MGT-521: Managing Dynamic Environment – Module 01/Discussion 01

MGT521_Mod01_PPT_Ch01.pptx

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Chapter 1: Changing Organizations in Our Complex World

Chapter Overview

The goal of the book: develop your ability to initiate and manage change

Environmental factors affecting change are outlined: social/ demographic, technological, political, and economic forces

Four types of organizational change are discussed: tuning, adapting, reorienting, and recreating

Four change roles are described: initiators, implementers, facilitators, and recipients. The terms “change leader” and “change agent” are used interchangeably and could mean any of the four roles.

The difficulties in creating successful change are highlighted and characteristics of successful change leader are described.

Your Experiences with Change Management

Talk with one another (in small groups) about your experiences with change management.

What does this suggest organizational change management is about?

Organizational Change: Defined

The intentional and planned alteration of organizational components to improve organizational effectiveness.

Organization Components

Organization components include the organization’s:

Mission and vision

Strategy

Goals

Structure

Processes or systems

Technology

People

When organizations enhance their effectiveness, they increase their ability to generate value for those they serve

The “Knowing−Doing” Gap

Change capability has become a core managerial competency

But managers’ abilities to deliver on change are modest at best

There is a major “knowing−doing” gap

Knowing concepts and theories is not enough

Managers need to become effective agents of change, possessing the will and skills to make positive change happen

Orientation of the Book

There is a story of two stone cutters:

The first, when asked what he was doing, responded: “I am shaping this stone to fit into that wall.”

The second, however, said: “I am helping to build a cathedral.”

This book is orientated towards those who want to be builders.

Why is change a Hot Topic?

Environmental Forces Driving Changes (PESTEL factors):

Political Changes

Economic Changes

Social, Cultural and Demographic

New Technologies

Legal Changes

Ecological/Environmental Factors

Turbulence and ambiguity define the landscape for both the public and private sectors

Toolkit Exercise 1.2 Analyzing Your Environment

Select an organization you are familiar with. What are the key environmental issues affecting it? List these and their implications for the organization.

Political Factors …………… Implications?

Economic Factors …………… Implications?

Social Factors …………… Implications?

Ecological/Environmental Factors ……… Implications?

Legal Factors …………… Implications?

New Organizational Forms & Management Challenges Due to Environmental Change

Macro Changes and Impact

Digitization leading to:

Faster information transmission

Lower cost information storage and transmission

Integration of states and opening of markets

Geographic dispersion of the value chain

All leading to globalization of markets

New Organizational Forms & Management Challenges (cont.)

New Organizational Forms and Competitive Dynamics

Global small and medium-sized enterprises

Global constellations of organizations (i.e., networks)

Large, focused global firms

All leading to:

Spread of autonomous, dislocated teams

Digitally enabled structures

Intense global rivalry and running faster while seeming to stand still

New Organizational Forms & Management Challenges (cont.)

New Management Challenges

Greater diversity

Greater synchronization requirements

Greater time-pacing requirements

Faster decision making, learning and innovation

More frequent environmental discontinuities

Faster industry life-cycles

Faster newness and obsolescence of knowledge

Risk of competency traps where old competencies no longer produce desired effects

Greater newness and obsolescence of organizations

The Causal Model Driving Change

Macro Changes and Impacts in the Environment

New Organizational Forms & Competitive Dynamics

Management Challenges in “A New Time”

Macro Changes and Impact

Digitization

Integration of States and Opening of Markets

Faster Information Transfer

Lower-cost information storage and transmission

Geographic dispersion of the value chain

Globalization of Markets

New Org Dynamics

New Organizational Forms and Competitive Dynamics

Rise of global SME’s

Rise of global constellations

Rise of large, focused global firms

More intense “Red Queen”

More intense competitive rivalry

Spread of digitally enabled structures

Spread of autonomous, dislocated teams

Management Challenges

Management Challenges in “A New Time”

Faster decision making, learning and innovation

Greater Time Pacing Requirements

Greater Synchronization Requirements

Greater Diversity

Faster newness and obsolescence of knowledge

More frequent environmental discontinuities

Faster industry lifecycles

Greater Risk of competency traps

Faster newness & obsolescence of organizations

Common Management Responses to Competitive Pressures

Running hard, but for all purposes standing still

Called the Red Queen phenomenon (Alice Through the Looking Glass, by Lewis Carroll)

In global competition, what matters is not the firm’s absolute rate of learning and innovation, but the relative pace of its development compared to its rivals.

Toolkit Exercise What Change Challenges do You See?

Pick an Organization

What are the change challenges you

see it facing?

How well are they doing?

Four Types of Organizational Change

Tuning

Re-orientation

Adaptation

Re-creation

Incremental

Strategic

Anticipatory

Reactive

Types of Organizational Change

	Incremental/Continuous	Discontinuous/Radical
A N T I C I P A T O R Y	Tuning Incremental and anticipatory Need is for internal alignment Focuses on individual components or sub-systems Middle management role Implementation is the major task	Redirecting or Reorienting Strategic proactive changes based on predicted major changes in the environment Need is for positioning the whole organization to a new reality Focuses on all organizational components Senior management create sense of urgency and motivate the change
R E A C T I V E	Adapting Incremental changes made in response to environmental changes Need is for internal alignment Focuses on individual components or sub-systems Middle management role Implementation is the major task	Overhauling or Recreating Response to a significant performance crisis Need to reevaluate the whole organization, including its core values Focuses on all org. components to achieve rapid, system-wide change Senior management create vision and motivate optimism

Nature of the Impact of Change

Short-term impact/consequences

Direct and indirect effects

Moderating factors

Intermediate impact/consequences

Long-term impact/consequences

THE LESSON: Planned changes don’t always produce the intended results

Common Causes of Difficulty with Organizational Change

Managers don’t do their analytic homework

Managers are action oriented and assume others will see the inherent wisdom in the proposed change

Managers under or overestimate their own power and influence (and that of others)

Managers see transition periods as a cost, not an investment

They underestimate the resources & commitment needed to integrate the human dimensions with other aspects of the change

Common Causes of Difficulty with Change (cont.)

Managers are unaware their actions (and those of other key managers) may be sending conflicting messages

Managers find human processes unsettling or threatening

Managers lack capacity (attitudes, skills, and abilities) to manage complex changes that involve people

Managers' critical judgment is impaired due to overconfidence, under confidence, and/or group think

Unanticipated external factors can play a huge role

Four Organization Change Roles

Change Initiators

Identify need and vision

Act as a champion

Change Implementers

Chart the detailed path forward & make it happen

Nurture support and alleviate resistance

Change Facilitators

Aids in analysis and issue management along the way

Provides advice and council

Sometimes helps smooth the way through helping resolve issues, alleviate resistance and nurture support

Change Recipients

Those affected by the change who have little input to the process or content of the organizational change

Have to alter behaviors to ensure change success

Toolkit Exercise 1.3 Change Roles in Organizations

Think of a time when you have been involved in change. What roles did you play? How comfortable were you with each of those roles?

Change Initiator

Change Implementer

Change Facilitator

Change Recipient

How did each of these roles feel? What did you accomplish in each role?

Characteristics and Skills of the Change Leader

Formal change leaders (or agents) spearhead the change, and may play any or all of the change roles.

Informal change leaders can emerge anytime throughout the change process

What are the key characteristics and skills of the change leader?

What’s Required to be a Successful Change Leader?

Keen insight into the external environment and skilled anticipator of what is evolving

Rich understanding of organizational systems and processes, power structures and stakeholder networks

Excellent analytic, interpersonal and communication skills

Driving passion for action, yet patient and persistent

Well-developed sense of timing and tactics

Ability to assess and manage risk

An ability to focus on outcomes while also paying very close attention to process

What’s Required to be a Successful Change Leader? (cont.)

Tolerance for ambiguity and risk taking

Emotional maturity and courage

Self-confidence and optimism

Honest and trustworthy

Capacity to engage others and inspire confidence

Deep understanding of themselves and their impact

Curiosity and strong desire to learn

Change Leaders Embrace Change Paradoxes

Recognize that change leaders sometimes drive change from the front, while at other times they empower others and stay out of the way

Recognize resistance to change is both a problem and an opportunity

Focus on the outcomes of change, but are very careful about the management of the process

Recognize the tension between “getting on with it” and reassessing and changing direction

Capacity to balance patience and impatience

Recognize the absolute rate of learning is less important than the relative rate of learning in comparison to competitors

Critical Questions when Considering Change

What is the environment telling you prior to, at the beginning, during and following the implementation of the change? In particular:

What is the broader environment telling you about future economic, social and technological conditions and trends?

What are your customers or clients (both inside and outside the organization) telling you?

What are your competitors doing and how are they responding to you?

What are the partners within your network doing and how are they responding to you?

What do the people who will potentially be the leaders, managers and recipients of change want and need?

Critical Questions when Considering Change (cont.)

Why is change needed? Who sees this need?

What is your purpose and agenda?

How does that purpose project to a worthwhile vision that goes to the heart of the matter?

Critical Questions when Considering Change (cont.)

How will you implement and manage the change?

How will you resource the change initiative?

How will you select and work with your change team?

How will you work with the broader organization?

How will you monitor progress so that you can steer, alter speed and course, if necessary?

Critical Questions when Considering Change (con’t.)

How will you ensure that you act (and are seen to act) ethically and with integrity? What have I learned about change and how can I remember it for the future? How can I pass on what I learned?

Once the change is completed, what comes next? The completion of one change simply serves as the starting point for the next.

Summary

Need for change often originates in the external environment.

Change upsets the internal equilibrium in an organization and thus may be resisted.

People can play many different change roles.

How they play these roles makes a significant difference!

Appendix 1: Roots of Organizational Development

Small group training:

Focused on creating change by improving self-awareness and the group’s dynamics

Survey research and feedback:

Intervened with sophisticated surveys and analysis to create the need for change

Action research:

Encouraged the use of action, based on research, in continuous cycles (in essence, learning by doing, followed by observation, doing and more learning)

Socio-technical systems:

Focused on the interaction between the sociological and technical subsystems of the organization and described change in more holistic terms

Organizational Development vs. Organizational Change

	Organizational Development	Change Management
Underlying Theory & Analytical framework	Based primarily on psychology Individual/group functioning	Includes principles and tools from sociology, information technology and strategic change theories Individual/group functioning AND systems, structures, work processes (congruence model)
Role of Change Agent	Facilitator or process consultant	Content expert (organization design and human performance) AND process consultant Member of cross-functional team, which includes strategists and technologists Part of project organization, which includes client managers/employees

Organizational Development vs. Organizational Change

	Organizational Development	Change Management
Intervention Strategies	Not directly linked to strategy Focus on one component at a time Normative-re-educative (change attitudes to change behavior)	Driven by strategy Simultaneous focus on several components (strategy, human resources, organization design, technology) Action-oriented (change behavior before attitudes)

Positioning the Course

	Management Focused Change	OD / HR Focused Change
Strategy- Org Change	Re-Structuring Re-Engineering Re-Design	Surveys QWL Programs Hi-Perf Systems
Skills-Org Change	Visioning Stakeholder Analysis Action Planning	Process Skills Team Building Third Party Intervention

This Course