Managing Change & Org Transformation

Five Elements of Strategy

Mutually reinforcing - arenas, vehicles, differentiation, staging, and economic logic. Any misalignment of these signifies the need for change.

Demography

Ex: Generation C As population characteristics change, so do the nature/ motivation of the workforce and the demand for various products/ services

Credibility and Reputation

Ex: Mattel; Volkswagen Given recent corporate governance scandals, the pressure to maintain a good reputation and high level of credibility has increased

Growth Pressures (Change Drivers)

Ex: Microsoft Existing systems and processes in an organization may no longer be applicable when the size of the organization increases

Power and Politics (Change Drivers)

Ex: Morgan Stanley; Roche; NYPD Power relationships and politicking change internal processes and decision making and has significant effects within the organization

Different images of change...

...highlight the range of reasons why models like these may be utilized - they illustrate the numerous ways change can be interpreted.

Advantages of Diagnostic Tools

1. Simplifies a complex situation. 2. Identifies priorities for attention. 3. Highlights interconnectedness of various organizational properties (ex: strategy & structure). 4. Provides a common "language" to discuss organizational characteristics. 5. Provides a guide to the sequence of actions to take in a change situation.

The key to effective diagnosis is...

1. To know what to look for at each organizational level (individual, team, organization) 2. Recognize how the levels affect each other

Star Model

An organization is effective when the 5 components of organizational design - strategy, structure, processes and later capability, reward systems, and people practices - are in alignment.

PESTLE Framework

Analyzes the external environment in terms of 6 factors - political, economic, social, technological, legal, and environmental.

Receptive Organization

Asks a range of questions about the pressure change, shared vision, level of trust, will to act, available resources, allocation of accountability, etc.

Pressures for Change

Aspirations Life-Cycle Forces Growing International Interdependence Change in Demographics Shifting Political Dynamics Changes in Societal Values Introduction or Removal of Government Regulations Technological Advances

Pressure to change comes from...

External - environmental pressures Internal - organizational pressures

Forces for Change vs. Forces for Stability

External forces can vary: they either promote change or promote stability

Cultural Web

Provides a mapping of an organization's culture through a focus on 7 elements - paradigm, rituals and routines, stories, symbols, control systems, power structures, and organizational structure.

Scenario Planning

Creating stories of multiple possible futures that an organization might face as a basis for considering potential actions if various futures emerge.

Gap

Difference between what organization (group or individual) could do in its environment and what it actually does. Gap between the actual state and the ideal forms a basis for diagnosis and the design of interventions. Gap may be a result of ineffective performance by internal units or because of competitive changes or new innovations.

Properties of Systems

Environments Inputs, Transformations, and Outputs Boundaries Feedback Alignment

New Chief Executive (Change Drivers)

Ex: Bank of America; Harper's Bazaar Change at the senior management level - particularly the CEO - often initiates significant internal changes

Fashion Pressures

Ex: Boeing An organization/ manager's imitate practices associated with companies that are considered to be successful

External Mandate

Ex: Coca-Cola; Adobe; Chevron-Texaco An organization changes through either formally or informally mandated requirements

Hyper-Competition Pressures

Ex: Dell; YouTube; Dropbox The highly intensified rate of business - including shortened product life cycles and rapid responses by competitors - produces pressures for change at the organizational level

Integration (Change Drivers)

Ex: EDS Integration parts of the organization and creating economics of scale can lead to pressure for change in organizations

Globalization and Geopolitical Developments

Ex: Exxon Macroeconomic changes (or crises) place pressure on organizations to change the way they operate

Corporate Identity (Change Drivers)

Ex: Forte Hotel; US Mint A common organizational identity and the unified commitment of staff in different areas/ departments of an organization can be difficult to manage and may encourage change

Six-Box Organizational Model

Focus is on 6 variables - purpose, structure, rewards, helpful mechanisms, relationship, and leadership. It helps maintain awareness of all areas for consideration even though one variable may be identified as the main area for attention.

7-S Framework

Focus is on 7 key components that affect organizational effectiveness - structure, systems, style, staff, skills, strategy, and superordinate goals. These variables interconnectedness is vital to the success of change.

Characteristics of effective visions

Focused yet flexible Vision components Cognitive - focuses on identifying outcomes & how they will be achieved Affective - focuses on appealing to values & beliefs to build motivation & commitment 4 generic characteristics of vision: Possibility - what can be achieved Desirability - why what's achievable is attractive Actionability - how vision can be achieved Articulation - powerful imagery about future 3 components of vision: Why the change is needed The aim of the change The change actions that will be taken

Individual Readiness

Focuses on individual and organizational characteristics that predispose an individual to be ready to change.

Absorptive Capacity

Focuses on the ability of an organization to find, assimilate and apply new knowledge.

Key Change Issues

Identification of the factors that explain the success of a particular initiative Identifying factors specific to a change situation and those that constitute "lessons" applicable more generally The role of the change leader

The Innovative Organization

Identifies characteristics associated with organizations that are able to be innovative and creative.

Force-Field Analysis

Identifies factors that are driving forces for change, as well as restraining forces.

Strategic Inventory

Identifies managers' strategic assumptions and their consistency with the business environment. This determines whether strategy should be a focal point for change.

Stakeholder Analysis

Identifies those who are likely to be affected by an organizational change ("stakeholders"), their expected gains and losses, and their capacity to support or block a change.

Organization Effectiveness

Likely to be high when there is good alignment

Why do organizations not change after a crisis?

Organizational learning difficulties Second-order and third-order casual factors are not understood Lack of a "psychologically safe environment" "Defensive" agendas designed to prevent something happening (again) can be less appealing/ rewarding than "innovative" agendas focused on the development of something new (ex: products, markets, systems)

Soft Data

Relates to qualitative variables Can be harder to collect and categorize Often data that involves the future

Hard Data

Results of measuring Quantifiable variables Historical, based on past events or activities Accounting data

Environment as an Objective Entity vs. Environment as a Cognitive Construction

The former treats the environment as an objective entity to which managers must respond The latter emphasizes the centrality of managers' interpretations of environmental conditions as the key determinant of behavior

"Built to Change" (B2C) Organizational Model

These organizations are designed for change, not stability. They are based on design guidelines that promote change capability in the organization's strategy, design, & leadership. In a rapidly changing environment, this change capability can help the organization transition from one competitive advantage to another.

Bridging (adapting) vs Buffering (shielding)

These represent either strategies that can maintain effectiveness by adapting parts of the organization to changes happening in the outside environment (bridging) or focusing on efficiency by avoiding change through shielding parts of it from the effects of the environment (buffering).

Uses of these images of change management

They highlight a variety of assumptions that change managers make about change and increase the awareness of different interpretations of change. They draw attention to the dominant images of change within an organization. They highlight a range of perspectives available to change managers.

Four Frame Model

This offers 4 frames (i.e. structural, human resource, political, and symbolic) for the managers to conceptualize how the organization operates.

Gap Analysis

Used for reviewing the organization's current situation relative to the situation in which it wishes to be (the difference being "the gap").

Content of Meaningful Vision

Vision as stories This allows a vivid description of the change to which people can relate. Stories are more effective than simple vision statements because people can imagine themselves & their actions in the future. Relationship to mission & goals Vision is often confused with other terms such as mission statements, goals & values Vision usually paints a picture of the future & is inspirational, mission statements are more purposive & instrumental in outlining what needs to be done. Relationship of Vision to Market Strategy: It has been argued that having a well-specified market vision such as this helps to identify how the company will grow & compete.

Failure of Vision

Visions can fail for a number of reasons including when they are (Pendlebury et al., 1998): too specific; too complex; too vague; inadequate; irrelevant; blurred; unrealistic; a 'rearview mirror'

Setting

What works in one might not work in another

Organizational Learning vs. Threat-Rigidity

Whether external pressures facilitate or inhibit the process of change

Organizational Diagnosis

a collaborative process between organizational members and the change agent / manager (or consultant) to collect pertinent information, analyze it, and draw conclusions for action planning and intervention

To be an effective change manager...

be aware of change manager images, & to see the change process through different lenses understand the pressure & drivers for change, internal & external diagnose the nature & depth of the changes required & individual & organizational readiness determine what is going to change to develop a credible & compelling vision of the organization's future design "high impact" change communication strategies, anticipate & respond to resistance to change decide how the process will be driven: organization development & sense-making approaches decide how the process will be driven: checklist, process, & contingency approaches have strategies to embed change & manage sustainability effective change managers individuals & teams

Adaptability

being open to various change images and approaches being able to adapt to different situations or with others as the situation demands and juggling multiple interventions without getting flummoxed when conditions abruptly change The ability or degree of willingness to which one adapts in such situations essentially determines one's level of flexibility — and possibly the heights they will achieve in the future as leaders or change agents

Organizational learning perspective

building the capabilities of an organization to give members the ability to deal with change

Change

can be transformational or via a series of incremental steps capabilities may be systemic (organizational) or personal (individual) Leadership of change may be invested in one change leader or more widely distributed, etc.

Data

has to be converted into information for use by management. But without the right data, there is no foundation for information.

Diagnosis

involves understanding each of the parts in the model and then assessing how the elements of the strategic orientation align with each other and with the inputs

Change

is risky - many organizational changes fail or do not realize their intended outcomes

Stakeholders

may have different perspectives on the need for change and/or how it should be managed

Economic Perspective

satisfying the shareholders of the organization to ensure its survival