Leading and Managing Change Chapter 10

Leading and Managing Change Chapter 10 Ranae Reynolds Scott Smith Leona Turner Lynn Wilhelm LDR-686-SA – Organizational Design and Development – Dr. David B. Lucas Siena Heights University-Southfield Campus October 15, 2012

Overview of Change Activities • Effective Change Management • Motivating Change • Creating A Vision • Developing Political Support • Managing the Transition • Sustaining Momentum Lynn Wilhelm

Motivating Change • Creating Readiness for Change • sensitize organizations to pressures for change • real discrepancies between current and desired states • convey credible positive expectation for the change • Overcoming Resistance to Change • empathy and support • communication • participation and involvement Ranae Reynolds

Creating Vision Defined in two parts; Describing the core ideology and Reason for being, what brings employees to work everyday; Constructing the envisioned future Bold and valued outcomes Desired future state Ranae Reynolds

Developing Political Support J. Pfeffer says, “From a political perspective, organizations can be seen as loosely structured coalitions of individuals and groups have different preferences and interests”. • Examples • Shop Workers Marketing Departments • Top Executives Production Departments Leona Turner

Results • The groups wants and needs • Competition increases • Preservation of self interest • Balance of power Leona Turner

Assessing Change Agent Power • Evaluate the sources of power. • Determine how to use the power. • Identify areas that need to enhance power. • Greiner and Schein says, “There are three sources of personal power in an organization which are knowledge, personality, and other support”. Leona Turner

Three Key Sources Leona Turner

Identifying Key Stakeholders • Identify powerful individuals and groups • What groups will be affected? • Gain broad-based support. • Ask questions like, who can win from change? • Create a map of whose influence may be useful. • Get to know those who are involved or need to be involved. Leona Turner

Influencing Stakeholders • Three major strategies for using power to influence others in OD. • Playing it straight • Using social networks • Going around the formal system Leona Turner

Managing the Transition • Moving from an existing organization state to a desired future state. • Involves a transition period and some time • Learn what it takes to make the changes • Facilitating the change takes • Activity Planning • Commitment Planning • Change Management Structures • Managing the Learning Process During Change Leona Turner

Learning Process • Change involves new knowledge and skills • Stages 1 – 4 of the transition • These four stages are held together by conversation and dialogue • Discuss the changes and create shared meaning • Discover how individuals fit into the change • Discuss the change at all levels and the practices that will cause acceleration Leona Turner

Managing the Transition (cont.) Activity Planning Benchmarks, mid-point goals, direction Lynn Wilhelm

Commitment Planning Who’s on your side to make change?? Lynn Wilhelm

Change-Management Structure Lynn Wilhelm

Learning Processes • Creating a system view • Create shared meaning • After action reviews • Local self-design • CONVERSATION & DIALOGUE ARE KEY TO SUCCESS Lynn Wilhelm

Chapter 10 Topics Sustaining Momentum • Providing Resources • Building a Support System • Developing New Competencies • Reinforcing New Behaviors • Staying the Course Scott Smith

HP-Compaq Overview • 2002 merger to create $87B company • Worldwide positions in servers, PCs and handhelds, and Imaging and Printing • Leading positions In IT Services, Storage, Management Software • Carly Fiorina will be chairman and CEO of the new HP • Jeff Clark (Compaq CFO) and Webb McKinney (HP) to lead transition team Scott Smith

Providing Resources for Change • Financial and human • Training • Consultation • Data collection • Meetings • Performance buffer • “Clean Team” integration group • 500/900/1000 LL • Adopt & Go cross-company Scott Smith

Building a Support System for Change Agents • Psychological distance • Network of change agents • Mutual Learning and support • Adopt & Go • Cross-company LL pairs • Escalation to Clark and McKinney • Quick decisions Scott Smith

Developing New Competencies/Skills • Leadership styles • Problem solving • Multiple opportunities • WBT • OJT • Technical and social • Senior management inclusion • Adopt & Go • Cross-company LL pairs • Escalation to Webb and McKinney • Quick decisions • Green/Yellow/Red • Corporate Culture Team • Cultural workshops • Cultural differences • Cultural synergies • 650 “cultural consultants” Scott Smith

Reinforcing New Behaviors • Awards • Punishments • Intrinsic rewards / early successes • Adopt & Go • Cross-company LL pairs • Escalation to Webb and McKinney • Quick decisions • Product roadmaps in 4 months Scott Smith

Staying the Course • Change requires time • New change • Abandon change • Decline • Performance • Productivity • Satisfaction • Focus • “Next big idea” • Day-One plans • Customers • Leadership and structure • Administration • Common email • KT • Customer contact buddies Scott Smith

Ian Fried on Merger: Susan Bowick, HP's senior VP of human resources...had early conversations with HP CEO Carly Fiorina and Capellas to make sure the cultural issues were not overlooked. Bowick likens mergers to an iceberg. The tip is made up of the sorts of financial goals and organizational structures that always get top billing. But the things below the surface, such as how workers communicate and what words they use, are just as important. Scott Smith

Scott McNealy on Merger: Scott McNealy, chief executive of Sun Microsystems, Inc., predicted “a slow-motion collision of two garbage trucks.” Scott Smith

Ben Rosen on Merger: …the board hired Mark Hurd to replace Fiorina. Only then did the company acquire the management skills needed to take the raw material that was there and transform it into a world leader in technology. …since Hurd became CEO, the results have been truly remarkable. He took the pieces assembled by Fiorina, applied his management skills to them, and created a growing, profitable and increasingly valuable company. Scott Smith

Rosen, P.1 Scott Smith

Betsy Burton on Merger There are a few twists... First, one of the most-complex aspects...it is not initially obvious what the overriding benefit of this action will be for ...HP and Compaq, and the IT industry in general. Second, ...there is significant overlap between HP's and Compaq’s products and services, and HP/Compaq will have a huge task before them to reconcile this overlap. Third, there seems to be little support from the market as evident in the decrease in stock value...this lack of support may impact its fruition. Scott Smith

Jonathan Gifford on Merger It was a huge undertaking – rather effectively implemented by Carly Fiorina. But if the CEO and chairman of the board...doesn’t own the idea of such a momentous merger, then who on earth does? If Carly can’t stand up, even now, and say – ‘I decided to do it; I think it was the right decision and I believe that time will prove me right’ – then who is in charge here? And, more importantly, who was really in charge at the time? Did she really own this massive project while it was happening? Did she believe that she did own it at the time but is now keen to pass the buck? Scott Smith

More Jonathan Gifford There remains, for me, the nagging doubt that Fiorina was happy to own the idea of the merger, but never really stood up to be counted about the long-haul strategic implementation. If she had… maybe she would have kept her job. As it is, she obviously lost the confidence of the people who mattered most to her continued career – the board. We don’t know why, because the board have never given a full explanation and Fiorina isn’t telling. “I was mystified by the board’s recent behaviour,” she says, shortly before the meeting at which she is summarily sacked. At this meeting, she reads out a prepared statement, which includes the following: “The board has made and reconfirmed the most fundamental aspects of our strategy . . . My personal belief is that our strategy is sound and our greater issue is execution . . .” Scott Smith

And Yet More Jonathan Gifford So the board of HP made (and has just reconfirmed) the strategy? Strategy by consensus? Isn’t that what Fiorina thought was fundamentally wrong with the culture of HP? A leader can’t afford not to stand up and be counted about the biggest business decision of their career. Saying, ‘The board decided to do it, they set the strategy’ really doesn’t wash. And not knowing what the board of which you happen to be chairperson is doing behind your back (planning to sack you) isn’t just foolish – it’s suicidal. Scott Smith

Russ Banham on Merger But, in the long run, they had very good execution, a consequence of HP’s sharp transition teams. Both companies also agreed to build one new company with one new culture, as opposed of pockets of this and that, and it worked. Scott Smith

References Adair, J. (2006). Leadership and Motivation: The Fifty-Fifty Rule and the Eight Key Principles of Maintaining Others. Great Britain: Kogan Page Limited Banham, Russ. (April 16, 2012). M&A: Adding Up the Numbers. Retrieved on October 4, 2012 from http://chiefexecutive.net/manda-adding-up-the-numbers Babou. (2008).What is stakeholder analysis? Retrieved October 10, 2012 from http://leadershipchamps.wordpress.com/category/stakeholder-management/ Burton, Betsy. (September 12, 2001). Untangling the HP/Compaq Acquisition. Retrieved on October 4, 2012 from http://www.gartner.com/id=340754 Fried, Ian. (September 2, 2002). HP-Compaq merger: Worth the wait? Retrieved on October 4, 2012 from http://news.cnet.com/HP- Compaq- merger-Worth-the-wait/2100-1001_3-956202.html Gifford, Jonathan. Carly Fiorina and the HP Compaq merger. Retrieved on October 4, 2012 from http://jonathangifford.com/carly-fiorina-and-the-hp- compaq-merger/ Greiner and Schein, Power and organization development.

References (cont.) Levy, P. E. (2010). Industrial Organizational Psychology. New York, New York: Worth Publishers. Motivation Theory and Leadership. (2006-2010). Retrieved from Money-Zine: http://www.money-zine.com Nadler. Effective management; Beckhard and Pritchard, Changing the Essence Pfeffer,J.,(1982). Power in organizations. New York, Pitman Rosen, Ben. (April 9, 2008). The Merger That Worked: Compaq and Hewlett-Packard. Retrieved on October 4, 2012 from http://http://www.huffingtonpost.com/ben-rosen/the-merger-that-worked-co_b_95873.html Schein, E. H. (2010). Organizational Culture and Leadership. San Francisco: Josey-Bass. Worley, T. G. (2008). Organization Development and Change. Mason: South-Western Engage Learning.

Leading and Managing Change Chapter 10