Why change programs don’t

produce change
U.S. Financial

• Deregulation was posing serious competitive

challenges.

• The only solution was to change fundamentally how

the company operated. And the place to begin was
at the top
U.S. Financial
• CEO Established:

1. A new organizational structure.

2. A new performance appraisal.
3. A new payoff system.
4. New training program.

• Turn Managers into change agents

U.S. Financial

• Two years later CEO Launched the change

program, virtually nothing in the way of actual
changes in organizational behavior had
occurred.
What had gone wrong?

The answer is “everything” was wrong.

Common problem

• Increased competition
• Companies were struggling to reestablish their
dominance.
• Regain market share and ensure their survival.
Task alignment
• In many companies change led by general managers of
those units, not by the CEO.
• aligning employee roles, and responsibilities and
relationship to address the organization most important
task.
• Unlike the CEO at U.S. financial, they didn’t employ
massive training programs or rely on speeches and
mission statement
Contrasting assumption about change
Programmatic change
• Problem in behavior are a
function of individual
knowledge, attitude and
beliefs,
• The primary target of
renewal should be the
content of attitude
• The target for renewal
should be at the individual
level
Task alignment
• Individual attitude and
beliefs are shaped by
recurring patterns of
behavioral interactions.
• The primary target of
renewal should be the
behavioral
• The target for renewal
should be at the level of
roles and responsibilities.
 The fallacy of programmatic change

• Most change programs don’t work because they are

guided by a theory of change that is fundamentally
flawed.

• This theory gets the change process exactly

backward. In fact, individual behavior is powerfully
shaped by the organizational roles that people play.
 Six steps to effective change
• Companies avoid the shortcomings of
programmatic change by concentrating on
task alignment.

• six steps called critical path that develop a self

reinforcing cycle of commitment, coordination
and competence.
Mobilize commitment to change
through joint diagnosis of problems

• Developed a shared diagnosis of what is wrong in

organization
• What can and must be improved.
• The group of 20 person visited a number of
successful organizations.
Develop a shared of how organize and
manage for competitiveness

• After group committed analysis of the

problems, GM can lead employees toward a
task aligned vision of organization.

• defined new roles and responsibilities

Cont..

• The group came up with a model of the

organization in which cross functional teams
would accomplish all work, particularly new
product development.
Foster consensus for the new vision,
competence to enact it, and cohesion to move it
along.

• Simply develop a new vision is not enough to

overcome resistance to change
• Strong leadership from the general manager is
crucial.
Cont..

• The changes in roles, responsibilities, and

relationships foster new skills and attitudes. Changed
patterns of coordination will also increase employee
participation, collaboration, and information sharing.
Spread revitalization to all departments without
pushing it from the top

• Members of teams cannot be effective unless

the department from which they come is
organized and managed in a way that supports
their roles as full fledged participants in team
decisions.
Institutionalize revitalization through formal
policies, systems, and structures.

• when the new approach has become entrenched,

the right people are in place, and the team
organization is up and running.

• The revitalization of the unit was highly successful.

Employees changed how they saw their roles and
responsibilities and became convinced that change
could actually make a difference
Monitor and adjust strategies in response to
problems in the revitalization process.

• The purpose of change is to create an asset that did

not exist before a learning organization capable of
adapting to a changing competitive environment.
• Finally, as improved coordination helps solve relevant
problems, it will reinforce team behavior and
produce a desire to learn new skills.

• This learning enhances effectiveness even further

and results in an even stronger commitment to
change.
Thank you