A critical analysis of the recubed change management initiative at Pragma

Volschenk, Louis (2006-12)

Thesis (MBA)--Stellenbosch University, 2006.

Thesis

ENGLISH ABSTRACT: Today's market environment stands in stark contrast to the business world of just a few decades ago when there was less global competition, the pace of business was much slower, and work was predominantly non-tacit in nature. This new environment calls for transformational change, which is the topic of this project. It is also about a small company called Pragma that had to find its way in a twnultuous business environment. Not only has Pragma had to contend with the prevailing macroeconomic forces, but the company also found itself in one of the most turbulent market environments, namely software development. In response to mounting external pressures, Pragma launched a change initiative dubbed "Recubed". This thesis evaluates this initiative by first considering a wide spectrum of change management literature and cases before applying it to Pragma. Pragma provides solutions that improve the perfonnance of physical assets at optimal lifecyc1e cost. Since the company's foundation in 1990, it has helped hundreds of organisations ranging in size from small enterprises to large multinationals to achieve improved operational efficiency. Clients have billions of rand invested in plants and equipment. In order to be globally competitive it is crucial that they should derive optimal value from these assets during their lifecycles, and Pragma helps them achieve this through a range of offerings that include software, outsourced services, consulting, and training. In late 2003, faced with poor company perfOiTIlanCe, Pragma had to ask itself in depth questions about the industry it was competing in, the business models and corporate structures it was employing, the vision it was pursuing and the culture it was living. The first change management model to be considered is the Four Box model as it provides a very basic, yet universal approach to thinking about change. The more complicated BurkeLitwin model is discussed next, as it has in recent years become a favoured framework for thinking about organisational change and perfonnance. The DICE model is a recent innovation purported to provide some hard handles on a very soft subject. The Positive Deviance approach seeks to identify individuals or organisational divisions that defy the status quo. Organisations can then learn from their practices and apply it throughout. Collins' Good to Great model is included since it provides a non-traditional view on what is really important in bringing about lasting change. To balance this, the author also include Kotter's model as the traditional change management benchmark. The MegaChange model is based on the assumption of human capability rather than limitations. The thesis considers the situations at some large international companies that successfully transfonned themselves. These companies are P&G, Telef6nica de Espaiia, D&B, Poste Italiane, Banca Intesa, EMC and Barclays Bank. The one overriding conclusion is that deep change is possible, whatever the challenges faced or the industry under consideration might be. Yet change does not bappen by itself, and in each of the cases there was a strong leader and a competent and motivated team that supported him. Each case places emphasis on a different element of the change process, but underlying patterns emerged. These include the importance of speaking to both the hearts and minds of people, ceaseless communication, facing up to the current reality, managing simultaneously for the short and long-tenn, the alignment of systems with the vision, and progress measurement. Leadership is essential to organisational change. Change, by definition, requires an alternative vision of the future. Leaders are required to craft this vision and to get people to believe in it. Employees and managers today need to know much more about leadership than their predecessors. In the modem organisation, every employee should be a leader, as he will be required to lead at least himself. Great leaders are instigators. Their challenge is to do everything in their power to get other people to join together to make the envisioned future come true. To do this they require a capacity to stir an excitement and belief within people, and the way they do this is through words, actions, images, pictures, and scores. If they can tap into the common thread that runs through humanity's hopes and dreams, they will be successful. There are many leadership styles, each with its own pros and cons. This thesis will consider charismatic leadership, leadership when you are not the boss, servant leadership, and spiritual leadership. The leadership chapter concludes with a case study on leadership - the leadership style of Colin Powell. The main positive elements of the Recubed initiative included strong individual leadership, a willingness to face the reality of the crisis, a culture of discipline, a commitment to a Hedgehog Concept, and copious communication of the vision. The element that most set the initiative apart from other literature and cases is the use of sensual stimuli to tap into the emotional side of the audience, as well as the use of creative elements such as stories, riddles and puzzles. The primary shortcomings of the initiative relate to its implementation. There were not enough senior managers who were prepared to devote the required amount of time to cascading change down into the organisation. Progress measurement tools were also not implemented. The lack of a fonnal HR function exacerbated the implementation problems.

AFRIKAANSE OPSOMMING: Vandag se mark omgewing sien daar baie anders daar uit as die besigheidswêreld van’n paar dekades gelede toe daar minder globale kompetisie was, die pas waarteen besigheid bedryf was aansienlik stadiger was, en werk tipies nie-taktiel van aard was. Hierdie nuwe omgewing verg transformele verandering, wat die onderwerp van hierdie studie is. Dit handel ook oor ‘n klein maatskappy genaarnd Pragma wat sy weg moes baan te midde van 'n ongeordende besigheidsomgewing. Pragma moes nie net rekening hou met die heersende makroekonomiese kragte nie, maar die maatskappy het homself ook bevind in een van die mees turbulente mark segmente, naamlik sagteware ontwikkeling. In reaksie op toenemende druk het Pragma 'n veranderingsinisiatief geloods wat "Recubed" genoem is. Die tesis evalueer hierdie inisiatief deur eerstens 'n wye spektrum literatuur en gevallestudies oor verandering bestuur te oorweeg voordat dit op Pragma van toepassing gemaak word. Pragma voorsien oplossings wat die prestasie van fisiese bates verbeter en die lewensiklus koste optimeer. Sedert die maatskappy se ontstaan in 1990 het dit honderde organisasies wat wissel vanaf klein ondernemings tot groot multinasionale maatskappye gehelp om hul operasionele effektiwiteit te verbeter. Kliënte besit aanlegte en toerusting ter waarde van biljoene rande. Om globaal te kan kompeteer is dit noodsaaklik dat hulle optimale waarde uit hul bates put, en Pragma help hulle hiermee deur middel van 'n reeks aanbiedinge wat sagteware, uitkontraktering, konsultasie en opleiding insluit. In laat 2003 het Pragma swak presteer, en die maatskappy was verplig om diepgaande ondersoek in te stel na die industrie waarbinne dit kompeteer, die besigheidsmodelle en strukture wat dit aanwend, die visie wat dit nastreef, en die kultuur wat dit leef. Die eerste bestuursmodel wat oorweeg word, is die Four Box-model aangesien dit 'n baie eenvoudige, maar tog universele benadering tot verandering versinnebeeld. Die meer ingewikkelde Burke-Litwin-model word ook bespreek aangesien dit die afgelope jare 'n voorkeur raamwerk vir denke oor organisasie verandering en prestasie geword het. Die DICE model is 'n onlangse innovasie wat streef daarna om vaste greep te kry op 'n klaarblyklik moeilike onderwerp. Die Positiewe Afwyking-benadering streef daarna om individue te identifiseer wat beter as die status quo presteer. Organisasies kan van hul praktyke leer en dit regdeur die organisasie aanwend. Collins se Good to Great-model word ingesluit as 'n nie-tradisionele uitkyk op wat werklik belangrik is om volhoubare verandering teweeg te bring. Ter wille van balans word Kotter se model ook beskou as 'n tradisionele riglyn vir bestuursverandering. Die MegaChange model is gegrond op die veronderstelling van menslike bekwaamheid eerder as beperkinge. Die tesis bestudeer ook 'n aantal groot internasionale maatskappye wat daarin geslaag het om suksesvol te transformeer. Hierdie maatskappye is P&G, Telefonica de Espana, D&B, Poste ltaliane, Banca Intesa, EMC en Barclays Bank. Die sentrale gevolgtrekking wat uit hierdie gevallestudies gemaak kan word, is dat verandering moontlik is, ongeag die uitdagings of industrie ter sprake. Tog gebeur verandering nie vanself nie, en in elk van die bespreekte gevalle was daar 'n sterk Ieier wat ondersteun is deur 'n bevoegde en gemotiveerde span. Elke geval benadruk 'n spesifieke element van die veranderingsproses, maar onderliggende patrone tree na vore. Dit sluit in die belangrikheid daarvan om tot mense deur te dring deur sowel hul hart as hulle verstand aan te spreek, onophoudelike kommunikasie, die trotsering van die huidige realiteit, om gelyktydig vir beide die kort- en langtermyn te bestuur, om stelsels in lyn te bring met die visie, en die meting van vordering. Leierskap staan sentraal tot verandering wat per definisie 'n alternatiewe visie van die toekoms vereis. Leiers word benodig om hierdie visie te vorm en om mense te oorreed om daarin te glo. Werknemers en bestuurders moet vandag meer weet van leierskap as hul voorgangers. Binne die moderne organisasie moet alle werknemers leiers wees, aangesien hulle ten minste hulleself sal moet lei. Goeie leiers is aanstigters. Hul uitdaging is om alles binne hul vermoë te doen om ander te kry om hulle visie 'n realiteit te maak. Dit verg die vermoë om mense te inspireer en aan te moedig deur middel van woorde, dade, beelde, prente en tellings. Hulle is suksesvol wanneer hulle mense se universele hoop en drome aanspreek. Daar is verskeie leierskap style, elk met sy eie voor- en nadele. Die tesis sal 'n aantal andersoek - charismatiese Ieierskap, leierskap wanneer jy nie die baas is nie, dienende leierskap, and geestelike leierskap. Die Ieierskap hoofstuk sluit af met 'n gevallestudie - die leierskap styl van Colin Powell. Die belangrikste positiewe elemente van die Recubed-inisiatief sluit in individuele leierskap, 'n bereidheid om die realiteit van die krisis te trotseer, 'n kultuur van dissipline, 'n verbintenis tot 'n Hedgehog Concept, en oorvloedige kommunikasie van die visie. Die element wat dit die meeste onderskei van ander modelle en gevallestudies is die gebruik van sensuele stimulus om die emosies van die luisteraars aan te spreek, asook die gebruik van kreatiewe elemente soos stories en raaisels. Die primêre tekortkomings het betrekking op die implementering van die inisiatief. Nie genoeg senior bestuurders was bereid om die tyd te bestee wat dit sou verg om die verandering deur die maatskappy te laat filter nie. Die nodige instrumente om vordering te meet, het ook ontbreek. Die gebrek aan 'n formele personeelbestuursfunksie het die probleem vererger.

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