Functional Process Improvement Fundamentals Chapter 7: Functional Process Improvement and Organizational Change Department of Defense Topic(s): Government BPR, Reengineering / BPR

Chapter 7

It's not so much that we're afraid of change or so in love with the old ways, but it's that place in between that we fear.... It's like being between trapezes. It's Linus when his blanket is in the dryer. There's nothing to hold on to.

-- Marilyn Ferguson, American Futurist

INTRODUCTION

After going through the time-consuming process of improving your function's activities, you would expect the function to run smoother, demand fewer resources, and allow you to provide world-class service to your customers, right? After all you did go out to the "Best in Class" organizations in government and the private sector and model the way their processes were designed. So, shouldn't your function be world-class? Maybe not!

Even though you have followed all of the steps of the FPI methodology and you've really cut out waste, there may be a problem achieving the savings or gaining the efficiencies you were expecting.

One of the biggest reasons why some process improvement projects do not achieve the level of success the organization expects deals with the issue of organization culture change. You can have the most efficient process in the world, on paper or in a model, and still not have a "world-class" operation. We must remember that people have to execute the plans, perform the activities, and provide the interface to the customer. If you have left out of the improvement process a plan on how to change the behavior of the human resource, your project will not succeed.

Culture change does not come only as a result of a change in the "system". It comes as a result of consistent (incremental) change in the way a person feels about that system. Human beings must see that there is less pain and more pleasure (benefit) associated with the change than not changing.

When an organization is planning a change of any kind that will affect the day-to-day activities of people, the relationship between pain (emotional cost) and pleasure (benefit to the individual) in a person's mind must be considered. Human beings are stimulated or (held-back) based on their association of personal benefit or personal cost to a change in their environment. As a person is faced with change, he will evaluate or question whether or not making the change will cost a great deal in emotional stability or provide a great deal of personal benefit. It is this relationship that determines real, lasting change in a person.

Before we go any further, let's define what we mean by pain and pleasure in the context of organizational culture. Everything we, as human beings, do in our daily lives is based on two things: our avoidance of pain or our quest for pleasure. What do we mean? Pain is the feeling of dread a person feels when faced with a new situation. Pleasure, on the other hand, is the benefit or sense of accomplishment, satisfaction, contentment , or happiness a person feels as a result of being in the situation they are in. Here's a couple of examples.

Try to remember back when you were a child and your parents wanted you to take swimming lessons. Do you remember the first time they brought you to the swimming pool for your lesson? If you are like most people, you felt very comfortable while you were in the shallow part of the pool, where your feet could touch the bottom.

But, what happened when the swimming instructor asked you to move into deeper water? Did you willingly and happily move into the deeper end of the pool or were you hesitant?

Again, most people when faced with this situation on their first time in the water, not only were hesitant, but they felt a profound sense of dread or pain. In their mind they were evaluating whether or not they wanted to "change" the situation in which they were comfortable (at the shallow end of the pool) and enter a "new" environment (the deep end of the pool). Some children never get past this obstacle of feeling afraid of the deep end of the pool and most eventually quit swimming lessons.

On the reverse side, most children find that the "pleasure" they would get from learning to swim in the deep end of the pool outweighs the "pain" of not "changing" their situation. Maybe the reason that they changed their way of looking at the deep end was to use the diving board to impress their friends, or maybe it was as a result of peer pressure that made them feel isolated or left out if they didn't do what the others did. Either way, the change happened.

Even though this is a very simple example of the relationship between pain and pleasure, we are all controlled by, it illustrates the very essence of culture change. You can easily apply this same notion to the workplace.

For instance, a supply depot has elected to change the way they process a parts requisition. The current system (or the way the activity is performed) has been in place for ten years. The current employees that process parts requisitions have "grown up" using this system and see no reason to change it.

They have been told of the benefit the organization will realize if the change is made, in terms of cost savings, ability to process more requisitions more easily, etc. So, why do these employees resist the change in the way they are currently operating?

The answer is simple. They associate more pain to changing than not changing. They may feel that when management says "cost savings" they really mean job abolishment. When they say "ability to process more requisitions" they really mean the employees' workload will increase. With this interpretation, or mis-interpretation, of the situation, is there any wonder why these depot employees are not interested in changing the way they do business?

This is a real situation. It happens every day throughout DoD. So, let's explore what these individuals actually went through as the decision-making process (transition from old to new) took place.

The following will give you an idea of what the employees at the supply depot, as well as, the children faced with swimming lessons, in the examples above were going through. Consider these different reactions to change.

REACTIONS TO CHANGE

Shock.

Once a change has been announced, usually the first reaction people have is to meet the change with a sense of shock. They ask themselves, "Where did this come from?", "What is going on?", "I didn't know anything about this!", or "This isn't what I agreed to!" How many of us have been confronted with a change and felt this way?

Anger.

After you've gotten over the shock of the new situation, most people, if they view the change as a negative impact on their personal situation, become very angry. Many times they will begin a process of looking for the person or persons to blame. They may begin to talk about the new situation in very negative terms, such as, "It won't work!" or "I'm not going to support this!" This anger, if not addressed, may lead to some actually trying the sabotage the change process.

Denial.

This phase is a little harder to define. Many people, depending on their basic values and beliefs, go directly from anger to the fourth phase, Acceptance. However, there are a significant number of people who go through a denial phase, so it is necessary to show you what to look for. A person going through this phase will make up excuses why he should not be held accountable for anything that goes wrong with the organization as a result of the change. For example, he may make the excuse, "The change will never work because I haven't been directly involved with the solution!" or "Don't blame me if it doesn't work!" These attempts to disassociate himself from the new situation often causes the person to alienate himself from the group.

Acceptance.

Only after a person gets through the first phases can he truly begin to accept the change that is taking place. Once the person has accepted the change as real and that it is going to happen, he begins to rationalize his role in the new situation.

It is extremely important for you to understand that people will go through each of these phases, in varying degrees, as they transition from the old way of doing business to the new. How we manage this transition period is the key.

What can we do to manage this transition?

Change cannot be accomplished without the commitment and involvement of the organization's leaders. We have talked about how important leadership is in the FPI process. As we transition from an old way of doing business to a new way of doing business, leadership becomes the glue that will hold the organization together. Let's look at the role a leader should play during the change process.

Leaders must have an assured (and unwaiverable) way of thinking about change. They should have a "model" which will guide analysis of the situation and help him to formulate the process of change to be implemented.

Leaders must have clear goals. They must have a clear idea of what results the change will generate.

Leaders should initiate change at the point where they have the most control and can make reliable predictions about the consequences of their actions.

Leaders should recognize that change in any one part of the situation affects the whole. They must be alert for unanticipated consequences of their actions.

The most important task of a leader is creating the climate that is conducive to the change being attempted. An emotional atmosphere in which people feel that the leader is empathetic and non-judgmental toward the employees and their needs is a climate in which people will be more open about their feelings and resistance.

IMPLEMENTATION STRATEGIES

Change is itself a process and must be treated as such. An organization cannot expect people to change they way they have done things for years over night. Change is not something that should be taken lightly. It is complex and if managed properly, can be very beneficial to the employees and the organization as a whole.

Proper management of the transition of people through the process of change is critical to the success of the new system.

There are three aspects to the transition of people through change.

Discontinuation of the old way of doing business.

Migration.

Starting the new way of doing business.

Discontinuation of the old way of doing business

The first aspect of the transition is the discontinuation of the old way of doing business. This sounds simple, but its not. It is during this part of the transition that many of the reactions to the change are experienced. So how do you get people to give up the old way?

Identify who is losing what.

Accept the reality and importance of subjective losses.

Don't be surprised at overreaction.

Acknowledge losses openly and sympathetically.

Expect and accept signs of grieving. (Do everything possible to restore people's sense of having some control over their situation.)

Compensate for losses.

Give people information -- over and over again.

Define what is over and what isn't.

"Mark" the ending.

Treat the past with respect.

Let people take a part of the old way with them.

Show how endings ensure the continuity of what is really important.

Avoid dragging it out -- whatever must end, must end.

Migration

Migration is the in-between part of the transition. You have let go of the old way but you haven't quite got to the point of fully grasping the new way. It's like being on a trapeze. As you let go of the first trapeze there is a moment before the other trapeze gets to you. It's during that time that you have nothing to hold on to. It is also during that time that many questions may go through the trapeze artist's mind; things like, "Was this a wise thing to do?" or "Will the I be able to catch the other trapeze?" This can be a very difficult time, yet it can be a very innovative and creative time. Some things to look for:

Anxiety/absenteeism/old weaknesses and wounds emerge.

People are overloaded; systems are unreliable; signals get mixed.

Teamwork is undermined; people take sides; old way/new way.

Organizations and people are vulnerable to attacks from outside -- defenses are weakened.

The way to get through this phase is to:

Recognize this behavior is "normal" and expected.

Create temporary systems or ways to deal with this period.

Protect your people.

Review policies and regulations. Make sure they are flexible enough to deal with the changes taking place.

Strengthen and encourage intragroup connections.

Communicate, keep the people informed. Be open and honest about the affects of the changes being made.

Starting the new way of doing business

This part of the transition is very important in that it is here that you solidify the changes the organization has made. It is here that lasting change takes place. How do I reinforce this new beginning?

Be consistent. Be careful of conflicting messages. Walk the talk. Don't reward old behaviors.

Ensure quick success.

Symbolize the new identity.

Celebrate the success.

Each of these ideas can be used to reinforce the new behaviors, thus, reinforcing the new processes or ways of doing business.

These are only a few ideas on how to manage the transition of change in your organization. It is important to note that there are many schools of thought on this subject but all have a common theme -- open and honest communication is essential throughout the transition.

SUMMARY

If the FPI program is going to realize its full potential of improving the way DoD does business, changing of the organizational culture must be considered an integral part of the process. Systems cannot be developed irrespective of the people that will be managing and operating those systems.

One of the biggest reasons why some process improvement projects do not achieve the level of success the organization expects deals is because the organization or functional manager did not deal with the issue of organization culture change. You can have the most efficient process in the world, on paper or in a model, and still not have a "world-class" operation. We must remember that people have to execute the plans, perform the activities, and provide the interface to the customer. If you have left out of the improvement process a plan on how to change the behavior of the human resource, your project will not succeed.

Culture change does not come only as a result of a change in the "system". It comes as a result of consistent (incremental) change in the way a person feels about that system. Human beings must see that there is less pain and more pleasure (benefit) associated with the change than not changing.

With proper emphasis given to transitioning through change during the FPI process, organizations can indeed see significant, and more importantly, lasting improvement in their functions.

Activity -- Student Exercise (Chapter 7)

SUMMARY REVIEW QUESTIONS

1. What is organizational change?

2. Why is it important to consider organizational change during an FPI project?

3. How can an organization increase the likelihood that the system or process changes that are recommended will provide lasting improvement for the function?

The Relationship between FPI and Org Change

We've talked a little bit about the concept of change and transitioning through change, now let's talk about how the FPI process relates to organizational change. We must understand that when we change the system, we must change the whole system, which includes the people that make up the "brain power" of the system's processes.

Consider the following analogy to illustrate this idea. Visualize a railroad track running between two cities. A manufacturing company in city A wants to get its products to city B and has decided to do so by rail.

At this point, the major goal of the company is to get the products transported from city A to city B in the most timely and cost-effective manner possible. Now, on the other hand, the goal of the railroad company is to provide the mechanism for the manufacturing company to get its products from city A to city B in the most timely and cost-effective manner possible.

If you look at the two cities as being the change, city A represents the old process and city B represents the new process. The train (process improvement) represents the mechanism to get from the old to the new.

In other words, for the railroad company to stay in business, it must not only go from one city to the other without derailing, but it must also do so in the shortest timeframe and at the least cost to the customer.