CHANGE MANAGEMENT THEORIES AND STRATEGIES

Dr. Tam Weng Wah Leadership Centre INTAN, Bukit Kiara

OBJECTIVE

TO ENHANCE PARTICIPANTS
KNOWLEDGE AND UNDERSTANDING ON THEORIES AND STRATEGIES OF MANAGING CHANGE

SCOPE
Why change? Understanding the change process Some approaches to change Dealing with resistance to change Change management model and tools

WHY CHANGE?

IN LIFE

THE ONLY CONSTANT

IS CHANGE

WHAT HAPPEN IF WE DONT CHANGE?

THREE TYPES OF PEOPLE (ORGANISATIONS)

THOSE WHO MAKE THINGS HAPPEN (LEADERS)

THOSE WHO WATCH THINGS HAPPEN (SPECTATORS) THOSE WHO WONDER WHAT HAS HAPPENED (VICTIMS)

DRIVERS OF CHANGE

ECONOMIC Globalisation

Culture

Strategy

Structure

SOCIO-CULTURAL

ECONOMIC 1

ECONOMIC 2

P1a

Globalisation

Culture 1

Culture 2

Strategy 1

Strategy 2

Structure 1

Structure 2

SOCIO-CULTURAL 1

SOCIO-CULTURAL 2

TYPES OF CHANGE

INCREMENTAL

TRANSFORMATIONAL

INCREMENTAL CHANGE

improving the fit among organisational components (strategy, structure, process, technology, culture) focused and bounded building on existing works

Procedural Mindset

Culture

Strategy

Structure

TRANSFORMATIONAL CHANGE

fundamental redefinition of the organisation (identity, vision, strategy, values)

involves all organisational components (culture, structure, processes, technology) complete break from the past

Procedural-Focused Mindset

Citizen-Focused Mindset

Culture

Culture

Strategy

Strategy

Structure

Structure

APPROACHES TO CHANGE

Top-down

Bottom-up

Mixed

Expert

UNDERSTANDING THE CHANGE PROCESS

Gap Theory

Strategy Desired Future State

Current State

Rrichard Beckhard & Reuben T. Harris: Organisational Transitions -- Managine Complex Change

Kurt Lewins Theory

Kurt Lewins Theory

Refreeze

Change
Unfreeze

Kurt Lewins Theory

Unfreeze
Identifying and share need for change (why) Develop value creating idea (what)

Making Change Happen

Motivate people Deal with resistance

Refreeze
Follow-up change effort Prepare for next change

British Airways
Levels
Individual

Unfreezing
Downsizing (59,000 to 37,000) middle managers New top management team Putting People First

Movement
Acceptance of concept of emotional labour Personnel staff as internal consultant Peer support group

Refreezing
Continued commitment of top management Promotion of staff with new BA values Top flight Academies

Open Learning program

Structure & Systems Use diagonal task-force to

plan change Reduction in levels of hierarchy

Profit sharing Opening Terminal 4 Purchase of Chartridge as training centre

New performance appraisal system based on both behaviour and performance

Modify budget process

New, user friendly MIS

Performance-based compensation system

Continued use of task forces

Climate/ interpersonal style

Redefinition of business service not transportation Top management commitment and involvement

Greater emphasis on open communication Data feedback on work-unit climate Off-site, team-building meetings

New uniforms New coat of arms Development and use of cabin-crew teams Continued use of databased feedback on climate and management practices

ASSESSING THE CHANGE ENVIRONMENT

Political Security Economic

Legal

PESTELS
Social/ Cultural

Environmental Technological

PESTELS Analysis
Political - changes in government, law &
regulations, ideologies, etc.

Economic - macroeconomic factors, levels of

growth, exchange rates, budget and wage rates, etc.

Social - demographic trends, lifestyle,

working practices, attitudes to work and employment, gender roles, etc.

Technologies - IT, transportation,

communication, computer, entertainment, etc.

PESTELS Analysis
Environmental - changes in the physical
environment

Legal - changes in the law and regulations at

national and international levels that act as constraints

Security - changes in the security needs of

the country that have impact on the organization

Strengths

Threats

SWOT

Weaknesses

Opportunities

SWOT Analysis
Enables an internal analysis of internal aspects that are working or not working well: knowledge working practices working relationships shared values external relationships financial systems customer knowledge

SWOT Analysis
Strengths and weaknesses represent
opportunities for improvement

Threats may become reality if nothing is done

to reduce its weaknesses and sustain its
strengths

SWOT may result in reductionist approach

in problem solving

Internal Environment
Strengths Weaknesses

External Environment
Political Security Legal Economic

Sociological
Technological

Opportunity +ve / -ve

Threats

Environmental

McKinsey 7-S Framework

Structure Strategy

Systems

Shared values
Skills Style

Staff

7-Ss Components

Strategy - The way in which competitive

advantage is intended to be achieved. Structure - The way in which tasks and people are divided. Systems - Formal systems and procedures (MIS, PBS, HRMIS, SSB, PMS). Staffing - The people, background, (HRM &HRD).

7-Ss Components

Skills - Organisational competencies

(people, management practices, IT)

Style - Leadership style of top

management and overall operating style of organisation (norms)

Shared values - Widely shared values

which serves as guiding concepts of what isright and determines priorities.

Changing Key Factors Key Factors Shared Values Strategy Systems Structures Style Skill Staff What are they now? What they should be?

RESISTANCE TO CHANGE

WHY PEOPLE RESIST CHANGE?

Comfort zone Fear of unknown Loss of power, status, territory or relationship Scepticism and mistrust Lack self-confidence More work No feeling of ownership Apathy Lack incentives Resent being not consulted or kept in the dark Misunderstanding or lack of understanding

HOW TO DEAL WITH RESISTANCE

Communication Education

Facilitation
Participation

Negotiation
Co-option Coercion

Skill & Will

Will
Guide
coach train explain allow mistakes relax with progress

Delegate
set objective, not method praise, dont ignore invoke decision making give stretching tasks dont over-manage

High

Direct

Motivate
identify reason vision monitor feedback encourage

Low

clear briefing build skills provide feedback praise and nurture close supervision

Low

High Skill

A MODEL FOR MANAGING CHANGE

1. Surface dissatisfaction 2. Promote participation 3. Reward behaviour 4. Provide time & opportunity

Resistance

Need to Motivate Change

Control

Need to Manage the Transition

1. Develop clear image 2. Multiple leverage points 3. Transition structures 4. Feedback mechanisms

Power

Need to Shape Political Dynamics

1. Gain support of key groups 2. Use leader behavior 3. Use symbols and language 4. Build in stability

(Morris & Raben, 1994)

SUMMARY
Why change? Understanding the change process Some approaches to change Dealing with resistance to change Change management model and tools

MESSAGE Although change is inevitable, you still have a choiceto approach it positively and take charge or just be a victim of the continuously changing circumstances!

THANK YOU