leading organizational change

LEADING ORGANIZATIONAL

CHANGE

DR. Tb. Donny Syafardan

Best Practice of

Organizational Change

Transformation

Business Restucturing

Business Process Reengineering

Total Quality Management

Etc.

Etc.

2

FORCES DRIVING THE NEED FOR

MAJOR ORGANIZATIONAL CHANGE

More Large-Scale Changes in OrganizationsStructure change Mergers, joint ventures, consortia

Strategic change Horizontal organizing, teams, networks

Culture change New technologies, products

Knowledge management, enterprise New business processes

resource planning E-business

Quality programs Learning organizations

More ThreatsMore domestic competition

Increased Speed

International competition

Global Changes, Competition and Markets

• Technological Change

• International Economic Integration

• Maturation of Markets in Developed Countries

• Globalization and open economy

More OpportunitiesBigger markets

Fewer barriers

More international markets

Source: Adapted/ Based on John P. Kotter, The New Rules:

How to Succeed in Today’s Post-Corporate World

(New York: The Free Press, 1995).3

Types of Organizational Change

Adaptive Change

Innovative Change

Radically Innovative

Change

Reintroducing a familiar practice

Introducing a practice new

to the organization

Introducing a practice new

to the industry

Degree of complexity,

cost, and uncertainty

Potential for

resistance to change

Low High

4

Incremental vs. Radical Organizational Change

Continuous

progression

Paradigm-breaking

burst

Through normal

structure and

management

processes

Transform entire

organization

Affect

organizational

part

Create new structure

and management

Technology

improvements

Breakthrough

technology

Product

improvement

New products,

new markets

Sources: Based on Alan D. Meyer, James B. Goes, and Geoffrey R.

Brooks, “Organizations in Disequilibrium: Environmental Jolts and

Industry Revolutions,” in George Huber and William H. Glick, eds.,

Organizational Change and Redesign (New York: Oxford University

Press, 1992), 66-111; and Harry S. Dent, Jr., “Growth through New

Product Development,” Small Business Reports (November 1990): 30-40.

Incremental Change Radical Change

5

Strategy

Structure

Process

People

CHANGE IN TARGET

6

Sequence of Elements for

Successful Change

Environment

Suppliers

Professional

Associations

Consultants

Research

literature

Customers

Competition

Legislation

Regulation

Labor force

1. Ideas

2. Needs

3. Adoption 4.Implementation

5. Resources

Internal

Creativity and

Inventions

Perceived

Problems or

Opportunities

Organization

7

ENABLING FACTORS FOR

SUCCESSFUL CHANGE

Leadership

Capacity

Capability

Culture

DYNAMIC ROLE OF LEADERSHIP IN

ORGANIZATIONAL CHANGE

Leadership

Capacity

Capabiliy

Culture

Strategy Structure

SystemShared-Value

G O

A L

Driver Enabler Changes Output

SEEING

VISIONING

STRATEGIZING

RISKING

ENROLLING

DELEGATING

INSPIRING

PERFORMING

OBJECTIVESROLES AND RESPONSIBILITIES

Adaptation: Leading Change, John Kotter, Harvard Business School Press, 1996.

VISION

STRATEGIES

CHALLENGE

RISK

ACTION

LEADERS

MOVEMENT

ENERGY

PASSION

CHANGE

LEADERSHIP

10

PLANNING

BUDGETING

ORGANIZING

STAFFING

GUIDING

CONTROLLING

REASSURING

MONITORING

OBJECTIVESROLES AND RESPONSIBILTIES


PREDICTIBILITY

ORDER

CONSISTENCY

ZERO DEVIATIONS

STABLE PERFORMANCE

SHORT-TERM RESULTS

MANAGEMENT

11

A COMPARISON

CHANGE MANAGEMENT CHANGE LEADERSHIP

Change is a threat to be

controlled

Change is “managed” through

methods and tools

Selected change managers are

most qualified to handle change

Issues and problems can be

cleaned up “after the fact”

Change is a competitive

advantage to be embraced

Change is “led” through the heart

and mind

A team of change leaders is

required to lead change

Issues and problems can be

mitigated proactively

12

CHANGE MANAGERS AND CHANGE LEADERS

Leadership is required for change

“A change team made up only of managers – even

superb managers who are wonderful people – will

cause major change efforts to fail.” (John Kotter)

Leaders and managers need to work together

Leadership drives and management controls

SUCCESSFUL CHANGE TEAMS

75% Leadership + 25% Management


CHARACTERISTICS OF CHANGE LEADERS

Change Leaders Should Be: Moral and adhere to ethical

standards

Competent

Knowledgeable

Open

Concerned

Perceived as motivated by truth; not having vested interest in change

Source: S Fox and Y A Hamburger “The Power of

Emotional Appeals in Promoting Organizational Change

Programs,” Academy of Management Review,

November 200114

REASONS FOR FAILURE OF

ORGANIZATIONAL CHANGE INITIATIVES

Difficulty changing the culture of the organization

Lack of staff commitment and understanding

Lack of education, communication and training

Responsibility without sufficient authority

Lack of effective ‘Champions’

Loss of momentum after opening hype

Lack of funding

Source: William L Cunningham



Lack of quantifiable long term benefits (ROI)

Lack of organizational learning (lessons learned –

lack of iterative culture)

Satisfaction with status quo

Over-focus on tactical, isolated solutions rather

than a strategic solution

Trying to do everything at once – over ambitious




No accountability; lack of clear ownership

Tools unable to support processes

People not skilled enough to support

processes

No structured Project Management


RESISTANCE TO CHANGE

20-50-30 rule: 20% of the people in an organization will embrace

change and welcome it

50% are ambivalent

30% are resistant and may sabotage or undermine the change process

Nearly 80% of an organization’s staff will need to be convinced that the change is a good one and worth the stress involved in making it.

SOURCES OF RESISTANCE TO CHANGE

OVERCOMING RESISTANCE TO CHANGE

Encourage active participation in the

change process.

Provide education and communication

about the change process.

Facilitate the change process by making

only necessary changes, announcing

changes in advance, and allowing time to

adapt to change.

21

Do you have an army of sleepwalkers?

Source: Jack Smalley / 2013

The Opposite of Employee Engagement

Employees who don’t leave –the under-performing and disengaged

The “quit-and- stay” phenomenon

There are 9-to-5er’s who show up to work everyday but who have “checked out” mentally.

TODAY’s CHANGE LEADERS CHALLENGE

22

$300

Source: Jack Smalley / June 19 2013

Employee disengagement

costs businesses

billionin lost productivity every

year.

Are your profits melting away, employee after employee?

Over 13 million employees & over 32,000 business units surveyed show

of employees in most companies are not engaged in their work.

Customer retention vs. employee retention

67%

TODAY’s CHANGE LEADERS CHALLENGE

LEADING THE PROCESSES OF ORGANIZATIONAL CHANGE

Change Leader tries to change the behavior of another person or

social system.

LEWIN’S THREE PHASES OF CHANGE

LEADING CHANGE STRATEGIES

LEADING THE PROCESSES OF ORGANIZATIONAL CHANGE

Checkpoints for Successful Change Benefit—make sure people involved see a clear

advantage in the change.

Compatibility—keep the change as close as possible to existing values and experiences.

Simplicity—make the change as easy as possible to understand and use.

Triability—allow people to try the change step-by-step, making adjustments as they go.

Change leader's task: create a felt need for change

LEADING ORGANIZATIONAL CHANGE

Establish a Sense of Urgency

Form a Powerful Guiding Coalition

Develop a Compelling Vision and Strategy

Communicate Widely

Empower Others to Act on the Vision

Generate Short-term Wins

Consolidate Gains and Create Greater Change

Institutionalize Changes in the Organizational Culture

KOTTER’S EIGHT STEPS FOR LEADING ORGANIZATIONAL CHANGE

Create and implement a communication strategy that consistently communicates the new vision and strategic plan

4) Communicate the change-vision

Create a vision and strategic plan to guide the change process

3) Develop a vision and strategy

Create a cross-functional, cross-level group of people with enough power to lead the change

2) Create the guiding coalition

Unfreeze the organization by creating a compelling reason for why change is needed

1) Establish a sense of urgency

DescriptionStep

28

KOTTER’S EIGHT STEPS FOR LEADING ORGANIZATIONAL CHANGE

Reinforce the changes by highlighting connections between new behaviors and processes and organizational success

8) Anchor new approaches in the culture

The guiding coalition uses credibility from short-terms wins to create change. Additional people are brought into the change process as change cascades throughout the organization

7) Consolidate gains and produce more change

Plan for and create short-term “wins” or improvements

6) Generate short-term wins

Eliminate barriers to change, use target elements of change to transform the organization

5) Empower broad-based action

DescriptionStep

29

PT POS INDONESIA CASE

f r o m s l o w s n a i l s t o f l y i n g h i g h p i g e o n s

POS INDONESIA

REVOLUTIONtowards a trusted network company

130

POS INDONESIA PAST HISTORY

Pos Indonesia Vicious Circle

Poor Financial

Performance

Low Investment

Low Quality

Low Mail Volume

1-31

POS INDONESIA

TRANSFORMATION PROGRAM

1-34

2016

2013-2014

2009-

2012

Value Creation

Revitalitation

2015

IPO

Develop new business line

Grow in new productsand services

Expand into new

Segments and

businesses

35

Internet

Modem

CDMA-GPRS

eMobile Pos

38

ICT READINESS

LAN Post Office

BTNBMI

Telecommunication provider

Multi Finance

Credit Card

Electricity/ Water

Switching Engine

Host Gateway Provider

Data Center

Switching Engine

Host -Posindo

Taxes

BILLER

Data Reconcile

& settlement

CitIbankVSATMPLSRadio Link

Post

Offices

Agent

GPRS/3G

• Inhouse development :

Desktop based

Web based

Mobile /smartphone

based

• Billers connection alternatives

:

Data collocation

Host to Host through

switchers

Direct Host to Host

• International standard

application:

• SAP FICA (Giro, Fund

Distribution)

• IFS (International

Financial Services –

UPU)

• Western Union Host to

Host

• Eurogiro Money Transfer

(on progress)

Kantor Pos Pemeriksa

Kantor Pos Cabang

Ruang Vestibule/Front Office

V.S

REVOLUTIONARY MOVEMENT

Business Infrastructure

Financial Performance Financial Performance

Business Infrastructure

Revolutionary movement of the company has change Financial Performance, business

infrastructure, ICT Infrastructure, Organizational Structure, and Operational & Accounting

System, etc

1-41

All employees and

management are having the

same mentality and behavior

to treat the business of the

company as their own, so they

will work sincerely to achieve

the objective of the company.

All employees and management

are having the same mentality

and behavior to be innovative in

creating new businesses, and

to have courage to face risk and

uncertainty, in the environmental

change for the purpose of

achieving the stable profit and

growth.

Transformational leader is a

leader who is able to anticipate

changes of business and

economic environment,

internalize it into the

management system and

implement it through the

change management. Three

pilars of leadership principle,

vision, values and courage,

must be adhered to

transformational leader.

Leadership, Entrepreneurship Spirit, and sense of belonging are

strategically important in building organizational behavior in order to

achieve transformation objectives

42

CORPORATE CULTUREPos Indonesia efforts to build strength corporate value within the whole

human resources.

To be the leading network company in Indonesia by 2016 through the provision of reliable mail, parcels,

logistics, retail, and property services and trusted financial services.

a. We are committed to provide our customers with an efficient and on-time delivery.

b. We are committed to provide our employees a safe and enjoyable working environment.

c. We are committed to provide our shareholders with the best returns and continued growth.

d. We are committed to provide a positive contribution to our communities.

e. We are committed to behave in a transparent and trustworthy manner to all of our stakeholders.

Strategic tools have been interprated into vision & mission and corporate

culture, and followed by strategic mapping and programs

43

PSO Mail Warehousing REMITTANCE

ASSET

MANAGEMEN

T

E-COMMERCE NETWORKING

PARCEL

Commercial

Mail

AdMail

Freight

Forwarding

Regulated

Agent

Transportation

POSPAY

BANK

CHANNELIN

GFUND

DISTRIBUTIO

N

HOSPITALITYPOST SHOP INTERNET

CONTENT

Pos Market

Chain (Rural

Logistics)

Logistics Post Co Bhakti

Wasantara Net CoPostal Courier Postal Financial

ServicesRetail Post Property Post

SCM

Consulting

Strategic priorities and strategic inisiatives have been difined for each business and

supporting function, to run revitalisation and transformation programs

URAIANT A H U N

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Pendapatan 1.254.529 1.410.204 1.396.481 1.665.380 1.803.265 2.325.843 2.487.797 2.678.421 3.078.786 3.403.953

Biaya 1.251.750 1.645.664 1.541.507 1.796.973 1.826.937 2.396.592 2.389.531 2.633.399 2.922.318 3.191.621

Laba/Rugi 2.779 (235.460) (145.027) (131.593) (23.672) (70.749) 98.266 45.022 156.468 212.332

Profit Margin 0,22 (16,70) (10,39) (7,90) (1,31) (3,04) 3,95 1,68 5,08 5.33

0.22

(16.70)

(10.39)(7.90)

(1.31) (3.04)

3.95

1.68

5.08 5.33

(20.00)

(15.00)

(10.00)

(5.00)

0.00

5.00

10.00

(500,000)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Kinerja PT POS INDONESIA

Pendapatan Biaya Laba/Rugi Profit Margin

1-46

TERIMAKASIH

leading organizational change

Leadership & Management