Strategy in Action 14: Managing Strategic Change

Learning Outcomes (1) Identify the scope of a required strategic change Analyse how organisational context might affect the design of strategic change programmes Undertake a forcefield analysis to identify forces blocking and facilitating change 14-2

Learning Outcomes (2) Assess the impact of the role and management styles of change agents Assess the value of different levers for strategic change, including the management of organisational routines, political and symbolic processes and other change tactics Identify the pitfalls and problems of managing change programmes 14-3

Premises of Strategic Change Strategy matters Context matters Different approaches to managing strategic change are required for different contexts 14-4

Exhibit 14.1 Key Elements in Managing Strategic Change Diagnosis of context Change agents Levers for change Managing change programmes 14-5

Diagnosing the Change Situation Types of change Context of change Culture web Forcefield analysis 14-6

Exhibit 14.2 Types of Change 14-7

Exhibit 14.3 Context of Change 14-8

The Cultural Web Stories Symbols Rituals/ Power routines Paradigm structures Control systems Structures 14-9

What is a Forcefield Analysis? A forcefield analysis provides a view of change problems that need to be tackled, by identifying forces for and against change. 14-10

Exhibit 14.4 A Forcefield Analysis 14-11

Roles in Managing Change Change agents Strategic leaders Charismatic Instrumental Outsiders Middle managers Implementation and control Sense-making Reinterpretation and adjustment Relevance bridge Advisors 14-12

Styles of Managing Change Education/ Communication Collaboration/ Participation Intervention Direction Coercion 14-13

Challenging the taken for granted Levers for Change Challenging the taken for granted Changing routines Symbolic systems Political systems Other change tactics 14-14

Approaches for Managing Change Theory E Economic value Theory O Development of Organisational capability 14-15

What are Symbols? Symbols are objects, events, acts, or people that convey, maintain, or create meaning over and above their functional processes. 14-16

Rituals and Organisational Change Rites of passage Rites of enhancement Rites of renewal Rites of integration Rites of conflict reduction Rites of degradation Rites of sense making Rites of challenge Rites of counter-challenge 14-17

Power and Political Processes Acquisition of resources Association with powerful stakeholders Development of alliances Symbolic change 14-18

What is Turnaround Strategy? A turnaround strategy emphasizes the speed of change and rapid cost reduction and/or revenue generation. Use Marks and Spencer, begin at 2:40 (on growing business) and stop at 3:30. 14-19

Elements of Turnaround Strategies Crisis stabilisation Management changes Stakeholder support Target market clarification Refocusing Financial restructuring Prioritisation of critical improvement areas 14-20

ValuesJam at IBM Which change levers are evident? Compare the values-based approach to a programme of revolutionary change or reconstruction. 14-21

Aspects of Revolutionary Change Clear strategic direction Combined economic and symbolic levers Outside perspectives Multiple styles of change management Work with existing culture Monitoring of changes 14-22

Aspects of Evolutionary Change Empowered organisation Clear strategic vision Continual change and commitment to experimentation Transitional stages Irreversible changes Sustained top management commitment Winning hearts and minds 14-23

Chapter Summary (1) There are different types of strategic change which can be thought of in terms of the extent of culture change required and its nature It is important to diagnose wider aspects of organisational context such as resources and skills that need to be preserved, the degree of homogeneity, capability, capacity, readiness for change, and the power to make it happen The cultural web and forcefield analysis are useful as means of identifying blockages to change and potential levers for change 14-24

Chapter Summary (2) Change agents my need to adopt different styles of managing change according to different contexts and in relation to the involvement and interest of different groups Levers for managing strategic change need to be considered in terms of type of change and context of change. Levers include surfacing and challenging the taken for granted, the need to change operational processes, routines and symbols, the importance of political processes, and other change tactics 14-25

Key Debate: Management of Change from Top to Bottom? What are the problems associated with top-down or bottom-up views of change management? If you were a senior executive which approach would you take and in what circumstances? Are the different views reconcilable? 14-26

Case Example: Change at Faslane 14-27

Case Example: Change at Faslane What type of change is being pursued at Faslane? Describe the change style of John Howie. What levers for change are being used? What others might be used? What problems of change could occur? Assess the effectiveness of the change programme. 14-28