1. Managing Strategic Change

2. Key Elements Diagnosis: To understand the challenge faced in trying to effect strategic Change. To do this it is useful to consider the type of change required, the wider context in which change is to occur and the specific blockages to change that exist and what forces might exist to facilitate the change process. Types of Change Context of Change Organization Culture Force field Analysis

3. Types of strategic change Incremental : Strategic development is incremental in nature. It builds on prior strategy. It is adoptive in the way it occurs(Realignment), with only occasional more (Evolution) in transformational changes. It is beneficial for the nature of change.It would build on the skills, routines and beliefs of those in the organization, so that change is efficient and likely to win their commitment. Big Bang : Approach to change might be needed on occasions. If organization is facing crises or needs to change direction very fast.This can be thought of Reconstruction as a Realignment strategy rather than fundamental change of strategic direction.Or Revolutionary as a transformational change.

4. Context of Change Contextual features & their influence on strategic change programs: Scope: What degree of change is needed Preservation: What orgn. Resources and characteristics needed to be maintained Diversity: How homogeneous are the staff groups and divisions within the orgn. Capability: What is the managerial & personal capability to implement change Capacity: What is the degree of change resources available. Readiness: How ready for change is the workforce. Power: What power does the change leader have to impose change. Time: How quickly change is needed.

5. Cultural Web to diagnose organizational context The cultural web can be used as a way of understanding Current Organizational Culture and desired future culture. Example: Current Culture ST- How things used to be; it’s their fault/ The power of chief officers SY- Symbols of privilege for sr. managers(parking,offices, secretariesetc.) P –Power preserved through heirarchy, formal committee, control over budgets. O-Hierachical and mechanistic: strong emphasis on stucturing, budgeting & bureaucracy C -emphasis on formal budgetary control / But rapid reactions to complaints and emergencies R – Overloaded problem solvers,reacting to complaints, narrowly avoiding mistakes / Get your head down and go on with the job: if things go wrong, blame someone else PAR –Strong belief about high quality service in terms of professional standard( rather than satisfying users of the service)

6. Cultural Web Cont. Future Culture: ST – Giving praise rather than blame / Talk about success rather than failures SY – Car parking by need rather than by rank/ social events with different level managers/ letters of thanks shared and circulated / CEO more outgoing and in touch with day to day affairs P – More devolved responsibility O – Emphasis on project or on task groups which could be transient/Flatter structure C – more direct feedback from customers by surveys/business plans not just budgets R –Sr. executives more exposed to staff; listening in informal gatherings / question and challenge ways of doing things PAR – Need to focus on the customer rather than professional definition of good service/Proactive problem solvers/Emphasis partnership across departments.

7. Force Field Analysis Provides initial view of change problems that need to be tackled, by identifying forces for and against change. One is pushing and others are resisting resulting a change. Key questions: What aspects of the current situation might aid change in the desired direction, and how might these be reinforced? What aspects of the current situation would block such change, and how can these be overcome? What needs to be introduced or developed to aid change? Routines, control systems,structures,symbols and power or dependency relationships can be both important blockage and facilitators to change Deciding which are blockages and which are facilitators is a helpful diagnostic basis for managing change.

8. Change Management : styles and roles Styles: Education and communication: involve the explanation of the reasons for and means of strategic change Collaboration/Participation: is the involvement of those who will be affected by strategic change in the change agenda. Intervention: is the coordination of and authority over processes of change by a change agent who delegates elements of the change process. Direction :Involves the use of personal managerial authority to establish a clear future strategy and how change will occur. Coercion: Involving the imposition of change. This is necessary if the organization is in crisis, for example.

9. Roles in Managing Change A Change Agent is the individual or group that effects strategic change in an organization Strategic Leadership: process of influencing an organization/groups in its efforts towards achieving a goal. Types of leadership: Charismatic leaders: Concered with building a vision for the organization and emerging people to achieve it Instrumental or Transactional leaders: who focus more on designing systems and controling the organization’s activities and more likely to be associated with improving current situation.

10. Levers for managing strategic change Turnaround: managing rapid strategy reconstruction. Emphasis on speed of change and rapid cost reduction and /or revenue generation. Elements of turnaround strategies: Crisis stabilization: Regain control over the deteriorating position.short term focus on cost reduction or increasing revenue. Increasing revenue: Ensure marketing mix tailored to market segments. Review pricing strategy to maximize revenue Focus organizational activities on needs of target market sector customers Exploit additional opportunities for revenue creation related to target market Invest funds from reduction of costs in new growth areas.

11. Turnaround Reducing Costs: Reduce labor costs and reduce costs of senior management Focus on productivity improvement Reduce marketing costs not focused on target market Tighten financial control Tighten control on cash expenses Establish competetive bidding for suppliers; defer creditor payments; speed up debtor payments Reduce inventory Eliminate non-profitable products/services.

12. Levers of management change Contd. Management Changes: Top Management change/ changes in the Board of Directors for three reasons; Old management may be seen as the cause of problems by stakeholders. Bringing new management with experience of turnaround management. New management from outside may bring different approaches for turnaround. Gaining stakeholder’s support: Key stakeholders like bank/financial institutions/groups may be kept clearly informed of the situations and day to day improvements that are being made. Clear assessment of power of stakeholders will become important. Clarifying the target market(s) :Target market or market segments to generate cash and grow profits and revenue generating activities on those market segments. Getting closer to customers and improving the flow of market information to senior levels of management. Re- focusing: To discontinue products or services that are not targeted eating up management for little return or not making sufficient financial contribution. Necessity of outsourcing peripheral areas of activity. Financial Restructuring :Involves the existing Capital structure,raising additional finance or negotiating agreements with creditors, especially banks. Prioritization of critical improvement areas: Required ability of the management to prioritize those things that give quick improvements.

13. Levers Challenging Culture : Mindset to take up challenge. Changing organizational routines: Routins are the “ways we do things around here” which tend to persist over time and guide people’s behaviors. Change agents may experiment with changing routines as a way of changing strategy. Symbollic processes : Change levers are not always of an overt, formal nature.May besymbolic in nature.It explainshow symbolic acts and artefacts of an organizationhelp preserve the paradigm and how their relationship with culture and strategy can be analysed. Change of Rituals & Physical aspects of work enviournment. Behaviour change of change agents./languagechange: Corporate newsletter/Newspapers depicting stories act as levers. Power & political processes : powerful support from individual or groups having both power and interest.Example-CEO or any board memberor influential outsiders Communicating and monitoring change.

14. Potential Pitfalls of change programmes Unintended outcome of change programmes: Ritualization of change and initiative overload. Hijacked process of change Erosion Reinvention Ivory tower change Inattention to symbols of change