Transcript No Slide Title

Strategic managament
Lecture 13
Managing strategic change
Slide 10.1
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Managing Strategic Change - Outline
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Differences in scope of strategic change
Effect of organisational context on design of
strategic change programmes
Force-field analysis
Role of change agents and styles of
managing change
Levers for influencing strategic change
Unintended consequences of change
programmes
Slide 10.2
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Managing Strategic Change
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Tendency towards organisational
inertia and resistance to change
Top and middle managers (and below)
are responsible for strategic change
Need to link the strategic and the
operational aspects of the organisation
Managing change is context dependent
Slide 10.3
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Key Elements in Managing Strategic Change
Slide 10.4
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Diagnosing the Change Situation
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Why is strategic change needed?
Basis of strategy
• Strategic purpose/strategic intent
• Bases of competitive advantage
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Specific possible directions and
methods of strategy development
Changes in structures, processes,
relationships, resources and activities
required
• To translate strategic thinking into action
Slide 10.5
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Types of Change
Slide 10.6
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Influence of Context on Strategic Change
Slide 10.7
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Diagnosing context and change problems (1)
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Cultural Web
• Diagnostic tool to understand culture
• Covers hard and soft aspects
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Structures and control systems (hard)
Symbols, routines, political processes (soft)
• Can be used to analyse changes needed
for strategic success
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Map current and required culture
Slide 10.8
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Diagnosing context and change problems (2)
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Forcefield Analysis
• Identifies forces for and against change
• Provides an initial view of change
problems that need to be tackled
Slide 10.9
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Forcefield Analysis
Slide 10.10
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Styles of managing strategic change
Slide 10.11
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Styles of Managing Change
Style
Means/Context
Education/ Briefings
Communic Internalisation
-ation
Trust
Benefits
Problems
Overcome
lack of
information
Time
consuming
Unclear
When effective
Incremental
change/long
duration/horizo
ntal
Time/Within transformacurrent
tional change
paradigm
Collaboration/Participation
Involve in
developing
strategy
Ownership/
improved
quality
Intervention
Change agent
coordinates/
controls
Guided but
Perceived
with
manipulatio
involvement n
Incremental/
non-crisis
transformation
Direction
Use authority
to set direction
Clarity and
speed
No acceptance/ill
conceived
Transformational change
Coercion/
Edict
Explicit use of
power through
edict
May
succeed in
crisis
Least
Crisis/rapid
success
transform/auto
unless crisis -cratic culture
Slide 10.12
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Roles in Managing Change (1)
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Change Agent
• Individual or group that effects strategic
change in an organisation
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Strategic leadership
• The process of influencing an organisation
in its efforts towards achieving an aim or
goal
• Charismatic leaders
• Instrumental or transactional leaders
Slide 10.13
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Roles in Managing Change (2)
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Middle managers
• Facilitators or blockers?
• 5 roles in managing strategic change
 Implementation and control
 Translators of strategy
 Reinterpretation and adjustment of
strategy
 Relevance bridge between top
managers and lower managers
 Advisors to senior management on
blockages and requirements
Outsiders, e.g. new CEO, new
management, consultants, key
influencers (stakeholders)
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Slide 10.14
Strategic leadership approaches
Slide 10.15
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Strategic Leadership Approaches
Focus of
attention
Indicative
behaviour
Role of other
managers
Implications for
change mgt
Strategy
Strategy
analysis/
formulation
Scanning
markets/
technology
Day-to-day
operations
Delegated
Human
assets
Developing
people
Right people
Coherent culture
Strategy
development
devolved
Recruit/develop
people to manage
locally
Expertise
Expertise as
source of
comp. adv.
Improve
expertise via
systems
Immersion in/
management of
expertise area
Change in line
with expertise
approach
Control
Set
procedures/
measures
Monitor
performance for
uniformity
Ensure uniform
perf. vs.
measures
Change
monitored and
controlled
Change
Continual
change
Communication/
motivation
Change
Change central to
agents/open to
the approach
Slide 10.16
change
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Levers for Managing Strategic Change
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Turnaround
• Managing rapid strategy reconstruction
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Challenging the taken for granted
Changing organisational routines
Symbolic processes
Power and political processes
Communicating and monitoring
change
Change tactics
Slide 10.17
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Turnaround strategy (1)
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Emphasis on speed of change, rapid
cost reduction and/or revenue
generation
Prioritisation of things giving quick and
significant improvements
Crisis stabilisation
Management changes
Gaining stakeholder support
Clarifying the target market
Re-focusing
Financial restructuring
Slide 10.18
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Turnaround strategy (2)
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Prioritisation of critical improvement
areas
Focus on getting the business right,
not look for new markets
Slide 10.19
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Turnaround: Revenue Generation and Cost
Reduction
Slide 10.20
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Challenging the taken for granted (1)
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Need to change the paradigm
• Get people to see the realities
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Mechanisms
• Evidence from strategic analysis
• Analysing what people take for granted
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Workshop sessions
Bring into open
Debate and challenge
Slide 10.21
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Challenging the taken for granted (2)
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Mechanisms
• Scenario planning to overcome bias and
cultural assumptions
• Bringing managers face to face with
reality (customers)
Slide 10.22
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Changing organisational routines (1)
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Routines are the “way we do things
around here”
• Can become core rigidities
• Difficult to adapt to new strategies
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Mechanisms
• Identify critical success factors and underlying
competences
• Bring strategy down to operational levels
• Changes in routines make strategy meaningful
• Doing is better than thinking
Slide 10.23
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Changing organisational routines (2)
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Mechanisms
• Education/communication less powerful
than involving people
• Persistent extending and bending existing
ways of doing things
Slide 10.24
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Symbolic Processes (1)
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Symbols are objects, events, acts or
people which express more than their
intrinsic content
• Changing symbols helps reshape beliefs
and expectations, as meaning is apparent
in day to day experiences
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Mechanisms
• Introducing new rituals/abolishing old
ones
• Change systems and processes
• Change physical work environment
Slide 10.25
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Symbolic Processes (2)
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Mechanisms
• Behaviour of change agents
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Language – metaphors to galvanise change
Stories
Problems
• Symbolic levers may be misinterpreted
Slide 10.26
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Organisational rituals and culture change
Slide 10.27
Exhibit 10.8
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Organisational Rituals and Culture Change
Types of ritual
Role
Examples
Rites of passage
Promote social roles/
interaction
Induction/training
programmes
Rites of
enhancement
Recognise effort
Motivate others
Awards ceremonies
Promotions
Rites of renewal
Reassure about action
Focus on issues
Appoint consultants
Project team
Rites of integration
Push shared commitment
Reassert norms
Christmas parties
Rites of conflict
reduction
Reduce conflict/
aggression
Negotiate commitment
Rites of degradation
Acknowledge problems
Weaken political roles
Fire top execs
Demote/pass over
Rites of sensemaking
Share interpretations
Rumours, surveys
Rites of challenge
Throw down the gauntlet
New CEO behaviour
Rites of counterchallenge
Resist new ways
Grumble, work to rule
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Slide 10.28
Political mechanisms in organisational
Slide 10.29
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Political Mechanisms in Organisations
Activities
Mechanisms
Building the power
base
Overcoming
resistance
Achieving
compliance
Resources
Control resources
Acquire expertise &
resources
Withdraw
resources/
counterintelligence
Give resources
Elites
Sponsored by/
Division of elites
associated with elite Associate with
change agent
Remove resistant
elites. Visible
change hero
Subsystems
Alliance building
Team building
Foster change
momentum/
change agent
Part
implementation/Di
sciples/
‘Young Turks’
Symbolic
Build on
legitimation
Attack
legitimation/Foster
confusion/conflict
Applause/reward
Reassurance
Symbolic confirm
Key Problems
Time required
Duality of ideals
Threat to elites
Too low power
base/potentially
destructive
Converting the
body of the org.
Slipping back
Slide 10.30
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Communicating and Monitoring Change
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Effective communication possibly single most
important factor for overcoming resistance
Importance of clarity of vision and strategic
intent
Choices of media – effectiveness depends on
complexity of change
Involvement of members of organisation in
strategy development process
Two-way process – feedback is important
Emotional aspects important – emotions can
induce negative or positive responses
Need to monitor change programmes
Slide 10.31
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Effective and Ineffective Communication
of Change
Slide 10.32
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Change tactics (1)
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Timing
• Use crisis as catalyst for change
• Windows of opportunity, e.g. post takeover, new CEO
• Symbolic signalling of timeframes
• Choose time for promoting change to
avoid unnecessary fear and nervousness
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Job losses and de-layering
• Tactical choice, e.g. remove blockers of
change or senior managers to give signal
• Avoid creeping job losses – reduce
insecurity
Slide 10.33
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Change tactics (2)
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Job losses and de-layering
• Demonstrate visible, responsible, caring
approach to those who lose their jobs
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Visible short-term wins
Slide 10.34
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Potential Pitfalls of Change Programmes (1)
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Unintended outcomes (Harris & Ogbonna
2002)
• Ritualisation of change and “initiative
overload”
• Hijacked processes of change
• Erosion
• Reinvention
• Ivory tower change
• Inattention to symbols of change
• Uncontrolled and uncoordinated efforts
• Behavioural compliance
Slide 10.35
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Potential Pitfalls of Change Programmes (2)
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Managerial implications
• Monitor the change
• Understand the culture
• Involve people
• A major challenge
Slide 10.36
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Main steps of strategic change
1.
2.
3.
4.
Strategic diagnosis,
Find change agent,
Levers for strategy,
Education, participation and
communication
Slide 10.37
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Key Points
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Need to tailor approaches, styles and means
of change to context
Strategic change differs in scope and nature
Diagnosis of organisational context
Cultural web and forcefield analysis to
identify blockages and levers
Different roles and styles for managing
change
Levers for strategic change depend on type
and context of change
Slide 10.38
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005