PLM & OCM Ch. 6: Change is Pain
Patrick Hillberg Ph.D.
Adjunct Professor @ Oakland University | Product Lifecycle Management (PLM) | Speaker, Consultant, Expert Witness | Advocate for Workforce Development | Ex-Siemens PLM
“How is it going, Sarah?”
“Well, there have been some changes – spearheaded by me - and I’ll just have to hope they work.”
“What are those?”
“First, PLM implementations can take forever! And many fail entirely. People lose their jobs, and for the CTO, it can be risky to take on a PLM project. Spacely’s sales teams are concerned about it, and there is a group creating a template library which they claim will address the problem, but I’m keeping my head down and hoping that they won’t notice me.”
“A template library seems reasonable, what are your concerns?”
“There are two parts; the first is to create the template library, and the second is to assume that we can use templates to implement projects faster. All Spacely architects are required to create a few templates per year, there are a few hundred architects, and the idea is to capture our knowledge into a company database.”
“Again, this seems reasonable.”
“Yes and no. I mean yes in concept, but in reading the templates, I’m not convinced that authors believe in what they are publishing, or if a template, which was applicable to some previous project, is applicable to my project. I see templates in the database, by members of my own team, discussing things that we decided against doing at Acme. I’ve talked to my teammates about this, but they say ‘I know it’s wrong, but my manager keeps pushing me to get something posted’. Architects are posting things that they don’t believe in, just because they are required to get something posted.”
“Uh-oh. Have we talked about extrinsic, vs. intrinsic, motivation? Architects are being extrinsically pressured to post something based on some sort of performance criteria, rather than an intrinsic desire to help others and maybe gain a little fame for being an expert.”
“Yes, but still there is a positive in this. My Spacely team has grown to four people, and in a few months, we’ll have a dozen. I’m using the templates to qualify architects with experience in the topics that I need to fill. As I am building a team it helps to know their interests and experiences, even if I can’t entirely trust their templates. All consultants have resumes posted to an internal database, but reading the templates gives me much more insight.”
“That’s interesting, and I’m noting something … two years ago you were writing scripts, then you pitched a big, strategic, PLM vision to Acme, and soon you’ll be leading a team of a dozen people. Do you enjoy it?”
Sarah smiled. “I do! It’s very different from my experience. I am certainly not a boss… the people on my team know more than I do, and my role is to look at the Arrow Diagram and figure out what skills are needed to connect the dots. But it’s fun, I’m sleeping through most nights, and I feel inspired when I wake up in the morning.”
“Cool! So what things are you thinking about?”
Implementation is Driven by Learning
“Remember this, from the Challenger books?
‘It is deeply flawed to assume that customers know what they need’.
It gets to a fundamental issue of PLM: Is it a technology to increase efficiency of existing processes, or is it a strategy which reshapes the client’s business?”
“In his book Crossing the Chasm, Geoffrey Moore refers to the simple efficiency play as continuous innovation. A new toothpaste gives us whiter teeth and fresher breath, and all we need to do is grab a different tube off the shelf. We benefit, without having to change our behavior. There is a lecture on it here: Perception of Value, Jobs to be Done, and Disruption. (patrickhillberg.com). See the first video.”
“Early in this project, I read Acme’s annual reports to shareholders. This year’s includes a paragraph describing our project, and it says that Acme is adopting PLM and ERP as a business transformation. I’ve been in meetings with C-suite execs who all say that this project is part of a larger effort to adopt Industry 4.0 and is part of a broad-based digital transformation.”
“So, it is not a simple efficiency play. It’s a discontinuous innovation, in which people need to change their behavior to reap the benefits. An example of this would be battery electric vehicles, where owning a BEV means people need to think about charging their cars with electricity, rather than fueling them at a gas pump, and all the other things that a BEV entails. Does ‘Acme’ and I guess I mean the Acme culture, know what they need to restructure like this? The execs may agree on this, but what about the rest of the company?”
“The purpose of this project is to reshape the operations of, let’s say, 50% of the company and the path we will take is difficult to predict up front. This gets to my concerns over the template strategy; Spacely architects are told ‘you must use these templates, and we expect you to implement faster’. But implementation pace isn’t driven by technology, it is driven by organization’s willingness to change. The limiting factor is Acme’s ability to learn.”
“Why is learning important to create change?”
Sarah thought for a moment. “Because this isn’t an efficiency play. It’s not just a new toothpaste that gives you whiter teeth without changing how you brush your teeth. A digital transformation means that every group represented by a bullet in the Arrow Diagram will need to change what they do every day. They’ll need to give up on what’s comfortable and learn something new.”
“How is Spacely selling the idea of templates?”
“The pitch deck shows a glorified waterfall approach, where Spacely and the client agree up-front on the value that will be provided, and Spacely uses its templates to implement that agreement.”
“Are the templates used to implement value in the Operations phase, or to implement the agreement developed in the Requirements phase?”
“Yes! Great question! What if the agreement developed early on is no longer considered valuable at the end of the project? An approach which says ‘templates are faster’ misses the need for organizational change. I truly believe that Spacely technology can support the transformation that Acme executives are looking for, in fact, we can achieve more than they are looking for, because they don’t yet know what to look for. But in this, the technology implementation is irrelevant to the pace of progress. It is all about organizational change.”
Processes Define what the Organization Cannot Do
“I agree with you, but change is hard, and it may be easiest for Acme executives to leave it up to the Spacely consultants to force change onto the rest or the organization. As an architect, you will feel tension between two counteracting ideas:
To be successful, it will be up to you as an outside consultant to enable change, but you can only change culture so fast, and you need to enable the change, not force it.”
“I feel that already. As we implement new features and new processes, we are challenging Acme’s value structure.” Sarah sighed. “This makes everyone nervous, including my own bosses.”
“Right! While Acme executives may see the need for change, the middle tiers rarely want it. They are committed to ‘how we do things here’. So… did you do the homework after our last call?”, Prof said with a grin. (See Practices, Processes, and the Pain of Change (patrickhillberg.com)).
“I did! Last time, we were talking about Practices and Processes, but I want to discuss the Pain of Change’. “
“What interests you?”
“That there are neuroscience reasons why people resist change. It is literally painful – it’s processed by the pain neurons?”
“Yes, that’s right, or there is evidence supporting it, anyway. And do you see overlaps between processes and confirmation bias?”
“We like status quo processes because they are routine, and we like routines because we don’t need to think too much about them… It takes less energy to do something habitual, and as we do so, it reinforces our confirmation bias that our habits are ‘good’. If lots of people around us are performing the same routines, a social inertia develops so that even if an individual could overcome their own inhibitions to change, they feel stymied by the group.”
“Right! So let me go back to the ‘People, Process, Technology’ triad that so many projects use. In The Innovator’s Dilemma (Ch. 8) Christensen discusses a different triad, which I like better. It is ‘Resources, Processes, and Values’, where:
And as you said, the purpose of processes is to consistently accomplish recurring tasks without having to think too much about them. Processes are intended to not change, and the organization places value in this consistency. However, per Dilemma:
Clear consistent and broadly understood values also define what define a company cannot do.”
Prof continued, “This is why established companies are disrupted by upstarts. For a company to be good at what it does, it necessarily accepts that it is not good at what it does not do. Acme executives told their shareholders that they want the company to move into new areas, to do new things, but the 50% of the company impacted by your Arrow may not want to change.”
“Acme execs have adopted PLM as a strategy to broaden the company’s future, but they can’t break what the company currently does.”
“Right.”
“If I could jump six months into the future and back and implement tomorrow morning exactly what we will have in six months, the Acme Leaders still wouldn’t like it.”
“In fact, will most likely hate it. They will dislike you, and middle and upper managers will dislike you and Spacely because you are causing so much angst throughout the company.”
Sarah thought some more. “The Execs created a strategy, but I’m not interacting with them so much as I am the Leaders of each dot in my Arrow Diagram. I should expect Leaders to prefer their current processes, but to be successful my team needs to encourage the Leaders to change those processes.”
“Yes, there is a phrase that culture eats strategy for breakfast.”
“I want to put Leaders into positions where they choose to learn something new and imagine a better reality.”
“Right! The way to enable digital transformation is to enable collective learning.”
“In fact, the perfect solution would be to create an environment such that Acme Leaders learn to want the things that I think that they should want. I want them to intrinsically adopt of their own accord, rather than be forced extrinsically to adapt. I can’t force technology upon them until they ask for it, but to implement quickly, I need them to start asking soon… like, now.”
“Right! In negotiation theory this is called ‘let them have your way’. So, how do you put them into a position where they want the things that you want them to want?”
Sarah thought some more. “I can’t tell them what to do. I can’t force my architecture or Spacely’s templates on them. I need to create learning situations where the Acme Leaders ask me to implement what I think is best. I can use the templates to refine my team’s thinking, but to lead, I need to not just enable, but to quickly encourage learning.”
“Right. And we’ll discuss this in the future, but you have an important friend in this. In short, people hate to change, but they love to learn. Peter Senge talks about this in his systems thinking book, The Fifth Discipline. And last time we talked about Grieves concept of Practices and Processes, and the psychologist Daniel Kahneman discusses a similar concept called Thinking Fast and Slow. In all, you need to trigger Slow Thinking in the Practice phase, to enable learning. And note that I am not saying teaching, but rather I use the phrase enable learning. You need to focus on what Acme learns, not on what your team teaches. Put the emphasis on the listener, not the speaker.”
“Thanks! I have a thought, but I need to talk to Gary and Mitch. Can we have a quick call tomorrow?”
“Sure. See you then.”
…
“Hi Prof. First, despite months of Sturm und Drang getting this project started, we are sticking to our original go-live date of October. That gives us only seven months, even though PLM projects often take years, and we’ve already lost almost half of that time.”
“Okay.”
“But we’re leaving it up to US Acme’s Leaders to decide what needs to be implemented, and we are not creating an agreement up front. We’re giving them a seven-month deadline, but not a task list of what we expect at the end of seven months. We’ll be telling the team ‘go figure out what you need to accomplish a new project in a new way, and Spacely will help you’. Every week we will discuss progress made, and we’ll adapt as needed. These are smart people, and happy for the opportunity to ‘win the race’ against HQ.”
“Who is responsible for driving progress forward?”
“Acme, not Spacely. We’ll run 1-week sprints, and every Friday Acme’s leaders will demonstrate what they have developed, Monday through Thursday, Spacely experts will prepare Acme Leaders, but progress will be driven by Acme people providing demos to other Acme people on Fridays. In a perfect world, Spacely won’t say or demo anything on Friday’s.”
“That’s an interesting dynamic. It puts Acme Leaders into a position in which they need to demonstrate what they have learned… to other Acme Leaders. You know, in class students care far less about what I think of their progress than what their peers think. But how will you keep Acme from asking Spacely to repeat the status quo?”
“The learning that we will enable will be consistent with the Execs' vision of digital transformation. I’m sure that there will be balance and negotiation, but I believe that Spacely can offer a lot of value to Acme. For four days per week, Acme can learn one-on-one from an Acme expert, and then show off what they’ve learned to their peers on Fridays.”
“Interesting! I like the approach.”
“But I need some help rolling out this plan to everyone next week. Can we talk on Monday?”
“Certainly! See you then.”
Learning Goals