MGT 450 – Spring 2016 Class 6 – Chapter 4 Concepts in Leading Change and Innovation WHY??? To cope with Globalization Technological revolution in products and services Deregulation Sweeping social and political changes To generate above average returns

Learning Objectives After studying this chapter, you should be able to: Understand the different reasons for resisting change. Understand the psychological processes involved in making major changes. Understand how to implement a major change in an organization. Understand the characteristics of a learning organization. Understand how leaders can increase learning and innovation in organizations. Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-2

Business Pressures for Change Globalization – Intense competition on an un-even playing field Technology revolution in products, services, manufacturing, communications, etc. Deregulation – removing certain barriers to doing business, e.g. airlines, trucking, etc. Sweeping social and political changes, e.g. diversity, autocracy vs. democracy, representative government

Change Reaction Stages Denial Anger Mourning Adaption Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-4

Do People Like Change ??? No – Don’t know if I can adapt What’s wrong with the current way If it ain’t broke, don’t mess with it Yes – New ideas and methods are needed in order to successfully compete Our way is not the only way, you know The internal and external environments are forcing us to re-think the way we do business

RHETORICAL THOUGHT STARTER People like change – if they are in charge of the change. They change their: Majors Careers and career aspirations Spouses, boyfriends/girlfriends, significant others Sexual identity & gender Jobs Clothing & hair styles Homes Friends Citizenship

Reasons for Resisting Change No clear justification for change – ambiguous reasoning Feasibility of proposed change – Does it make sense Unsuccessful earlier change efforts – poor track record Lacking self-confidence – can I master the new way Tangible cost/benefit – Performance suffers with any change Individual loss – job, security, status Inconsistency with individual values – unethical, illegal, immoral Lack of trust – leaders who propose the change are not trusted. Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-7

The Change Process Understanding the psychological processes involved in making major changes Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-8 Kurt Lewin (1890 – 1947) Three-phase change process 1.Unfreezing – realization that the old ways of doing things are no longer adequate or satisfactory 2.Changing – people look for new ways of doing things and select a promising approach 3.Re-freezing – the new approach is implemented and becomes established

Discussion topic Obamacare 1.Why is accepting Obamacare so difficult for a large segment of the American population? 2.Is it easy or hard for you to accept informed, but opposing, viewpoints as legitimate and very real

IMPLEMENTING CHANGE Four major concepts to think about when implementing change 1.Determining what to change 2.Understanding the complex relationships and systems dynamics 3.Who is responsible for implementing major change 4.The pace and sequencing of change

SOME GUIDELINES FOR IMPLEMENTING CHANGE Communicate a clear vision of the benefits to be gained Prepare people for the change by explaining how it will affect them Create a sense of urgency for the change Identify likely supporters, opponents and reasons for resistance Build a broad coalition to support the changes Empower competent people to help plan and implement the changes Provide opportunities for early successes to build confidence Keep people informed about the progress of change.

WHAT IS A VISION STATEMENT An inspirational description of what an organization would like to achieve or accomplish in the near or long term future. It is intended to serve as a clear guide for choosing current and future courses of action.

Elements of a Vision Mission StatementWhat is our reason for being Value StatementJohnson & Johnson Handout Newport News Ship Building: We will build good ships here – at a profit if we can – at a loss if we must – but always good ships. SlogansFord: Quality is Job #1 Strategic ObjectivesGE: GE will be #1 or #2 in its industries; if it is not, GE will fix it, close it, or sell it Project ObjectivesAt cost, on time, according to the contract Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-13

Guidelines for Vision Development Key stakeholders Shared values and ideals Strategic objectives with wide appeal Relevant elements in the old ideology Link vision to core competencies Continually assess and refine the vision Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-14

Developing a Vision Qualities of an effective vision Simple and idealistic (Ford – Quality is Job #1) Appeals to values Emphasizes future objective Challenging Realistic Addresses what is important Focused but not confining Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-15

Why Create a Learning Organization Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-16 Too much knowledge to be confined to one organization Critical thinking Vast expansion of knowledge and experiences Develop new predicts and services Attract and retain talent

Creating the Learning Environment Internal creation – Leaders create the environment in which learning and development can occur External acquisition – merger and acquisition of talent, products, procedures from which to grow the business Knowledge Diffusion – facilitates sharing of new knowledge and ideas among sub-units of an organization Learning Organizations – intense dissatisfaction with the status quo Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-17

Sharing of Information Are these traits of a learning organization 1.None of your business 2.That’s only available to selected people 3.Confidentiality abuse 4.Performance metrics 5.Reaching outside of your silo of expertise 6.Crossing disciplines to help others solve their problems 7.Virtual team 8.Matrix teams

What Has Learning Done For Me Lately, Corporate-wise Cell phonesPharmaceuticals TabletsBusiness acumen QRFinancial literacy Digital everythingBook buying ScannersNano-tech Medical diagnosticse-everything Business intelligenceUniversity research (pure & applied) Generated competitive advantages

Guidelines for Increasing Learning and Innovation Copyright© 2013 Pearson Education Inc. publishing as Prentice Hall Leadership In Organizations 4-20 Encourage appreciation for flexibility and innovation Encourage and facilitate learning by individuals and team Help people improve their mental models by educating them on the work at hand Evaluate new ideas with small scale experiments Encourage and facilitate the sharing of knowledge and ideas Reward entrepreneurial behavior

End of Class 6 HOMEWORK Re-read Chapter 4 Read Chapter 5 Team 3 = Prepare to lead Chapter 4’s Review and Discussion Questions Team 4 = Prepare to analyze and discuss the Case Study for Chapter 4