Transformational Change Management

The process of transforming the organization’s systems and culture to lean principles

The Process of Whole-System Organization Design

No one can define the steps in a process of change without knowing the context – knowing what is going on in the organization, the size, the urgency and priorities, the strengths and weaknesses. In each case the process should be developed taking the contextual realities into account.

However, the following is a simple template from which one can begin planning a redesign process. One can conceptualize this as 4 “D’s” – Discover, Dream, Design and Deploy or Develop. These four steps have proven successful repeatedly, although the exact content of each depends on what is happening within each organization.

Below I will simply point to some of the common steps that have proven successful and point out why. It may appear that these steps are defined in a linear manner, meaning that A comes before B that is necessarily followed by C. It almost never works like that. Can you separate the Dream stage from the Discovery stage? Surely, when you are discovering best practices it is only natural to be thinking about what the ideal might look like in your organization. It is not necessary that the stages be neatly separated. They are presented in an order that generally makes sense and it will be desirable to plan them in this order. But, it will also be important to let the process flow down a path that unfolds before it.

It is recommended that this process be an “inter-active” planning process with an executive steering team who gives the process direction and authority; and design teams comprised of members of the organization who are responsible for the following four stages of Discovery, Dream, Design and Development. These two lead groups will seek ways to involve as many as possible in the organization to gain the broadest possible engagement.

This design team will receive a “charter” from the steering team and this charter will provide clear guidance as to the objectives of their work and the boundaries of what they may and may not redesign. The design team will ultimately report back their design and recommendations for implementation.

The design team may do several things to gain even greater involvement from the organization, such as hold “design conferences” utilizing the Search Conference methodology developed by Marvin Weisbord[1] and others.

These design conferences may involve hundreds of employees, customers, suppliers and other “stakeholders” who have an interest in designing the ideal process. The first may be a “Discovery Conference” to search for those things that are done well in the organization and gain a shared awareness of strengths as well as needs. After other discovery there may be a “Dream Conference” to imagine the ideal future. It is possible to combine these two in some cases. There may be a third for the purpose of gaining broad based engagement in the design phase. And finally, after significant changes are approved by the steering team, there may be a Development Conference in which large groups become engaged in making plans for the implementation of the new design.

[1] Weisbord, Marvin R. Discovering Common Ground. San Francisco: Barret-Koehler Publishers, 1992.

Planning for Whole-System Design:

Identify Steering Team: The Steering team is the leadership team of the organization. It is very important that the team that assigns the design teams, and charters the design process, is the group that has the power to decide to implement the design. If the steering team does not have the authority to approve the design, it should not be chartering a design team to study and redesign the organization.

Write a Charter: A design charter is the output of the work of the steering team. This design charter is a very important document and will tell the design team exactly what their mission is, what is expected of their work and what they can and cannot do. Here are the key elements of a design charter.

  • Objectives: Why are we doing this and what changes, either in process or performance, are expected?
  • Principles: What principles should be considered when designing the organization?
  • Timeline and Expectations: How long does the design team have to do their work? What presentations or benchmarks are there in the timeline?
  • Boundaries: There are always things that are out of bounds, even though the design team may be charged with redesigning the whole systems. For example, can the design team redesign the compensation system? Whose compensation? You will quickly find a boundary. What are the boundaries of the work process, where does it begin and end? And, are there financial concerns or a budget that must be considered?
  • Core and Enabling Processes: The steering team should know which processes are core and enabling and should make this clear to the design team. A design team should start with studying the flow of the core process and redesigning that, and then design the enabling processes.
  • Appoint a Design Team: It is essential that the members of the design team are expert in the processes they are going to redesign. Only those who have had their hands on, who have first hand knowledge of a process, are expert in that process. The design team members must also have the respect of both the steering team and the members of the organization if the result will have credibility and be implemented. Design teams should be from eight to twelve members and should be diverse in their experience. They should have good communication and problem-solving skills, should be courageous and creative, and should have the desire to participate in a significant improvement effort.

Stage 1: Discover the Current Reality

Many different activities can be employed during the discovery phase, but you can generally divide them into External and Internal Discovery.

External would include anything happening outside the rganization that may impact the organization or that may generate ideas for a better future. In some methodologies, this is called an environmental scan, which has nothing to do with the weather! The environment includes the market, the technology environment, social environment and other factors that are external; as well as the extended environment of customers, suppliers and partners all create requirements and opportunities for the organization.

The internal environment begins with clarification of the guiding values, mission, vision and strategy. These principles and ideas should give direction to all the work of the design process. It is the responsibility of the steering team to provide this guidance.

The next step is mapping the core work process. This is the most important thing that happens in the organization, despite what many people may be thinking or feeling. Getting a solid grasp of this is an essential beginning. It is beyond the scope of this brief introduction to whole-system design to go into various mapping procedures, but the design team and conferences may spend a good bit of time developing this graphic depiction of the work of the organization. As they discover this map they will want to ask questions about the organizations strengths and discover stories about how individuals or teams have done heroic things to serve their customers and improve the product or service. These stories will be important in developing the dream of the future organization.

The design team will then want to identify all the enabling processes, those that support and make the core process successful. Depending on the scope of their effort, they may want to map these processes and follow the same steps they did for the core process.

Three different types of discovery activities can be used in this and most of the stages: individual interviews, small focus groups, or large scale conferences. The design team members may develop a series of interview questions focusing first on the strengths and positive performance of the organization and then on wishes, desires, or needs. They may split up into pairs to go interview customers and suppliers, or they may schedule focus groups. It is desirable to invite customers and suppliers to conferences for employees. I have seen customers speak to conferences of more than a hundred employees at Corning and other companies to give their views on what the company does well and what they would like to see.

Stage 2: Dream

There are three BIG questions that can help members of the organization develop dreams about their future:

  • Considering our mission as an organization, what would be the ideal service or product for our customers? What would this look like, be able to do, and how would it make our customers feel?
  • What would make this the world’s best place to work while we accomplish our mission? What would it feel like? What about the work setting would provide the most encouragement and development for the members of our organization?
  • How would the first two questions make us a great business, and help us achieve great business results?

Around each of these three big questions it will not be hard to image many other questions. There are numerous exercises and fun ways to explore the dream. For example you can ask individuals or small groups to write an article for the Wall Street Journal that is doing a story on your company ten years from now. The WSJ is writing an article about your company as a success story that will inspires others. The story should reflect everything you want the company to be, what you hope you will be able to say about the company. You can also call upon the creative imagination of members of your organization by asking them to develop and act out skits that reflect the dream of your future company. These skits, for example, could be at a cocktail party. The President of the United States, ten years from now, is having a dinner and cocktail party for winners of the National Quality Award. As a member of the team who helped make this happen, you have been invited. Now write a script and act out the conversation where you are explaining to others at the cocktail party what you did that made your company worthy to win this award.

These are just examples of some of the fun things you can do to encourage the development of the dream. Remember that people dream in groups. In other words, one person’s story stimulates ideas in another. Have you ever watched a group sitting around and imagining what could happen together? They feed on each other, laugh with each other, and from the dialogue comes a collective dream that none of them alone would have imagined.

Out of the discovery and dream stage it will be desirable to form a “consensus dream.” Some elements of this may become clear in large group meetings, but it will probably take more clear form in meetings by the smaller design team. Out of all the dreams, some of which may be far out into left field, we now need to develop a dream that becomes our real target.

Stage 3: Design

Based on the discovery and the dream, it is now time to begin the design process. While the dream phase put practical concerns and all forms of skepticism aside; now is the time to begin to get practical. Now is the time to say, “Ok, what can we actually do that will make that dream come true?”

 During the Discovery and Dream process you have generated a long list of things you would like to change. Now you have to organize those and start designing in some logical manner. The beginning point should be the core work process. It is best if they start with a clean sheet of paper and ask themselves the question “if we were starting a new company and had no restraint, what would we design to be the ideal process?”

This should include the following:

  • Cycle time analysis: what would be the fastest, most interruption free path from beginning to end of the process?
  • Quality – what do we do well and what are the variance from standards and customer expectations? Along each step in the process, how could we design features that would eliminate or reduce the potential for quality problems?
  • Principles – where does the process either reflect or deviate from our principles? How can we design our principles into the process?
  • Cost – where are the major costs in the process and how can costs be reduced while improving throughput and quality?
  • Eliminate waste – are there any unnecessary steps? Are there ways to combine steps? Does the product or service ever stand still as it makes its way through the process? How can these delays be eliminated?

Since the organization exists to create the output of the core process, the enabling processes (human resources, information systems, etc.) should be designed to support and optimize the core work process. At this stage the design team may either redesign those processes (they may not have the right people on the design team and it may not be within their charter); or, they may create process requirements for the enabling processes. The core work process is the customer of those processes and should be clear in stating what it needs in order to optimize the core work.

Once the core work process is designed into its ideal desired state, the design team begins to address the structure and systems around the process. There is one BIG rule as they begin to do this. Design the organization from the bottom up! In other words, what is the organization of groups at the first level, where the work is done, that will maximize the probability that the work will be done in the best possible way.

This is the beginning of structure. The structure of society begins with the structure of the family. The beginning of organization structure should be the design of the small work groups who will manage and improve their work on a day-to-day basis. After the first level groups are formed, the question is then asked “What help do they need to do their work in the best possible way?” Think about how this question is different than asking “How many managers are needed?” If you ask what help is needed you will get a very different answer, and it will be a more “lean” answer. If the right training, information, tools, decision authority, and coaching are provided, you will find that far less management is needed.

Similar questions are then asked about all of the systems in the organization. For example:

  • How can the information systems most help those who do the work?
  • What method of presentation and delivery of information would be most helpful to the teams?
  • What training systems would most enable teams and individuals to do their job in the ideal way?
  • What methods and patterns of communication would be most helpful and encouraging to employees?

The design team will identify all of the relevant systems that support the core work, and will then develop a list of questions and issues to be addressed in their design work.

Design teams are always confronted with the issue of how much detail to get into. An analogy has proven helpful. You are designing a house. When designing a new house you need to decide where the walls go, where the staircase is, and where electrical wires need to run. But, you do not need to decide the color of the walls, or the carpet, or where the furniture is going to go. You can leave those decisions to the new owners who will move in. In fact, allowing them to make these decisions will give them a feeling of ownership for the new house, and encourage them to care for it and improve it. Similarly, there are “walls” and then there is “furniture” when doing an organization design. The design team should ask themselves, are we doing furniture or walls, when they begin to feel that they may be descending in to excessive detail.

Stage 4: Development:

Rather than think of any design as complete, or finished, it is best to acknowledge the inevitable reality that you have only done the best you could do at this time. In short order, as groups set about implementing the new design, they will quickly find ways to improve it. Rather than create any resistance to this, it is best to plan for it, encourage it and hope that the process of implementation is one of on-going development and learning.

Once the design team has completed their work, they will first present that to the steering team for their reactions and approval. They may have a large group conference where they present their design as a proposal, a tentative design, and then get the group to react to this and suggest improvements, point out possible concerns, and suggest ways they can help the implementation of the design. This again, increases the engagement and commitment of the organization.

How the new design gets implemented will depend entirely on the nature of the new design. However it is generally the case that one or more implementation teams are appointed to take responsibility for components of the design. Depending on the specifics of the design, the nature of the implementation and implementation teams will vary. There may need to be an IS/IT implementation team if there are a large number of information system issues. There may be an implementation team to focus solely on the physical relocation and set up of a manufacturing plant if that has been redesigned. Similarly there may need to be a training implementation team or one for other human resource issues. The implementation teams should be appointed by the steering team, should be given a charter based on the design, and should report back their progress to the steering team.

Having observed more than one hundred whole-system design projects roughly following this model, it has always surprised me that an enormous amount of energy is put into the process of design, and then there is a let-down when it comes to implementation. The value of the design can be lost if similar energy is not invested in the implementation itself. The implementation must be managed. Good project management skills now need to be used.

It is important that everyone involved has an attitude of continuous improvement when implementing the new process, systems or structure. It will never be 100% right! It will be your best shot at this point in time. However, once you start implementing the new design you will start learning. You will find that some of the pieces don’t fit together perfectly, or you may find you have not thought of some element of the process that also needs to be aligned with the new process you have designed. If you view these discoveries as mistakes or failures, you will stifle the learning process. It is much better to understand that these are inevitable and the natural process of learning that occurs during implementation.