervisory or management personnel, if necessary.
Process and post credit memos within 7 days of receiving them.
Post all adjustments within 7 days. All adjustments must be current at month's end.
Ship 98 percent of orders to A customers within 24 hours.
Maintain 99.5 percent accuracy on order entry and assembly.
Order turnaround: 93 percent of orders filled completely within 72 hours.
Measures
A company needs to determine what to measure and how to measure it in order to deliver the outputs the customer wants.
Here are some guidelines to use for establishing measurements:
Find out why the key customers (the ones that account for a large portion of the company's dollar sales) keep coming back instead of going to the competition. Find out how good the entire company must be - not just your products or services. Use surveys, interviews, point of sale/service and follow-up calls.
Determine the obstacles to excellent service for external and internal customers. Look at company structure, work flows, and evaluate personnel abilities/skills/knowledge. Use tools such as employee attitudinal surveys and exit interviews and develop formal/informal feedback mechanisms.
Determine which processes are critical to the delivery of products or services to the customers or the ones that affect the criteria that the customer uses to evaluate the company's performance.
Develop measurements that strike a balance between cost, quality and cycle time.
Use as many proactive measurements as possible because they provide immediate feedback and allow time for corrective action before problems have any impact on the customer.
Use some reactive measures to take advantage of feedback after the product or service has been purchased by the customer. Examples of these are warranty claims, customer complaints, and surveys.
Measure quality standards in both production and service.
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Step Four - Control Processes Using Measurements
The goal in this step of the VALUE BASED journey is to use the measurement results to fine tune processes and align them with the desired outcomes and standards. Processes, standards and measures need to be controlled and aligned to ensure that the company is serving its customers and supporting the people who are serving the customers or producing the products or services.
Measurement allows management to "Manage by Fact" rather than managing by intuition or judgment by providing facts about the operating environment and performance. Based on the vision and the objectives desired, management can use those facts for analysis and decision making.
There are two primary uses of "Management by Fact". They are:
Manage service quality - Manage the processes and the deliverables to make sure they meet customer requirements/specifications.
Manage process improvement - Identify opportunities for process improvement, and then implement them.
The obstacles of "Management by Fact" include:
Unreliable, invalid measures. If the measures are not reliable and are not valid, they are not believable and will not be used.
Measuring individuals instead of groups/teams or projects. When measurements are thought to be individual performance indicators, the tendency is to manipulate those measures to make personal performance look better.
Non-timely recording of manual measures. When people are asked to keep manual logs, they frequently do not keep them up to date, resulting in inaccurate data.
Misuse of measurement data by management. If data is used to punish employees rather than improve processes, the measurement concept will be undermined.
Statistical methods need to be used to ensure that the information used for decision making is statistically valid otherwise the decisions may not be good ones and may actually create more problems.
DATA collected during the measurement stage are used to control and align operational processes and systems to the company's values and vision.
Explanation of Step Four - Control and Alignment
The information collected during measurement is called "measurement data". It may be survey feedback, sales per month, number of deliveries made each shift, number of errors in billing, etc.
Measurement data can be used to:
Ensure that the outputs of a process meet the requirements.
Identify where a process needs to be adjusted to meet the customer requirements
Monitor the defined/desired standards. (As customer needs and requirements change, standards will have to be adjusted and the process may also have to be adjusted.)
When there is a large amount of data, it is helpful to display it using more than one method. The reason for this, is that trends and other issues, can be easily seen when data are shown as a graph or bar chart. These methods make data more user friendly.
Impact of Control and Alignment on the Company
Vertical Organization Affected
Process improvement will have an affect on systems. Systems are basically the vertical organization of a company such as human resources, shipping/receiving or distribution, customer complaints or customer relations, purchasing, and accounting. As processes are controlled, improved and aligned, other parts of the company will be effected and may need to change and realign to ensure that the company VISION, goals and objectives are met.
Firing on All Cylinders offers these examples of realignments that were needed to support continuous improvement principles.
[In summary, the new appraisal process consisted of a meeting of the employee and supervisor where they agreed on job responsibilities, priorities, opportunities and training needs; a review meeting for the employee to give an update on progress; feedback on employee's performance by other employees; review of feedback and development of the next year's plan.]
Continual Training and Use of Teams and Statistical Tools
Teams will need training in statistics and the various tools as needed to ensure that they are kept up-to-date with new methods. As well, teams will need training in team building, effective brainstorming and problem solving techniques.
Management Practices
Management must start to manage using facts such as using monthly summaries of data in management meetings to keep up-to-date with operational changes needed or impacting another part of the company.
As well, management needs to review measurements, process improvements and other realignments during STRATEGIC PLANNING meetings to ensure they support the overall goals and direction of the company.
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Step Five - Implement Continuous Improvement
In Step Five of the VALUES BASED , the company continues doing what it has been doing; that is mapping its processes, establishing standards and measures and then controlling the processes based on the measurement data. But in addition, the company starts expanding what is has been doing to all aspects of its business.
From this point on, the company needs to continue its focus on customer requirements and improving value to customers and improvement of the overall company performance and capabilities. But the company must also start learning from others and assessing its progress. Using benchmarking or comparing the company to competition standards are ways to assess the improvement progress.
Explanation of Step Five - Continuous Improvement
Successful companies that are truly world class and that demonstrate VALUES BASED principles possess common characteristics :
LEADERSHIP and management commitment: unrelenting constancy of purpose
Total customer delight: no ifs or buts
Long-range effort: no instant pudding
Teamwork and partnerships: with employees, suppliers, and customers
Employee involvement and satisfaction: diversity and empowerment
Ongoing training: from the chief executive officer to the lowest ranks
Statistical measurement of progress
CONTINUOUS IMPROVEMENT : an unending journey
BENCHMARKING against the best in class
Total, open communication with employees, suppliers, and customers
The company needs to continue using the basics to improve its business. This is the foundation that will allow the company to be successful at implementing and using other tools, techniques and programs. It is necessary to review :
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· Measurement tools because there may be better ones and internal/external <link outdated-removed> or requirements may change.
· New methods for controlling processes.
The VALUES BASED improvement process must be integrated into the normal day-to-day operations. Quality and business need to become one with a focus on total customer satisfaction.
Impact of Continuous Improvement on the Company
When a company truly commits to becoming world class and successful, all employees realize that this is it. If a change in culture has not already occurred, it will happen now.
Tools and Assessments for Continuous Improvement
The tools that were mentioned in the other steps apply here as well. Communication, statistical tools, training, ongoing assessment of customer satisfaction criteria, and teamwork are some of the tools that will help with the journey.
Benchmarking
Benchmarking is a management technique that improves business performance by showing where the company stands compared to others. Before benchmarking, ensure that you have defined the goals and objectives and that you have looked at your own process and made improvements to it. Next, get training and assistance to help in preparing for and following up on the benchmarking findings.
Criteria for VALUED BASED PERFORMANCE
Leadership
Strategic planning
Customer and market focus
Information and analysis
Human resource development and management
Process management
Business results
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REGARDS
LEO LINGHAM
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From India, Mumbai
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