1. Managing Change April 13, 2000 Peter Levin, MBA, Ph.D. RHR International Company 949-364-8909 CSULA

2. “It’s not so much that we’re afraid of change, or so in love with the old ways, but it’s the place in between that we fear… it’s like being between trapezes. It’s Linus when his blanket is in the dryer. There’s nothing to hold on to.” - M. Ferguson

3. Class agenda Part I: Organizational Issues and change Part II: The nature of change. Part III: Leading others through change.

4. Characteristics of The Adaptive Organization The Prerequisites for Change Characteristics of Effective Change Sponsors What Effective Change Leaders Need to Do The Internal Players in the Change Process and their Roles The Role of Outside Consultants Part I: Organizational Issues

5. The Adaptive Organization Willingness to make change Identifies problems quickly ä Internal and external looking Implements solutions rapidly Focus on innovation ä Upward communication Trust Risk taking is rewarded Candidness ä Open to feedback Enthusiasm Long-term focus Skill Development Learning Organization

6. Prerequisites for Change V ision: Develop, articulate and communicate a shared vision of the desired change N eed: A compelling need has been developed and is shared M eans: The practical means to achieve vision: planned, developed and implemented R ewards: Aligned to encourage appropriate behavior compatible with vision and change F eedback: Given Frequently

7. An Effective Change Sponsor Must Have P ower: to legitimize change P ain: Personal Stake V ision: Total in-depth view P ublic /P rivate R ole: Commitment and ability to support change publicly/ meet privately with agents P erformance M anagement: Ability to reward/confront S acrifice: Pursue change despite personal price

8. What Effective Change Leaders Do E mbrace change when it’s needed D evelop a vision for change C ommunicate effectively S hake things up by challenging status quo and encouraging others to do the same S tay A ctively Involved by walking the walk and being visible about it. D irect, R eview I mplementation of change - continued participation - never done attitude. Be in position to notice and coach.

9. Roles: The Change Players Sponsors : Senior management leaders - the driving force of change - must walk the walk. Advocates : Allies of leaders, deploy the vision - communicate - involve - sell - MOTIVATE Agents: Influence sponsors’ commitment, target resistance, measure readiness, assess existing people/structures Targets : Everyone in organization - develop, train, reinforce, support

10. Role of Consultants A ssessment of: management, key players, barriers, opportunities C oach/ D evelop/ T rain: help people adopt new behavior P lan: Assist in process/knowledge V alues / V ision: Facilitate their development R edesign O rganizational F actors: Rewards, Reports, Re-engineer C ommunications: Facilitate the process P roject M anagement A ssistance

11. Introduction Change in business is not new — it’s just accelerating due to… New technology. Global competition. Growth & increased complexity. The result: Change or die Part II: The Nature of Change

12. What to expect from change Sense of loss, confusion. Mistrust and a “me” focus. Fear of letting go of that which led to success in the past. People hold onto & value the past. High uncertainty, low stability, high emotional stress Perceived high levels of inconsistency. High energy — often undirected. Control becomes a major issue. Conflict increases — especially between groups.

13. Individual prerequisites for change to occur Thinking & understanding Emotional/ Motivational Behavioral Head Heart Hands Why should I change? What’s in it for me? What do I do differently?

14. Change management Effective Change Equals Altering Mind-set Harnessing Motivation Shaping Behavior The Effective Management of Change Involves An Integrated Approach In Each Of These Three Arenas

15. Stages of change management “Coming to Grips with the Problem” “Working through the Change” “Attaining and Sustaining Improvement”

16. Strategy/change implementation “Coming to Grips with the Problem” 1. Arenas of Change Stages of Change Management 2. “Working through the Change” 3. “Attaining and Sustaining Improvement” Changing Behavior and Developing Competency and Capability Behavior (Capability) Mind-set (Thinking/ Understanding) Breaking the Conventional Mind-set and Generating a Picture of the Future Dealing with Reactions to Loss and Creating the Will to Succeed Motivation (Emotional/ Intuitive Dynamics)

17. 1. Identify (roughly) the stage person/group is in. 2. Determine obstacles/arenas: a. Head b. Heart c. Hands d. All of the above 3. Use tools to move through obstacles. ä May need several simultaneously. 4. Recognize and acknowledge steps forward. 5. Cycle back to Step 1. Part III: Leading Others through Change

18. Understanding what stage of change they’re in QuestionsStage Do they see a need for change? How uncomfortable are they with the status quo? Do they have any sense of urgency about changing? Are they struggling with making the change work? Are they looking for ways to make it work? Are they communicating with others involved in the change, to get salutations to problems, share Best Practices, etc. Are they looking for ways to leverage the change? To enhance it? One: Coming to grips with the problem. Two: Working through the change. Three: Attaining & sustaining improvement. One: Coming to grips with the problem. Two: Working through the change. Three: Attaining & sustaining improvement.

19. The technology of leading sustainable change Mind-set (Thinking/ Understanding) Stage One: Arenas of Change Stages of Change Management Motivation (Emotional/ Intuitive Dynamics) Behavior (Capability) Gather data to convince you/others that old way no longer works. Confront myths, assumptions, & beliefs that prevent seeing problem & changing. Increase dissatisfaction with old ways. Increase confidence that change is achievable. Outline costs of old way & benefits of new way. Form team to gather data. Have management talk about data & need for change. Assess individual readiness to change. Identify specific behaviors to change. “Coming to Grips with the Problem”

20. The technology of leading sustainable change Mind-set (Thinking/ Understanding) Stage Two: Arenas of Change Stages of Change Management Motivation (Emotional/ Intuitive Dynamics) Behavior (Capability) “Working through the Change” Create a vision of the future & articulate the new mind-set. Help people understand both the big picture & the details. Communicate the purpose & benefits broadly. Help people make the link between solving today’s issues & the new plan. Hold “reality check” meetings to work through the threats, losses, and resistance. Work through the leaders’ emotion/ resistance first. Use individual gain/loss analysis as as tool. Discuss how to manage stress. Be supportive of one another. Develop a new profile of leadership success. Evaluate the top levels of management in stores. Involve employees in building change plans. Reward successes; expect & learn from mistakes. Drive individual behavior change.

21. The technology of leading sustainable change Mind-set (Thinking/ Understanding) Arenas of Change Stages of Change Management Motivation (Emotional/ Intuitive Dynamics) Behavior (Capability) “Attaining & Sustaining Improvement” Continually update vision of desired future & teamwork. Create forum for feedback & continuous learning. Continue to articulate why’s & benefits. Celebrate & reward successes. Deal with people who will not change. Establish two-way communication. Involve people for buy- in. Continue to support each other in managing stress & change. Make sure systems & rewards reinforce desired behaviors. Train incoming people in the new behaviors. Coach, give feedback, & reinforce new behavior. Deal with people who cannot change. Stage Three:

22. Addressing mind-set Learn it thoroughly yourself. Build relationships. Explain the purpose of change. Help them understand & teach concept. Articulate the benefits. Link daily activities to their higher purpose & benefits. Repetition: Provide frequent & consistent communication about change & what’s needed. Paint a picture of the successful future using best practices. Working with Mind-Set

23. Addressing behaviors Model desired behaviors & attitudes. Clearly define desired behaviors & behaviors that need to change. Give feedback frequently to reinforce changed behavior & correct wrong behavior. Coach & teach desired behavior. Working with Behaviors

24. Addressing behaviors Identify training needs & communicate upwards. Create goals to work toward: a vision of success. Help people create specific, concrete behavior-change plans as needed. Communicate in multiple forms. Working with Behaviors

25. Summary You have to be comfortable with the change before you can get others to change. People can’t (or don’t want to) change when they don’t understand. ä What, why, how, WIIFM. You can’t intervene until you understand the situation. Resistance is part of the change process. ä Work with it. Address change at all three levels to be successful. Sustainable change occurs in steps. ä Define your priorities. Don’t take on too much at once.

26. A stepped approach to change Start X A journey of a thousand miles occurs one step at a time. Success