1. Managing Organizational Change/ Transformations Dr. Fred Mugambi Mwirigi 1

2. What is Organizational Transformation? Organization transformation implies radical changes in how members perceive, think, and behave at work. These changes go far beyond making the existing organization better or fine-tuning the status quo. They are concerned with fundamentally altering the organizational assumptions about its functioning and how it relates to the environment. 2

3. Contd. Changing these assumptions entails significant shifts in corporate philosophy and values and in the numerous structures and organizational arrangements that shape members' behaviors. Not only is the magnitude of change greater, but the change fundamentally alters the qualitative nature of the organization. 3

4. Contd. The process of transformation is essentially a death-and-rebirth process It is a movement from what is to what is not but should be The movement must begin with a change of mindset Only then can the organization begin a shift 4

5. It is a shift… it begins in the mind! 5 Closed-up status- quo-oriented Mindsets Open and receptive mindsets

6. It is a shift… 6 Wild Growth/ existence Focused Growth with clear objectives And milestones

7. It is a shift… 7 Shrinking Resource Base Growing and sustainable Resource Base

8. It is a shift… 8 De-motivated inactive Workforce Engaged and motivated workforce

9. It is a shift… 9 Ineffective and inefficient technologies Cutting edge Objective-driven technologies

10. It is a shift… 10 Hierarchical Bureaucratic Structures Flat efficient Structures

11. It is a shift… 11 Individualistic performance Team Performance

12. It is a shift… 12 Market Irrelevance Market Leadership Orientation

13. Identifying and triggering change Brainstorming sessions Diagnostic consultancy Structured management meetings Research 13

14. Triggering Change 14

15. It begins by questioning current realities 15

16. We must ask ourselves four fundamental questions: 1.What deadwood is holding us back from growing? 2.What can we do about it? 3.What are our contemporaries doing about it? 4.Where do we go from here? 16

17. Kurt Lewin’s Change Model 17 Unfreeze Change Refreeze

18. Lewin’s Model Explained The Unfreeze Stage When a structure has been in place for a while, habits and routine have naturally settled in. The organization as a whole is going in the right direction, but people or processes may have strayed off course. Tasks that are not relevant or useful anymore are still being performed by force of habit, without questioning their legitimacy. People might have learned to do things one way, without considering other, more efficient methods. Unfreezing means getting people to gain perspective on their day-to-day activities, unlearn their bad habits, and open up to new ways of reaching their objectives. 18

19. Change stage Once team members have opened up their minds, change can start. The change process can be very dynamic and, if it is to be effective, it takes some time and involves a transition period. In order to gain efficiency, people will have to take on new tasks and responsibilities, which entails a learning curve that will at first slow the organization down. A change process has to be viewed as an investment, both in terms of time and the allocation of resources After the new organization and processes have been rolled out, a certain chaos might ensue, but that is the price to pay in order to attain enhanced effectiveness within the structure. 19

20. Refreeze Stage Change will only reach its full effect if it’s made permanent. Once the organizational changes have been made and the structure has regained its effectiveness, every effort must be made to cement them and make sure the new organization becomes the standard Further changes will be made down the line, but once the structure has found a way to improve the way it conducts its operations, “re-freezing” will give the people the opportunity to thrive in the new organization and take full advantage of the change. 20

21. A different View 21 Set-the-Bar Motivate Change Sustain Change Scale the Change

22. Why Organizational Transformation? Transformations occur in response to or in anticipation of major changes in the organization's environment Changes often are associated with significant alterations in the firm's business strategy This may require modifying corporate culture as well as internal structures and processes to support the new direction. Such fundamental change entails a new paradigm for organizing and managing organizations. It involves qualitatively different ways of perceiving, thinking, and behaving in organizations. 22

23. Contd. Movement toward this new way of operating requires top managers to take an active leadership role. The change process is characterized by considerable innovation and learning and continues almost indefinitely as organization members discover new ways of improving the organization and adapting it to changing conditions. Organization transformation is a recent advance in organization development, and there is some confusion about its meaning and definition. 23

24. Pillars of Transformation 24 Sustainable Transformation Need to Transform Management Attitude To Change Resource Base Technology Support Structural Support Personnel Socialization

25. Types of Change Incremental change Revolutionary/ Transformational change Another View: The ‘good to great’ transformation Turnaround 25

26. Incremental change Change that occurs bit by bit May not have far-reaching effects on the organization Good for organizations that do not require ‘shock therapy’ Does not require fundamental change of prevailing systems and structural arrangement 26

27. Transformational change Is accompanied by a fundamental shift in consciousness, values, or perceptions. Entails a profound transmutation of the prevailing vision of reality. This shift in consciousness alters the basic ways an organization or individual responds to the environment. A transformation occurs when new meaning is successfully established in relation to the organization’s environment. 27

28. Characteristics of Transformational change Change is triggered by environmental and internal disruptions It is systemic and revolutionary It demands a new organizing Paradigm It is driven by senior executives and line management It involves continuous learning 28

29. Disruptions that trigger change 1.Industry discontinuities- sharp changes in legal, political, economic, and technological conditions that shift the basis for competition within industries 2.Product life cycle shifts- changes in product life cycle that require different business strategies 3.Internal company dynamics- changes in size, corporate portfolio strategy, executive turnover, and the like. These disruptions severely jolt organizations and push them to alter business strategy and, in turn, their mission, values, structure, systems, and procedures. 29

30. Hindrances to Change 1.Organizational culture 2.Organizational design 3.Lack of organization learning 4.Poor knowledge and information management 30

31. Culture Change Organization culture is the pattern of basic assumptions, values, norms, and artifacts shared by organization members. These shared meanings help members make sense out of everyday life in the organization. The meanings signal how work is to be done and evaluated, and how employees are to relate to each other and to significant others, such as customers, suppliers, and government agencies. 31

32. Levels of Organizational Culture Organization culture includes four major elements existing at different levels of awareness: 1. Artifacts/ symbols 2. Norms 3. Values 4. Basic Assumptions 32

33. Leadership Roles in Organizational Transformation Envisioning Direction setting Empowering individuals Enabling/facilitating Leading process redesign Triggering performance improvement 33

34. Keys to Transformation… in conclusion Leading a business from a historical to a future source of sustainable advantage. Combining tangible as well as intangible resource support Using existing resource base to create new sustainable resource bases Transforming from current structural arrangements to a much more sustainable one Moving steadily away from a system of waste 34

35. Thank you 35