Managing Cuts And New Growth

Managing Cuts +New GrowthUn:balanced Transformation

AGENDA

What is change?

© Doujak Corporate Development

What is change?


We’re restructuring our complete organization!

I have to move my desk!

What is change?


Merger

New strategy

New operations

Reengineering Downsizing

New way of working

New IT system

New organisationalstructures

New processes

New management tools

Turnaround

New culture

AGENDA

Why change?


Adapt to changing conditions.

Become competitive.

Stay competitive.

AGENDA

How to lead change?


= the BIG question we‘re trying to answer!


Narrow ↔ Broad

Discontinuous ↔ Continuous

Periodic ↔ Constant

Fast ↔ Slow

Top Down ↔ Bottom Up

Hard Cuts ↔ New Growth

What am I supposed to do?I need some orientation…



OK…let’s start by analyzing the overall situation!


The Change MapWhat‘s your situation?

Curr

ent N

eces

sity

for C

hang

e

High

Low

HighLow Change Capability

Securing survivalCrisis management -

restructuring

MobilizingAdapting and developmental

capacity Learning organization

Market responsiveness

RenewalGrowth

Radical repositioningStrategic turnaround -

organizational redesign


The Change MapDifferent challenges require different appraoches.

Curr

ent N

eces

sity

for C

hang

e

High

Low



restructuring




RenewalGrowth




• Turnaround projects• Goal: focus on survival + decrease the

current need for change


Curr

ent N

eces

sity

for C

hang

e

High

Low



restructuring




RenewalGrowth




• Goal: increase the capabilities and willingness for change of individuals, groups, and organisations.


Curr

ent N

eces

sity

for C

hang

e

High

Low



restructuring




RenewalGrowth




• Proactive turnaround, anticipating a crisis + strategic redesign

• Goal: move into a more stable environment and increase the change capacity of the organisation


Curr

ent N

eces

sity

for C

hang

e

High

Low



restructuring




RenewalGrowth




• Goal: find, test and imlement innovative potentials for new growth and success.

• The identity of company is being transformed and renewed.


Curr

ent N

eces

sity

for C

hang

e

High

Low



restructuring




RenewalGrowth




• Change is day to day business for the learning organisation (emergent change).

• Continuous development and innovation• Decentral self-organisation, fostered by the market,

reward systems and the organisation‘s culture.

The Change MapIn which direction to move?

Curr

ent N

eces

sity

for C

hang

e

High

Low



restructuring




RenewalGrowth




The Change MapUn:balanced Transformation

Curr

ent N

eces

sity

for C

hang

e

High

Low



restructuring




RenewalGrowth




What‘s influencingthe need?

• Financial pressure• Competitive pressure• Market pressure• The organization‘s ability to perform

(compared to peers)• Level of coordination• Level of target achievement• Level of customer satisfaction• Internal systems • Structure and processes• Organizational culture• Leadership, values, „climate“• ...

What‘s influencing the capabilities and the readiness?

• Has the organization some experiences with change?

• Do people have the skills for change? (Change Mgmt know how)

• How is the need for change perceived?• Is it a radical change?• Are systems and support structures in place

to facilitate the change?• How high is the trust in the ability to

change?• How high is the personal readiness for

change?• Does the change match people‘s values?• ...

The Change Map


What to think about...

Un:Balanced TransformationAnchoring hard cuts and new growth simulaneously

Hard cuts New growth

Goals Focus on short-term performance, efficiency and economic capital

Focus on long-term success, future growth potential and intellectual capital

Steering Top-down – close, clear, directive, linear, by program – “planned change”

Bottom-up involvement: self-organization, collaboration and networking, open. Emergent change.

Contents Decrease resources/costs – focus on processes, structure, systems, downsizing Involvement, participation, innovative culture

HR a cost factor capital, a resource, “entrepreneurs”

Logic of feelings longer coping processes (worries, distrust, aggression, disappointment, leave-taking – gradual new commitment)

focus, community (teams are important) and a basic feeling of joy, challenge and confidence

Reality construction

Feelings of loss and defeat influence perception Buoyant optimism, a combination of discipline and spirit of adventure influence perception (pioneers, winners of the future)

Architecture Core team steers the process of hard cuts – intense involvement of HR and line managers for implementation

Support autonomous initiatives and structures and short-term experiments – conducted on the sidelines of day-to-day operation

(“incubation” until matured)

OrientationPull towards the past and to the inside – a need for

stabilization and renewal of the employee – company contract

Pull towards the future and to the outside – desire to “ignore” or overcome existing conditions

ExecutivesProducers, ambassadors and bringers of “bad news” – the

situation calls for their presence in the roles of “implementers”, coaches, communicators and crisis/transition experts (security, orientation)

Architects, enablers and promoters of innovation – the situation calls for letting go and strengthening autonomy, encouraging

“revolutionaries”

Motivator for people

Security and risk minimization, finding one’s own position, maintaining stability

Involvement, challenge and free play, commitment. Performance in new, demanding areas


Approaches to ChangeOld and new images of transformations

Old Images New Images

Maintaining a balance between fields of tension and contradictions accelerates change.

Change management as management of Unbalance and Balance.

Conflicts must be deescalated. Transformation needs conflict.

Feelings are a side-effect in transformation processes; we have to accept them. Feelings are the motor for all phases of change.

Transformation decisions require a broad consensus. The combination of top-down decisions and bottom-up involvement is crucial.

Transformation is change planned top-down; management accounting and controls are a success factor (“planned

change”).

Transformations are a squaring of the circle - “planned quantum leap” (planned change) and at the same time self-

generated change “emergent change”.

A good concept makes up 90% of success. From step one, concept development must be interlinked with implementation work.

Now the others need to change. After all, we initiated it. For all those involved, transformation also means (more or less extensive) personal change.

It is important to always involve everyone. Clear-cut and step-by-step integration according to phases and stakeholders.

Before we can step outside, we need to have solved everything on the inside. Integration of relevant environments from the very beginning.


• Get your team (management, change, ...) together.• Plan 3-4 hours.• Put the change map on the floor.• Ask everybody to postion him/herself.• Spend the next 3 hours on deciding on a common

view of your situation.• Agree on how to evaluate the need.• Agree on how to evaluate the capacity.


Action Steps

Next we need a road map & outline who does what when.


How to ChangeThe Five Phases Model

The organizationsperceived ability to perform

Mas

terin

g th

e di

fficu

lties

on

the

high

land

pla

nes

– an

chor

ing

succ

esse

s

5

Cons

isten

t im

plem

enta

tion

- con

necti

ng th

e de

sire

for

inno

vatio

n w

ith

broa

d in

volv

emen

t

4

Cour

ageo

us d

ecis

ions

- j

umpi

ng in

to th

e co

ld w

ater

3

Crea

ting

visi

ons

of th

e fu

ture

- dev

elop

arc

hite

ctur

e an

d ro

adm

ap

2

Brea

king

thro

ugh

routi

ne –

w

e m

ust c

hang

e1

Time


How to ChangeThe Five Phases Model


Breaking through routine: We must change!

Creating visions of the future: Develop architecture and roadmap

Courageous decisions: Jump into the cold water

Consistent implementation: Connect the desire for innovation with broad involvement

Mastering the difficulties on the highland planes: Anchor successes

Key strategies:

• Disrupting routine: “Change starts with me”

• Evaluating the need for action: “From outside to inside”

• Assessment of the willingness and ability to change: “Let’s test ourselves!”

• Communicating by shaking up: “Opening up – taking a position – sending signals”

• Identifying the key players: “Finding the best people”

Phase OneBreaking through routine – we must change

Typical situation and dynamics• Diversity of perspectives and views concerning

situation and future developments• Energy for change varied• Contradictory signals from stakeholders• Doubts about information quality• Ambivalent collective mood: routine vs.

increasing interest in renewal vs. fear/blockades

Mas

teri

ng th

e di

ffic

ulti

es o

nth

e hi

ghla

nd p

lane

s –

anch

orin

g su

cces

ses

5C

onsi

sten

t im

plem

enta

tion

- co

nnec

ting

the

desi

re f

or

inno

vati

on w

ith

broa

d in

volv

emen

t

4

Cou

rage

ous

deci

sion

s -

jum

ping

into

the

cold

wat

er

3

Cre

atin

g vi

sion

s of

the

futu

re -

de

velo

p ar

chit

ectu

re a

nd r

oadm

ap

2

Bre

akin

g th

roug

h ro

utin

e –

we

mus

t cha

nge

1

Time


Phase TwoCreating visions of the future – develop a roadmap

Mas

teri

ng th

e di

ffic

ulti

es o

nth

e hi

ghla

nd p

lane

s –

anch

orin

g su

cces

ses

5C

onsi

sten

t im

plem

enta

tion

- co

nnec

ting

the

desi

re f

or

inno

vati

on w

ith

broa

d in

volv

emen

t

4

Cou

rage

ous

deci

sion

s -

jum

ping

into

the

cold

wat

er

3

Cre

atin

g vi

sion

s of

the

futu

re -

de

velo

p ar

chit

ectu

re a

nd r

oadm

ap

2

Bre

akin

g th

roug

h ro

utin

e –

we

mus

t cha

nge

1

Time

Key strategies:

• Work on the vision: “We are creating a (fitting) future.”

• Develop strategy and master plan : “Big picture of drastic cuts and new growth”

• Decide architecture and teams: “Containment due to process stability and trust”

• Communicate seriously and transparently: “That’s there we want to go and how we get going”

• Deepen and broaden change management know-how: “About the art of change”

Typical situation and dynamics• First concepts and ideas about possible future• Concepts too vague to get implemented on a 1:1

basis• Unclear: who will be concerned, degree of

commitment, details of implementation• Only key people are involved • Perceived performance increases, potential

threats are felt less • Collective emotional level: interest is

predominant, those who are directly involved feel spirit of a new era


Phase ThreeCourageous decisions – jumping into the cold water

Mas

teri

ng th

e di

ffic

ulti

es o

nth

e hi

ghla

nd p

lane

s –

anch

orin

g su

cces

ses

5C

onsi

sten

t im

plem

enta

tion

- co

nnec

ting

the

desi

re f

or

inno

vati

on w

ith

broa

d in

volv

emen

t

4

Cou

rage

ous

deci

sion

s -

jum

ping

into

the

cold

wat

er

3

Cre

atin

g vi

sion

s of

the

futu

re -

de

velo

p ar

chit

ectu

re a

nd r

oadm

ap

2

Bre

akin

g th

roug

h ro

utin

e –

we

mus

t cha

nge

1

Time

Key strategies:

• Plan and implement pilots and quick wins: “Taking advantage of the trampoline”

• Cost-cutting and decisionsabout people “Challenging the unpleasant aspects first – with support measures”

• Promote growth and innovation: “Incentives and scope for freedom”

• Deal with resistance: “Work with the resistance – not against it!”

• Use evaluation as a motor: “Broad, stimulating – with consequences”

Typical situation and dynamics • First implementation steps: try out big things “en

miniature”• Initial euphoria• Subsequent disillusionment:

“misunderstandings”, “misinterpretations”• Resistance: reactions out of fear, sometimes

aggressive• Collective emotional level: “Defending the former

identity” vs. “Conquering new territories”


Phase FourConsistent implementation – connecting the desire for innovation with broad involvement

Mas

teri

ng th

e di

ffic

ulti

es o

nth

e hi

ghla

nd p

lane

s –

anch

orin

g su

cces

ses

5C

onsi

sten

t im

plem

enta

tion

- co

nnec

ting

the

desi

re f

or

inno

vati

on w

ith

broa

d in

volv

emen

t

4

Cou

rage

ous

deci

sion

s -

jum

ping

into

the

cold

wat

er

3

Cre

atin

g vi

sion

s of

the

futu

re -

de

velo

p ar

chit

ectu

re a

nd r

oadm

ap

2

Bre

akin

g th

roug

h ro

utin

e –

we

mus

t cha

nge

1

Time

Key strategies:

• Speed up implementation activities and projects consistently: “Pulling yourself out of the swamp.”

• Adapt architecture continuously: “Nothing is forever”

• Winning over undecided and skeptical individuals: “From the team to the organization”

• Adapt systems step by step: “Good systems save energy”

• Continue to learn and build up skills for transformation: “Looking behind the backdrop and creating skills”

Typical situation and dynamics • Initial euphoria has worn off by now – the

setbacks have hit home • “Should we stop or continue”• Middle-management are at the centre of change

as mentors and multipliers responsible for implementation

• Change process becomes broader, more and more projects are completed

• Top-management impatient, middle-management overloaded with work, many people who will be affected are not yet involved


Phase FiveMastering the difficulties on the highland – anchoring successes

Mas

teri

ng th

e di

ffic

ulti

es o

nth

e hi

ghla

nd p

lane

s –

anch

orin

g su

cces

ses

5C

onsi

sten

t im

plem

enta

tion

- co

nnec

ting

the

desi

re f

or

inno

vati

on w

ith

broa

d in

volv

emen

t

4

Cou

rage

ous

deci

sion

s -

jum

ping

into

the

cold

wat

er

3

Cre

atin

g vi

sion

s of

the

futu

re -

de

velo

p ar

chit

ectu

re a

nd r

oadm

ap

2

Bre

akin

g th

roug

h ro

utin

e –

we

mus

t cha

nge

1

Time

Key strategies:

• Harmonizing leadership systems: “Integration at all levels.”

• Cultural change: integrate behavior, norms, values into day2day-business: “Awareness creates new possibilities”

• Continue training on a broad basis: “Practice, practice, practice!”

• Increase outward orientation: “Happiness lies on the back of a horse”

• Bring leadership into the focus of attention and finish the transformation: “With enthusiasm towards new efficiency”

Typical situation and dynamics • Longest and most decisive phase – albeit not the

most exiting one• Clear project orientation and broad

implementation, • Systems integration and in-depth anchoring:

slowly but surely – all systems, all staff members• Transformation is becoming second nature to

people


• Well it depends very much on the phase you‘re in!• The team (change, management,...) should be aware

of these phases!• The question is „In which phase is the organization?“

versus „In which phase is the change/mgmt team?“• Think of how the people must feel• Get some feedback from the organisation• Establish a sounding board• Establish regular feedback loops• How does your team feel?


Action Steps


Action Steps

See the book starting on page 235 for specific actions in each

phase.

Let me know how they worked!

How to I get people to come along?



I´m going to be confronted with

horrible emotions...

Cool! Finally some change!

I‘m afraid. Will I loose my job?

I couldn’t care less…

I hope they‘ll be able to keep it

under control...

The Logic of EmotionsEvery emotion has a function

disappointmentsadness

joycourage

daily routine fearuncertainty

anger aggression

curiosityinterest

daily routine


The Logic of Emotions

Thinking and feeling cannot be seperated.

• Emotions are drivers and barriers to our thinking.

• Emotions bias our focus and attention.

• Emotions impact learning and remembering.

• Emotions attract certain thoughts and reject others.

Emotions are the drivers of change processes

Implications forleadership.• Emotional and affective tune is just as

important as the cognitive understanding.• Communication doesn‘t work without a

minimum of emotional conformity (being on the same page).

• As a result affective accomodation, responding to people, picking them up where they are is important.

• Affective moods, verbal and non-verbal, are highly infective. They spread at lightning speed and impact following situations and messages.


The Logic of EmotionsEmotions are the drivers of change processes

Emotional Consternation Emotional Leadership

Fear, insecurity: denial of the need for change, mental block, unable to actpositive: focus

Stabilization: address fears, crossover model, strategies for crisis management, enable a solution orientated mood

Anger, aggression: borders are being defined, defence through devaluationpositive: things worth keeping are defended

Tension regulation: “fighting arena”, offer support to prevent burnout, expectation management

Disappointment, resignation, sadness: structures, dissolve, holding points are lost, doubt about own competencies and problem solving capacity, slowdown, cling to the past, depressive moodpositive: open mind for new things

Continuous: reliable communication, ongoing rhythms and rituals, consistent staffing, celebrate (small) quick wins appreciate the past, farewell rituals


The Logic of EmotionsHow people act

Increasing fearinsecurity, time pressure,

burnout, stress

Betrayal, cynicism, mistrust

Resistance, avoidance

Discrimination dynamicsscapegoats, mobbing, groups, in-group/out-group-dynamics,

intrigues

Decreasing loyalty internal dismissal, decreasing

commitment, quitting

Position fights, power games“dog-eat-dog”-mentality

(social Darwinism)

Projections on outside worldcustomers, other

departments, leadership, idealization and devaluation

Psychological illnessdepression, anxiety disorder,

addiction

Psychosomatic illnessback problems, cardiovascular diseases, stomach problems


Expecting resistance

• Is the urgency for change considered low?• Are there any ambiguous expectations?• Are there doubts about successful project closure?• Are the results uncertain?• Are negative results to be expected?• Are the results unalterable?• Are the results associated with few advantages but with high costs?• Is the change profound?• Are those affected insufficiently involved?• Does the change imply poor performance up until now?

The more often you answer „Yes“ to these questions, the higher the expected resistance.

Where is it coming from?


The Logic of Emotions

• Decide wisely – layoffs as the last resort

• Communicate as clear and concise as possible – open – interactive – with content and emotional messages

• Plan hard cuts comprehensively based on a stakeholder analysis

• Communicate plausibly what the hard cuts will bring and why they are necessary

• Implement as announced including support

• Monitor and evaluate results continuously

How to deal with Hard Cuts


Action Steps

The Logic of EmotionsLeadership needed

Assuring one‘s own ability to work through

willingness and capability to self-reflection, self-criticism, self-honesty.

Assuring employees‘ ability to work through

containment, and security

Enabler of processes: impulses, facilitation,

coaching

Development of individuals, groups and

the organisation

• Clear language and information: vision, objectives, tasks, feedback

• Open communication: speak and listen honestly

• Build transparency: motives and foreseeable consequences, culture of information

• Social perception• Ability to deal with conflicts, provide

structure (“containment”)• Appreciative, accepting and

respectful attitude with resistance and fears. Practice listening!

• Employee participation: views, experiences, competences, in an appropriate manner


Action Steps

More on Managing Cuts and Hard Cuts...

www.doujak.eu/thinking


Thanks for your attention!

Marc SniukasDoujak Corporate Development

Lainzer Strasse 80A-1130 Vienna

Mobile: +43 699 122 [email protected]

Follow Marc atwww.twitter.com/sniukas

Blogging for Manchester Business School at http://sniukas.tm.mbs.ac.uk


mailto:[email protected]

http://www.twitter.com/sniukas

http://www.twitter.com/sniukas

Doujak Corporate Development

Doujak Corporate Development is a consulting company partnering with CEOs and their executive teams to resolve the global strategic and organizational challenges they face.We help them to shape strategy and develop the capabilities and organizational culture, structure, processes and systems needed for global execution and transforming their businesses.

What we do

Strategy• Purpose & Culture• Strategic Innovation• Strategy Development• Strategy Implementation

Change Management• Un:balanced Transformation• Hard Cuts + New Growth• Restructuring• High Impact IT

Professional Development• Top Executive Coaching• Top Executive Teambuilding• Inhouse Programs• Open Programs


Corporate DevelopmentDeveloping....

47© Doujak Corporate Development

Purpose

Culture

Strategy

Organization

Leadership

Stakeholder Relationships

Our FocusDimensions of our work

48© Doujak Corporate Development

Content Process

What? Why? Who? How?

Lainzer Strasse 80A-1130 Vienna

Austria

Tel: +43.1.306 33 66Fax: +43.1.306 33 66 9

[email protected]

Date post:	22-Jan-2015
Category:	Business
Upload:	marc-sniukas
View:	3,387 times
Download:	0 times