House of Operational Excellence Part 14: Change Management

An important element of the Operational Excellence management system is to effectively manage change.

Companies are competing globally and to do this, organizations need to effectively manage change. Change involves doing something different but more importantly, stop doing the things that we’ve always done.

Quote: “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” ― Charles Darwin

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Transcript:
In the last session, we talked about the second component of the management system for operational excellence as profitable growth. This session, we're going to talk about the third element, which is change management. So how do we effectively manage change? If we don't manage change effectively, then the system will not remain stable and capable, and we won't create that continuous improvement culture. So one of the key elements is effectively managing change. So when we look at change, we can look at it from this change management matrix, that there's two sides of change. There's a positive aspect of change and there's a negative, but also there's... on the other axis, there's what happens if we don't change and what if we do change? So this four box matrix defines the four elements of the positives of not changing, the positives of change, the negatives of not changing, and the negatives of change.

So when we start any change management process or any continuous improvement process, first place we want to focus is the negatives of not changing. So what are all the alligators that are biting us every day and frustrating the employees and creating that chaotic culture? So we need to identify what are those negative aspects of not changing and then focus on what's the root cause of those. The next is define what to change to. So what's the positive that we want to achieve by creating the change? So we want to move from this negative of not changing to the positive of change. Of course, with any change, we're going to get resistance from employees because there's a group of employees that when you propose a change can only see the negatives of the change. So what that means is yes, they agree that we need to change, but they don't agree with the direction and whatever direction we chose they see a bunch of negative implications to that direction of the solution.

So they say, oh yeah, but I agree. But there's five things that I see that are going to happen as a result of the change. So to be a complete solution, we need to address these negatives of change. Many companies fail to do this piece. They force this change down people's throat. And then there's a bunch of negative things that consequences that come as a result of the change. They don't address those negative consequences. And thus, we don't get complete buy-in. Then the fourth Black's box is to focus on what not to change. So there's a bunch of things that the company is doing well. Let's continue to do those things well. So the whole change management of building a high performing organization is made up of four steps.

The first step is what to change. So what is the cause of the alligator? So we need to do root cause analysis and then determine what's creating the alligators. Then, second step is what to change to. So define what the pot of gold is or define the objective of the change, what you're trying to accomplish. The third step is how to cause a change. So to be a complete solution, it needs to eliminate the alligators. And then the fourth step is to sustain the change. So in order to sustain the change, we need to do two things. We need to stop doing what we're doing in the past and start doing something different. So we need to eliminate any of the negative implications that can come from the change and we need to create more mermaids.

So this is the basics of the change management process. If you don't have a good change management process, you're not going to achieve the buy-in from the employees. If you don't achieve the buy-in and addition have the right measurements in place, you're not going to get the right behaviors and you're not going to create that continuous improvement culture.