Manage Change

8/9/2019 Manage Change

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Strategy in Action

14: Managing

Strategic Change


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Exploring Corporate Strategy 8e, Pearson Education 2008 14-2

Learning Outcomes (1)

Identify the scope of a requiredstrategic change

Analyse how organisational contextmight affect the design of strategicchange programmes

Undertake a forcefield analysis toidentify forces blocking andfacilitating change


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Learning Outcomes (2)

Assess the impact of the role andmanagement styles of change agents

Assess the value of different levers forstrategic change, including themanagement of organisational routines,political and symbolic processes and otherchange tactics

Identify the pitfalls and problems ofmanaging change programmes


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Exploring Corporate Strategy 8e, Pearson Education 2008

Change complex!!

Always remember - Change

management is complex. Change is

generally resisted and not easilywelcomed - as Mark Twain once said

The only person who likes change is

a baby with a wet diaper

14-4


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Kumar Manglam Birla

Case AV Birla group under K.M. Birla

since 1995.

Status when KMB took charge age

old babu culture, womb to tomb policy,

Partha system, In house recruitment

focus more towards managing thelicence raj and not meeting changing

forces of competition.

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Kumar Manglam Birla

KMB discontinued various age old practices.

Rising Sun logo Corporate logo as unification symbol for theGroup.

Young managers hired and average age of managers reduced

group wide.

EVA model to replace Partha system.

ABMCL Mgt. Services group to think out of the box and adviseon group strategy.

360 degree feedback, performance appraisal systems, feedbackencouraged, develop leaders for tomorrow through formal trainingetc.

Delegation of authority.

Global expansions

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Forces for Change

Change is all pervasive Nature of the Workforce

Greater diversity

Technology

Faster, cheaper, more mobile Economic Shocks

Mortgage meltdown

Competition

Global marketplace

Social Trends

World Politics

Terrorism, the opening of China, emergence of BRIC

2009 Prentice-Hall Inc. All rights reserved. 19-7

E X H I B I T 19-1


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Resistance to Change

Resistance to change appears to be a natural and positivestate

Inertia and Resistance to change is natural people hold on

to existing ways of doing things this often leads to a

strategic drift situationForms ofResistance to Change:

Overt and Immediate

Voicing complaints, engaging in job actions

Implicit and Deferred

Loss of employee loyalty and motivation, increased errors or

mistakes, increased absenteeism

Deferred resistance clouds the link between source and reaction



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Sources ofResistance to Change


E X H I B I T 19-2


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The Stages of Concern Model - in change

management scenario

1. Information Concerns - What is the change? Why is it needed?What is wrong with what we are doing now? How much and howfast will the change be implemented?

2. Personal Concerns - How will this change impact mepersonally? Will I win or lose? Can I learn new skills needed? Howwill I find time and resources to implement change?

3. Implementation concerns - How will the change beimplemented? How long will it take? How will the structure andsystems change in the company? What happens if there areproblems in the implementation?

4. Impact concerns - Is the change worth it? Will things get betterfor me and for the organization? Will the change make asignificant difference?

5. Collaboration concerns - Who else will be involved in the changeprocess? How will I work with them? Who else should be involvedfor success?

6.Refinement concerns - How can we refine the change and makeit better? Will I be allowed to suggest? How can we leverage onnew opportunities thrown up by the change?



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Tactics for Overcoming Resistance to Change

Education and Communication Show those effected the logic behind the change

Participation Participation in the decision process lessens resistance

Building Support and Commitment Counseling, therapy, or new-skills training

Implementing Change Fairly Be consistent and procedurally fair

Manipulation and Cooptation Spinning the message to gain cooperation and buy out of the

resistance leaders Selecting people who accept change

Hire people who enjoy change in the first place

Coercion Direct threats and force closure, transfers, negative

performance evaluations

Approach to managing change has to be CONTEXTDEPENDENT



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The Politics of Change

Impetus for change is likely to comefrom outside change agents, newemployees, or managers outside themain power structure.

Internal change agents are mostthreatened by their loss of status inthe organization.

Long-time power holders tend toimplement incremental but not radical

change.

The outcomes of power struggles inthe organization will determine thespeed and quality of change.



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Lewins Three-Step Change Model

Unfreezing Change efforts to overcome the pressures of both individual

resistance and group conformity

Refreezing

Stabilizing a change intervention by balancing driving andrestraining forces


Unfreeze Move Refreeze

E X H I B I T 19-3


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Lewin: Unfreezing the Status Quo

Driving Forces Forces that direct behavior away from the status quo

Restraining Forces

Forces that hinder movement from the existing equilibrium


E X H I B I T 19-4


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Kotters Eight-Step Plan

Builds from LewinsModel

To implement change:

1. Establish a sense of urgency

2. Form a coalition3. Create a new vision

4. Communicate the vision

5. Empower others by removing barriers

6. Create and reward short-term wins

7. Consolidate, reassess, and adjust

8. Reinforce the changes


E X H I B I T 19-5

Unfreezing

Movement

Refreezing


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Action Research

A change process based on systematic collection of data andthen selection of a change action based on what the analyzeddata indicates

Process steps:

1. Diagnosis

2. Analysis3. Feedback

4. Action

5. Evaluation

Action research benefits: Problem-focused rather than solution-centered

Heavy employee involvement reduces resistance to change



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Organizational Development

Organizational Development (OD) A collection of planned interventions, built on humanistic-

democratic values, that seeks to improve organizational

effectiveness and employee well-being

OD Values Respect for people

Trust and support

Power equalization

Confrontation

Participation



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Six OD Techniques

1. Sensitivity Training Training groups (T-groups) that seek to change behavior through

unstructured group interaction

Provides increased awareness of others and self

Increases empathy with others, listening skills, openness, and

tolerance for others

2. Survey FeedbackApproach

The use of questionnaires to identify discrepancies among member

perceptions; discussion follows and remedies are suggested

3. Process Consultation (PC)

A consultant gives a client insights into what is going on around

the client, within the client, and between the client and other

people; identifies processes that need improvement.



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Six OD Techniques (Continued)

4. Team Building High interaction among team members to increase trust and

openness

5. Intergroup Development

OD efforts to change the attitudes, stereotypes, and

perceptions that groups have of each other

6. Appreciative Inquiry

Seeks to identify the unique qualities and special strengths ofan organization, which can then be built on to improve

performance

Discovery: Recalling the strengths of the organization

Dreaming: Speculation on the future of the organization

Design: Finding a common vision

Destiny: Deciding how to fulfill the dream



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Creating a Culture for Change: Innovation

1. Stimulating a Culture of Innovation Innovation: a new idea applied to initiating or improving a

product, process, or service

Sources of Innovation: Structural variables: organic structures

Long-tenured management

Slack resources

Interunit communication

Idea Champions: Individuals who actively promote the

innovation



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Creating a Culture for Change: Learning

2. Learning Organization An organization that has developed the continuous capacity

to adapt and change

Learning Types

Single-Loop: errors are corrected using past routines Double-Loop: errors are corrected by modifying routines

Characteristics

Holds a shared vision

Discards old ways of thinking

Views organization as system of relationships

Communicates openly

Works together to achieve shared vision


E X H I B I T 19-6


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Creating a Learning Organization

Overcomes traditional organization problems: Fragmentation

Competition

Reactiveness

Manage Learning by:

Establishing a strategy

Redesigning the organizations structure

Flatten structure and increase cross-functional activities Reshaping the organizations culture

Reward risk-taking and intelligent mistakes



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Premises of

Strategic Change

Strategy matters

Context matters

Different approaches to managing

strategic change are required

for different contexts


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Exhibit 14.1 Key Elements in

Managing Strategic Change

1. Diagnosis of

context

4.Change

agents

2. Levers

for

change

3.Managing

change

programmes


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Diagnosing the

Change Situation

Types of change Context of change

Culture web Forcefield analysis


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Exhibit 14.2 Types of Change

Minor changes

Major cost

cutting

Planned major

change

Rapid major avert existence

threat


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Exhibit 14.3

Context of Change


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Organisational Culture

The basic assumptions and beliefs that are

shared by members of an organisation, that

operate unconsciously and define in a basic

taken-for-granted fashion an organisations

view of itself and its environment

Schein 1997


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Organisational Culture

Exhibit 4.10


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The Cultural Web

Stories Symbols

Structures

Power

structures

Controlsystems

Rituals/

routines Paradigm


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The Cultural Web: some useful questions

Exhibit 4.12


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Stories Stories ofpraising others vs.

blaming

Symbols Carparking by need vs.

by rank

Routines andRituals Challengepractices vs. avoid

change

Power Strucutre decentralized vs.

formal organization

Controls Informal

feedback vs. formalcontrols

Structure of

Organization Flatvs. Hierarchies


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What is a Forcefield Analysis?

A forcefield analysis provides a view ofchange problems that need to be tackled,

by identifying forces for and against change.

What aspects of the current situation aidchange in the desired direction?

What aspects are blocking change?

What needs to be done to aid change?


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Exhibit 14.4

A Forcefield Analysis


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Roles in Managing Change

Change agents

Strategic leaders

Charismatic

Instrumental

Outsiders

Middle managers

Implementation and

controlSense-making

Reinterpretation and

adjustment

Relevance bridge

Advisors


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Styles of Managing Change

Education/

Communication why the change

Collaboration/

Participation InvolveIntervention by authorities

Direction clear vision Coercion Impose change


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Levers for Change

Challenging the taken for granted

Changing routines work practices

Symbolic systems e.g. open offices

Political systems

Other change tactics Timing, rewards


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What are Symbols?

Symbols are objects, events, acts,

or people that convey, maintain, or

create meaning over and above their

functional processes.


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Rituals and Organisational Change

Rites of passage -Induction

Rites of enhancement

- Awards Rites of renewal

Project teams

Rites of integration -Parties

Rites of conflictreduction -Committees

Rites of degradation -Fire

Rites of sense making

- Surveys

Rites of challenge-New CEO challengesstatus quo

Rites of counter-challenge Work torule


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Power and

Political

Processes

Acquisition

of resources

Association with

powerful stakeholders

Development of

alliances

Symbolic change


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Sources and indicators of power

Exhibit 4.6


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What is Turnaround Strategy?

A turnaround strategy emphasizes the

speed of change

and rapid cost reduction

and/or revenue generation.


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Elements of Turnaround Strategies

Crisis stabilisation

Management

changes

Stakeholder

support

Target marketclarification

Refocusing

Financial

restructuring

Prioritisation of

critical

improvement areas


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Aspects of

R

evolutionary ChangeClear strategic direction

Combined economic and symbolic levers

Outside perspectives

Multiple styles of change management

Work with existing culture

Monitoring of changes


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Aspects of

E

volutionary ChangeEmpowered organisation

Clear strategic vision

Continual change and commitment toexperimentation

Transitional stages

Irreversible changes

Sustained top management commitment

Winning hearts and minds


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Chapter Summary (1)

There are different types of strategic change

which can be thought of in terms of the extent of

culture change required and its nature

It is important to diagnose wider aspects of

organisational context such as resources and

skills that need to be preserved, the degree of

homogeneity, capability, capacity, readiness for

change, and the power to make it happen

The cultural web and forcefield analysis are useful

as means of identifying blockages to change and

potential levers for change


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Chapter Summary (2)

Change agents my need to adopt different styles

of managing change according to different

contexts and in relation to the involvement and

interest of different groups

Levers for managing strategic change need to be

considered in terms of type of change and context

of change. Levers include surfacing and

challenging the taken for granted, the need tochange operational processes, routines and

symbols, the importance of political processes,

and other change tactics


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Key Debate:

Management of Change

from Top to Bottom?

What are the problems associatedwith top-down or bottom-up views of

change management?

If you were a senior executive whichapproach would you take and in what

circumstances?Are the different views reconcilable?


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Strategic Leadership

It is nothing more than the ability to anticipate, prepare, and get positioned forthe future.

It is the ability to mobilize and focus resources and energy on things that make adifference and will position you for success in the future.

It is the courage to think deeply about what you want to do. Applied strategic

leadership is about creativity, intuition, and planning to help you reach yourdestiny.

It is nothing more than the ability to anticipate, prepare, and get positioned forthe future. It is the ability to mobilize and focus resources and energy on thingsthat make a difference and will position you for success in the future. It is thecourage to think deeply about what you want to do. Applied strategic leadershipis about creativity, intuition, and planning to help you reach your destiny.Strategic people think and act before they have to, before they are forced totake up a defensive or reactive position. Strategic people think and act before

they have to, before they are forced to take up a defensive or reactive position.

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STRATEGIC LEADERSHIP COMMUNICATING WITH KEY STAKEHOLDERS


Across Outward

Managers

must sufficiently

communicate in 4

directions

Upward

Downward

Convince top management

of a new strategy (e.g., Intels shift

to microprocessors)

Enlist support of

those who implement

Win cooperation ofexternal stakeholders

including customers

and distributors (e.g.,

Compaq failed to do

this with retailers)

Win support of other

units within the firm


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Real strategic leadership means taking responsibility for the future,as well as for what is happening today.

A primary goal of a strategic leader is to gain a betterunderstanding of the business conditions, the environment (themarket, customers, and competitors), and the leading indicators

that identify new trends and situations that may arise.

A leader must be "tuned in" to the signals that provide insightabout the needs and wants of team members, seniormanagement, and suppliers.

As a leader, you must know who your customers are, why theycome to you and your organization, what they will be looking for in

the future, and how your environment is evolving. A leader must be tuned into the competitors (what products they

offer and how customers see them).

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There are plenty of legitimate reasons why we pay attention to operational andshort-term issues. In many cases, we get rewarded for it and our job securitydepends upon it.

But we must also look to the horizon and identify the signs that indicate comingchanges or disruptions in our world. The challenge we face, is that no one willgive us the time to consider these issues - we have to make a conscious choice

to carve out an opportunity to look to the future. Strategic leadership requires the ability to see and understand your work

environment. It requires objectivity and an ability to separate you from thechallenge of daily events, and look at the bigger picture.

In short, one may define strategic leadership as the ability of an experienced,senior leader who has the wisdom and vision to create and execute plans andmake consequential decisions in the volatile, uncertain, complex, andambiguous strategic environment.

E.g GE Jack Welch, Nissan Carlos Ghosn, Procter & Gamble under chiefexecutive A.G.Lafley, New York City Mayor Michael Bloomberg, JRD Tata

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Anatomy of a Strategic Leader

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Exploring Corporate Strategy 8e, Pearson Education 2008 Copyright Houghton Mifflin1 - 54

Strategic Leadership what

should the possessVision, eloquence, and consistency to give a

sense of direction and communicate thedirection (YES WE CAN)

Commitment walk the talkBeing well informed through formal contacts,

MIS, networks, foresight

Willingness to delegate and empower

The astute use of power to build consensus,manage contingencies and manage change

Emotional intelligence


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Exploring Corporate Strategy 8e, Pearson Education 2008 Copyright Houghton Mifflin1 - 55

Emotional Intelligence

Self-awareness understand onself

Self-regulation control self think andact

Motivation passion, energy andpersistence.

Empathy understand feelings of

others

Social skills - friendliness, contacts


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Challenges to Strategic Decision

Making Cognitive biases

Prior hypothesis bias strong prior experience beliefs

Escalating commitment

Reasoning by analogy simple analogies to resolvecomplex problems

Representativeness generalize from small samples

Illusion of Control

Hubris hypothesis over confidence

Groupthink

Documents

Manage Change