Strategic Change

Aims of the Session To outline key components in the management of change To introduce key content components in the management of change To detail the McKinsey 7 S framework

Management of Change “There is nothing permanent except change” Heraclitus of Ephesus (Greek philosopher remembered for his cosmology, 540-480BC)

Managing Change “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things” (Machiavelli 1469 - 1527)

Context Content Practice

Causes of Change Environment Business Relationships Technology People Shifts in economy; competitive pressures; legislative changes Business Relationships New alliances; acquisitions; partnerships, etc may require changes to organisational structures Technology Inevitably can change the way an industry needs to operate People Senior management change; alterations in staff profiles Tichy, N. 1983

Management of Change Key Elements: Necessity for Change Types of Change Timing Barriers Culture Styles Leadership & Power Process/ Techniques (Change agents) Communication Monitoring & Control

Managing Change Involves: new skills new attitudes new products new processes new businesses new paradigms

Types of Change Dramatic/ Transformational/ Revolutionary Incremental/ Evolutionary Active Passive

Types of Change Corporate Corporate Transformation Revolutionary Business Scope Redefinition Scope of Process Business Network Redesign Business Process Redesign Internal Integration Evolutionary SBU Localised Exploration Time?

Emergent Approaches to Change Learning Theory Learning organisations perpetually seek change Team learning; Sharing of views and visions; Exploration of the organisation; Systems Thinking Senge, P. 1990 Five Factors Theory Environmental Assessment Leading Change Linking Strategic & Operational change Human resources as assets and liabilities Coherence in the management of change (Pettigrew, A. & Whipp, R. 1991)

Attitudes Towards Change Actors of Change Wait & See Hope Uncertainty Fear Anxiety Promoters Joy Motivation Enthusiasm Opponents Disappointment Resignation Disapproval Resistance Uncertain Indecisives Consequences of Change Certain Positive Negative Attitudes Towards Change Kruger, W. 1996

Resistance to Change 3 Inherent Problems the need to motivate changes in behaviour of individuals to manage the transition Lewin’s 3 stage model: Unfreeze; Change; Refreeze to shape the political dynamics, e.g. power structures (Pettigrew 1975)

Activity Consider how you reacted to major changes that you have been involved with. What were the main thoughts and emotions?

10 most common resistors to change Loss of control Loss of face Excessive personal uncertainty Avoid surprises Loss of competence Loss of identity More work Past resentments Unintended consequences Real threats Kanter, R. M. 1984

Overcoming resistance to change People issues (approach) Education & communication Participation & involvement Facilitation & support Negotiation & agreement Manipulative and co-option Explicit & implicit coercion Organisation (& People) seek areas of agreement Explore “knock-on” effects Support key opinion leaders Identify resistance (real resistance) Show potential benefits Do not disguise your feelings

McKinsey 7 S Framework The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you: Improve the performance of a company; Examine the likely effects of future changes within a company; Align departments and processes during a merger or acquisition; or Determine how best to implement a proposed strategy

McKinsey 7 S Framework - Content Strategy Skills Subordinate Goals (Value System) Staff Structure Systems Style

Applying the 7 S Framework A detailed analysis is required because the model covers almost all aspects of the business and all major parts of the organisation. The seven components described are normally categorised as soft and hard components. The softer components of the model are difficult to change and are the most challenging elements of any change-management strategy. It is too easy to fall into the trap of only concentrating on the hard factors as they are readily available from organisations' reports etc. You should not just write about these components individually but also highlight how they interact and affect each other. This re-inforces the relational element that we have explored in a number of previous models

Higgins – 8 S Framework Structure Strategy Systems Subordinate Goals Environment Structure Strategy Systems STRATEGIC PERFORMANCE Subordinate Goals (Value System) = Performance RESOURCES Style Staff Higgins, 2005

Activity We have considered a number of models within the module. How do you think that they can help to manage change?