Leading and Managing Change JUST THINK ABOUT HOW WE HANDLE CHANGE IN OUR EVERYDAY LIVES.

Leading and Managing Change Identify reasons that act as stimulants to change. Summarize the sources of individual and organizational resistance to change. 3. To understand how leadership is linked to change activities L E A R N I N G O B J E C T I V E S Page No.

Reasons for change External Causes Internal Causes Government Policies Change in Leadership Changes in the Economy New Technology Competition Decline in Profitability Technology Union Actions Pressure groups

Managing Planned Change Goals of Planned Change: Improving the ability of the organization to adapt to changes in its environment. Changing the behavior of individuals and groups in the organization.

Magnitude of Change First-Order Change. Change is continuous in nature and involves no major shifts in the way an organization operates. This type of change is often associated with the continuous improvement movement. Second-Order Change. Radical change; major shifts involving many different levels of the organization and many different aspects of business. These are major and complex changes.

What can change agents change? Structure Strategy Technology People Process

Change Management Activities Motivating Change Creating Vision Effective Change Management Developing Political Support Managing the Transition Sustaining Momentum

Motivating Change Sensitize the organization to pressures for change Creating Readiness for Change Sensitize the organization to pressures for change Identify gaps between actual and desired states Convey credible positive expectations for change Overcoming Resistance to Change

Resistance to Change Forms of Resistance to Change Overt and immediate Voicing complaints, engaging in job actions Implicit and deferred Loss of employee loyalty and motivation, increased errors or mistakes, increased absenteeism

Sources of Individual Resistance to Change

Sources of Organizational Resistance to Change

Overcoming Resistance to Change Tactics for dealing with resistance to change: Education and communication Participation Facilitation and support Benefits and provide incentives Negotiation Manipulation and cooptation Coercion Psychological safety

Creating a Vision Discover and Describe the Organization’s Core Ideology What are the core values that inform members what is important in the organization? What is the organization’s core purpose or reason for being? Construct the Envisioned Future What are the bold and valued outcomes? What is the desired future state?

SOUTHWEST AIRLINES Our vision is to expand our locations both domestic and overseas by being the largest and most profitable airline company to achieve both short and long-haul carriers efficiently and with low cost. Also to be an airline carrier that has the most productive workforce to guarantee the best flight possible for each and every passenger

McDonald "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."

Developing Political Support Assess Change Agent Power Identify Key Stakeholders Influence Stakeholders

Sources of Power and Power Strategies for Change Agents Individual Sources of Power Power Strategies Knowledge Playing it Straight Knowledge Playing it Straight Using Social Networks Others’ Support Using Social Networks Others’ Support Going Around the Formal System Personality Going Around the Formal System Personality

The Politics of Change Impetus for change is likely to come from outside change agents. Internal change agents are most threatened by their loss of status in the organization. Long-time power holders tend to implement only incremental change. The outcomes of power struggles in the organization will determine the speed and quality of change.

Managing the Transition Activity Planning What’s the “roadmap” for change? Commitment Planning Who’s support is needed, where do they stand, and how to influence their behavior? Change-Management Structures What’s the appropriate arrangement of people and power to drive the change?

Change as a Transition State Desired Future State Current State Transition State

Sustaining Momentum Provide Resources for Change Build a Support System for Change Agents Develop New Competencies and Skills Reinforce New Behaviors Stay the Course

Lewin’s Three-Step Change Model

Lewin’s Three-Step Change Model

Unfreezing the Status Quo

Human Resource Shifts From Perform task Reward for doing Skills life equal to career life Training as 1% of payroll Individual treated as cost To Perform task and provide knowledge Reward learning and doing Skills obsolescence at 20% p.a. Training as 7% of payroll Individual viewed as asset

Human Resource Shifts From Teach Productivity Teach the Need to Change Customer Satisfaction To Teach Innovation & Creativity Teach the Process of Change Society / Stakeholder Satisfaction