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INSTRUCTIONS 650 word paper • Introduction • Provide a critique of several tactics that can be used to engage employees in the organic change process. • Describe how benchmarks are best used in the change process • Conclusion References: Ajelabi, I., & Tang, Y. (2010). The adoption of benchmarking principles for project management performance improvement. International Journal of Managing Public Sector Information and Communication Techniques, 1(2), 1-8. Carter, M. Z., Armenakis, A. A., Feild, H. S., & Mossholder, K. W. (2013). Transformational leadership, relationship quality, and employee performance during continuous incremental organizational change. Journal Of Organizational Behavior, 34(7), 942-958. doi:10.1002/job.1824 Freytag, P. V., & Hollensen, S. (2001). The process of benchmarking, benchlearning and benchaction. The TQM magazine, 13(1), 25-34. Mento, A. J., Jones, R. M., & Dirndorfer, W. (2002). A change management process: Grounded in both theory and practice. Journal Of Change Management, 3(1), 45. A change management process: Grounded in both theory and practice Received (in revised form): 30th May, 2002 Anthony J. Mento is a professor of Organizational Behavior at the Sellinger School at Loyola College. Dr Mento has taught in executive programmes at such institutions as Aegon, Deutsche Bank and the US Government as well as at Loyola. Raymond M. Jones is a professor of Organizational Strategy at the same university. Prior to academic life, he was an executive at Occidental Petroleum Corporation. Dr Jones helped design and taught in the executive programmes of this paper’s anonymous corporation. Walter Dirndorfer is a graduate of Loyola’s executive MBA programme. He is a project manager at a defence contractor who requested anonymity as a result of increased security measures after the events of 11th September. KEYWORDS: change management, lessons learned, mind mapping, project management, storytelling, metaphors ABSTRACT There exists in the literature a number of change models to guide and instruct the implementation of major change in organisations. Three of the most well known are Kotter’s strategic eight-step model for transforming organisations, Jick’s tactical ten-step model for implementing change, and General Electric (GE)’s seven-step change acceleration process model. This paper introduces a framework that draws from these three theoretical models but is also grounded in the reality of the change process at a Fortune 500 defence industry firm. The purpose of the paper is to provide guidance to the practitioner leading an organisational change process. This guidance is grounded in both theory and practice. The guidance is further enriched by the demonstrated use of such methodologies as mind mapping, lessons learned, storytelling and metaphors. Anthony J. Mento Professor of Organizational Behavior, Sellinger School, Loyola College, 4501 North Charles Street, Baltimore, MD 21210, USA Tel: ⫹1 410 617 1507; Fax: ⫹1 410 617 2005; e-mail: amento@loyola.edu MODELS OF THE CHANGE PROCESS Three models have stood as exemplars in the change management literature. The first model is Kotter’s (1995) eight-step model for transforming organisations. Kotter’s model was developed after a study of over 100 organisations varying in size and industry type. After learning that the majority of major change efforts failed, Kotter couched his model as a way of 䉷 Henry Stewart Publications 1469-7017 (2002) Vol. 3, 1, 45–59 avoiding major errors in the change process. It is best viewed as a vision for the change process. It calls attention to the key phases in the change process. Two key lessons learned from the model are that the change process goes through a series of phases, each lasting a considerable amount of time, and that critical mistakes in any of the phases can have a devastating impact on the momentum Journal of Change Management 45 Mento et al. of the change process. Kotter’s model is aimed at the strategic level of the change management process. Jick (1991a) developed a tactical level model to guide the implementation of major organisational change. His ten-step approach serves as a blueprint for organisations embarking on the change process as well as a way to evaluate a change effort already in progress. He notes that implementing change is an ongoing process of discovery, with thoughtful questions continually being asked throughout the change journey. Jick states that implementation is a blend of both art and science. How a manager implements change is as important as what the change is. How well one does in implementing a particular change depends ultimately on the nature of the change, on how sensitive the implementers are to the voices in the organisation, and on the recognition that change is a continuous, not a discrete process. The seven-step change acceleration process used at GE (Garvin, 2000: 131) follows closely Lewin’s (1947) notion of unfreezing, movement and refreezing as the essential components of the change process. In essence, the model focuses on the leader’s role in creating urgency for the change, crafting and communicating the vision, leading the change, measuring the progress of change along several dimensions, and institutionalising the change. Institutionalising the change, or the refreezing, involves changes in the organisational design factors, ie creating a fit of systems and structures to enable change. Kerr (quoted in Garvin, 2000), one of the developers of the model, refers to the series of seven steps as a pilot’s checklist. According to Garvin (2000) checklists are used by even the most experienced pilots; yet they offer no new insights. Instead, they make existing knowledge more visible and 46 Journal of Change Management Vol. 3, 1, 45– 59 accessible, ensuring that all essential steps are followed. Discipline, not discovery is the goal of the checklist. The three models of the change process are configured in Figure 1 as a Mind Map. Mind mapping is a creativity and productivity enhancing technique that can improve the learning efficiency and capability of individuals and organisations (see eg Buzan, 1989; Mento et al., 1999). The Mind Map visually shows the intellectual roots upon which we drew. Three plus years of practical experiences, however, further shaped these theoretical constructs with change management at an anonymous defence contractor (ADC). Because of increased security measures after the events of 11th September, the defence firm requested anonymity after the write-up of the projects had commenced. Thus drawing lessons learned from both the theoretical literature and a practitioner’s experience, this paper provides guidance to the leader of an organisational change process. This guidance is grounded in both theory and practice. Furthermore, it demonstrates and is enriched by the use of such methodologies as mind mapping, lessons learned, storytelling and metaphors. COMPANY BACKGROUND In the 1990s, the defence industry was greatly affected by a shrinking defence budget after the collapse of the former Soviet Union. The reduced defence expenditures caused a consolidation of firms within the industry. The division under study was acquired and became a core business area for the acquiring firm in the mid-1990s. Additional acquisitions created a de facto market of internal engineering organisations, all vying for the same corporate resources to fund both product improvements and new product development. A critical 䉷 Henry Stewart Publications 1469-7017 (2002) A change management process Figure 1 Three models of the change process 䉷 Henry Stewart Publications 1469-7017 (2002) Vol. 3, 1, 45– 59 Journal of Change Management 47 Mento et al. Figure 2 Visual metaphors 48 Journal of Change Management Vol. 3, 1, 45– 59 䉷 Henry Stewart Publications 1469-7017 (2002) A change management process imperative for the divisions internally, and the company externally, was to learn how to adapt more quickly to this changing environment. The munificent environment of the 1980s was being replaced by a more parsimonious context in the 1990s. Given this environmental shift, it became imperative for ‘our’ division to have an effective change management programme. Two of the authors became involved with this project, one very directly and one in a consultative capacity. The paper will explicate 12 steps that are recommended when one wants to implement change. These 12 steps are based on lessons learned from the change models discussed above filtered through the actual experience that occurred throughout the late 1990s. These 12 steps are shown holistically as visual metaphors (Morgan, 1998; Davenport, 1999) in Figure 2. They are detailed in what follows. A FRAMEWORK FOR CHANGE Step 1: The idea and its context It is important as the starting point of a change effort to highlight the idea for what needs to be changed or what new product should be introduced or what particular innovation might bring a significant lead over competitors. A source for ideas for improving the organisation can arise through creative tension (Senge, 1990). Senge notes that creative tension evolves from clearly seeing where we want to be, our vision, and telling the truth about where we are now, our current reality. The gap between the two generates a natural tension. In an interview (Tichy and Charan, 1989), Jack Welch similarly notes a key characteristic of any leader is to first face reality. There is a key distinction between 䉷 Henry Stewart Publications 1469-7017 (2002) Vol. 3, 1, 45– 59 leading a change effort around ideas developed through creative tension as opposed to implementing fixes to current organisational problems. When one focuses on problem solving, the energy to change comes from the desire to escape an unpleasant status quo. With creative tension, the energy for the change comes from the vision, of what one wants to create, juxtaposed with the current reality. With problem solving, the energy for the change diminishes as the problems become less pressing and the situation is improved. Senge notes that the energy for change that drives the problem-solving process is extrinsic because it represents a way to escape from the status quo. Change driven by creative tension tends to be intrinsic. The extrinsic/intrinsic orientation can have a significant impact on the consequences of the change effort. In the context of a learning organisation, extrinsic motivation for change produces adaptive learning, whereas change driven by creative tension yields generative or new learning. Recognising change (the need for, the idea of, and the context thereof) is just the first step. Step 2: Define the change initiative Defining the change initiative tracks closely with Jick’s step 1 of analysing the organisation and its need for change. It is useful at this point to define the roles of the key players in all change efforts: Strategists, implementers and recipients (Jick, 1991a). Change strategists are responsible for the initial work: Identifying the need for change, creating a vision of the desired outcome, deciding what change is feasible, and choosing who should sponsor and defend it. The vision creation assists in the formation of creative tension that can yield generative learning. Change implementers are the ones who make it happen. Their task is Journal of Change Management 49 Mento et al. to help shape, enable, orchestrate and facilitate successful progress. Change recipients represent the largest group of people that must adapt to the change. In the case of a new product development, the end user is also a recipient who must be convinced that the change will be beneficial to them. If the initiative lacks credibility with any of the targeted audiences, the initiative is dead before it even begins. The actual case was a late-1990s project that involved the development of a tactical radio system for the military. The idea was that the revolution in the cellular market would allow for the development of one radio whose software could be reprogrammed to mimic any of the military’s current inventories of radios. The change management team was successful in defining the change and getting the target audience behind them. Step 3: Evaluate the climate for change This step is similar to Jick’s step 1 (analyse the organisation and its need for change) but with further elaboration. Both change strategists and implementers must implicitly understand how the organisation functions in its environment, how it operates, and what its strengths and weaknesses are. Such understanding will assist in developing alternative scenarios that could be created by the proposed changes. This will facilitate crafting an effective implementation plan. As part of this analysis, change masters need also study the company’s history with previous change. Although failures of the organisation in implementing previous change efforts do not forever doom an organisation to future failure, Dalziel and Schoonover (1988) suggest that these patterns of resistance are likely 50 Journal of Change Management Vol. 3, 1, 45– 59 to be repeated. In such situations, a gradual non-threatening, and more participative process is advocated to break the failure syndrome. The authors’ tactical radio project experience reinforced the need for assessing the company’s readiness to support a change initiative. Two indices were utilised to evaluate the readiness of a company to change. One measure evaluates the current organisational stress of the company (see Beer’s matrix for assessing the impact of a change effort; Beer, 1980: 58). No product development or improvement ever occurs without someone else’s effort being hindered. There is the stress of everyone competing for the same common resources — money, people and sponsorship. A non-trivial hurdle for any new initiative is not the competitor from outside your company, but rather the one you face down the hall. The second measure is historical readiness to perform new projects. Scepticism is very natural when the change is a Big Hairy Audacious Goal (the BHAG components of a vision of effective companies, as defined by Collins and Porras, 1996). Patterns of the past are often hard to break. It is helpful to champion a concerted effort of using lessons learned (Daudelin, 1996). Learning from past development efforts will avoid making errors in the planned change. Executives and managers will continue with familiar patterns of operations unless they are taught a more retrospective approach. The lessons learned methodology is further discussed in step 12. Compatibility of change goals with the company’s Long-Range Strategic Plan (LRSP) is a significant plus. To gain support for the previously mentioned radio project, it was important to tie into ADC’s LRSP goal of expanding into commercial airborne radars. The division’s efforts were sold internally as 䉷 Henry Stewart Publications 1469-7017 (2002) A change management process being part of an integrated avionics sales pitch. Most aircraft vendors want only one company to install the avionics, of which the radios and radar are the major components. This programme was sold on the idea that either the division could continue to buy the radios from the people against whom it was competing or could build its own in-house radio. This radar alliance created a silent partner rather than a vocal opponent. Three words to follow are to prioritise, focus and align your efforts such that you build an internal alliance(s) to support your efforts. Step 4: Develop a change plan This step tracks closely with Jick’s step 7 — craft an implementation plan. At a minimum, the plan should include specific goals and provide detailed and clear responsibilities for strategists, implementers and recipients. A plan that does not solicit input with respect to both the content of the change as well as the process of the change will surely prove to be non-optimal. A proper balance between specificity and flexibility is key; too much specificity can lead to a plan that does not mesh well with evolving organisational needs. When developing a plan for implementation, one must tailor the approach to the frame of reference (FOR) of the individual participants. A change will require the efforts of people at many levels in the company with many diverse roles. Each person will have their own FOR that will affect how resistant or open to the effort they will be. Some of the basic framing methods to consider are the hammer, the carrot, the challenge and the prestige (often useful with researchers). In all instances, creating the implementation plan is very much like planting seeds in a garden. Groundwork needs to be done 䉷 Henry Stewart Publications 1469-7017 (2002) Vol. 3, 1, 45– 59 to discover what seeds will be most fruitful or whether the ground needs to be broken apart forcefully (the hammer) before anything will take root and grow. Many times, the approach also depends on the needed speed of implementation. Short-term pressures usually involve the hammer, but this does not win people for a long-term project. Listening to and actively seeking the involvement of the recipients of the change will prove fruitful in performing many of the later steps in the process. Getting people to see a future return on their personal investments today (carrot) is a successful method in long-term projects. FOR involves more than just deciding ‘Pay me now or pay me later’. Rather, the proper balance must be reached between the use of power to ensure order compliance and the use of time to build commitment. Hill (1994) offers insights on these issues when discussing power dynamics in organisations. She notes that the existence of organisational politics is a way of life. Political conflict can be viewed as a function of three variables — diversity, interdependence and competition for scarce resources. According to Hill, both precipitating and prevention factors exist in all organisations with respect to political conflict. The use of both positional and personal power is needed to successfully manage the interdependence between various stakeholders in the modern network organisations. Being cognisant of the change time frame and one’s power sources segues to the most critical decision in implementing change with the tactical radio project, the sponsorship step. Step 5: Find and cultivate a sponsor This stage corresponds to both Kotter’s (1995) notion of developing a powerful guiding coalition and Jick’s (1991a) step Journal of Change Management 51 Mento et al. 7 — line up political sponsorship. Kotter is referring to the support of powerful line executives who can help create a critical mass of support for the change. Jick tends to offer more specific guidance. He urges the recruitment of influential informal leaders and the development of a commitment chart. The commitment chart should help one to: Identify target individuals or groups whose commitment to the change is needed; define the critical mass needed to ensure the effectiveness of the change; develop a plan to gain the commitment of the critical mass; and create a monitoring system to assess the progress. In the radio project, a single individual played the role of the sponsor. The sponsor is to be viewed as the person that will legitimise one’s cause. The strategy used to win and keep a sponsor must be defined in the FOR. It must emphasise the needs, expected levels of pain for the organisation, clear goals and a time frame. Points for possible exit along the way must be indicated. Sponsorship is easier to win and maintain when the person believes their decision is not irreversible. If the sponsor does not show a real commitment, however, the resistance from the recipients will be significant, and one’s ability to acquire the required resources will be more complex. The sponsor needs to be informed frequently and regularly of progress in order to adapt their talk or their walk to push the effort. He/she must possess a sufficient amount of organisation power and influence to obtain the resources required for success. The sponsor must express, model and reinforce the initiative for the maximum effect. He/she should be pushing to generate strategic convergence both vertically down and horizontally across the organisation. Recruiting the individual at the lowest level in the 52 Journal of Change Management Vol. 3, 1, 45– 59 organisation to whom all the change recipients report is often a good choice. Implementation of the change occurs from the top down, but the content for the change must be developed from the bottom. A sponsor at too high a level may introduce unnecessary risk due to a lack of direct involvement. A second ADC project involved a missile development programme. The authors’ goal was for the sponsor to support the replacement of the current seeker portion of the missile with their own department’s version. A sister department within their division was responsible for integrating the missile and was presently purchasing the seeker section from the major competitor. The VP responsible for the entire division was recruited as a sponsor. He had influence over the current Program Manager (PM). More importantly, the VP changed how success was to be measured for the PM. The measurement for success was changed from the number of units produced to the profit per unit produced for the firm as a whole. Without the actions of this sponsor, the PM would have, most likely, resisted change because there would have been little reward for the increased risk for making such a change. The sponsor expressed, modelled and reinforced the initiative. It was successful. In contrast, difficulty with sponsorship occurred on the AMC’s radio project. Sponsorship was never secured high enough in the organisation to obtain an alignment of changing goals. While initially viewed favourably, the new product development activities were frozen when a potential large-scale merger was announced. It was never possible to change the FOR of the negative risk/reward ratio engendered by the proposed change at the time of the proposed merger. The sponsor was not sufficiently powerful to prevent the freeze on activities. 䉷 Henry Stewart Publications 1469-7017 (2002) A change management process Step 6: Prepare your target audience, the recipients of change This stage of the change process is best understood from the perspective of the recipients of the change. This issue is not clearly dealt with in any of the other three models of the change process. Jick (1991b) argues that change is not possible unless, at the very least, the change recipients accept the change. Change is not possible unless people are willing to change themselves. Jick makes the cogent points that change can be ‘managed’ internally by those who decide when it is needed, and how it ‘should’ be implemented. Actual implementation, however, occurs only when employees accept the concept of change, generally, and of the specific change, internally. It has been observed that it does not matter whether the change is perceived as being a positive or a negative. Resistance is generated because the status quo will be affected. People are comfortable with knowns. The introduction of a change, even for the better, is an unknown. It adds stress to people. Specific strategies for dealing with resistance as well as the advantages and disadvantages of each approach can be found in Kotter and Schlesinger (1979). They advocate the use of focus groups, surveys and suggestions to bring the issues of resistance to the surface. Resistance to change efforts is directly related to how the situation is framed (Gabarro and Kotter, 1993). Speaking with the audience most affected by the change gives immediate feedback and allows the target to express their FOR. Resistance is a natural emotion that must be dealt with and not avoided. If one can look at the positive aspects of resistance to change, by locating its source and motives, it can open further possibilities for realising change. 䉷 Henry Stewart Publications 1469-7017 (2002) Vol. 3, 1, 45– 59 Hultman (1979) states: ‘Without resistance to change, we are skeptical of real change occurring. Without real questioning, skepticism, and even outright resistance, it is unlikely that the organisation will successfully move on to the productive stage of learning how to make the new structure effective and useful.’ Resistance to change should have previously been considered at Step 3, ‘Evaluating the climate’. Step 7: Create the cultural fit — Making the change last During the evolution of any change effort, the change must became rooted to the existing culture. In essence, organisation members need to accept and understand the fact that change is in reality ‘how things are done around here’. In Kotter’s step 8, failure to anchor the change initiative with the corporate culture is a grievous error. Step 5 in the GE change model deals with getting change started with concrete actions and developing long-term plans to ensure that change persists. ‘Changing systems and structures’ (step 7 in the GE change model) is concerned with altering staffing, training, appraisal, communication and reward systems, as well as roles and reporting relationships, to ensure that they complement and reinforce change. A strategic initiative that is congruent with the established organisational culture has a high probability of success. When a disconnect exists between the corporate culture and the change, culture can diminish the potency of the change initiative. If a conflict is expected, it should be discovered during the climate evaluation and the development of change plans steps. An adaptation plan can be created through a consistent vision, BHAGs and development of clear linkage between Journal of Change Management 53 Mento et al. strategic direction, core competencies and corporate culture. When this occurs and when the cultural changes are viewed as an investment over time rather than a quick fix or a change de jour, the likelihood of success is significantly enhanced. Step 8: Develop and choose a change leader team In his ten-step tactical model for implementing change, Jick (1991a) makes the observation that, in large-scale change, the leader plays a critical role in creating the corporate vision. The leader both inspires the employees to embrace the vision, and crafts an organisational structure that consistently rewards people who focus their efforts on pursuing the vision. In step 5 of the model, which deals with supporting a strong leader role, Jick takes the view similar to the one learned in the change process at AMC. A change leader team can better provide the necessary leadership role than can a single individual. A team can be carefully assembled to maximise the appropriate skill sets. Billington’s (1997) review of the team literature found that there are three essentials of an effective team: Commitment, competence and a common purpose. Commitment refers to the achievement of specific performance goals. Core competencies of team members are a critical determinant of how effective a team can be. The best teams invest the time and the effort to explore, shape and agree on their purpose that is to be internalised both individually and collectively. The team must be self-energising and self-motivating in believing they are the agents of change. Diversity of skills and opinions makes a team strong as long as all share the vision. (Katzenbach and Smith, 1993). In our radio project, there were seven 54 Journal of Change Management Vol. 3, 1, 45– 59 people who did the necessary design, marketing and fieldwork. Team members had to rely and trust that their counterparts were equally committed to the change goal. They did have highly visible sponsorship. The sponsor would drop by the development lab and check the progress. He would bring sandwiches for dinner as the team worked late at night. He was available continually to listen to their concerns. He knew they all were motivated by the challenge (no carrot or hammer) of creating a new business area for the company. In all change efforts, timing is critical. Unfortunately, new business creation ceased to be a high priority when the LRSP shifted, owing to a proposed large-scale merger. When anti-trust issues subsequently killed the merger, new business creation again became a part of the LRSP. By that time the team was no longer together. Nor were they anxious to reassemble. They were no longer motivated by the thrill of the challenge. Step 9: Create small wins for motivation Creating short-term wins as a way to motivate employees is critical during a long change effort (Kotter, 1995). One must plan for and create visible performance improvements. Employees involved in those improvements should be recognised. Without specific important and visible short-term wins, people may give up and default to change resister status. A change team may be working on a BHAG that requires a multi-year effort. It is very difficult to keep the change leader team self-energised if they do not see any tangible benefits corresponding to their level of effort. The longer and more drastic the change, the more necessary it is for small victories to be celebrated. The further the goal is in the future, the 䉷 Henry Stewart Publications 1469-7017 (2002) A change management process more important are the achievable goals that must be built as part of the roadmap to success. It is human nature to work on what we are measured against. The constant battle for resources and the continual need to update the sponsor also drive the need for small victories. Often, the sponsor is in fear of over-commitment and must feel that positive progress is occurring. The small victories can be as simple as meeting a design milestone and having a special lunch or happy-hour event. The display of appreciation by the sponsor goes far in spawning more teamwork and opening the lines of communication. It is often through the informal small win celebrations that new ideas will surface. The authors’ project experience has shown this to be true. New opportunities originated from ideas that were first surfaced at these informal gatherings. In essence, the small win events are transformed into brainstorming events. The more informal setting frequently results in the better mixing and generation of ideas. At ADC, the focus was on communication with the sponsor and the strategists and implementers who held needed resources. Effective communication with the sponsor had been a recurring theme. The tides in a company will constantly be changing and so will the needs of the programme. As an effort becomes larger, often the resource power of the sponsor will be exceeded, and the sponsor either needs to draw additional support or to obtain sponsorship themselves. Communicating the message in the same way will not have the desired affect at the different levels of the organisation. It is important to tailor each communication to the FOR of the audience. The radio project sponsor failed to communicate strategically in his efforts to obtain higher-up sponsorship at the time of the proposed merger. The sponsor failed to recognise that the proposed merger had changed his superiors’ FORs. His communication was no longer effective, as it was not couched in terms of how it would impact the merger. Step 10: Constantly and strategically communicate the change The concept of constantly communicating the change throughout the organisation is adapted from Jick’s step 9 — ‘Communicate, involve people, and be honest’. From the very beginning of the change effort, effective communication is critical. The process by which the change is introduced can set the tone among recipients with respect to acceptance or rejection. The goals of the communication effort should be: To increase the organisation’s understanding and commitment to change to the fullest extent possible; to reduce confusion and resistance, and to prepare employees for both the positive and negative effects of the change. Step 11: Measure progress of the change effort This step is in concurrence with step 6 of GE’s Change Acceleration Process, which is Monitoring Progress. This involves creating and installing metrics to assess programme success and to chart progress, using milestones and benchmarks. The notion of assessing the effects of change goes hand in hand with developing a small wins strategy (step 7) in order to motivate sustained effort for the change effort. Schaffer and Thompson (1992) caution companies to avoid the ‘rain dance’ of change improvement programme measurement that entails a concentration on activities, as opposed to tangible, measurable results. They recommend focusing on 䉷 Henry Stewart Publications 1469-7017 (2002) Vol. 3, 1, 45– 59 Journal of Change Management 55 Mento et al. results-driven programmes that bypass lengthy preparations, and instead aim for quick measurable gains within a few months. The key is to measure often only those variables believed to be logically related to important milestones in the change effort. In psychometrics, the idea is to avoid criterion deficiency, ie assessing the wrong or a deficient measure of the true concept one wants to assess. Change progress needs to be measured at all stages of the programme, not merely at the end. In a recent Business Week article (Burrows, 2001), Hewlett Packard’s CEO Carly Fiorina comments that business planning is similar to sailing in that ‘you are going to need to tack at times’. Tacking is highly dependent upon knowing in what direction the winds are blowing. In creation of the cultural fit and in creation of the proper motivation when building the team, it was recognised that the proper measurements and reinforcements are critical to keeping the programme on track. Measurement is also concerned with all members involved in the change effort being crystal clear with respect to roles, goals and expectations. It has been observed that organisations too often forget to have the proper tools or information available to measure the amount of progress achieved. Using an example from the HP article, implementers were successful in changing the business into four organisations instead of 83 business units. This, however, required a new cost accounting system that lagged the changes. The company was claiming a certain level of financial benefit but was not measuring the proper characteristics to support this result. As the measurement system came on-line, managers were shocked to discover that the system was suffering a lack of financial accountability and transition costs were somewhat out of control. In a 56 Journal of Change Management Vol. 3, 1, 45– 59 similar manner, many people measure success on winning a contract. If the contract win is done at a price too low or under the assumption of too great a technological risk, however, the contract in actual financial terms is a loss with subsequent cost over runs and late deliveries. Step 12: Integrate lessons learned No other model of the change process directly deals with the process of generating a set of lessons learned through reflection. At the root of lessons learned is reflection. Reflection is a personal cognitive activity that requires stepping back from an experience to think carefully and persistently about its meaning through the creation of inferences (Baird et al., 1997; Kleiner and Roth, 1997; Seibert, 1999). Reflection, using a set of techniques first suggested by Daudelin (1996), brings to light insights and learning themes (concepts) by directing and guiding change strategists and implementers to think actively about the learning that is going on during the change process itself. Reflection then connects learning directly to job performance and yields more relevant personal learning. Reflection is an extremely powerful way to learn from experience. It is a major component of individual learning, and individual learning is the building block for organisational learning. At the heart of the reflection process is the use of carefully thought out trigger questions. Research has shown that people are generally poor reflectors unless provided with questions about their experience as stimuli (Seibert and Daudelin, 1999). Very useful is a set of questions developed by the US Army in their After Action Review Process (AAR), as documented by Garvin (2000). 䉷 Henry Stewart Publications 1469-7017 (2002) A change management process These questions are: (1) What did we set out to do? (2) What actually happened? (3) Why did it happen? and (4) What are we going to do next time? ‘Those who forget the past are condemned to repeat it’ is the quote that often comes to mind with respect to change efforts. At all times, not just at the end of a project, effort needs to be expended on a retrospective look at what works and what did not. These efforts allow for the continuous refinement of the evolving process. Many of the lessons learned should concentrate on the problems and solutions of dealing with both the formal and the informal organisation. Organisation design factors such as policies, procedures, compensation and organisational structure are just the tip of an iceberg when evaluating your organisation. Documenting the cultural norms, unwritten rules of work, the political system and informal leaders will serve you well in your use of lessons learned. The best companies are learning organisations that will not forget, but rather learn from the past. CONCLUSION The use of metaphorical storytelling (Botkin, 1999; Jensen, 2000) based on the theme of a ship embarking on a perilous journey facilitates the summation of the change stages encountered at the authors’ firm. While preparing to embark on the challenging voyage, one needs to do certain things to improve the chances of success. It has to be clear in one’s mind why one is taking this trip (The idea and its context). Next, one needs to have a fairly good understanding of exactly what one intends to accomplish by taking this voyage (Define the change initiative). It is always necessary to have some idea of what the weather will be 䉷 Henry Stewart Publications 1469-7017 (2002) Vol. 3, 1, 45– 59 like when one intends to begin the journey (Evaluate the climate for change). Prior to departure, one must have an accurate set of nautical charts and sailing plans that will help to overcome obstacles and barriers in the person of pirates and rocks (Develop a change plan). Similar to Columbus, before embarking on the long voyage, one needs to line up a powerful and benevolent sponsor (Find and cultivate a sponsor). A sound step to take next would be to work with the selected crew in clarifying roles, goals and expectations that they need to be aware of during the duration of the voyage (Prepare the target audience, the recipients of the change). A further step is to make sure that the ship is capable of accomplishing the task and that the route chosen, given the expected storms and bad weather, is not beyond the structural integrity of the ship itself (Create the cultural fit — making the change last). Along these lines, one of the most important preparatory steps is to make sure the carefully chosen crew are committed, competent and share the same goal of a safe and exciting journey. People should work together like a well-oiled piece of machinery (Develop and choose a change leader team). There must be specific milestones or goals to reach during the journey to provide feedback with respect to how well and how fast one is sailing toward the objective. Also one should stop in various ports of call to celebrate one’s good fortune in arriving safely and to let off steam after being at sea and alone for great lengths of time (Create small wins for motivation). It is important to let one’s sponsor know on a regular basis how well one is doing, and to share with the crew why one is taking the actions one is taking, as well as taking the time to listen and learn from the suggestions of the crew (Constantly and strategically communicate the change). As the voyage Journal of Change Management 57 Mento et al. continues over months and years, it is necessary to consider the progress made, whether one is indeed going in the right direction or whether one has been blown off course. It is necessary to ensure also that the morale of the crew is positive and that the route and plan are flexible enough to accommodate changes in sponsors, and in the weather (Measure progress of the change effort). Finally, at the end of the journey, an after action review should be conducted so that knowledge gained through reflection is captured and disseminated among other ship captains and crews throughout the organisation who might be embarking on similar perilous journeys through the unforgiving environment (Integrate lessons learned). All 12 steps are not to be regarded only sequentially, but also as an integrated, iterative process to enable change. Business and engineering are about growing, changing, adjusting and improving the accepted norms and procedures today to make the future brighter. Engineering is often referred to as turning dreams into reality. But one fails to realise that miracles often do not occur overnight and that there is actually a progression that must be painfully followed. The thought for the 21st century change leaders is that they must be astute decision makers and marketers, trusted innovators, agents of change, preachers of difficulties, master integrators, enterprise enablers, technology stewards and knowledge handlers. They will need first-rate managerial, technical, interpersonal and scientific skills. Complex systems and issues will need to be embraced and they must reach the decisions about the amounts of time, money, people, knowledge and technology they are willing to commit to meet what should be a common end goal that was well communicated and accepted all around 58 Journal of Change Management Vol. 3, 1, 45– 59 the company. Hopefully, the authors’ change model will provide some much-needed guidance along these lines and will help to ensure that their voyage will be successful. REFERENCES Baird, L., Henderson, J. C. and Watts, S. (1997) ‘Learning from Action: An Analysis of the Center for Army Lessons Learned’, Human Resources Management, 36(4), 385–395. Beer, M. (1980) Organization Change and Development: A Systems View, Goodyear, Santa Monica. Billington, B. (1997) ‘The Three Essentials of an Effective Team’, Harvard Management Update, Reprint No. U9701A, Harvard Business School Press, Boston. Botkin, J. W. (1999) Smart Business: How Knowledge Communities can Revolutionize your Business, Free Press, New York. Burrows, P. (2001) ‘The Radical: Carly Fiorina’s Bold Management Experiment at HP’, Business Week, cover story, 19th February. Buzan, T. (1989) Use Both Sides of Your Brain, 3rd edn, Plenum, New York. Collins, J. C. and Porras, J. I. (1996) ‘Building your Company’s Vision’, Harvard Business Review, 74(5), 65-77 (Reprint No. 96501). Dalziel, M. M. and Schnoover, S. C. (1988) Changing Ways: A Practical Tool for Implementing Change Within Organizations, American Management Association, New York. Daudelin, M. W. (1996) ‘Learning from Experience Through Reflection’, Organizational Dynamics, 24(3), 36–48. Davenport, T. (1999) Human Capital, Josey-Bass, San Francisco. Gabarro, J. J. and Kotter, J. P. (1993) ‘HBR Classic — Managing your Boss’, Harvard Business Review, 72(3), 150–157. Garvin, D. (2000) Learning in Action: A Guide to Putting the Learning Organization to Work, Harvard Business School Press, Boston. Hill, L. (1994) Power Dynamics in Organizations, Note 9-494-083, Harvard Business School Press, Boston. 䉷 Henry Stewart Publications 1469-7017 (2002) A change management process Hultman, K. (1979) The Path of Least Resistance, Learning Concepts, Austin, TX. Jensen, W. (2000) Simplicity, Perseus, Cambridge, Mass. Jick, T. (1991a) Implementing Change, Note 9-191-114, Harvard Business School Press, Boston. Jick, T. (1991b) Note on the Recipients of Change, Note 9-491-039, Harvard Business School Press, Boston. Katzenbach, J. R. and Smith, D. K. (1993) The Wisdom of Teams, Harvard Business School Press, Boston. Kerr, S. (2000) Quoted in Garvin, D. Learning in Action: A Guide to Putting the Learning Organization to Work, Harvard Business School Press, Boston, 131. Kleiner, A. and Roth, G. (1997) ‘How to Make Experience your Company’s Best Teacher’, Harvard Business Review, 75(5) (Reprint No. 97506). Kotter, J. P. (1995) ‘Why Transformation Efforts Fail’, Harvard Business Review, 74(2) (Reprint No. 95204). Kotter, J. P. and Schlesinger, L. A. (1979) ‘Choosing Strategies for Change’, Harvard Business Review, 55(2), 4–11. Lewin, K. (1947) ‘Group Decision and Social Change’, in E. E. Maccoby, T. Newcomb 䉷 Henry Stewart Publications 1469-7017 (2002) Vol. 3, 1, 45– 59 and E. Hartley (eds) Readings in Social Psychology, Holt, Rinehart & Winston, New York. Mento, A. J., Martinelli, P. and Jones, R. M. (1999) ‘Mind Mapping in Executive Education: Applications and Outcomes’, Journal of Management Development, 18(4), 390–407. Morgan, G. (1998) Images of Organization, Berrett-Koehler, San Francisco. Schaffer, R. H. and Thompson, H. A., (1992) ‘Successful Change Programs Begin with Results’, Harvard Business Review, 70(1), 80–90. Seibert, K. W. (1999) ‘Reflection in Action: Tools for Cultivating On-the-job Learning’, Organizational Dynamics, 27(3), 54–65. Seibert, K. W. and Daudelin, M. W. (1999) The Role of Reflection in Managerial Learning: Theory, Research, Practice, Quorum, London. Senge, P. (1990) ‘The Leader’s New Work: Building a Learning Organization’, Sloan Management Review, 32(1), 7–24. Tichy, N. and Charan, R. (1989) ‘Speed, Simplicity, and Self-confidence. An Interview with Jack Welch’, Harvard Business Review, 65(5), 112–118. Journal of Change Management 59 Copyright of Journal of Change Management is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT) Vol. 1, No. 2, December 2010 The Adoption of Benchmarking Principles for Project Management Performance Improvement. Ifeoluwa Ajelabi and Yinshang Tang Informatics Research Centre, Henley Business School, University of Reading, United Kingdom. i.k.ajelabi@reading.ac.uk, y.tang@henley.reading.ac.uk ABSTRACT Effective management of projects is increasingly becoming important for organisations to remain competitive in today’s dynamic business environment. The use of benchmarking is widening as a technique for supporting project management. Benchmarking is the search of best practices that will lead to superior performance in some business activity. Benchmarking has been recognised as one of the most responsive evaluation tool for performance improvement within organisations by creating a culture of continuous improvement from learning best management practices. This paper presents how benchmarking principles can be applied to improve project management process and performance. The benefits and challenges of benchmarking management of projects are also discussed. KEYWORDS Project management, Benchmarking, Evaluation 1. Introduction Project management over the years has been a successful tool for implementing change in organisations. Organisations have reported the benefits derived from using project management tools and methodologies to implement change. So much so, opportunities are constantly being explored to make it a more effective tool [10]. One of such opportunities is the ability to transform or improve project’s performance using the management lessons learnt from project to project. Benchmarking has been argued to be an efficient tool which makes significant improvement to performance. Past research, has shown the difference in performance between leading organizations and average ones in performing particular activities [11]. Benchmarking against leading companies has resulted in significant success for average organizations in improving their performance [21]. This paper continues this inference and suggests that similar improvements in performance of managing companies that occur from benchmarking can also be achieved by benchmarking projects. This paper explores this in four sections. First, existing definition of benchmarking and the general purpose of benchmarking are reviewed, indicating benchmarking process. The second section of the paper, will explain the different types of benchmarking and how it can be applied to the management of projects. Next, will discuss what to benchmark and the competencies to look out for and how these competences are measured and evaluated. Finally, the challenges of benchmarking management of projects will be discussed. 1 International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT) Vol. 1, No. 2, December 2010 2. What is Benchmarking? Benchmarking is a technical core of Total Quality Management (TQM), a subject characterized by the culture of continuous improvement. It is a process of identifying superior performance or practices of other organizations or projects (to keep in the context of this paper) and to internalize such knowledge for competitive advantages [1]. Benchmarking is a learning process to find better ways of doing things. It is a management process that requires constant updating whereby performance is regularly compared with the best performers that can be found. The key philosophy of benchmarking is the ability to recognise one’s shortcomings and acknowledge that someone is doing a better job, learn how is it being done and implement it in one’s field of business[2]. Benchmarking is not about copying or imitating, rather it is about adapting lessons learnt from the best for the development of an improved organizational or project performance [5]. Benchmarking , has endued many different definitions since it was first pursued by Xerox Corporation, the International Benchmarking Clearinghouse (IBC) Design Steering Committee concluded and represented the consensus after consulting about 100 companies in 1992. They defined benchmarking as: “A systematic and continuous measurement process; a process of continuously measuring and comparing an organisation’s business processes against business process leaders anywhere in the world to gain information which will help the organisation take action to improve its performance [3].” The definition of benchmarking reveals that benchmarking is not only a measurement process that results in comparative performance measure, it also describes how exceptional performance is attained. The exceptional performance is identified by measures of performance indicators, which are called benchmarks and the activities that facilitate the exceptional performance called enablers [4]. Enablers explain the reasons for the superior performance, therefore benchmarking studies are conducted with the support of the two components when they are practically connected. That is, benchmarks can be achieved by attaining enablers. In order to transform benchmarking analysis requirement to the above two types of output, many models and methods have been evolved from the original ten-step four-phase model developed by Xerox, to explain and guide the benchmarking process. Most of the approaches are valid and they all take their root in an iterative benchmarking process proposed by W.E Deming. The model of benchmarking process is famously referred to as the “Deming cycle” and it includes a minimum of four phases “Plan –Do-Action-Check” as illustrated in Figure 1 below. IV I Adapting, Improving, and Implementing Findings III ACT PLAN CHECK DO Analyzing the Data Planning the Study II Conducting the Research Figure 1: Deming’s Benchmarking Cycle 2 International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT) Vol. 1, No. 2, December 2010 3. Types of Benchmarking Benchmarking is about comparing processes, practices or procedures. Processes may be compared within an organisation against internal operation or with partners outside the organisation. There are several ways to classify types of benchmarking, depending on the focus of the benchmarking process. The types of benchmarking reflect “what is compared” and “what the comparison is being made against”. The former involves comparisons of performance, process and strategic benchmarking; while the latter involves internal, competitive, functional and generic comparisons [5]. Type Performance Benchmarking Process Benchmarking Strategic Benchmarking Internal Benchmarking Competitive Benchmarking Functional Benchmarking Generic Benchmarking Definition It is the comparison of performance measures for the purpose of determining how good an organisation is in comparison to others It is the comparison of methods and processes in an effort to improve the processes in an organization It is the comparison of an organisation’s strategy with successful strategies from other organisations to help improve capability to deal with a changing external environment. It is the comparisons of performance made between department/ divisions of the same organisation solely to find and apply best practice information. This is the comparison made against the “best” competition in the same market to compare performance and results. It is comparisons of a particular function in an industry. The purpose of this type of benchmarking is to become the best in the function. It is the comparison of processes against best process operators regardless of industry. Table 1: Types of Benchmarking Types of benchmarking are rather complementary than being mutually exclusive. They can be chosen and combined for a specific purpose [7]. Their combination is based on the relevance of the type of benchmarking to a specific context. Table 2 below, shows the combination of the types of benchmarking designed by Bhutta and Huq [7] to yield better results. As can be seen from the combinations, some types of benchmarking are more relevant than others in particular contexts. For instance, an internal benchmarking is given a low relevance in relation to strategic benchmarking, as a comparison of strategy with oneself would give little or no improvement. However, competitive benchmarking is given a high relevance in relation to strategic benchmarking, as it would reveal a lot of information and provide many ways for improvement. What is what to benchmark Benchmarked Against Competitive Functional Internal Performance Medium High Medium Process Medium Low High Strategic Low High Low Table 2: The matrix of different forms of benchmarking [15] Generic Low High Low 3 International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT) Vol. 1, No. 2, December 2010 Watson [9] also discusses benchmarking as a developing science [9]. Figure 2 shows how the first generation of benchmarking evolved following from Camp [4]. This generation of benchmarking called “Reverse Benchmarking” was product oriented, and focused solely on the comparison of products characteristics, functionality and performance with similar products. The second generation “Competitive Benchmarking” involved the comparisons of processes with those of competitors. Third “Process Benchmarking” allowed for information sharing from companies outside their industry. Evaluations targeted companies with recognised strong practices independent of the industry and competitors. The fourth generation “Strategic Benchmarking”, involves a systematic process of evaluating alternatives, implementing strategies and improving performance by understanding and adapting successful strategies from external partners who partners who participate in an ongoing business alliance. The fifth generation “Global Benchmarking” is an emergence of a global application of benchmarking, thus dealing with globalization of industries themselves [1]. Some extensions of the model are beginning to emerge as Kyro [8] claims to foresee a sixth and seventh generation called “benchlearning” and “network benchmarking” respectively. Figure 2: Benchmarking as a developing evaluation tool [23]. 4 International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT) Vol. 1, No. 2, December 2010 4. Benchmarking in Project Management The primary driver behind any benchmarking initiative including that of project management is improvement. Maylor[12] described the process for project management as having four phases as illustrated in Figure 3 below. The concept behind the “Develop the process” phase is of continuous learning and improvement, by evaluating project progress, learning from its experience and using the information to improve the management process of future projects. The improvement process is divided into two parts 1) learn by doing and learn before doing. Tools such audit reviews, lesson learnt and scorecards are used to evaluate the project progress. Benchmarking on the other hand bridges “Learn by doing” and “Learn before doing” with the objective of learning and improving the management process of future projects. Figure 3: Four phases of project lifecycle [12]. 4.1 What to Benchmark? As mentioned earlier, benchmarking is a method of assessing the quality of a project’s management and learning from it for the management of future projects. Based on literature, the project manager is responsible for orchestrating the management progress of a project [5, 13]. The project manager therefore should posses certain skills and competency to achieve excellence in managing projects. These excellence skills and competency are measured for classification as best practice. Competence is defined as the knowledge, skills and personal attributes that lead to superior results or meet performance standards [16]. The two well known project management bodies of knowledge (APM and PMI) identify the primary competencies an effective project manager should possess. Although more explicitly stated by PMI[22], the core competencies include, scope, schedule management, cost management, human resources, communication management, risk management, quality and contract management. 5 International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT) Vol. 1, No. 2, December 2010 4.2 How is the competency measured? The management of a project process is mostly measured by the success of the project. The success criteria used to measure the management of a projects has been studied by various researchers over the years. Primal success criteria have been an integrated part of project management theory given that early definitions of project management includes the “Iron triangle” success criteria- cost, time and quality [14]. Atkinson in his paper stated that “as a discipline project management has not really changed or developed the success measurement criteria for project management in almost 50 years”. He argues that the “Iron triangle” does not indicate how excellent or otherwise the management of a project has been. He further argues, the iron triangle is trying to match two best guesses (time and cost) and a phenomenon (quality) correctly [14]. Therefore evaluating against these criteria is flawed. To meet the urgent need of modernizing the out of date success criteria to measure project management success, Atkinson suggested the “Square root”, which he believed would create a more realistic view of the management of projects [5]. The square root is a combination of quantitative and qualitative objectives. He combines the “Iron triangle” into one criterion and added three other criteria, Information systems, Organisational Benefits and Stakeholders Benefits. Belout [20] in his attempt to measure project management success suggested the achievement of project goals (effectiveness) and the maximisation of output for a given output (efficiency) as the success criteria to judge the management of a project. 5. Challenges of Benchmarking in Project Management. Benchmarking the management of projects has its own challenges. First is, projects by definition are unique entities with a stipulated lifecycle. Therefore, there is little commonality between projects or the differences between projects are so great that separating between differences from the similarities is almost impossible. The unique difference between projects is reflected in the way they are managed, making it difficult to translate the best management practices between one another. Second, the lack of an objective way to measure the subjective metrics of project management success. For example, Atkinson’s project management success criteria [14], the success criterion “benefit to organisation” includes some subjective attributes, such as increased profits, organisational learning, reduced waste and improved effectiveness. Logical as these success criterion attributes are, the lack of an objective way to evaluate them remains a challenge. Third, is the difficulty in determining the true causes of project performance. Even if successful project managers are asked what they have learned, do we really believe that they can identify what has worked and what has not, what works under what project conditions but not others. Fourth, project success factors have a significant effect on the management of a project. These project success factors have being researched and numerated by various authors [17, 18, 19]. These factors are critical to the success of a project and form the basis of the management evaluation criteria. This poses a challenge for project management benchmarking as the underlying influences of comparable projects must be similar. Benchmarking of project management most times highlights the difference in performance without giving the reasons for the difference. Barber [5] in her paper highlighted that the difference in performance identified by benchmarking has more to do with the difference in methods of measuring and tracking project performances, rather than the difference in management of projects. Furthermore, benchmarking is learning from external sources and then applying the knowledge “before doing”. Benchmarking therefore, can only address problems that have previously been 6 International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT) Vol. 1, No. 2, December 2010 encountered by the compared project partner. It is quite difficult for benchmarking to provide feedback to assist current project experiencing difficult management problems because benchmarking can be a time consuming effort and unlikely to provide any solution at the latter stages of the project. Despite these challenges, benchmarking management of project has its benefits. It is a continuous process that allows for management of projects to measure their performance against the best practice and identify areas for improvement. 6. Conclusion This paper has examined how benchmarking principles can be applied to evaluate and improve project management performance. Benchmarking an outward looking evaluation tool, compares the performance of project management activities against the performance of project management conducted by leading benchmark partners. By benchmarking projects, maximum benefits are derived from projects. Not only from the outcome of the project but information gained from measuring the effectiveness of the project management process against best practice can be used to identify areas of improvement for managing future projects. In addition, project management best practice across an organisation can be identified, providing an opportunity for corporate learning. REFERENCES [1]Ramabadron R., James W. Dean Jr and James R.Evans.(1997), Benchmarking and Project Management: a review and organizational model. Benchmarking: An international Journal, 4(1), 47-58. [2]American Productivity & Quality Center (APQC) (1996), Emerging Best Practices in Knowledge Management, American Productivity & Quality Centre, Houston, TX. [3]American Productivity & Quality(APQC) (1992)Planning, Organizing, and Managing Benchmarking Activities: A User’s Guide, APQC, Houston, TX. [4]Camp, R.(1989) Benchmarking: The search for industry best practices that lead to superior performance, ASQC Quality Press, Milwaukee. [5] Barber E. (2004) Benchmarking the management of projects: a review of current thinking. International Journal of Project Management, 22(4), 301-307. [6]Kerzner H. (2000) Applied project management: best practices on implementation. New York; John Wiley [7] Bhutta K.S Huq F. (1999) Benchmarking best practices: an integrated approach. Benchmarking: An international Journal, 6 (3), 254-268. [8] Kyro P.(2003) Revsing the concepts and forms of benchmarking. Benchmarking: An international Journal , 10(3), 210-225. [9] Watson GH. (1993) Strategic benchmarking: how to rate your company’s performance against the world’s best. New York: John Wiley. [10]Clarke A. A (1999) practical use of key success factors to improve the effectiveness of project management. International Journal of Project Management, 17(3), 139-145 7 International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT) Vol. 1, No. 2, December 2010 [11]Gattorna JL, Berger AJ. (2001)Supply chain cybermastery: building high performance supply chains of the future. London Gower. [12] Mayor H.(2005) Project management 3rd Ed.London: Finacial Times. [13] Cook-Davies T. (2002)The real Success factors on projects. International Journal of project Management, 20(3), 185-190 [14] Atkinson R. (1999) Project management: cost, time and quality, two best guess and a phenomenon, it’s time to accept other success criteria. International Journal Project Management, 17(6), 337-42 [15] Leibfried and Mcnair (1992), Benchmarking ± A Tool for Continuous Improvement, Harper Collins [16] Crawford,L.H .(2003). Assessing and developing the project management competence of individuals. In J.R.Turner(Ed). People in Project Management. Aldershot,UK:Gower. [17]Shenhar AJ, Levy O, Divir D. (1997) Mapping the dimensions of project success. Project Management Journal, 28 (2), 5-13 [18]Pinto JK, Selvin DP. (1988) Critical success factors across the project lifecycle. Project Management Journal, 19(3), 67-75. [19]De Wit A. (1988) Measurement of project success. International Journal of Project Management ,16(3), 164-70. [20]Belout A.(1998) Effects of human resources management on project effectiveness and success: towards a new conceptual framework. International Journal of Project Management, 16,21-26 [21]Luu V.T, Kim S.Y and Huynh T.A (2008) Improving project management performance of large contractors using benchmarking approach,. International Journal of Project Management, 26, 758-769. [22]Project Management Institute (2004). Guide to project management body of knowledge 3rd Ed. ANSI. [23] Ahmed, P.K. and Rafiq, M. (1998), Integrated benchmarking: a holistic examination of select techniques for benchmarking analysis. Benchmarking for Quality Management and Technology, 5(3), 225-242. 8 The TQM Magazine The process of benchmarking, benchlearning and benchaction Per V. Freytag, Svend Hollensen, Article information: To cite this document: Per V. Freytag, Svend Hollensen, (2001) "The process of benchmarking, benchlearning and benchaction", The TQM Magazine, Vol. 13 Issue: 1, pp.25-34, https://doi.org/10.1108/09544780110360624 Permanent link to this document: https://doi.org/10.1108/09544780110360624 Downloaded on: 28 November 2017, At: 20:27 (PT) References: this document contains references to 11 other documents. 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About Emerald www.emeraldinsight.com Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. *Related content and download information correct at time of download. Techniques The process of benchmarking, benchlearning and benchaction Introduction Per V. Freytag and Svend Hollensen To meet this challenge many firms have launched a variety of initiatives to improve their strategic and operational performance. One such strategic management technique is ``benchmarking''. This article discusses the process of benchmarking, potentials, and limitations of the technique. A seven stages model will be introduced and discussed. Altogether benchmarking, benchlearning and benchaction is a strategy for implementing changes in organizations. It is a way of measuring operations against similar operations in order to improve business processes. The purpose of benchmarking is to improve products and processes in order to meet customer needs better. The linkage of the business process to customer needs is critical to effective benchmarking. Benchmarking is also a way of measuring your firm's strategies and performance against ``best-in-class'' firms, both inside and outside your own industry. The aim is to identify best practices that can be adopted and implemented by the organization with the purpose of improving company performance. This is the benchlearning-process. The actual implementation is taking place in the benchaction process. Usually, benchmarking is carried out within the same industry. However, benchmarking is often carried out between organizations that have a similar process but belong to different industries. By benchmarking the process across industries, the organization sometimes achieves greater results than by sticking to its own industry. Benchmarking a process across industries causes people to challenge some of the assumptions that are part of the problem. Benchmarking as a tactical planning tool originated with Xerox Business Systems in the late 1970s. Japanese affiliates were selling better quality copiers for less than the manufacturing costs of similar products in the USA. One of the first experiments on benchmarking took place in the production Many firms face still fiercer competition in global markets. The declining competitiveness of these firms is reflected in decreasing market shares and poorer business performance. But as General Sun Tzu wrote: If you know your enemy and know yourself, you need not fear the result of hundred battles. Downloaded by Grand Canyon University At 20:27 28 November 2017 (PT) The authors Per V. Freytag and Svend Hollensen are at the University of Southern Denmark, Sùnderborg, Department of Marketing, Denmark. Keywords Benchmarking, TQM, Improvement, Organizational change Abstract Benchmarking is more than giving marks. It is a way of measuring a firm's strategies and performance against "best-in-class'' firms, both inside and outside the industry. The aim is to identify best practices that can be adopted and implemented by the organization with the purpose of improving a company's performance. The process of benchmarking is divided into seven phases: which functions to benchmark; importance of each subject area; whom to benchmark against; gather the benchmarking information; identify performance gaps; how to learn from the ``best-in-class'' (benchlearning); and implementation of the changes (benchaction). Benchmarking, benchlearning and benchaction is not a one-time project. It is a continuous improvement strategy and a change management process. Thus benchmarking is a part of the total quality management (TQM) system, and it relates well to other TQM initiatives. Electronic access The research register for this journal is available at http://www.mcbup.com/research_registers The current issue and full text archive of this journal is available at http://www.emerald-library.com/ft The TQM Magazine Volume 13 . Number 1 . 2001 . pp. 25±33 # MCB University Press . ISSN 0954-478X 25 The process of benchmarking, benchlearning and benchaction The TQM Magazine Volume 13 . Number 1 . 2001 . 25±33 Downloaded by Grand Canyon University At 20:27 28 November 2017 (PT) Per V. Freytag and Svend Hollensen logistics area (warehousing, packing, and shipping). We define the three keywords as: (1) Benchmarking. Benchmarking is an independent efficiency raising process based on: . analysis of the existing performance levels of the company unit or object under examination and comparison with other organizational levels; and . identification of the causes for performance ``gaps'' as the basis for optimum reconfiguration of corporate activities (adapted from: Krutten, 1999). (2) Benchlearning. The process of learning from the ``best in class'' with the purpose of integrating these best practices in all organizational levels of the company. (3) Benchaction. The actual implementation of the planned changes in the organization, e.g. in the form of upgrading personal skills through training and development activities. usually share some common technological and market characteristics. Often, they also concentrate on specific functions. Because there are no direct competitors involved, the benchmarking partners are more willing to contribute and share. Disadvantages can be scheduling companies that are already overflowed by benchmarking and therefore reluctant to participate in benchmarking. Competitive benchmarking This type of benchmarking is used against direct competitors. Performed externally, its objective is to compare companies offering competing products, services or processes in the same markets. With direct competitors, information is not easy to obtain. Public domain information is the most accessible. If some key customers in the market have experience with more suppliers (competitors) they may be willing to give their evaluation of these suppliers. But this method often involves high costs. Process (generic) benchmarking Here, similar procedures at dissimilar companies are benchmarked. Although it is considered relatively effective it is difficult to implement. Process benchmarking requires a broad conceptualisation of the entire process and a thorough understanding of procedures. As indicated above, the concept has also been referred to as generic benchmarking because it is not restricted to any industrial structure or market. As a contrast to process benchmarking, data benchmarking is a way of comparing quantitative measures (key figures) with competitors or with members of an industry group (key average figures). In data benchmarking the team is not interested in the underlying processes. Types of benchmarking There are different types of benchmarking depending on what the company wants to benchmark. Internal benchmarking Benchmarking against internal operations is one of the simplest forms of benchmarking since most companies have similar functions inside their business units. The immediate benefit comes from identifying the best internal procedures, and subsequently transferring them to other parts of the organization. Companies which implement internal benchmarking alone often retain an introverted view, unless they use internal benchmarking as a baseline for external benchmarking at a later time. The process Benchmarking and the following benchlearning/benchaction usually involve seven main stages: (1) Decide what functions of the business to benchmark by evaluating the KSFs (key success factors). (2) Evaluate the importance of each subject area (KSF). (3) Identify against whom to benchmark (determine benchmarking partners). (4) Gather the benchmarking information. Industry (functional) benchmarking Industry (functional) benchmarking is the measurement of various facets of the company's functional operations and comparison of these to similar measurements from other companies (often industry leaders) within the industry group. Many industry groups publish comparative data either privately (for members of the group) or publicly or both. The benchmarking partners 26 The process of benchmarking, benchlearning and benchaction The TQM Magazine Volume 13 . Number 1 . 2001 . 25±33 Per V. Freytag and Svend Hollensen Downloaded by Grand Canyon University At 20:27 28 November 2017 (PT) (5) Compare ``best-in-class'' with the firm's own performance (identify performance gaps). (6) Implications of benchmarking-results, benchlearning: how can the firm's skills/ processes be improved by learning from the ``best-in-class''? (7) Benchaction: implementation of the changes. performance can be reduced to two basic factors: the value that customers perceive in the product/service offered, and the costs of creating this value. The term KSF is, therefore, reserved for the skills and resources that have a direct impact on customers' perceived value and/or relative costs compared to the competitors. The KSFs cover a wide range of very different factors (production factors, organizational factors, managerial factors, marketing factors, etc.), but some of them are more critical to the firm's performance than others. A few key functions demand that ``things must go right'' for the management goals to be attained. Therefore, these functions must be given greater importance in the overall quantitative measurement of business performance. Another reason for a different weighting is that KSFs are not the same for all firms. They are market- and firm-specific. Hence, the weights of the different factors (KSFs) must reflect these different conditions. How do we find the KSFs? Brainstorming is one method of generating a number of ideas for KSFs. Another possibility is to ask customers about their criteria when choosing suppliers. The respondent could start specifying some success criteria and describing how main competitors differ with regard to these criteria. The interviewer could keep asking ``what is the reason for . . .'' or ``why do you prefer . . .''. This technique may provide a list of potential KSFs, and an estimate of the subjective strengths of a causal relationship. An important question is to what extent such a general model can be used, and to what degree the model needs refinement for use in all companies operating under different market conditions. Some markets are characterized by being very international and others by being more local with regard to the actors' operation on the markets. The markets also differ regarding the type of goods and services sold in the markets. On some markets the items are very standardized, and on others they are customized. A benchmarking model should be able to cope with such differences in a manner that offers useful guidance to the companies. In the following we will further develop the six steps involved in the benchmarking process. Decide what functions of the business to benchmark by evaluating the KSF Key success factors (KSFs) are the limited number of the firm's subject areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. In benchmarking projects the starting point is identification of subject areas within which improvements are critical. The criteria for selecting the subject areas are: . they should be of strategic importance to the business; and . improvements in the areas will make a significant contribution to overall business results. Evaluate the importance of each subject area (KSF) Here, the purpose is to narrow down the number of subject areas (from the brainstorming stage) to a few areas in which benchmarking might have a considerable impact. After this screening the subject areas are prioritised and may be given importance. It is wise to direct attention to a small number of areas, particularly in the early stages of benchmarking when knowledge of the technique needs to be developed concurrently with the process itself. One must always bear in mind whether the subject area is really important to the success of the company. Difficulties in agreeing on this might signal a too narrow focus. Then, a more strategic First, one must identify the strategic intent of the business or process which is to be benchmarked. Many times the source of this information is the company's mission statement. Several writers have argued that a key success factor is a statement on a causal relationship between actual success in business performance and causes of success (Grunert and Ellegaard, 1992). The immediate cause of differences in 27 The process of benchmarking, benchlearning and benchaction The TQM Magazine Volume 13 . Number 1 . 2001 . 25±33 Per V. Freytag and Svend Hollensen overview could extend the focus to include suppliers, employees and customers. entirely new perspective will be found (Sheth and Sharma, 1997). The partner could be found: . within your industry at the same location; . at other locations but in the same industry; . in a different industry and the same type of company; . in a different type of company within the same industry; or . completely outside the industry. Identify against whom to benchmark (determine benchmarking partners) The following two questions provide the starting point in the search for suitable partners: (1) Who/what is better (at a particular process) than us? (2) To whom is this process a key to survival? Downloaded by Grand Canyon University At 20:27 28 November 2017 (PT) Essentially, benchmarking partners might be found in two locations: (1) internally; and (2) externally. Some of the criteria in selecting external partners are: . The partner should be measurably better than ``our'' company. . Avoid direct competitors where possible, unless markets are exclusive or processes are general and affect the whole industry. Internal partners Most organizations start with internal comparisons wherever possible. This makes a great deal of sense since there are relatively few hurdles to overcome in terms of language, culture and data availability. Hierarchies are understood and communication channels generally exist which makes it easier to visit someone. The benchmarking teams can develop familiarity with their own work process before they look at what others are doing. In addition, internal benchmarking can produce some relatively quick returns. However, there comes a point when it is no longer possible or desirable to improve against internal performance because more drastic changes are needed. Although external comparisons may seem more threatening they have a higher probability of producing significant returns, discovering innovations or changing paradigms. Typically, it may also take longer to identify and implement improvements to existing processes if external comparisons are sought. When seeking ``best'' practice it should be clearly defined what is understood by ``best'' for the company. The task of identifying data sources for selecting possible external benchmarking partners is a challenging one. These data sources could include: . business newspapers and magazine articles; . trade journal articles; . industry and professional associations; . books on well-run companies; and . consultant accounting firms who work in your industry. When likely candidates are found, some preliminary research should be performed to help narrow the list. Some potential partners may not have much information available. In these cases, they are normally dropped from the list. The ones remaining will have sufficient public data so that the benchmarking team can make a final decision as to which organization they want to approach as their external benchmarking partner. External partners Identifying potential external benchmarking partners is another step in the research phase. The best is always to develop a list of potential benchmarking partners. Some potential partners may not be interested, have not got the time, or do not wish to share information. Although benchmarking practice stresses using the ``best in class'' for our benchmark, it often has to be tempered with other factors, such as co-operation, costs, time, location, and established relationships. To find a likely external benchmarking partner is not easy. The broader the horizon of search the greater the likelihood that an Gather the benchmarking information The data collection team needs to have uniform collection methods (the same forms seeking the same data in the same way). Be sure to specify the data at the proper aggregation level: specify the data in terms of units and intervals to make the comparison and the analysis phase easier. It is good practice to mail any questionnaires prior to your visit in order to provide time for the 28 The process of benchmarking, benchlearning and benchaction The TQM Magazine Volume 13 . Number 1 . 2001 . 25±33 Downloaded by Grand Canyon University At 20:27 28 November 2017 (PT) Per V. Freytag and Svend Hollensen benchmarking partner to prepare the data in the format requested. As pointed out earlier, the purpose of benchmarking is to improve operations. The same purpose also applies to the benchmarking project itself. Use the site visits as a way of improving the data collection design and method. Also realize that the world is not standing still during this exercise. Build in robustness in the questionnaire and the benchmarking plan because things will change before the project is complete. Almost everything requires give and take. Information on companies' internal and external relations is usually considered confidential. Often, giving information to others, especially competitors, is considered disloyal and often results in dismissals. Thus, most companies have the deep-rooted attitude that information about them must be withheld. However, when it comes to information about other companies, with whom one has a co-operative or even a competitive relation, things are quite different. Here, the interest in gathering information about others is large. Sometimes, it may be better for the company to hide its own intentions or behaviour, as it is usually impossible to be entirely invisible in a market, and hiding one's intentions may facilitate the company's competitive opportunities. In a way benchmarking to a certain degree contrasts with the idea that discretion is of the utmost importance. Thus, a high degree of openness is basically required, even if the demands vary depending on the chosen benchmarking approach. When choosing a benchmarking approach where you benchmark yourself against another company, which is more effective at a certain process, a high degree of willingness and openness towards co-operation is required if such a project shall succeed in getting any further than the problems of collecting valid and reliable information. Another type of benchmarking is used when collecting certain information about companies in a certain industry and across industries in order to be able to analyse both within and across industries. Here, the benchmarking depends on how well chosen, how extensive, and how reliable the pieces of information are. Compare ``best-in-class'' with the firm's own performance (identify performance gaps) The specific company's competitive position is always unique. The company's internal make-up of the resources, competencies, etc. is special, customer demands and requests vary and competitors act differently. Of course, these and other factors create the need to compare the results of a benchmarking process with one's own unique company situation. On the other hand, companies more or less tend to compete in selling comparable products and services. Detailed knowledge of other companies' actions and successes may, therefore, be of the utmost importance for your own company's competitiveness. In benchmarking where the starting point is a wide spectre of variables it is most important to choose an expedient basis of the evaluation of your own situation in relation to the other parties in the database. Thus, comparisons within and across the industries are said to have their own strengths and weaknesses (see Table I). Within a data benchmarking concept it is easier, ceteris paribus, to diagnose relevant benchmarks within industries than across industries because of the concept's general application. However, at a superior level it is perhaps possible to study who is overall best in class, although maybe the comparison is not to be used directly. Specific competitive conditions such as patents, dominating market positions, special relations, etc. may make comparisons difficult. In order to reduce the risk of carrying out irrelevant benchmarks, one must, however, study not only the industrial differences. Basically, your problem is to define your competitive arena (Day, 1984) or when you try to define expedient segments (Bonoma Table I Advantages and disadvantages of benchmarking within and across industries Benchmarking within the industry Benchmarking across industries Advantages: similarity of the competitive situation eases the transfer of experience Drawbacks: the perception of the competitive situation is too narrow which makes it difficult to catch up with other companies as regards competition 29 Advantages: inspiration to improve processes, etc. In which areas are the advantages best and/or easy to realize Drawbacks: it is difficult to transfer experience across industries. Perhaps eliminate focus from the obvious problems in the company The process of benchmarking, benchlearning and benchaction The TQM Magazine Volume 13 . Number 1 . 2001 . 25±33 Per V. Freytag and Svend Hollensen Downloaded by Grand Canyon University At 20:27 28 November 2017 (PT) and Shapiro, 1984) where the industry appears not to have the best basis for understanding the situation. Therefore, in order to assess whether other companies are successful or not it may be a good idea to characterize their competitive position. A company's competitive position can be described in several ways depending on the aspects one wants to expound. Within the industry, the most well known model for this is Porter's five-forces (Porter, 1985). Across industries there are more approaches where Jackson (1985) differentiates between always-a-share and lost-for-good markets, the first being characterized by the parties' poor co-operation, isolated transactions and primary price competition, the latter being characterized by the parties' close co-operation, repeated transactions and the fact that the price is not the only decisive factor. In addition to this, companies' competitive relations may be more or less internationally influenced. This may have consequences as to how comprehensive the competition is, and as to the type of management and tools used, etc. Thus, in order to evaluate who did best in the competition, one cannot only compare within and across industries but must also study the companies' competitive position more generally. Therefore, if a competitor's competitive position is fundamentally different (see Table II) you can ask yourself if you really compete with the competitor and if so, there is a need of trying to change your own competitive position. Table II also makes sure that you do not make too extensive conclusions based on analyses across industries. Thus, performance rating is very much based on the same starting point, and you make sure that the one you compare yourself with does not have a total different starting point (as in, for example, an allowance of 10m in a 100m race, etc.). In other words, the idea of involving the competitive parameters, which are considered to dominate the market and its internationalization, is, at the early stage of diagnosis, to try to avoid one of the most important benchmarking inadequacies. Dealing with a gap in the competitor's performance level, as shown in the gapanalysis (Figure 1), the chance of the comparison being valid is greater. All in all, this means that we are dealing with a process of more stages. The starting point is taken in the business excellence model (http://www.efqm.org/), which forms the overall framework for the understanding of the company and its processes. However, the fact being that the companies' competitive position may differ fundamentally, it can be inconvenient to study best in class performance within the industry or across industries alone. Therefore, when starting up a benchmark project it is important that you ensure that you do not choose inappropriate companies to benchmark against. However, if at a later time you discover that you have chosen a bad starting point it may be an extensive process to reverse the development to the better. Implications of benchmarking results, benchlearning: how can the firm's skills/processes be improved by learning from ``best in class''? Despite the many pitfalls in the implementation of the benchmark itself, this is only the first step towards an improvement of the company's performance. Companies can be considered as being a set of routines and practices. It is characteristic that the routines and practices have been developed Figure 1 Gap analysis Table II Powers in the market: degree of internationalization and type of competitive parameters Degree of internationalization Competitive parameters Price dominating More parameters Low High 30 The process of benchmarking, benchlearning and benchaction The TQM Magazine Volume 13 . Number 1 . 2001 . 25±33 Downloaded by Grand Canyon University At 20:27 28 November 2017 (PT) Per V. Freytag and Svend Hollensen and acquired throughout a longer period of time and that the awareness of their importance often is limited. A central challenge is trying to understand the link between individual and organizational learning better. Companies consist of individuals. The individuals are meant to carry out specific tasks. This performance, however, is not independent of the individuals. Hence, an individual can strongly influence how specific tasks are carried out. Thus, the performance varies indefinitely and may cause innovation. A way of understanding the individual's task performance can be to distinguish between a task-based and a non-task-based behaviour (Webster and Wind, 1972). The first only relates to the way the individual carries out the tasks assigned to him due to his/her position in the company, i.e. what kind of fractional functions and operations are immediately related to the performance of a certain task. However, other things than the task itself influence the performance. Due to his/her educational level, his/her experience, his/her role perception, etc., the individual will define the specific fractional function and operation in his/her own characteristic way. One could say that the type of task and the individual's perception of it determine how the task is carried out. Usually, one distinguishes between different types of learning processes by dividing into double- and single-loop learning. The latter is about learning routines, which within the given frameworks can be refined to the last decimal. Double-loop learning, however, also deals with tasks to be carried out, but with the individual being open towards new ways of doing this. In other words, the individual does not hold in advance a specific procedure as to the task performance. Therefore, when you transfer experience from other companies you must understand two processes that are closely related. First, the task itself and the functions and operations in question. The individual who carries out the task will, however, influence the specific performance. In addition to this, one must consider the aspects regarding learning in connection with the task performance. Some tasks are held to a specific procedure where the power lies in the ability to obtain a high degree of performance perfection without bringing any innovative 31 elements to the performance. Such procedures are relatively easy to transfer, the fact being that the biggest problem often is to be permitted to observe the performance. On the other hand, it can be most difficult to see which elements are attached to a certain process or the like which can be altered or re-combined. Double-loop learning is certainly about the ability to learn new things. You do not ensure a successful implementation by trying to transfer a certain process. One must seek the key to understanding creative processes as such in the non-task-based behaviour and, therefore, in the individual's personality. Thus, focus on understanding other companies' ability to carry out tasks is transferred to the company itself, to the human resources in the company and the ability to use these. Benchaction: implementation of the changes The actual implementation of the planned changes could take place through developing skills of the employees, training and organizational development. A workforce with superior skills is a primary force of sustainable competitive advantage (Olian et al., 1998). Hence, training and development become the critical means for creating readiness and flexibility for change across all organizational levels. Implementation often takes time to be successful. It is crucial for the benchmark concept that the company sees the results of the benchmarking process only as a snapshot of the situation. It is up to the management and the employees to change it. Changes are not always easy to undertake. In particular, changes of habits and routines are often time consuming and complicated. In an organization these habits and routines have developed over a long period of time. Therefore, n...
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Organizational Change (Outline)


Introduction



Provide a critique of several tactics that can be used to engage employees in the organic
change process.



Describe how benchmarks are best used in the change process



Conclusion


Running Head ORGANIZATIONAL CHANGE

Name
Organizational Change
Course
Instructor
Date

1

Organizational Change

2
Organizational Change

Introduction
In the current up-tempo and dynamic global market these days, the constant change
is the key focus for any leader. The things that are working today might not be effective in
the coming day. For an organization, there are a number of possible causes for executing an
initiative of change, from requiring to adapting to a dynamic landscape with the intention
of keeping cultural or regulatory relevance. It can be argued that the change needs to be an
ongoing process; that the initiative itself needs to be designed for aligning the performance
of the management with executive level methods and procedures of decision makin...


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