Strategy Safari

Change Dynamics

Culture,Values and Change

Leadership and Change

Wednesday; January 31, 2007

Khurram Aziz

SBE – UMT, Pakistan

SBE - UMT Culture and Change 2

Session Plan

1. The impact of organizational Culture and reshaping capabilities on Change implementation success: The mediating role of readiness for Change.

2. A new framework for managing Change across Cultures.

3. If you want strategic Change, don’t forget to Change your Cultural artifacts.

4. Cultural Leadership in organization.

SBE - UMT Leadership and Change 3

Some basic Ideas

Organizational Culture: Pattern of shared values and

norms that distinguishes one organization from another.

Indicate what is believed to be important in the organization—what is of value to organizational members.

Indicate how things are done in the organization.

Provide direction and meaning for the organization’s members.

Energize organizational members in the pursuit of organizational purpose.

Culture is organization’s personality.

(as quoted in Higgins & Mcallaster, 2004)


Some basic Ideas … cont.

Change:

Means several things. Sometimes refers to the external world of technology, customers, competitors and such like. Sometimes refers to internal changes such as practices, styles and strategies.

(Senge, 2001) Change can also be the

change in shared assumptions, values and practices of organizational factors as they are stimulated by changes in the environment.

(as quoted in Higgins & Mcallaster, 2004)

The Impact of Organizational Culture and Reshaping Capabilities on

Change Implementation Success: The Mediating Role of Readiness

for Change

Renae A. Jones, Nerina L. Jimmieson and Andrew Griffiths, Journal of Management

Studies 42:2 March 2005


Rationale …. R u ready?

While the failure of planned organizational change may be due to many factors, few are so critical as employees’ attitudes towards the change event.

Schein (1987, 1988, 1999) has addressed the failure of organizational change programs by arguing that the reason so many change efforts run into resistance or outright failure is traceable to the organization’s inability to effectively unfreeze and create readiness for change before attempting a change induction.

Organizations often move directly into change implementation before the individual or the group to be changed is psychologically ready.

This attracted researchers attention.


Readiness for Change

Readiness for change is the extent to which employees hold positive views about the need for organizational change and the extent to which employees believe that such changes are likely to have positive implications for themselves and the wider organization.

(Armenakis et al., 1993; Holt, 2002; Miller et al., 1994).


Theoretical Framework ……

Employee’s perception of Human Relation

Values Culture

Employee’s perception of Open System Values Culture

Reshaping Capabilities

CHANGE IMPLEMENTATION

SUCCESS

Employee’s perception

of Level Of

Readiness forChange


Theoretical Framework ……

Employee’s perception of Human Relation

Values Culture

Employee’s perception of Open System Values Culture

Reshaping Capabilities

Employee’s perception

of Level Of

Readiness forChange

CHANGE IMPLEMENTATION

SUCCESS


Research Hypothesis …..

Employees who perceive a human relations cultural environment within their division would report higher levels of user satisfaction and system usage and this relationship would be mediated by their ratings of readiness for change …. (H1a)

Employees who perceive an open systems cultural environment within their division would report higher levels of user satisfaction and system usage and that this relationship is mediated by their change readiness perceptions (H1b)

Employees who report high levels of reshaping capabilities within their divisions would also perceive heightened levels of readiness for change which, in turn, would be predictive of change implementation (H2)


The Competing Values Framework

Flexibility

I

N

T

E

R

N

A

L

Human Relations Open Systems

E

X

T

E

R

N

A

L

End – Cohesion and Morale

Means - Training and Development, Open Communication and Participative Decision-Making.

End – Innovation and Development

Means – Adaptability and Readiness, Visionary Communications and Adaptable Decision-Making

Internal Processes Rational Goal

End – Stability and control

Means - Information management, precise communication and data-based decision-making.

End – Efficiency and Productivity

Means - Goal-setting and planning, instructional communication and centralized decision-making.

Control


Reshaping Capabilities - I

Leading organizations in the current and future global markets will be those that can demonstrate timely responsiveness to effectively coordinate and redeploy external and internal competencies (Teece and Pisano, 1994)

Penrose (1959); Teece (1982) and Wernerfelt (1984) acknowledged the concept of organizations being flexible in manipulating current capabilities and developing new ones.

Recently, researchers have begun to focus on capabilities needed to respond to shifts in the internal and external environment, more concisely, the capabilities needed for change (Teece and Pisano, 1994).

Capabilities required for successful change have been specifically addressed by Teece and his colleagues who refer to these capabilities as dynamic capabilities (Teece and Pisano, 1994; Teece et al., 1997). Dynamic capabilities refer to the capacity to renew competences so as to achieve congruence with the changing business environment.


Reshaping Capabilities - II

Turner and Crawford (1998) discussed organizational capabilities needed for change.

Differentiated between operational capabilities and reshaping capabilities.

Operational capabilities are required for sustaining everyday performance. Generally do not help organization to manage change effectively.

The capabilities needed to achieve change implementation success are very different from those required for current business performance.

Proposed a taxonomy consisting of engagement, development, and performance management capabilities.

Engagement is based on informing and involving organizational members in an attempt to encourage a sense of motivation and commitment to the goals and objectives of the organization.

Development involves developing all resources and systems needed to achieve the organization’s future directions.

Performance Management involves proactively managing the factors that drive the organization’s performance to ensure it consistently and effectively achieves the intended change.


Measures ….

Organizational Culture; Using Zammuto and Krakower

(1991), Instruments asks employees to indicate the extent to which their organizations possesses characteristics associated with each of the four culture types. Along five dimensions.

Dimensions include character, leadership, cohesion, emphases and rewards.

Reshaping Capabilities. Ten items were developed for

use in the present study based on Turner and Crawford’s taxonomy of engagement, development and performance management.

Respondent’s were asked to indicate the existing strength or weakness of each capability for their division on a five-point scale, ranging from 1 to 5.


Measures ….

Readiness for Change: Measured with a 7 item scale

designed to assess the extent to which employees were feeling positive about the changes.

Scale was constructed ranging from 1 (strongly disagree) to 7 (strongly agree).

System Usage: Consisted of a single item. Responses were made on a 5-

point scale, ranging from 1 (never) to 5 (all the time).

User Satisfaction: Measured with the End-User-

Computing Satisfaction Instrument (Doll and Torkzadeh, 1988), consisting 34 item designed to measure five aspects of user satisfaction (i.e., accuracy, content, user friendliness, format and timeliness).

Participants responded to each item on a five-point scale, ranging from 1 (almost never) to 5 (almost always).


Methodology

State Government department in Queensland Australia.

About to implement an end-ser computing system effecting all employees within the organization.

Implementation strategy was incremental with three pilot stages and a “roll-out” to all employees.

Temporal study, predictors are measured at Time T1, just prior to implementation.

Outcome variables were assessed at Time 2 (T2), approximately five weeks after collection of T1 data.

Questionnaires posted to all employees (N=572), response rate 27%.

Multi-item scales were used to ensure adequate measurement of each variable.

Reliability was ensured using Cronbach’s alpha coefficient.


Research Results ….. H1b not supported

Lack of support for Hypothesis 1b might be explained by a study conducted by Cooper (1994) who examined the compatibility of different types of information systems across the four culture types represented in the CVF.

Suggested that implementation of information systems that are incompatible with the cultural values of the organization will result in less than successful change outcomes.

Organizations with a strong open systems culture require information systems that focus on the external environment and allow for the scanning and filtering of opportunities that promote linkages across organizations.

Organizational systems characterized by informal coordination and reduced control also are key features of this type of organizational culture.

These characteristics are somewhat inconsistent with the type of HRIS implemented in the context of this study which was designed to apply structure to internal communication processes.

Employees with an open systems view of their organizational culture may have felt that the new computing system was incompatible with the way in which work was done in their division, thereby reducing the role that these cultural values had on change readiness and the outcome variables of user satisfaction and system usage.

If You Want Strategic Change, Don’t Forget to Change Your Cultural

Artifacts

James M. Higgins & Craig Mcallaster, Journal of Change Management, Vol. 4, No.

1, 63–73, March 2004.


Overview

Case study of Continental Airlines and Owens and Minor Inc.

Less than 6 months, converted 11th to 4th, from loser into a profit makers. ($200M)1994to$556M1996.

Gordon Bethune (CEO) and Greg Brenneman (COO), one of the best corporate turnarounds.

Superior Customer Service, invest in people and value them

Provided employees with a sense of purpose, rewards for success and improved climate within which to work.

KSF – aligned major strategy execution factors (structure, systems and processes) with new strategy and ALSO aligned relevant parts of organizational culture (i.e., its value systems and norms –Cultural Artifacts).


Cultural Artifacts

Once you change strategy, you must align organizational culture with strategy, or face almost certain strategic failure (Peters & Waterman, 1982).

Set of attributes – objects and behaviors differentiating one organization to other. Key values and norms. Myths and sagas. Language systems and metaphors. Symbols, rituals and ceremonies Use physical surroundings including interior design

and equipment. New cultural artifacts reinforced service as a key

value as opposed to the previous.


ORGANIZATIONALCULTURE

Key Values & Norms

Myths & Sagas

Language Systems & Metaphors

Symbols, Rituals & Ceremonies

Use of Physical Surroundings

ORGANIZATIONALCHANGE

Cultural Artifacts (Shrivastava, 1985)


Alignment of Strategy with Cultural Artifacts -I

Aligning Identifiable Systems & Norms with Strategy: High productivity, Pay-for-performance, delivery of bonus, valuing

customers through valuing employees, Face-to-face communication explaining strategy, virtues of services and getting employee buy-in to create that service.

Changing core values in not recommended unless the organization’s competitive environment forces a change in vision and mission.

Myths and sagas Stories about key players and events in organizational history. Help shape attitudes of new and veteran employees. With new strategy, if required, change old myths and sagas to

emphasize new values and norms that are being stressed. HR Director torn out the most hated policy manual.


Alignment of Strategy with Cultural Artifacts -II

Language Systems and Metaphors. Organizations develop their own language for expressing who they are

and what they are about. Go Forward Plan – Business Plan (Did you know there are no rear view

mirrors on an airplane. The runway behind is irrelevant), Fly to Win – Marketing Plan, Fund the Future – Financial Plan, Make reliability a reality – product / service plan, Work together – people plan.

From Worst to First – Company Slogan. Symbols, Rituals and Ceremonies.

Demonstrate what is important to the organization (Lange, 1991) Company logo, flag, and slogans also convey the importance an

organization places on certain values, ideas or events. Meatball, Plane coloring, Seating, Re-carpeting, managers work

altogether on holidays.


Alignment of Strategy with Cultural Artifacts-III

Use of Physical surroundings including interior design and equipment. Include plant and equipment Design and decoration convey important messages to those who

work in an organization., e.g., reveal values of organization. Gray-metal desks and open bays v/s wooden desk and closed

offices. Building with majestic exteriors or free flowing designs ma

stimulate more innovation than those that are dull and ordinary.

Aligning cultural artifacts with a new strategy, even if it is your organization’s first strategy, cannot guarantee strategic success, but doing so takes an organization a long way towards successful strategy execution.

A New Framework For Managing Change Across Cultures

Trompenaars, Fons and Woolliams, Peter, Journal of Change Management, Vol. 3, 4, 361–

375 (2003)


Research Theme ……

New paradigm for management of change is proposed. Existing frameworks tend to want to discard current

situation in favor of a new corporate culture, thus discarding best of what already exists.

Authors argue that changing an organization’s culture is a contradiction in terms because cultures act to preserve themselves and to protect their own living existence.

So rather than seeing change as a ‘thing’ opposing continuity, it is considered as a difference.

Authors believe organizations seek change to preserve the company, profitability, market share and core competence.

The reason for changing certain aspects is to avoid changing in other respects.


Research Theme ……

Organizations must reconcile change with continuity in order to preserve an evolving identity.

New methodology is centered on diagnosing the tensions between the current and ideal corporate culture.

New approach for the management of change is to reconcile emerging dilemmas.

Change processes where leaders are not involved are like up-hill skiing. It is possible, but one needs to be a very good athlete.

Authors demonstrated with examples and offered a new conceptual framework on how seemingly opposing values deriving from the tensions arising from change imperatives can be integrated to achieve a ‘win-win’ outcome.


Extreme Stereotypes of Corporate Culture

The Incubator The Guided Missile

-Person oriented

-Power of Individual

-Self-realization

-Commitment to one self

-Professional Recognition

-Task Orientation

-Power of knowledge/expertise

-Commitment to (tasks)

-Management by objectives

-Pay for performance.

The Family Culture The Eiffel Tower Culture-Power Orientation

-Personal Relationships

-Entrepreneurial

-Affinity/Trust

-Power of Person

-Role Orientation

-Power of Position/Role

-Job Description/Evaluation

-Rules and Procedures

-Order and Predictabiliy


Top Six Ranked Tension Scenarios

Current Ideal Scenario

Guided Missile Incubator Scenario 1

Eiffel Tower Guided Missile Scenario 2

Family Guided Missile Scenario 3

Eiffel Tower Incubator Scenario 4

Family Incubator Scenario 5

Incubator Guided Missile Scenario 6


Dilemmas – An Example

Current: Guided Missile Ideal: Incubator

Typical Dilemmas

Leadership Depersonalized authority v/s development of creative individuals

Reconciliation Attribute highest authority to those managers who have innovation and learning as prime criteria in their goals.

Management Consistent Goal-Oriented around Task v/s Power of Learning

Reconciliation Make learning and innovation part of the task description.

Rewards Extrinsic reward job done versus intrinsic reward self-development

Reconciliation Describe task in terms of clearly stated innovation outputs


The Change Process

Reconciliation Process

BusinessDilemmas

Reconciliation Process

LeadershipCompetence

LeadershipCompetence

Core ValuesKey Purpose

Current Org.Culture

Envisioned Future


New Methodology in Practice

1. Developing an envisioned future in order to develop a sense of what to go for.

2. Diagnosing the current corporate culture with the cross-cultural assessment profiler (CCAP).

3. Defining core values and key purpose to develop a sense of what one stands for.

4. Defining the ideal corporate culture with CCAP embedding core values and key purpose.

5. Defining major business dilemmas caused by the tensions between envisioned future and key purpose and between current and ideal corporate cultures

6. Reconciling four or five major business dilemmas

7. Diagnosing the current leadership competence to reconcile major value dilemmas

8. Implementing new design and defining concrete action points to be taken as defined by the change agents.


The Basic Dilemma Template

10/1Value/Behavior

taken too far

1/1oValue/Behavior

taken too far

Reconciled Value /

Behavior

Ideal value/behavior that one needs to further develop

Curr

ent

Valu

e /

Beh

avio

r th

at

one inte

nd

s to

keep


Basic Pro-Forma Framework

On the one hand, we want more and/or keep the following values and behaviour of our current organization

On the other hand, we need to develop the following values and behaviour for supporting our envisioned future and core values

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.


Guided Template for action to be taken

I. In order to reconcile the first dilemma we need to be taking the following steps in the following areas of:

The Market (think about what you could do in areas of customers, time-to-market response, flow of information from and to customers)

Human Resources (consider areas such as management development, staff planning, appraisal and rewards)

Business Systems (what can you do in areas of IT systems, knowledge management, manufacturing information, quality systems etc)

Structure and design (consider what could be done in areas of the design of your organization, both formally and informally, basic flows of materials and information).

Strategy and Envisioned Future (review vision of leaders, mission statements, goals, objectives, business plans and the like)

Core Values (think about action points that could enhance the clarity of values, how to better translate them into behaviour and action etc)

II. Who is taking action and carries responsibility (consider for each of the possible action points who is responsible for the outcome)

III. How to monitor the change process (consider milestones and qualitative and quantitative measures of genuine change)

1.

2.

1.

2.

Cultural Leadership in Organizations

Harrison M. Trice; Janice M. Beyer, Organization Science, Vol. 2, No. 2 (May, 1991). Pp. 149-169.


Overview

“….the unique and essential function of leadership is the manipulation of culture.” (Schein, 1985).

Part that leadership plays in organizational cultures has not been systematically explored.

Most applications of leadership theory focused on how leaders influence the accomplishment of the work of the organization (Daft 1983).

The cultural approach to leadership reveals how leaders influence the understandings and networks of meanings that other hold and express through their actions.


Culture and Uncertainty

Cultures never totally resolve uncertainties, merely subjectively reduce them (Greertz 1973)

People need some sense that they understand how the world works in order to behave relatively confidently and consistently within (Apter 1964).

By providing this sense, cultures provide some degree of order and continuity in social life (Moore and Meyerhoff 1977).

Repeated communication and affirmation of the shared understandings, through cultural myths, symbols, rites (Trice and Beyer 1984), and rewards (Kerr and Slocum 1987) make cultures concrete and keep them vital.


Links between Elements of Cultural Leadership and Consequences for Culture.

Elements of Cultural Leadership

Consequences

Innovation Maintenance

1-Personal Qualities

Self Confidence

Dominant

Strong Convictions

Evangelist

Dramatic

Confidence in group

Facilitator

Strong Convictions

Catalyst

Persuasive

2-Perceived Situation

CrisisNo crisis, or a manageable one

3-Vision & Mission Radical Ideology Conservative Ideology

4- Follower Attributions

Extraordinary qualities to manage needed to deal the crisis.

Leader represent existing values that were successful in past.

Drawn from Weber’s and other conception of Charisma




Consequences


5-Leader Behavior

Effective role model.

Creates impression of success and competence.

Articulate Ideology

Communicates high expectations, confidence in followers.

Motivates

Effective role model.

Creates impression of success and competence.

Articulate Ideology

Communicates high expectations, confidence in followers.

Motivates

6-PerformaceRepeated success in managing crisis

Continuation of success.




Consequences


7-Administrative Actions

New structure and strategies, or innovative changes in structure and strategies

Refurbish and strengthen existing structures and strategies, incremental changes in structure and strategies.

8-Use of Cultural Forms

Communicate new cultural ideologies and values

Affirms and celebrates existing cultural ideologies and values.

9-Use of Tradition Establish new traditionsContinues existing traditions.


Variants of Basic Types of Cultural Leadership


Variants Create Change Embody Integrate

Core

Organ’zatnal

Problem

To attract followers and unite them.

To displace elements of old culture with new ones.

To keep existing culture vital.

To reconcile diverse interests of subcultures.

Possible

Solutions

Personal Qualities

Rites of Integration

Personal Qualities

Rites of degradation

Rites of renewal

Rites of conflict reduction

Analog in Mgt Literature

Charismatic Transformational

Inspirational Consensus

Documents

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