Chapter 1: WHAT IS CHANGE MANAGEMENT?1. Title: What Is Change Management?2. Author: Jin-Hyuk Ahn, Sathappan Thiagarajan, and Subramaniam Ramasubramanian,Aleesha Hegde, Josiah Johnson, Vivek Venkatramani4. Chapter Objectives:Key concepts of this chapter are; Definition of Change Management The Importance of Collaborative and Interactive Relationship for Change Management Paradigm Shift in Business Strategic Programs to Change Management Emotional Factors and People Issues for Change Management Eight Steps of Change Process Ten Principles of Change ManagementWe will also explore two case studies relating to the need for Change Management5. Introduction:

This book is part of The Global Text Project1 which is a project which will create opencontent electronic textbooks that will be freely available from a website. The goal is to maketextbooks available to the many who cannot afford them. The main vision behind developing thisproject is not to have just simple transfer of knowledge but to engage those who used thesebooks to engage actively in improving the quality this book. The Change Management book waswritten by students studying in the Day Master of Science in Information Management (MSIM)program at the Information School, University of Washington under the guidance of Mr. KevinClyde D’Souza and consultants and executives working at BearingPoint.In this chapter, you will learn a general definition of Change Management. Also, you willfind out the reason why lots of modern enterprises try to adopt Change Management to theirbusinesses through analyzing well-known management innovation programs such as ERP, 6Sigma, etc.The purpose of this chapter is not only to give general concepts of ChangeManagement, but also introduce the eight steps of Change Process and the ten principles ofChange Management.6. Chapter Content:AA. WWhhaatt iiss CChhaannggee edu/

1. Definition of Change Management‘Any modern enterprise having a fear to change never survives today!’Society today is characterized by ongoing quick change. Given the speed at which businessmoves the market, many enterprises are out of breath and struggle to simply keep up. Thismeans that today, successful business is based on the management capacity to oversee andadapt to fast forward change. Thus, fast, reliable, active, and comprehensive countermeasuresto overcome an accumulated stereotyped idea and a traditional organizational culture in thecurrent business environment is the key for survival. Meanwhile, there has been a new tool forthe business operation called ‘Change Management.’ What is Change Management?Change Management is a systematic activity to prepare an organization for and implementongoing environmental changes in a business operation. So to speak, Change Management isabout innovative strategies and speedy activities to deal with variable and sudden changes. Inaddition, the current definition of Change Management can contain individual changemanagement models to address the people side of change.2Generally, change management can address the large part of a business operation fromplanning to controlling; i.e. organization and governance structure, product development,customer satisfaction etc. Successful Change Management not only improves the governancestructure which needs to be changed, but also raises productivity up to the maximum level bymodifying and complementing the existing organization system. Through these processes, thecustomer satisfaction can be done with a good image and benefit of a business enterprise.To achieve the most optimal result via Change Management, it is critical that eachorganization member works collaboratively and maximizes their capacity. From themanagement-level to entry-level employees, they should make one voice based on thebusiness vision and goals. However, there are always various types of people in theorganization for the matter of change; passive, active, stubborn, or apathetic. Because of thesediversities, a leader has to lead his/her members to one direction. In this way, the role of the‘change manager’ is important to control the variable inside of its organization.In addition, the role of the sponsor and active support that change needs to receive fromthe sponsor should take into the consideration for more effective Change Management. No2Original description for Change Management from Wikipedia, available at management (people)

matter how good a leader we have, change is likely not to succeed without strong sponsorshipand partnership. According to the report result from, they suggestedas follows; ‘active and visible executive sponsorship is the number one contributor to changemanagement success.’3 Through this collaborative and interactive relationship between twoor more, each organization can not only exchange the ideas for changes, but also conduct itsbusiness for mutual benefit.Also, an information technology and engineering aspect of Change Management takesinto the consideration a systematic approach which keeps tracking the system in theorganization. For example, what kind of operation system will be reliable to each individual'scomputer, how often the system update will be made by user's feedback and bug reports, andwhat patches have to be updated for the system resilience? To decrease the potential risk bychanging the system, IT engineers should construct communication, education, and feedbacksystems which can be changed or updated by the internal and external needs of the targets ofchange. These needs (data, contents, system requirement, etc.) enable the IT engineers toestimate the potential risk for the change, the detailed system implementation steps to minimizethe risk, and the budget control for system implementation.2. Paradigm Shift to Change Management‘Management Innovation program focuses on the client-centered business operation’Before going to next phase, it is worthy of taking a look at the real and simple businesscases which could make it for companies have competitive business resilience under the fastchanging business environment. Through these cases, Change Management is not onlyapplicable to the organizational structure, but also reliable to in and outside factors of theorganization such as maintaining a competitive business strategy and developing a niceproduct.3available at 2.pdf

There are several Management Innovation programs to deal with change for any moderncompany, such as 6-Sigma, TQM (Total Quality Management), TPM (Total ProductiveMaintenance), ERP (Enterprise Resource Planning), etc. Especially among these, 6-Sigma andERP are the most figurative and energetic programs on the basis of an innovative quality in anelectronic and manufacturing field most actively.6-Sigma is a management philosophy and methodology which was invented byMotorola. It focuses on producing reliable and consistent results through minimizing processvariation. As of today, various sectors of industry implement 6-Sigma to the large part of theapplications in many different ways. And the main purpose of using 6-Sigma is to discover andthen eliminate the causes of defects or errors in manufacturing lines and business processes.4More detailed 6-Sigma procedure is described below:‘Originally, it referred to the ability of manufacturing processes to produce a very highproportion of output within specification. Processes that operate with "six sigma quality"over the short term are assumed to produce long-term defect levels below 3.4 defectsper million opportunities (DPMO). Six Sigma's implicit goal is to improve all processes tothat level of quality or better.’5 Six Sigma, WikipediaFor a decade, most of the world’s leading companies (Citibank, GE, POSCO, Samsung,etc.) imported 6-Sigma program to their businesses in order to increase the product quality andachieve cost savings.As a striking example, GE produced the key concepts for its 6-Sigma implementation asfollows;6Critical to Quality: Attributes most important to the customerDefect: Failing to deliver what the customer wantsProcess Capability: What your process can deliver4Jiju Antony. "Pros and cons of Six Sigma: an academic perspective". Retrieved on 1 May, 2008Six Sigma, Wikipedia, available at Welch, Winning, Chapter 15: Six sigma, Collins Business; 1 edition (April 5, 2005)5

Variation: What the customer sees and feelsStable Operations: Ensuring consistent, predictable processes to improve what thecustomer sees and feelsDesign for 6-Sigma: Designing to meet customer needs and process capabilityGenerally, these management innovation programs have a goal of ‘CustomerSatisfaction.’ It is very important for the customer management to treat each customer as itsfamily members. Maintaining the product quality is also critical. Thus, these kinds of programsand projects, which aim to improve the system and product development of a company, can bemost reliable when they can measure the customer [clients] needs accurately.In addition, here is another Management Innovation Program which can be successfullyimplemented to the target organization by Change Management; Enterprise Resource Planning(ERP). From this case, you can recognize the importance of Change Management.For the successful ERP implementation, analyzing the reason why systemimplementation failed is more important than evaluating the system itself. Usually, the enterpriseusing ERP starts analyzing the reason of failure from the internal system. But in most of thecases, external factors tend to be more critical to make their ERP systems fail such as choice ofa consulting firm and an internal support.7The choice of a consulting firm is as important as the student needs to have a brilliantteacher for better education. Here is a critical comment about this:“There is much hype when the vendors are out to move their products, and will alwayssell and tell you about their success stories and how you will leapfrog into your vision.They never tell you of any failures of such ERP projects, and there seems to be noattention paid to lessons learnt from the famous FoxMeyer Corporation scenario, whichlead to its bankruptcy and the lengthy legal battles in the courtrooms with theirconsultants thereafter. ‘My basic principle is that you don’t make decisions because they7A Recipe and Ingredients for ERP Failure, available at cipe-andingredients-for-erp-failure-124383.html

are easy, you don’t make them because they are cheap, you don’t make them becausethey are popular but you make them because they are right.’ - Theordore Hesburgh”Ernest Madara, 2007.8In addition, the internal support is usually more complex than choosing a reliableconsulting firm. The internal support consists of several processes such as budgetary allocation,mobilization of man-power, change management, etc., but the key process is how much changemanagement capacity the enterprise has. In this sense, a new system implementation mainlydepends on its groups [members] who are willing to change their mind-sets and behaviorprocesses for the company.As mentioned before, Change Management confronts the resistance to change in anaspect of a new paradigm shift. If it does not get over the current paradigm by ongoing changes,Change Management will be just like one day dream. If so, what is the main point of ChangeManagement to get over the current paradigm at least, and decrease the trial and error at most?Ongoing change is a natural process and result with a positive cognition of eachemployee, so that they are willing to participate in change movement. Because each employeeis naturally individualistic considering their characteristics, the experts and professionalsrecommend that continuous education and open communication, and diverse support arerequired to be aware of the needs for Change Management on a regular basis.Furthermore, an interactive process, which can make each employee workcollaboratively with other teams and divisions, is also critical to accomplish the ChangeManagement implementation in the business environment.8Original work from A Recipe and Ingredients for ERP Failure, available at ipe-and-ingredients-for-erp-failure-124383.html

B. Arising Needs for Change Management‘What is the relationship between Management Innovation program and ChangeManagement? And why is Change Management so important to any modern company?’While the business environment has been changing much faster, we must stand in themiddle of change to be always competitive. So, the endless effort in making ourselves morecompetitive as well as intuitive is much more critical than ever before. To do this, what kind ofattitude is necessary to do the business?No matter what era and environment we are living in, there is one thing we should keepin mind all the times; that is ‘Mannerism.’ It often means an art style of a period of European art,but in this part, the meaning of Mannerism is exaggerated or affected adherence to a particularstyle or manner.9 If any modern employee, who needs to maintain the sense of creativeness,originality, and changing, falls into mannerism, his or her mind-set is going to be sick as well asweak slowly. So, mannerism should be kept away from any modern employee.9Definition, Merriam-Webster, available at m

In fact, creativeness and originality are indispensable for anyone. If someone resistsbeing changed, they are an old-fashioned to convention or stick to formality, which means‘retrogression (or backward).’ So, the passion for creativeness and originality is related to themeaning of having better tomorrow and challenging the future.Hardly anyone can deny the fact that active participation t