Change management


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  • Change management

    2. 2. Change is important for individual, corporate,institutions and even the country to adapt itselfto changing environment.•Change is the key to success in today’s time.• Today, change is not the exception but a steadyongoing process.
    3. 3. DEFINITION OF CHANGE MANAGEMENTChange Management means to plan, initiate,realize, control and finally stabilize changeprocesses on both corporate and personal level.• Change may cover such diverse problems strategicdirection or personal development programs forstaff.• Change is the continuous adoption of corporatestrategies and structures to changing externalconditions.
    4. 4. •Change comprises both, revolutionary one-offprojects and evolutionary transformations.• We find that most people have negativeattitudes and perceptions towards change.•They have fears of losing their job, their statusor their social security, or they are afraid of ahigher workload.
    5. 5. • In many cases, first effects of change on employees, leaders, andon performance levels are negative.•These effects include fears, stress, frustration and denial ofchange.•Most employees tend to react with resistance to change ratherthan seeing change as a chance to initiate improvements.•They are afraid of losing something, because they haveincomplete information on how the change processes will effecttheir personal situation in terms of tasks, workload, orresponsibilities
    6. 6. •Managers need to keep in mind those negativeside-effects of change initiatives in order to achievethe expected positive results.• The success of change projects depends on theorganization’s ability to make all their employeesparticipate in the change process in one way or theother.
    7. 7. Dynamics of Change• According to Alvion Toffler the man’sexistence is 50,000 yrs. Old.• If divided into period of 62 years (Lifetime) than man’s existence is 800 life time.• From the total of 800 life times 650 lifetimes man has spent in caves.
    8. 8. Dynamics of Change• Only during 70 life times man has beencommunicating and passing knowledgefrom the life time to another.• During the last six life times man has beenpossible to measure time with precision.
    9. 9. Time Skip• Present life time man has seenautomation, computerization; spaceresearch; nuclear advancement, satellite,microwaves and internet applications.• Man is caught in what might be called“Time Skip”.• In fact “Cultural Shock” has taken place inSocial, Political; Scientific and culturalenvironments.
    10. 10. Time Skip• Future shock is the premautre arrival ofthe future.• Future shock is a time phenomenon, aproduct of greatly accelerate rate ofchange in the global society.
    11. 11. • The need to replace complacency with a desire tocontinually improve goes back to the early days ofthe modern management era.• This idea has been accelerated by the TotalQuality Management (TQM) movement.• However, things are moving much more rapidly inthe 21st century, and in this environment,incremental transformation is not enough.
    13. 13. PerceivedCompetenceTime1. Shock2. Refusal3. RationalUnderstanding4. EmotionalAcceptance5. Exercising6. Realisation7. IntegrationTHE SEVEN PHASES OF CHANGE
    14. 14. THE SEVEN PHASES OF CHANGE1. Shock and Surprise:- Confrontation with unexpectedsituations. This can happen ‘by accident’ (e.g. lossesin particular business units) or planned events (e.g.workshops for personal development and teamperformance improvement.)2. Denial and Refusal:- People activate values assupport for their conviction that change is notnecessary.
    15. 15. THE SEVEN PHASES OF CHANGE3. Rational Understanding:- People realize the need forchange.- According to this insight, their perceived competencedecreases again.- People focus on finding short term solutions, theyonly cure symptoms.- There is no willingness to change own patterns ofbehavior.
    16. 16. THE SEVEN PHASES OF CHANGE4. Emotional Acceptance:- This phase, which is alsocalled ‘crisis’ is the most important one.-Only if management succeeds to create a willingnessfor changing values, beliefs, and behaviors, theorganization will be able to exploit their real potentials.5. Exercising and Learning:- The new acceptance ofchange creates a new willingness for learning.-People start to try new behaviors and processes.- They will experience success and failure during thisphase.
    17. 17. THE SEVEN PHASES OF CHANGE6. Realization:- People gather more information bylearning and exercising.-This knowledge has a feedback-effect.-People understand which behavior is effective in whichsituation.7. Integration:- People totally integrate their newlyacquired patterns of thinking and acting.- The new behaviors become routine.
    19. 19. THE PSYCHOLOGY OF RESISTANCE TO CHANGE• Unless the change being proposed strengthens in avisible and unambiguous way the psychologicalsecurity of the people is affected – change will beresisted.•Most of us, being human, feel our securitythreatened from time to time.• The extent to which we feel secure is mainlydependent on our cumulative experience since birth.
    20. 20. • All of us at one time or another have had theexperience that, despite the planning, hard work andcareful thought we have put into a new scheme,people won’t go along with it.• This is often a source of disappointment when wefind that our brilliant ideas and logical analysis arejust simply rejected.• Change, however is more than an intellectualprocess.• It is a psychological process as well.THE PSYCHOLOGY OF RESISTANCE TO CHANGE
    21. 21. Factors that determine how an individual might feel about achange that affects him.- Basic predisposition to change (derived from birthexperiences, early feeding and weaning toilet training,sibling rivalries etc.)- Personal sense of security (dependent on individualpersonality and current circumstances such as financial andmarital status, etc.)THE PSYCHOLOGY OF RESISTANCE TO CHANGE
    22. 22. - Prevailing cultural beliefs (relating to a particular country, orcommunity, class trade or even work groups)- Extent of trust and loyalty (resulting from past and presentrelationships with management, union and work groups.)- Objectives historic events (including the nature of after-effects of past changes, natural and regional patterns ofunemployment, labor mobility, government interventions,etc.)THE PSYCHOLOGY OF RESISTANCE TO CHANGE
    23. 23. -Specific apprehensions and expectations about the particularchange (relating the individual to the content and method of thechange, to the work group and to the organization as a whole).• Each situation and each individual tend to be unique and henceit is difficult to predict how a particular change will be regardedby those affected.• Conditions for man’s psychological readiness to change.THE PSYCHOLOGY OF RESISTANCE TO CHANGE
    24. 24. • The factors that influence an individual’s attitude towards achange, the manner of change is the one most under thecontrol of the change catalyst, manager, consultant, orwhoever is introducing the change.• Some general principles of reducing resistance to changesare briefly considered under three types of heading viz. Whobrings the change? What kind of change? And procedures ininstituting change?THE PSYCHOLOGY OF RESISTANCE TO CHANGE
    26. 26. INSTITUTING CHANGEResistance will be reduced:• If participants have joined in diagnostic efforts leading themto agree on what the basic problem is and to feel itsimportance.• If the project is adopted by consensus following groupdiscussion.• If the parties involved can see both sides of the question andrecognize valid objections and take steps to relieveunnecessary fears.
    27. 27. INSTITUTING CHANGE• If it is recognized that innovations are likely to bemisunderstood and misinterpreted, and if provision is madefor feedback of views on the project and any furtherclarification.• If participants can begin to develop acceptance of each otherand so experience support, trust and confidence in theirrelations with one another.• If the project is kept open to revision and reconsideration ifexperience indicates that a change in direction or emphasiswould be desirable.
    28. 28. • Managers need to know in which phase they have toexpect what types of situations and problems.• Most successful organizations are those that are ableto adjust themselves to new conditions quickly.• This requires planned learning processes that lead toimproved organizational effectiveness.• Normally, people perceive change processes in seventypical stages.
    29. 29. Resistance will be less;• If managers, supervisors, union leaders and otherkey people involved in the organization feel that aprogramme of planned change is their own- not onedevised and operated by outsiders.• The way in which the change is introduced.• If any programme started clearly has the whole-hearted support from the people with the groupsconcerned.
    30. 30. Resistance will be less:• If participants in any project see the change asreducing rather than increasing their currentburdens;• If the project accords with values and ideals whichhave long been acknowledged by the participants;• If the programme offers the kind of new experiencethat interests participants;• If participants feel that their autonomy and securityis to threatened.
    32. 32. • People exposed to war or disaster may develop a nervousbreakdown, people with exposed to rapid changes of modernlife may develop state of helplessness and inadequacy.• The ‘Life Change Scale’ is a psychological tool which measurethe amount of change experienced by a person over a giventime interval.• The ‘Life change’ questionnaire asks people to mark on a listwhich important changes they recently underwent: move tonew home, new job, marriage, divorce travel promotion etc.
    33. 33. • The total score for a person is calculated as the sum of allchanges that the person experienced multiplied by theirrelative weights.• Using this scale, it was shown that individuals with highlife change scores are significantly more likely to fall ill.• It turned out that illness correlates with all changes,positive as well as negative.
    35. 35. • Organizations must undertake organization-widechange to evolve to a different level in their lifecycle, e.g., going from a highly reactive,entrepreneurial organization to more stable andplanned development.
    36. 36. LEADERSHIP – NEW ROLELEADERSHIP – NEW ROLE• Change is the biggest challenge for the leader in thenew millennium.• Keeping pace with the complexity and the rate ofchange, have become the most critical factors for theorganizations today.
    37. 37. LEADERSHIP – NEW ROLELEADERSHIP – NEW ROLE• Millennium leaders will be known –- Less for what they say, and more for what theydeliver.- Less by the goals they set, and more by the mindsetsthey build.- Less by what they control, and more by what theyshape.
    38. 38. LEADERSHIP – NEW ROLELEADERSHIP – NEW ROLE• Millennium leaders will be known –- More for Vision, Change leader and Knowledgemanagement.- More for Process they create; Integrative Thinkingand Innovation.- More for keeping pace with complexity and Speed –expectation @ of Speed of Thought.
    39. 39. LEADERSHIP – WINNERSLEADERSHIP – WINNERS• The only survivors of this onslaught will becorporations headed by leaders - endowedwith the ability to see what lies ahead.• To create necessary resilience to deal with thefuture.
    40. 40. •The road to leadership is a transformingjourney for anyone who pursues itdiligently and patiently.• Leadership is more a function of the heartthan mind.
    41. 41. Effective leadership has become more criticalbecause of –•The rapidly changing socio, political and businessenvironment.•Coping with complexity and coping with change.
    42. 42. TYPES OF CHANGESThere are two types of changes:• Organizational Development:- It is moregradual and evolutionary approach to change.-It bases on the assumption that it is possible toalign corporate objectives with the individualemployee’s objectives.- In practice, however, this will rarely bepossible.
    43. 43. • Reengineering:- It is a corporatetransformation or business transformation.- It is the more radical form of changemanagement as it challenges all elements ofprocesses or structures that have evolved overtime.
    44. 44. Quantum Leaps- The explanation• A MINI LEAP is consistent with the notion ofcontinuous improvement. It means from point Ato point B• A MEDI LEAP is more ambitious. It means skippingone iteration of progress. Moving directly frompoint A to Point C• A MEGA LEAP OR QUAMTUM LEAP is the mostambitious of all. It means skipping two iterationsof progress or improvement. Moving from Point Ato Point D
    45. 45. The Quantum LeapersContinuous ImprovementaKa The MINI LEAPA B C DTHE MEDI- LEAPA B C DTHE MEGA LEAPor Quantum LeapA B C DGiant Steps are taken that jump over two or moregenerations of progress
    46. 46. Exemplification• A good case study of a Quantum Leaper is Syntel,an electronics manufacturer. When Companieswere producing chips that had capacity from 4Kto 64K, Syntel produced chip with a whoppingcapacity of 256K memory.• But Quantum Leap is not always possible. Thereare times when it is necessary to move slowly atfirst, restricting to medi leaps or even mini leaps
    47. 47. Attributes of Quantum LeapersThey Institute a Climate of Innovation• Quantum Leap companies encourage employees at alllevels to speak up about any and all mattersconcerning the organization• The best- ideas received come from non-professionals who see things from a different viewpoint• To develop this innovative atmosphere, theseorganizations use both formal and informalapproaches
    48. 48. • ‘Idea- Meetings’ are another form of program thatgenerates ideas and cultivates creativity. Participants aretold the subject of the meeting beforehand and areexpected to get at least one idea related to it.• Quantum Leapers conduct brainstorming sessions togenerate ideas and encourage participants to express anyand all ideas that emerge. They use the psychologicalprinciple called “triggering”• When suggestions are carefully considered with rapidfeedback, the programs not only succeed but add to theculture of innovation
    49. 49. Benchmark• Quantum Leapers are the first to admit they do nothave all the answers and are on the Learning Curve.• They are always in the process of seeking out ideasfrom other organizations who have faced similarsituations and benchmarking against best practices.
    50. 50. Foster an Entrepreneurial Spirit• Entrepreneuring is not limited to small, independent environments.Large organizations encourage this and is called “Intrapreneuring”.The intrapreneur may be a creator, inventor or dreamer, but hefigures out ways to turn an idea into a profitable reality.• The following should be the culture traits to support:– Listen to anyone with an original idea– Encourage; don’t nitpick. Let people run with an idea– Hire good people and leave them alone– If you put fences around people, you get sheep. Give people theroom they need– Encourage experimental doodling, give it a try- and quick
    51. 51. Willing to take Risks• The Quantum Leapers do not stay insidethe safe shell of complacency.• They are willing to take risks and moveahead• Risk taking, in certain cases, is part of theCorporate Culture of all Quantum Leapers
    52. 52. Anticipate Trends• Quantum Leapers are proactive and work on thefuture trends. The Software Industry is full of suchexamples:• Steve Jobs anticipated the demand for personalcomputers with the Apple Computer and laterMacintosh. Bill Gates saw the trend towards packagedsoftware. The founders of revolutionizedthe book selling business.• Such people are called trend- setters
    53. 53. Thinking two or three moves ahead• Like good chess players, the ExponentialManager plans several steps ahead beforemaking a move.• To make a Quantum Leap, one must be ableto anticipate what the effect will be on varietyof factors.
    54. 54. Believe in Empowerment• Empowerment is giving of the power held by a manager tothose being managed. In an empowered environment, thesupervisor brings the workers together and says: “Here is ourproject, let’s determine how it should be done”• There are 3 major advantages to this:– Ideas- People who work on the job can provide deeper insights toa situation– Synergy- When people work together in developing a project, aninterrelationship develops among them that leads tocollaborative efforts to achieve success– Ownership- People are committed to success when they areinvolved in designing of the project
    56. 56. • Before an organizational culture can be changed, itmust be analyzed and assessed.• It is necessary to understand the culture anddetermine what problems exist and how seriouslythey affect productivity, quality of product or service,morale of the workers and the overall efficacy of theorganization.• Perception is Reality in the minds of the perceiver
    57. 57. •It creates distinction between one organization& the other.•It conveys a sense of identity for organizationmembers.•It facilitates the generation of commitments tosomething larger than one’s individual self-interest.•It enhances the stability of the social system.WHAT DOES CULTURE DO
    58. 58. Need for new organizational culture• Organizations are restructuring, downsizing andoutsourcing, employee morale has fallen to newdepths.• The unconditional loyalty and dedication of employeeswho looked upon their jobs as careers and theiremployment as relatively secure is replaced in manycompanies with uncertainty .
    59. 59. A new organizational culture must bedeveloped to overcome barriers to changeand renew - an attitude of commitmentand cooperation.
    60. 60. DIFFICULT Y IN ACCOMPLISHINGORGANIZATION CHANGE• There are strong resistances to change, peopleare afraid of the unknown.• Many people think things are already just fineand don’t understand the need for change.
    61. 61. WAYS FOR CARRYING ORGANIZATIONCHANGE• Successful change must involve top management,including the board and chief executive.• Usually there’s a champion who initially instigates thechange by being visionary, persuasive and consistent.• A change agent role is usually responsible to translatethe vision to a realistic plan and carry out the plan.
    62. 62. WAYS FOR CARRYING ORGANIZATIONCHANGE• Change is usually best carried out as a team- wideeffort.• Communications about the change should be frequentand with all organization members.• To sustain change, the structures of the organizationitself should be modified, including strategic plans,policies and procedures.
    63. 63. What is “Revitalising People”• Revitalising People entails– Change of Attitude– “Mindset Change”• But can we teach Old hays…new Tricks??
    64. 64. It is observed that:• Some Individuals with the same attitude andpersonality traits, can behave differently withdifferent context.• To change the behavior, the context has to bechanged.
    65. 65. What does the Organisation want fromit’s People?• The Organisation wants it’s People to:– Collaborate– Share– Help each other– Feel a sense of commitment– Take initiative– Learn continuously– Bring benefits of learning– Support company success
    66. 66. Overall, the point is simple: If you wishto see Initiative, Collaboration,Commitment and Learning, theChallenge is to Change/ Create the right“Smell of the Place” -Culture
    67. 67. Potential dysfunctional aspects of culture• Barriers to change• Barriers of diversity• Barriers to acquisitionsCULTURE AS LIABILITY
    68. 68. - Sensitive to ones own culture and also to other’s culture- Building relationships quickly, generating collaborations.- Ability to work with cross functional teams- Humility to learn and adaptCULTURE AND RELATIONSHIP
    69. 69. GLOBAL MANAGERAccording to Andrew Kakabadse:• There are two views about global managera. Global manager is a managerb. They are entirely different breed of executivesThe stronger view is they are different breed of executivesWhat make a GLOBAL MANAGER exceptional -that he can thinkacross the cultural boundaries.
    70. 70. GLOBAL MANAGER
    72. 72. GALLUP SURVEY• It is a feedback system tied to bottom line – salesgrowth, Productivity and Customer Loyalty for theemployees that would identify and measure elements ofworker engagement.• Studies have revealed that:- Employee actively engaged in job role: 29%- Employees not engaged in job role : 54%- Employees disengaged in job role : 17%
    73. 73. Questions Your RatingQ01 I know what is expected of me at work.Q02 I have the materials and equipment to do my work right.Q03 At work, I have the opportunity to do what I do best every day.Q04In the last seven days, I have received recognition or praise for doing goodwork.Q05 My supervisor, or someone at work, seems to care about me as a person.Q06 There is someone at work who encourages my development.Q07 At work, my opinions seem to count.Q08 The mission or purpose of my organization makes me feel my job is important.Q09 My associates or fellow employees are committed to doing quality work.Q10 I have a best friend at work.Q11 In the last six months, someone at work has talked to me about my progress.Q12 This last year, I have had opportunities to learn and grow.Employee Engagement Effectiveness Index(5=Strongly Agree, 4=Agree, 3= Neither Agree nor Disagree, 2=Disagree,1=Strongly Disagree)
    75. 75. Questions Your RatingQ01 My manager/supervisor demonstrates competence in his or her job.Q02 My manager/supervisor treats everyone fairly (i.e., plays no favorites).Q03 My manager/supervisor creates a motivating and supportive work climate.Q04My manager/supervisor represents my needs, ideas and suggestions to his/hermanager.Q05My manager/supervisor takes an interest in my professional growth anddevelopment.Q06My manager/supervisor involves me in decision making, problem solving andplanning processes.Q07 My manager/supervisor creates a high performance and collaborative work team.Q08I have the opportunity to interact with Management above my immediatesupervisor.Leadership Effectiveness Index(5=Strongly Agree, 4=Agree, 3= Neither Agree nor Disagree, 2=Disagree, 1=Strongly Disagree)
    76. 76. The score of Great Workplace Award should have min. score 4.5At the same time your engagement is very high to the company.RESULTEMPLOYEMENT ENGAGEMENT SURVEYLEADERSHIP SURVEYThe Great Manager should have minimum score 4.5
    77. 77. Strategic Management andStrategic Management andStrategic CompetitivenessStrategic Competitiveness
    78. 78. Corporate StrategyDirectional Strategy:– Orientation toward growth• Expand, cut back, status quo?• Concentrate within current industry, diversify intoother industries?• Growth and expansion through internaldevelopment or acquisitions, mergers, or strategicalliances?
    79. 79. Corporate StrategyGrowth Strategies:– Most widely pursued strategies– External mechanisms:• Mergers– Transaction involving two or more firms in whichstock is exchanged but only one firm survives.• Acquisition– Purchase of a firm that is absorbed as an operatingsubsidiary of the acquiring firm.• Strategic Alliance– Partnership of two or more firms to achievestrategically significant objectives that are mutuallybeneficial.
    80. 80. Corporate StrategyInternationalEntryOptionsExportingLicensingFranchisingJoint VenturesAcquisitionsGreen-Field DevelopmentProduction SharingTurnkey OperationsBOT ConceptManagement Contracts
    81. 81. Corporate StrategyPortfolio Analysis– How much of our time and money should wespend on our best products to ensure thatthey continue to be successful?– How much of our time and money should wespend developing new costly products, mostof which will never be successful?
    82. 82. Corporate StrategyPortfolio AnalysisBCG (Boston Consulting Group) Matrix– Product life cycle and fundingdecisions• Question marks• Stars• Cash cows• Dogs
    83. 83. Corporate Strategy• Directional Strategy:Orientation toward growth -• Expand, cut back, status quo?• Concentrate within current industry, diversify intoother industries?• Growth and expansion through internal developmentor Acquisitions, Mergers or Strategic Alliances?
    84. 84. GROWTH STRATEGIESConcentrationCurrent Product line in one industry Vertical Growth Vertical Integration•Full Integration•Taper Integration•Quasi Integration Backward Integration Forward IntegrationHorizontal GrowthHorizontal IntegrationDiversificationOther Product lines in other industriesConcentric•Growth into related industry•Search for SynergyConglomerate•Growth into unrelated industry•Concerned with Financial considerationRETRENCHMENTSTRATEGIESTurnaroundCaptive CompanySell - Out / DivestmentBankruptcy / LiquidationSTABILITY STRATEGIESPause / Proceed withCautionNo ChangeProfitDirectional Strategy
    85. 85. Competitive success is transient...unless care istaken to preserve competitive positionOnly 16 of the 100 largest U.S. companies at thestart of the 20th century are still identifiabletoday!In a recent year, 44,367 businesses filed forbankruptcy and many more U.S. businesses failedChallenge of Strategic Management
    86. 86. • Rapid technological changes• Rapid technology diffusions• Dramatic changes in informationand communication technologies• Increasing importance ofknowledgeFundamental nature ofcompetition is changingThe pace ofchange isrelentless....and increasingTraditionalindustryboundaries areblurring, suchas...• Computers• Telecommunications21st Century Competitive Landscape21st Century Competitive Landscape
    87. 87. The global economy ischanging• People, goods, services andideas move freely acrossgeographic boundaries• New opportunities emerge inmultiple global markets• Markets and industries becomemore internationalizedTraditional sources ofcompetitive advantage nolonger guarantee successNew keys to successinclude:• Flexibility• Innovation• Speed• Integration21st Century Competitive Landscape21st Century Competitive Landscape