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Scooped by Deb Nystrom, REVELN
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Understanding simple, complicated, complex, and chaos in Systems Thinking

" If you manage a complex organization as if it were just a complicated one, you’ll make serious, expensive mistakes.”


Most of the approaches used to address complex system are approaches for complicated system ( Six Sigma, Balance Scorecard, …).


But how to work in a complex system ?  


According to Gökçe Sargut and Rita Gunther McGrath , they recommend to:
    
· Improve the way you forecast by using tools/models that simulate the behavior of the system. Process Behaviour Chart (see Shewart)
· Improve the way you mitigate risk by minimizing the need to rely on predictions/expectations to experiment, by…
· Make different resource tradeoffs by providing diversity of thoughts and by investing in incremental and small investment in new project/approaches.



They describe some of the essential parts of " a system of profound knowledge" :
  • appreciation for a system, 
  • knowledge about variation, 
  • theory of knowledge, and 
  • psychology. 
     
The system of profound knowledge is a complex system as we've to consider it a a network of interdependent components that work together to accomplish the purpose of the system.
   
The  4 interrelated parts can't be understood if separated from one another.
     
As Deming said : "Rational prediction requires theory and builds knowledge through systematic revision and extension of the theory based on comparison of prediction with observation."(Deming, The New Economics). 
     
The system of profound knowledge is based on the premise that management is prediction.  
    
If we fail to predict what we expect  ("Theory), we fail to predict the results of our experiment to improve, we fail to analyze the results of our experiment and we fail to learn about our system.
     
So we don't improve. 
Deb Nystrom, REVELN's insight:

As many large change projects ARE in complex systems, dealing with forecasts (alternate scenarios included), and risk and resource allocation changes IS key to agile  & appropriate change plans.  ~  D

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Scooped by Deb Nystrom, REVELN
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Cure Your Company's Allergy to Change, Aetna and Blue Cross Blue Shield Examples

Cure Your Company's Allergy to Change, Aetna and Blue Cross Blue Shield Examples | Change Management Resources | Scoop.it

"The HBR post cites several case studies illustrating why many transformations fizzle, then two examples for how to turn it around."


The cautionary tales, names removed, are listed first.  Then the positive stories follow.  ~  Deb


Excerpted:


______________________

   

But they're not failing fast to learn. They're just failing more. It's definitely not a learning organization.

______________________


A health insurer demonstrates a repeated pattern of 3- to 5-year cycles where it launches a change program, takes awhile for managers to get behind it, and then more time to get it funded. A program gets funded for a year but then everyone loses interest, and it gets defunded and dies.


Recently they're failing faster; the three- to five-year cycle is moving to two to three years. But they're not failing fast to learn. They're just failing more. It's definitely not a learning organization.


Just about everyone in the company agrees the culture is dysfunctional:

   

  • Some point to politics - competition between the COO and CFO blocking each other's progress. 
  • The CEO also had a way of questioning and stress-testing people that discouraged risk-taking => a "play it safe" mentality.
  • Executives who want quick wins scope projects to be done in a year. Most change programs there needed multiple years, so by the time a program extends beyond year one, executives move onto a new initiative.


What countermeasures are there to break a tragic change cycle like this?


______________________

   

Adopting improvement methods such as "agile" or "lean" can change the culture so that results and trust are prized over process and contracts.

______________________


Successful efforts at health insurance companies Aetna and Blue Cross Blue Shield of Michigan offer insights:


Organizational realignment — The structure of an organization determines the incentives that drive identity, behavior, and employee understanding of roles and responsibilities and priorities, as well as a sense of ownership and accountability.


Blue Cross Blue Shield of Michigan's tried a more traditional functional management structure but then found it lost customer focus.

  

  • It appointed leaders to run market segments with profit and loss responsibility with the focus of changing the product mix and improve profitability. 
  • By organizing by customer, cross-functional changes became much easier to implement, and there was a dramatic turnaround in business results.
   

Improvement methods — a platform for doing work nimbly and at low cost included:

  

  • Adopting improvement methods such as "agile" or "lean" can change the culture as employees are empowered  so that results and trust are prized over process and contracts. 
  • Tactics such as daily huddles drove immediate wins and helped entrench a culture of empowerment.


Employee engagement — Employees fundamentally want themselves and the company to be successful, so successful change agents listen to their needs and help them transition.


Aetna describes how new CEO John Rowe and the senior team "sought out employees at all levels — those who were well connected, sensitive to the company culture, and widely respected — to get their input on the strategy, design and execution of intended process changes."


Executives at Blue Cross Blue Shield of Michigan went into the field to gather input and communicate their commitment to change. Employees were trained in improvement methods ("Lean"), with every employee going through two sessions in accountability training.


Curator: Enrich your perspective on change planning, facilitating, organizing, implementing or sustaining especially when dealing with demanding deadlines and short staffing.


Contact Deb Nystrom here for an initial consultation, without obligation.

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Harry Cannon's comment, November 1, 2012 11:30 AM
See article in HBR Jul-Aug 2012 by Katzenback et al.
Deb Nystrom, REVELN's comment, November 3, 2012 8:10 PM
Thanks Harry. I appreciate the link.