Importance of Change Management

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Importance of Change Management
Gweta MarkosianKarim CamaraRenzo
HoogendoornSander ZijlmansVincent Tseng
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Agenda

• Introduction
• Relation to Adaptive Cycle
• What is Change Management?
• Resistance
• Internal vs. External Change
• Change Management Models
• Advantages disavantages of the different models
• Common Factors to Successful Change Management
• Conclusions

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Relationship to the Adaptive Cycle
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Change management is

• Its such a volatile world that the first
  resolution for any business leader coming into
  2012 must be to become change friendly. I cant
  think of any sector that could not change
  massively within the next year.William Higham,
  founder of future trends consultancy The Next Big
  Thing
• it is not the strongest species that survive,
  nor the most intelligent, but the ones who are
  most responsive to change Charles Darwin
• To cope with a changing world, an entity must
  develop the capacity of shifting and changing
  of developing new skills and attitudes in short,
  the capability of learning
• A De Gues, The Living Company

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What is change management?
Change management is a systematic approach to
deal with change, both from the perspective of an
organization and on the individual level from
online Business Dictionary
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Why are employees resistant to change?

• 1. Employees were not aware of the underlying
  business need for change.
• 2. Lay-offs were announced or feared as part of
  the change.
• 3. Employees were unsure if they had the needed
  skills for success in the future state.
• 4. Individuals were comfortable with the current
  state they wanted to maintain the personal
  rewards and sense of accomplishment and
  fulfillment provided by the status quo.
• 5. Employees felt they were being required to do
  more with less, or do more for the same pay.

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Internal vs External Change

• Advantages
• Internal Internal change has many advantages for
  an organization, including increased morale among
  the employees, a sense of employee empowerment
  and control and a high likelihood of the change
  becoming permanent. Because the change originates
  from the group, it is more easily accepted and
  becomes the norm.
• External While external change is harder to
  accept than internal change, there are some
  distinct advantages for external change in an
  organization. This type of change can help jump
  start a declining organization and can change its
  course completely. Another advantage of external
  organizational change is that many organizations
  tend to reach a plateau level if left unchanged
  for too long. People become comfortable in their
  ways and stop seeking new and better ways to
  accomplish things. 

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Internal vs External Change

• Disadvantages
• Internal If a team or organization has a very
  domineering member, the internal change will
  often be a result of that single person and will
  therefore be too single-minded to be good for the
  organization at large. Additionally, when teams
  have been working together for too long in the
  same environment, the group mentality can take
  over and create unproductive change within the
  organization. 
• External When change is forced on an
  organization, often the organization will rebel.
  One of the main disadvantages of externally
  imposed change is that it is unsuccessful in the
  long term. Often, external resources can force
  the change for a while, but when those people
  move on to different roles, the organization will
  return to its previous behaviors. Additionally,
  the change process itself can cause temporary
  chaos within the organization and actually reduce
  productivity for a couple of weeks or months.

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Benefits of effective change management

• Returns of investment (ROI)
• Quality of the outcome achieved
• Efficiency of resources

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Requirements for becoming a change leader

1. Policies to make the future.
2. Systematic methods to look for and to anticipate
   change.
3. The right way to introduce change both within and
   outside the organisation.
4. Policies to balance change and continuity.

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Some change management models

• In order to manage change, several models have
  been developed. We will take a look at some of
  the most used models. Each approach has its pros
  and cons, however their is no framework that is
  "best" in all situations.
• McKinsey 7-S Model
• Lewin's Change Management Model
• Kotter's Eight Step Change Model

Nielsen (2008) quoted that organizational change
is complex. Even little changes are not easy to
undertake.
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McKinsey change management model
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McKinsey change management model

• SHARED VALUES called "super ordinate goals" when
  the model was first developed, these are the core
  values of the company that are evidenced in the
  corporate culture and the general work ethic
• STRATEGY the plan devised to maintain and build
  competitive advantage over the competition.
• STRUCTURE the way the organization is structured
  and who reports to whom
• STAFF the employees and their general
  capabilities
• SYSTEMS the daily activities and procedures that
  staff members engage in to get the job done
• SKILLS the actual skills and competencies of the
  employees working for the company.
• STYLE the style of leadership adopted.

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Advantages/disadvantages of Mckinseys model

• Advantages
• All parts are interrelated, so all portions must
  be addressed and focused on (12Manage, 2007)
• It is an effective way to diagnose and understand
  the organization
• It is a guide for organizational change
• Disadvantages
• When one of the parts is changed, all parts
  change because they are all interrelated
  (12Manage, 2007). The model is complex.
• This model ignores differences (Morgan, n.d.).
  After five years many of the companies that used
  this model fell from the top (Morgan, n.d.).
• Companies using this model have been known to
  have a higher incidence of failure.

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Link to the Adaptive cycle
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Lewins change management model
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Lewins change management model

• Unfreeze Getting ready to change, understanding
  that change is necessary moving out of the
  comfort zone
• Change (transition) Moving to a new way of
  being, people are fearful and unsure, support is
  important -gt training, coaching, and expecting
  mistakes as part of the process
• Refreeze Establishing stability, changes are
  accepted and become the new norm, new
  relationships and routines are created

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Advantages/disadvantages of Lewins model

• Advantages
• It is a simple and easily understood model for
  change
• this model has fewer steps
• The model is done through steps this is an
  efficient model that is used today (Mind Tools,
  2007 Syque, 2007).
• Disadvantages
• At the refreezing period, many people are worried
  that another change is coming, so they are in
  change shock (Syque, 2007). This change shock
  causes employees to not be as efficient or
  effective in their jobs (Syque, 2007).
• Refreeze phase change is continuous, change may
  occur within weeks, no time to settle down

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Link to the Adaptive cycle
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Kotters change management model
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Advantages/disadvantages of Kotters model

• Advantages
• This is a step by step model, which is easy to
  follow.
• It does not focus on the change itself, but
  rather on the acceptance and preparedness for the
  change which leads to an easier transition.
• Disadvantages
• It is a top-down model and opportunities can be
  missed, because not everyone is involved in
  co-creation of the vision.
• You cannot skip a step because the change process
  will then completely fail. As with the other two
  models, change still takes a lot of time.

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Link to the Adaptive cycle
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Common Factors to Successful Change Management

• Planning Develop and document the objectives
  that need to be achieved with the change and the
  means to achieve it.
• Defined Governance Establish appropriate
  organisational structures, roles and
  responsibilities for the change that engage
  stakeholders and support the change effort.
• Committed Leadership Ongoing commitment at the
  top and across the organisation to guide
  organisational behaviour.
• Informed Stakeholders Encourage stakeholder
  participation and commitment to the change by
  employ open and consultative communication
  approaches that will create awareness and
  understanding of the change throughout the
  organisation.
• Aligned Workforce Identify the human impacts of
  the change and develop plans to align the
  workforce in order to support the changing
  organisation.

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Conclusions

• Change management is of strategic importance and
  companies cannot exist without it. Their ability
  to change and adapt quickly brings enormous
  market advantages.
• Each change management model has its pros and
  cons, however none of the models is the "best"
  in all situations. Most change management models
  are made to help the change management be more
  effective.
• Common factors to successful change management
  include planning, committed leadership, aligned
  workforce, informed stakeholders and defined
  governance.

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Questions?