Managing Change & Transition

Managing Change & Transition

Pick any industry and chances are that it looked very different in the 1970s than it did in the 1980s.

Quality improvement, Adoption of new methods, Adaptation to new technologies, Response to regulatory change, Facing up to new competitors.

Most will be forced through a new set of changes in the years ahead

Although its impossible to anticipate the when, what, and where of change, it is something businesses can count onand should plan for.Introduction

A merger, acquisition, or divestitureThe launch of a new product or serviceA new leaderA new technology

Indicators of Change

Structural changeDone by top management for greater overall performanceMergers, acquisitions, consolidations, and divestiture of operating unitsCost cuttingelimination of nonessential activitiesProcess changealtering how things get done (e.g. reengineering a loan approval process)Cultural changecompanys general approach to doing business or the relationship between its management and employees.A shift from command-and-control management to participative management is an example of cultural change

Types of Change

An organization is change-ready when three conditions are present:1. Leaders are respected and effective.2. People feel personally motivated to change.3. The organization is nonhierarchical and people are accustomed to collaborative work.Motivation to Change

all fundamental changes in organizations involve some changes in the rewards system

different reward systems are more appropriate at different phases of a change initiative. For example:Performance-based pay plans, such as stock options and profit sharing, are most appropriate during the motivation stage of change.During the implementation phase, bonuses for achieving performance targets and successful implementation are useful.Finally, once change has been effected, the organization may want to change to a pay-for-performance regime that focuses on the strategic performance and the attraction/retention of talented people.Reward

Step 1. Mobilize Energy and Commitment through Joint Identification of Business Problems and Their Solutions

Step 2. Develop a Shared Vision of How to Organize and Manage for Competitiveness

Step 3. Identify the Leadership

Step 4. Focus on Results, Not on Activities

Step 5. Start Change at the Periphery, Then Let It Spread to Other Units without Pushing It from the Top

Step 6. Institutionalize Success through Formal Policies, Systems, and Structures

Step 7. Monitor and Adjust Strategies in Response to Problems in the Change Process

7 steps to change

Problem identification (Why must we do this?) is necessary for motivation and creating urgency

how the problem is identified is also important. People at the top often assume (wrongly) that they have identified the entire problem (top down approach).

developing a solution to the problem. Here again employees should be involved.Mobilize Energy and Commitment through Joint Identification of Business Problems and Their Solutions

The people in charge of change must develop a clear vision of an altered and improved future.

They must also be able to communicate that vision to others in ways that make the benefits of change clear.

an effective vision must:describe a desirable futurebe compellingbe realisticbe focusedbe flexiblebe easy to communicate to different levelsDevelop a Shared Vision of How to Organize and Manage for Competitiveness

a visible leader and sponsor of change, someone who owns and leads the change initiative.

The leadership must act as champion,assemble the resources needed for the project, and take responsibility for success or failure.Identify the Leadership

Many companies make the mistake of focusing measurement and managerial attention on training, team-creation, and other activities thatlogicallyshould produce desirable results down the road.

a shift to measurable short-term performance improvement goals, even though the change campaign is a long-term, sustained one.For example, Within ninety days we will reduce fuel costs by 15 percent.

Results-driven improvement efforts bypass lengthy periods of preparation, training course development, and other rituals of change.Focus on Results, Not on Activities

Changing an entire organization at once is much more difficult and less likely to succeed

Once change on a smaller scale is accomplished and witnessed by employees in adjacent units, diffusion of the change initiative throughout the organization is much more likely.Start Change at the Periphery, Then Let It Spreadto Other Units without Pushing It from the Top

Gains can be consolidated and cemented through policies that describe how work is to be done, through information systems, and through new reporting relationships.

For example, once it had achieved a key goalover 99 percent on-time deliveries of furniture orders the company institutionalized its gains through a performance measurement system that kept everyones focus on that metric.Institutionalize Success throughFormal Policies, Systems, and Structures

All types of unanticipated problems crop up as people move forward. Developments in the external environment can also affect whats going on inside the company.

change leaders must be flexible and adaptive, and their plans must be sufficiently robust to accommodate alterations in schedules, sequencing, and personnelMonitor and Adjust Strategies inResponse to Problems in the Change Process

leaders create an appealing vision of the future and then develop a logical strategy for making it a reality. They also motivate people to pursue the vision, even in the face of obstacles.

Managers, on the other hand, have the job of making complex tasks run smoothly. They have to work out the implementation details, round up the required resources, and keep employee energy channeled in the right direction

HR people, however, can play a critical supportive role by:helping management with the hiring and assignment of consultants; reassigning and/or outplacing personnel displaced by change; arranging for employee training; facilitating meetings and off-site conferences; and helping institutionalize successful change through employee development, rewards, and organizational design.Roles for Leaders, Managers & HR

Although implementation can be a tricky and unpredictable challenge, you can improve the odds of success if youenlist the support and involvement of key people, craft a solid plan,support the plan with consistent behaviors, develop enabling structures,celebrate milestone successes, and communicate relentlessly.Change Implementation

This means assembling a team with the right blend of skills, authority, resources, and leadership.

implementation will go more smoothly if it has the backing and involvement of key people (not just the CEO) - employees whom others respect, individuals with key technical skills, people with access to vital resources, and the informal leaders to whom people naturally turn for direction and advice.Enlist the Support andInvolvement of Key People

characteristics of a good implementation plansimple, flexible, divided into achievable chunks, and with clearly defined roles and responsibilities.Craft an Implementation Plan

Make sure that management walks the talk.

Inconsistency in either will send a damaging messagethat management is either not serious about implementing change or unwilling to do its partSupport the Plan with ConsistentBehaviors and Messages

This means training, pilot programs, and alignment of the rewards system with your change goals.

Develop Enabling Structures

Identify important milestones in the project and celebrate them when they are reached.

Celebrating a series of short-term wins can:neutralize skepticism about the change effort;provide evidence that peoples sacrifices and hard work are paying off;help retain the support of senior management;keep up the momentum; andboost morale.Celebrate Milestones

tell them why, tell them how, and tell them often.Communicate Relentlessly

Successful management of change requires that you recognize the primacy of people factors and the social systems in which they operate.

The rank and file, the resisters, and the change agents are the three sets of players typically encountered in a change initiative.Social & Human Factors

Change resisters will either drag their feet or actively attempt to undermine your efforts. You can identify potential resisters by determining where and how change will create pain or loss in the organization.

Once youve identified them, there are several things you can do to neutralize their resistance or make them active participants. These include: explaining the urgent need to change, Describing how change will produce benefits for them, and finding new ways in which they can contribute.

People who do not respond to these efforts should be moved out of your unit.The Resisters

Change agents see the need for change and articulate it effectively to others.They are critical catalysts for a change initiative and should be placed in key positions.

Tips for identifying change agents:Find out who people listen to.Be alert to people who think otherwise.Take a close look at new employees who have come from outsideLook for people with unusual training or experienceThe Change Agents