2.3 Change Management

1. 2.3 Change Management

2. Agenda Nature And Sources Of Change In Business Reasons For Resistance To Change Managing Change Effectively

3. What promotes/provokes/causes change in an organisation?

4. nature and sources of change in business External influences Internal influences Structural responses to change

5. Sources of Change INTERNAL EXTERNAL Changing nature of markets Economic Financial Geographic Social Legal Political Technological Developments • Effects of accelerating technology • Ecommerce • New systems & procedures • New business cultures

6. What is meant by “a structural response to change”?

7. Structural Response To Change • Ways of adopting new systems & procedures to cut costs & increase competitiveness in the marketplace: • Outsourcing • Flat structures • Strategic alliances & networks

8. Outsourcing • Contracting with organizations outside your own for work that could otherwise be done by employees within your company • Why do it? • Cost effectiveness • Who does it? • Just about everyone – large and small companies • Can you think of some examples from your workplace?

9. Why Resist? Financial costs Inertia of managers, owners Cultural incompatibility in mergers/takeovers Staffing

10. Resistance is futile……….

11. Resistance to Change - Financial • Purchasing New Equipment • Currency = competitiveness • Example = airplanes • Redundancy Payments • When jobs become no longer necessary staff are displaced and compensation payments are required • This is a significant cost to the business: • High financial payments • Possible loss of ‘old knowledge’ within the business

12. Financial (cont) • Retraining • Significant cost • Trainers • Replacement staff for those on training • Reorganising Plant Layout • Manufacturing e.g. where robotics & computerisation replaces people • Expensive & time consuming to move equipment in the short term • Short term pain often = long term gain

13. Patricks Stevedoring • Go to page 29 of text (HSC Business Studies Getting Better Results v2.0 (Sykes & Crawford)) • Read “Patricks - Business Example” • Based on the “Think about these” questions: • Create a SWOT diagram in your books • Complete 2 points per quadrant

14. Resistance to Change - Inertia • Inertia = lack of energy or resolve to do something about a problem however • If you always do what you’ve always done….. then you’ll always get what you’ve always got. • Can be seen when managers procrastinate about an issue – often don’t have the skills , or do but don’t realise it!

15. Resistance to Change - Cultural • e.g. “red’ business merges with “yellow” business to create “orange” business • Existing attitudes, beliefs & values about the way things should be done • A red job and a yellow job merges into one orange job. Who get the job? • Red Manager? • Yellow Manager? • Increased internal competition for promotions and roles

16. Resistance to Change - Staffing • De-skilling • Technology replaces the old way of doing things e.g. typing pool staff replaced with word processing staff • Acquiring new skills • Opportunity required for • Regular upskill training • Development of 2-3 year career plans • Loss of career / promotion opportunities • When jobs /roles are reviewed very often they move to a “less is more” position.

17. How do I know when I need to change? As opposed to “How do I know if I want to change? 

18. managing change effectively • identifying the need for change • setting achievable goals • creating culture of change • encouraging teamwork approach using change agents • change models • force-field analysis, • Lewin’s unfreeze/change/refreeze model

19. Identify the need for change It’s a little tricky sometimes…….. Your text suggests capturing statistical information via MIS (management information systems) What if…….. You don’t know what you don’t know? Formal capture of business information via MIS is good business practice Reviewing the information provided via the MIS is even better business practice Then you get a clue as to what you should be looking for!

20. Set Achievable Goals • Do people like change? • Create SMART evolutionary goals • Analyse: • Existing systems, resources and procedures • Future systems, resource and procedure requirements • Proper Preparation Prevents Poor Performance (5ps) • Eat the elephant one bite at a time • Break the changes into manageable bits, create cultural change one small step at a time

21. Force Field Anaylsis What It Is Used For • To show how process variables or factors impact the process status quo. When to Use It • When looking at a complex situation to organize the variables that affect the situation in one direction or another. Important Notes • Arrows are drawn to signify the forces pushing on an issue or situation. The relative size of each arrow should be adjusted to indicate its relative impact on the issue. • Parties from all aspects of the issue or situation should be involved in setting up the force field

22. (A) Force Field Analysis Activity • In your groups analyse the following: • After receiving a consultants report the Senior Management Team (SMT) is about to make a significant change is organisational approach. It is proposing to move from a classical-scientific approach to a behavioural management style. • SMT would like feedback from their staff on the viability of this approach • Note the answers on the worksheet provided. • Nominate one person to share the groups outcomes with the rest of the class.

23. Lewins Unfreeze/Change/Freeze Model Kurt Lewin proposed a three stage theory of change commonly referred to as Unfreeze, Change, Freeze (or Refreeze). His interest in groups led to research focusing on factors that influence people to change, and three stages needed to make change successful.

24. Unfreeze Change Create a change management team Identify staff affected Train them Empower them • Explains why certain things have to change. • For people to accept change they like to feel that they are part of it Refreeze • Consolidate the changes to reduce back slip • Reward staff for making the change

25. Creating a Culture of Change • New management is essential to change the culture of a business • If the old managers had thought they needed to change they would have done so already • Work with the change agents – those people who are tasked with the project of creating the change • Implement new systems and procedures to consolidate the change culture

26. (A) Think Pair Share Activity Go to p36 of your text In pairs complete the ThinkPairShare activity box “What are the forces resisting change at your school?”