1. Change Management Prof. Steve Phelan Lecture 20

2. Today Continuous change at GE  Cracking the code of change (2000)  Unlocking the mystery of large scale change  GE issues LMZ Chs 43-44  Seven practices of successful organizations (1998)  The new agenda for OD (1997)

3. Cracking the code of change Two change styles (Theory E and O)  Theory E is shareholder value driven, top down, focused on structure and systems, relies on financial incentives  Theory O is commitment driven, bottom up, focused on culture and employee skills  Authors argue that management needs to do both by explicitly embracing the paradox

4. Unlocking the mystery New think  Shared ownership of vision – open dialog  Public information – we all work from the same picture  Volunteer mindset (‘what can I do?’)  Respect for whole individual head, heart, hands, spirit – equally human  Wisdom We have the knowledge and skills we need or know how to get them  System I understand how we fit together  Process We continually learn and change together

5. GE Issues Challenges of copying GE strategy/culture  What were the hardest things to copy?  Why?  What should be done? Workout  Is violating “no meeting Wed” a big deal? Internet strategy  How did it roll-out so fast?

6. Pfeffer The seven practices are:  Employment security  Selective hiring  Self managed teams  High compensation contingent on performance  Training  Reduction of status differences  Sharing information Best way of unlocking Vaill’s latent energy?

7. The New Agenda for OD Loss of community  People pretend to care more about one another than they really do Loss of employer-employee social contract  I must take care of myself Employability  Is my employer giving me the skills to find another job if I have to? Trust  Widening gap between have and have nots  Difference between what managers say and do  Lack of openness Culture Clash  Need for negotiation and conflict resolution skills

8. On mergers Interesting list of change strategies  Importance of vision/superordinate goal  People need to understand the why behind the vision  Importance of employee communication  Relationships beyond the workplace  A few off-site meetings together early  Proximity was key  Getting on with it/rapid decision making  Walk the talk  Don’t forget the customer Very similar to our merger simulation

9. Managing discontinuities List of emerging discontinuities  Globalization  Deregulation/privatization  Volatility (need for flexibility)  Convergence of technologies  Indeterminate industry boundaries  Standards  Disintermediation  Eco-sensitivity What about terrorism, oil? Not even anticipated