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18-1. Chapter Creating and Managing Change 18 McGraw-Hill/Irwin Management, 7/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

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Presentation on theme: "18-1. Chapter Creating and Managing Change 18 McGraw-Hill/Irwin Management, 7/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved."— Presentation transcript:

1 18-1

2 Chapter Creating and Managing Change 18 McGraw-Hill/Irwin Management, 7/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

3 18-3 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

4 18-4 Managing Change

5 18-5 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

6 18-6 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

7 18-7 Sustainable, Great Futures

8 18-8 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

9 18-9 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

10 18-10 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

11 18-11 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

12 18-12 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

13 18-13 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

14 18-14 Motivating People to Change  Some change-specific reasons for resistance include  Self-interest  Misunderstanding  Different assessments  Management tactics

15 18-15 Motivating People to Change

16 18-16 A General Model for Managing Resistance  Motivating people to change often requires three basic stages  Unfreezing  Moving  Refreezing

17 18-17 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

18 18-18 Specific Approaches to Enlist Cooperation

19 18-19 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

20 18-20 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

21 18-21 Leading Change

22 18-22 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

23 18-23 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

24 18-24 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 an age 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

25 18-25 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

26 18-26 Creating the Future

27 18-27 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

28 18-28 Shaping Your Future

29 18-29 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

30 18-30 Learning and Leading

31 18-31 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

32 18-32 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

33 18-33 Learning and Leading

34 18-34 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.

35 18-35 Concluding Thought For yourself, as well as for your organization, be ambidextrous: recognize and live the genius of the and.

36 18-36 Unfreezing  Unfreezing – management realizes that its current practices are no longer appropriate and the company must break out of its present mold by doing things differently  An important contributor to unfreezing is the recognition of a performance gap  A performance gap is the difference between actual performance and desired performance  A performance gap can also be between what is and what could be  Management must use care not to blame people for performance gaps Return

37 18-37 Moving  Moving is the process instituting the change  Begins with establishing a vision of where the company is heading  One technique that helps to manage the change process is force-field analysis  Force-field analysis is an approach to implement Lewin’s unfreezing, moving, refreezing model; it involves identifying the forces that prevent people from changing and those that will drive people toward change Return

38 18-38 Refreezing  Refreezing means strengthening the new behaviors that support the change  Implementing control systems that support the change  Applying corrective action when necessary  Reinforcing behaviors and performance that support the agenda  Given the dynamic nature of today’s business world refreezing is not always the best third step, if it creates new behaviors that are as rigid as the old ones  Refreezing is appropriate when it permanently installs behaviors that maintain essential core values Return

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