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FINAL DRAFT, Change Management Simulation Presentation
- 1. CHANGE MANAGEMENT SIMULATION: BUILDING APRO FORMA MODEL TO LEAD CHANGE Brittany Auerbach, Heather Stewart, Joshuaine Toth, Matthew Urdan 1
- 2. Introduction Mission: Through theappropriate use of change levers, persuade a critical mass of Spectrum employees to adopt a new initiative Approach: Demonstrate change management skills in an online simulation as the director of product innovation at Spectrum Sunglass Company 2
- 3. Learning Objectives There isno right or wrong way to manage change Practice diagnostic and action- planning skills Gain insight into change resistance, learn to overcome Identify key contextual contingencies How and when to choose change strategies and tactics Identifying common missteps of change agents 3
- 4. Types of Change Radical/re-creation Game-changing Short amount of time Upheaval across departments Critical for long term survival of company Change in approach to corporate social responsibility Incremental/adaptive React to change in industry trend and customer demand Changing market conditions Critical to remain competitive Organizational restructuring Adaptation of manufacturing process General approach 4
- 5. Managing Change Radical vs.Incremental Change Agent Upper level Mandate • New Product Development / Product Innovation • Supply Chain Issues • Modify Production Processes • Accelerate Marketing and Sales • Existing organic structure was optimal • Ideas “bubble upward from lower-and middle-level employees” (Daft, 2013, p. 453) Middle management: Poor position for top-down strategy implemented in radical changes Middle management: Empowered by CEO and given aggressive timelines Radical Incremental 5
- 6. Contingency Factors Political Frame Increase Credibilit y Political frame Coalition building 1:1 Interviews Recognize adopter Largersocial networks increased impact 6
- 7. Contingency Factors Environmental Strengthen Horizontal Network Personal Interviews Townhall meetings Consultant approval External training Coalition building Changing external environment called for “a more flexible, organic structure with strong horizontal coordination and collaboration” (Daft, 2013, p. 70) 7
- 8. Applying our Levers UtilizingFrames HR • External skill building • Email notice • Reward system Symbolic • Walk the Talk • Get CEO’s Support • Hold Town Meetings Structural • Goals/deadline s • Reorganization • Pilot project Political • Build critical mass • Public support • Private meetings • Build a coalition 8
- 9. Lever Summary Team Results Levers Incremental Results NetSum of Changesin Credibility Sum of No. of WeeksEngaged in Lever Ratio of effectiveness (Result to Weeks) Leadership Frame Conduct Private Interviews 68 0 18 3.8 Political, Human Resources Hold Town Hall meeting 43 -1 15 2.9 Political, Human Resources Walk the Talk 40 12 21 1.9 Symbolic Announce goals& deadlines 22 -1 16 1.4 Symbolic, Structural Get consultant'ssupport 17 5 15 1.1 Political, Symbolic Conduct pilot project 15 0 36 0.4 Symbolic, Structural Recognize an adopter 14 -1 21 0.7 Political Tell a successstory 14 -4 12 1.2 Symbolic Restructure organization 12 0 16 0.8 Structural Provide external skill building 10 0 24 0.4 Human Resources Revise reward system 9 -1 36 0.3 Human Resources Build a coaltion of support 9 -4 30 0.3 Political, Structural Get CEO'spublic support 8 14 20 0.4 Political, Symbolic Privately confront resister 6 -3 7 0.9 Political, Human Resources Issue e-mail notice 5 -2 5 1.0 Human Resources Provide internal skill building 4 0 12 0.3 Human Resources Post ProgressReports 0 -6 6 0.0 Symbolic Grand Total 296 8 310 1.0 9
- 10. Coping with Resistance DecisionResult Factor Failure Success Lever 1 Lever 3 Lever 2 Time Choices Leve r 1 Failur e Leve r 2 Succe ss Leve r 3 Failur e 10
- 11. Pro Forma Model CommonMissteps SituationalAwareness • Incorrectly diagnosing the situation • Mistaking the situational power of the change agent • Miscalculating organizational awareness and appetite for change Speed • Employing radical change levers for a situation where incremental is better • Utilizing incremental change levers when a more radical catalyst is needed Timing • Incorrectly applying a change lever at the wrong stage 11
- 12. Change Models Information Personal Implementation Impact Collaboration Refinement Organization Frame Bending Heroism vs. Stewardship Six Changes of Concern The 8 Steps to Transforming your organization A range of Uniform and Differentiated Approaches 12
- 13. Recommendations for Leading Change •Making mistakes is good if you learn from them Decision Learning • Change is not formulaic • There is more than one way to drive change No Magic Button • Organizations are like complex organisms • Change in one area will often affect others in another area Complexity • Change happens One Person at a Time • Use the power network to your advantage Incremental • Reframing is essential • Try to color the assessment using more than one frame Four Frames • Change Levers don’t always work in each stage • Time the catalysts appropriately Timing 13
- 14. Final Thoughts Thereis no right or wrong way to manage change Utilize levers that enhance political power Know what stage each employee is at in the change process Change happens one employee at a time Respond to the needs of each employee as they pass through the stages of concern Strategic utilization of leadership frames in conjunction with change levers can prevent common missteps and ensure the success of the change process 14
- 15. References Bolman, L. G.,& Deal, T. E. (2008). Reframing organizations: Artistry, choice, and leadership. San Francisco: John Wiley & Sons, Inc. Bolman, L. G., & Deal, T. E. (n.d.). The power of reframing: Reframing leadership. In Reframing Organizations (Third ed., pp. 107- 129). Retrieved October 25, 2014, from https://quinnipiac.blackboard.com/bbcswebdav/pid-1191757-dt-content-rid- 6257611_1/courses/MBA625DE_14FA/The%20power%20of%20reframing%20leadership_bolman%20and%20deal.pdf Daft, R. L. (2013). Organization Theory & Design. Mason, Ohio: South-Western : Cengage Learning. Harvard Business School Publishing. (n.d.). Change management: Power and influence Online Simulation. Harvard Business School Publishing. Retrieved December 4, 2014 Higgs, M., & Rowland, D. (2005, June). All changes great and small: Exploring approaches to change and its leadership. Journal of Change Management, 5(2), 121-151. Kotter, J. (1996). 8 steps to transforming your organization summary png image. In J. Kotter, Laeding Changes. Retrieved December 5, 2014, from https://quinnipiac.blackboard.com/webapps/portal/frameset.jsp?tab_tab_group_id=_2_1&url=%2Fwebapps%2Fblackboard%2Fe xecute%2Flauncher%3Ftype%3DCourse%26id%3D_37839_1%26url%3D Nadler, D. A., & Tushman, M. L. (1989). Organizational frame bending: Principles for managing reorientation. Academy of Management Executive, 3(3), 194-204. Senge, P. M. (1990, Fall). The leader's new work: Building learning organizations. Sloan Management Review, 32(1), 7-23. The Ken Blanchard Companies. (2008). Leadership strategies for making change stick. Perspectives, pp. 1-8. Watkins, M. D. (2009, January). Picking the right transition strategy. Harvard Business Review, 1-9. 15
- 16. Appendix 16 The following fourslides consist of personal examples of change each of our group members has experienced within our own work history. These examples demonstrate a synthesis of the concepts we learned in this class through the assignment of change levers that were involved in our own change efforts and the recognition of the Four Frames of Leadership as they were dynamically applied. These personal examples clearly show the relevance of the course material. We now have new tools at our disposal to more effectively lead our respective organizations.
- 17. Change Management Example-Brittany Auerbach Travelers Insurance Situation: Open VP position at my company. Actions: Interviews took place with current senior leadership team, candidates met with all potential peers, research was conducted on past performance of all candidates, debriefs with all interviews, and finally the decision was made. Levers: Individual Interviews were conducted, meetings held with all senior leaders, discussion 1x1 with each leader about transition, announcement of January 1st transition (goals and deadlines), town hall meeting with VP’s new organization to introduce new leader, email from CIO was sent to the whole organization announcing transition Learning: For me, it was really interesting to see change levers applied in class through a real and recent example at work. To me, this example also ties closely with the political frame and shows the importance of communication and conversations up front with all impacted individuals. The timing of the town hall and email was also critical to ensure that all employees of the organization would be comfortable with the change in leadership. 17
- 18. Change Management Example- Joshuaine Toth Boehringer Ingelheim Pharmaceutical Situation: New Global Head of Research + budget shortfall = “Resetting the Baseline” Actions: New research strategy introduced in order to meet the demands of the market while keeping up with our competitors Levers: (1) Informative email introducing the idea of a new research strategy (2) Town hall meeting announcing more specifics with interactive Q&A (4) Reorg that consolidated groups based on overlapping research focus (3) creation of middle management led work-streams that will design new components of the organization (5) Continued updates from our new leader via email and site visits Learning: This new guy is good. I am on the Research Communication Committee. Based on feedback from our most recent survey, people are pleased with our new guy and his dedication to communication. Not only is he using levers that seem to be working (we all love the idea, we’re all on board), but he is friendly, approachable, and most importantly, he is visible. 18
- 19. Change Management Example– Matthew S. Urdan Nantahala Outdoor Center Situation: Conduct a Corporate CSR and Environmental Stewardship Benchmark Assessment per CEO Directive to Begin the Process of Culture Change by Aligning Company Decision Making with Corporate Mission and Strategy Actions: Data Compilation, Analysis and Reporting Levers: 1) Issue Email Notice Explaining the Data Gathering Project and the Need for Department Head Input. 2) Announce Goals of the Project and Deadlines for Employee Survey Completion and Collection. 3) Get CEO’s Public Support. 4) Hold Town Hall Meetings to Explain the Project. 5) Conduct Private Interviews and 6) Walk the Talk to Continually Explain how Data Collection Can Improve Processes and Benefit Employees, the Community and the Environment through adding Corporate Benefits Employees want, Supporting Volunteerism and Increasing Local Community Involvement and Charitable Giving, and Reducing the Company’s Environmental Impact through Smart Energy Utilization and Conservation, Recycling, and Carbon and Pollution Offsets. Not only would employees, the community and the environment benefit, but the company would also benefit from the differentiator of improved reputation among consumers that would result in greater market share and increased business revenue. Learning: The project was assigned to me by the CEO without any preparatory work in ascertaining a problem or perceived need within the company for a CSR or Environmental Assessment, let alone a culture change. Thus I was met initially with significant resistance and a lot of questions. After informing the CEO of the issues, he sent out an email to department heads to give me the support and access I needed, and then together, we held Town Hall Meetings explaining the scope of the project and why it was being undertaken. What I learned from the process was how important it was to obtain a coalition of support and informational awareness prior to beginning any company wide change project with comparable scope and magnitude. What I learned looking back at the process after completing the change simulation was how important symbolic leadership played in the process. Achieving cultural change is difficult and complex—even an act of aligning the culture more closely with the company mission and strategy is a shift in cultural interpretation. Therefore it was critical to share a vision of change, tell stories, relate examples from other companies and even share other 19
- 20. Change Management Example– Heather Stewart Blount Inc. Situation: Build and Global Procurement Organization through process and functional reporting centralization of activities with geographically separated teams. Actions: Information Gathering: World Tours for Interviews, World Tours to “Sell” the Concept, Restructuring, Recruitment, Legal Entity Formations, Workshops, External Consultants, Multiple Board Meetings, Board Announcements and Approvals Levers: 1) Personal Interviews for all affected stakeholders in global Blount locations 2) After identifying pain and resistance points, developing “Walk the Talk” presentation 3) World tour to “Walk the Talk” and gain support from all global stakeholders 4) Incremental Board Announcements of Change 5) Hiring External Consultants to provide support and unbiased reviews of current organization 6) Restructuring of organization including legal entity formations in China and Europe 7) Redesigned award and promotion system 8) Internal and external training on new processes 9) Iterative public announcements of support from Board 10) Displays of progress in visible areas 11) Recognition of adopter by public announcement from those adopters Learning: I was recruited to the position with the intent that Procurement needed to be restructured to a shared service concept across the global organization to capitalize on economies of scale, best practices and ensure seamless post M&A transitions. Although there was a considerable amount of resistance because I was an “outsider”, adoption was quite rapid. The implementation, however, was quite lengthy as I had underestimated the competitive employment market in the area and recruitment proved to be difficult. Timing of bringing in external consultants was very key; had I brought them in earlier, the “outsider” view may have been amplified as there was certainly some displays of resistance. Symbolic platforms helped immensely; once the structures started to take shape, these displays created healthy competition that drove the organizational acceptance and learning forward. 20
Editor's Notes
- #2 Hi, my name is Brittany Auerbach. On behalf of my groupmates, Heather Stewart, Josh-a-win Toth, and Matthew Urdan, I will be walking you through our presentation on the results of our change management simulation and discussing the building of a pro forma model to lead change.
- #3 To begin, we will first discuss the purpose of the change management simulation from Harvard Business School Publishing. The simulation was to help us develop the critical skill of leading change. In the simulation, we assumed the role of a change agent, the Director of Product Innovation, in Spectrum Sunglass Company. Our task was to influence and convince a critical mass of key Spectrum personnel to adopt our new initiative, focused on sustainability. Throughout the simulation, it was important for us to plan and time the use of Change Levers to gain the most adopters and supporters.
- #4 Next, we will discuss the specific learning objectives from the change management simulation. These five objectives highlighted here include providing us with an opportunity to practice action-planning in regard to leading strategic change, understanding why there may be resistance to change and how to develop change implementation strategies to avoid it, appreciate key contextual contingencies, determine how and when to use effective change strategies, and lastly how to identify common missteps people often use to implement change. One of our biggest takeaways as a group was that we all approached the simulation in different ways. Yet, we all were able to influence the critical mass to adopt the new initiative. Therefore, this presentation will illustrate the general lessons our group learned about managing change as a result of our differing approaches to the change management simulation.
- #5 There are many types of change. Determining the type of change impacts the change strategy adopted and the change management process. There are four types of strategic change: technology, products and services, strategy and structure, and culture (Daft, 2013). Our group differed in opinion over the type of change that was called for in the simulation, thus our strategies differed. Some of us felt that the change needed was radical restructuring due to the game-changing nature of introducing a green product line and focused change management strategies on company restructuring and new reward systems. Others felt that the change was more incremental and adaptive to changing market conditions in that customers vocally expressed a desire for more green products. This group did not change the company structure.
- #6 Interestingly, both approaches worked and achieved critical mass in the change simulation. Radical restructuring change achieved a critical mass in as low as 61 weeks in one simulation and incremental adaptive change achieved a critical mass in as low as 66 weeks in another simulation. Both simulations achieved high change efficiency ratios of 0.3 and 0.29 respectively. The question that needs to be asked, however, is radical change that results in corporate restructuring necessary when incremental change may be less disruptive to the organization and may suffice? While it cannot be determined based on the simulation results which approach was preferable based upon the type of change as only one simulation utilized the restructuring lever; consideration in determining the type of change necessary and the change process should include thought concerning the positional nature of the change agent and whether the direction of change needs to be top down from the Management Core or bottom-up from the Technical Core.
- #7 The entire group did significantly consider the positional power of the change agent. Since throughout the simulation, we had the role of Product Director, we really had to rely on boosting credibility in order to increase our power. Our change agent had to earn credibility and utilize political frame skills (Bolman and Deal, 2008) to obtain support for all the corporate executives above him, but also for key personnel in other departments. Political frame skills were used to great advantage in Private Interviews, which was by far the most effective lever in each of our simulations. Further, our choices in selecting personnel for private interviews and coalition building sessions were highly influenced by the social networks of our interview targets. Targeting those with more expansive social networks, such as the V.P. of Human Resources, netted greater progress in moving through the adoption stages than those with limited social networks. It was critically important to confront a person resisting the change at the right time; failing to do this effectively caused adverse circumstances. Finally, we all used the “Recognize Adopter” lever for the political frame advantages of increased credibility, power and influence this tactic afforded.
- #8 The environment contingency factor was also greatly considered. Spectrum was faced with a rapidly changing external environment that “called for a more flexible, organic structure, with strong horizontal coordination and collaboration” (Daft, 2013, p. 70). Therefore, each of us in our simulations utilized private interviews, town hall meetings, consultants, external skill building and coalition building attempts across departments to maximize horizontal coordination efforts.
- #9 As our change agent was a mid-level management employee, we utilized levers that would enhance our political power (credibility), build coalitions and horizontal structural teams (especially through the launch of pilot projects), assuage fears, establish a new vision and correct misconceptions to develop a critical mass of supporters for the change needed. Private meetings at all stages were critical to success, and used initially in getting early supporters onboard. Holding Town Meetings were necessary to provide information and answer questions. Holding External Skill Building for those in Manufacturing and Finance was also strategic with the realization that their resistance may have just stemmed from not knowing how to implement the change or being unaware of how moving to sustainability is profitable for an organization. Additionally, the timing of the use of the change lever was critical to its effectiveness. Some levers were more effective in the beginning of the change process, such as Town Hall Meetings and Conducting Private Interviews when Informational and Personal Concerns factored into employee interest and moved employees towards adoption of the change. Other levers like Corporate Restructuring and Revising the Reward System were effective in the middle of the change process to continue momentum towards critical mass adoption, while the same levers were ineffective in the final stages when most had already committed to the change process. A symbolic lever, like Walk the Talk was effective at every stage of the process, except the very beginning. This most likely has to do with awareness of the change within the organization. Early on when Walk the Talk is practiced, employees may be mostly unaware of the change so they have no context to interpret the pro-change lever, so there would likely be no effect from the lever’s use at first. However, in the symbolic frame, communication of vision, telling stories, history and sharing successes all have cumulative effects. Finally, while we were greatly unaware of the conscious application of the four leadership frames during the simulation, associating frames with each lever demonstrates that levers were also chosen as an effective blend of all leadership frames in the change management process.
- #10 This table shows the incremental and net impacts of effectiveness of all the levers used in the group’s change simulations; as well as the leadership frame associated with each lever. Incremental results are a summary calculation of all step changes by each lever used; net changes in credibility captured the gains and losses of each lever; and Ratio and effectiveness identifies the impact to time consumed in weeks using the particular lever. Although it is clear that many different levers proved effective, we consistently found personal contact through private interviews and town hall meetings were highly effective, especially if the process was iterative. Other configurations and combinations of lever use could also be just as effective depending on the credibility of the change agent. This lever analysis illustrates that using symbolic and political leadership significantly drives the change process.
- #11 When change levers did not work, the strategy we used the most was to go back to what did work, and to try using different levers. Ultimately, every lever worked at least once in at least one of the simulations in our group. As we progressed through the simulation we realized that some levers were overwhelming unlikely to work. However, most of the other levers were effective at particular stages of the simulation. While some levers were ineffective at the very beginning of the simulation, such as Walk the Talk, they became more effective as the simulation progressed and advanced to different stages with increasing levels of adoption. In many cases, such as using the lever to confront a resister, the timing was critical. Those that were most effective were used best iteratively.
- #12 Based on the insights gained from this experiential activity, there are three common missteps in managing change that are displayed here. Situation awareness can be a common misstep- this includes not understanding the situation, incorrectly assuming the power of the change agent, and lastly employing change levers at the wrong time. These common missteps can be avoided through the utilization of a number of effective change management modules. It is important to keep in mind that according to Daft, “organizations are interdependent systems, and changing one part often has implications for other parts of the organization” (Daft, 2013, p. 436). This was reflected in our simulation and we found that it was necessary for every department, and multiple management levels within each department, to agree to support the change effort. Therefore, no matter which model of change a change agent utilizes, he needs to keep in mind that the entire organization needs to be prepared for and involved in the change process.
- #13 While there are many change management models available with similar steps, processes or phases: the 8 Steps to Transforming Your Organization (Kotter, 1996); Heroism vs. Stewardship (Watkins, 2009), Leading People Through the Change Model featuring the Six Stages of Concern (The Ken Blanchard Companies, 2008), Organizational Frame Bending (Nadler and Tushman, 1989) and a range of Uniform and Differentiated Approaches (Higgs and Rowland, 2005); change happens one person at a time. Therefore the change agent needs to keep track of what stage each employee is at in the change process: the awareness stage, the interest stage, the trial stage or the adoption stage to employ change levers at the right time for maximum efficacy. For example, The Ken Blanchard Companies illustrates the change process each person goes through with the Six Stages of Concern. In any given change process, an individual will have information concerns, personal concerns, implementation concerns, impact concerns, collaboration concerns and refinement concerns. Once information has been presented, employees move into the next stage with personal concerns of how the change will affect them. During implementation, concerns may arise about processes, skillsets, and knowledge. Therefore appropriate change levers to address these concerns include skill development, utilization of consultants, cross-functional teams conducting pilot programs and announcing goals and deadlines to provide structure to the implementation. Next, collaboration concerns arise so change levers that build coalitions of support can be most effective. Finally, as the change process moves along, pilot programs near completion and implementation issues arise, new refinement concerns emerge that can again best be handled by conducting private interviews.
- #14 The Six Stages of Concern provide one framework for using change levers at the right time in an iterative process. The Frame Bending Principles of Nadler and Tushman offer another framework focusing on principles of Initiating Change, the Content of Change, Leading Change and Achieving Change that correspond to the simulation stages of Awareness, Interest, Trial and Adoption as shown in the following slide. But the key take-away in building a pro forma model to lead change successfully is that the change process, no matter how brilliant the plan design may be, has to be responsive to the needs of each employee as they pass through the stages of concern. In addition to this, for new managers, or anyone leading change for that matter, it is important to learn from mistakes, know there are multiple ways to lead change, understand what other areas you may impact with your change, focus on one person at a time, leverage the four frames, and ensure the timing is appropriate.
- #15 Finally, as we conclude our presentation, each change lever corresponds with at least one of the four leadership frames, it is important to be cognizant of and to utilize each leadership frame effectively when executing a change lever that is associated with one of the frames. For example, when a change agent Walks the Talk, in addition to leading by example he should also share a vision, tell a success story, relate the change to company history and other elements of the symbolic frame. Change levers need to be used carefully, strategically, and purposely. Utilizing the leadership frames in this way in conjunction with change levers at the right time strategically in the change process can certainly help one avoid common missteps and ensure the success of the change process.