Example of Change Model Introduction Several years ago, I had worked in a manufacturing Company, C. Electronic Group, in Mainland China as an administration manager. The company had two factories in South China; they were nearby in order to get the advantage of sharing the resources, total workers were around two thousand. The company was an electronic manufacturing base; In this company, I experienced the strike which was the first time for me to handle. The strike was happened as top management needed to introduce more new machines to improve the efficiency and effectiveness.
In fact, the sharp raised the cost of materials and labor in Mainland China, and the new requirement of government in different countries were the pressure of external environment, it made change was inevitable. The new machines could reduce half of manpower and electricity to operate, the speed was 40% faster than old one, but it needed more attention and awareness in operating and maintenance. It was not only the financial but also the technological factors triggered the change.
Obviously, it was not accepted by the old workers as they needed more complicated to operate especially learning the maintenance and repair of new machines, they were resisted to learn more and sometime refused to operate the new machines, they always used the old machines for production neglect the warning of managers, they all complained the operating of new machines were too complex to learn. Because of the primary stage to testing the efficiency of new machines, no fierce punishment had been taken by management.
But the strike occurred while the annual bonus had released and some level of supervisors had adjusted the salaries basis. By communication with their representative of production department, the reasons of strike were: 1)They all complained that the annual bonus and salary adjustment were not fair which compared with the other department, 2)even on the same production department, some newcomers who had trained by them still achieved the better results and adjustment. )They refused to train the newcomers again and argued the Performance Appraisal System was superficial evaluation their working ability. In fact, low efficiency and productivity in those old workers were being recorded in past three months, it reflected in their annual personal appraisal. The case was settled after a half year, but the schedule of new machines installed was delayed, and the morale of workers was in weakening. Besides, it damaged the image and confidence in our clients and recorded a negative growth in that year as a result.
To review the whole case, replacement of machines was the main reason to activate the event, this typical change was inevitable and would happen in anytime as it was under the pressure of external environment, but it could have done better. I would like to revisit this case to take for an example to provide more information; it would be help for our decision making in facing the present problem. Theories of change model First of all, some theories I should recommend for supporting my point of view, it would be clearer in our mind when manage the change. ) “Leading Change: Why transformation efforts fail,” Kotter, JP 2007, He conceptualized eight primary reasons that organizations are unsuccessful when implementing efforts to change: 1 Establish a sense of urgency. 2 Create a guiding coalition. 3 Develop a vision and strategy. 4 Communicate the change vision. 5 Empower employees for broad-based action. 6 Generate short-term wins. 7 Consolidate gains and produce more change. 8 Anchor new approaches in the culture. It is an eye-opening series of revelations about the mistakes that leaders make and the ineffectiveness of the predominant approaches to organizational change.
He emphasized that managing change is the key component of successful leadership. Submitting the plan of change process I submit the plan to Board of Director with the proposal of replacement of new machines together. This plan is to provide the idea and the expected result of change process, I would outline the theory for illustration of the plan, the time frame and the risk management plan for re-evaluation the change process. It is very important that all the planned result must align to the vision and mission of organization. This plan includes the details as follows:
A) Present state of production department The primary data must collect before beginning of the change process, the initial data of production department are its real performance of production, it uses for the record and compare the actual result. -financial – gross profit margin, direct overhead cost of production, etc -Main KPI of production department -Benchmarking in present state -Customers’ satisfaction in old machines B) Defining the desired future state Successful replacement of new machines, the following targets should be achieved a. Financial objectives – gross profit margin increase from 18% to 30% -direct labor cost reduce 40% -direct overhead cost of electricity reduce 30% -the speed of production increase 30% b. Target for all KPI should be improve 30% -production tolerances -Machine wait time -set up time -waste rates -peak capacity % c. Quality control need to meet the following condition when the new machines go life. -meet the same benchmark of industry e. g, ISO, RoHs, -meet the specific requirement of clients -pass all reliability test d. Increasing the satisfaction of customers e.
Improvement the social responsibility in protection of environment f. Providing more education and learning process to employee C) Implement plan 1) Identity the Key persons who can help the change and set up a committee for change with those persons There are some key persons in change we must recognize before the change happen. Change sponsor – Change sponsor is a person in organization who has the authority, seniority, power, and enthusiasm to lead the changes, and he ensures that the necessary resource are available throughout the change progress for successful implementation.
Usually, the CEO of company would act as this post. Change leaders –A change leader receives authority and responsibility to make changes from top management. Typical characteristics for a good change leader are : – Good communication skills – A good understanding of why change is necessary – Able to listen to what other people are saying. As change projects are never easy, change leaders should be selected with care. In this case, as a HR and AD manager, I recommend myself to be a change leader, I can fulfill the above conditions because it is our job content in nature.
Moreover, I think nobody know much more than me in this change process, I am a early bird to understand of why change is necessary. Change managers The change managers need to organizing and staffing, controlling and problem solving, monitoring results versus planning in some detail, identifying deviations, and then planning and organizing to solve these problems, produces a degree of predictability and order. (A Force for Change, John Kotter). In this case, I recommend the production manager as a change manager. He has a enough technique, knowledge, experience and reputation to handle this position. Change champion-
The change champion acts as catalysts for others, speaking positive and doing ahead to demonstrate that the change can be done, in this case, the junior managers of production department I recommend to be the change champion, they have a big impact on the day-to-day commitment of their local teams to any change activities. They act with subordinates to forming a powerful guiding coalition. Furthermore, they would work ahead to demonstrate that the change can be worked and certainly. Change agent Change agent is a person or institution, it must have effective training and dealing with employees uncertainties.
I recommend the outsourcing institution to take this role and the training course of new machines’ operation together, it is a good arrangement for our workers can easily accept them, uncertainties and fears should be reduced No. of personRolesPositionCome from 1Change sponsor CEO Our company 1Change leader HR & AD Manager Our company 1Change managerProduction Manager Our company 3Change championPD Junior manager Our company 1Change agent Outsourcing institution Strategic planning of committee members must be necessary, it provides a good communication platform for workers to understand the change process.
All of function can go through this committee to implement including the communication with different stakeholders. 2) Creating a vision to help direct the change effort Vision is a picture of the future and also the expectation of our organization. In change occurs, change sponsor and leader must both recognize the need for change and create a change vision that captures the hearts of those involved. The change vision must align with the organizational vision. In this case, the organizational vision of C. Electronic Group is: Experience and reliability you can trust
We strive to provide the best services and quality products to our customers through application of innovative technologies, maintaining competitive pricing and continuous upgrading of our design and manufacturing capabilities”. The change vision, we must verify the purpose of change: Our Promise, Your Future New technologies to raise the satisfaction of customers, lower cost to maintain benefit of employees Mark Eaton asserted “trying to bring everyone on board” – the aim should be to create a realistic vision and plan that engages the majority of the workforce. Why change progarmmes fail, Mark Eaton,2010). 3) Measures and indicators in change process Variance analysis will be undertaken by comparing actual and planned result, improvement action will then need to be enforced for making change to be successful step by step. A right measure should be selected for its objectiveness, completeness and responsiveness. A) Financial measure (financial indicators) – The financial indictors measure the cost saving / profit increment within the financial reporting period.
Manager would evaluate and compare the objective data to measure the output and cost saving performance of production department, the main indicates which I used in this case, 1) Gross profit margin in production department – it provides the clues for the problems of our company’s pricing, cost structure and production efficiency. 2) Electricity of production / cost of good sold – to calculate the proportion of electricity consumption in production cost 3) Direct wages / cost of good sold – the cost of direct labor in production 4) Output of new machines compares with old machines
B) Internal process measure Internal processes relate to the basic, day to day routine activities necessary to first produce and ultimately deliver a product to the market. By identifying and monitoring measures in internal process, we should ensure our processes are both efficient and effective, resulting in satisfied and loyal customers and creating value for our shareholders. 1) Maintenance and repair process -The machine operators are the inspectors, machines are repaired and rebuilt based on machines capability studies. Records must be kept so that complete traceability of production can be done.
These daily maintenance records are important for quality control. – The indicator for maintenance and repair process – the production tolerances is not more than 0. 5%, 2) Operating performance Key performance indicators on related discipline are setup up for evaluation success of particular activities and achieve pre-determinant target. The following are some KPI in production should alert in change process, comparing with the initial data, we can keep the progress and recognize the feasibility of project, and it is very useful for risk management planning in change process. Machine wait time, set up time, waste rates, peak capacity % – common uses for machines operating. – Products (units)/ hour – it indicators how many products would be produced in one hour in one new machine – Manpower ratio of each new machine – it indicators how many worker to operate one new machine – Total products (Units) / the total headcount of direct labor within a certain period – Pollution levels – it is important for new machines replacement, the indicator of influence to external and internal environment and our products. 3) Benchmark
We are benchmarking on product quality and customer desired functionality and reliability. – Quality Assurance – we are keeping up with the leading advanced technology and management system in the world. Such as ISO 9000 and 14000, RoHS implementation and the corresponding system, 5S the practical operation, and Quality activities on the implementation of continuous improvement – Reliability Tests –those tests are to make sure our product safety and reliability to public. Such as 100% Electrical Test, 100% Visual Inspection(including warp & twist check) and Thermal Test (288±5oC; 10 sec. nspect delamination, etc) C) Customer measure This measure is related to the management of a company’s customers, and includes the satisfaction of our products in new machines manufacturing. The achievement of customer satisfaction leads to company loyalty and product repurchase. The following data should be recorded in change: -satisfaction in on-time delivery -satisfaction in adherence to specifications, it includes our Internal and external quality measures are often tied together. -Satisfaction with the price-performance ratio of our product D) Learning and education of employees measure
Ensuring our working team has the skills and knowledge, and it is vital that all employees possess skills that are matched to our unique strategy and allow us to outperform the competitors. In this case, outsourcing of training is necessary to ensure our workers to meet the standard. After training, examination is needed and certificate is required for operation of our new machines. Besides, all workers must attend Statistical Process Control seminars every 2 months for operator inspection. Certificate of passing the operating examination and the attendance record of SPC course are the measures of this part. ) How do we reduce the resistance to change ? Resistances are come from uncertainties, when an organization proposes large-scale change, those affected begin to worry about how their jobs will change, what new skills they will need. Some common employee reactions to change include confusion, denial, loss of identity, and anger. And this resistance is not limited to employees—managers and executives may be just as employees to experiencing problems with organizational change Change leader should consider how they can bring organization members “onside” with the change and reduce the resistances.
Usually, the change leader uses the following methods to reduce the resistances from employees – education and communication, participation and involvement, facilitation and support, negotiation and agreement, manipulation and co-optation, explicit and implicit coercion. In this case, outsourcing change agent is one of method to reduce the resistances. They can focus on the people side of an organization; their perspective from the outside looking in could be a great asset when implementing change.
Another ways a change agent can do this is by education and communication to making sure everyone involved understands the benefits. The change champion can use the methods of participation and involvement, manipulation and co-optation, explicit and implicit coercion to reduce the resistances of employees and align them together to create a guiding coalition. 5) The communication plan of my organization: Communication is most important in change process, I suggest committee should provide the updated messages to all stakeholders in different methods; the following is the communication schedule which I recommend during change.
StakeholderInformation required/ ObjectiveFrequencyMedium (channel)Owner Senior managerintroduce the reasons of change, the objective and management approach of change processmonthlyreportchange leader project managerProject guidance ,monitors, executing weeklyface to faceChange manager project teamdetailed level of communication, clear understanding the change framework, news, coordinationweeklymeeting, face to face, conference call,change champion, change agent, committee member All interest partiesupdate and communicate the news of project As neednewspaper, report, ?
The two-way communication is very important between management and staffs, it states that continuous dialogue or other channels should take place throughout implementation and until the change has been effected. Misunderstand can be eliminated by effective communication. Milestones and award in timeframe it is very true that we need to recognize the performance of subordinates which align together toward the target of change.
In this case, short-term wins should be created, we not only consider the whole plan of success, we should agree on the ability of our subordinates, especially the role of change champion and leaders, In fact, celebrating and reward the people involve with recognition, promotions and even money is crucial. Short-term wins could encourage people and make them a sense of success, it also help them to clarify again the whole vision whether it should revise. Milestones and short-term wins in this case:
Target achieve 2months 4months 6months Financial measures 30% 60% 100% Internal process measures 20% 60% 100% Customers measures 10% 40% 100% Learning & education measures 50% 30% 100% If the progress is achieved, reward and celebration in this 3 stages are necessary to motivate the staffs. 6)Contingency planning
Contingency planning should be introduced while change happens, we must discuss with change agent in the beginning, they would monitor the implementation and provide the professional suggestion to us, but we always alert some indicators occurs especially low KPI performance of daily report, The following Indicators occur, we need to review the plan: 1)milestones and short-term can not achieve on time 2)customers complaint 3)KPI abnormal e. g. The machines wait time, the scrap rate of product over the average 4)Turnover rate of workers is high than average 5)budget of project is out of expected
In fact, we usually compare the measures of past and present record to ensure the progress, if sometime wrong, change leader should call emergency meeting to review the whole project and some adjustment should make accordingly. 7) Socially responsible manner and ethically relate in external stakeholders. No matter how change we do, the social responsibility should take in account in the first step. In this case, the benchmark in protection of environment must be achieved in our product, I have already added the KPI – pollution level in measures, it would make the workers and managers to alert the production.
Doing right products at the right way, in our right heart are the mission of our group. The most important message in this case for our future use: In Kotter’s theory, two long term objectives must be set up in all organization in order to cope with the change. In fact, if C. Electronic Group can establish these two long term objective in its organization, it would be another success story of change. A) Establish a sense of urgency in change Kotter claims that over 50% of the companies he observed fail in the first stage: that is, they do not establish a great enough sense of urgency about why the organization needs to change.
In above case, the management of C. Electronic Group needed to focus on the potential revenue would drop, the new technology development and some indicators represented non-alignment between vision and mission. The managers must be used to outspokenly discuss with top management the potential disadvantages and unpleasant facts about the shrinking profit margin, decreasing market share, slow revenue growth and other relevant indicators of a declining competitive position.
It provides a sense of urgency toward the change. The force for change is probably in the organization’s business and related to its survival. B) Create a culture of change in organization Kotter asserted that two strategies help institutionalize change in the corporat culture: (1) Showing people how new approaches, attitudes, and behaviors contributed to improvements in performance. According to Kotter, when left to their own devices to make the connection, people often overlook heir contributions to the changes. (2) Making certain that the succeeding generation of top leadership “really does personify the new approach. ” Requirements for promotion have to change and succession decisions are critical. “Improvement always means change but change does not necessarily mean improvement” (Eaton 2010, p. 53), References: Why change progarmmes fail, Mark Eaton,2010 “Leading Change: Why transformation efforts fail,” Kotter, JP 2007, A Force for Change, John Kotter