Understanding and Leading Change Colbourne College Summer 2017 – Week Four Facilitator: Dr Paul B. Thompson

Revision Last class, we looked at, among other things, implementing organisational change from the organisational and people-oriented perspectives, individual and organisational resistance to change, the force-field theory, and how to manage change. Today, we will focus on two analyses that could help to guide the change process, SWOT and PEST(EL), and Change Impact Analysis

SWOT Analysis An organisation must take stock to determine where it stands in relation to its current performance, and what factors in the external environment will affect its proposed future plans (Cole, 1996). The SWOT analysis is one way of “taking stock.” It is a review of the organisation’s major internal strengths and weaknesses and an assessment of the external opportunities and threats that could impact its strategic choices.

Possible Strengths Questions What advantages does your organization have? What do you do better than anyone else? What unique or lowest-cost resources can you draw upon that others cannot? What do people in your market see as your strengths? What factors mean that you "get the sale"? What is your organization's unique position

Possible Weaknesses Questions What could you improve? What should you avoid? What are people in your market likely to see as weaknesses? What factors lose you sales?

Possible Opportunities Questions What good opportunities can you spot? What interesting trends are you aware of? Useful opportunities can come from such things as: Changes in technology and markets on both a broad and narrow scale. Changes in government policy related to your field. Changes in social patterns, population profiles, lifestyle changes, and so on. Local events.

Possible Threats Questions What obstacles do you face? What are your competitors doing? Are quality standards or specifications for your job, products or services changing? Is changing technology threatening your position? Do you have bad debt or cash-flow problems? Could any of your weaknesses seriously threaten your business?

SWOT Analysis Internal-External (IE) Matrix Strengths Weaknesses -Finances, leadership - lack of strategic direction -economies of scale - weak managerial depth - type of technology - obsolete facilities Opportunities Threats - serving new clients - competition, - sales of other - entering new markets products, - slowing market -falling trade barriers - protectionism

SWOT Analysis The foregoing would be subject to brainstorming as managers, advisors, and employees give their views, opinions, or suggestions in the order s-w-o-t. (Americans call this analysis TOWS) Palmer, Dunford, and Akin (2009) warn of the danger of the SWOT analysis easily becoming a listing of “believed” perspectives, which are the very things that are to be challenged, if the organisation is to improve/change

SWOT Analysis For strategic change in an organisation, the suggestions would be summarised and used in the development of a corporate strategy. How the concept is applied would vary from one organisation to another, and would depend on where the organisation is in its lifecycle (Cole, 1997)

PEST(EL) or PEST(LE) Analysis Another acronym which is used in strategic management is PEST. It refers to the key external influences that the organisation needs to analyse as it contemplates its strategic direction. These influences are Political, Economic, Social, and Technological. The acronym has been extended to BPEST, with the addition of Business

PEST(EL) or PEST(LE) Analysis Palmer, Dunford, & Akin (2009) The initial PEST has been extended to PESTEL, with Environmental and Legal issues being included for consideration. Thus, Political – e.g. the threat of terrorism, tax policy, foreign trade law Economic – e.g. unemployment levels, inflation, interest rates, exchange rates, economic growth Social – e.g. demographic challenges, population growth, age distribution, health consciousness, career attitudes

PEST(EL) Analysis Palmer, Dunford, & Akin (2009) Technological – e.g. introduction of new products that influence production, distribution, communication Environmental – e.g. antipollution policies, ethical issues pertaining to companies, carbon footprint targets, environmental impact assessment Legal – e.g. antitrust law (controlling monopolies), health and safety laws, equal opportunities, product safety, advertising and labelling laws, consumer rights

Change Impact Analysis/ Assessment Change impact assessment is a systematic approach that seeks to discover possible risks associated with planned, strategic changes to be undertaken by an organisation. Failure to assess the risks involved in intended changes could result in significant losses for the organisation. Change impact analysis is a proactive way of managing risks to avoid surprises which could be costly

Change Impact Analysis/ Assessment www. itsmsolutions Change Impact Analysis/ Assessment www.itsmsolutions.com/newsletters/DITYvol3iss3.htm The procedure for performing an impact assessment consists of the following five steps: 1. Define the extent of the change proposed 2. Determine key differences in the changed state (proposed) from a point of reference or the original state 3. Focus on the possible effects of the key differences from step #2 4. Sort and prioritize the possible effects (#3) from the key differences (#2) based on risk and possibility 5. Make a decision using the results

Change Impact Analysis/ Assessment Factors to be considered Current State Future State Gap Scale of Change Type of Impact Timing of Impact Level of Impact (High/Med/Low) Summary of Impact

Change Impact Analysis/ Assessment Factors to be considered Key Risks Roles Affected Number Affected Level of Impact Communication Requirements Training Requirements Leadership Requirements Alignment / Collaboration

Change Impact Analysis/ Assessment Factors to be considered I will share screen with you in discussing these factors in greater depth