Dimensions of Transforming People – Part 3 of 3

Given the current business volatility & disruptions driven by technology, digitalization, business-model innovation, industry dynamics, globalization, regulation, or other factors, business transformation has become an imperative. Forward-thinking companies are launching transformations even when they dominate a market, retooling themselves so they stay ahead. Companies that implement change effectively give themselves a significant competitive edge by focusing on the factors that are essential to success. Successful transformation requires visibly engaged C-suite leaders who communicate clearly about the changes at hand. A transformation’s success also requires that people across the organization have a specific role to play and that everyone knows how to carry out his or her part. Senior managers seek radical organizational change to improve performance by changing behavior and capabilities throughout the organization.

The leader's role is to turn separate transformation initiatives into a balanced, integrated program of people, process and technology changes. It is not lost on many executives that the critical component among all transformation initiatives, are those that relate to the people transformation, also called organizational change. However, successful organizational change will require combining separate transformation initiatives to include three types of organizational change work streams that are balanced and integrated in a framework for a coherent overall program. Real transformations in performance come only when efforts along all three dimensions are coordinated and engaged; The 3 dimensions are:

  1. Top-down direction setting & culture shift to create focus throughout an organization and develop the conditions for performance improvement.

  2. Cross-functional organizational change to enable linking activities, functions, and information in new ways with process, people and technology changes that would achieve breakthrough improvements in cost, quality, and timeliness.

  3. Bottoms-up performance improvement & organizational engagement to get people at all levels to take a fresh approach to solving problems and improving performance.

If top-down initiatives are lacking or faulty, managers will be left to guess where to aim new skills, activities and energy. If horizontal core cross-functional organizational change management is ignored, function-specific efforts will never add up to the critical mass of change required. If bottoms-up involvement with real engagement is absent, motivation will falter, momentum will flag, opportunities for improvement will be overlooked, and the new skills and behavior will not be built or change will not stick.

D3. Bottoms-up Performance Improvement & Organizational Engagement

Organizational change management is complex and should not be taken lightly. This complexity can easily overwhelm an enterprise, dissipating energy before the effort achieves its objectives. Organizations cannot change unless the people in them change. Ineffective efforts exhort the organization to "fix everything at once." It is far better to choose just a few objectives at any one time (improve customer response, reduce order lead times) and devote all energy to them until measurable progress is achieved.

Although top-down efforts create the focus and the necessary preconditions for transformational change, they alone are not sufficient to achieve organizational change. One of the biggest challenges to overcome is the widely held management view that "all we have to do is tell employees what we want, provide some training and rewards, and change will happen." This approach may work when the desired results lie well within the existing capabilities of an organization—for instance, developing a product extension. But it falls far short when the change requires fundamentally new ways of doing business—like moving from a product to a customer orientation. In these cases, embedded skills, systems, and attitudes are usually so at odds with the new requirements that a much more intensive process is needed to retool the organization to effect lasting change.

What's needed, therefore, is to get large numbers of people throughout an organization (in operations, support units, and business management teams alike) aggressively and creatively working to improve performance. This, in turn, depends on the availability—or the creation—of disciplined processes for identifying opportunities and developing plans to close clearly identified performance gaps. Many such problem-solving processes exist, most of which are rooted in the Quality movement and share common principles: set goals, determine gaps, understand root causes, brainstorm and try out solutions, monitor results, and making adjustments.

To be truly effective, however, these approaches must be tailored to the specific challenges, skills, and change readiness of a given part of the organization. This requires, among other things, designing a methodology for setting appropriate goals and performance objectives, developing analytical templates to guide problem solving, and determining specific information needs that, of course, will vary by level and unit.

The net effect of launching such team-based problem-solving efforts is much like getting a flywheel spinning. Initially, tremendous inertia exists, and the first cycle can be lengthy and difficult, requiring substantial energy from outside the group to get it started. But if the process continues to be supported and rewarded by management, momentum gradually builds, improvements are achieved, the problem-solving cycle runs a more regular course, and the promise of "continuous improvement" becomes a real possibility.

Tapping the brains and energy of thousands of people is powerful in itself, but there is a second reason for using bottom-up problem solving. In many cases, you already know what needs to be done, but you don't believe that people can change their behavior just because they are told—with good reason—to do so. What does it actually take to create new behavior?

For many reasons, bottom-up initiatives go far beyond the familiar "pilot testing and implementation." This is largely a functio