2. Common Paradigm of Change Organization IndividualsMost books
on STRATEGIC CHANGE: Outline all the ORGANIZATIONAL levers you
should pull to change the company so that INDIVIDUAL change will
follow
3. New Paradigm of Change Individuals Organization To
strategically change your organization, you must first change
individuals
4. Unlock Individual Change People carry their own mental maps
Successful strategic change requires a focus on individuals and
redraw their mental maps If not remapped Brain Barrier To lead
strategic change Map Maker
5. The Map Makers Over 80% companies listed leading change as
one of the top 5 core leadership competencies Driving change is not
easy People are resistant to change
6. Barriers of Change
7. SIMPLIFY and APPLY Why?
8. Fundamental Cycle of Change
9. Failure to See (Case: Motorola) Late 1980s - early 1990s Has
the largest consumer market products (analog mobile phone) in U.S.
New technology (digital mobile phone) The new technology would
require new and expensive infrastructure Biggest competitor Nokia
in Europe Motorolas reaction denied that this new technology and
competitor was anything to worry about
10. Failure to See (Case: Motorola) Year 1993 1997 Nokias
revenue increased from $2.1 billion to $8.7 billion All of Europe
adopted a common digital standard that allowed people to use mobile
phones anywhere in the region Motorolas reaction put more
investment and effort into its analog phones Result (end of 2000)
Motorolas market share dropped from 35% to under 15% Nokias market
share increased to 35% with profit share nearly 70% of all mobile
phone handsets
11. Blinded By the Light If we fail to see the need for change,
we will not change We often deny the visible need for change
because we are blinded by the existing mental maps Why? Because the
existing mental maps have worked well and successful
12. Successful but Mistaken Maps
13. Distorted MapsTend to exaggerate some elements while
diminishing others You believe what you know is everything and what
you dont know is nothing Implications: It works as long as we dont
venture outside the known area The distorted map leads us to stay
within the exaggerated area
14. Distorted Maps (Case: Kelloggs) Kelloggs cereal has
dominated the breakfast table of Americans (especially children)
Problem: Kelloggs view of its new products & markets very small
compared to existing products & markets. U.S sales started to
drop competitors increased their quality but offer lower price
15. Distorted Maps (Case: Kelloggs) Kelloggs solution:
Increased their trade promotions Kelloggs mistake: Did not explore
new products no new brand between 1983 1991 Did not explore new
markets even though they operated in roughly 30 countries, they
still focus the majority of efforts and returns to U.S.
markets.
16. Distorted Maps Key points: Just because a map works does
not mean that it accurately reflects all the terrain. As long as
the terrain in focus doesnt change and you dont venture outside the
area of focus, the map continues to work fairly well. Even when
signs start to emerge that the map is not working well, its
distorted nature creates a logical incentive to stay at home. Even
as evidence starts to show that the terrain has shifted, there are
great pressures to respond by doing what you know how to do.
17. Central Position MapsTend to put yourself (and your
country) in the center and have everything else revolve around
you.
18. Central Position Map (Case:IKEA)IKEA is one of the largest
retail furniture companies in the world.But IKEA failed in selling
some items, specifically beds and sheets, when it expanded into
U.S.
19. Central Position Map (Case:IKEA) IKEA was trying to sell
low-priced, moderate-quality, metric-sized beds and bedding in U.S
But U.S has different ways to measure beds and bedding king-size,
queen-size, twin-size CEO of IKEA (Anders Dahlvig) said We dont
adapt to local markets
20. Central Position Map (Case:IKEA)The strategic maps of using
metric to measure beds continued for 2 years. Why did IKEA persist
in following its strategic map of metric sizing in U.S? Because it
had worked well in the past, and IKEA was very good at it.
21. Strip Maps Has a restricted or narrow view of the terrain
and a fixed sequence for getting from one place to anotherHow come
we fall into strip-mapping?The path has proven to be successful,
then wed never think about other alternatives.
22. Strip Maps (Case: Barnes &Noble) Lennie Riggio opened
SBX (Student Book Exchange) in 1965. By 1971, he owned 5 SBX
college bookstores and bought Barnes & Noble. In 1979, he
bought Marboro books which had 6 stores. Mental strip map: To sell
more books, own more book shops
23. Strip Maps (Case: Barnes &Noble) Barnes & Noble
continued to establish and reinforce the mental strip map: to
increase sales, buy or build more stores and make them bigger The
mental strip map was successful: By 1995, Barnes & Nobles
market share increased from 7% to over 15%. By July 1998, Barnes
& Nobles stock price reached $48 (220% increase over two
years)
24. Strip Maps (Case: Barnes &Noble) In July 1995, Jeff
Bezos started Amazon.com By 1998, Amazon.com had 8.4 million
registered customer and Barnes & Noble had just 1.7 million
Barnesandnoble.com was created in 1998 but Amazon.com already had
75% market share of all online book purchases.
25. Upright MapsTend to think the only way to see a map is the
way it has been seen Given enough time and exposure to any map, it
becomes the right map and diminish our capacity to see it any other
way
26. Contrast Contrast is one of the key means by which the
human eye distinguishes different objects. In complex
organizational settings So many things to look at people tend to
selectively focus on elements that are similar (rather than
different). People tend to ignore key contrasts because of its
complexity
27. Confrontation Fact: people dont easily see contrasts in
organizational and business settings. Leaders have to confront
their people with the key contrasts between the past, present and
future
28. Contrast-Confrontation Matrix High Contrast Low Low High
Confrontation
29. Contrast-Confrontation Matrix Parade Old Shoe High
contrast, low Low contrast, high confrontation confrontation People
will be impressed Its there confronting by the difference, but
people, but remains the easily forget the need to same each day
change Breakthrough Garbage Can High contrast, high Low contrast,
low confrontation confrontation Commonly, leaders make Wasting
time, money, 2 common mistakes energy
30. Mistake #1: TheComprehensiveness Mistake Happens when
leaders make complex and comprehensive illustration of the
contrasts between past and present (or future) Why? The reality is
complex and leaders dont want to appear simple-mindedBeware!
Complexity allows employees to focus on what they want. Increase
the chances that employees will select the wrong targets
31. Mistake #2: The I Get ItMistake Presenting the contrasts
once and only once As the leader, you present it to the others one
time and expect them to understand it instantly We tend to forget
the process of understanding and end up thinking that saying it
once to others is more than enough.
32. Creating High Contrast Focus on the core 20% of what is
different Enhance (even slightly exaggerate) the simple description
between the old and new Create visual images, or pictures, of the
old and new so that the contrast is understood as more than just
words
33. Creating High ImpactConfrontation Repeat the messages of
the old and new maps over and over and over again Create high
impact, inescapable confrontation Focus the experience on what you
think are the core contrasts. Do not dilute it with too much
complexity Make sure that the experience involves as many of the
senses as possible. Physically ensure that people cannot easily
avoid the experience but must take the brunt of it right between
the eyes
34. Creating High ImpactConfrontation (Case: Samsung) Samsung
Electronics is the leading consumer electronics company in Korea In
U.S. markets, Samsung products were treated differently Samsung
products were behind the market leader (Sony) Samsung products were
sold in bargain bins of large stores in U.S. The experience created
contrasts and confrontation to Samsung executives.
35. Brain Barrier # 2 People who fail to move are not dumb,
they are actually smart. Failure to move, divided in 2 parts: Just
because someone admits the old thing is wrong, does not mean that
they directly see the new right thing the new right thing is not
clear Even if the new thing is clear, they will focus on the fact
that they will go from doing the wrong thing well to doing the
right thing poorly
36. Strategic Change Matrix Right Thing Wrong Thing Old right
thing becomes wrong Done Well X Cant instantly be good at the new
right thing Done Poorly
37. Many people preferred to be competent at the wrong thing
than incompetent at the right thing How to tackle this problem?
People must see and believe in a path that will take them from
doing the right thing poorly to doing it well
38. BelievingSteps to help other people believe: Make sure
others see the destination or target clearly Give them the skills,
resources, and tools to reach the destination Deliver valuable
rewards along the journey
39. Step 1: Destination Check how clearly others see where they
are going (the destination).How? Ask people directly or indirectly
to describe each element of the new map Ask them what the new
destination will require from them in terms of personal
capabilities Ask them to speculate about its possible
implications
40. Step 2: ResourcesPeople must believe they have the
necessary skills and tools to reach the destinationHow? Determining
what you believe are the resources required to arrive at the new
destination Assessing whether the employees believe they have the
required resources (skills, knowledge, tools, manpower, etc)
Providing any missing required resources (training, education,
mentoring, coaching, etc)
41. Step 3: Rewards Reward moneyConsider this: Money often
represents a means to something that people care about (security,
status, health, fun, etc) Its effects are often much less powerful
than we believe in most cases, the immediate and repeated
reinforcements people receive are much more powerful than
once-yearly bonuses.
42. ARCTIC Approach The ARCTIC approach encompasses major
categories of values that people exhibit from a motivational
perspective ARCTIC approach: Achievement Relations
Conceptual/Thinking Improvement Control
43. ARCTIC ApproachAchievement Accomplishment: The need to meet
or beat goals, to do better in the future than one has done in the
past Competition: The need to compare ones performance with that of
others and do better than others do
44. ARCTIC ApproachRelations Approval: The need to be
appreciated and recognized by others Belonging: The need to feel a
part of and accepted by the groupConceptual/Thinking Problem
Solving: The need to confront problems and create answers
Coordination: The need to relate pieces and integrate them into a
whole
45. ARCTIC ApproachImprovement Growth: The need to feel
continued improvement and growth as a person, not just improved
results Exploration: The need to move into unknown territory for
discoveryControl Competence: The need to feel personally capable
and competent Influence: The need to influence others opinions and
actions
46. Motivating People Key to motivating people:Listen and
identify the most powerful motivating factors for a given
individual Fulfilling the motivating factors is a reward for the
individualsWhat if I dont have time to know people and provide
customized rewards? Try this:Cascade this individualization of
understanding and reward customization down the organization
47. Failure to FinishRemember: People do not change easily or
quickly Impossible to implement change overnight (will take months
or years)Consequence of the time lag: People will get lost People
will get tired
48. Getting TiredIf you are trying to get employees to think
and behave differently, their willingness relies on how much they
trust you.
49. Getting Tired Change requires energy and effort The more
substantial the change, the more energy and effort must be
expended. People will get tired of attempting to change when the
past has worked fine (from their perspectives)
50. Getting LostReasons why people are getting lost: Unsure of
their position in the change process Unsure of the progress Unsure
of how much farther it was to the destination
51. Providing ChampionsSteps of providing champions: Identify
and designate some early launch sites Launch sites must be staffed
with trained and motivated employees (champions) Stay close to the
action to find the first successful result
52. Providing Champions The natural consequences of change:
will likely to meet negative behaviorHow to counteract the negative
behavior? Be close to the action Look for desired efforts not
results Counteract the natural negative consequences with positive
ones
53. Charting ProgressTypes of progress charting Overall
organizations performance organization level Employees personal
progress and achievement individual level Inform the employees
about their individual progress and relates it with the overall
organizations performance
54. The CBA of Strategic ChangeFailure to See ConceiveFailure
to Move BelieveFailure to Finish AchieveThree Gravitational Force
Three Stages ofof Change Implementing Change Successfully
55. The CBA of Strategic Change Right Thing Wrong Thing Achieve
Conceive Done Well Done Poorly Believe
