Change ManagementChange Management

Prof. Steve Phelan Prof. Steve Phelan

Lecture 20Lecture 20

TodayToday

• Continuous change at GE Cracking the code of change (2000) Unlocking the mystery of large scale change GE issues

• LMZ Chs 43-44 Seven practices of successful organizations

(1998) The new agenda for OD (1997)

Cracking the code of changeCracking the code of change

• Two change styles (Theory E and O) Theory E is shareholder value driven, top

down, focused on structure and systems, relies on financial incentives

Theory O is commitment driven, bottom up, focused on culture and employee skills

Authors argue that management needs to do both by explicitly embracing the paradox

Unlocking the mysteryUnlocking the mystery• New think

Shared ownership of vision – open dialog Public information – we all work from the same picture Volunteer mindset (‘what can I do?’) Respect for whole individual

• head, heart, hands, spirit – equally human Wisdom

• We have the knowledge and skills we need or know how to get them

System• I understand how we fit together

Process• We continually learn and change together

GE IssuesGE Issues

• Challenges of copying GE strategy/culture What were the hardest things to copy? Why? What should be done?

• Workout Is violating “no meeting Wed” a big deal?

• Internet strategy How did it roll-out so fast?

PfefferPfeffer• The seven practices are:

Employment security Selective hiring Self managed teams High compensation contingent on performance Training Reduction of status differences Sharing information

• Best way of unlocking Vaill’s latent energy?

The New Agenda for ODThe New Agenda for OD• Loss of community

People pretend to care more about one another than they really do

• Loss of employer-employee social contract I must take care of myself

• Employability Is my employer giving me the skills to find another job if I have to?

• Trust Widening gap between have and have nots Difference between what managers say and do Lack of openness

• Culture Clash Need for negotiation and conflict resolution skills

On mergersOn mergers• Interesting list of change strategies

Importance of vision/superordinate goal People need to understand the why behind the vision Importance of employee communication Relationships beyond the workplace A few off-site meetings together early Proximity was key Getting on with it/rapid decision making Walk the talk Don’t forget the customer

• Very similar to our merger simulation

Managing discontinuitiesManaging discontinuities• List of emerging discontinuities

Globalization Deregulation/privatization Volatility (need for flexibility) Convergence of technologies Indeterminate industry boundaries Standards Disintermediation Eco-sensitivity

• What about terrorism, oil? Not even anticipated