Albert A. ANGEHRN - CALT
Transcription
Albert A. ANGEHRN - CALT
The Challenge of Change & Knowledge Management Pfizer ELDP The Challenge of Change & Knowledge Management Albert A. ANGEHRN Professor, IT & Entrepreneurship Director, Centre for Advanced Learning Technologies (CALT) Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 INSEAD European Institute of Bus. Administration Fontainebleau & Singapore Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Pfizer ELDP The Challenge of Change & Knowledge Management Albert A. ANGEHRN Professor, IT & Entrepreneurship Director, Centre for Advanced Learning Technologies (CALT) Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 INSEAD European Institute of Bus. Administration Fontainebleau & Singapore Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Pfizer ELDP The Challenge of Change & Knowledge Management Albert A. ANGEHRN Professor, IT & Entrepreneurship Learning by Doing Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Director, Centre for Advanced Learning Technologies (CALT) INSEAD European Institute of Bus. Administration Fontainebleau & Singapore Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Changing how we address Change Serious Play From Traditional to simulation-based Experiential Learning Stanford Northwestern U Chicago U MIT INSEAD Developing Individual Change Competencies Albert A. ANGEHRN Organizational [email protected] Change Readiness ISAGA05/AAAngehrn/INSEAD/June 2005 Hong Kong U Columbia U Duke U Evidence of IMPACT in management world Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management No doubt: Change is CRITICAL ! “Business is going to change more in the next 10 years than it has in the last 50.” Bill Gates, Business at the Speed of Thought, 1999 Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management No doubt: Change is CRITICAL ! “Business is going to change more in the next 10 years than it has in the last 50.” Bill Gates, Business at the Speed of Thought, 1999 A critical asset to be developed: Change readiness Albert A. ANGEHRN The competency that enables organizations to address productively both incremental and radical change. [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Large change initiatives aiming at performance improvements Business Process Reengineering Empowerment Activity-based Costing/Mgmt TQM Benchmarking Time-based Competition Matrix Structures Network Organisations Project-based Organisation Cross-functional Teams Mergers & Acquisitions e-Everything Albert A. ANGEHRN … Customer Relationship Mgmt (CRM), Supply Chain Mgmt (SCM), Knowledge Mgmt (KM), … [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management But Change, in Reality, is HARD ! 75% of all transformation efforts fail 50-75% of “re-engineering” projects fail Failure rates are higher (78%) when IT involved E G CHANGE N STRATEGISTS E L L A H C CHANGE IMPLEMENTATION PROCESS Albert A. ANGEHRN CHANGE RECIPIENTS [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management The expectations … Performance measure Time What we aim at … Albert A. ANGEHRN [email protected] 6/6/2006 ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management …the reality … and what we typically get … Performance measure Time Unsustainable improvements Performance measure Albert A. ANGEHRN Performance measure Time Little impact Time Unsustainable pace [email protected] 6/6/2006 ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 Change Readiness & Implementation Patterns Assessment The Challenge of Change & Knowledge Management Performance A Time Pattern “A” Meeting Targets Performance Performance B Pattern “B”: Unsustainable Pace C Time Pattern “C”: Unsustainable Improvements Time Performance D Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pattern “D”: Little or No Impact Time Pfizer ELDP, INSEAD, June 2006 Change Readiness & Implementation Patterns Assessment The Challenge of Knowledge Change & Knowledge Exchange Management Performance Learning Opportunities A •Resistance Dynamics •Diffusion Dynamics •Cultural/Cont. Factors Time Pattern “A” Meeting Targets Performance Performance B Pattern “B”: Unsustainable Pace C Time Pattern “C”: Unsustainable Improvements Time Performance Learning Opportunities D Albert A. ANGEHRN •Resistance Dynamics •Diffusion Dynamics [email protected] •Cultural/Contextual Factors ISAGA05/AAAngehrn/INSEAD/June 2005 Pattern “D”: Little or No Impact Time Knowledge Exchange Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Change in Reality ! 75% of all transformation efforts fail 50-75% of re-engineering projects fail 78% of IT projects fail Key Factors: Organizational resistance Insufficient exec. sponsoring Unrealistic expectations Inadequate programme mgmt Unclear business case Lack of qualified resources Scope of expansion/uncertainty Ineffective leadership 82% 72% 65% 54% 46% 44% 44% 43% Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management The challenge … CHANGE CHANGE STRATEGISTS IMPLEMENTATION PROCESS CHANGE RECIPIENTS Reflecting & understanding the dynamics of Albert A. ANGEHRN [email protected] 6/6/2006 Diffusion, Change & Resistance ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The EIS Challenge (www.calt.insead.edu/eis) The Challenge of Change & Knowledge Management What stages do change recipients go through before adopting ? Awareness • Change recipient becomes aware that the change project and its objectives Interest • Change recipient develops curiosity about the innovation and is open to information (how does it work, potential benefits, etc.) Appraisal/ Trial • Change recipient is ready to: evaluate costs/benefits of the innovation, assess probability of success, try out on a small scale or in a pilot project Adoption • Change recipient adopts the innovation, using it on a continuous basis Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, AAAngehrn/INSEAD June 2006 The EIS Challenge The Challenge of Change & Knowledge ORGANIZATIONAL Management DIAGNOSIS EFFECTIVE ORG.L INTERVENTIONS STRATEGY Adaptive NETWORKS Explicit PROCESS Formal & informal networks INDIVIDUALS Power & diffusion networks Role & history Attitude towards change ! Key driving principles (collaborative vs. competitive) Leveraging networks & key individuals Expectation mgmt Motivation & Resistance Process fairness dimensions Influence ORG. CULTURE Communication culture Albert A. ANGEHRN Positive/negative signals [email protected] Values & vision Mgmt style ISAGA05/AAAngehrn/INSEAD/June 2005 Awareness Interest Trial Adoption TACTICS Adapted to people, timing & adoption stage Target individuals vs groups Open vs. covert Collaborative vs competitive Pfizer ELDP, INSEAD, June 2006 The EIS Challenge Experience The Challenge of Change & Knowledge ORGANIZATIONAL Management DIAGNOSIS Analysis Levels My company/unit/group What is different/similar? NETWORKS Formal & informal networks INDIVIDUALS Power & diffusion networks Role & history Attitude towards change Motivation & Resistance Influence ORG. CULTURE Communication culture Albert A. ANGEHRN Positive/negative signals [email protected] Values & vision Mgmt style ISAGA05/AAAngehrn/INSEAD/June 2005 àINDIVIDUAL LEVEL Typical Resistance Patterns àNETWORK LEVEL Diffusion Patterns àCONTEXT Cultural Patterns Which areas should be addressed first to increase CHANGE READINESS ? Myself Which are the most typical and counterproductive TRAPS in which we tend to fall into ? Which opportunities to improve significantly our MANGERIAL ACTIONS ? Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Managing Expectations CHANGE CHANGE STRATEGISTS IMPLEMENTATION PROCESS Performance measure CHANGE RECIPIENTS ‘Linear’ Expectations 100% result effort Albert A. ANGEHRN H Time Horizon [email protected] 6/6/2006 ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Managing Expectations Kim & Mauborgne Tipping Point Leadership HBR, April 2003 CHANGE CHANGE STRATEGISTS IMPLEMENTATION PROCESS CHANGE RECIPIENTS Performance measure 100% Tipping Point Albert A. ANGEHRN I II III Time Horizon [email protected] 6/6/2006 ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Think Networks! From Linear to Epidemic Diffusion Dynamics Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 black: opinion leaders red: influenced green: uninfluenced grey: undecided Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The EIS Challenge The Challenge of Change & Knowledge ORGANIZATIONAL Management DIAGNOSIS EFFECTIVE ORG.L INTERVENTIONS STRATEGY Adaptive NETWORKS Explicit PROCESS Formal & informal networks INDIVIDUALS Power & diffusion networks Role & history Attitude towards change ! Key driving principles (collaborative vs. competitive) Leveraging networks & key individuals Expectation mgmt Motivation & Resistance Process fairness dimensions Influence ORG. CULTURE Communication culture Albert A. ANGEHRN Positive/negative signals [email protected] Values & vision Mgmt style ISAGA05/AAAngehrn/INSEAD/June 2005 Awareness Interest Trial Adoption TACTICS Adapted to people, timing & adoption stage Target individuals vs groups Open vs. covert Collaborative vs competitive Pfizer ELDP, INSEAD, June 2006 Behind the Classical Change Adoption Stages The Challenge of Change & Knowledge Management Attitude/ Behavioral Changes Awareness Interest Appr./Trial Adoption Our Impact Addressing & Diffusing: Intentions/Committment Desires/Goals Knowledge/Beliefs Key Challenges Capturing & Securing: Albert A. ANGEHRN Presence/Collaboration Trust Attention [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Understanding Resistance & Diffusion % of typical population 30 20 10 Albert A. ANGEHRN [email protected] Innovators ISAGA05/AAAngehrn/INSEAD/June 2005 Early Adopters Early Majority Late Majority Resisters Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Understanding Resistance & Diffusion % of typical population 30 20 Resistance WE contribute in generating (lack of sensitivity for self-determination needs and Procedural Fairness/Justice issues) 10 Albert A. ANGEHRN [email protected] Kim & Mauborgne Fair Process: Managing Early Early in Innovators Knowledge Economy Adopters Majority HBR, February 2003 ISAGA05/AAAngehrn/INSEAD/June 2005 Late Majority Resisters Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Insights from Motivational Theory c Basic Psychological Needs nAutonomy The feeling of possessing a sufficient level of control over own choices and activities, and that one is recognized as oneself apart from any social grouping nBelonging The perception of being embedded in a network of strong, stable relationships, and to be validated in these relationships nCompetence The feeling of being able to effectively bring about the results and outcomes desired from particular activities Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Fulfilling and guaranteeing a sustainable fulfillment is high priority, particularly when near critical levels, although intensities of needs (and related levels of activity) vary from individual to individual. Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Insights from Motivational Theory ? Change Potential ‘gains’ & alignment Pride Potential ‘losses’ c Autonomy Belonging Competence Collaborative Behavior (e.g. supportive attitude and active involvement in the implementation of the change process, intrinsic motivational factors) Fears Defensive Behavior (e.g. resistance, blind compliance, and other un- or non-productive attitudes towards the change and different resistance forms leading to lack of intrinsic motivation) Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Change Tactics/Initiatives Appropriateness EIS Tactic Personal profiles Task forces Coffee breaks Social networks Face-to-face meetings Internal magazine Electronic mail Memorandum Seek advice Management training Workshop Staff meeting Questionnaire External speaker Directors’ meeting Pilot test Directive Covert lobbying Diagnosis Awareness Interest Trial ? ? Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Understanding the Impact of Culture on Change Processes Change Processes People Change Processes Artifacts Change Culture Organizational Culture Culture Relationships Processes Systems Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Changing Culture is Hard “… the peasants of the Bigouden in Brittany, in the year 1920, do not know that there is a sea only ten kilometres away; the world is black beyond their own villages, filled with devils and danger …” Zeldin (1994) Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 Changing The Challenge of Change & Knowledge “… the Russians rioted in Management Culture is Hard the 1840s when the government tried to persuade them to grow potatoes. Being used to living mainly on rye bread, they suspected a plot to turn them into slaves and force a new religion on them. Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 But within fifty years they where in love with potatoes! The explanation is that they added the same sourness – kislotu – which had always given savour to their food, and which was what they were ultimately addicted to …” Zeldin (1994) Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Culture Management The Knowing-Doing Gap - The Challenge of Changing how we Change 1. Real Value comes from “Doing” 2. Real Competence comes from “Experience” 3. Doing means Learning – which means Mistakes 4. Beyond Fear and unproductive int. Competition 5. Oh no! Not another Program! 6. Sacred Cows 7. The Dark Side of Measurement Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowing-Doing Gap Insights 1. Real Value comes from “Doing” Knowledge and Intellectual Capital are key, but top management too often prefers to engage into easier and safer activities such as developing and discussing concepts, producing reports and databases, invest in infrastructure, planning and attend long decision-making meetings. Albert A. ANGEHRN "In some organizations that we studied there seemed to be an unspoken, but powerful belief that once a decision had been made to do something, no additional work was needed to make sure it was implemented.“ Pfeffer; 2000 Towards a “doing-oriented” culture [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowing-Doing Gap Insights 2. Real Competence comes from “Experience” Ideas and concepts are key, and the market is willing to value them (sometimes even too much), but execution is what ultimately produces value and competence based on real experience. Equally, the real value of knowledge is its “actionability”. Albert A. ANGEHRN I've always found the job market to be perplexing for this reason: You can be a plant manager -- actually have what it takes to run a plant -and make $80,000 to $100,000 a year. Or you can talk about plant management and make twice that. Pfeffer; 2000 Towards a “execution-oriented” culture [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowing-Doing Gap Insights 3. Doing means Learning – Learning means Mistakes The trend of making people accountable for their performance is productive – but only if companies are able to build a forgiveness framework - a tolerance for error – into their culture. If you're going to be held accountable for every mistake that you make, how many chances are you going to take? How eager are you going to be to convert your ideas into actions? Pfeffer; 2000 Towards a “learning” and “experimentationoriented” culture Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowing-Doing Gap Insights 4. Beyond Fear and unproductive int. Competition You can forget bridging the Knowing-Doing Gap in organizations where fear is a dominant factor – fear to fail, but also fear to address issues – and the tendency to focus only on the short term and on one’s own survival. I want everybody to tell me the truth - even though it costs him his job Sam Goldwyn; Movie Producer We have met the enemy, and it is us! Albert A. ANGEHRN Towards a “fear-free” and “collaborationoriented” culture Pogo Comic Strip [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowing-Doing Gap Insights 5. Oh no! Not another Program! Many of the ‘programs” rolled out in corporations mean that the the company is about to spend all of its time worrying about the content of the program, rather than learning by doing. Experience shows that no matter how smart you are, you can't preplan everything and then roll out your program. Enlightened trial and error outperforms the planning of flawless intellects David Kelley; Founder and CEO of Ideo Product Development Towards a “not-only-planning oriented” culture Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowing-Doing Gap Insights 6. Sacred Cows Combined again with fear, corporate memory of "how we've always done things around here" too often substitutes for "doing things the right way around here." After a while, what was originally adopted as a means to an end becomes an end in itself (see for instance HR policies). What you end up with are sacred cows -- things that you take for granted; processes, practices, and rules that you think will help you get things done. In reality, all they do is get in the way of getting things done. Pfeffer; 2000 Towards a “challenging the pastoriented” culture Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowing-Doing Gap Insights 7. The Dark Side of Measurement What gets measured is what gets done – but measurement can also become the reason why nothing gets done, as there are too many measures in place, which in addition are not always relevant. In fact, companies often exclusively measure outcomes, and not process – preventing themselves to understand where to intervene to change outcomes. outcome process good good bad Avoiding the “Illusion of Control” bias bad Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Helping people cope with change nRethink resistance to change uAs a natural self-protection mechanism. uAs a step towards adaptation to the changes. uAs information on the effects of the change strategy. nGiving first-aid uAccept and understand emotional responses. uMinimize uncertainty. uProvide resources and support. nCreating org’l capabilities for change uMake Albert A. ANGEHRN organizational support for risk-taking clear. uInvolve people in the decision-making process. uProvide opportunities for individual growth. [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Evidence on Change Processes > Most important changes may meet with resistance from powerful people in the organization > Resistance to change originates in multiple sources, especially in lack of will and lack of skill > People’s reaction to change processes are a function of how change is introduced and managed (the “fear” factor) > The initiators of change typically underestimate the level of resistance, the magnitude of the effects of change, as well as the time required for a successful implementation > A history of success is likely to become an important obstacle for people to perceive the need of change Albert A. ANGEHRN [email protected] > Successful implementation strategies typically take into account the level of resistance, the power, and the informal networks of the people that are key to success of the change/innovation project ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Overview of Key Points 1: Change – Key Issues a) Change is CRITICAL: Engaging people into change à importance of making it clear why change is so critical b) Change is COMPLEX: Understanding the factors underlying success and failure of change initiatives 2: Change – Experience and Analysis a) Simulation b) A Map of critical success factors (6 areas of analysis): Albert A. ANGEHRN - Individuals (diversity, attitudes, responsiveness) - Networks (mapping and leveraging informal networks and relationships/influence patterns) - Culture (understanding specificities, protocols and “wired” habits – ex: Knowing-Doing Gap) - Process management: Setting expectations right and exploiting “tipping points” dynamics - Strategy – Tactics interplay - Sources of Resistance (addressing or avoiding their emergence) [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The EIS Challenge Experience The Challenge of Change & Knowledge ORGANIZATIONAL Management DIAGNOSIS Follow Up My company/network What is different/similar? NETWORKS Formal & informal networks INDIVIDUALS Power & diffusion networks Role & history Attitude towards change Motivation & Resistance Influence ORG. CULTURE Communication culture Albert A. ANGEHRN Positive/negative signals [email protected] Values & vision Mgmt style ISAGA05/AAAngehrn/INSEAD/June 2005 àINDIVIDUAL LEVEL Typical Resistance Patterns àNETWORK LEVEL Diffusion Patterns àCONTEXT Cultural Patterns Which areas should be addressed first to increase CHANGE READINESS ? Myself Which are the most typical and counterproductive TRAPS in which we tend to fall into ? Which opportunities to improve significantly our MANGERIAL ACTIONS ? Pfizer ELDP, INSEAD, June 2006 The EIS Challenge: Reflection Points The Challenge of Change & Knowledge Management Change Implementation Traps Change Process Traps Change Tactics Traps (1) Optimism Trap (1) Selection Traps (2) Illusion of Control Trap (2) Narrow Focus Trap (3) Naivety Trap (3) No Follow-up Trap (4) Push Through Trap (4) Target Blindness Trap (5) History Blindness Trap (5) Shooting in the Dark Trap (6) Solution- vs People-orientation Trap (6) Stakeholders Blindness Trap (7) Single Perspective Trap (7) Give Up Trap (8) Backfiring Trap (8) Network Naivety Trap Albert A. ANGEHRN (9) Quick Win Trap (9) Get it Done Quickly Trap (10) Context Sensitivity Trap [email protected] (11) Individual Progress Blindness Trap (12) Change Project Progress2005 Blindness Trap ISAGA05/AAAngehrn/INSEAD/June Strategy & Resistance Traps (1) Blind Flight Trap (2) Visibility & Assessment Trap (3) Single-Loop vs Double-Loop Trap (4) Rigid Assumptions Trap (5) Outcome vs Learning Trap (6) Lack of Differentiation Trap (7) Distributive Justice Trap Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Follow Up Support Page http://www.calt.insead.edu/ eis/SessionsPages/Pfizer Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Focus: KM & Collaboration Opportunities & Challenges n KM & Collaboration as Change Challenges u u n Innovation:The Knowledge Integration Frontier u u n PW Experiences and Failure Patterns “Enterprise 2.0”: Wikis, Blogs and Social Networks SW Beyond traditional Innovation Models Innovation beyond company’s boundaries Collaboration 2.0 @ Pfizer ??? Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowledge Management Experiences in a global Consulting Company (1989) “The corporate psychology makes the use of the KM System difficult. Particularly the consultants career path which creates a backstabbing and aggressive environment in which … people maximize opportunities for themselves” Albert A. ANGEHRN [email protected] “I am trying to develop an area of expertise that makes me stand out. If I shared that with you, you would get the credit, not me. It’s really a cut-throat environment.” ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowledge Management Experiences in a global Consulting Company (1989) “The corporate psychology makes the use of the KM System difficult. Particularly the consultants career path which creates a backstabbing and aggressive environment in which … people maximize opportunities for themselves” Albert A. ANGEHRN [email protected] “I am trying to develop an area of expertise that makes me stand out. If I shared that with you, you would get the credit, not me. It’s really a cut-throat environment.” ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Knowledge Management Experiences in a global Consulting Company (1989) “Power in this firm is your client base and technical ability. Now if you put all this information in a shared knowledge base, you lose power. There will be nothing which is privy to you, so you lose power. It’s important that I am selling something that no one else has. Sharing expertise in the firm is just a ‘dream’.” Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Collaboration & its Key Ingredients Collaboration can be seen as a way to achieve a set of Objectives. Its key ingredients are People, a set of Processes & Plans, and a set of Resources. Objectives Degree of Objectives Achievement Time • Collaboration Spaces (physical, virtual) Albert A. ANGEHRN Processes & Plans [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 • Documents and other types of Knowledge Assets People Resources • Funds •… Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Collaboration & its Key Ingredients Corporate collaboration is necessary, in general, because no matter how we organize work, we end up with activities that cut horizontally across the company. Main Objectives : Albert A. ANGEHRN [email protected] •To optimize business activities that cannot be optimized by "sum of the local metrics" •To identify innovations that are unlikely to be seen from any single vantage point •To reinforce professional disciplines that cut across product or geographic organizations •To identify and replicate operational best practices •To identify and cross-train next-generation managers ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 Collaboration & its Breakdowns The Challenge of Change & Collaboration is unfortunately not always successful. Knowledge Instead of successful Patterns (“A”) we often end up with unsuccessful ones (“B”, “C”, or “D”) Management Degree of Objectives Achievement Pattern “B” No Take-Off Breakdown Time Degree of Objectives Achievement Degree of Objectives Achievement Pattern “C” Crash Landing Breakdown Time Pattern “A” Successful Collaboration Time Degree of Objectives Achievement Pattern “D” Hijacking Breakdown Albert A. ANGEHRN Time [email protected] Note that unsuccessful patterns can be temporary sub-patterns of an ultimately successful one. ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Collaboration Breakdowns Change & Knowledge Communication may be withheld or feels incongruent, manipulative, Signals dishonest, misleading Management Power Struggles Political Intrigue Unethical Behavior Communication Impasses Escalating Conflict Deepened Organizational Cynicism ... Collaboration is a process of collective alignment where the energies in a system are all working congruently, consistent with a common purpose. Aim at promoting dialogue and clear understanding of values, needs, actions and goals. Surveys of top executives consistently cite poor communication as the number one cause of failure in business ventures. Negotiation is adversarial and strives to "win the deal," not win the relationship Aim at optimizing mutual gains and develop relationships of reciprocity. Myth or reality: the goal of a negotiation is to "win the deal?" This can backfire badly when the ones who feel cheated also feel entitled to get you back, any way they can and probably within the terms of the agreement. If your goal is collaboration, then you need partners who consistently negotiate to "win the relationship" and to expand your creative options. Conflict resolution is positional, coercive, conditional, punitive, and too little too late Aim at facilitating reconciliation--restoring trust and healing from betrayal. Conflict is a cost and opportunity of doing business. Your choice is what to do about it. Address it in "real time" to dissolve any blockage. Do you have processes for managing and resolving conflict to meet needs for fairness, mutual gains, and workable results? Collaborative process is an afterthought or unskillful, without necessary focus, structure and coherence; it often feels futile and like a waste of precious time - what process?! Aim at generating participatory decision making and buy-in. Optimal results come from balanced attention to process to make meetings productive and efficient. Process builds and maintains the web; it keeps communication feedback loops fluid, useful and complete. Agreement structuring Albert A. ANGEHRN [email protected] is unrealistic, incomplete, focuses on control measures with insufficient consideration for what would support alignment and reconcile ongoing relationships Aim at clarifying adaptable guidelines and to manage expectations and results from a clear foundation of reciprocity and trust. The goal of every negotiation, conflict resolution process, and collaboration process is a reliable, clear and accurate agreement that accommodates change. These agreements can take many forms, but ultimately they must serve your core needs. Do your agreements promote collaboration Adapted from: B.C. Lewis, 2005 Adapted from: B.C. Lewis, 2005 ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Example: WorldMusic Game Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Albert A. ANGEHRN [email protected] Collaboration & the “Enterprise 2.0” vision “Internet” “Our companies”? Transparency Partial, multiple information Lack of clear procedures Sharing culture Vertical info. sharing only Retention within “Clans” Process integration Processes organized in “Silos” Pooled Coordination Top down processes, sequential processes Real-time Commitment Several checks, vertically organized Horizontal structures Hierarchical structures ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management IT Generations/Perspectives IT Impact Strategic Value Enterprise 2.0: The Dawn of Emergent Collaboration, Sloan Mgmt Review, Spring 2006 Value Creation through Innovation Knowledge Integration, Collaboration Productivity Gains from Reengineering Leveraging The Web ERP, SCM, eEverything, etc. Cost savings from Automation Competitive Necessity Data Warehousing, Mining, etc. Albert A. ANGEHRN Recent Past Today Near Future [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management The IT Perspective: Collaboration Technologies Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management The Business Perspective: The Knowledge Integration Challenge Type of Knowledge & K-intensive Processes Beyond the Knowledge Integration Frontier “complex” “simple” Co-located Confluent Albert A. ANGEHRN [email protected] Dispersed Diverse Knowledge Source Future source of competitive advantage ? ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management The Business Perspective: The Knowledge Integration Challenge Type of Knowledge & K-intensive Processes “complex” 1 “simple” 2 Co-located Confluent Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Learning from the bottom-up spread of Wikis, Blogs, and Social Network SW Dispersed Diverse Learning from the Opensource Movement Knowledge Source Experimentation Paths & New Management Competencies Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management KM Trends: Customer Focus KM CRM CKM Knowledge sought in Employee, team, company, network Customer Database Customer experience and creativity Axioms ‘if only we know what we knew’ ‘retention is cheaper than acquisition’ ‘if we only knew what our customers know’ Objectives Sharing knowledge about customers among employees Mining knowledge about the customer Gaining, sharing and expanding knowledge of (inside) the customer. Experiences in applications, competitor behavior, future solutions, etc Role of customer Passive, recipient of product Captive, tied to product by loyalty schemes Active, knowledge partner. Recipient of Incentives Employee Customer Customer Corporate role Lobbying knowledge hoarding employees Captivate customers Emancipate customers Business objectives Efficiency and speed gains, avoidance of reinventing the wheel Customer retention Customer base nurturing, maintaining our customers Customer satisfaction Collaboration with customers, joint value creation Performance against budget; Customer retention rate Performance in terms of customer satisfaction and loyalty Performance against competitors in innovation and growth; Contribution to customer success Conceptual base Albert A. ANGEHRN Business metrics Customer success, innovation, organizational learning [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management 20 million Users (users did Mkt Mkt)) Mirabilis.com ICQ (I seek you) AOL: $ 440 m People & Costs (users did R&D) 4 Y1 Y2 K IDEA Re-Designing Knowledge Flows & Relationships Traditional Models à New Value Creation Models Albert A. ANGEHRN [email protected] 6/6/2006 Traditional Valuation Models à New Valuation Models ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Insights from ICQ Case Knowledge Emerging ICT and Collaboration Technologies • Ideas and Exchanges • Functional Know-how (R&D, product., mktg, distr., etc.) • Market needs Know-how New processes, systems and org. cultures supporting the effective access and integration of: - diverse knowledge sources - in distributed global contexts Market Value @ industry level Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 (example: opensource and the recent transformation of the Software Industry) @ company level (example: reorganizing IT professional at Xerox into a global community) Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Example: Xerox CodeX Case Project Objectives Project Approach OpenSource tools, Methods & Culture •Who is developing what and where? •Identify experts •Share globally •Harmonize SW development practices •Avoid 3rd party licensing 4000 distributed software engineers Project Results Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 > Faster development > Improved quality and SW features > Increased diffusion of best practices > Growing sense of community > User satisfaction rates above 90% > Substantial, quantified costs savings Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management More Follow-up Opportunities Another couple of articles for follow-up readings: - “Customers as Innovators: A New Way to Create Value” by S. Thomke & E. von Hippel, Harvard Business Review, April 2002. (http://www.calt.insead.fr/papers/customers-innovators.pdf ) - “Managing Innovation in Turbulent Markets” by M. Sawhney & E. Prandelli, Best Paper Award, California Management Review, Summer 2000. (http://www.calt.insead.fr/papers/communities-creation.pdf ) Albert A. ANGEHRN - ‘Enterprise 2.0: The Dawn of Emergent Collaboration’, Sloan Mgmt Review, Spring 2006. [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006 The Challenge of Change & Knowledge Management Thank you Ideas, Suggestions, Questions, Issues [email protected] Albert A. ANGEHRN [email protected] ISAGA05/AAAngehrn/INSEAD/June 2005 Pfizer ELDP, INSEAD, June 2006