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Understanding the importance of leading change in Knowledge Age organizations.

Understanding the importance of leading change in Knowledge Age organizations.

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  • 1. Leading Change Pathfinder
  • 2. Leading Change
    • Harvard Business School professor, John Kotter, working with Dan Cohen of Deloitte Consulting, has developed the most frequently used model for leading organizational change
    • This model is based:
      • An eight-step process
      • An emphasis on an emotional approach (vs. an analytical) approach to leading change
    Kotter, J. & Cohen, D. (2002). The Heart of Change: Real-Life Stories of How People Change Their Organizations. Boston: Harvard Business School Press. (ISBN: 1-57851-254-9)
  • 3. The Challenge of Change
    • “ When written in Chinese the word crisis is composed of two characters. One represents danger, and the other represents opportunity.”
    • - John F. Kennedy
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 4. Human Reactions to Change
    • Kotter & Cohen have identified that individuals fall into one of two “camps” regarding change:
      • Change Agents
      • Change Resisters
        • Anger
        • Complacency
        • Fear
    Kotter, J. & Cohen, D. (2002). The Heart of Change: Real-Life Stories of How People Change Their Organizations. Boston: Harvard Business School Press. (ISBN: 1-57851-254-9)
  • 5. Drivers of Change
    • Advancing Technology
      • How does technology drive change?
    • Increasing Globalization
      • How does globalization drive change?
    • Increasing Customer Expectations
      • How do customer expectations drive change?
    [Source: Jackson, S. & Schuler, R. (2006). Managing Human Resources Through Strategic Partnerships. Mason, Ohio: Thomson Higher Education. (ISBN: 0-324-28991-X)]
  • 6. Types of Organizational Change
    • Degree of Change
      • Radical Change
      • Incremental Change
    • Timing of Change
      • Reactive Change
      • Anticipatory Change
    [Source: Jackson, S. & Schuler, R. (2006). Managing Human Resources Through Strategic Partnerships. Mason, Ohio: Thomson Higher Education. (ISBN: 0-324-28991-X)]
  • 7. Kotter & Cohen’s Change Model
    • HBS’ John Kotter & Deloitte Consulting’s Dan Cohen have to develop our change model:
      • Set The Stage:
        • Increase Urgency
        • Build The Guiding Team
      • Decide What To Do:
        • Get The Vision Right
      • Make It Happen:
        • Communicate For Buy-In
        • Empower Action
        • Create Short-Term Wins
        • Don’t Let Up
      • Make It Stick:
        • Make Change Stick (Create A New Organizational Culture)
    Kotter, J. & Cohen, D. (2002). The Heart of Change: Real-Life Stories of How People Change Their Organizations. Boston: Harvard Business School Press. (ISBN: 1-57851-254-9)
  • 8. Leading Change: Logic vs. Emotion
    • Kotter & Cohen assert that humans process change in one of two ways:
      • Logic
        • Analysis
        • Think
        • Change
      • Emotion
        • See
        • Feel
        • Change
  • 9.
    • Step 1: Increased Urgency
  • 10. Urgency Quote
    • “ If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
    • - Jack Welch
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 11. Most Important Message from Step 1 of The Heart of Change
    • “ In successful change efforts, the first step is making sure sufficient people act with sufficient urgency” (Kotter & Cohen, page 15) :
      • Get people “on their toes” seeking opportunities; behavior that energizes colleagues, and “beams” a sense of “let’s go”
      • Short-circuit behaviors that inhibit change:
        • Complacency (driven by arrogance)
        • Fear (self-protection; leads to immobilization)
        • Anger (“you can’t make me do that”)
  • 12. Creating The Sense of Urgency
    • The goal of Step 1 is to “raise a feeling of urgency so that people say ‘let’s go’, making a change effort well positioned for launch” (Kotter & Cohen, page 36) .
    • What Works:
      • Showing the need for change with a compelling object the can see, touch, feel
      • Showing people valid and dramatic evidence from outside the organization
      • Looking for cheap and easy ways to reduce complacency
      • Never underestimating how much complacency, fear and anger exists, even in good organizations
  • 13.
    • Step 2: Build The Guiding Team
  • 14. Build The Guiding Team Quote
    • “ Coming together is a beginning; keeping together is progress; working together is success.”
    • - Henry Ford
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 15. Most Important Message from Step 2 of The Heart of Change
    • Personal characteristics of Guiding Team members:
      • Position Power
      • Expertise
      • Credibility
      • Leadership
    • Sponsoring Leaders & Guiding Team must demonstrate:
      • Trust, teamwork, enthusiasm, commitment
      • And minimize frustration
  • 16. Building The Guiding Team
    • “ When there is urgency, more people want to help provide leadership, even if there are personal risks.” (Kotter & Cohen, page 37) .
    • What Works:
      • A team consisting of the right people
      • A team demonstrating teamwork
  • 17.
    • Step 3: Get The Vision Right
  • 18. Change Vision Quote
    • “ The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”
    • - Michelangelo
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 19. Most Important Message from Step 3 of The Heart of Change
    • When developing the change vision , Kotter & Cohen recommend that the Guiding Team answer these questions:
      • What change is needed?
      • What is our vision of the new organization?
      • What should NOT be altered?
      • What is the best way to make the vision a reality?
      • How fast can/should we move?
    • Goals in creating the change vision :
      • Be as concrete as possible
      • The vision is simple and clear (“60 second speech”)
      • Make the vision action-oriented – BE BOLD!
  • 20. Characteristics of an Effective Vision
    • An effective change vision moves the change process forward by being clear and easily understood. It should be:
      • Futuristic
      • Compelling
      • Desirable
      • Realistic & Feasible
      • Clear & Focused
      • Flexible
      • Easy to Communicate
    Source: Cohen, D. (2005). The Heart of Change Field Guide: Tools & Tactics for Leading Change in Your Organization . Boston: Harvard Business School Press. (ISBN: 1-59139-775-8)
  • 21. Validate The Vision
    • To gain as many points-of-view as possible, feedback should be sought from various stakeholders, including:
      • Leaders who will need to commit to the change process
      • Customers, suppliers, and stockholders/shareholders
      • Management and employees from all parts of the organization who will have a role to play in making the vision happen
      • Independent experts who have a solid knowledge of the industry and business strategy
    Source: Cohen, D. (2005). The Heart of Change Field Guide: Tools & Tactics for Leading Change in Your Organization . Boston: Harvard Business School Press. (ISBN: 1-59139-775-8)
  • 22. The Fortune Magazine Exercise
    • Write your organizational Fortune article:
      • This is an exercise for each individual on the Guiding Team; then compare “articles” and consolidate the best from each
      • Project 5 years, and write the results of your change effort:
        • How is the organization different?
        • What customers have to say about the company?
        • What employees are saying?
        • Performance on relevant indexes
      • Be as concrete as possible
        • Include fictitious quotes, numbers, new structure, product, service descriptions
  • 23.
    • Step 4: Communicate For Buy-In
  • 24. Change Communication Quote
    • “ In the small matters trust the mind, in the large ones the heart.”
    • - Sigmund Freud
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 25. Most Important Message from Step 4 of The Heart of Change
    • When sharing change communication , Kotter & Cohen recommend that the Guiding Team:
      • Widely communicate the direction of change
      • Communicate for both understanding and gut-level buy-in
    • Goals for communicating the change vision :
      • “ To get as many people as possible acting to make the vision a reality” (Kotter & Cohen 83)
  • 26. Most Important Message (cont)
    • What works:
      • Keep your communications simple and focused on “see/feel/change” – emotions
      • Know how people are feeling about the change effort, and adapt communications accordingly
      • Address anxieties, confusion, fear, anger, and distrust
      • Keep communication channels “clean”
      • Use all means of communication
  • 27. Communicating for Buy-In
    • Helping individuals progress from total lack of awareness of the problem to understanding and committing to the vision, includes the following key activities:
      • Initially Communicating The Vision
      • Engaging in Continuous Dialogue with the Stakeholders
      • Enrolling Stakeholders in the Change Effort
    Source: Cohen, D. (2005). The Heart of Change Field Guide: Tools & Tactics for Leading Change in Your Organization . Boston: Harvard Business School Press. (ISBN: 1-59139-775-8)
  • 28. Is Your Message Understood?
    • It is important to assess how well those around you understand, and have bought into the change vision and strategy
    • Ask a “safe” sampling of employees
      • What is your understanding of the change vision and strategies?
      • Are they sensible?
      • Do they seem compelling?
      • Do you want to help?
    • Debrief the answers and take action
  • 29. Effective Change Communication
    • You know effective communication is taking place when you observe the following:
      • Managers can concisely express the vision in their own words
      • Managers can articulate what the change means for their unit or group
      • There are discussions about the vision, the goals, and the strategy in routine management meetings, and in formal and informal gatherings
      • The vision works its way into everyday memos, presentations, and company communications to stakeholders
      • More questions about the change initiative are addressed to the managers, leaders, guiding teams, and other participants in the change process
      • Terms used in the vision start to become part of the language used throughout the organization
    Source: Cohen, D. (2005). The Heart of Change Field Guide: Tools & Tactics for Leading Change in Your Organization . Boston: Harvard Business School Press. (ISBN: 1-59139-775-8)
  • 30. Other Indications of Effective Communication
    • Employees are “getting the message” when you see:
      • More excitement, energy, and focus to tackle problems because employees have clear guidance and goals
      • More individuals come forward voluntarily to offer their assistance and support
      • Decisions are made that break from past ways of thinking and acting, and are consistent with the new vision
      • Employees express dissatisfaction about the current work environment
      • Employees spontaneously attempt to persuade co-worker “resisters” regarding the merits of the change effort
    Source: Cohen, D. (2005). The Heart of Change Field Guide: Tools & Tactics for Leading Change in Your Organization . Boston: Harvard Business School Press. (ISBN: 1-59139-775-8)
  • 31.
    • Step 5: Empower Action
  • 32. Empower Action Quote
    • “ If it's a good idea, go ahead and do it. It is much easier to apologize than it is to get permission.”
    • - Admiral Grace Hopper
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 33. Most Important Message from Step 5 of The Heart of Change
    • When people begin to understand and act on the change vision, leadership must:
      • Remove barriers in their path
      • Provide encouragement and resources
      • Remove elements and resistors to change
    • Goals for empowering action :
      • “ Deal effectively with obstacles that block action, especially dis-empowering bosses, lack of information, the wrong performance measurement and reward systems, and lack of self-confidence.” (Kotter & Cohen 123)
  • 34. Most Important Message (cont)
    • What works:
      • Find individuals with change experience who can bolster people’s self-confidence with we-won-you-can-too anecdotes
      • Provide recognition and reward systems that inspire, promote optimism, and build self-confidence
      • Provide feedback that can help people make better vision-related decisions
      • “ Retooling” disempowering managers by giving them new jobs that clearly show the need for change
  • 35.
    • Step 6: Create Short-Term Wins
  • 36. Short-Term Wins Quote
    • “ Celebrate what you want to see more of.”
    • - Tom Peters
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 37. Most Important Message from Step 6 of The Heart of Change
    • In successful change initiatives, empowered people create short-term wins:
      • Victories that nourish faith in the change effort
      • Victories that emotionally reward the hard workers
      • Victories that keep the critics at bay
      • Victories that build momentum
    • Short-Term Wins are:
      • “ visible, timely, unambiguous, and meaningful to others.” (Kotter & Cohen 125)
  • 38. Most Important Message (cont)
    • What works:
      • Early wins that come fast
      • Wins that are as visible as possible to as many people as possible
      • Wins that penetrate emotional defenses by being unambiguous
      • Wins that are meaningful to others – the more deeply meaningful the better
      • Early wins speak to powerful players whose support you need and do not yet have
      • Wins that can be achieved cheaply and easily, even if they seem small compared with the grand vision
  • 39. Benefits of Short-Term Wins
    • Evidence that the plan for change is working
    • A test against real conditions and an opportunity to adjust the plan
    • Tangible results to keep leaders and stakeholders on-board as well as undermine resisters and silence the cynics
    • A chance to catch your breath and celebrate – to make a tough journey more tolerable
  • 40. Four Step Approach to Short-Term Wins
    • You get the most benefit out of short-term wins by taking the following four steps:
      • Planning for visible improvement in performance
      • Achieving those wins
      • Communicating the wins visibly and convincingly
      • Embedding the learning into the plan going forward
  • 41. Cool Short-Term Win Exercise
    • ID projects or tasks that are part of your change effort that could produce short-term wins
    • For each project or task assess the following
      • When could you realistically get this done?
      • How much effort and expense will it take? Grade it on a 1 to 10 scale (1 = almost no effort/expense, 10 = huge effort/expense)
      • How unambiguous will the win be? (1 to 10)
      • How visible will it be? (1 to 10)
      • Will this be viewed as a meaningful win? (1 to 10)
      • Who will see it as meaningful? (think stakeholders)
    • Given these assessments, which projects or tasks should receive priority? Pick the top 5.
  • 42. Monitoring The Short-Term Wins
    • To successfully implement the projects or tasks designed to earn short-term wins, you must engage your leadership team to roll-out and monitor the projects/tasks:
      • Conduct workshops to identify short-term wins
      • Build specific tasks and goals into the project plans and budgets
      • Give clear accountabilities for implementing the projects or tasks
      • Assign responsibilities within the Guiding Team for monitoring efforts
      • Ensure that measurement systems allow leaders to track key data and demonstrate improvements
  • 43. Communicating Short-Term Wins
    • Immediately communicate short-term wins by:
      • Key objectives:
        • To gain credibility
        • To build support for the change effort
        • To demonstrate that progress is occuring
      • Target audiences:
        • Leaders who provide resources to the effort
        • People in the organization affected by the change
        • The skeptics, so they become believers
        • The supporters, so they become active participants
  • 44. Communicating Short-Term Wins (cont)
    • Immediately communicate short-term wins by (cont):
      • Key message:
        • Communicating enthusiasm and excitement about achievements and progress
        • Clarifying how the wins relate to the change effort
        • Demonstrating how the wins prove the validity of the vision
        • Communicating progress without giving the impression that the work is complete
        • Demonstrating unequivocal positive results that leave little room for doubt that progress is being made
      • Effective mechanisms for delivery:
        • A key sponsor for the change (CEO?)
        • A member of the Guiding Team
        • A former resister to the change
        • A satisfied or impressed customer
        • A system that provides reliable data
        • A trial test that can be seen
  • 45.
    • Step 7: Don’t Let Up
  • 46. Don’t Let Up Quote
    • “ Many of life's failures are people who did not realize how close they were to success when they gave up .”
    • - Thomas Edison
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 47. Most Important Message from Step 7 of The Heart of Change
    • After the first set of short-term wins, an organization will build on this momentum by:
      • Keeping the sense of urgency up
      • A feeling of false pride down
      • By eliminating unnecessary, exhausting, and demoralizing work
      • By not declaring victory prematurely
    • Don’t Let Up through actions that:
      • “ Continue with wave after wave of change, not stopping until the vision is a reality, despite seemingly intractable problems.” (Kotter & Cohen 159)
  • 48. Most Important Message (cont)
    • What helps:
      • Aggressively ridding yourself of work that wears you down – tasks that were relevant in the past but not now, tasks that can be delegated
      • Looking constantly for ways to keep urgency up
      • Using new situations opportunistically to launch the next wave of change
  • 49. Don’t Let Up: Tackling Bigger Change Issues
    • Processes: How should processes, work practices, procedures, and policies be changed to fit the vision?
    • Structure: What accountabilities need to be realigned with the new processes?
    • Technology:
      • What information is needed to sustain the new business environment?
      • What technology is needed to enable the new processes?
  • 50. Start-Up to Guiding Change
    • As your change effort moves from the “start-up” stage to multiple projects driving the change effort, the guiding team must:
      • Keep decisions aligned with the change vision
      • Keep multiple initiatives coordinated
      • Manage conflicts and priorities
      • Measure results and adjust/realign efforts
      • Make timely decisions
      • Continue to remove barriers to progress
  • 51. Don’t Let Up: People-Related Issues
    • Who should lead the changes and manage the projects at the lower levels?
    • How will you energize exhausted leaders?
    • Who can you bring in to help gain insight and support from key people resisting the change?
    • Which leaders need to be removed from the guiding team(s)?
  • 52. Sustaining The Momentum
    • Strategies for sustaining change momentum:
      • Maintain the “sense of urgency”
      • Promote visibility of the change effort and its success
      • Show commitment and support for the change through actions
      • Ensure that those implementing the change remain in touch with the true purpose of the change
      • Build commitment by connecting to critical stakeholders
      • Ensure middle management support for the change
      • Listen closely to people throughout the organization
      • Conduct a feedback/assessment process on the effectiveness of the communication about the change
      • Arrange for members of the “guiding team” to experience the problems “down in the ranks”
      • Remain intensely involved in the change effort
  • 53. Signs of Success
    • The following are indicators that your change is not letting up:
      • Leaders are actively monitoring and measuring progress
      • New projects and initiatives are launched to make more changes to the organization’s processes, technology, and systems
      • Related systems and HR infrastructure continue to be adjusted to fit the vision as it unfolds
      • New change leaders emerge
      • Leaders of the organization still demonstrate passion
      • Performance feedback supports the change
      • Time and effort are directed to support managers and employees during the transition
  • 54. Warning Signs
    • Symptoms that indicate the effort may be losing momentum:
      • Planned changes are delayed
      • Issues identified and marked for action are ignored
      • Key leaders are unavailable for meetings or presentations
      • Recommendations are shelved
      • Decisions are recycled as people have second thoughts
      • Resources, once secured for the project, are committed to other priorities
  • 55. The Organizational Stress Level
    • This is the stage where the brisk pace of change must be balanced with specific actions to help manage the organizational stress level. Strategies for managing stress:
      • Check the pulse: Keep a finger on the level of stress in the organization
      • Clarify what will change and what will not change
      • Provide support mechanisms to cope with the change
      • Help employees and managers solve problems, and to recognize and manage stress.
  • 56.
    • Step 8: Make It Stick
  • 57. Make It Stick Quote
    • “ The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year.”
    • - John Foster Dulles
    Source: http://www.ouricebergismelting.com/html/quotes.html#top
  • 58. Most Important Message from Step 8 of The Heart of Change
    • Change can be fragile:
      • Organizational culture is a complex “thing”
      • The long-standing behavioral norms and shared values of the “old way of doing things” are very difficult to eradicate
      • It is (often, subconsciously) a set of common feelings about what is of value and how organization members should act
    • Don’t Let Up cautionary insight:
      • “ Tradition is a powerful force. Leaps into the future can slide back into the past.” (Kotter & Cohen 161)
  • 59. Most Important Message (cont)
    • What helps:
      • Not stopping at Step 7 (“Don’t Let Up”), the initiative is not over until the changes have “roots”
      • Use new employee orientations to compellingly show recruits what the organization really cares about
      • Promote people who act according to the new norms into influential and visible positions
      • Tell vivid, compelling stories over and over again about the new organization, and why it succeeds
      • Make absolutely sure you have the continuity of behavior and results that help a new culture grow
  • 60. Making It Stick: Anchors
    • During the “Make It Stick” step, change is often held in place by:
      • The Guiding Team
      • A senior leader passionate about the change
      • A compensation system
      • The new organizational structure
      • Initial enthusiasm over the results created by the change
      • Leaders consistently holding staff accountable
  • 61. Making It Stick: Approach
    • During the “Make It Stick” step, several key elements help new behaviors “stick”:
      • Achieving tangible results as quickly as possible
      • Showing how the change is working, and why the old ways won’t work.
      • Measuring and supporting the sustained performance
      • Ensuring that leadership will support and model the new behaviors
      • Initiating necessary turnover
  • 62. New Employee Orientation
    • New, enthusiastic employees offer a great opportunity to enlist new disciples to the change initiative
      • These new, enthusiastic and capable (they better be, you just hired them!) professionals are not attached to the old culture, norms, behaviors, or ways of doing things
      • These new employees can quickly become contributors to the new culture
      • And, new employees may be replacing resisters to the change process
  • 63. Promote Change Supporters
    • Bottom-Line: Promote those people who truly reflect the new norms
      • This makes these supporters more influential
      • Their enhanced role in the organization will help to strengthen the new norms
    • This sends a clear message of accountability to the organization
    • As these change supporters assume more responsibility, the new culture becomes more solid and stable
  • 64. Other Operational Activities
    • During the “Make It Stick” step, there are other key operational activities that can help behaviors “stick”:
      • Management Systems: Goals, performance, information systems
      • Organizational Infrastructure: Recruiting and hiring, training and development, performance appraisals, rewards and recognition, career development and promotion, communication process
      • Informal Practices: Coaching and mentoring, social gatherings, informal recognition
  • 65. The Power of Emotion
    • Throughout The Heart of Change , we have addressed the power of the “see/feel/change” method
    • To “Make It Stick”, engaging employees feel the benefits of the change initiative will expedite buy-in and sustained momentum
      • Help employees see the benefits of the change
      • Help employees feel the power of the new culture
      • Help employees feel good about being a productive and positive part of the change
  • 66. Making It Stick: Communication
    • During the “Make It Stick” step, communication plays a key role:
      • Broadly publicize the results and benefits of the change
      • Recognize and celebrate achievements and personal contributions
      • Link organizational successes to the change initiative
      • Acknowledge how the old culture served the company but is no longer appropriate
      • Educate employees on how the new values serve as the foundation for continued success
      • Promote role models that embody the new behaviors and values
      • Reinforce the need to continuously change, and where to focus effort
      • Maintain dialogue among leaders and employees regarding challenges arising in the new culture
  • 67. Change Culture Last
    • Many organizations will attempt to change the organizational culture first:
      • Logic might lead us to believe that changing the culture should be the first step of a change initiative
      • With a culture changed, the vision can be more readily implemented
    • However, culture truly changes only when a new way of operating has been shown to succeed over a period of time
      • Norms and values (culture) will take time to genuinely shift
      • Behavior must consistently align with the change before a new culture develops
  • 68. References
    • Kotter, J. (1996). Leading Change. Boston: Harvard Business School Publishing (ISBN: 0-87584-747-1) 
    • Kotter, J. & Cohen, D. (2002). The Heart of Change: Real-Life Stories of How People Change Their Organizations. Boston: Harvard Business School Press. (ISBN: 1-57851-254-9)
    • Cohen, D. (2005). The Heart of Change Field Guide: Tools & Tactics for Leading Change in Your Organization . Boston: Harvard Business School Press. (ISBN: 1-59139-775-8)
    • Kotter, J. & Rathgeber, H. (2005) Our Iceberg Is Melting . New York: St. Martin’s Press. (ISBN: 0-312-36198-X)
    • Kotter, J. (2008) A Sense of Urgency . Boston: Harvard Business School Publishing. (ISBN: 978-1-4221-7971-0)
    • Lencioni, P. (2002).  The Five Dysfunctions of a Team:  A Leadership Fable .  San Francisco:  Jossey-Bass.  (ISBN:  0-7879-6075-6)  
    • Lencioni, P. (2005).  Overcoming The Five Dysfunctions of a Team:  A Field Guide for Leaders, Managers, and Facilitators .  San Francisco:  Jossey-Bass.  (ISBN:  0-7879-7637-7)