Double click to add object
Imagine that it's February 1996 and you are in Hinrichs' shoes just coming on the job.
What were his key objectives?
What are the contextual factors that motivate the changes in objectives?
What is the root of Hinrichs' motivation to implement changes?
Establish & succeed in new, independent role as plant manager
Continue to produce TCCs for on-time delivery
Manage the budget
Reduce costs of production
Get buy-in for change
Ensure that the conversion to carbon fiber is successfully completed
Promote continuous improvement in the production process
Maintain flexibility for increasing number of SKUs
THE CHANGES IN THE OPERATIONS
What were the changes that were made?
Were these in tune with Hinrichs' objectives?
Were these the right changes? Did he start in the right place?
Do these changes represent a big deal? Why or why not?
CHANGES MADE AT THE
New bonding equipment
New assembly cells replacing old assembly line & earlier cells
Reassignment of jobs
Upgrading old machinery
HINRICHS AS A LEADER OF
What critical things has he done to make this work, thus far?
What was his change strategy?
Did he follow Theory E or O or a combination?
What is your assessment of whether or not the changes are sustainable?
How much of his success would you attribute to his management skills? His leadership skills?
Hinrichs used the strike as a way to display his commitment to the workers.
Decided that the workers would rather prefer to work than to be laid off during a strike.
Speech to the plant workers explaining what he was trying to do – workers integral players in the future of the company - built trust in him.
Generates involvement in the change process.
FEBRUARY 1997: NEXT
Vote on each of Hinrichs' options.
Option 1 (outside repair)
Option 2 (vendor installs new equipment)
Option 3a (outside repair & new die)
Option 3 (vendor installs new equipment & new die)
What are the cost implications?
What are the labor implications?
What is the risk & uncertainty associated with each option?
Which option best supports continuous improvement in the future?
Faced with the broken press, Hinrichs took a modified Option 3.
People from outside did the repair
Outsourced the three process steps to another GM plant (during the time of the repair).
New press more reliable & Hinrichs was able to install the new die & get it to work.
Hinrichs promoted in April 1997 to GM's Romulus Engine plant outside of Detroit as the Assistant Plant Manager of the 2000-person plant.
Change slowed for a while (because his six direct reports were promoted to other positions in different plants around the same time he was promoted – 6 months later, rate of change once again increased.
Given the environment, Hinrichs' success hinges on 2 issues: the technical viability of the system of changes he wishes to make, and the way in which he introduces and manages the change process.
The change model, the technology, & the organization have to be aligned.
ALIGNING THE CHANGE MODEL, THE TECHNOLOGY
& THE ORGANIZATION
Double click to add object
The changing world of word revisited
Resistance to change
Managers as change agents
Managing planned change
1st order vs. 2nd order (evolutionary vs. revolutionary change)
What can managers change?
Techniques for changing people
Contemporary issues in managing change
DIFFERENT NAMES FOR
EXTENT OF CHANGE
1st order versus 2nd order
Incremental vs. innovative
Incremental vs. discontinuous change
Evolutionary vs. revolutionary
CHALLENGE OF DISCONTINUOUS CHANGE
THREE VARIANTS OF ERROR
IN THIS INDUSTRY
THE DECISION NOT TO0 INVEST IN THE NEW TECHNOLOGY
TO INVEST BUT PICKING THE WRONG TECHNOLOGY
CULTURAL (INABILITY TO PLAY 2 GAMES AT ONCE)
1960S -- DOMINANT JAPANESE WATCH PRODUCER -- SMALL PLAYER IN GLOBAL MARKETS
ASPIRATION: A GLOBAL LEADER
CONDUCTED INTERNAL EXPERIMENTATION -- BOLD BET & BECAME BOTH A MECHANICAL & QUARTZ WATCH COMPANY
EMPLOYMENT IN SWISS WATCH INDUSTRY
REAL TEST OF
TO BE ABLE TO COMPETE SUCCESSFULLY BY BOTH INCREASING THE ALIGNMENT OR FIT AMONG STRATEGY, STRUCTURE, CULTURE, AND PROCESSES, WHILE SIMULTANEOUSLY PREPARING FOR THE INEVITABLE REVOLUTIONS REQUIRED BY DISCONTINUOUS ENVIRONMENTAL CHANGE
REAL TEST OF
COMMON PATTERN OF
Periods of incremental change punctuated by discontinuous or revolutionary change
Long-term success marked by increasing alignment among strategy, structure, people & culture through incremental or evolutionary change punctuated by discontinuous or revolutionary change.
MANY SIMILARITIES BETWEEN POPULATIONS OF INSECTS & ANIMALS & POPULATIONS OF ORGANIZATIONS
MODELS OF POPULATION ECOLOGY USED TO STUDY SETS OF ORGANIZATIONS (WINERIES, NEWSPAPERS, AUTOMOBILES, BIOTECH COMPANIES, RESTAURANTS)
POPULATIONS OF ORGANIZATIONS ARE SUBJECT TO ECOLOGICAL PRESSURES
EVOLUTION OCCURS THROUGH PERIODS OF INCREMENTAL ADAPTATION PUNCTUATED BY DISCONTINUITIES
THOSE ORGANIZATIONS & INDIVIDUALS BEST ADAPTING TO A GIVEN MARKET OR COMPETITIVE ENVIRONMENT WILL PROSPER
CANNOT USE INCREMENTAL EVOLUTION FOR DISCONTINUITIES
& ORGANIZATIONAL EVOLUTION
SLOW EVOLUTIONARY CHANGE IN FAST CHANGING
IS THE ROAD TO
TECHNOLOGY CYCLES &
Dominant Substitution Dominant
Design #1 Event Design #2
Rate of Innovation
SUCCESSFUL COMPANIES LEARN WHAT WORKS WELL & INCORPORATE THIS INTO THEIR OPERATIONS (ORGANIZATIONAL LEARNING)
STRESS THEREFORE IS ON ACHIEVING CONGRUENCE
BUT CONGRUENCE IS A TRAP
Size & Age
IBM -- lost $14 billion between 1990-1993. Why?
Culture major reason -- inward focus, stress upon consensus, arrogance, sense of entitlement for jobs
Culture product of success but also key to long-term failure
DILEMMA FACING MANAGERS
short run -- increase fit of strategy, structure & culture
long run -- may have to destroy the alignment that made their organizations successful
NEED AMBIDEXTROUS ORGANIZATIONS TO
OVERCOME SUCCESS PARADOX
Hewlett-Packard, Johnson & Johnson, & ABB
Each has been able to periodically renew itself & to produce streams of innovation
Organizational architecture -- reliance on small, autonomous units
Reliance on strong social controls (both tight & loose)
Emphasis on autonomous groups
Retain benefits of size (especially marketing & manufacturing)
Decisions kept as close to the customer or technology as possible
Headquarters facilitates operations
Reliance on strong social controls
Simultaneously tight & loose
Common overall culture promotes integration & encourages identification & sharing of information & resources.
Managing units pursuing widely different strategies & that have varied structure & cultures is a juggling act –
3 companies successful
Relatively long tenure
Continual reinforcement of social
ANDY GROVE OF
“ There is at least one point in the history of any company when
you have to change dramatically to rise to
the next performance
level. Miss the moment and you
start to decline.”
CONTEMPORARY ISSUES IN MANAGING CHANGE: CULTURE
Good luck in finishing up the work
Please keep to the due dates.
I have really enjoyed this class – definitely my favorite out of the three I have taught