Final Take exam.
csht
Session89.pptSession #8 & #9
LEADING CHANGE & RAPID PERFORMANCE IMPROVEMENT
“If a manager cannot create and lead change, they are
going nowhere fast.”
Dr. John Kotter
Session Learning Objectives
- To review the various types of change and improvement initiatives organizations are using to improve performance.
- To better understand the fundamentals of change and improvement.
- To examine the factors that drive successful change and improvement as well as failure.
- To better understand a leader’s role in the change process.
- To apply the lessons of two-minute drill thinking and leadership to accelerate the improvement process.
*
THE NAME OF THE GAME IS CHANGE
AMSCO Manufacturing
AMSCO Manufacturing has been a leading machine tool manufacturing company in the U.S. for almost 60 years. The organization has four manufacturing plants in the U.S. each of them producing a different mix of the organization’s rather broad but specialized product line of high-end machine tools. The company has experienced extreme competitive pressures from abroad during the past sixteen years. This has caused AMSCO to take a number of rather large steps in their mind to meet these challenges. Their heaviest competition is currently coming from Germany and Japan, but China has become a bigger player the past four years. And while the world market for their products has grown, AMSCO’s share has shrunk. AMSCO has come to the realization that the world is indeed flat and the current economic downturn has only exacerbated their problems of flat top-line sales and shrinking margins.
In response, AMSCO has recently spent $47 million in capital improvements to upgrade their less than cutting edge manufacturing technologies and processes. At the same time, the company has implemented a newer MRP system that is wholly integrated into the organization’s manufacturing and administrative processes. In addition, the Board of Directors recently appointed a new, well-traveled and highly paid CEO to AMSCO to help better control the organization’s slipping profit margins and reductions in earnings per share. The new CEO is an accountant by trade (a former CFO from the airline industry) and is the first “non-engineer” to head up AMSCO. During the past six years, AMSCO managerial ranks have contracted in a designed reduction from 376 managers to 248 today. These reductions also touched off a period of heavy turnover among managers who were frequently replaced by younger managers with only limited operational experience but strong technical and computer-based skills. By in large top management has been unaffected by these shake-ups and is frequently thought to be “out of touch” with the current realities of operations.
The company’s manufacturing plants are all unionized being represented by the AFL-CIO in negotiations for three year contracts. The 2,450 members of the company’s hourly workforce at one time had the highest wages in the industry but after the last two contracts have had to make a variety of concessions to management including: a reduction in jobs; a loss of automatic COLA increases; a reduction in health benefits coverage; a tightening up of work rules concerning pay for time not worked; mandatory drug testing and expanded job classifications.
Six years ago the company was rocked by a seven week strike that created a rift between management and labor that is still felt today. There has been talk about empowerment and work teams in the plant operation and some movement in that direction, but no real change. The average member of the workforce is 46.4 years old with 11.1 years of formal education. The company currently is attempting to increase productivity in all departments and enhance its performance as a total quality manufacturer and service enterprise using a lean manufacturing process (but again is seeing limited results at best). AMSCO recently completed another ISO certification which was viewed as both a good thing as well as a waste of time, depending on whom you talked to. At present, there is extreme pressure for short-term results at AMSCO as it enters the New Year, and especially after the ongoing uncertainty created by the financial markets meltdown of 2008.
QUESTIONS:
- What patterns do you see at AMSCO that are present in the world as a whole? Be specific.
- What do you see as some key organizational issues that will affect AMSCO’s ability to compete in the future?
- What would you do if you were the CEO to lead AMSCO forward?
This case is a quick overview of the dynamic nature of the modern workplace. This organization was a leader and they suddenly find himself wracked with a wide variety of changes that need to be addressed. Asked the students to read the case individually or out loud and then have a discussion around the key issues listed as questions. Increased competition, changes in technology, aging workforce, labor management tension, are just a few of the challenges they face. How to these compare with what’s going on in India? Asked the students
*
- Change defined: “Making things different.”
2. What are the forces for change and organizational response (Chandler Thesis)?
3. Change can be:
a. Proactive:
b. Reactive:
What are most organizational change efforts? _______________________________
- Change can take place at the:
a. Individual level:*
b. Group level:
c. Organizational level:
*All change must at some point become individual
5. Why do people resist change?
a. ______________________________________________________________
b. ______________________________________________________________
c. ______________________________________________________________
d. ______________________________________________________________
e. ______________________________________________________________
- The change Learning Cycle:
Problem/Opportunity Tension Plans to Change Change Develop New Habits
THE ISSUE OF CHANGE: A Primer
ENVIRONMENT
STRATEGY
STRUCTURE
Effectiveness
Efficiency
- Economic
- Social
- Technological
- Governmental
- International
Here is a quick primer that can be used to augment what the students read in the book. The Chandler Thesis (2.) is one of the most important models of business leader can understand when discussing change. When the environment changes organizations must realign and changed their strategy. One strategy is realign with the environment which is constantly changing they must realign their structure. These issues were most likely discussed in session number two. Leaders must constantly be concerned with the affected this link between the environment and strategy-doing the right things and with the link between strategy and structure which is the efficiency link-doing things right. Regardless of your position in an organization or your level in the hierarchy it is imperative to be both efficient and effective.
3. Most organizational change is reactive. Why? Because research shows most organizations change only when they have to change!
4. Change takes place at the individual, group, and organizational level. In the end group and organizational change only work if individuals change the us all change is driven by changing individual behavior. This is why organizations, which are large collections of individuals, are difficult to change.
5. Why do people resist change ask people to fill the sin individually and then have a discussion around the issue. This is obviously going to be discussed in the text so see what they have learned in this regard. In the end the number one reason why people resist change is because it is easier not to change. Change is work and most people resist additional work on top of their already busy lives.
“Why do people resist change?”
Key Question?
Reasons Employees Resist Change
- Individual’s predisposition toward change
- Surprise and fear of the unknown
- Climate of mistrust
- Fear of failure
- Loss of status or job security
Reasons Employees Resist Change
- Peer pressure
- Disruption of cultural traditions or group relationships
- Personality conflicts
- Lack of tact or poor timing
- Non-reinforcing reward system
Overcoming Resistance To Change
A Model of Resistance to Change
THE FAST CHANGE EXERCISE:
____________________________________________________________________________________________________________________
Instructions: In the space provided below, briefly describe:
1) The change that you had to make;
2) What forces were driving you to make the change QUICKLY; and
3) What were the key factors that made the change successful.
You will be asked to share what you have written. On your mark, get set, GO!
*
STOP RIGHT NOW AND THINK OF ONE OF THE BIGGEST CHANGES THAT YOU HAVE HAD TO MAKE IN YOUR LIFE QUICKLY!
This quick writing exercise asked people to identify a successful change it they had to make in their life quickly. Give people three or 4 min. to complete the exercise and answer each of the three questions the key part of the discussion is number three which says what were the key factors to making this change successful. Typically it comes down to the simple fact that people had to make the change. Not changing was not an option! This is will be a good learning exercise for all parties concerned.
THINK!
What if you had to make a major change in your life-style or you would die prematurely?
COULD YOU DO IT?
*
KEY QUESTION:
TO AVOID A SECOND BYPASS SURGERY, WHAT SPECIFIC LIFE-STYLE CHANGES WERE REQUIRED OF PATIENTS?
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Life-Style Changes
Quit Smoking
Diet: Start & Stop
Regular Exercise
Reduce Stress Levels
Take Medications
Get Better Sleep
Alcohol Consumption
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Patients say, “WELL I AM GOING TO CHANGE!”
THINK!
COULD YOU DO IT?
11.1%
77.8%
*
THINGS THAT DON’T
DRIVE REAL CHANGE :
FACTS
FEAR
FORCE
*
Real Change Drivers:
REFRAME
RADICAL & RAPID
REPEAT
RELATIONSHIPS
*
Collins’s Five Stages of Organizational Decline
Stage 1 Hubris Born of Success (Cocky)
Stage 2 Undisciplined Pursuit of More (Over-reaching)
Stage 3 Denial of Risk and Peril (Unreality)
Stage 4 Grasping for Salvation (Desperation)
Stage 5 Capitulation to Irrelevance or Death (Gone!)
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
- _____________________________________________________________________
CHARACTERISTICS OF IMPROVEMENT INITIATIVES
Based on your experience, list at least five (5) characteristics of an effective or successful organizational improvement initiative?
Based on your experience, what are the characteristics of an ineffective or unsuccessful organizational improvement initiative?
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Divide the class and half finance half the class to complete the top half of the exercise which is to identify a successful change initiative and answer the question what made it successful. Have the other half of the class identify and unsuccessful change initiative and what caused it to be a failure. You can ask the groups to do this in small teams or in the classroom as a whole but you will see quickly that successful versus unsuccessful change are polar opposites. Successful changes have clear focus on successful changes do not. Successful changes have good leaders unsuccessful change is typically do not. This discussion will set the stage for the remainder of the discussion.
A Model for Change
(or is it problem-solving?)
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THE CHANGE POP QUIZ
Instructions: Please answer each of the questions below based on your experience.
*
| 1. All improvement requires change. | True | False |
| 2. Most people resist change at work. | True | False |
| 3. Workforce resistance is usually the primary barrier to implementing organizational change. | True | False |
| 4. Most front-line managers are generally quick to embrace organizational change efforts. | True | False |
| 5. The most important factor in getting people to change is presenting them with a clear, rational and well-thought out plan of action. 6. Most real change and improvement is continuous. 7. Effective leadership is the single most important factor for successful change. 8. It is generally better for workplace change to take place slowly rather than faster. 9. In the workplace change represents a hardship for most leaders. The majority of workers are not willing to play a key role in driving organizational change. Bonus Question: Over 90% of all workplace change/ improvement initiatives are simply problem-solving activities. Your Score: __________ out of 10 | True True True True True True True | False False False False False False False |
- True
- False-most people do not openly resist change at work, most people are passive about the change until they see that it is either serious or not serious. Some people confuse this with resistance but passively has a different solution when compared to resistance.
- False- front-line leadership is typically the primary barrier to implementing organizational change.
- Falls-front-line leaders have the most to lose in a leadership change as they are caught between top management and the front-line workers. Thus they are not quick to embrace change
- False –the most important factor for getting people to change is not a well thought out plan of action rather leadership.
- Most real change in improvement is continuous-False-most change tends to be discontinuous in that organizations make a change they behave a certain way until they are forced to change. Thus, changes made as needed rather than on an ongoing basis.
- True-leadership is the single most important factor for successful change
- False-research shows that fast change is better than slow change
- True-workplace change represents a hardship for most leaders is it takes place on top of their already busy day jobs.
- False -the majority of workers are willing to help drive change but they do not do so because they have not been asked or empowered to be engaged.
Bonus-true workplace changes all about problem solving.
BONUS QUESTION:
Over 90%of all workplace change/improvement initiatives are simply problem solving activities.
TRUE
PROLOGUE: STATE OF THE CHANGE GAME
Most improvement in organizations is not continuous, rather, it is discontinuous in that changes take place, things settle down, habits and routines develop and the need for change emerges again at a later point in time out of necessity or provocation.
Time is the enemy of most change efforts as the longer the change takes to plan and implement, the more difficult it is to maintain focus, enthusiasm and momentum.
Frequently, managers and employees are asked to make changes that have little or nothing to do with their efforts to improve real performance and/or the desired outcome of the change is not clearly defined which causes a lack of commitment, motivation and confidence.
A sense of importance and urgency on the part of those involved with making the change is a critical ingredient of any successful change effort.
Change typically represents hardship for those involved in the process (regardless of how positive the change may be) as the additional activities associated with making change happen take place on top of an already busy schedule.
Planning change is frequently a game of extremes in that leaders/participants tend to either under-plan or over-plan for the rollout of change initiatives with negative outcomes at either end of the continuum.
A leader must ultimately be responsible for every change initiative if it is to be successful and the credibility of the leader carries great weight in the success or failure of any change effort.
8. Formal improvement processes can cause a myriad of dysfunctional problems if they are not properly maintained including improvement bureaucracies, organizational caste systems of participants, paperwork jungles and can cause leaders to abdicate their role and responsibility in the change process.
9. Many change efforts are frequently too complicated and/or complex to be properly executed in the reality of the workplace.
10. Communication breakdowns are a primary cause of failure in change efforts and leaders frequently over-estimate their effectiveness in sharing critical information with those who must make the change work.
11. At some point, all change must become personal and individualized as people must be equipped and motivated to act differently if things are going to actually change collectively.
12. In many organizations so many change initiatives are in action at any one time that these efforts are not taken seriously by those involved.
13. When positive change and improvement does take place, organizations are frequently prone to backsliding and allowing old behaviors and practices to reemerge nullifying improvement.
14. Politics are inevitably something that either accelerates or decelerates the change process regardless of the size of the organization and must be taken into consideration in any attempt at making change.
Review: After reading this, circle the three (3) points that you can best relate to given your experience.
Introduction: As we begin our seminar on how to successfully lead real and rapid change, please read the following key findings which are based on an analysis of over 1,000 organizational change initiatives and circle any points that resonate with your experience:
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Asked people to read the 14 Points and Cir. Three that they can relate to given their experience as the instructions spell out. Most people will be able to say that organizations approach change and rather ineffective ways given these key findings.
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Organizational Attitudes/Approaches
Concerning Change
KEY PRINCIPLES FOR EFFECTIVE CHANGE AND IMPROVEMENT
Organizational Lethargy
Organizational Urgency
Organizational Panic
- Nothing is Important
- Lack of Real Focus
- Inaction
- Key Things are Important
- Focus on Desired Outcome
- Appropriate Action
- Everything is Important
- Lack of Real Focus
- Chaotic Action
#5: ANY CHANGE WORTH MAKING IS
WORTH MAKING FAST!
#6: FAST AND EFFECTIVE CHANGE = IMPROVEMENT!
#1: CHANGE IS ALL ABOUT EFFECTIVE
PROBLEM-SOLVING!
#2: PEOPLE CHANGE
WHEN THEY ARE FORCED TO CHANGE OR
WHEN THEY WANT TO CHANGE!
#3: CHANGE IS EITHER WORTH DOING RIGHT
OR
POINTLESS!
#4:THE FACTORS THAT DRIVE EFFECTIVE CHANGE
ALSO DRIVE SPEED!
On page 8 there is an important starting point concerning how organizations approach the change process there are six important points that students need to be reminded of into review. Some organizations are most large Ichabod change others are panicky about change but the key is that organizations have a sense of urgency surrounding the change that’s why this slide is important. Changes about problem solving and it is important remember people change when they are forced to change, so if we are going to make a change we either need to do it right or not waste people’s time. Thus, any change worth making should be done effectively and quickly.
A MODEL FOR CHANGE!
(or is it problem-solving?)
Change Models: While there are literally hundreds of models that can be used to understand, design, and drive change, the basic components of these models are illustrated below and are a variation of the traditional problem-solving process.
Critical questions for any discussion of change and improvement:
- What can go wrong using any change model?
- What must go right using any model to reap real improvement?
*
Change is really about problem solving. Above is a change model but at the end of the day it is really all about solving problems. Ask your students to look at this model and answer this question. When your organization has to go through a change are they disciplined in approaching this process?
IMPROVEMENT MODELS
*
Listed below are some of the more popular process improvement and change models:
- Lean
- Kaizen
- Six-Sigma
- TPS (Toyota Production System)
- TQM (Total Quality Management)
- Lean/Six-Sigma
- Reengineering
- Ford QOS
- Quality Circles
- Traditional Organizational Development Approaches
- Less Formal Models Include: Fist Pounding, Panic, Threats, Fear Mongering, Mandates, Cutting, Forceful E-mails, Changing the Format, Burning Platform Pep Talks, “Change or Die” Meetings…
____________________________________________________________
Questions:
- What model(s) are you using at your organization?
- How proficient are you at improving performance?
- What needs to be done to improve and accelerate improvement?
All of these current models for organizational change are really nothing more than various twists on the problem solving process. As the students which models they are familiar with and talk briefly about them. In the and all of these models have common ground which is illustrated in the next page.
COMMON GROUND ACROSS IMPROVEMENT MODELS
Problem/Opportunity Identification
Mapping, Data Collection, & Detailed Analysis
Gap Analysis/Benchmarking
Idea Generation & Selection
Action & Implementation Planning
Plan Implementation/Execution
Monitor & Measurement
Follow-up & Adjustment
*TMD thinking and practices can be an accelerant at each step of your improvement effort. Each activity should be viewed as a “play” that must be properly executed by the right players to move the improvement drive towards the ultimate goal of “scoring” (which means real improvement).
*
If you take all of these models and break them down these are the key steps. When organizations go into change initiatives they have a tendency to leapfrog over the steps in the process. Example: an organization has a problem, please give going through a diagnostic phase, they do not go through a brainstorming phase to identify various courses of action and select the best one, they frequently go right to the first solution or obvious solution that comes to mind and go right to implementation. In doing so they short-circuit the model and create additional problems for themselves because they lack the discipline to work the process. Laying out the steps in the change process are critical because they increase the likelihood of success but they also increase the ability of an organization to accelerate the change process once the key steps have been identified.
Key Research Findings on Successful and Rapid Organizational Change (n=1,000 Cases)
__________________________________________________________________________________________________
Winning TMD Research Finding #1: Real and rapid change does not happen without effective, trustworthy, hands-on leadership from the person in charge of that unit.
Winning TMD Research Finding #2: Successful change efforts are triggered by the realization that performance on a specific performance dimension is not where it needs to be, things must change and clearly defined goals/outcomes must be established.
Winning TMD Research Finding #3: Leaders of successful change efforts know what they are up against and who their real opponents are as well as their team’s strengths and weaknesses in developing realistic improvement plans.
Winning TMD Research Finding #4: Real and rapid change can take place when people have clear focus on achieving a specific desired outcome, they believe the changes are important, they have a sense of urgency, they know time is critical and that failing to change has negative consequences.
Winning TMD Research Finding #5: Effective change is based on action plans that are realistic, understandable, designed to get a specific result using the talents of the right people and have a high probability of success when properly executed.
Winning TMD Research Finding #6: Successful change initiatives have a starting point where individuals and teams have been prepared to perform, clearly understand that their performance will determine the success of the effort and that performance will be measured and critiqued accordingly.
Winning TMD Research Finding #7: Successful change leaders reinforce effective behavior, let team performers know when they score, take actions to make the changes stick and learn to celebrate the victory/success.
Winning TMD Research Finding #8: Organizational change efforts should be reviewed and analyzed so that lessons can be documented, shared with others and so that lesson can be drawn for future improvement.
_____________________________________________________________
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Source: The Two-Minute Drill: Lessons on Rapid Organizational Improvement from America’s Greatest Game
These key findings are from our book the two-minute drill and represent the key concepts for leading change. Ask the students to review this list and to draw their own conclusions in this regard. Leaders have to take these challenges in and do so effectively when they go to the problem solving process of leading change
KEY RESEARCH FINDINGS:
Change & improvement efforts will fail when they lack…
- Clear focus & desired outcomes
- Effective leadership & support
- Real knowledge of your opponents
- A sense of urgency & importance
- A solid game plan & preparation
- Talented & motivated people
- Proper execution & teamwork
- Performance measurement
- Performance feedback & rapid adjustment
- Organizational learning from mistakes & successes
- Momentum & energy
Are these things lacking, at times, in your change and improvement efforts? Leadership is key!
*
Here are key summaries of these key research findings.
WHAT DOES YOUR IMPROVEMENT “PLAY BOOK” LOOK LIKE?
__________________________________________________________________________________________________________________
Instructions: Select an improvement opportunity critical to your success:
________________________________________________________________________
Now, list the specific steps that you would take to make to solve this problem or make this improvement .
- ________________________________________________
- ________________________________________________
- ________________________________________________
- ________________________________________________
- ________________________________________________
- ________________________________________________
- ________________________________________________
- ________________________________________________
- ________________________________________________
- _______________________________________________
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As students to think of a change that needs to happen at work or in their personal life. Now ask them to complete a step-by-step set of activities that would allow them to execute the change process in their lives, whether personal or professional. These are the action steps necessary for success.
YOU ARE THE CHANGE LEADER: STRENGTH RATING
LEADER STRENGTH RATING
*
Change Leadership Skill
Ineffective/
Liability
Very
Effective
A Real
Strength
Come energized & ready to execute the game plan
Seize control of the initiative
Communicate above the
roar of the crowd
Create ownership of the
initiaitve
Demonstrate extreme time
sensitivity
Make adjustments quickly
Have the courage to do the right things and avoid doing stupid stuff
Use creativity & innovation
in finding a way to win
Act as a cheerleader & coach
Demonstrate confidence & poise
Not Very
Effective
1 2 3 4 5
Total Leader Strength Rating (LSR)
Effective/
Competitive
When going into a change/
improvement effort, do you as
the leader effectively…
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
Page 15 is an assessment of key activities that leaders must demonstrate when leading the change process. Each of these activities tell us that leadership is paramount in the change process because leaders must come energized and excited, take control of the initiative, use creativity, make adjustments quickly, use time wisely, and the like. Ask students to assess their own behavior in approaching the change process
DESIGNING YOUR IMPROVEMENT “PLAY BOOK”- Worksheet I
__________________________________________________________________________________________________________________
Instructions: Now select one of the improvement opportunities you identified:
________________________________________________________________________
Before discussing your improvement opportunity with anyone, sit down and answer the following key questions about the specific steps that you would take to make to solve this problem or make this improvement:
- Clearly Define the Present Unacceptable Situation (Opportunity or Problem):
- Clarify The Sense of Urgency and Importance Surrounding this Issue:
- What Data and Diagnosis is Needed to Better Understand the Situation:
- Redefine the Situation in Terms of What Desired Improvement is Needed:
- Clearly Determine What You are Up Against in Making This Change Happen:
- Determine Who Will Be Key Players on Your Team and Why:
21
Pages 21 and 22 represent a great checklist for people approaching the change process personal and/or professional basis. This is a good way to wrap up the discussion on change by saying any time you go into a change initiative it is imperative to take the time to walk through and identify the key issues identified in these questions. These are the things that affected change leaders do in mapping out their plan of attack.
DESIGNING YOUR IMPROVEMENT “PLAY BOOK”- Worksheet II
__________________________________________________________________________________________________________________
Key Issues Continued…
7. Design What the Change Will Look Like:
8. Select Your Action Plan that Describes What Must Take Place for Real Change to Take Place:
9. Develop Your Implementation Plan - Who, What, When, Where and How?:
10. Implement Your Game Plan with a Timeline, Action and Accountability:
11. Monitor and Measure Both Behavior and Key Metrics:
12. Determine Impact on Original Situation:
22
Presentation
Reading #13: Characteristics of Successful Improvement Efforts
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Presentation
Reading #14A: The Tragedy of General Motors
*
Presentation
Reading #14B: $11 Billion Turnaround at GM
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Presentation
Reading #15: Leadership and Change Management: A Narrative of an Organizational Turnaround
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Review Question
- Since change is always with us, what should I understand about it?
Ways to Deal With
Change and Innovation
- Allow room for failure
- Give one consistent explanation for the change
- Look for opportunities in unconventional ways
- Have the courage to follow your ideas
- Allow grieving, then move on
Comment The Nature of Change in Organizations
- A. People are generally uncomfortable about change, in both small and large matters.
- B. If small changes cause uneasiness, large changes can cause considerable stress – but they are often necessary for a company’s survival.
Collins’s Five Stages of Decline
Stage 1 Hubris Born of Success
Stage 2 Undisciplined Pursuit of More
Stage 3 Denial of Risk and Peril
Stage 4 Grasping for Salvation
Stage 5 Capitulation to Irrelevance or Death
Areas in Which Change is Often Needed
Changing people
Perceptions, attitudes, performance, skills
Changing technology
Changing structure
Changing strategy
Changing Technology
- Technology
- any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product
- not just computer technology
Lewin’s Change Model
- Unfreezing
- creating the motivation to change
- Changing
- learning new ways of doing things
- Refreezing
- making the new ways normal
Steps to Leading Organizational Change
Kotter’s Steps to Leading Organizational Change
Gain Allies by Communicating
Your Vision
- Showing how the product or service will be made
- Showing how potential customers will be reached
- Demonstrating how you’ll beat your competitors
- Explaining when the innovation will take place
Pressures for Change
- Technological advances
- Government regulations
- Societal values
- Political dynamics
- Demographic changes
- Global interdependencies
- Company life cycle
- Discrepancy in company’s goals & performance
*
Change is difficult due to…
- Human nature
- Change is often imposed upon people
- Organizational inertia
- Organizations are patterned structures & behaviors
- Unanticipated consequences
- Interdependencies of structure & process, power & influence, values & identity
*
2 Sides of Change
- Hard Side
- Processes
- Procedures
- Tools
- Deadlines
- Structures
- Soft (and difficult) side
- Buy-in
- Commitment
- Attitude
- Creativity
- Overcoming resistance
- Because:
Set patterns of behavior
Defined relationships with others
Work procedures, and job skills
*
Major Factors Affecting
Success of Change
Advocates of change
Degree of change
Time frame
Impact on culture
Evaluation of change
Driving Forces Toward Acceptance of Change
Driving forces are anything that increases organization to implement proposed change.
Driving forces include:
- Dissatisfaction with present situation
- External pressures toward change
- Momentum (involvement, investment)
- Managers’ motivation
Restraining Forces Blocking Implementation of Change
- Uncertainty regarding change.
- Fear of unknown.
- Disruption of routine.
- Loss of benefits.
- Threat to security.
- Threat to position power.
- Redistribution of power.
- Disturb existing social networks.
- Conformity to norms and culture.
*
Strategies to Lessen Resistance
- Education and communication.
- Create a vision.
- Participation and involvement of members.
- Facilitation and support.
- Negotiation and agreement.
- Leadership.
- Reward systems.
- Explicit and implicit coercion.
- Climate conducive to communications.
- Power strategies.
Leading Change
- Begin with a vision
- Identify strategic objectives with a broad appeal
- Link the vision to core competencies
- Continue to assess and refine the vision
*
Implementing Change
- Guidelines for organizational action
- Determine who can oppose or facilitate change
- Build a broad coalition of support for the change
- If necessary, build on a small scale
- Make dramatic, symbolic changes that affect the work
- Monitor the progress of the change
*
Implementing Change
- Guidelines for people-oriented action
- Create a sense of urgency about the need to change
- Prepare people to adjust to the change
- Help people deal with the struggles of change
- Keep people informed about the progress of change
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Implementing Change
- Guidelines for people-oriented action
- Demonstrate continued commitment to the change
- Empower people to implement the change
- Remind people about the strategic vision
- Encourage experimentation and risk
- Reward learning and innovation
- Continue to question old beliefs & assumptions
*
4 Dimensions of Change
- Scope
- Radical — Incremental
- Pacing
- Punctuated — Continuous
- Source
- Top-down — Bottom-up
- Process
- Planned — Emergent
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Four Steps For Fostering Innovation
Figure 10.4
Effective Issue Selling
Requires Influence
- What is influence?
- the impact of one person upon another
- the ability to change another person’s attitudes, beliefs or behavior
*
Primary Influence Tactics
- Rational Persuasion
- Explain the reason for a request or proposal
- Explain how the person would benefit
- Provide evidence that the proposal is feasible
- Explain why the proposal is better than competing ones
- Explain how likely problems or concerns would be handled
(Yukl, 2006, Leadership in Organizations)
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Primary Influence Tactics
- Inspirational Appeal
- Appeal to the person’s ideals or values
- Link the request to the person’s self image
- Link the request to a clear and appealing vision
- Use a dramatic, expressive style of speaking
- Use positive, optimistic language
*
Primary Influence Tactics
- Consultation
- Ask for suggestions on how to improve a tentative proposal
- State the objective and ask what the other person can do to help achieve it
- Involve other people in planning how to attain the outcome
- Respond to other’s concerns and suggestions
*
Secondary Influence Tactics
- Exchange
- Offer to share the benefits
- Offer to help the person carry out the request
- Offer to do some of the person’s regular work
- Modify the request to make it easier to do
- Indicate that a favor is owed to the other person
*
Secondary Influence Tactics
- Personal Appeals
- Appeal to friendship for a personal favor
- Explain why the request is important to you
- Say that you are counting on the other person’s help
*
Secondary Influence Tactics
- Ingratiation
- Compliment the person on past achievements
- Emphasize the person’s unique qualifications
- Be sympathetic about problems caused by your request
- Be sensitive to the person’s moods
*
Secondary Influence Tactics
- Legitimating Tactics
- Refer to organizational rules and policies
- Get someone in authority to approve your request
- Invoke tradition or precedent
*
Secondary Influence Tactics
- Pressure Tactics
- Use persistent requests
- Remind the other person that he/she agreed to do something for you
- Ask for a specific date when it will be done
*
Secondary Influence Tactics
- Coalition Tactics
- Mention credible people who support your proposal
- Bring someone along to help you in your influence attempt
- Get other people to provide evidence or an endorsement
- Ask someone in a higher position to help you
*
9 Influence Tactics
- Inspirational Appeal
- Power source: Referent
- Commitment: High
- Consultation
- Power source: All
- Commitment: High
- Rational Persuasion
- Power source: Expert
- Commitment: Moderate
*
9 Influence Tactics
- Ingratiation
- Power source: Referent
- Commitment: Moderate
- Personal Appeal
- Power source: Referent
- Commitment: Moderate
- Exchange
- Power source: Reward
- Commitment: Moderate
*
9 Influence Tactics
- Coalition Building
- Power source: All
- Commitment: Low
- Legitimate Tactics
- Power source: Legitimate
- Commitment: Low
- Pressure
- Power source: Coercive
- Commitment: Low
*
Persuading Others
- We tend to use a one-size-fits-all approach when trying to influence our managers and colleagues
- New research shows that this approach is a mistake
(Williams & Miller, 2002, Change the Way You Persuade, HBR)
Common Barriers to Influence
- Not assuming other person is at least a potential ally
- Not clarifying your goals and priorities
- Not assessing your resources
- Underestimating your resources
- Not assessing your ally’s social and political capital
- Limiting your range of options
(Cohen & Bradford, 2005, Influence Without Authority)
Factors Blocking
Issue Selling Success
- Time and skill required to reach consensus
- No room in the organization to “think out loud”
- Conflict-avoiding culture
- Perception or reality that risk-taking is not rewarded
- Complex organizational politics
*
Factors Facilitating
Issue Selling Success
- Do one’s homework
- Data about organizational history on the issue
- Information on other staff’s objectives and agendas
- Include others with a stake in the issue
- Frame the issue as congruent with organizational goals
- Frame the issue as dealing with external threats
- “This will help us avoid…”
- “This will help us cope with…”
*
Factors Facilitating
Issue Selling Success
- Communicate flexibly about the issue
- Talk numbers with the finance people, long-term benefits with the strategy staff, etc.
- Be opportunistic about timing
- Be a student of organizational history and context
- Understand the organization’s dynamics (political lens and cultural lens)
*
Issue Selling:
Common Tactics
- Get objective opinions or support
- Hire a consultant
- Gather external evidence
- Articles from industry publications
- Information from competitors
- Test the waters
- Informal discussions
- Lobby individuals before a group presentation
- Establish deadlines
*
Strategies to Build Influence
- Identify your power
- Identify your skills
- Strengths
- Gaps
- Build self confidence
- Repeat your personal PR message
- Find high-profile projects
- Get a mentor/be a mentor
Coca-Cola Case
*
How Do We Get the Fizz Back in Coke?
- Up until 1998 The Coca-Cola Company was considered a crown jewel of corporate America, the owner of the world’s biggest, best-known brand. Since then, the company has slipped so badly that a Fortune writer has called Coca-Cola a case study in corporate dysfunction. During a six-year period, the board has installed one CEO, ousted him, and then installed another inexperienced and abrasive CEO. A third CEO was named soon after – a retired Coke executive who had been passed over for the top job earlier.
- Despite all the confusion, the company continues to perform well financially. Coca-Cola has made considerable progress in strengthening its bottlers, cutting costs, boosting profit margins, and increasing cash flow. In the first quarter of 2004, the company earned a record $1.1billion. Despite the rosy financials, broad market forces were working against Coke and its management was bouncing from one strategic change to another. Worldwide volume growth slowed to 4% in 2003, down from 7% in 1997. Per capita consumption of soft drinks in the US had been in steady decline because of health concerns and increased competition from water and other drinks. After a big global push in the 1990’s, Coke had fewer emerging markets to tap for market growth.
- To add to its troubles, in 2003 Coke faced the revelation that its middle-level managers had tried to trick Burger King into promoting a new frozen Coke product in 2000. Coke had apparently fabricated data about consumer attitudes toward the new product. As a result it had to apologize to one of its biggest customers and agreed to pay up to $21million to Burger King and its franchises.
- “The whole Coke model needs to be rethought” says Tom Pirko, president of a beverage consulting firm. “The carbonated soft drink model is 30 years old and out of date.” Another concern is that succession of managers at Coke has focused on trying to do what Coke has always done, only better. The new CEO, E. Neville Isdell, says the company’s salvation lies in simply tuning up the soda operations and capitalizing on existing brands. He believes that the company needs to execute better but that its basic strategy is sound. Isdell is adamant that growth remains in carbonated soft drinks.
- To stem the tide of slower growth, Coke management turned to a couple of modest innovations. Vanilla Coke was introduced in 2002, as well as a new 12-pack for cans called Fridgepak that fits conveniently in refrigerators. Coke says it has become the leading provider of noncarbonated, nonalcoholic beverages worldwide, with 7% of the market share.
- Overall, the company has had trouble finding new brands to stoke growth. Two small but high-profile acquisitions in 2001, Planet Java coffees and Mad River juices and teas, flopped and the company phased out those drinks in 2003. Coke’s iFountain dispenser, supposed to improve drink quality, was a bust with restaurants. The key Coke brands remain Coca-Cola, Diet Coke, Sprite and Fanta. Coke’s plans to make Dasani bottled water into a global brand were slowed when the launch in Europe was stopped after
*
- elevated levels of bromate, which can cause cancer after long-term exposure, were detected in bottles in Great Britain.
- Coke still lacks a popular entry in the highly profitable energy drink category to compete with Red Bull. One Coke product in this market continues to sputter and a planned roll out of a new energy drink has been postponed. Some frustrated Coke bottlers have resorted to selling energy drinks made by other companies to preserve shelf space in their stores.
- “I am convinced that a lot of the slowdown in soft drink volume is because we forgot we had to innovate in soft drinks and keep consumers interested” says Gary Fayard, Coke’s CFO. “We want to be the best marketing company in the world. We are not there yet.”
- More than once, Coke has successfully overcome brand fatigue. Two decades ago, the flagship cola showed signs of running out of gas and the company came up with the infamous reformulated New Coke. It flopped, but the nostalgia it triggered among consumers reinvigorated the original Coke for another decade.
- To help boost Coke sales, Coke gave more power to regional marketers several years ago. Some very un-Coke-like ads resulted. In a 2000 commercial in the US, a grandmother angry that Coke is not being served at a family reunion yells at a relative and knocks down a table with her wheelchair. A German commercial for Coke showed two adults in an x-rated intimate embrace. The ads were pulled and the company reversed the “act local” policy.
- After studying company operations, a business reporter concluded “In the US market, Coke hasn’t created a best-selling new soda since Diet Coke in 1982. In recent years, Coke has been outbid by rival PepsiCo Inc. for faster-growing, non-carbonated beverages like Gatorade.”
- QUESTIONS
- What internal and external pressures for change are present in this case?
- With $5billion in annual profits, why should Coca Cola worry about managing change?
- What steps do you recommend Coca Cola take to become more of a change leader?
*
Effective Issue Selling
Requires Influence
- What is influence?
- the impact of one person upon another
- the ability to change another person’s attitudes, beliefs or behavior
*
Primary Influence Tactics
- Rational Persuasion
- Explain the reason for a request or proposal
- Explain how the person would benefit
- Provide evidence that the proposal is feasible
- Explain why the proposal is better than competing ones
- Explain how likely problems or concerns would be handled
(Yukl, 2006, Leadership in Organizations)
*
Primary Influence Tactics
- Inspirational Appeal
- Appeal to the person’s ideals or values
- Link the request to the person’s self image
- Link the request to a clear and appealing vision
- Use a dramatic, expressive style of speaking
- Use positive, optimistic language
*
Primary Influence Tactics
- Consultation
- Ask for suggestions on how to improve a tentative proposal
- State the objective and ask what the other person can do to help achieve it
- Involve other people in planning how to attain the outcome
- Respond to other’s concerns and suggestions
*
Secondary Influence Tactics
- Exchange
- Offer to share the benefits
- Offer to help the person carry out the request
- Offer to do some of the person’s regular work
- Modify the request to make it easier to do
- Indicate that a favor is owed to the other person
*
Secondary Influence Tactics
- Personal Appeals
- Appeal to friendship for a personal favor
- Explain why the request is important to you
- Say that you are counting on the other person’s help
*
Secondary Influence Tactics
- Ingratiation
- Compliment the person on past achievements
- Emphasize the person’s unique qualifications
- Be sympathetic about problems caused by your request
- Be sensitive to the person’s moods
*
Secondary Influence Tactics
- Legitimating Tactics
- Refer to organizational rules and policies
- Get someone in authority to approve your request
- Invoke tradition or precedent
*
Secondary Influence Tactics
- Pressure Tactics
- Use persistent requests
- Remind the other person that he/she agreed to do something for you
- Ask for a specific date when it will be done
*
Secondary Influence Tactics
- Coalition Tactics
- Mention credible people who support your proposal
- Bring someone along to help you in your influence attempt
- Get other people to provide evidence or an endorsement
- Ask someone in a higher position to help you
*
9 Influence Tactics
- Inspirational Appeal
- Power source: Referent
- Commitment: High
- Consultation
- Power source: All
- Commitment: High
- Rational Persuasion
- Power source: Expert
- Commitment: Moderate
*
9 Influence Tactics
- Ingratiation
- Power source: Referent
- Commitment: Moderate
- Personal Appeal
- Power source: Referent
- Commitment: Moderate
- Exchange
- Power source: Reward
- Commitment: Moderate
*
9 Influence Tactics
- Coalition Building
- Power source: All
- Commitment: Low
- Legitimate Tactics
- Power source: Legitimate
- Commitment: Low
- Pressure
- Power source: Coercive
- Commitment: Low
*
Persuading Others
- We tend to use a one-size-fits-all approach when trying to influence our managers and colleagues
- New research shows that this approach is a mistake
(Williams & Miller, 2002, Change the Way You Persuade, HBR)
Common Barriers to Influence
- Not assuming other person is at least a potential ally
- Not clarifying your goals and priorities
- Not assessing your resources
- Underestimating your resources
- Not assessing your ally’s social and political capital
- Limiting your range of options
(Cohen & Bradford, 2005, Influence Without Authority)
Factors Blocking
Issue Selling Success
- Time and skill required to reach consensus
- No room in the organization to “think out loud”
- Conflict-avoiding culture
- Perception or reality that risk-taking is not rewarded
- Complex organizational politics
*
Factors Facilitating
Issue Selling Success
- Do one’s homework
- Data about organizational history on the issue
- Information on other staff’s objectives and agendas
- Include others with a stake in the issue
- Frame the issue as congruent with organizational goals
- Frame the issue as dealing with external threats
- “This will help us avoid…”
- “This will help us cope with…”
*
Factors Facilitating
Issue Selling Success
- Communicate flexibly about the issue
- Talk numbers with the finance people, long-term benefits with the strategy staff, etc.
- Be opportunistic about timing
- Be a student of organizational history and context
- Understand the organization’s dynamics (political lens and cultural lens)
*
Issue Selling:
Common Tactics
- Get objective opinions or support
- Hire a consultant
- Gather external evidence
- Articles from industry publications
- Information from competitors
- Test the waters
- Informal discussions
- Lobby individuals before a group presentation
- Establish deadlines
*
Strategies to Build Influence
- Identify your power
- Identify your skills
- Strengths
- Gaps
- Build self confidence
- Repeat your personal PR message
- Find high-profile projects
- Get a mentor/be a mentor
M & M Case
*
Team Activity: M&M Color
You work for Mars Candy, and your company has decided to add a new color to the standard M&M package. There are three new colors in the running: purple, pink, and white. Your team has 7 minutes to decide how to persuade your top manager that your color is the one that should be chosen.
Each team will have 1 minute to persuade your top manager that your color should be chosen.
M&M Color Activity Discussion
Why do you think that this color was chosen over the other colors?
More effective or persuasive methods
Personal preference
*
M&M Color Activity Discussion
What methods or techniques did your team use to try to build a persuasive argument?
M&M Color Activity Discussion
What were some of the challenges you faced in creating a persuasive argument?
Not a personal idea or goal
Working with new people
Not knowing preferences of the person we are trying to persuade.
*
M&M Color Activity Discussion
What do you think could have made your argument more persuasive?
M&M Color Activity Discussion
How does this activity demonstrate the concept of idea selling?
Final Thoughts
Who can benefit from better understanding idea selling?
Final Thoughts
How could you take and apply the concepts of idea selling to your own job?
