CHANGE MANAGEMENT

DEFINITIONChange managementis an approach to shifting/transitioningindividuals,teams, aimed at helping change stakeholders to accept and embrace changes in their business environment. In someproject managementcontexts, change management refers to a project management process wherein changes to a project are formally introduced and approved. Kotter defines change management as the utilization of basic structures and tools to control any organizational change effort. Change management's goal is to minimize the change impacts on workers and avoid distractions.Tools or components of change management include: Change management process Readiness assessments Communication and communication planning Coaching and manager training for change management Training and employee training development Sponsor activities and sponsor roadmaps Resistance management Data collection, feedback analysis and corrective action Celebrating and recognizing successReadiness assessmentsAssessments are tools used by a change management team or project leader to assess the organization's readiness to change. Readiness assessments can include organizational assessments, culture and history assessments, employee assessments, sponsor assessments and change assessments. Each tool provides the project team with insights into the challenges and opportunities they may face during the change process.Assess the scope of the change, including: How big is this change? How many people are affected? Is it a gradual or radical change?Assess the readiness of the organization impacted by the change, including: What is the value- system and background of the impacted groups? How much change is already going on? What type of resistance can be expected?Assess the strengths of your change management team.Assess the change sponsors and take the first steps to enable them to effectively lead the change process. Communication and communication planningMany managers assume that if they communicate clearly with their employees, their job is done. However, there are many reasons why employees may not hear or understand what their managers are saying the first time around. In fact, you may have heard that messages need to be repeated 6 to 7 times before they are cemented into the minds of employees. That is because each employees readiness to hear depends on many factors. Effective communicators carefully consider three components: the audience, what is said and when it is said.For example, the first step in managing change is building awareness around the need for change and creating a desire among employees. Therefore, initial communications are typically designed to create awareness around the business reasons for change and the risk of not changing. Likewise, at each step in the process, communications should be designed to share the right messages at the right time.Communication planning, therefore, begins with a careful analysis of the audiences, key messages and the timing for those messages. The change management team or project leaders must design a communication plan that addresses the needs of front-line employees, supervisors and executives. Each audience has particular needs for information based on their role in the implementation of the change.Coaching and manager training for change managementSupervisors will play a key role in managing change. Ultimately, the direct supervisor has more influence over an employees motivation to change than any other person at work. Unfortunately, supervisors as a group can be the most difficult to convince of the need for change and can be a source of resistance. It is vital for the change management team and executive sponsors to gain the support of supervisors and to build change leadership. Individual change management activities should be used to help these supervisors through the change process.Once managers and supervisors are on board, the change management team must prepare a coaching strategy. They will need to provide training for supervisors including how to use individual change management tools with their employees.Training and training developmentTraining is the cornerstone for building knowledge about the change and the required skills. Project team members will develop training requirements based on the skills, knowledge and behaviors necessary to implement the change. These training requirements will be the starting point for the training group or the project team to develop training programs.Sponsor activities and sponsor roadmapsBusiness leaders and executives play a critical sponsor role in change management. The change management team must develop a plan for sponsor activities and help key business leaders carry out these plans. Sponsorship should be viewed as the most important success factor. Avoid confusing the notion of sponsorship with support. The CEO of the company may support your project, but that is not the same as sponsoring your initiative.Sponsorship involves active and visible participation by senior business leaders throughout the process. Unfortunately many executives do not know what this sponsorship looks like. A change agent's or project leader's role includes helping senior executives do the right things to sponsor the project.Resistance managementResistance from employees and managers is normal. Persistent resistance, however, can threaten a project. The change management team needs to identify, understand and manage resistance throughout the organization. Resistance management is the processes and tools used by managers and executives with the support of the project team to manage employee resistance.Data collection, feedback analysis and corrective actionEmployee involvement is a necessary and integral part of managing change. Managing change is not a one way street. Feedback from employees is a key element of the change management process. Analysis and corrective action based on this feedback provides a robust cycle for implementing change.Celebrating and recognizing successEarly successes and long-term wins must be recognized and celebrated. Individual and group recognition is also a necessary component of change management in order to cement and reinforce the change in the organization.The final step in the change management process is the after-action review. It is at this point that you can stand back from the entire program, evaluate successes and failures, and identify process changes for the next project. This is part of the ongoing, continuous improvement of change management for your organization and ultimately leads to change competency.SummaryThese eight elements comprise the areas or components of a change management program. Along with the change management process, they create a system for managing change. Good project managers apply these components effectively to ensure project success, avoid the loss of valued employees, and minimize the negative impact of the change on productivity and a company's customers.Change management processThe change management process is the sequence of steps or activities that a change management team or project leader would follow to apply change management to a project or change. Based on Prosci's research of the most effective and commonly applied change, most change management processes contain the following three phases:Phase 1 - Preparing for change(Preparation, assessment and strategy development)Phase 2 - Managing change(Detailed planning and change management implementation)Phase 3 - Reinforcing change(Data gathering, corrective action and recognition)

It is important to note what change management is and what change management is not, as defined by the majority of research participants. Change management is not a stand-alone process for designing a business solution. Change management is the processes, tools and techniques for managing the people-side of change. Change management is not a process improvement method. Change management is a method for reducing and managing resistance to change when implementing process, technology or organizational change. Change management is not a stand-alone technique for improving organizational performance. Change management is a necessary component for any organizational performance improvement process to succeed, including programs like: Six Sigma, Business Process Reengineering, Total Quality Management, Organizational Development, Restructuring and continuous process improvement. Change management is about managing change to realize business results.How to Manage Change Management as Change Becomes the NormThe art and science of change management is due for a change: Quit thinking about change as something that is negative. Stop talking about change management as an event. Use new models and move away from those based on grief management.Change management roots in studies of griefMany change management models and associated processes are based on early learning from grief management. This work, started in the 1960s and focused on the experience of personal loss (e.g. death of a loved one, experiencing significant health problems, etc.), was used to design interventions, and change process to help employees accept change.The assumption is that change is bad; employees need to grieve the loss of their pre-change conditions, and through a drawn-out recognition of how negative the change is, employees can learn to move on.The reason these models were used by organizations was that consultants saw a parallel between grieving loss in health-related issues and grieving loss of a job or a department. The grief models applied to business change worked well when change was an event. One could see a clear starting and stopping point of the change event, and then a path for recovery could be plotted out.This change strategy recognized the full range of emotions laid out in the health-related grief models. The concept of mourning the loss of the prior organization and job was quite useful in helping employees move through change.Cycles of change are different todayHowever, what we see today in our Leadership Pulse research and client work suggests that these grief-based models are not appropriate 50 years later. Today, the cycles of change have escalated; there is no relief time between change events because business continues to speed up.Leaders, managers, and employees need to keep up with the frantic pace of business. Todays global organization does not have time for the long grief cycle-focused change management processes that the earlier models require. It is time for successful organizations to reinvent change management based on what is known about business in 2011.Today, things are different: Change is constant. Change needs to be embraced not mourned. Resilient employees who know how to make change work for their own careers will embrace change and thrive with new change making skills. It is critical to learn how to develop organizational and employee resiliency.Change Lens ResearchIn a new series of studies done with clients and via the Leadership Pulse, we examined how employees respond to various types of change using something we call a Change Lens. Measuring employee perceptions of their personal rate of change and the rate of change of the group in which they are working (e.g. department or team), characteristics of successful change management could be modeled. These studies also involved gathering data on employee energy at work, employee engagement, fairness and confidence in a number of business factors. We tracked employee attitudes throughout various types of change processes.The studies examined conditions under which engagement, energy, perceptions of fairness and confidence improved as change escalated. Comparing perceptions of personal rate of change and department rate of change, the data suggest that employees have the lowest attitude scores when the gap between personal and department rates of change are higher.Regardless of the amount of change reported by an individual employee, if the employee reported his/her personal rate of change to be the same as the rate of change of the department (context), then the scores on engagement, fairness, confidence and energy were positive and high.Marketing and sales models replaced the grief-based modelsEmployees were positive about change because the models used were different. One of the theories that we use in change management work comes from protection motivation theory. This theory is useful if a change event or ongoing change process is designed to lead to different employee behaviors. Protection motivation theory has been used to develop interventions for large-scale attitude and behavioral changes in other fields (e.g. for people to stop smoking, change habits to improve health, etc.).The core concepts of the theory are:1. High emotional charge is needed to get people to listen to the change message. The message must be strong, and it must be targeted or important to the individual.2. As you raise the emotional charge (sense of urgency to change), people need to feel confident they can be successful in this new environment. Thus, marketing processes become useful in creating interventions.Organizations spend millions of dollars on change and transformation efforts. If they can take those resources and use them to build an agile and fast organization that expects change, they can stay ahead of the competition. Money spent on getting through one change does not have as high a return on investment because employees are waiting for the change to be over, and it will not happen; change will continue, and it will come around faster every time.Benefits of marketing change vs. treating it like a death sentenceAs we analyze data in the firms going through change, organizations that did more aggressive and positive marketing of their change campaigns and that raised the level of positive emotion associated with change did much better. Employees recovered quickly if there were negative spikes, and in many cases, employee engagement, energy, fairness and confidence scores were positively rather than negatively affected by the change mantra.Keeping all employees focused on continuous change is similar to stressing that people take on health habits vs. kicking the smoking habit only. Employees can be tempted to go back to the status quo (just like smokers who quit can go back to smoking). Thus, surrounding employees with messages about movement, momentum and accepting change is like creating a healthy environment. Employees are emotionally charged to think in the right direction, and they build healthy change-ready habits.The implications for leaders who want to create agile and fast organizations that sustain high change ready people are: Increase sense of urgency (or high emotions) targeted at being change ready. Use of sales and marketing models not grief models. Build employee coping skills. Target emotion or urgency at the right stuff. Measure employee energy and sense of urgency or readiness for change. Use data to constantly re-target the message (just like marketing executives do with advertising campaigns).The challenge for todays leaders is to determine how to keep overall employee momentum and energy moving forward. Grief-based models and tools suggest to employees that change will end, and that is not the case. CHANGE change management starting today.10 Principles of Change ManagementNo single methodology fits every company, but there is a set of practices, tools, and techniques that can be adapted to a variety of situations. What follows is a Top 10 list of guiding principles for change management. Using these as a systematic, comprehensive framework, executives can understand what to expect, how to manage their own personal change, and how to engage the entire organization in the process.1. Address the human side systematically: Any significant transformation creates people issues. New leaders will be asked to step up, jobs will be changed, new skills and capabilities must be developed, and employees will be uncertain and resistant. Dealing with these issues on a reactive, case-by-case basis puts speed, morale, and results at risk. A formal approach for managing change beginning with the leadership team and then engaging key stakeholders and leaders should be developed early, and adapted often as change moves through the organization. This demands as much data collection and analysis, planning, and implementation discipline as does a redesign of strategy, systems, or processes. The change-management approach should be fully integrated into program design and decision making, both informing and enabling strategic direction. It should be based on a realistic assessment of the organizations history, readiness, and capacity to change.2. Start at the top: Because change is inherently unsettling for people at all levels of an organization, when it is on the horizon, all eyes will turn to the CEO and the leadership team for strength, support, and direction. The leaders themselves must embrace the new approaches first, both to challenge and to motivate the rest of the institution. They must speak with one voice and model the desired behaviors. The executive team also needs to understand that, although its public face may be one of unity, it, too, is composed of individuals who are going through stressful times and need to be supported.Executive teams that work well together are best positioned for success. They are aligned and committed to the direction of change, understand the culture and behaviors the changes intend to introduce, and can model those changes themselves. At one large transportation company, the senior team rolled out an initiative to improve the efficiency and performance of its corporate and field staff before addressing change issues at the officer level. The initiative realized initial cost savings but stalled as employees began to question the leadership teams vision and commitment. Only after the leadership team went through the process of aligning and committing to the change initiative was the work force able to deliver downstream results.

3. Involve every layer: As transformation programs progress from defining strategy and setting targets to design and implementation, they affect different levels of the organization. Change efforts must include plans for identifying leaders throughout the company and pushing responsibility for design and implementation down, so that change cascades through the organization. At each layer of the organization, the leaders who are identified and trained must be aligned to the companys vision, equipped to execute their specific mission, and motivated to make change happen.A major multiline insurer with consistently flat earnings decided to change performance and behavior in preparation for going public. The company followed this cascading leadership methodology, training and supporting teams at each stage. First, 10 officers set the strategy, vision, and targets. Next, more than 60 senior executives and managers designed the core of the change initiative. Then 500 leaders from the field drove implementation. The structure remained in place throughout the change program, which doubled the companys earnings far ahead of schedule. This approach is also a superb way for a company to identify its next generation of leadership.

4. Make the formal case: Individuals are inherently rational and will question to what extent change is needed, whether the company is headed in the right direction, and whether they want to commit personally to making change happen. They will look to the leadership for answers. The articulation of a formal case for change and the creation of a written vision statement are invaluable opportunities to create or compel leadership-team alignment.Three steps should be followed in developing the case: First, confront reality and articulate a convincing need for change. Second, demonstrate faith that the company has a viable future and the leadership to get there. Finally, provide a road map to guide behavior and decision making. Leaders must then customize this message for various internal audiences, describing the pending change in terms that matter to the individuals.

5. Create ownership: Leaders of large change programs must overperform during the transformation and be the zealots who create a critical mass among the work force in favor of change. This requires more than mere buy-in or passive agreement that the direction of change is acceptable. It demands ownership by leaders willing to accept responsibility for making change happen in all of the areas they influence or control. Ownership is often best created by involving people in identifying problems and crafting solutions. It is reinforced by incentives and rewards. These can be tangible (for example, financial compensation) or psychological (for example, camaraderie and a sense of shared destiny).At a large health-care organization that was moving to a shared-services model for administrative support, the first department to create detailed designs for the new organization was human resources. Its personnel worked with advisors in cross-functional teams for more than six months. But as the designs were being finalized, top departmental executives began to resist the move to implementation. While agreeing that the work was top-notch, the executives realized they hadnt invested enough individual time in the design process to feel the ownership required to begin implementation. On the basis of their feedback, the process was modified to include a deep dive. The departmental executives worked with the design teams to learn more, and get further exposure to changes that would occur. This was the turning point; the transition then happened quickly. It also created a forum for top executives to work as a team, creating a sense of alignment and unity that the group hadnt felt before.

6. Communicate the message: Too often, change leaders make the mistake of believing that others understand the issues, feel the need to change, and see the new direction as clearly as they do. The best change programs reinforce core messages through regular, timely advice that is both inspirational and practicable. Communications flow in from the bottom and out from the top, and are targeted to provide employees the right information at the right time and to solicit their input and feedback. Often this will require overcommunication through multiple, redundant channels.In the late 1990s, the commissioner of the Internal Revenue Service, Charles O. Rossotti, had a vision: The IRS could treat taxpayers as customers and turn a feared bureaucracy into a world-class service organization. Getting more than 100,000 employees to think and act differently required more than just systems redesign and process change. IRS leadership designed and executed an ambitious communications program including daily voice mails from the commissioner and his top staff, training sessions, videotapes, newsletters, and town hall meetings that continued through the transformation. Timely, constant, practical communication was at the heart of the program, which brought the IRSs customer ratings from the lowest in various surveys to its current ranking above the likes of McDonalds and most airlines.

7. Assess the cultural landscape: Successful change programs pick up speed and intensity as they cascade down, making it critically important that leaders understand and account for culture and behaviors at each level of the organization. Companies often make the mistake of assessing culture either too late or not at all. Thorough cultural diagnostics can assess organizational readiness to change, bring major problems to the surface, identify conflicts, and define factors that can recognize and influence sources of leadership and resistance. These diagnostics identify the core values, beliefs, behaviors, and perceptions that must be taken into account for successful change to occur. They serve as the common baseline for designing essential change elements, such as the new corporate vision, and building the infrastructure and programs needed to drive change.

7. Address culture explicitly: Once the culture is understood, it should be addressed as thoroughly as any other area in a change program. Leaders should be explicit about the culture and underlying behaviors that will best support the new way of doing business, and find opportunities to model and reward those behaviors. This requires developing a baseline, defining an explicit end-state or desired culture, and devising detailed plans to make the transition.Company culture is an amalgam of shared history, explicit values and beliefs, and common attitudes and behaviors. Change programs can involve creating a culture (in new companies or those built through multiple acquisitions), combining cultures (in mergers or acquisitions of large companies), or reinforcing cultures (in, say, long-established consumer goods or manufacturing companies). Understanding that all companies have a cultural center the locus of thought, activity, influence, or personal identification is often an effective way to jump-start culture change.A consumer goods company with a suite of premium brands determined that business realities demanded a greater focus on profitability and bottom-line accountability. In addition to redesigning metrics and incentives, it developed a plan to systematically change the companys culture, beginning with marketing, the companys historical center. It brought the marketing staff into the process early to create enthusiasts for the new philosophy who adapted marketing campaigns, spending plans, and incentive programs to be more accountable. Seeing these culture leaders grab onto the new program, the rest of the company quickly fell in line.8. Prepare for the unexpected: No change program goes completely according to plan. People react in unexpected ways; areas of anticipated resistance fall away; and the external environment shifts. Effectively managing change requires continual reassessment of its impact and the organizations willingness and ability to adopt the next wave of transformation. Fed by real data from the field and supported by information and solid decision-making processes, change leaders can then make the adjustments necessary to maintain momentum and drive results.

A leading U.S. health-care company was facing competitive and financial pressures from its inability to react to changes in the marketplace. A diagnosis revealed shortcomings in its organizational structure and governance, and the company decided to implement a new operating model. In the midst of detailed design, a new CEO and leadership team took over. The new team was initially skeptical, but was ultimately convinced that a solid case for change, grounded in facts and supported by the organization at large, existed. Some adjustments were made to the speed and sequence of implementation, but the fundamentals of the new operating model remained unchanged.10. Speak to the individual: Change is both an institutional journey and a very personal one. People spend many hours each week at work; many think of their colleagues as a second family. Individuals (or teams of individuals) need to know how their work will change, what is expected of them during and after the change program, how they will be measured, and what success or failure will mean for them and those around them. Team leaders should be as honest and explicit as possible. People will react to what they see and hear around them, and need to be involved in the change process. Highly visible rewards, such as promotion, recognition, and bonuses, should be provided as dramatic reinforcement for embracing change. Sanction or removal of people standing in the way of change will reinforce the institutions commitment.Most leaders contemplating change know that people matter. It is all too tempting, however, to dwell on the plans and processes, which dont talk back and dont respond emotionally, rather than face up to the more difficult and more critical human issues. But mastering the soft side of change management neednt be a mystery.

ORGANIZATIONAL ADAPTATIONThe word adaptation is a metaphor that captures the endeavors of organizations to be fitted better to its environment. Two things remain prominent with organization in this process: 1) It has an articulated purpose2) An established mechanism for achieving it. Most organizations are constantly evaluating their purposes, questioning, verifying and re-defining the way of interaction with their environments. Effective organizations maintain alignment with its environment, and ineffective organization fail to maintain the alignment with environment. These effective organizations also constantly modify and refine the mechanism by which they achieve their purposes and are re-arranging their structure of roles, relationships and managerial processes. Hence the essence of management is coping with external environmental change by changing objectives, changing structures and changing processes. We will discuss here the same as the concept of organization adaptation frame-work or model as proposed Miles and Snow. The model contains two major elements:1. It specifies the major decisions needed by organization to maintain an effective alignment with its environment.2. This also highlights an organizational typology which portrays different patterns of adaptive behavior. The Adaptive Cycle: Strategic Choice theorists argue that organization behavior is only partially ordained by environmental conditions and the choices made by top managers are the critical determinant of organization structure and processes. The adaptive cycle is present in all organization, according to Miles & Snow, and it is more visible in new or growing organizations. Now the question is what is meant by adaptive cycle? This has been defined by the two leading scholars as under: The Entrepreneurial problem An entrepreneur must give a concrete definition of organization domain: a specific good or service and a target market or market segment, and the entrepreneurial problem is an added dimension. In either a new or on-going organization the solution to entrepreneur problem is marked by management's acceptance of a particular product-market domain, and this acceptance becomes evident when management decides to commit or allocate resources. Second is to achieve objectives related to the entrepreneur domain. In many companies entrepreneurial solution is sought by through the development and projection of an organizational image, internally and externally. Therefore in this phase two important phenomena are the identification of a new opportunity and the initial impetus for movement toward it. Engineering problem begins to appear at this stage. The Engineering Problem The engineering problem involves the creation of a system which operationalizes management's solution to the entrepreneurial problem. Such a system requires management to select appropriate technology (input-transformation-output) for producing and distributing the chosen product, and further need new information, communication and control linkages. (Job-order, batch or flow production) As solution to the problems is reached through initial implementation of the administrative system but final configuration of the organization will be reached as management consolidates relations with the environment (final shape of the organization will be settled during administrative phase).The Administrative ProblemAdministrative system is to reduce uncertainty within the organizational system. Therefore in this phase management establishes process for coordinating and controlling internal operations and rationalizing the system already developed. It also involves formulating and implementing those principles which will enable the org. to continue to evolve (innovation). This phase is termed pivotal by the author in the cycle of adaptation owing to the followings: Rationalization and Articulation Management must be adept at two conflicting functions: first, to create an administrative system (structure & processes) for monitoring and controlling current activities and second, at the same time allowing the system not to jeopardize the future innovation. This has been identified as lagging and leading variable in the process of adaptation. The lagging variable suggests organization must rationalize through the development of appropriate structure and processes, strategic decisions made at previous points in the adjustment process. While the leading variable the administrative system must facilitate the org. future capacity to adapt by articulating and reinforcing the paths along which innovative capacity can proceed. Therefore an administrative system is such to deal with past and future. The same dilemma can be identified in the classical principle of Henri Fayol; especially when he talked of maintaining stability and initiative in the organization. In terms of marketing management of an organization the same problem persists as revenues from existing product and at the same time the need to develop new products and businesses. The dilemma is, how can we get both out of the same structure one needs innovation and creativity while the other demands tight discipline and regimentation? Having dealt with adaptive cycle as given by Miles and Snow the question then arises how organizations move through the cycle. For this we need to understand the typology presented by them in the form of different set of organizational strategies. The question is what strategies organizations employ in solving their entrepreneurial, engineering and administrative problems. The research of Miles & Snow shows that there are essentially three-strategic types of organizations:1. Defenders2. Prospectors3. Analyzers4. ReactorsEach strategy has a distinct way to engage or interact with its environment. Each type has its own unique strategy for relating to its chosen market. Each has a particular configuration of technology, structure and process that is consistent with its market strategy. Besides the fourth type of organizations exist known as Reactor, which is identified by Miles & Snow as a form "Strategic failure" owing to inconsistencies among its strategy, structure, technology and process.

1. DefendersThe defender deliberately enacts in an environment for which a stable form of organization is appropriate. Stability is achieved by the defender's definition of, and solution to its entrepreneurial problem. The defenders define it as " how to seal off a portion of the total market in order to create a stable domain, and they do so by producing only a limited set of products directed at a narrow segment of the total potential market. Within this domain defender strives aggressively to prevent competitors entering its turf, but also ignores developments and trends outside of their domains. Over a time he is successful in carving out its own niche which is difficult for competitors to penetrate. The engineering problem for the defender is how to produce and distribute goods as efficiently as possible? The defender does so by developing a single core technology that is highly cost efficient out put on continuous and predictable basis. Some defenders follow vertical integration strategy by incorporating each stage of production from raw material to distribution of final output. The defender's Administrative problem is "How to achieve strict control of the organization in order to ensure efficiency. So this is resolved through structural-process mechanism described as mechanistic bearing the following features:i) Top management group heavily dominated by production and cost-control specialistii) Little or no scanning of the environment for new avenues.iii) Functional structure characterized by division of labour, centralized control, communications through hierarchical channelsSuch administrative is suitable for generating and maintaining efficiency but have adaptive or adaptability problems. Therefore this system operates well for stable industries and is ineffective for turbulent industries (where market environment changes quickly)For example this view of strategic adaptation is popular amongst managers in developing countries e.g. electronic industries in context of Pakistan split air conditioner may be different from traditional manufacturers of window air conditioning units. The question then is why traditional stable business in this industry was un-able to realize and adapt quickly in the changed environment. Or it is the organization who acted like defenders of the Miles & Snow's typology.2. ProspectorsThe prospector enacts an environment that is more dynamic than other types of organizations. Unlike the defender, whose success comes primarily from efficiently serving a stable market, the prospector's prime capability is that of finding and exploiting new product and market opportunities. For Prospector maintaining a reputation as an innovator in product and market development may be perhaps more important profitability.Entrepreneurial problem for prospector is how to locate and develop market opportunities? The systemic addition of new products or markets, combined with retrenchment in other parts of domain characterizes the prospector. The prospector must have the ability to scan, survey a wide range of environmental trends and events. So the organization spends heavily on individual and groups who scan the environment. Change (within industry and to different industry) is major tool of the Prospector manager to gain edge over competitors. Product and market innovation protect the organization from a changing environment but the organization risks the low level of profitability and stretch (over expansion) of it resources.Engineering problem for prospector is how to avoid long term commitments to a single technological process? Therefore the solution for this problem from prospector's perspective is to invest in flexible, proto-type technologies, and also to invest in multiple technologies. Prospectors have low degree of routinization and mechanization. Prospectors believe in organic organization where technology is embedded in people. Therefore technological flexibility permits a rapid response to changing domains but the organization cannot develop economies (or efficiency) in production and distribution system because of multiple technologies. This type of decentralization increases cost as economies are difficult to achieve through this way.3. AnalyzerThe research shows that the defender and prospector seem to reside at the opposite ends of continuum of adjustment strategies. Between these two extreme we have analyzer and it is a unique combination of the two types. A true Analyzer is an organization that attempts to minimize risk while maximizing the opportunity for profit. It combines the strengths of both the prospector and defender into a single system. The best word to describe Analyzer's adaptive approach is "balance".The entrepreneurial problem is how to locate and exploit new products and market opportunities while simultaneously maintaining a firm base of traditional products and customers. The obvious solution is to operate in hybrid domain that is both stable and changing. The analyzer move towards new markets or products only after their viability has been demonstrated. This may be accomplished though imitation of the prospector once success is demonstrated by the prominent prospector. At the same time majority of the analyzer's revenue is generated by a fairly set of traditional products or markets a defenders' attribute. The operational efficiency of defender is to pursue and effectiveness of prospector in looking for new markets and products. Therefore analyzer can grow through both market penetration and market development strategies.The duality of analyzer's domain is reflected in its engineering problem and solution. The main problem for analyzer is how to be efficient in its technology which a stable portion and to be a flexible in changing portion? The organization must learn how to achieve and protect equilibrium between conflicting demands for technological flexibility and for technological stability.4. ReactorsBesides the fourth type of organizations is Reactors. This type of organization exhibits a pattern of adjustment to its environment that is both inconsistent and unstable. This type lacks a set of response mechanism which it can consistently apply to a changing environment. The reactors adaptive cycle usually consists of responding inappropriately to environmental change and uncertainty, performing poorly as a result, and then reluctant to act aggressively in the future. Interesting question here would be why organizations become reactors? Three reasons cited by the authors, Miles & Snow et al, and are as follows:i) Top management may not have clearly articulated the organization's strategy. For example a company founded by one-man (prospector with immense personal skills) successfully establishes its business but upon his death the firm is in strategic void.ii) Management does not fully shape the organization structure and processes to fit to a chosen strategy. Strategy is a mere statement not a guide to behavior; similarly functional strategies might not be aligned. This is a typical case with organizations in LDCs to come forth quick with beautiful written vision and mission statements and other strategy documents.iii) The ultimate cause of instability and failure might be the tendency on the part of management to maintain the organizations current strategy-structure relationship despite overwhelming changes in environmental conditions.

SKELETAL MODEL OF ADAPTATIONA state of adaptation, in a biological sense describes a sate of survival for an organism. Analogously, a state of adaptation for a business organization is one in which it can survive the conditions of its environment. There may be several niches available to a firm for surviving the conditions of its environment.

Simon gives us three modes that are open to a system:1. Passive insulation (Defender)2. Reactive negative feedback (Analyzer)3. Predictive or Proactive adaptation (Prospector)

CASE STUDIESTowers Watson Global Study Identifies Six Activities That Influence Success of Organizational Change Management

NEW YORK and LONDON, April 19, 2012 Companies that manage change effectively are more likely to have a formal, systematic process and a dedicated staff than organizations that manage change poorly, according to new research by global professional services company Towers Watson (NYSE, NASDAQ: TW). The research, from Towers Watson's Change and Communication ROI Study, also identified six activities leading, measuring, communicating, involving, learning and sustaining that influence a company's overall change success."When it comes to managing major organizational change, many companies have a difficult time getting it right," said Kathryn Yates, global leader of communication consulting at Towers Watson. "In fact, our research shows that less than half stay on schedule, come in at or under budget or hold people accountable for deadlines. Considering that the average survey respondent went through three major changes in the past two years and the effect change management can have on the bottom line, there is plenty of reason for them to learn how the best organizations manage change."The Towers Watson study found that nearly two-thirds (65%) of companies with the best change management follow a formal, systematic process, compared with just 14% of companies with low change effectiveness. Additionally, 45% of respondents with high change effectiveness have a staff dedicated to change management efforts, versus just 16% with a lower level of change effectiveness.According to the study, leading activities, which include finding executive sponsorship for organizational change, developing a clear vision of desired organizational change, creating an integrated communication and change management strategy, and creating strong employee motivation for making organizational change, have the most influence in the overall success of an organization's change. More than eight in 10 (84%) of highly effective companies have a clear vision of what their organizational change is intended to achieve, compared with just 19% of companies with low change effectiveness. Notably, both senior leaders and communication and change management professionals have an important role to play in these leading activities.Measuring activities were also among the top drivers of change success. More than three-fourths (76%) of highly effective companies set clear, measurable goals up front for the impact of changes, compared with just 14% of low-effectiveness companies. Just under three-fourths (73%) of highly effective companies measure their progress against goals, versus 12% of companies with low-change-effectiveness practices.The study also found that effective companies incorporate programs to sustain the positive effects of change over time. Nearly two-thirds (64%) of highly effective companies continue to exhibit new behaviors and use new skills after changes have been made, compared with fewer than one in 10 (8%) of low-effectiveness companies."Organizational change is a continuous reality. Regardless of the type of change an organization experiences or where an organization is located, the critical change activities remain constant. Organizations that get the leading, measuring and sustaining activities right will be the ones that experience the greatest success," concluded Yates.Other findingsRoughly two-thirds of highly effective companies create a sense of co-ownership about organizational change initiatives and develop support from enough employees for change initiatives to succeed, compared with one in 10 low-effectiveness companies.More than eight in 10 (83%) of respondents reported that they train managers in the area of change management, but only 36% find it effective.Effective communication is an important element of change management and, if both are done well, can significantly impact financial performance. Companies highly effective at both communication and change management are 2.5 times as likely to outperform their peers as companies that are not highly effective in either area.

Organizing for successful change management: A McKinsey Global SurveyExecutives say energy and communication are essential for a successful business transformation.The most successful transformations of business performance occur when executives mobilize and sustain energy within their organizations and communicate their objectives clearly and creatively, according to a new online survey conducted by The McKinsey Quarterly.1 Executives further improve their chances for success if they significantly raise employee expectations, actively change people's behavior, and engage the attention of individuals at all levels of the organization, from top management to the front line.These and other insights into the change-management process emerge from the survey, in which executives were invited to assess and characterize one transformation they had been involved in during the previous five years. For this purpose, we defined a transformation as a coordinated program, in companies or business units, that typically involves fundamental changes to the organization's strategy, structures, operating systems, capabilities, and culture.Why change?Transformations come in various shapes. Cost cutting, not surprisingly, is a consistent theme, with more than half of the respondents agreeing that it was a major goal. Half say their company's main objective was moving from good performance to great performance, with 41 percent observing that their company's transformation was the result of a restructuring: merging, splitting up, or divesting a part of the organization. Only 27 percent of the executives were involved with turning around a crisis situationperhaps the best-known and most headline-grabbing context for change.Success is the normWe asked executives to judge the success of the transformation in two ways. One was to gauge the company's subsequent performance, such as its profitability, return on capital employed, market value, and the like. The other was to measure the extent to which the process laid a foundation for sustaining corporate health over the longer termthrough, for example, upgraded capabilities, closer relationships with customers or suppliers, and a positive shift in organizational culture. Respondents are a little more positive about the first yardstick, with 38 percent saying that the transformation was "completely" or "mostly" successful at improving performance, compared with 30 percent similarly satisfied that it improved their organization's health. Around a third declares that their organizations were "somewhat" successful on both counts. About one in ten admit to having been involved in a transformation that was "completely" or "mostly" unsuccessful.

Transformation takes energyWhen we compare the subsequent responses of the 38 percent who characterize their company's transformation as "completely" or "mostly" successful (that is, those who are the top performers) with the entire sample, a striking observation comes to light. Whereas around 30 percent of all surveyed executives involved in a transformation say that their organization was "completely" or "mostly" successful at mobilizing energy, this number jumps to more than 55 percent when the responses of only the top performers are included. With regard to sustaining that energy, 57 percent of top performers, compared with 28 percent overall, say that their organization was "completely" or "mostly" successful. The contrast between top and bottom performers is even greater.Energy boostersAsked about the mechanisms the executives used to mobilize and sustain energy, they strongly emphasize the impact of clear, comprehensive, and compelling communication. A majority of all respondents say their organization sought to define clear goals for the next one to two years and communicated the transformation as a compelling story, and a little under half say that their company offered an inspiring view of a better long-term future. Again, the top performers are markedly more enthusiastic about some of the factors that underpin these themes. Three in four, for instance, say that the setting of clear goals was a part of their program. Two-thirds of those respondents say that their company integrated the goals of the transformation program into processes such as budgeting, performance management, and recruiting. And nearly three in five of them say that successes were acknowledged regularly and publicly.The ingredients of successFurther correlations can be made between executives' reports of success in their transformation efforts and specific features of their transformation programs. Respondents with the most successful transformations reckon that their company was conspicuously more effective than the others at raising expectations about future performance, addressing short-term performance, engaging people at all levels of the organization, including a clear and coordinated program design, and making the change visiblethrough, say, new IT tools or physical surroundings.What transformation feels like?The survey, meanwhile, sheds new light on the nature of the transformation experience for those involved. More than 80 percent of the executives agree that it changed the way they work, though 36 percent of that group says that it did so in ways that differ from the original intentions of the change program. Those affiliated with top-performing organizations are significantly more likely to say they changed in ways that line up with the program's original goals.Emotions play a leading role in a performance transformation. Overall, the respondents report negative and positive moods in roughly equal proportions, with anxiety (mentioned by 46 percent of all respondents) as the most common negative feeling, well ahead of confusion, frustration, fatigue, and resistance. Among the positives, a sense of focus, enthusiasm, and feelings of momentum occur roughly equally. Not surprisingly, more of the top performers report experiencing the positive emotionsespecially focus and enthusiasm.