Introduction to Change Management

1. Introduction to Change Management Chapter 1 Dr. Muayed H. Saleh

2. Things do not change, We change

3. The Evolution of Starbucks As Starbucks grew, they realized that the informal techniques were not sufficient and needed to have a more formalized process in place. Why were these changes difficult for the organization? Starbucks is faced with new challenges today. It has dominated the marketplace. Have they grown too fast? Will changes in the marketplace require a different approach? What do you think the future will hold for them?

4. As we enter the 21st Century, change and how to lead it successfully has become the foremost topic on the minds of organizational leaders. And for good reasons: Change is happening everywhere; its speed and complexity are increasing; and the future success of our organizations depends on how successful leaders are at leading that change. In today’s marketplace, change is a requirement for continued success, and competent change leadership is a most coveted executive skill

5. Over the past decade or so, these struggles have given rise to the field of change management. change management practitioners have attempted to provide solutions to two major problems: • how to plan better for implementation and • how to overcome employee resistance. However, these two necessary components of change have not produced adequate positive results, especially for transformational change. Why? Because attention to implementation and resistance is only the tip of the iceberg of what is required in transformation. It is now time to move beyond change management into change leadership, now time to develop the advanced change strategies that support this new type of change

6. leaders themselves must transform in order to lead transformation successfully in their organizations • Only then will they be able to see, understand, and apply the strategies and approaches that make transformation work. And only then will they want to. • The challenge is that today’s marketplace is not asking for just leadership. It is demanding change leadership—even more, transformational change leadership—a new breed of leader for a new breed of change • Leaders are doing their best at leading change, given the training and experience they have had.

7. What is Change Management? • Change management is the application of a structured process and set of tools for leading the “people side” of change to achieve a desired outcome. • When change management is done well, people feel engaged in the change process and work collectively towards a common objective, realizing benefits and delivering results

8. What is Change Management? • Organizational change is the process of converting an organization from its current state to some future desired state. • All innovation results in change… • But not all change is innovation

9. No Change Management Strategy =

10. Benefits of Change Management • Projects and initiatives that are delivered on time, on budget and with the intended results. • Improved employee and stakeholder engagement. • Trust and credibility for the next change. • Reduce resistance to change. • Ability to innovate and move forward. • Make it fun!

11. Present and Future Organizations

12. Change Management Techniques

13. Excellent Organizations

14. Change management, Organization Development and Organizational change • Organization development can be distinguished from change management and organizational change. OD and change management both address the effective implementation of planned change. They are both concerned with the sequence of activities, processes, and leadership issues that produce organization improvements. They differ, however, in their underlying value orientation. OD’s behavioral science foundation supports values of human potential, participation, and development

15. Change management, Organization Development and Organizational change • Change management focuses more narrowly on values of cost, quality, and schedule. • Organization Development distinguishing is concern with the transfer of knowledge and skill so that the system is more able to manage change in the future.

16. The Drivers of Change • The model describes seven drivers, four that leaders are most familiar with and three that are relatively new to their leadership screens. It shows that the drivers move from what is external and impersonal (environment, marketplace, organizations) to what is internal and personal (culture and people).

17. The Drivers of Change model Marketplace Requirements for Success Environment Business Imperatives Leader and Employee Behavior Leader and Employee Mindset Cultural Imperatives Organizational Imperatives

18. The Drivers of ChangeEnvironment. The dynamics of the larger context within which organizations and people operate. These forces include: • Social, • Business and economic, • Political, • Governmental, • Technological, • Demographic, • Legal, and • Natural environment.

19. The Drivers of ChangeEnvironmental Forces. • Government antitrust laws created an even playing field for domestic competition. • Changes in Technology: Expansion introduction of electronic components into customer premises and network equipment; • Customers: Increased competition

20. The Drivers of ChangeMarketplace Requirements for Success. The aggregate set of customer requirements that determine what it takes for a business to succeed in its marketplace and meet its customers’ needs. This includes not only actual product or service needs, but also requirements such as speed of delivery, customization capability, level of quality, need for innovation, level of customer service, and so forth. Changes in marketplace requirements are the result of changes in environmental forces. For instance, as the environment is becoming infused with technology that makes speed and innovation commonplace, customers are demanding higher quality, customized products and services and expecting them faster

21. The Drivers of ChangeMarketplace Requirements for Success. • Focus on the customer; • Customers demanded technology that directly served their needs; • Customization of communication solutions; • Demand for high-speed transmission; • Demand for higher quality of service and equipment

22. The Drivers of ChangeOrganizational Imperatives. Organizational imperatives specify what must change in the organization’s structure, systems, processes, technology, resources, skill base, or staffing to implement and achieve its strategic business imperatives successfully

23. The Drivers of ChangeOrganizational Imperatives. • Downsize to enable lower cost structure; • Build a strong marketing organization that includes a new sales force and product development functions; • Shift from blue collar to white collar job focus (high tech, sales and marketing) and develop appropriate skills; • Restructure company into strategic business units along product lines to reflect the needs of the marketplace; and • Streamline processes to increase efficiency and cost savings

24. The Drivers of ChangeBusiness Imperatives. Business imperatives outline what the company must do strategically to be successful, given its customers’ changing requirements. These can require systematic rethinking and change to the company’s mission, strategy, goals, business model, products, services, pricing, or branding. Essentially, business imperatives pertain to the organization’s strategy for successfully meeting its customer requirements.

25. The Drivers of ChangeBusiness Imperatives. • Become more competitive and customer focused; • Lower bottom-line operating costs and improve profitability; 20 Beyond Change Management • Tailor equipment and service to customer needs; • Lower price of service; • Acquire new companies to expand services (McGaw for wireless; NCR for computers); and • Shift focus of Bell Laboratories from winning new patents to producing sellable customer products..

26. The Drivers of ChangeCultural Imperatives. Cultural imperatives denote how the norms, or collective way of being, working, and relating in the company, must change to support and drive the organization’s new design, operations, and strategy. For instance, a culture of teamwork may be required to support reengineering business processes (organizational imperatives) to drive the strategy (business imperative) of faster cycle time and increased customer responsiveness.

27. The Drivers of ChangeCultural Imperatives. • Shift from family culture to bottom-line orientation; • Shift from being internally focused to being market and customer focused; • Shift from communal to competitive orientation; • Shift from entitlement to empowerment; and • Shift from laissez-faire to accountability.

28. The Drivers of ChangeLeader and Employee Behavior. Collective behavior creates and expresses an organization’s culture. Behavior speaks to more than just overt actions: It describes the style, tone, or character that permeates what people do. It speaks to how people’s way of being must change to establish a new culture. Therefore, leader and employee behavior denotes the ways in which leaders and employees must behave differently to re-create the organization’s culture to implement and sustain the new organizational design successfully.

29. The Drivers of ChangeLeader and Employee Behavior. • Focus on results, not just activities; • Share information and communicate openly; • Take risks; • Become more entrepreneurial and innovative; • Act more quickly and decisively in new marketing environment; • Become more accountable to Wall Street; and • Become more collaborative and less autocratic.

30. The Drivers of ChangeLeader and Employee Mindset Mindset encompasses the worldview, assumptions, beliefs, or mental models that cause people to behave and act as they do. Becoming aware that each of us has a mindset, and that it directly impacts our behavior, decisions, actions, and results, is often the critical first step in building a person’s 18 Beyond Change Management and an organization’s capacity to transform

31. The Drivers of ChangeLeader and Employee Mindset When the scope of change in the environment and marketplace is minimal, content change usually suffices. When change is required only to business and organizational imperatives (content) and not to culture, behavior, or mindset (people), the type of change is developmental or transitional. (The different types of change will be described in detail in the next chapter.) However, when the magnitude of environmental or marketplace change is large, then it triggers the need for radical content change, which drives the need for change in culture and people. This type of change, which includes all these drivers, is transformational. By definition, transformational change requires that leaders attend to content (external, impersonal) as well as people (internal, personal).

32. The Drivers of ChangeLeader and Employee Mindset Leaders: Shift mindset from “the customer doesn’t matter” to “the customer is primary”; Shift focus from “study and document” to “act and learn”; Think like an entrepreneur; Shift from a “take it or leave it” attitude toward customers to become more image, brand, and service conscious; and Shift from command and control style toward coaching and motivating. • Employees: Shift from “job for life” to “earn my way” through my results and contribution; Shift from “family” atmosphere to “look after myself”; Shift from “do as your supervisor tells you” to “be empowered to do the job as you see it!”; Shift from “cover your arse” to being accountable; and Shift from avoiding failure to learning through prudent risk