Strategy and Management of Change

1
Strategy and Management of Change

• Managing Strategic Change
• Professor Julian Lowe
• School of Business

2
(No Transcript)
3
Background

• The average life of a large US firm in 1960 was
  65 years
• The average life of a large US firm in 1998 was
  10 years
• How can companies change so the can grow and
  survive longer?

4
Why do western companies fail?

• Companies fail because of cultural lock-in,
  redundant assets and competences
• Fail to re-design the corporation
• Focus on existing profit rather than future
  health
• Fail to manage uncertainty

5
Sources of failure

• Technological uncertainty
• Market uncertainty
• Organisational uncertainty
• Strategic uncertainty
• How do we manage these uncertainties?
• And lack of fit or growing misalignment

6
Change Strategy and Organisation
(Mintzberg and Westley, 1992)
7
Change or Transformation

• Definition of Terms
• Change
• Entails incremental improvement on existing
  organisational capabilities
• Transformational
• Entails a one-time, discontinuous shift in
• Financial Performance
• Industry Benchmarks (eg. Cycle time, quality,
  transaction costs)
• Climate (eg. Do employees say this is a different
  organisation than it was five years ago?)
• Re-invention
• Entails ongoing transformation

8
Change and Transformation

• The Problem
• Nothing fails like success
• Few organisations sustain growth and success over
  long periods of time
• Many organisations, through benchmarking,
  converge towards similar strategies

9
When is transformational change required?

• Resistance
• Psychological, Cultural, Political, Lock in
  (investment, competence, systems, stakeholder)
• Major shift in markets, technology or finance

10
When is evolutionary change likely?

• In a learning organisation that can adapt.
• When no major shifts in external environment
• When existing organisation still fits tasks

11
Magnitude of Change
Scope of Change
Broad Narrow
High Low
Amplitude of Change
12
Critical Change Processes

• Diagnosing
• Analysing
• Communicating
• Political alignment and persuasion
• Symbols
• Re engineering
• Training
• Recruitment

13
Mechanisms to Examine Change

• Seven S
• Reframing
• Cultural Web

14
The Seven S Framework or other similar eg.PARC
Strategy
Structure
Systems
Skills
Shared Values
Style
Staff
15
Seven S Definitions
16
Gemini Model
Reframe changing focus of what we are and can
do Restructure look at processes and
structure Revitalisation realign activities
with the changed environment Renewal culture,
people and skills
17
A Framework for Planned Strategic Change gemini
model

• Renew Reframe
• SPIRIT MIND
• Revitalize Restructure
• BODY AND BODY
• ENVIRONMENT WITHIN

TRANSFORMATION
18
And in GE?
Intent Restructure Strategy in place Values
..directionhardsoftconsolidation
19
Conventional model
unfreezing
refreezing
Persuading and informing
20
How to manage change
Education Participation Intervention Direction Coe
rcion
21
Figure 11.8 Political mechanisms in organisations
22
Political manoeuvres to avoid change
23
Doing v. Being

• Activity 4
• Describe your company
• Describe your competitors
• Identify similarities, differences
• Is your company defined by most of you in terms
  of what it does?
• Transformation is about doing and being

Doing
Being
24
Managing the process The Transformation Roller
Coaster
Discontinuous Improvements in performance
Stakeholders Enrolled in new future
High
Psychological contract
Action plan Resources Committed Enrol
Lower levels
Allied on transformation
Tangible benefits
Task teams formed
Audit
Task team proposals
Morale Index
Begin Design
Start to enrol
Visible progress
Dark side revealed
Tensions arise
Competitive situation assessed
Contention testing of senior team
Change not working
Low
1 2 3 4 5 6
7 8 24 Time
(Months)