© 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. CALM: Enabling Organizational Change “Test-Drive Your Organizational Change Strategies” Dr. David KoehnDr. Richard Adler DJKoehn Consulting Services, Inc.DecisionPath, Inc

2 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. Agenda Organizational Change –What is it? –Why is it so hard? –A better way to enable effective change in your organization Change Adaptation Learning Model (CALM) Key features -Pragmatic -Measurement-based -Dynamic: provides flexibility to respond to continual change -Fast (but intense)

3 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. Organizational Change Organizations compelled to change by their environments –New laws, increased workloads, new technologies... Common responses –Modify structures, processes, IT systems, offerings… But…. –Change alters status quo & moves people out of their comfort zone –Creates fear, uncertainty, resistance

4 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. Change “Management” (CM) Anticipate disruptions that impair focus & performance Try to avoid or mitigate loss of momentum & productivity –Prepare and guide organization and employees Great idea, except… –70+% of change management initiatives fail –Costing tens of billions of dollars annually in US alone* Consulting fees, write-offs, severance costs, IT purchases,… * Sources: Surfing the Edge of Chaos, R. Pascale, M Millemann, L Gioja; Creating Contagious Commitment, A Shapiro.

5 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. Why Traditional CM Fails? Typical CM approaches are largely tactical –Communicating –Training – new systems or processes –Activities amenable to project management methods Necessary, but not sufficient Social and personal behaviors aren’t mechanical like IT Traditional CM does not impact culture, norms, beliefs, and habits These factors can’t be scheduled or controlled Do not generate the trust, confidence, and energy required to achieve and sustain change Change is continual, not a single event

6 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. What is CALM? Methodology and supporting software to enable change –Change Adaptation Learning Model Treats change as a strategic (core) competency Pragmatic & measurement-based –Readiness to change, in three “dimensions” Socio-cultural / workforce psychology / business “infrastructure “ –Measure current levels and envision goal/target state Dynamic planning –Identify change activities & business case for doing them Schedule, cost, estimated impact on readiness metrics –Anticipate impacts of situational forces, trends, events –Simulate plan to test and validate or refine prior to roll-out

7 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. Measuring Readiness to Change Org. Mindset Infrastructure Personal Mindset CALM defines three “dimensions” of readiness metrics Assessed on a scale of 1 to 100 by org. change team Consensus estimates, documenting points of view, justifications Net value for dimension is computed from values of component metrics Cultural Coherence Org. Alignment Leadership Change Capacity Teaming Mental Schema Dev., Work Preferences, Learning Capability, Competency Dev. Functional Personal & Social BPR & CPI, Technology Upgradeability, Operational Agility, Organizational Adaptiveness

8 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. CALM Models Change Dynamics Organizational Unit Internal Forces External Forces Transformation Plan Change Initiatives Events Change Dimensions Org. Mindset Infrastructure Personal Mindset Outstanding Great Good Baseline Change Path

9 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. Government organization –Department of Defense – employees, union shop Change challenge –Replacing traditional seniority-based compensation system with pay for performance scheme Initial focus –Tactical programs to train employees to complete annual objectives and managers to conduct annual reviews –Failed to address critical socio-cultural and psychological issues driving acceptance by workforce Demo Case Study

© 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. Demo

11 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. CALM – When to Use It Before change –Ideally, use CALM as a planning tool up-front During execution –Routine monitoring Periodically update Scenarios & re-project change strategy -Early Warning of emerging problems, allowing prompt diagnosis and mid-course adjustment –Crisis Capture strategy, environment, goals explicitly Diagnose problems, devise & validate new/modified plan Post-change –Continuous learning

12 © 2012 DJ Koehn Consulting Srvcs, Inc. and DecisionPath, Inc. All Rights Reserved. Comprehensive Strategic Dynamic “lifecycle” support Unique model/”what-if” simulation drives systems thinking –“Practice” change strategies & learn from low-cost virtual mistakes –Monitor execution, detect problems, make mid-course fixes Fast and cost effective –Develop and validate change strategies in weeks, not months –Small consulting team leads facilitated workshops, analysis Reduce risk, improve confidence & consistency CALM Benefits