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Importance of Change Management. Gweta Markosian Karim Camara Renzo Hoogendoorn Sander Zijlmans Vincent Tseng. Agenda. Introduction Relation to Adaptive Cycle What is Change Management? Resistance Internal vs. External Change Change Management Models
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Importance of Change Management Gweta MarkosianKarim CamaraRenzo HoogendoornSander ZijlmansVincent Tseng
Agenda • Introduction • Relation to Adaptive Cycle • What is Change Management? • Resistance • Internal vs. External Change • Change Management Models • Advantages & disavantages of the different models • Common Factors to Successful Change Management • Conclusions
Change management is “It’s such a volatile world that the first resolution for any business leader coming into 2012 must be to become change friendly. I can’t think of any sector that could not change massively within the next year.”William Higham, founder of future trends consultancy The Next Big Thing “it is not the strongest species that survive, nor the most intelligent, but the ones who are most responsive to change”Charles Darwin “To cope with a changing world, an entity must develop the capacity of shifting and changing – of developing new skills and attitudes; in short, the capability of learning” A De Gues, The Living Company
What is change management? “Change management is a systematic approach to deal with change, both from the perspective of an organization and on the individual level” from online Business Dictionary
Why are employees resistantto change? • 1. Employees were not aware of the underlying business need for change. • 2. Lay-offs were announced or feared as part of the change. • 3. Employees were unsure if they had the needed skills for success in the future state. • 4. Individuals were comfortable with the current state; they wanted to maintain the personal rewards and sense of accomplishment and fulfillment provided by the status quo. • 5. Employees felt they were being required to do more with less, or do more for the same pay.
InternalvsExternal Change • Advantages • Internal: Internal change has many advantages for an organization, including increased morale among the employees, a sense of employee empowerment and control and a high likelihood of the change becoming permanent. Because the change originates from the group, it is more easily accepted and becomes the norm. • External: While external change is harder to accept than internal change, there are some distinct advantages for external change in an organization. This type of change can help jump start a declining organization and can change its course completely. Another advantage of external organizational change is that many organizations tend to reach a plateau level if left unchanged for too long. People become comfortable in their ways and stop seeking new and better ways to accomplish things.
InternalvsExternal Change • Disadvantages • Internal: If a team or organization has a very domineering member, the internal change will often be a result of that single person and will therefore be too single-minded to be good for the organization at large. Additionally, when teams have been working together for too long in the same environment, the group mentality can take over and create unproductive change within the organization. • External: When change is forced on an organization, often the organization will rebel. One of the main disadvantages of externally imposed change is that it is unsuccessful in the long term. Often, external resources can force the change for a while, but when those people move on to different roles, the organization will return to its previous behaviors. Additionally, the change process itself can cause temporary chaos within the organization and actually reduce productivity for a couple of weeks or months.
Benefits of effective change management • Returns of investment (ROI) • Quality of the outcome achieved • Efficiency of resources
Requirementsforbecoming a change leader • Policies to make the future. • Systematic methods to look for and to anticipate change. • The right way to introduce change both within and outside the organisation. • Policies to balance change and continuity.
Somechange management models In order to manage change, several models have been developed. We will take a look at some of the most used models. Each approach has its pros and cons, however their is no framework that is "best" in all situations. • McKinsey 7-S Model • Lewin's Change Management Model • Kotter's Eight Step Change Model Nielsen (2008) quoted that organizational change is complex. Even little changes are not easy to undertake.
McKinsey change management model • SHARED VALUES: called "super ordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic • STRATEGY: the plan devised to maintain and build competitive advantage over the competition. • STRUCTURE: the way the organization is structured and who reports to whom • STAFF: the employees and their general capabilities • SYSTEMS:the daily activities and procedures that staff members engage in to get the job done • SKILLS: the actual skills and competencies of the employees working for the company. • STYLE: the style of leadership adopted.
Advantages/disadvantages of Mckinsey’s model • Advantages: • All parts are interrelated, so all portions must be addressed and focused on (12Manage, 2007) • It is an effective way to diagnose and understand the organization • It is a guide for organizational change • Disadvantages: • When one of the parts is changed, all parts change because they are all interrelated (12Manage, 2007). The model is complex. • This model ignores differences (Morgan, n.d.). After five years many of the companies that used this model fell from the top (Morgan, n.d.). • Companies using this model have been known to have a higher incidence of failure.
Lewin’s change management model • Unfreeze: Getting ready to change, understanding that change is necessary & moving out of the comfort zone • Change (transition): Moving to a new way of being, people are fearful and unsure, support is important -> training, coaching, and expecting mistakes as part of the process • Refreeze: Establishing stability, changes are accepted and become the new norm, new relationships and routines are created
Advantages/disadvantages of Lewin’s model • Advantages: • It is a simple and easily understood model for change • this model has fewer steps • The model is done through steps; this is an efficient model that is used today (Mind Tools, 2007; Syque, 2007). • Disadvantages: • At the refreezing period, many people are worried that another change is coming, so they are in change shock (Syque, 2007). This change shock causes employees to not be as efficient or effective in their jobs (Syque, 2007). • Refreeze phase – change is continuous, change may occur within weeks, no time to settle down
Advantages/disadvantages of Kotter’s model • Advantages: • This is a step by step model, which is easy to follow. • It does not focus on the change itself, but rather on the acceptance and preparedness for the change which leads to an easier transition. • Disadvantages: • It is a top-down model and opportunities can be missed, because not everyone is involved in co-creation of the vision. • You cannot skip a step because the change process will then completely fail. As with the other two models, change still takes a lot of time.
Common Factors to Successful Change Management • Planning: Develop and document the objectives that need to be achieved with the change and the means to achieve it. • Defined Governance: Establish appropriate organisational structures, roles and responsibilities for the change that engage stakeholders and support the change effort. • Committed Leadership: Ongoing commitment at the top and across the organisation to guide organisational behaviour. • Informed Stakeholders: Encourage stakeholder participation and commitment to the change by employ open and consultative communication approaches that will create awareness and understanding of the change throughout the organisation. • Aligned Workforce: Identify the human impacts of the change and develop plans to align the workforce in order to support the changing organisation.
Conclusions • Change management is of strategic importance and companies cannot exist without it. Their ability to change and adapt quickly brings enormous market advantages. • Each change management model has it’s pros and cons, however none of the models is the "best" in all situations. Most change management models are made to help the change management be more effective. • Common factors to successful change management include planning, committed leadership, aligned workforce, informed stakeholders and defined governance.
