mgmt org leadership

7Leading_Change_2021.ppt

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MGMT 560 – Organizational Leadership

Leading Change

Harrisburg University of Science & Technology

"The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.“
- Peter Drucker

"Change is the law of life and those who look only to the past or present are certain to miss the future."
- John F. Kennedy

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.”
- Margaret Mead

“If you always do what you’ve always done, you’ll always get what you’ve always got.”

- Anonymous

“I alone cannot change the world, but I can cast a stone across the waters to create many ripples.”

- Mother Teresa

"The rate of change is not going to slow down anytime soon. If anything, competition in most industries will probably speed up even more in the next few decades."
- John P. Kotter

Harrisburg University of Science & Technology

Thoughts on Change

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Organizational Change: An alteration in an organization’s alignment with its external environment

Change can be transformational or incremental

Organizational change is any transition that requires a change in human performance

Lussier, R.N. & Achua, C.F., Leadership: Theory, Application, & Skill Development.

Leading Change & Transition

Understanding Change

Leading Change
(Kotter, 2012)

Patterns of success:
Associated with a multi-step process that creates power and motivation
Process is driven by high-quality leadership, not just excellent management
Aspects of Management: planning, budgeting, organizing, staffing, controlling, problem solving
Aspects of Leadership: establishing direction, aligning people, motivating and inspiring
“Corporate cultures discourage employees from learning how to lead.” DO YOU AGREE??

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

Lussier, R.N. & Achua, C.F., Leadership: Theory, Application, & Skill Development.

The Leader’s Role in Leading Change

Options that leaders can use to effectively manage change rather than simply reacting to it include:

Articulating a compelling reason for change
Having open and regular communications
Having a road map for implementation
Having training programs for required skills/competencies
Forming a coalition of supporters and experts
Staying the course in spite of perceived difficulties
Recognizing and rewarding the contributions of others
Carefully managing resources and priorities
Keeping the process transparent
Having a plan for dealing with resistance

The Eight-Stage Process

Establishing a Sense of Urgency

Creating the Guiding Coalition

Developing a Vision and Strategy

Communicating the Change Vision

Empowering Broad-Based Action

Generating Short-Term Wins

Consolidating Gains and Producing More Change

Anchoring New Approaches in the Culture

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

The Eight-Stage Process

The first four steps help “defrost the hardened status quo.” - YOU MUST ADDRESS THESE STEPS

Phases five through seven introduce new practices

Step eight grounds the changes in the culture

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

1. Establishing a Sense of Urgency

“People will find a thousand ingenious ways to withhold cooperation…”
Ineptitude & complacency are not necessarily linked
Nine sources of complacency.
Big egos and arrogant cultures reinforce complacency
“Never underestimate the magnitude of the forces that reinforce complacency and that help maintain the status quo.”
Ways to raise the urgency level.
No crises? Create one!! How??
Key players are often middle- and lower-level managers
Muster up the courage to listen carefully to outsiders (customers, suppliers, stockholders) – What is the urgency rate? What is the level of complacency?

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

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Ways to Raise the Urgency Level

Create a crisis – allow a financial loss, expose managers to major weaknesses, allow errors to blow up.
Eliminate obvious examples of excess.
Set revenue, income, productivity, customer satisfaction, and cycle-time targets so high that they can’t be achieved by conducting business as usual.
Insist that more people be held accountable for broader measures of performance.
Send more data about customer satisfaction and financial performance to more employees (especially weaknesses).
Insist that people talk to unsatisfied customers, unhappy suppliers, and disgruntled shareholders.
Use consultants to force more relevant data and honest discussion.
Stop senior management “happy talk.”
Bombard people with information on future opportunities, on the rewards for capitalizing on these opportunities, and on the organization’s current inability to pursue those opportunities.

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

Sources of Complacency

The absence of a major and visible crisis
Too many visible resources
Low overall performance standards
Organizational structures that focus employees on narrow functional goals
Internal measurement systems that focus on the wrong performance measures
A lack of sufficient performance feedback from external sources
A kill-the-messenger-of-bad-news, low-candor, low-confrontation culture
Human nature, with its capacity for denial, especially if people are already busy or stressed
Too much happy talk from senior management

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

Why People Resist Change

Threat to one’s self-interest

Uncertainty

Lack of confidence that change will succeed

Lack of conviction that change is necessary

Distrust of leadership

Threat to personal values

Fear of being manipulated

Lussier, R.N. & Achua, C.F., Leadership: Theory, Application, & Skill Development.

Minimizing Resistance to Change

Lussier, R.N. & Achua, C.F., Leadership: Theory, Application, & Skill Development.

Effective leaders ensure that they keep employees informed, supported, and motivated about any change initiatives
Change agents should pay attention to the “5-Ps”—purpose, priorities, people, process, and proof
Training, education and mentoring are needed to help employees acquire skills and capabilities for their role in the implementation process or for their new responsibilities

People-Centered Recommendations for Minimizing
Resistance to Change

Show relentless support and unquestionable commitment to the change process

Communicate the need and the urgency for change to everyone

Maintain ongoing communication about the progress of the change

Avoid micromanaging and empower people to implement the change

Ensure that change efforts are adequately staffed and funded

Anticipate and prepare people for the necessary adjustment that change will trigger such as career counseling and retraining

Lussier, R.N. & Achua, C.F., Leadership: Theory, Application, & Skill Development.

Task-Centered Recommendations for
Minimizing Resistance to Change

Assemble a coalition of supporters inside and outside the organization

Align organizational structure with new strategy, for consistency

Transfer the implementation process to a working team

Recruit and fill key positions with competent and committed supporters

Know when and how to use ad hoc committees or task forces to shape implementation activities

Recognize and reward the contributions of others to the change process

Lussier, R.N. & Achua, C.F., Leadership: Theory, Application, & Skill Development.

2. Creating the Guiding Coalition

The belief that one highly visible leader can transform an organization is dangerous
A strong guiding coalition is needed with the right composition, level of trust, and shared objective
The low credibility committee
Decision making in today’s business environment
Key characteristics needed for an effective guiding coalition:
Position power
Expertise
Credibility
Leadership
Individuals that sabotage success: egomaniacs, snakes, and the reluctant player
“Personnel problems that can be ignored during easy times can cause serious trouble in a tougher, faster-moving, globalizing economy.”
The Right People + Trust + A Common Goal = Effective Teamwork

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Decision Making in Today’s Environment

Today’s Environment:

Demands more large-scale change via new strategies, reengineering, restructuring, mergers, acquisitions, downsizing, new product or market development, etc.

Decisions Made Inside the Organization Are:

Based on bigger, more complex, more emotionally charged issues
Made more quickly
Made in a less certain environment
Require more sacrifice from those implementing the decisions

A New Decision-Making Process:

Is required because no one individual has the information needed to make all major decisions or the time and credibility needed to convince lots of people to implement the decisions

Must be guided be a powerful coalition that can act as a team

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3. Developing a Vision and Strategy

Authoritarian decree &/or micromanagement – common and ineffective
Vision – a picture of the future with commentary on why people should strive to create that future
By providing a direction it simplifies detailed decisions
It motivates people to take action in the right direction
It helps coordinate actions in a fast and efficient way
Can “clear the decks” of expensive and time-consuming clutter
The relationship of vision, strategies, plans, and budgets
Characteristics of an effective vision
Strategic feasibility – stretching resources and capabilities with great leadership that makes ambitious goals look doable
Creating an effective vision is not easy:
Vision is not a component of effective management, but of effective leadership
A vision statement may appear to be rather simple and straightforward, but data and synthesis are also required
Head & heart are required
Lack of teamwork = endless negotiation
If urgency is not high, the process will not be completed
“An ineffective vision may be worse than no vision at all”
What’s the Vision of your organization??

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Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

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Vision, Strategies, Plans & Budgets

Leadership Creates:

Management Creates:

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Vision A sensible and appealing picture of the future

Strategies A logic for how the vision can be achieved

Plans Specific steps and timetables to implement the

strategies

Budgets Plans converted into financial projections and

goals

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Characteristics of an Effective Vision

Imaginable: Conveys a picture of that the future will look like

Desirable: Appeals to the long-term interests of employees, customers, stockholders, and others who have a stake in the enterprise

Feasible: Comprises realistic, attainable goals

Focused: Is clear enough to provide guidance in decision making

Flexible: Is general enough to allow individual initiative and alternative responses in light of changing conditions

Communicable: Is easy to communicate; can be successfully explained within five minutes

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4. Communicating the Change Vision

Quality versus quantity
If urgency rate isn’t high, people won’t listen
If guiding coalition does not have the right people it will have difficulty creating and sending an appropriate message
Selling a poor vision is a tough job
“A gallon of information dumped into a river of routine communication”
Accepting a vision is an intellectual and emotional task
Key elements in the effective communication of a vision:
Simplicity
Metaphor, analogy, and example
Multiple forums
Repetition
Leadership by example
Explanation of seeming inconsistencies
Give-and-take
If people don’t accept the vision the next two steps (empowering individuals for broad-based action and creating short-term wins) will fail

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

5. Empowering Broad-Based Action

Barriers to Empowerment
Formal Structures
Lack of Needed Skills
Personnel & Information Systems
Discouraging Bosses

Empowering People to Effect Change
Communicate a sensible vision to employees
Make structures compatible with the vision
Provide the training employees need
Align information and personnel systems to the vision
Confront supervisors who undercut needed change

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

6. Generating Short-Term Wins

The Role of Short-Term Wins
Provide evidence that sacrifices are worth it
Reward change agents with a pat on the back
Help fine-tune vision and strategies
Undermine cynics and self-serving resisters
Keep bosses on board
Build momentum
Characteristics of Short-Term Wins:
It’s visible
It’s unambiguous
It’s clearly related to the change effort
Planning versus Praying
Keep the Pressure (Maintain Sense of Urgency)
The Role of Leadership and Management

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

7. Consolidating Gains and Producing More Change

“Short-terms wins are essential to keep momentum going, but the celebration of those wins can be lethal if urgency is lost. With complacency up, the forces of tradition can sweep back with remarkable speed and force.”
Progress can slip for two reasons:
Corporate culture (next stage)
Increased interdependence – difficult to change without changing everything
What success looks like in Stage 7:
More change, not less – additional and bigger change projects
More help – additional people are brought in, promoted, and developed
Leadership from senior management – clarity of shared purpose
Project management and leadership from below – lower ranks provide leadership for specific projects
Reduction of unnecessary interdependencies – make change easier

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

What Success Looks Like

More change, not less – the guiding coalition uses the credibility afforded by short-term wins to tackle additional and bigger change projects.

More help – additional people are brought in, promoted, and developed to help with all the changes.

Leadership from senior management – senior people focus on maintaining clarity of shared purpose for the overall effort and keeping urgency levels up.

Project management and leadership from below – lower ranks in the hierarchy both provide leadership for specific projects and manage these projects.

Reduction of unnecessary interdependencies – to make change easier in both the short and long term, managers identify unnecessary interdependencies and eliminate them.

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology

8. Anchoring New Approaches in the Culture

Culture is powerful for three reasons:
Individuals are selected based on compatibility with culture and then indoctrinated
Culture exerts itself though the actions of the people in the organization
It is unconscious
Confront inconsistencies between culture and change efforts
“…the challenge is to graft the new practices onto the old roots while killing off the inconsistent pieces.”
Anchoring Change in a Culture (Table 10-1, p. 166)
Comes last, not first
Depends of results
Requires a lot of talk
May involve turnover
Makes decisions on succession crucial

Harrisburg University of Science & Technology

Kotter, John P. (2012). Leading change. Boston: Harvard Business School Press.

Harrisburg University of Science & Technology