1 Leading & Managing Change February 9, 2010 MGMT-4000 Linda Miklas, Christina Finegold Harvard University

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3 Key Questions  What is Change Management?  What do we know about change?  How do we successfully manage change in an organizational context?  What goes wrong most often?

4 What is Change Management?  Change management is the continuous process of aligning an organization with its marketplace- and doing so more responsively and effectively than competitors. ~Lisa M. Kudray& Brian H. Kleiner, “Global Trends in Managing Change,” Industrial Management 1997  Change management is the formal process for organizational change, including a systematic approach and application of knowledge. Change management means defining and adopting corporate strategies, structures, procedures, and technologies to deal with change stemming from internal and external conditions. ~Society for Human Resource Management, Change Management Survey Report 2007  Change management is a critical part of any project that leads, manages, and enables people to accept new processes, technologies, systems structures, and values. It is the set of activities that helps people transition from their present way of working to the desired way of working. ~Lambeth Change Management Team, Change Management Toolkit  In thinking about what is meant by “change management,” at least four basic definitions come to mind: The task of managing change The task of managing change An area of professional practice An area of professional practice A body of knowledge A body of knowledge A control mechanism A control mechanism ~Fred Nikols, “Change Management 101: A Primer,” Distance Consulting 2006 Source: 2008 Corporate Executive Board, Corporate Leadership Council’s “Change Management Fundamentals”

5 Dynamics of Change (Individual)  No Matter How Exciting the Change….Expect a Sense of Loss  No Matter How Competent People Are….Expect a Sense of Confusion and Ambiguity  To varying degrees….Expect Resistance  Expect the Loss and Ambiguity to Lead to a Deterioration of Trust and a Sense of Self- Preservation

6 Dynamics of Change (Organization)  Communications Deteriorate  Productivity Suffers  Loss of Team Play – See Each Other as “The Competition”  Power/Turf Struggles  Morale Goes Down – Lose Commitment  Bail-Outs Occur – Lose Good People

7 Eight Stages of Transformation  Establishing a sense of urgency  Forming a powerful guiding coalition  Creating a vision  Communicating the vision  Empowering others to act on the vision  Planning for and creating short-term wins  Consolidating improvements and….  Institutionalizing new approaches Source: Why Transformation Efforts Fail, Kotter, John P. Harvard Business Review 1995

8 Leading Change The Art of Balancing content, processes and employees’ emotions and behaviors  Employee trust  Employee empowerment Transition Management Team Source: Managing Change: The Art of Balancing Jeanie Daniel Duck, Harvard Business Review, 1993

9 Leading Change: TMT Responsibilities  Establish context for change  Stimulate conversation  Provide resources  Coordinate projects  Ensure congruence of messages and behaviors  Provide opportunities for joint creation  Anticipate and address people problems  Prepare the critical mass Source: Managing Change: The Art of Balancing, Duck, Jeanie Daniel, Harvard Business Review, 1993

10 Leading Change  Foster adaptation  Embrace disequilibrium  Generate leadership  Take care of yourself Source: Leadership in a (Permanent) Crisis, Heifetz, Ronald, Grashow, Alexander & Linsky,Marty, Harvard Business Review, 2009

11 10 Commandments for Implementing Change Todd Jick 1. Analyze the organization and its need for change 2. Create a shared vision and common direction 3. Separate from the past 4. Create a sense of urgency 5. Support a strong leaders role 6. Line up political sponsorship 7. Craft an implementation plan 8. Develop enabling structures 9. Communicate, involve people and be honest 10. Reinforce and institutionalize the change

12 What are the commonalities?

13 Change versus Transition Change is: an event It is situational and is external to us  Something old stops  Something new begins

14 Transition is very different: Think about the times you’ve moved…  How long did it take for you to move your “stuff” from point A to point B?  How long did it take you to feel at home again in the new place?

15 The difference?  Change is situational  Transition is psychological

16 The Three Phases of Transition 1. The Ending Losing Losing Letting go…getting closure…saying goodbye Letting go…getting closure…saying goodbye All transitions start with endings All transitions start with endings 2. The “Neutral Zone” Chaos, confusion, unsettled feelings, “in-between” Chaos, confusion, unsettled feelings, “in-between” Could also be experienced as freeing Could also be experienced as freeing 3. The New Beginning A whole new chapter A whole new chapter Sense of renewal and often increased energy Sense of renewal and often increased energy Fully moving on Fully moving on NOTE: These are not linear “steps” and can overlap. Da Capo Lifelong Books; third edition, 2009 Source: Managing Transitions: Making the Most of Change, Bridges, William, Da Capo Lifelong Books; third edition, 2009

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18 Tips for Getting through each Phase  Acknowledge who is losing what  Mark the ending  Let people take a piece of the old way with them  Set sort-term goals  Strengthen intragroup activities  Consider a TMT  Explain the purpose  Paint a picture  Lay out a step-by-step plan  Give each person a part Da Capo Lifelong Books; third edition, 2009 Source: Managing Transitions: Making the Most of Change, Bridges, William, Da Capo Lifelong Books; third edition, 2009

19 Circle of Influence From Stephen Covey’s, The Seven Habits of Highly Effective People Concern Influence Who/what can help me succeed? Who/what might serve as a barrier to my success?

20 Skills for Managing Change  Political Skills Diplomacy, ability to engage a large group Diplomacy, ability to engage a large group  Personal Skills Communicating, listening, understanding different viewpoints Communicating, listening, understanding different viewpoints  Analytical Skills Workflow operations, systems analysis, financial analysis Workflow operations, systems analysis, financial analysis  Systems Skills Technological and how people, industries and economies interact Technological and how people, industries and economies interact  Business Skills Understanding how the business works so you can understand how it will change Understanding how the business works so you can understand how it will change Source: 2008 Corporate Executive Board, Corporate Leadership Council’s “Change Management Fundamentals”

21 Why Transformation Efforts Fail  Not establishing a sense of urgency  Not creating a powerful enough guiding coalition  Lacking a vision  Undercommunicating the vision  Not removing obstacles to the new vision  Not systematically planning for and creating short-term wins  Declaring victory too soon  Not anchoring changes in the corporation’s culture Source: Why Transformation Efforts Fail, Kotter, John P. Harvard Business Review 1995

22 Ways to Heighten Anxiety  1. Mandate a change without explaining why it’s needed.  2. Assume people understand the new “regime” and how to behave differently (new skills are often required).  3. Stay behind closed doors.  4. Neglect to deal with your own anxiety. Source: The Change Monster, Duck, Jeanie Daniel, Three Rivers Press, 2001

23 References   2008 Corporate Executive Board, Corporate Leadership Council’s “Change Management Fundamentals.”   Why Transformation Efforts Fail, John P. Kotter, Harvard Business Review, 1995   Managing Change: The Art of Balancing, Jeanie Daniel Duck, Harvard Business Review 1993   Leadership in a (Permanent) Crisis, Heifetz, Ronald, Grashow, Alexander, Linsky, Marty, Harvard Business Review 2009  Implementing Change, Jick, Todd, Harvard Business Review 1991  The Seven Habits of Highly Effective People. Covey, Stephen R., 2004, Free Press.  Managing Transitions: Making the Most of Change. Bridges, William, 2009, Da Capo Lifelong Books; third edition.   The Change Monster: The Human Forces that Fuel or Foil Corporate Transformation & Change. Duck, Jeanie Daniel, 2001, Three Rivers Press.  Reframing Organizations: Artistry, Choice, and Leadership. Bolman, Lee G. and Deal, Terrence E., 2008, Jossey-Bass.