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Chapter
Chapter
Creating and Managing Change
Creating and Managing Change
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McGraw-Hill/IrwinMcGraw-Hill/IrwinManagement, 7/eManagement, 7/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
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Learning Objectives
After Studying Chapter 18, You will know What it takes to be world class How to manage change effectively How to create a successful future
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Managing Change
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Becoming World Class
Managers today want, or should want, their organizations to become world class To some this may seem like a lofty, impossible,
unnecessary goal but it is a goal that is essential to survival and success in today’s intensely competitive business world
Being world class requires applying the best and latest knowledge and ideas, and having the ability to operate at the highest standards of anyplace anywhere
World-class companies create high-value products and earn superior profits over the long run
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Sustainable, Great Futures
Over the years world-class companies have been widely admired, been considered the premier institutions in their industries, and made a real impact on the world
World class companies also Turn in extraordinary performance over the long run Have strong core values in which they believe deeply;
and they express and live the values consistently They do not focus on beating the competition; the focus
primarily on beating themselves Great companies have core values, know
what they are and what they mean, and live by them – year after year
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Sustainable, Great Futures
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The Tyranny of the ‘Or’
Many companies, and individuals, are plagued by the tyranny of the or This refers to the belief that things must be
either A or B, and cannot be both Examples include
Choose to either change or remain stable Be conservative or bold Have control and consistency or creative
freedom
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The Genius of the ‘And’
Organizational ambidexterity; genius of the ‘and’ refers to the ability to achieve multiple things simultaneously Purpose beyond profit and pragmatic pursuit of
profit Relatively fixed core values and vigorous change
and movement Conservatism with the core values and bold
business moves Clear vision and direction and experimentation Long-term thinking and investment and demand
for short-term results Visionary, futuristic thinking and daily, nuts-and-
bolts execution
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Organization Development
Organization development is a system wide application of behavioral science knowledge to develop, improve, and reinforce the strategies, structures, and processes that lead to organization effectiveness It improves the organization’s ability to respond
to external groups like customers, stockholders, governments, employees, and other stakeholders
It has an important underlying value orientation – it supports human potential, development, and participation in addition to performance and competitive advantage
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Achieving Greatness
Three are four key factors to achieving greatness Strategy – focused on customers, continually fine-
tuned based on marketplace changes, and clearly communicated to employees
Execution – good people, with decision-making authority on the front lines, doing quality work and cutting costs
Culture – one that motivates, empowers people to innovate, rewards people appropriately, entails strong values, challenges people
Structure – making the organization easy to work in and easy to work with, characterized by cooperation and the exchange of information and knowledge throughout the organization
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Managing Change
Shared leadership is crucial to the success of most change efforts People must be not just supporters of change
they also need to be implementers There needs to be a permanent rekindling of
individual creativity and responsibility, a true change in the behavior of people throughout the organization
The essential task is to motivate people fully to keep changing in response to new business challenges
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Motivating People to Change
People must be motivated to change Managers tend to underestimate the amount
of resistance they will encounter Some general for resistance include:
Inertia – people don’t want to disturb the status quo
Timing Surprise Peer pressure
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Motivating People to Change
Some change-specific reasons for resistance include Self-interest Misunderstanding Different assessments Management tactics
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Motivating People to Change
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A General Model for Managing Resistance
Motivating people to change often requires three basic stages Unfreezing Moving Refreezing
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Specific Approaches to Enlist Cooperation
Most managers underestimate the variety of ways they can influence people during a period of change
Some effective approaches include Education and communication Participation and involvement Facilitation and support Negotiation and rewards Manipulation and cooptation Explicit and implicit coercion
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Specific Approaches to Enlist Cooperation
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Harmonizing Multiple Changes
Total organization change involves introducing and sustaining multiple policies, practices, and procedures across multiple units and levels
Total organizational changes can Affect the thinking and behavior of everyone
in the organization Enhance the organization’s culture and
success Be sustained over time
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Leading Change
Successful change requires managers to actively lead it
Leaders must start by examining the current realities facing the organization From here they can
create a sense of urgency
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Leading Change
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Shaping the Future
A newspaper reporter found a variety of forecasts about the global future, but clear agreement on two things A very different world is roaring up on us The history of our times will be the story of
how we prepared for this different world – which so far, is mostly a story of how we have failed to prepare
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Shaping the Future
Most change is reactive Reactive change is in response to pressure; it is
problem driven change Implies that you are a follower not a leader
Proactive change means anticipating and preparing for an uncertain future It implies being a leader and creating the future
you want On the road to the future will you be:
The windshield The bug Or the driver
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Thinking about the Future
If you think only about the present, or wallow in the uncertainties of the future, your future is just a roll of the dice
“The global economy could be on the cusp of anage of innovation equal to that of the past 75 years. All the right
factors are in place: Science is advancing rapidly, more countries are willing to devote resources to research and
development and education, and corporate managers, too, are convinced of the importance of embracing change” - Business
Week
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Creating the Future
Companies can try different strategic postures to prepare to compete in an uncertain future Adapters take the current industry structure and its
future evolution as givens Shapers try to change the structure of their
industries, creating a future competitive landscape of their own design
The challenge is not to maintain your position in the current competitive arena, but to create new competitive arenas, transform your industry, and imagine a future that others don’t see Create your own advantages
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Creating the Future
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Shaping Your Own Future
If you are an organizational leader, and your organization operates in traditional ways, your key goal should be to create a revolution, genetically reengineering your company before it becomes a dinosaur of the modern era
Creating the future you want for yourself requires setting high personal standards Don’t’ settle for mediocrity Become a life long learner Consciously and actively manage your own career Become indispensable to your organization
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Shaping Your Future
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Learning and Leading
Continuous learning is a vital route to renewable competitive advantage; organizations and people should constantly explore, Discover Take action
The philosophy of continuous learning helps your company achieve lower cost, higher quality, innovation, and speed – and helps you grow and develop on a personal level
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Learning and Leading
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Learning and Leading
A leader should be able to create an environment in which others are willing to learn and change so their organizations can adapt and innovate [and] inspire diverse others to embark on a collective journey of continual learning and leading
To do this you will need to commit to life long learning Life long learning requires occasionally taking risks;
moving outside of your ‘comfort zone’; honestly assessing the reasons behind your successes and failures; and being open to new ideas
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Learning and Leading
As a leader you will inhabit and grow into different stages in life This suggests that you not only do these things
but you do them well These stages are:
Level 1 – Highly capable individual Level 2 – Contributing team member Level 3 – Competent manager Level 4 – Effective Leader Level 5 – Level 5 executive
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Learning and Leading
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The future
A successful future derives from adapting to the world and shaping the future;
being responsive to others’ perspectives and being clear about what you want to change; encouraging others to change
while recognizing what you need to change about yourself; understanding
current realities and passionately pursuing your vision; learning and
leading.
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Concluding Thought
For yourself, as well as for your organization, be ambidextrous: recognize
and live the genius of the and.
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