© Philippe Leliaert September 2004 Slide 1 Management of Change & Influencing Skills in China feat. LingHe Simulation ® LingHe Simulation ® is a registered trademark of AlphaLabs, France

© Philippe Leliaert September 2004 Slide 2 Change Management & Influencing Skills in China  09:00 – 10:00 Introduction  change dynamics & resistance to change  Introduction to the LingHe Simulation ®  10:00 – 12:30 the LingHe Simulation ® - Change Management business game lunch  13:30 – 14:00 Lessons learned  14:00 – 15:00 innovators & resisters: how to spot them, … and how to influence them  15:00 – 15:45 importance of Formal vs Informal structures  15:45 – 16:30 use and misuse of authority and coercion  16:30 – 17:00 Feedback, Key lessons & Closing Remarks

© Philippe Leliaert September 2004 Slide 3 Management of Change & Influencing Skills in China An event organised by  Maastricht School of Management  INSEAD  Nanjing University School of Business … and co-financed by  the European ASIA IT&C Programme

© Philippe Leliaert September 2004 Slide 4 The European ASIA IT&C Programme  an initiative from the European Commission  designed to promote mutual benefit & understanding between the European Union and Asia  aims at improving eight key sectors through the innovative use of information technology and communication  for non-profit making partnerships

© Philippe Leliaert September 2004 Slide 5 Change Initiatives Benchmarking Business Process Re-engineering Customer Retention Customer Satisfaction Surveys Cycle Time Reduction Core Competencies Self-Directed Teams Shareholder Value Analysis & EVA TQM Source: Management Tools & Techniques (Bain & Co, 1995) Empowerment Network Organisations eCommerce eBusiness Knowledge Management ERPXRP Balanced Scorecard

© Philippe Leliaert September 2004 Slide 6 Typical outcomes: 50 to 70% of Re-engineering Initiatives FAIL <20% of IT projects completed on time and within budget; ~30% of IT projects cancelled before completion (Standish Group report, 1995) sophisticated Management Systems are seldom used or mis-used … … and generate a lot of FRUSTRATION Change Initiatives : facts & figures

© Philippe Leliaert September 2004 Slide 7 Key Factors: Organisational resistance82% Insufficient executive sponsoring/support72% Unrealistic expectations65% Inadequate programme management54% Unclear business case46% Lack of qualified resources44% Scope of expansion/uncertainty44% Ineffective leadership43% Change Initiatives : facts & figures

© Philippe Leliaert September 2004 Slide 8 Dynamics of Change Change is a Process in 4 Steps:  Awareness: people become aware of the need  Interest: people show an interest – they are curious to know more about it  Trial: people want to try – to test & evaluate  Adoption: people become regular users

© Philippe Leliaert September 2004 Slide 9 Dynamics of Change Attitude towards Change / Resistance to Change Attitude towards change Early Adopters Resisters “Outlaws” Late Majority “10-proof people” Early Majority “1-proof people” 5% 45% 5% Innovators “Pioneers” positivenegative

© Philippe Leliaert September 2004 Slide 10 Dynamics of Change Speed of Adoption / Ease to Convince “easy”“very hard” “hard”“normal” 5% 45% 5% Attitude towards change positivenegative

© Philippe Leliaert September 2004 Slide 11 LingHe Simulation ® a Business Game… ?  Management “flight simulators”  Flexible  Risk-free  Fun  Used at major business schools and in corporate executive & management development programmes LingHe Simulation ® is a registered trademark of AlphaLabs, France

© Philippe Leliaert September 2004 Slide 12 LingHe Simulation ® - Briefing  Context  Your Mission  Tactics / Initiatives  The User Interface  Supporting Materials Turn to your PC

© Philippe Leliaert September 2004 Slide 13  Context  click on “YOUR MISSION”  Why this particular context ?  privatisation of State-owned Company  local management have no real motivation to change  HQ have no real power base to impose change  traditional top-down ‘rule by edict’ no longer works LingHe Simulation ® - Briefing

© Philippe Leliaert September 2004 Slide 14  The impact for LingHe Company  click on “The Change Plan”  What is a Performance Management System ? (PMS) LingHe Simulation ® - Briefing

© Philippe Leliaert September 2004 Slide 15  What is the aim of the business game ?  click on “YOUR CHALLENGE”  So what do we do ?  click on “HOW TO GO ABOUT IT” LingHe Simulation ® - Briefing

© Philippe Leliaert September 2004 Slide 16 Define your Strategy  from: clear objectives to: “how to get there”  Determine which tactics will you use, with whom, and when LingHe Simulation ® - Briefing

© Philippe Leliaert September 2004 Slide 17  choose among 20 different initiatives (tactics)  initiatives are aimed at  gathering information  taking direct action to convince one or several managers, and thus influence their willingness to adopt the proposed innovation.  immediate feedback on impact of your decision LingHe Simulation ® - Briefing

© Philippe Leliaert September 2004 Slide 18 LingHe Simulation ® - Briefing  Study the Tactics / Initiatives  Do not take at face value (eg. “breaks”, “sandwich”)  Discuss & Agree on Strategy  Determine which tactics will you use, with whom, and when  You may at any time review your strategy (take note of when & why)

© Philippe Leliaert September 2004 Slide 19 Good luck !

© Philippe Leliaert September 2004 Slide 20 LingHe Simulation ® - Debriefing  Lessons learned: DO’s & DON’Ts  Informal Influence / Use of Power  Types  How to spot them  How to deal with them  Overcoming Resistors  Choice of Tactics

© Philippe Leliaert September 2004 Slide 21 DO’s DON’Ts..

© Philippe Leliaert September 2004 Slide 22 Expectations of Adoption Process Time Results A B C or something else … ?

© Philippe Leliaert September 2004 Slide 23 Expectations of Adoption Process Bandwagon effect (e.g. Jay-walkers, line cutters, stock markets) The presence of a critical mass of adopters is reason enough for others to adopt without (much) management intervention Hence: Tipping Point = point at which future adoption is self-generating (Wow!) “S-shaped” adoption curve

© Philippe Leliaert September 2004 Slide 24 Adoption is self-generating past the Tipping Point Tipping Point © Brian Uzzi, Kellogg Graduate School of Management

© Philippe Leliaert September 2004 Slide 25 How to Spot them  Accumulate Knowledge (knows prices to the penny; warranty difference)  Like to share knowledge all the time  High Awareness and Interest  “experts” What they do  experiment with risky but promising innovations  unselfish credibility is infectious to others Influence Tactics  Magazine, , Memo, Bulletin Board  Face-to-Face meeting (  time consuming !!)  Task Force (  risky !!) Innovators … “Experts” © Brian Uzzi, Kellogg Graduate School of Management

© Philippe Leliaert September 2004 Slide 26 How to Spot them  Know a lot of people in diverse parts of firm  Are ‘Brokers’ close to key organizational players  do many shared activities  Interest increases with trial by ‘Experts’ What they Do  Stay well connected and well informed  Spread ideas (contagious element that infects early majority) Influence Tactics  Dinner Meetings; (Face-to-Face)  Workshop, Staff Meeting, External Speaker, (Task Force) Early Adopters … Brokers © Brian Uzzi, Kellogg Graduate School of Management

© Philippe Leliaert September 2004 Slide 27 How to Spot them  Look for percentage increases  Like predictable returns  Risk is not exciting  Think ‘Experts’ waste their time  Pay attention to Brokers & Status What they Do  Get the bandwagon going with a critical mass of adopters Influence Tactics  Top Management meeting, Pilot testing, Staff Meeting (when enough adopters)  Directives, ‘Sandwich’, Neutralise Resisters (  risky !) Early Majority … Bandwagon begins © Brian Uzzi, Kellogg Graduate School of Management

© Philippe Leliaert September 2004 Slide 28 How to Spot them  “if it ain’t broke, don’t fix it” mentality  See change as a net gain of zero  Think ‘Experts’ waste their time  Are influenced by bandwagons, … but won’t admit it What they Do  they want to fit in, so do what’s normative  Jump on the bandwagon after a critical mass has adopted Influence Tactics  Make adoption rate salient: Broadcast, get message out, raise profile: Bulletin Board, Internal Magazine, Staff Meeting (when enough adopters)  Directives, ‘Sandwich’ (  very risky !) Late Majority … Ride Bandwagon © Brian Uzzi, Kellogg Graduate School of Management

© Philippe Leliaert September 2004 Slide 29 How to Spot them  Never support an initiative but their own  Always play “Devil’s Advocate.” What they Do  Block change effort at every stage Influence Tactics  Trade-off and Conflict scale (see further) Resisters … Last efforts (?) © Brian Uzzi, Kellogg Graduate School of Management

© Philippe Leliaert September 2004 Slide 30 Establishing ‘Personal Profiles’ Fan Wei Xia Lan Mao Ke Xu Xiaofen Zhu Jie Guo Ming Tang Quan Zhang Hang Ren Ai Peng Yanyan Ding Pai Kang Guangtao Ni Xiang An Cheng Hua Gang Yang Xuan Qiu Meng Cai Zhen Ou Ran Jia Ning Shen Ningjuan Wan Dalin

© Philippe Leliaert September 2004 Slide 31 Causes of Resistance to Change Resistance to Change may come from those who …  Feel threatened by the change (power, prestige, opportunity, career, …)  Do not understand the implications of changes  Lack trust in the ‘change agents’  F-U-D  Other: plain laziness or obstinacy

© Philippe Leliaert September 2004 Slide 32 Causes of Resistance to Change Resistance to Change may come from those who …  Have a good reason to resist

© Philippe Leliaert September 2004 Slide 33 Use of Authority… How did you react to: The LingHe Simulation®

© Philippe Leliaert September 2004 Slide 34 The LingHe Simulation® Use of ‘Risky’ Tactics - neutralise resisters - directive - ‘sandwich’  Pro  Con

© Philippe Leliaert September 2004 Slide 35 Tactics:  Demonstrate: Show how your idea may help (Workshop, Pilot)  Sell: Sell your ideas, use rewards (Face to Face, Staff Meeting)  Train: Help people to adapt (Management Training)  Negotiate: make trade-offs (Face to Face, Top Mgt Meeting, Staff Meeting)  Co-opt: Use buy-in to align moderate opponents interests with yours (Staff Meeting, Workshop, Dinner Meeting, Face to Face, Task Force)  Network: Use third parties to sell, induce tipping points, and neutralize opposition (Social Networks, Process Mapping, Short Breaks; Dinner Event)  Build Coalition: Build political support (Top Mgt Meeting, Pilot, Dinner Event)  Authority: Force compliance through punishments (Directive) Demonstrate SellNegotiateCo-opt Build CoalitionsTrain Authority CONFLICT POTENTIAL Networks based on © Brian Uzzi, Kellogg Graduate School of Management

© Philippe Leliaert September 2004 Slide 36 Change Management: using the ‘S’-curve Route of least resistance Concentrate & Strategise from the “waist down” –Focus resources on starting the process up to the point where it is self-generating (i.e. Tipping Point) –Identify the Innovators & Early Adopters

© Philippe Leliaert September 2004 Slide 37 Change Management: using the ‘S’-curve Neutralise INNOVATORS EARLY ADOPTERS RESISTORS high Resistance to Change low earlylate Timing of decision Leverage Innovators to mobilise likely supporters EARLY MAJORITY LATE MAJORITY based on © Brian Uzzi, Kellogg Graduate School of Management Enlist champions Bandwagon Effect Tipping Point

© Philippe Leliaert September 2004 Slide 38  Who are Key Influencers ?  Are they Innovators or Resisters ?  Both have a lot of support – even if not explicit  Resisters often voice the concerns of the Late Majority (ref. Maggie Thatcher)  Where are they on the track to adoption ?  How to deal with laggards ? Change Management: Formal vs Informal Structure

© Philippe Leliaert September 2004 Slide 39 Change Management: using the ‘Influencers’ Use of Power / Informal Influence low high Resistance to Change low Power- RESISTORS LATE MAJORITY Power- INNOVATORS EARLY MAJORITY Enlist champions Leverage Innovators & Brokers to mobilise likely supporters Bandwagon Effect Engage BROKERS Implicate

© Philippe Leliaert September 2004 Slide 40 The LingHe Simulation ® Main Pitfalls  Underestimation of Informal Structure  key personnel, champions, gatekeepers, …  Informal networks & power  Ignoring ‘resisters’ … (esp. Wan Dalin, Xia Ning) … has an effect on others … makes it difficult to impossible to win them over  Over-estimation of Authority

© Philippe Leliaert September 2004 Slide 41 Change is a Process :  People progress at Different Speeds  It is not a one-way Evolution : People may lose interest  Create & Maintain Momentum (waves)  Evoking Change vs Enforcing Change Key Lessons (the Human Factor)

© Philippe Leliaert September 2004 Slide 42 Change is a Process :  Match Tactics to  Profiles (e.g. Innovator vs Late Majority),  Strategies (e.g. networking), and  Timing (when in 4 phases of adoption)  Make use of the Bandwagon Effect Key Lessons

© Philippe Leliaert September 2004 Slide 43 Appropriate Timing for Tactics: The point at which tactics are likely to be more effective … The LingHe Simulation ®

© Philippe Leliaert September 2004 Slide 44 LingHe Simulation ® East vs West: lessons for Chinese managers  overestimation of Emotional Intelligence  Too much time spent on developing relations  ignoring lower management levels … may underestimate their (informal) influence … may overestimate one’s authority  risk avoidance when faced with uncertainty … yet risk is inherent / unavoidable ! LingHe Simulation ® is a registered trademark of AlphaLabs, France

© Philippe Leliaert September 2004 Slide 45 LingHe Simulation ® East vs West : lessons for Western managers  double "tipping point"  Lower management will not commit before top management  Top management will not commit unless certain of outcome  need to communicate at all levels … time consuming … use range of communication channels  reduce uncertainty & highlight benefits LingHe Simulation ® is a registered trademark of AlphaLabs, France

© Philippe Leliaert September 2004 Slide 46 "It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change" (Charles Darwin)

© Philippe Leliaert September 2004 Slide 47 Thank you for your participation Please fill in the Feedback Questionnaire

© Philippe Leliaert September 2004 Slide 48 Contact information: prof. Albert A Angehrn the Alcatel Chaired Professor of the Net Economy and E-Management, Professor of Information Technology and Entrepreneurship Director, Centre for Advanced Learning Technologies (INSEAD) ir. Philippe Leliaert MBA MSc visiting lecturer MsM & NJU project manager