Change Management Major References: Chapter 13, Essential VCE Business Management Unit 3 & 4 Jeffery, M (2013). Change Management, VCTA Compak issue 6

Change Change is any alteration to an organisation and/or its work environment. Taking an existing organisation, altering it and establishing a new or altered form. Changes can be; Proactive: initiate change Or Reactive: responding to events or external changes once they have already occurred.

Change Management Change management is a structured approach to shifting individuals, teams and organisations from the current state to the desired future state. Employees may resist change, but effective change management will help them adapt and embrace change. Change occurs to ensure that an organisation remains competitive, abide by regulations & ultimately survives.

To manage change successfully you need:  Vision  Values  Strategy  Resources  Capability  Motivation  Feedback

Change Pressure Change pressure is any factor that forces or creates stimulus for change. It is important that all organisations anticipate the need for change, plan for it and implement it effectively. If they do not do this, they will fall behind their competitors and/or become irrelevant.

Internal Pressures for Change  P

Operative Environment Sources of Change  P

Macro environment sources of change 

Force field analysis Kurt Lewin developed concept of force-field analysis as a tool to understand problems and the effects of change on an organisation. This analytical approach involves four steps: 1 defining the target of change 2 identifying the forces that act to drive and those that act to restrain 3 analysing the forces that can be changed 4 developing an action plan about what can be changed.

Driving and restraining forces for change

Examples of driving forces for changeExamples of restraining forces for change A positive corporate culture where employees are more likely to take a positive view of change. Employees feel alienated from the organisation and do not feel appreciated. Therefore, they are less likely to embrace change and undertake proposed changes. A positive relationship between employees and management. Employees and management distrust each other. There is a lack of consultation. Change is not accepted or trusted. A management style based on consultation and employee participation. The use of an autocratic management style may mean that employees do not trust or understand the need for change. The organisation is able to plan ahead and put strategies in place ahead of time. The organisation has not been proactive and has not anticipated the need for change. The effect of this is that there is little time to implement change. High productivity means that an organisation can easily modify operations in order to accommodate change. Low productivity may mean changes may affect profitability.

Successful change is influenced by whether the change is being driven by driving or restraining forces. When driving forces are dominant the change is more likely to be successful. However, if the driving forces are met by restraining forces at a similar level, it is less likely that the change will be successful.

Role of leadership If change is to be successfully implemented, it is important that there is an effective leadership team in place to drive and oversee the change. Successful change managers (change agents) must:  articulate the organisational vision for the future (‘this is what we want to achieve and this is how it will be done’)  motivate and inspire staff to work towards successful change as envisaged  have strong and effective communication and interpersonal skills  have effective and clear plans and strategies developed before undertaking the change  gather the necessary resources to implement the change.

Role of leadership Effective change management also requires managers to:  perform an accurate diagnosis of the current situation and accurately anticipate what is likely to occur in the future (proactive analysis and planning)  adapt their behaviour to suit the situation at hand (situational approach)  communicate their expectations and vision to those being led effectively, which includes coaching and articulation of the vision. In doing this they will develop positive relationships with different stakeholder groups affected by the change.

John Kotter The most crucial factor in successful change management is ‘winning people’s hearts and minds’. Kotter believes that for successful change management to occur, the manager/leader responsible for implementation of the change must take into account all elements of the organisation, including both:  visible (obvious) factors—such as policies, uniforms and procedures  non-visible (hidden) factors—such as people’s aspirations, beliefs, feelings, the corporate culture and the personalities involved.

Kotter’s eight- step theory for successful change management Note: this image does not use the same terms as the textbook, rather it is a simple overview. Sourced: tudleadership.wordpress.com tudleadership.wordpress.com

1 Create the urgency for change Inspire people to want to change. Develop a sense of urgency around the need for change to help spark the initial motivation needed to get things moving. ‘We need to change because …’

2 Form a powerful coalition Assemble a group of leaders to lead the organisation through the changes. Get the right people in place with the right emotional commitment to making the change successful. These people must have the required skills to introduce the change. ‘These people are the best choice to guide you through the change.’

3 Create a vision for change Clarify how this vision will be better than what has happened in the past. A vision will help everyone understand what is being asked of them and directions given to them will make sense. ‘It will be better because …’

4 Communicate the vision Communicate the essential aspects of the vision. Everyone must understand and accept the strategy and work towards achieving the vision. All aspects of operations need to be tied to the vision. ‘It will be best to achieve our goals this way because …’

5 Empower Others Continually check for barriers to change. Remove obstacles. Identify change leaders who can implement the change and reward those who can make the change happen. ‘You have the authority to …’

6 Create short-term wins Create short-term targets (rather than large- scale targets) that become short-term successes, as these will help motivate staff. Change does not occur overnight. ‘One step at a time. Be patient …’

7 Build on the change After every success in the process, analyse what went right and what needs improving. Set goals to continue building on the momentum that has been achieved and encourage continuous improvement. ‘Keep pushing one step at a time.’

8 Anchor the change in corporate culture Institutionalise new approaches and create a new culture so the changed state becomes the norm. Include change ideals and values when hiring and recruiting staff. Make plans to replace key leaders of the change team as they move on. ‘We will keep it going by …’

Characteristics of an change-ready organisation A change-ready organisation has the following characteristics:  a decentralised organisational structure  a participative management style  encourages staff ideas and risk-taking  breaks down barriers between departments so that they work as a team  puts an emphasis on leadership and people  adopts a client/customer focus  establishes informal links at all levels  is enabling rather than controlling.

Low-risk vs. High-risk change practices Low RiskHigh Risk Two- way communication between employees and employers Threatening employees who do not agree with strategies Participative management style, employees help in decision making (sense of ownership) Manipulation of a situation, distorting facts Support (counselling and time) for those going through change Use of autocratic management style, like input from employees Team work