Change Management

Leading Corporate Transformation

Contents

Forces for Change

Principles of Change

Five Activities Contributing to Effective Change Management

Motivating Change

Creating Vision of Change

Developing Political Support

Managing the Transition

Sustaining Momentum

Elements of Change Enablement

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“ When the rate of change outside exceeds the rate of change inside, the end is in sight”

Rate of Change Jack Welch

Forces for Change... Electronic commerce Virtual organizations Digital convergence “ Knowledge economy” ... are transforming the world of business Mergers & acquisitions Privatizations A-2 “ Information Superhighway”

Rate of Success in Change Efforts Not Very Successful Very Successful Moderately Successful Too soon to tell Unsure 33% 27% 27% 9% 4%

Technical Side of Change Human Side of Change Two Sides of Change

Change is a process that can be enabled, not managed

The change process must be linked to business and performance goals

Building capacity to change is a strategic imperative

Building capacity for change is an evolutionary process

Effective change processes require a systemic view of the organization

The change process involves both organizational and personal transitions

Behavioral change is a function of perceived need and occurs at the emotional, not the intellectual level

Resistance to change is predictable reaction to an emotional process and depends on a person’s perception of a change situation

A handful of change enablement best practices account for the success of most change processes

Change strategies are situational

Motivating Change

2. Creating Vision of Change 3. Developing Political Support 4. Managing the Transition of Change 5. Sustaining Momentum Effective Change Management

Motivating Change

Motivating change and creating readiness for change Sensitize organizations to pressure for change Reveal discrepancies between current and desired states Convey credible positive expectations for the change

Force Field Analysis Model Current Situation Restraining Forces for Change Driving Forces for Change

Force Field Analysis Model Strengthening or adding driving forces Removing or reducing restraining forces Changing the direction of some of the forces Change

Group Exercise

Take this opportunity to think of a situation in your organization where Force Field Model could be demonstrated. Begin by identifying a change being instituted in your organization.

List the driving forces

List the restraining forces

Resistance to Change Source: Information Week, June 20, 1994 Limitations of Existing Systems Lack of Executive Commitment Lack of Executive Champion Unrealistic Expectations Lack of Cross-Functional Team Inadequate Team and User Skills Technology Users Not Involved Project Charter Too Narrow Barriers to Change 20% 40% 60% 80% 100%

Individual Resistance Individual Resistance Habit Selective Information Processing Economic Factors Job Security Fear of the Unknown

Organizational Resistance Organizational Resistance Threat to Established Power Relationship Group Inertia Threat to Established Resource Allocations Structural Inertia Limited Focus of Change

Denial Resistance Exploration Past Future Four Phases of Transition Commitment

“ How good things were in the past”

“ It can’t happen here”

Numbness

Everything-as-usual attitude

Refusing to hear new information

Anger

Loss and hurt

Stubbornness

Blaming others

Complaining

Getting sick

Doubting your ability

Some of the Signs in Each Phase Denial Resistance

Exploration Commitment

“ What’s going to happen to me?”

Seeing possibilities

Chaos

Indecisiveness

Unfocused work

Energy

Clarifying goals

Seeing resources

Exploring alternatives

“ Where I am headed”

Focus

Teamwork

Vision

Cooperation

Balance

Some of the Signs in Each Phase

Overcoming Resistance to Change Education and Communication Participation and Involvement Facilitation and Support Negotiation Manipulation and Cooptation Coercion Overcoming Resistance to Change

2. Creating Vision of Change Constructing the Envisioned Future Bold and Valued Outcomes Desired Future State

3. Developing Political Support Assessing Change Agent Power Identifying Key Stakeholders Influencing Stakeholders Developing Political Support

Roles in Organizational Change Change Sponsor Change Agents Change Target These are individuals or groups with the power to determine that a change will occur These are individuals or groups responsible for seeing that a previously determined change occurs These are individuals or groups who are asked to change something (knowledge, skills, or behavior) as a result of the change

Influencing Key Stakeholders A set of questions designed to profile an individual stakeholder:

Reluctant and occasional

Make response to threats

Assertive and direct

Deception and subtlety

What is their style of using power?

What is their source of power ?

What they can control: money, time, resources, people, information ?

Who they can influence: friends, admirers, those who feel obligation ?

Power

Influencing Key Stakeholders

Changes their power ?

Affects other needs ?

Affects goals, objectives and interests ?

Opposition, uncertainty or support ?

Action now or ‘wait and see’ ?

Open action or hidden action ?

Individual action or acting with others ?

What is their likely response to the change? How does the change really affect them? Effect of Change

Significant or limited ?

Local or widespread ?

Recoverable or permanent ?

What would be the impact of their response? Effect of Change

Influencing Key Stakeholders What would make them more supportive of the change?

Information / understanding ?

Involvement and ownership ?

Changes in planned actions?

Direction from more senior managers ?

Evidence of the success of the change ?

What would make them less supportive of the change?

Personal threat ?

Non-involvement in decisions ?

Personal rivalries ?

Insufficient evidence in ‘trial period’ (defined by them) ?

4. Managing the Transition Current State Desired Future State Transition State

Activity Planning

Change Management Team

Head (Executive Sponsor) Head Organizational Development (Change Leaders) Communication Role (Change Agents) Human Resources Role (Change Agents)

Corporate Management

Key project accountability and ownership

Report to CEO on project outcomes/success

Coordinate overall change program

Develop clear change strategies for change

Responsible and accountable for overall success

Develop individual and team change capability

Provide clear communication to all key stakeholders on change related issues

Develop 2-way communication channels to foster ongoing organizational change

Provide expert HR advice on personal transitions and support

Provide Change Office & project based HR infrastructure

Change Management Team : Roles Example

Project Leaders

Take responsibility for key initiatives

Coordinate project team

Report to business unit GM and Change Office on project progress

Develop leadership change management capability

Provide ongoing change advice to leaders

Coordinate project infrastructure & integration

Prioritize and plan overall project timeframes

Establish clear project performance measures and reporting systems

Manage ongoing project performance

Report to Executive on overall progress

Leadership Advisory Role Process Co-ordination Role Performance Management Role C - 5 Change Management Team : Roles Example

C - 6 Critical Skills of Change Agents Understands change dynamics Appreciates diversity Anticipates and manages resistance Understands power and influence Has high credibility Manages multiple tasks

5. Sustaining Momentum Sustaining Momentum Providing Resource for Change Building a Support System for Change Agents Developing New Competencies and Skills Reinforcing New Behaviors Staying the Course

Motivating Change

2. Creating Vision of Change 3. Developing Political Support 4. Managing the Transition of Change 5. Sustaining Momentum Effective Change Management

Elements of Change Enablement

Culture Capacity Leadership Capacity Individual & Team Capacity Future State Current State Leading Designing Realizing Ending Exploring Beginning Leadership Capacity Individual & Team Capacity Change Architecture Communication Performance Management Cultural Capacity Organizational Transition Personal Transition Elements of Change Enablement

Change Architecture Communication Performance Management Organizational Transition Leadership Capacity Team & Individual Capacity Cultural Capacity Personal Transition Change Process Elements of Change Enablement

There is an explicit strategy and structure which define the nature and sequence of specific activities and resources required to facilitate the change process. Change Architecture Communication An infrastructure and plan is in place to build awareness of change goals, communicate progress toward attainment of these goals, and encourage collective ownership of the change process and outcomes. Change Enablement – Best Practices

Human Resources processes - recruiting, training, measuring and rewarding - are aligned to drive new behaviors in support of the business vision. Performance Management Change Enablement – Best Practices

Leaders’ values and behaviors are aligned with the business vision; leaders possess the skills to drive the change process to completion, and accept the responsibility for doing so Leadership Capacity Team & Individual Capacity Actions have been taken to increase individuals’ and teams’ ability to enact the business vision and operate effectively in the new environment. Change Enablement – Best Practices

The organization has assessed the alignment of the current culture with the change process and built new values and behaviors as appropriate to support it. Cultural Capacity Change Enablement – Best Practices