1. 16 Leading Change

2. Chapter Objectives Recognize social and economic pressures for change in today’s organizations. Implement the eight-stage model of planned major change and use everyday strategies for gradual change. Use techniques of communication, training and participation to overcome resistance to change. Effectively and humanely address the negative impact of change. Expand your own and others’ creativity and facilitate organizational innovation.

3. Change Leadership about change rather than stability More so in recent times Old patterns of behavior and attitudes no longer work No guarantee that new ways will succeed: uncertainty

4. Key characteristics of leaders with successful change projects Define themselves as change leaders Demonstrate courage Believe in employees’ capacity to assume responsibility Able to assimilate and articulate values that promote adaptability Recognize & learn from own mistakes Capable of managing complexity, uncertainty and ambiguity Have vision and can describe it in vivid terms

5. Ex. 16.1 Forces Driving the Need for Major Organizational Change Globalization, technological change, e-business, increased competition, changing markets More threats More domestic competition Increased speed International competition More opportunities Bigger markets Fewer barriers More international markets More large-scale change in organizations Reengineering Horizontal organizing – teams Networks Quality programs New technologies and products Mergers, joint ventures Consortia Virtual and global teams Strategic change Cultural change Learning organization

6. Ex. 16.2 The Eight-Stage Model of Planned Organizational Change 1. Establish a sense of urgency 2. Form a powerful guiding coalition 3. Develop a compelling vision and strategy 4. Communicate the vision widely 5. Empower employees to act on the vision 6. Generate short-term wins 7. Consolidate gains, create greater change 8. Institutionalize changes in the org. culture

7. The Eight-Stage Model Establish a sense of urgency: nothing like crises/threats to thaw resistance to change Establish coalition: with enough power to guide change; then developing teamwork Developing vision/strategy: compelling vision motivates people Communicate the vision/strategy: at this stage, use coalition of change-agents; they set example by modeling new behaviors

8. The Eight-Stage Model (Contd) Empower employees to act on vision: getting rid of obstacles; give knowledge, resources & discretion Generate short-term wins: celebrate employees who do well towards change Consolidate improvements: build on credibility achieved by short-term wins to attack larger problems Institutionalize new approaches in the culture

9. On a daily basis, can use other measures for incremental change: Disruptive self-expression: doing something (reflects values you want to introduce) yourself that others would notice Verbal Jujitsu: Turn opponent’s negative attitudes/behaviors to opportunities Variable-term opportunism: Strategic alliance building

10. Ex. 16.3 A Range of Everyday Change Strategies Private Leader working alone Public Leader working with others Disruptive self- expression Variable-term opportunism Verbal Jujitsu Strategic alliance-building

11. Personal Compact: understanding why people resist change The reciprocal obligations and commitments that define the relationship between employees and the organization People resist changes that violate the personal compact

12. Personal Compact Employees perceive that change violates PC because:  Self interest: they think that change will take away something of value to them – power, prestige, pay, etc  Uncertainty: how change will affect them  Different assessments & goals: people may assess change differently than those who propose it

13. Overcoming resistance Using 8-stage model; daily strategies Also:  Communication & Training: open, honest communication – reduces uncertainty and gives some measure of “control”. Training to equip employees with changed conditions  Participation & involvement: creates buy-in & commitment (but can be time consuming)  Coercion: works when time is critical/in crisis; but not good in long-term – employees may sabotage changes

14. Downsizing *Change not always good *Downsizing: Intentionally reducing the size of a company’s workforce -Involve employees -Communicate more, not less -Provide assistance to displaced workers -Help survivors thrive

15. Innovation Terms Creativity  The generation of new ideas that result in improved efficiency and effectiveness of the organization Idea Incubator  A safe harbor where ideas from employees throughout the organization can be developed without interference from company bureaucracy or politics

16. Innovation Terms (contd.) Corporate Entrepreneurship  Internal entrepreneurial spirit that includes values of exploration, experimentation, and risk taking Idea Champions  People who passionately believe in a new idea and actively work to overcome obstacles and resistance

17. Innovation: necessary elements in the organization Alignment: for creativity to benefit the organization, need for people’s interests to align with organization goals Self-initiated activity: Leaders can unleash deep- seated motivations for creativity & innovation (use idea champions) Unofficial activity: allow employees leeway to experiment & dream (free-time) Diverse stimuli: invite people for talks, job rotation, etc Internal communication: frequent contact with interdisciplinary networks

18. Ex. 16.4 Characteristics of Innovative Organizations and Creative People Social competence Emotionally expressive Loves people Within-company communication Open-mindedness Conceptual fluency Enjoys variety Diverse stimuli Self-confidence Nonconformity Curiosity Unofficial activity Interdependence Persistence Energy Self-initiated activity Commitment Focused approach Alignment The Creative IndividualThe Innovative Organization

19. Ex. 16.5 Stages in the Creative Process Recognition of problem/opportunity Evaluation and implementation InsightIncubation Information gathering

20. Creative Process: notes Stage 3 (incubation): allows subconscious to mull over it. Sleep. Routine, mindless activity. Stage 4 (Insight): while watching TV. Showering. Try day-dreaming. Stage 5 (Evaluation): keep fit. Eat right. Take note of intuitive hunches