LEADING ORGANIZATIONAL CHANGE

DR. Tb. Donny Syafardan

Etc.

Transformation

Business Restucturing

Best Practice of Organizational Change

Business Process Reengineering

Total Quality Management

Etc.
2

FORCES DRIVING THE NEED FOR MAJOR ORGANIZATIONAL CHANGE

Global Changes, Competition and Markets Technological Change
International Economic Integration Maturation of Markets in Developed Countries Globalization and open economy

More Threats
More domestic competition Increased Speed International competition

More Opportunities
Bigger markets Fewer barriers More international markets

More Large-Scale Changes in Organizations

Structure change Strategic change Culture change Knowledge management, enterprise resource planning Quality programs
Source: Adapted/ Based on John P. Kotter, The New Rules: How to Succeed in Todays Post-Corporate World (New York: The Free Press, 1995).

Mergers, joint ventures, consortia Horizontal organizing, teams, networks New technologies, products New business processes E-business Learning organizations
3

Types of Organizational Change

Adaptive Change Reintroducing a familiar practice Innovative Change Introducing a practice new to the organization Radically Innovative Change Introducing a practice new to the industry High Degree of complexity, cost, and uncertainty Potential for resistance to change
4

Low

Incremental vs. Radical Organizational Change

Incremental Change
Continuous progression Affect organizational part Through normal structure and management processes Technology improvements Product improvement
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.

Radical Change
Paradigm-breaking burst

Transform entire organization

Create new structure and management Breakthrough technology New products, new markets
5

CHANGE

IN

TARGET

Strategy

Structure

Process

People
6

Sequence of Elements for Successful Change

Environment
Suppliers Professional Associations Consultants Research literature Internal Creativity and Inventions

Organization
1. Ideas 3. Adoption 4.Implementation 2. Needs 5. Resources
Perceived Problems or Opportunities

Customers Competition Legislation Regulation Labor force

ENABLING FACTORS FOR SUCCESSFUL CHANGE

Leadership
Capacity Capability Culture

DYNAMIC ROLE OF LEADERSHIP IN ORGANIZATIONAL CHANGE

Capacity

Strategy

Structure

GOAL

Capabiliy

System

Leadership

Culture

SharedValue

Driver

Enabler

Changes

Output

LEADERSHIP
ROLES AND RESPONSIBILITIES OBJECTIVES

SEEING

ENROLLING

VISION
VISIONING INSPIRING STRATEGIES CHALLENGE STRATEGIZING

LEADERS
MOVEMENT ENERGY

PERFORMING

RISK
ACTION

PASSION
CHANGE

RISKING

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

10

MANAGEMENT
ROLES AND RESPONSIBILTIES OBJECTIVES

PLANNING

GUIDING

PREDICTIBILITY
ORDER

BUDGETING

REASSURING

CONSISTENCY ZERO DEVIATIONS

ORGANIZING

MONITORING

STABLE PERFORMANCE SHORT-TERM RESULTS

STAFFING

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

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

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

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, 14 November 2001

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

REASONS FOR FAILURE OF ORGANIZATIONAL CHANGE INITIATIVES

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
Source: William L Cunningham

REASONS FOR FAILURE OF ORGANIZATIONAL CHANGE INITIATIVES

No accountability; lack of clear ownership Tools unable to support processes People not skilled enough to support

processes

No structured Project Management

Source: William L Cunningham

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 organizations 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.

TODAYs CHANGE LEADERS CHALLENGE

Source: Jack Smalley / 2013

The Opposite of Employee Engagement

Do you have an army of sleepwalkers?

The quit-and- stay phenomenon
There are 9-to-5ers who show up to work everyday but who have checked out mentally.

Employees who dont leave the under-performing and disengaged

TODAYs CHANGE LEADERS CHALLENGE

Source: Jack Smalley / June 19 2013

$300 billion
Are your profits melting away, employee after employee?

Employee disengagement costs businesses

in lost productivity every year.

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

67%
of employees in most companies are not engaged in their work.
Customer retention vs. employee retention

LEADING THE PROCESSES OF ORGANIZATIONAL CHANGE

Change Leader

tries to change the behavior of another person or social system.

LEWINS THREE PHASES OF CHANGE

LEADING CHANGE STRATEGIES

LEADING THE PROCESSES OF ORGANIZATIONAL CHANGE

Checkpoints for Successful Change

Benefitmake sure people involved see a clear advantage in the change. Compatibilitykeep the change as close as possible to existing values and experiences. Simplicitymake the change as easy as possible to understand and use. Triabilityallow people to try the change step-bystep, making adjustments as they go.
create a felt need for change

Change leader's task:

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

KOTTERS EIGHT STEPS FOR LEADING ORGANIZATIONAL CHANGE

Step 1) Establish a sense of urgency Create the guiding coalition Description
Unfreeze the organization by creating a compelling reason for why change is needed Create a cross-functional, cross-level group of people with enough power to lead the change

2)

3)
4)

Develop a vision and strategy

Create a vision and strategic plan to guide the change process

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

28

KOTTERS EIGHT STEPS FOR LEADING ORGANIZATIONAL CHANGE

Step 5) Empower broad-based action Generate short-term wins Consolidate gains and produce more change Description
Eliminate barriers to change, use target elements of change to transform the organization Plan for and create short-term wins or improvements The guiding coalition uses credibility from shortterms wins to create change. Additional people are brought into the change process as change cascades throughout the organization

6) 7)

8)

Anchor new approaches in Reinforce the changes by highlighting connections between new behaviors and processes and the culture
organizational success

29

PT POS INDONESIA CASE

POS INDONESIA towards a trusted network company REVOLUTION

from slow snails to flying high pigeons

130

POS INDONESIA PAST HISTORY

Pos Indonesia Vicious Circle

Poor Financial Performance

Low Mail Volume

Low Investment

Low Quality

1-31

1-32

1-33

POS INDONESIA TRANSFORMATION PROGRAM

1-34

2016 2015

IPO
2013-2014 Value Creation
Expand into new Segments and businesses

20092012
Revitalitation
Grow in new products and services Develop new business line

35

1-36

37

Internet

CDMA-GPRS

eMobile Pos

Modem

38

ICT READINESS
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)
VSAT MPLS Radio Link Switching Engine Host -Posindo

BMI

BTN

Taxes

CitIbank

LAN Post Office

Telecom municat ion provider Multi Finance Switching Engine Host Gateway Provider

Post Offices Agent GPRS/3G Data Reconcile & settlement

Credit Card

Data Center

BILLER

Electrici ty/ Water

Kantor Pos Pemeriksa

Kantor Pos Cabang

Ruang Vestibule/Front Office

Revolutionary movement of the company has change Financial Performance, business infrastructure, ICT Infrastructure, Organizational Structure, and Operational & Accounting System, etc

REVOLUTIONARY MOVEMENT
Financial Performance

V.S

Financial Performance

Business Infrastructure

Business Infrastructure

1-41

Leadership, Entrepreneurship Spirit, and sense of belonging are strategically important in building organizational behavior in order to achieve transformation objectives

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.

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.

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.

42

Strategic tools have been interprated into vision & mission and corporate culture, and followed by strategic mapping and programs

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. b. c. d. e. We are committed to provide We are committed to provide We are committed to provide We are committed to provide We are committed to behave our customers with an efficient and on-time delivery. our employees a safe and enjoyable working environment. our shareholders with the best returns and continued growth. a positive contribution to our communities. in a transparent and trustworthy manner to all of our stakeholders.

Pos Indonesia efforts to build strength corporate value within the whole human resources.

CORPORATE CULTURE

43

Postal Courier

Logistics Post Co

Postal Financial Services

REMITTANCE POSPAY BANK CHANNELIN G FUND DISTRIBUTIO N

Retail Post

Property Post
ASSET MANAGEMEN T HOSPITALITY

Bhakti Wasantara Net Co

NETWORKING INTERNET CONTENT

PSO Mail PARCEL Commercial Mail AdMail

Warehousing Freight Forwarding Regulated Agent

Transportation

E-COMMERCE
POST SHOP Pos Market Chain (Rural Logistics)

SCM Consulting

Strategic priorities and strategic inisiatives have been difined for each business and supporting function, to run revitalisation and transformation programs

Kinerja PT POS INDONESIA

4,000,000 3,500,000 3,000,000 0.22 (7.90) (1.31) (3.04) 3.95 1.68 5.08 10.00 5.33 5.00

2,500,000
2,000,000 1,500,000 1,000,000 500,000 0 (500,000)

0.00
(5.00) (10.00)

(10.39)

(16.70) (15.00)

2003

2004

2005
Pendapatan

2006

2007
Biaya

2008
Laba/Rugi
TAHUN

2009

2010

2011

2012

(20.00)

Profit Margin

URAIAN

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
1-46

TERIMAKASIH