Change Management

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This revision presentation provides an overview of the topic of change management in the context of business strategy. It highlights the main theories on change management including Lewin's Forcefield analysis as well as providing some examples of recent change management case studies

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Change Management

  1. 1. ChangeManagement
  2. 2. Examples of change – Royal Mail In its Victorian heyday, Royal Mail was envied for its speed and reliability Recent decades: suffered management crises, industrial disputes and lost profits Struggling to modernise fast enough to keep pace with loss of letters volumeMoya Greene to electronic media Strategy now to improve efficiency and profitability to enable privatisationhttp://www.bbc.co.uk/news/10175621
  3. 3. Examples of change – Nokia Nokia has seen its market share in the mobile phone market plummet as competitors like Apple, Samsung and HTC have taken market share through smartphone innovation. Elop joined Nokia in 2010 and began a strategic review. He famously likened Nokias position as being like standing on aStephen Elop burning platform. Feb 2011: Elop announced a new strategy for Nokia - to partner with Microsoft and abandon Nokias Symbian operatinghttp://www.bbc.co.uk/news/business-16953411 system.
  4. 4. Examples of change – Starbucks When Starbucks share price fell by 40% in 2007, Starbucks turned to its founder Howard Schultz to turn the business around. Schultz was brutal about what had gone wrong and what needed to be done to fix the business. "When you succeed at this level for so long... you get a little soft," said Schultz.Howard Schultz "We have to get back to what made this company great, and that is to have the courage and curiosity, and commitment, tohttp://news.bbc.co.uk/1/hi/business/7219458.stm have not been done before." do things that
  5. 5. Management is aboutcoping with complexity.Leadership, by contrast is about coping with change Professor John Kotter
  6. 6. What is change management? Change management involves the process thatensures a business respondsto the environment in which it operates
  7. 7. Four elements to change
  8. 8. Two types of changeStep change Incremental changeOccurs rapidly Change occurs over a period of time in incremental stages
  9. 9. Step v incremental change• Step change – Dramatic or radical change in one fell swoop – Radical alteration in the business – Gets it over with quickly – May require some coercion• Incremental change – Ongoing piecemeal change which takes place as part of an organisation’s evolution and development – Tends to more inclusive
  10. 10. Lewin’s Force Field Analysis Forcefield analysis provides an overview of the change problems that need to be tackled by a business, splitting factors into forcesKurt Lewin for and against change
  11. 11. Lewin’s Forcefield AnalysisForces for change Forces resisting changeDriving forces Restraining forces
  12. 12. Forcefield analysis• There are forces driving change and forces restraining it• Where there is an equilibrium between the two sets of forces there will be no change• In order for change to occur the driving force must exceed the restraining force• The analysis can be used to: – Investigate the balance of power involved in an issue – Identify the key stakeholders on the issue – Identify opponents and allies – Identify how to influence the target groups
  13. 13. Forces for changeInternal forces External forces• Desire to increase • Customer demand profitability • Competition• Reorganisation to • Cost of inputs increase efficiency • Legislation & taxes• Conflict between • Political departments • Ethics & social values• To change organisational • Technological change culture
  14. 14. Resistance to change• A degree of resistance is normal since change is: – Disruptive – Stressful• A degree of scepticism can be healthy especially where there are weaknesses in the proposed changes• However resistance will also impede the achievement of organisational objectives
  15. 15. Four reasons why change is resisted • Parochial self interest – Individuals are concerned with the implications for themselves • Misunderstanding – Communications problems – Inadequate information • Low tolerance of change – Sense of insecurity • Different assessment of the situation – Disagreement over the need for change – Disagreement over the advantages and disadvantagesSource: Kotter and Schlesinger
  16. 16. Typical responses to change• “My needs are already being met”• “We don’t need to do this”• “This sounds like bad news”• “The risks outweigh the benefits”• “What does this mean for me?”
  17. 17. Organisational barriers to change• Structural inertia• Existing power structures• Resistance from work groups• Failure of previous change initiatives
  18. 18. Individual barriers to changeTradition and set ways: Fear of:• Loyalty to existing • Loss of power relationships • Loss of skills• Failure to accept the need • Loss of income for change • The unknown• Insecurity • Redundancy.• Preference for the existing • Inability to perform as well arrangements in the new situation• Break up of work groups• Different person ambitions
  19. 19. Inappropriate change management• Change is often resisted because of failures in the way it is introduced – i.e. failure to: – Explain the need for change – Provide information – Consult, negotiate and offer support and training – Involve people in the process – Build trust and sense of security – Build employee relations
  20. 20. Why staff might welcome change
  21. 21. The role of leadership in changeStrategic leadership is vital if a business is to achieve strategic change
  22. 22. How newcomers can help drive change
  23. 23. Stages in preparing for change• Environmental analysis (PEST analysis)• SWOT analysis• Identify the changes required• Determine the major issues• Identify and assess the key stakeholders• Win the support of key individuals• Identify the obstacles• Determine the degree of risk and the cost of change• Understand why change is resisted
  24. 24. Building the vision• Develop a clear vision• Make it people clear about what a change involves and how they are involved in it – What is involved – What is the proposed change – Why should we do it – What will the major effects be – How can we manage the change
  25. 25. Plan the change (1)• Devise appropriate strategies to introduce change• Design the change• Identify the significant steps in the change process• Discuss the need for change and the full details of what is involved• Allow people to participate in planning change• Communicate the plan to all concerned• Produce a policy statement
  26. 26. Plan the change (2)• Devise a sensible time scale• Produce action plans for monitoring the change• Allow people to participate in planning change• Get all parties involved in and committed to the change• Inspire confidence by forestalling problems and communicating regularly• Devise a sensible time scale for implementation of change• Anticipate the problems of implementation• Understand why change is resisted
  27. 27. Implementing the change• Check on and record progress• Make sure that change is permanent• Evaluate the change• Improve on any weak areas• Overcome resistance• Involve all personnel affected• Keep everyone informed• Devise an appropriate reward system• Be willing to compromise on detail• Ensure that strategies are adaptable• Select people to champion change• Provide support and training• Monitor and review
  28. 28. Change management and HRM• Organisational structure• Personnel of teams Change• Operational processes projects• Location affect• Workloads every• Work roles aspect of• Working practices HR• Supervision
  29. 29. Agile businesses & change (1) The CIPD asked HRM professionals what capabilities organisationsneed to be changeable…here are the results
  30. 30. Agile businesses & change (2)
  31. 31. Techniques to help implement change • Cross-functional teams • Stronger internal communication • Negotiation • Action planning • Change agents or champions of change • And a certain amount of compulsion manipulation and coercion
  32. 32. Helping people to accept change• Act decisively – demonstrate momentum• Consider how they will be affected• Involve them in the change• Consult and inform frequently• Be firm but flexible• Monitor the change
  33. 33. Reasons why resistance to change increases • Failing to specific about a change • Failing to explain why change is needed • Not consulting • Keeping people “in the dark” • Creating excess work pressure • Expecting immediate results • Not dealing with fears and anxieties • Ignoring resistance
  34. 34. Reasons why change can fail• Employees do not understand the purpose or even the need for change• Lack of planning and preparation• Poor communication• Employees lack the necessary skills and/ or there is insufficient training and development offered• Lack of necessary resources• Inadequate/inappropriate rewards
  35. 35. Turnarounds and change Where a business needs to achieve a rapid improvement in performance in order to survive
  36. 36. Key requirements of a turnaround
  37. 37. Keep up-to-date with businessstories, resources, quizzes and worksheets for your business course. Click the logo!

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