Chapter 11 Strategic Leadership and Managing Crises and Change Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

2 Summary of Lecture 21 Role of leadership in strategic management process Relevance of internal and external environment Importance of a vision and mission statement Relationship between corporate objectives and strategies Importance of strategy evaluation Risk Assessment Process Crises Leadership and Management Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

3 Learning Objectives Crises Leadership and Management Need for Change Phases of the change process Major reasons for resisting change People and task-oriented techniques for overcoming Resistance to change Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

4 Risk Assessment Model Risk Identification (Risk Chart) Risk Assessment & Ranking Risk Reduction Strategies Crisis Prevention Simulations Crisis Management SWOTSWOT Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

5 Crisis Management Rapid response is vital Leadership’s Role Stay engaged Lead from the front Focus on the big picture Communicate the vision Work with crisis management team Effective Crisis Communication Can make or break company reputation Designate Spokesperson in event of crises Failure can extend crisis Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

6 Effective Crisis Communications First 24 hours crucial Media’s need to know – Tell company’s story Press releases Press kits Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

7 Guidelines for Effective Crisis Communication & Management 1) Be honest 2) Don't spin 3) Communicate plan of actions 4) Be sensitive with affected parties 5) Avoid conflicting messages 6) Admit the situation and specify actions to manage crises or counter its damage and what are plans to avoid such incidence in future 7) Don't make excuse for leaders keep informed and updated employees during crises 8) keep informed and updated employees during crises 9) Media is your link to public be honest and straightforward to them 10)Tell what your are doing to fix crisis 11) Acknowledge fear and grief of employees 12) Post crises evaluation Be there Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

8 Leading Change Organizational Change Activities associated with planning, designing, implementing, and internalizing tools, procedures, routines, processes, or systems that will require people to perform their jobs differently Organizations spend millions on change efforts Organizational change is any transition that requires change in human behavior and performance Process improvement, Restructuring, Downsizing, Expansion, Merger, adaptation of new technology etc. Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

9 Need for Change Environment changing rapidly – New technology – Global economy – Changing market requirements – Intense domestic and international competition New opportunities and threats for leadership 1) Survival Anxiety 2) Learning Anxiety Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

10 Response to Pace of Change Flatter, more agile organizational structures More empowering, team-oriented cultures Leaders must lead the responses and act as transformational leader Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

11 LEADING CHANGE Not every leader can successfully implement change Role of the leader is to facilitate change that results in better performance Change-oriented leaders are responding by initiating strategies that match the requirements of the turbulent environments in which organizations exist The change process mean to transform organization Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

12 Stages In The Change Process The Force Field Model Unfreezing Changing Refreezing 9-11 Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

13 THE EIGHT STAGE MODEL OF THE CHANGE PROCESS Unfreezing 1 Establish a sense of urgency Change 2Form a powerful guiding coalition 3Develop a compelling vision 4Communicate the vision widely 5Empower employees to act on the vision 6Generate short-term wins 7Consolidate gains, create greater change Refreezing 8Institutionalize or stabilize changes in the organizational culture Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

14 Why Do People Resist Change? Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning Challenge status quo and lead to stress, discomfort, and uncertainty

15 Why Do People Resist Change? Threat to self interest Uncertainty & loss of comfort zone Lack of faith in the change That it is necessary That it will succeed Distrust of leadership Distrust of leadership Learning Anxiety Learning Anxiety Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

16 Why Do People Resist Change? Threat to values PersonalOrganizationalFear Of the unknown Of being manipulated Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

17 How Can a Leader Reduce Resistance to People-Oriented Change? Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

18 How Can a Leader Reduce Resistance to People-Oriented Change? Show relentless support & unquestionable commitment to the change process Communicate an urgent about the need for the change Continually communicate regarding the progress of the change Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

19 How Can a Leader Reduce Resistance to People-Oriented Change? Avoid micromanaging Empower people to implement the change Help people deal with the trauma of the change Ensure change efforts are funded Prepare people for necessary adjustment -Career counseling – Retraining Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

20 Task How Can a Leader Reduce Resistance to Task -Oriented Change? Assemble a coalition of supporters Align organizational structure with new strategy for consistency Survey the organizational landscape for likely supporters and opponents Reward contribution for change efforts Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

21 Task How Can a Leader Reduce Resistance to Task -Oriented Change? Recruit and fill key positions with competent and committed supporters Know when and how to use ad-hoc committees or task forces to shape implementation activities Know when a full-scale approach to implementation is needed Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning

Discussion Question 1: What to do in crises situation? Discussion Question 2: How can change be managed effectively in organization? Discussion Questions 3: Which approach is better in managing change (task oriented or people oriented)? Discuss Discussion Questions

23 Summary Crises Leadership and Management Need for Change Phases of the change process Major reasons for resisting change People and task-oriented techniques for overcoming Resistance to change Lussier, R. and Achau, C. (2007): Effective Leadership, 3 rd Edition, South-Western, Cangage Learning