Professional Certificate in Strategic Change Management Strategic Change Overview 06 – 10 March 2017

Strategic Change SANTANDER: PULLING DOWN TO BUILD BACK UP When in 2008 Santander wanted to establish a stronghold in the UK banking sector, its strategy was to acquire a portfolio of heritage-centric UK financial institutions – Abbey National, Bradford and Bingley, and Alliance and Leicester. Group Santander chairman Emilio Botin felt, however, that the legacy in these UK financial institutions, dating as far back as 1849, had left them incapable of change and, therefore, unable to evolve and grow. In buying these traditional UK financial institutions and unifying them under the Santander brand, Santander aimed to break down their engrained processes and turn them into a formidable retail bank. To do this, they would need a fast-track, systems-led banking model. Only this could bring clarity, efficiency and best practice to institutions that had become totally entrenched in ‘their way’ of doing things. For incoming Santander UK CEO his focus would be ensuring that all stakeholders grasped the value of shedding ‘old ways’ and embracing the new era in banking – a revolution, rather than evolution. There were many opportunities during the change programme for cultural misunderstandings. Counter-intuitively, this can be particularly noticeable when national or linguistic similarities give a false illusion of commonality. In fact, the cultures of the UK acquisitions were very different, they had developed as regional building societies and their footprints, portfolios and client bases were each unique. This meant that forceful and careful management would be needed to integrate the systems, processes and people in the different organisations. Those who were going to be impacted by the change were fully briefed; risks and issues were discussed and mitigated. Even those who weren’t likely to be impacted by consolidations were given clear messages about the future. The aim of this process was to make sure they didn’t just understand the change, but that they embrace it. In January 2010, Santander UK was launched against ferocious economic and banking headwinds. By 2013, it had become one the country’s leading retail banks and one of the largest providers of savings and mortgages.

Strategic Change SHELL’S TOUGH LOVE In 2004 Shell was facing an oil reserves crisis that hammered its share price. The situation was compounded by the abrupt departure of the oil group’s existing chairman. The new group chairman, Jeroen van der Veer, believed that in order to survive, the corporation had to transform its structure and processes. A series of global, standardised processes were identified. These, if introduced, would impact more than 80 Shell operating units. While the changes were vital to survival, they proved unpopular in the short term as some countries stood to lose market share. The message was a tough one, and many operating units balked. However, for a change programme of this scale to be successful, everyone had to adhere to the new systems and processes. The leadership needed unflinching determination and to focus on gaining adoption from everyone involved. Those leading the change had to ensure that the major players in all their markets knew what was required and why. They needed to be aligned with the change requirement. From the start, it was recognised that mandating the changes was the only way for them to drive the transformational growth they aimed for. This wasn’t an opt-in situation. There is a strong case to suggest that change programmes are most successful when, as a result of external factors,  there’s a shared sense of urgency to deliver tangible change.

Managing Strategic Change A restructuring of an organization's business or marketing plan that is typically performed in order to achieve an important objective. For example, a strategic change might include shifts in a corporation's policies, target market, mission or organizational structure. Theories of organizational change in public organizations Ensuring need and providing a plan Change Management Tools Building support for change and overcoming resistance Ensure top-management support and commitment

Organisational Change and Organisational Culture - Some Definitions Organisational change occurs when a company makes a transition from its current state to some desired future state. Managing organizational change is the process of planning and implementing change in organisations in such a way as to minimize employee resistance and cost to the organisation while simultaneously maximizing the effectiveness of the change effort and maintaining the least disruption to the customers Organisational culture is a system of shared assumptions, values, and beliefs, which governs how people behave in organizations. These shared values have a strong influence on the people in the organization and dictate how they dress, act, and perform their jobs.

Where does Organisational Change come from? Organizational change initiatives often arise out of problems faced by a company or in fact the recognition of major opportunities. In some cases, however, companies change under the impetus of enlightened leaders who first recognize and then exploit new potentials dormant in the organization or its circumstances. People changes can become necessary due to other changes, or sometimes companies simply seek to change workers' attitudes and behaviours in order to increase their effectiveness or to stimulate individual or team creativeness. Almost always people changes are the most difficult and important part of the overall change process.

Change management is: The process, tools and techniques to manage the people side of change, to achieve the required business results. Change Management is about the way people think and act

Attitudes to Change There are two main approaches: Top down, transformational change Emergent, bottom up change Organisations that manage change effectively normally combine these two approaches

Kotter's 'eight steps to successful change' American John P Kotter (b 1947) is a Harvard Business School professor and leading thinker on organizational change management. Each stage acknowledges a key principle identified by Kotter relating to people's response and approach to change, in which people see, feel and then change. The eight step change model can be summarised as: Increase urgency - inspire people to move, make objectives real and relevant. Build the guiding team - get the right people in place with the right emotional commitment, and the right mix of skills and levels. Get the vision right - get the team to establish a simple vision and strategy, focus on emotional and creative aspects necessary to drive service and efficiency. Communicate for buy-in - Involve as many people as possible, communicate the essentials, simply, and to appeal and respond to people's needs. De-clutter communications - make technology work for you rather than against. Empower action - Remove obstacles, enable constructive feedback and lots of support from leaders - reward and recognise progress and achievements. Create short-term wins - Set aims that are easy to achieve - in bite-size chunks. Manageable numbers of initiatives. Finish current stages before starting new ones. Don't let up - Foster and encourage determination and persistence - ongoing change - encourage ongoing progress reporting - highlight achieved and future milestones. Make change stick - Reinforce the value of successful change via recruitment, promotion, new change leaders. Weave change into culture. FOR YOUR REFERENCE: Kotter's eight step model is explained more fully on his website www.kotterinternational.com.

Other Approaches to Change Management The McKinsey 7-S Framework Ensuring That All Parts of Your Organization Work in Harmony ACTION LEARNING FOR CHANGE - Principles of Action Learning - can be used to enhance performance and help manage change in the workplace. Much has been written about the challenges of managing change in organisations and the importance of keeping people motivated and positive throughout the process. The core principle is that participants learn best when reflecting upon and resolving their own work problems with support from a group of colleagues.  AGILE CHANGE MANAGEMENT– Managing Change needs to go faster