Detailed models of strategic change management

This unit helps would-be-managers to understand the nature of change and to cope with it. It gives an understanding about change and the ways to manage with it without disturbing the working of the organization. In this unit we have discussed the different definitions and models of change which have been given by thinkers in the past which helps in evaluating the relevance of models of strategic change to organizations in the current economy. As we proceed, we examine the need for change and assess the factors that are driving the need for it. Also, the resource implications are discussed which do not respond to strategic change. The theories given by Kotter, Prosci, Lewis and others are milestones of the research on change management. Their theories have helped in thorough understanding of change management. As the topic develops, it gives vital information on the reasons of change in markets, budget pressures, new technologies and other new programs such as TQM and re-engineering. All in all, the topic is an important resource on the factors and implications that bring change. Another unavoidable and inseparable resource of the organization is stakeholders of the company. The topic discusses about systems modelling, divergence and convergence and methods of involving them into organization. It is also quite obvious that change brings resistance; therefore this unit enables us to manage resistance giving a way to strategies such as communications, education, forums, etc.

The entire work gives a clear picture of change management. All a manager needs is to understand the criteria and manage with a difference on the guidelines of the researchers.

Task 1: Discuss the Models of Strategic Change

There are many theories about how to manage change. Most of the theories originate with leadership and change management guru, John Kotter who is a professor at Harvard Business School and world renowned change expert. The following eight steps in the change process are his contribution.

JOHN KOTTER: Eight steps to transforming an organization (Kotter.J, 1995)

Establishing a sense of urgency

Forming a powerful guiding coalition

Creating a vision

Communicating the vision

Empowering others to act on the vision

Planning and creating short term wins

Consolidating improvements and producing still more change

Institutionalising new approaches

Kotter’s research gave a whole new way to managing change.

A programme of planned change and improved performance developed by Lewin involves the management of a three-phase process of behaviour modification.

Lewin’s Change Management Model

Source: http://www.infed.org/thinkers/et-lewin.htm

Unfreeze- Reducing those forces which behaviour in its present form, recognition of the need for change and improvement to occur.

Movement – Development of new attitudes or behaviour and the implementation of change.

Refreezing – Stabilising change at the new level and reinforcement (Hardy 1996)

A new culture should be created within the organization such that managers look to change as an opportunity and adapt their business system to continuously emerging conditions. (Hussey 2000)

Prosci’s ADKAR

Effective change management demands five key goals to form the basic ADKAR model:

Awareness of the need to change

Desire to participate and support the change

Knowledge of how to change (and what change looks like)

Ability to implement the change on a day-to-day basis

Reinforcement to keep the change in place (Hiatt 2003)

Prosci’s ADKAR

Source: http://techotoys.com/qwxDnJu0J/

Action Research

Action research refers to a way to look at one’s own work practically and check as he would like it to be. Because research is done by the person himself or the practitioner, it is called practitioner based research. It is also referred to as a form of self reflective practice because it involves the person himself and his own work. (Hardy 1999)

Action research

Source: http://www.llas.ac.uk/projects/2837

Task 1.2

Evaluate the relevance of models of strategic change to organizations in the current economy

Teambuilding Consensus

Strategic change models, as discussed above are the keys to success of any organization provided they are implemented in a sophisticated way. To achieve effective team decision making leadership, (Franzen 1994) describes Consensus Team Decision Making CTDM model which has three key pillars.

Maintain high conceptual level

Strive towards consensus

Manage the decision making process

Strategic interventions

Types of interventions selected for a project although depend on variety; they are highly concentrated in a project. Strategic interventions are useful in situations like

Rapid changes in the external environment

Rapid or stagnant sales

Increased competition

Rapid expansion of markets

Mergers and acquisitions (Lewin 2005)

Decision Making

Contingency Theory of Decision Making

Decision participative contingency theory or the Normative Decision Theory is a model which says that the efficiency of a decision procedure depends on a number of aspects of the situation: the importance of decision quality and acceptance; the quantity of relevant information possessed by the leader and subordinates. (Fiedler 1999)

In the autocratic style, the leader takes decisions without consulting others. (Lewin 2005)

The participative style leadership, also known as participative democratic leadership style does the job of creating and maintaining healthy relationships between the employees and their leaders.(Kotter 2007)

Proactive and Reactive (Whitehead 2006)

PROACTIVE

REACTIVE

Needs to have and use own answers

Understands the power of and uses team in solving problems

Makes decisions by self

Requests that team members make decisions

Pushes for results

Shares a vision so compelling the team wants to move towards it

Reacts to change

Foresees and influences change

Teaches team to expect direction

Teaches team to be self reliant

Focuses on finding and fixing problems

Focuses on achieving performance outcomes

Quick to punish on mistakes

Lets the team learn by errors

Task 1.3

Assess the value of using strategic intervention techniques in the organization

The most important asset of any organization is human resource and strategic intervention helps them to adjust with the changing strategies of the organization and understand it.(George 1999). At Sapphire Beauty Box, it is vital to have a peaceful mind and sound behaviour as this profession deals with direct clientele.

The method of strategic intervention assists the employees of Sapphire to find meanings to their life, discover what, and why they do and how to meet their needs in positive and negative ways which helps to promote sustainable change. (Hiatt 2006)

Human Process Interventions:

These are helpful in particular during change project in organizations where there are some combinations of many new employees, different cultures, working together, many conflicts, etc.

Activities: Coaching, counseling, delegating, group learning, virtual teams, etc. ( Hiatt and Creasey 2003)

Techno-structural Interventions:

These interventions are helpful in particular for rapid growth but few internal systems to sustain growth, many complaints from customers, etc.

Activities: Balanced scorecard, downsizing and out placing, ISO 9000, Six sigma, etc.(Kurt 2005)

Human Resource Management interventions:

These interventions are helpful in situations like establishment of new organizational goals, implementation of technology for a short time, low productivity, etc.

Activities: Staffing, evaluating performance, career development, employee wellness programme (George 1999)

Task 2.1

Examine the need for strategic change in the chosen organization

Reasons for change

Change in market: The United Kingdom is going through recession and there has been recession and the CPI annual inflation has rose to 3.3%. (London Business Times 2009). There has been increase in prices, job loss, bankruptcy and what not. Every business has gone through losses and needs to cover up their expenses. (Fiedler 1999). At this point of time, Sapphire needs to change accordingly to ease customers at their purse and still keep them coming.

Economic downturns: Due to price rise, the raw material needed at the store is also become expensive. It is important to cover the costs by bringing about change in the organization. (Paul 1996)

Customer Expectations: There is a very hard competition in the market especially in the beauty field. Customers get attracted to offers and it is not easy to get their confidence. To invest into customers, It is important to change the strategies accordingly. (Kotter and Cohen 2002)

Competitive Edge: Competition is healthy but can be fatal if the strategies become too monotonous and outdated. There is need for change to face competition. (Kotter 1995) Sapphire needs to be updated with products and material being used by competitors and try to do better than other turning the tables towards them. (Kotter 2007)

Mergers: The merger of the organization with another can lead to change in strategy as the new staff can have better ideas and plans to make the company a success. (Paul 1996). If Sapphire merges with another company to make it a success, it may have to revise the ways to do things.

Change in mission: If the mission of the company changes, obviously there has to be a different strategy to deal with it. The mission of Sapphire is to fight ageing and make people look beautiful but now the market demands more of stress releasing treatments. So Sapphire needs to rethink about its strategy. (Franzen and Hardaker 1999)

Task 2.2

Assess the factors that are driving the need for strategic change in an organization

The Shifting Economy – The economy is so very changing and dynamic. Due to the unpredictability of it, the organization is in constant need of change in the strategy and economic plan. This is more prevalent since recession

Environmental factors – There are certain environmental changes that have an effect on the production and sales. These changes are to be monitored and the demand of change arises.

Financial pressure – There occur financial pressures on the organizations, in order to meet deadlines and targets. In order to handle finances, there has to be a change in finance plans. This is where the need for change management occurs.

Technological advances – There has been drastic change in production, marketing, outsourcing and other fields due to technology. The organization needs upgrading and has to keep in pace with the technological advances to succeed in its mission and make way for growth. Keeping in mind the factors discussed above, there is a need for change.

Funding cuts – With the recession in the economy, the company has cut down on costs and funds. There is need for change in financial strategy to keep the balance.

Competition – Competition is a healthy asset for any business. To keep up to the standards and do better than others is very important, hence it is vital to keep a watch at what others are doing and bring change in the company accordingly.

Task 2.3

Assess the resource implications of the organization not responding to strategic change

Restructuring of HR- If the company does not respond to the changes as discussed above, it may have to face severe consequences and lose in the process. The organization will have to restructure the HR making way for a new beginning. There have to be leaders chosen again and staff employed for the smooth working of the company.

Interview and hire of new employees – Interviewing and hiring of new staff will have to be done which is a time consuming and costly process for any business.

Redundancies – The organization will have redundancies if proper steps for the change are not taken in time. This will affect the working and time management of the strategy of work.

Training – Training is another costly and time taking process. It takes a lot to train the employees and bear the costs. If the need for strategic change is understood, there is no need for the organization to bear costs or losses.

Task 3.1

Develop systems to involve stakeholders in the planning of change in the chosen organization

A stakeholder is one who has something to gain or lose through the outcomes of a planning process or project. These are also called interest groups and can have a strong bearing on the outcomes of political processes. It is useful for research projects to identify and analyse the needs and concerns of different stakeholders, particularly when these projects have an effect on policy

Input-output transformation model

Operations management transforms inputs (labour, capital, equipment, land, buildings, materials and information) into outputs (goods and services) that provide added value to customers. Transformation System is the critical element in the model that determines how well the company produces goods and services that meet consumer needs. It does not matter whether the organization is a for-profit company, a non-profit organization (religious organizations, hospitals, etc.), or a government agency; all organizations must strive to maximize the quality of their transformation processes to meet customer needs.

Steps Involved

Step 1: Clarify the research or policy change objective (Problem Tree Analysis or objectives analysis might help with this.)

Stap 2: Identify all the stakeholders or interest groups associated with this objective, problem or issue. Stakeholders can be organizations, groups, departments, structures, networks or individuals.

http://www.odi.org.uk/resources/details.asp?id=5257HYPERLINK “http://www.odi.org.uk/resources/details.asp?id=5257&title=stakeholder-analysis”&HYPERLINK “http://www.odi.org.uk/resources/details.asp?id=5257&title=stakeholder-analysis”title=stakeholder-analysis

Step 3: Using the grid organise the stakeholders in different matrices according to their interest and power. ‘Interest’ measures to what degree they may to be affected by the research project. ‘Power’ measures the influence they have over the project or policy, and to what degree they can help achieve, or block, the desired change.

The Cultural Web

The Cultural Web

http://www.mindtools.com/pages/article/newSTR_90.htm

The Cultural Web identifies six interrelated elements Johnson and Scholes (2002) call it the “paradigm” – the pattern or model – of the work environment. By analyzing the factors in each, you can begin to see what is working, what isn’t working, and what needs to be changed. The six elements are:

The past events and people talked about inside and outside the company. Who and what the company chooses to celebrate say a great deal about what it values, and perceives as great behaviour.

The daily behaviour and actions of people that indicate acceptable behaviour. This determines what is expected to happen in given situations, and what is valued by management.

The visual representations of the company including logos, how exquisite the offices are, and the dress codes.

Multiple Cause Diagrams

Multiple cause diagrams

http://ilearn.cto.int/login/index.php

Multiple cause diagrams are a way of using interconnectedness to shape up a complex situation.

They represent both adequate and casual cause without making a distinction between them.

This system is pictured as an interconnected group of events or effects to cause an effect as a purpose. Sometimes, if the input cause is removed, the output cause continues to happen, may be because feedback loops are present or other causes drive the effect.

Influencing skills

The careless reception of authority is becoming increasingly less common in the world. To get things done, it is better to rely on commitment rather than authority. For example, gaining co-operation from other departments.

Task 3.2

Develop a change management strategy with stakeholders in the chosen organization

Developing a winning strategy is messier than textbooks suggest. Most insights that are important for formulating strategies rest in the heads of operating managers. (Kotter 2007)

The Stakeholder Circle

This is designed to put stakeholders on the ‘project management radar’. It is a proven method supported by a tough, easy to use tool that guides us through five easy steps namely:

Identify your projects stakeholders and understand their needs

Prioritize the stakeholders on the basis of power, proximity and urgency.

Visualize the key stakeholders using the Stakeholder Circle.

Engage with the stakeholders by building and implementing an effective communication

plan.

Monitor changes as you update and review your stakeholders at key points in the project.

Public Hearings: There can be events where stakeholders are allowed to give evidence or question general public authorities about decisions.

Public hearings: Regulated, formal arrangements for times and places at which members of the general public and other types of stakeholders can give evidence or question public authorities about decisions.

Deliberative Polling: This collects views when people are introduced to the issue and think about it. It also includes a feedback session.

Task 3.3

Evaluate the systems used to involve stakeholders in the planning of change in the chosen organization

The stakeholder model is helpful in explaining the rules of the economic game and the link between stakeholder value and competitive advantage. The stakeholder strategy plan guides us on how to interact and communicate with each stakeholder during different stages of a project. It also helps to define who should participate, in what ways and on what level of the project. It gives thorough knowledge of the matter and suits best to most organizations. Other ways such as polling, seminars and workshops are also perfect ways to handle change in a proper manner.

Task 3.4

Create a strategy for managing resistance to change in the chosen organization

Selective Perception: People’s self interpretation of stimuli presents a unique image of the real world and results in selective perception. This leads to biased view of the situation that fits into the perception of reality.

Habit: People are used to the same way of doing things which makes a habit. It becomes serves as a source of comfort. Bringing about change brings resistance.

Loss of Freedom: If the change is seen as an inconvenience, it reduces freedom of action or results in increased control, there will be resistance.

Direct vs Indirect

There is staff that may resist directly and others that may be indirect in resistance. Direct resistance is to oppose in a direct manner and fighting straight but indirect resistance is to show resistance by making excuses such as resigning.

Task 4.1

Develop appropriate models for change in the chosen organization that will reflect their circumstances

The best model for change that applies to Sapphire Beauty Box is Prosci’s Five Building Blocks change management model which includes the ADKAR

The first thing Sapphire needs is the Awareness of the need for change. If the need for change is understood, half the job is done. Planned communication is essential for understanding. Sapphire needs change as there is a need for it.

Next is the Desire to participate and help the change. The employees of Sapphire need to make a personal decision to support the change and sustain it too. The CEO announced incentives for individuals creating a desire to be a part of the change.

The third building block is providing Knowledge. Sapphire held a seminar for imparting awareness for change, how to undergo change and how to implement it. Prosci (2003) suggested forums and mentoring for knowledge of change.

Ability to implement required skills and behavior is another building block of the ADKAR model. It is the difference between theory and practice. Once knowledge is imparted on change, the performance of the individual needs to be supported. Sapphire can do this by practice, coaching and feedback.

Lat, but not the least comes Reinforcement. It is the final and essential stage of the model where efforts to sustain the change is accentuated. It is to be ensured that changes stay in place and individuals do not revert to old ways. The ways to do it are positive feedback, recognition, rewarding, etc. Sapphire makes it a point to take feedback of the customers as well as the employees to keep both sides balanced. There is a ‘Best Employee of the Month’ award scheme at Sapphire Beauty Box which inspires employees to do their best.

Prosci’s Change Management Model

http://www.change-management.com/tutorial-adkar-overview.htm

Task 4.2

Plan to implement a model for change considering the internal and external circumstances impacting on the organization

Kaizen Method

This is a Japanese method for continuous incremental improvement. It is a concept for gradual, continuous improvement. It assumes that every aspect of life has to be constantly improved. The main elements of Kaizen are effort, quality, and willingness to change, communication and involvement of employees. Its five founding elements are

Teamwork

Personal Discipline

Improved Morale

Quality Circles and

Suggestions for Improvement.

The Kaizen method is best for Sapphire Beauty Box as it is people oriented, requires long term discipline and easy to implement.

Matrix Organizations

This kind of organization offers the advantages of flexibility, greater security and control of project information. It establishes a grid with a two way flow of authority and responsibility.

Task 4.3

Develop appropriate measures to monitor progress of the developed model

Goal Based Evaluation

To start with goal based evaluation, there can be two main questions we can ask for

How has the programme made a difference

Are the participants of the programme feeling better as a result of the programme?

Outcome based evaluation is a way that determines if the project at Sapphire Beauty Box have achieved its goals. The organized process using OBE helps to establish clear outcomes, to measure benefits, clarify groups for which benefits are targeted.

Other ways to monitor progress in Sapphire Beauty Box are regular reports of the activities being practiced in there. Meetings are also undertaken by higher authorities to administer the changes and keep a watch on them. Quality Circles appear simple and straightforward but have to be viewed in regard to Japanese culture and management systems. Quality circles are do work and are used successfully by British organizations.

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CONCLUSION

It can be concluded that strategic change is the key factor in any organization. Change is a pervasive influence. We are all subject to change in one form or the other which is continuous. The steps to change from Kotter give vital knowledge about making change Kotter is called the GURU in terms of change management. Prosci’s ADKAR building blocks give deep understanding and guidance for applying change and monitoring it to sustain change. Kurt Lewin’s change model is also an important one. The freeze, refreeze and transition stages develop new attitudes and behaviour.