Executive-Level Planning
Improvements won’t happen unless management leads the process.

Stanley A. Marash, Ph.D.

Previous articles in this series on change management dealt with the inevitability of change, the financial implications of not changing and the barriers to change. In this column, we’ll look at leadership’s role in making change happen.

Change can be brought about in two ways. The first, innovation, generally involves capital investment and sophisticated analytical tools. The second, continual improvement, results from small, incremental changes that don’t often require large financial investments or complex technology. Although the entire organization contributes to continual improvement, most opportunities are management-controllable--not operator-controllable (i.e., the systems, not the people, are the source of the problem). Therefore, executives and managers must invest their personal time to lead system improvement initiatives.

The major required leadership investment is the time needed for identifying processes that represent the greatest opportunities for improvement. Time is a precious resource and must first be spent learning how to make the changes and, second, how to use quantitative and qualitative management tools to make information- driven decisions.

The most highly evolved companies educate their senior executives in the change process. Educated executives drive change through an organization. As the process cascades from level to level, it ultimately involves everyone in the company.

The first step is to assess what re-sources exist and how effective they are.

In previous columns, I’ve suggested that many of the processes companies have in place don’t really serve any useful function. For example:

Strategic business plans that are locked up where nobody can read them

Control charts that don’t control anything

Internal audits that only check to see that documented procedures are being followed

Procedures that require multiple signatures when only one person actually checks the process

Part of this assessment should include flowcharts or process maps of the overall process to help identify the biggest opportunities for improvement.

An evaluation of existing resources should include the employees who’ve been trained in previous improvement initiatives. How many of them are actually applying what they were taught? My experience is that for every 20 people trained, there are one or two actually using what they learned. In many cases these individuals are good candidates for participating in, or leading, the change process. Their use of skills makes them natural team leaders--whether official or unofficial. Although they might be at a lower level of management than others on the team, they’re always highly respected, which shows when those in higher levels of management defer to their judgment.

Identifying available resources and potential opportunities also means analyzing them to ensure they correspond to the strategic plan’s goals. We must invest our resources where they’re most likely to help achieve those goals. Setting priorities involves locating the greatest opportunities for improvement and focusing on them. The strategic plan helps set priorities by clearly defining outcomes that should be valued in terms of increasing customer satisfaction, improving profits, reducing cycle times, lowering costs, and growing and developing personnel and the organization--in short, yielding benefits to all stakeholders, including the community.

The process of managing change will vary, depending on the basic cultures that affect an organization. Today, given the global economy and media’s international scope, the Internet and consumer products, many cultural aspects are universal, but others are still national, regional and local. Typically, several cultures must be considered:

Corporate cultures. In IBM, GE, Panasonic or American Express, certain corporate rules and ways of getting things done exist, regardless of whether the facility is in New York, California, France or Japan.

Occupational cultures. Engineers, software designers, scientists, electricians, carpenters, accountants and so forth often use common vocabularies, employ the same tools, follow similar procedures and generally feel most comfortable with others who understand their skills and problems.

Ethnic and/or national cultures. A plant with a large minority or ethnically diverse workforce might have different communication problems, serve different foods in its cafeteria and establish work rules that accommodate certain ethnic customs.

Facility cultures. Many multinational conglomerates grow by acquiring smaller, established firms. Although certain corporatewide processes (e.g., financial reporting) can be imposed on the acquired entity, the already successful acquisition often has its own culture, and under most circumstances, management won’t tamper with it.

Change management is leadership-driven, and it imbues quality improvement methods into routine activities throughout an organization. It establishes a continual improvement process that produces short-term improvements while creating a solid foundation and a constancy of purpose that encourages innovation.

About the author

Stanley A. Marash, Ph.D., is chairman and CEO of The SAM Group, which includes STAT-A-MATRIX Inc. and Oriel Inc. This article is partially adapted from Marash’s new book, Fusion Management (QSU Publishing Co., 2003). Note: Fusion Management is a trademark of STAT-A-MATRIX Inc. ©2003 STAT-A-MATRIX Inc. All rights reserved. Letters to the editor regarding this column can be e-mailed to letters@qualitydigest.com.