Creating and Leading Change Chapter Eighteen Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Learning Objectives LO 1 Discuss what it takes to be world class LO 2 Describe how to manage and lead change successfully LO 3 Describe strategies for creating a successful future 18-2

Becoming World Class  Being world class requires applying the best and latest knowledge and ideas and having the ability to operate at the highest standards of any place anywhere  World-class companies create high-value products and earn superior profits over the long run  The result is an organization capable of competing successfully on a global basis 18-3

Sustainable, Great Features  Great companies  Have strong core values  Are driven by goals  Change continuously  Focus on beating themselves, not on beating the competition 18-4

Core Ideologies in Built-to-Last Companies 18-5 Table 18.1

Core Ideologies in Built-to-Last Companies 18-6 Table 18.1

The Tyranny of the Or  Tyranny of the or  The belief that things must be either A or B and cannot be both; that only one goal and not another can be attained 18-7

The Tyranny of the Or Examples  You must choose either change or stability  Be conservative or bold  Have control and consistency or creative freedom  Do well in the short term or invest for the future  Plan methodically or be opportunistic  Create shareholder wealth or do good for the world  Be pragmatic or idealistic 18-8

The Genius of the And  Genius of the and; organizational ambidexterity  Ability to achieve multiple objectives simultaneously.  Examples  Purpose beyond profit and pragmatic pursuit of profit  Relatively fixed core values and vigorous change and movement  Clear vision and direction and experimentation 18-9

Achieving Sustained 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

Achieving Sustained Greatness  Culture  one that motivates, empowers people to innovate, rewards people appropriately, entails strong values, challenges people, and provides a satisfying work environment 18-11

Achieving Sustained Greatness  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 18-12

Organization Development  Organization development (OD)  The system wide application of behavioral science knowledge to develop, improve, and reinforce the strategies, structures, and processes that lead to organizational effectiveness

Organization Development  Strategic interventions  helping organizations conduct mergers and acquisitions, change their strategies, and develop alliances  Technostructural interventions  relating to organization structure and design, employee involvement, and work design 18-14

Organization Development  Human resources management interventions  Attracting good people, setting goals, and appraising and rewarding performance  Human process interventions  Conflict resolution, team building, communication, and leadership

Managing Change  Shared leadership is crucial to the success of most change efforts—people must be not just supporters of change but also implementers  An essential task is to motivate people fully to keep changing in response to new business challenges 18-16

Question One reason for an employee’s resistance to change is ___________. A. Inertia B. Quality C. Speed D. Service 18-17

Reasons for Resistance to Change Figure 18.1

Motivating People to Change  General reasons for resistance  Inertia  Timing  Surprise  Peer pressure 18-19

Motivating People to Change  Change-specific reasons for resistance  Self-interest  Misunderstanding  Different assessments  Management tactics 18-20

Motivating People to Change Figure 18.2

A General Model for Managing Resistance  Unfreezing  Realizing that current practices are inappropriate and that new behavior is necessary  Performance gap  The difference between actual performance and desired performance

A General Model for Managing Resistance  Moving  Instituting the change  Refreezing  Strengthening the new behaviors that support the change 18-23

Force-field Analysis  Force-field analysis  An approach to implementing the unfreezing/ moving/refreezing model by identifying the forces that prevent people from changing and those that will drive people toward change 18-24

Methods for Managing Resistance to Change Table 18.2

Harmonizing Multiple Changes  Total organization change  Introducing and sustaining multiple policies, practices, and procedures across multiple units and levels

Harmonizing Multiple Changes  What is the evidence that the approach really can produce positive results?  Is the approach relevant to your company’s strategies and priorities?  Can you assess the costs and potential benefits? 18-27

Harmonizing Multiple Changes  Does it really help people add value through their work?  Does it help the company focus better on customers and the things they value? 18-28

Leading Change Figure 18.3

Sources of Complacency Figure 18.4

Shaping the Future  Reactive change  A change effort that occurs under pressure; problem- driven change.  Proactive change  A change effort that is initiated before a performance gap has occurred

Creating the Future  Adapters  Companies that take the current industry structure and its evolution as givens, and choose where to compete  Shapers  Companies that try to change the structure of their industries, creating a future competitive landscape of their own design

Vast Opportunity Figure 18.5

Which Should You and Your Firm Do?  Preserve old advantages or create new advantages?  Lock in old markets or create new markets?  Take the path of greatest familiarity or the path of greatest opportunity?  Be only a benchmarker or a pathbreaker? 18-34

Which Should You and Your Firm Do?  Place priority on short-term financial returns or on making a real, long-term impact?  Do only what seems doable or what is difficult and worthwhile?  Change what is or create what isn’t?  Look to the past or live for the future? 18-35

Learning and Leading  The philosophy of continuous learning helps a company achieve lower cost, higher quality, better service, superior innovation, greater sustainability, and greater speed—and helps one grow and develop on a personal level

Learning Cycle: Explore, Discover, Act Figure 18.6

Level 5 Hierarchy Figure 18.7

A Collaborative, Sustainable Future? As you lead and learn into the future, you should: 1. bear in mind the long run, in addition to the immediate demands you must face, and 2. consider collaboration as a key to sustained success

Video: Hollywood Labor Unions  What changes led to the evolution of performers’ unions? 18-40