1. Leading and Managing
Change

2. Change as a Transition State
Desired
Future
State
Current
State
Transition
State

3. Change Management Activities
Motivating Change
Creating Vision
Effective
Change
Management
Mobilizing
Commitment
Managing the Transition
Sustaining Momentum

4. BARRIERS TO MOTIVATING CHANGE
Direct Costs
Saving Face
Forces for Change
Fear of the Unknown
Breaking Routines
Incongruent Systems
Incongruent Team Dynamics

5. Creating a Vision
Discover and Describe the Organization’s Core Ideology
What are the core values that inform members what is important in the organization?
What is the organization’s core purpose or reason for being?
Construct the Envisioned Future
What are the bold and valued outcomes?
What is the desired future state?

6. What makes a good model/vision?
Desirable
Satisfies stakeholders
Motivates/In spires employees
Feasible
Opportunity for short term wins
Realistic stretch
Relevant
Contextually sensitive
Communicable: Clear, Concise, Understandable

7. What makes visions fail?
Failing to focus
Sitting out the dance
Skipping the skill building
Mismatching Messages & Metrics
Clashing Powers
Neglecting the Talent Pipeline

8. Phases for Enabling a Vision
Framing the Agenda – frame the organizations’ challenges as compelling stores that created urgency for action.
Engaging the Organization – Distribute “ownership” broadly
Building Mission-Critical Capabilities – Develop necessary capabilities
Connecting the Dots by Creating Alignment - Align systems, mind-sets, messages
Energizing the Org through Power of the People - Make a link between talent requirements and competitive capability requirements. Keep people energized!

9. Language Of Leadership: Rhetorical Crafting
Leader’s ability to use symbolic language to give emotional power to his or her message
Metaphors (ex. Mary Kay’s bee)
Analogies (ex. Chrysler is like a family)
Stories (ex. CEO’s house at midnight)
Speech: repetition, rhythm, balance, alliteration
Language: gearing language to fit the audience
Nov. 15, 2006
Lant MOA F2006

10. Mary Kay What vision did she create?
What techniques were used in her speeches to create culture and change?
Is she a transactional or a transformational leader?

11. BHAG: Big Hairy Audacious Goals
BHAG is part of envisioning the future
BHAG is a clearly articulated goal that is reachable within years
Can be qualitative or quantitative
David vs. Goliath thinking
Be like an iconic role-model
Internal transformation

12. PILLARS OF SUSTAINABILITY
Sustainability - Meeting the needs of the present without compromising the ability of future generations to meet their own needs (WCED, 1987: 8).
PILLARS OF SUSTAINABILITY
1) Economic Sustainability – A company cannot survive if expenditure exceeds income.
2) Social sustainability – Embodies the humanitarian context of business and related to issues of poverty, income inequality, disease
3) Environmental sustainability - Considers the impact of business on the quality and quantity of natural resources, the environment, global warming, ecological concerns, waste management, reductions in energy, alternative energy production and improved pollution and emissions management (Townsend, 2008)

13. Learning about sustainability
1) Codes of Conduct - minimum acceptable standards in corporate processes and procedures
2) Impact Measures – calculating not only financial standards, but social and environmental impact
3) Structures and Policies – designing company structures and policies that embody the principles of economic, social and environmental sustainability (e.g., corporate governance or decision making)
4) Purchasing and Supply Chain Initiatives – Dialogue about sustainability in the supply chain, along with human rights practices that foster well-being
3) Communications & Dialogue – means to communicate the importance of sustainability internally across the organization and externally to stakeholders
4) Employee Training and Dialogue (should be ongoing!)– Train and teach methods of sustainability

14. Evolution of Institutionalizing Sustainability
Marvis & Googins (2006)
Werbach (2008)
Zadek (2004)
Goodman & Dean (1982)
Primary Phase
Elementary
Engaged
Innovative
Integrative
Transformative
Blind
Aware
Compliant
Transparent
Defensive
Managerial
Strategic
Civil
Maturity Pers.
N/A
Persistence Indicators
Citizen concept
Strategic Intent
Leadership
Structure
Issues mgmt
Stakeholder rel.
Transparency
Role of media
Maturity of Perspective
Knowledge
Performance
Preference Normative & Value Consensus
Drivers of Change
Challenges: Credibility, capacity, coherence, commitment
Strategy Implementation
Market Forces
Org Learning
Congruence
Socialization
Rewards Diffusion
Sensing & Calibrating

15. When do you know that sustainability is institutionalized at the Gap?
1) Codes of Conduct
2) Impact Measures
3) Structures and Policies
4) Purchasing and Supply Chain Initiatives
3) Communications & Dialogue
4) Employee Training and Dialogue (should be ongoing

16. The Challenge of Organizational Change
As the rate of change in the business environment continues to increase, the premium on organization’s being able to change is growing ever more significant.
Organizations are built to be stable. … As a result, most efforts at designing and managing organizational change are dismal failures.
Source: Lawler, E. & Worley, C Built to Change: How to Achieve Sustained Organizational Effectiveness. San Francisco: Jossey-Bass, pages xiv and 11 respectively.

17. Formulaic Approach to Strategic Change
Off–the–Shelf Solutions or Change Agent’s Preferences
Implementation Strategy
Change Outcomes
Source: Balogun, J. and Hailey, V Exploring Strategic Change, 3rd Edition. Essex, England: Prentice-Hall, page 12.

18. Context-Sensitive Approach to Change
Change Context
Implementation Strategy
Change Outcomes
Adapted from Balogun, J. and Hailey, V Exploring Strategic Change, 3rd Edition. Essex, England: Prentice-Hall, page 13.

19. Overview of Simulation Model
Change Context:
Environmental Sustainability in a High or Low Urgency Situation
Player’s Authority:
Mid Level Manager or CEO
Change Strategy:
18 Change Levers

20. Four Distinct Scenarios
Power of the Change Agent
Low
High
Scenario 1
Scenario 2
Director, Product Innovations
CEO
Low
Urgency for Results
Scenario 3
Scenario 4
Director, Product Innovations
CEO
High

21. Context of Change Reactive Change Proactive Change
Closing a performance gap
(what is and what should be)
Proactive Change
Closing an opportunity gap
(what is and what could be)

22. Power of the Change Agent
Realignment
Power of the Change Agent
Low
High
Scenario 1
Scenario 2
Proactive change (Address opportunity gap)
Proactive change (Address opportunity gap)
Low
Urgency for Results
Scenario 3
Scenario 4
Reactive Change (Address performance gap)
Reactive change (Address performance gap)
High
Source: Tichy, N. M Managing Strategic Change: Technical, Political and Cultural Dynamics. New York: Wiley.

23. Scenario Group Debriefing
Why were some of you more successful than others?
What seemed to work? What didn’t?
Were there any common missteps?
Did you take any time to diagnose and strategize before you began to act?
What levers did you find yourself using first? How about later?

24. Scenario Discussion Takeaways: Role
Things to DO: CEO
Things NOT to DO: CEO

25. Scenario Discussion Takeaways: Urgency
Things to DO: Urgent Change Situations
Things to DO: Non-Urgent Change Situations

26. Three Distinct Organizational Change Phases

27. Kotter’s 8 Steps Mobilization (Unfreeze) Movement (Change)
Establishing a Sense of Urgency
Mobilization
(Unfreeze)
Forming a Powerful Guiding Coalition
Creating a Vision
Communicating a Vision
Movement (Change)
Empowering Others to Act on the Vision
Planning for and Creating Short-Term Wins
Sustain (Refreeze)
Consolidating Improvements and Producing Still More Change
Institutionalizing New Approaches
From: Kotter, J Leading Change: Why Transformation Efforts Fail, Harvard Business Review.
(c) Ranjay Gulati

28. Change Formula (D x M x P) > Cost of Change if Change is to Occur
D = dissatisfaction; M = model; P = process
Source: Beer from teaching note
Sources: Beer, M., and N. Nohria Cracking the code of change. Harvard Business Review (May–June) and Beckhard, R. and Harris, RT (1987) ‘Organizational Transitions: Managing Complex Change, 2nd Edition.’ Prentice Hall.

29. Resistance to and Costs of Change
Resistance to Change
Costs of Change
Anger
Active or passive aggression
Withdrawal
Fear of loss
Change in reward structure
Power shifts
Requirement for new competencies
Need for new relationships
Challenge to identity
Require time and energy

30. Raising Dissatisfaction
Dissatisfaction — Emotional energy about performance or opportunity gaps
Communicate NEED for change and COSTS of not changing
Performance / opportunity gap analysis (internal and external)
Comparative data
Contextual landscape analysis
Benchmarking
Employee attitudes
Sharpen awareness of gap analysis
Involve key people

31. M: Focusing Dissatisfaction
D x Focus URGENCY
Clear and widely understood MODEL for change (M), sometimes referred to as vision
What is being changed and why?
Where we want to go / what do we want to become?
Model / vision must be compelling and meaningful
Appeal to logic, emotion, and values

32. P: Some Key Process Choices
Build Credibility
Build Coalition
Metrics and Measurement
Training
Communication Plan
Pace and Involvement
Build Organizational Capability

33. Pace of Change Directive Persuasion Urgency or crisis
High dissatisfaction
Low resistance
High level of support
Change agent has relevant information
Changes are clear
Not a crisis
High need for commitment to engage in change
Change is not clear
Change is complex
Change agent needs support of key constituents
Source: Kanter, R.

34. Key Change Lever Attributes in the Simulation
Restructure Firm
Values Clarification
Reward System
Town Hall Meeting
Recognizes Adopter
Goals and Deadlines
Coalition of Support
External Skill Building and Pilot Project
Credibility Required of Change Agent
Issue and Tell Success Story
Confront Resister
Internal Skill Building
Progress Reports
Conduct Interviews
Walk the Talk and CEO Support
Consultant Report

35. Change Levers Enabling Credibility Communication Training Substantive
Technical
Political
Cultural

36. Six Types of Change Levers
Enabling – These levers raise awareness for targets
Credibility (e.g., invite external consultant to extoll change)
Communication (e.g. initiate town hall meeting)
Training (e.g. provide external training experience)
Substantive – These levers facilitate adoption by targets
Technical (e.g., align the reward system to with change initiative)
Political (e.g., privately confront a resister)
Cultural (e.g., tell a success story)

37. Lever Deployment Effectiveness
Lever Effectiveness = Function
Urgency of the Situation
Change Agent Formal Authority and Credibility
Timing of Deployment,
Change Target Receptivity

38. Moderately Disruptive
Change in Low Urgency Situations: Gradual Build to Institutionalization
Highly
Disruptive
Levers
Confront Resister
Goals and Deadlines
Revise Reward System
Restructure Firm
Moderately Disruptive
Internal Skill-Building
External Skill-Building
Pilot Projects
Recognize Adopters
Values Clarification
Minimally Disruptive
Conduct Interviews
Post Progress Reports
Issue
Tell Success Story
Build Coalition of Support
Hold Town Hall Meetings
Coalition of Support
Town Hall Meetings
Mobilize Phase
Movement Phase
Sustain Phase
Can we center these two slides and take of semi colons

39. Moderately Disruptive
Change in High Urgency Situations: Accelerated Build to Institutionalization
Highly
Disruptive
Levers
Confront Resister
Goals and Deadlines
Revise Reward System
Restructure Firm
Moderately Disruptive
Internal Skill-Building
External Skill-Building
Pilot Projects
Recognize Adopters
Values Clarification
Pilot Projects;
Minimally Disruptive
Conduct Interviews
Post Progress Reports
Issue
Tell Success Story
Build Coalition of Support
Hold Town Hall Meetings
Mobilize Phase
Movement Phase
Sustain Phase

40. Stages in Adoption
Stage 1: Awareness
Change target is aware of the change
Stage 2: Interest
Target recipient is curious about the change
Open to information (how does it work, potential benefits, etc.)
Stage 3: Trial
Change target is prepared to
Evaluate the costs and benefits of the innovation
Assess the innovation’s probability of success
Stage 4: Adoption
Target adopts the innovation and uses it regularly
Each person goes through these 4 stages. Simulation allows you to keep track of these stages.
(c) Ranjay Gulati 2006

41. Social Network Effects

42. Developing Political Support
Assess Change Agent Power
Identify Key Stakeholders
Influence Stakeholders

43. Sources of Power and Power Strategies for Change Agents
Individual Sources of Power
Power Strategies
Knowledge
Playing it Straight
Knowledge
Playing it Straight
Using Social
Networks
Others’ Support
Using Social
Networks
Others’ Support
Going Around the
Formal System
Personality
Going Around the
Formal System
Personality

44. Managing the Transition
Activity Planning
What’s the “roadmap” for change?
Commitment Planning
Who’s support is needed, where do they stand, and how to influence their behavior?
Change-Management Structures
What’s the appropriate arrangement of people and power to drive the change?

45. Sustaining Momentum Provide Resources for Change
Build a Support System for Change Agents
Develop New Competencies and Skills
Reinforce New Behaviors
Stay the Course