Download - Leading Change_Teigland
Leading Change: Integrating Theory and Practice
Robin TeiglandCenter for Strategy and
CompetitivenessStockholm School of Economics
[email protected]: RobinTeigland
www.knowledgenetworking.orgAugust 2013
Who am I? (LinkedIn Inmaps)
SSE
IFL
Swedish Industry
Research Wharton
Stanford
McKinsey
SSE MBA
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Agenda
Afternoon1. Live Project Groupwork
2. Some Change Tools
Morning1. What is Change
2. Kotter’s 8 Stages
3. Groupwork
Going Forward
4
Leading Change objectives
To expose participants to some Change concepts, frameworks, and tools
To develop Change techniques and skills through developing and discussing a live change project
To deliver real business benefits for your company
To provide participants with an interactive and reflective team experience in which everyone (participants and faculty) learns together
Jack Welch…
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"...when the rate of change outside an organization is greater than the change inside, the end is near...."
Competitive advantage increasingly based on organization’s ability to change
Of original Forbes 100 in 1917- 61 companies ceased to exist by 1987- 18 of remaining 39 underperformed market by 20%- Only 2 beat market index (GE & Eastman Kodak)- Only 1 (1%) today!
Average S&P 500 company lifespan 1920s – 67 years 2010s – 15 years
Dr. Richard Foster, Yale, Sept 2012 Today's rate of change is at faster pace than ever By 2020 prediction is >75% of S&P 500 will be
companies we do not know about today
http://www.fastcompany.com/3001444/what-zara-pg-and-berlitz-know-about-agility
Only 20-30% of all change projects achieve full value Less than 20% of anticipated value from M&A materialized Only 25% of JVs stay together after “honeymoon” Less than 50% of quality-improvement efforts make
satisfactory progress
Only 9% of all major software development applications in large organizations worth cost
31% of software implementation projects cancelled before completion
Irrespective success or failure, 53% software implementations result in cost overruns by up to 189%
High number of change initiatives unsuccessful!
So, are change initiatives successful?
Beer 2002, Gratton 2007, Maurer and Co
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Your experience with change
Discuss in pairsChoose one of your more significant experiences with change (either successful or unsuccessful). Which events/phases of change from the Iceberg story do you recognize in your experience? Did you experience all the phases or only some of them? Why or why not?Do you recognize any of the key characters in this change experience? Freds, Alices, NoNos? Other? Reflect on your own role in this change experience. Which character(s) did you play in these?Was this change experience successful? Why or why not? How does the outcome differ from that of the Iceberg story?
www.ouricebergismelting.com
Organizational Change
An alteration of an organization’s environment, structure, culture, technology, or people A constant force An organizational reality An opportunity or a threat
Change agent A person who initiates and assumes the
responsibility for leading a change in an organization
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Change focus
Burnes 2004
Small-scale change
Large-scale change
Rapid changeSlow change
Level: The organizationFocus: Structures & processes
Level: The organizationFocus: Culture
Level: Individual/groupFocus: Tasks & procedures
Level: Individual/groupFocus: Attitudes/behavior
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What triggers change?
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PESTEL – External pressures for change
Johnson & Scholes 1997
Political
Environmental Technological
Legal Social
Economic
Organization
PeoplePeople• “ “Net generation”Net generation”• 24x7 “mobile” 24x7 “mobile” workforceworkforce• Social entrepreneurshipSocial entrepreneurship
Technology Technology • Broadband accessBroadband access• Mobile hardware Mobile hardware • ICTsICTs• 3D printing 3D printing
Open Open SourceSource
• Software Software • HardwareHardware• PhysiblesPhysibles
Convergence of…..
FinanceFinance• Microlending/microfinancMicrolending/microfinance e • Crowdfunding/equityCrowdfunding/equity• Digital, non-fiat Digital, non-fiat currenciescurrencies
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Organizational forces: Internal pressures
Need for improved performance In current or new markets
Need for integration and collaboration E.g., alliances, synergies, economies of scale
Power and politics E.g., changes at top management and board
level Changes in surrounding organizations
E.g., key customers, suppliers, partners
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Pressures from one area can affect the entire organization
Political
Environmental
TechnicalLegal
Social
Economic
Culture Systems
VisionStrategy
Structure People
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A new opportunity???
But every challenge is…..
Only 20-30% of all change projects achieve full value Less than 20% of anticipated value from M&A
materialized Only 25% of JVs stay together after “honeymoon” Less than 50% of quality-improvement efforts make
satisfactory progress Only 9% of all major software development applications
in large organizations worth cost 31% of software implementation projects cancelled
before completion Irrespective success or failure, 53% software
implementations result in cost overruns by up to 189%
Remember…. Are initiatives successful?
Beer 2002, Gratton 2007, Maurer and Co
Why? According to Fortune 500 executives,
resistance/people not accepting changes
Why do people resist change?
21Prentice Hall 2002
Innovators - Leap with enthusiasm at change proposal and strongly support.- Expect others to be active in pursuing change.
Early Adopters - Rapidly persuaded, especially by early success. - Likely to want to adapt change proposals to own circumstances.
Early Majority - Want to see tangible outcomes to change proposals. - Not convinced merely by idea or principle.
Late Majority - Follow powerful person when agree and support change ideas. - Commitment centered on political calculation.
Resistors (Laggards)
- Predictable. - Need considerable evidence – more vivid and directly observable, the better – before they can be mobilized. - Relatively risk adverse.
People react differently...
Rogers 1983, 1995
Reactions to change distribution
Rogers 1983, 1995
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Say the color, not the word
YELLOW BLUE ORANGE BLACKBLACK
GREEN PURPLE YELLOW RED
ORANGEORANGE GREEN BLACK BLUE
Stroop
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The challenge of change
ChangeLeadership
ChangeManagement
The WHATThe ‘hard’ edge:
Systems, processes, structures, and business
strategy
The HOWThe ‘soft’ side:
Culture, behaviors, values,
and people
Zwanenberg
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Kotter’s eight-stage process for change
Kotter 1996
2. Form a powerful guiding coalition
1. Establish a sense of urgency
3. Create a vision
8. Anchor new approaches
4. Communicate the vision
5. Empower others to act on the vision
6. Plan for and create short-term wins
7. Consolidate improvements and produce more change
3030
Tata Motors
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Tata Motors
India’s largest commercial vehicle maker for decades World’s fifth largest manufacturer of medium
and heavy trucks India’s largest automobile company (#1 in
commercial and #2 in passenger) Building global presence (e.g.,
partnership/acquisition with Fiat, acquisition of Jaguar/Land Rover)
Major turnaround 2001 to 2007 March 2001 - $110 mln loss for fiscal year,
corporate India’s biggest loss 3Q 2007 - $132 mln profit
http://www.youtube.com/watch?v=rOnQpP5haUQ
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Groupwork - In your groups
Discuss how change was implemented at Tata Motors What triggered the change? How does the change process map onto Kotter’s
eight stages? What is the real change? What are the lessons learned from the case?
Prepare a maximum 10 minute presentation Present groupwork Discussion
http://www.mckinseyquarterly.com/Leading_change_An_interview_with_the_managing_director_of_Tata_Motors_1908
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1. Establish sense of urgency
Forces for
change
Forces for
stability
The status quo
Burnes 2004http://www.youtube.com/watch?v=U5802FBaMSI
Force field modelW
ho a
nd W
hat
Can
Ch
ange
Who a
nd W
hat
Can
Ch
ange
Lewin 1947, 1951; Iles & Southerland, 2001
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1. How to create a sense of urgency?
Create a crisis/rivalry Benchmark within and outside industry
Find/develop a “red hot” burning issue Align with a powerful sponsor
Revise existing or develop new standards Income, profitability, effectiveness, efficiency, customer
satisfaction
Get an outside opinion Bring in consultants, customers, shareholders
Adapted from Kotter 1996
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2. Form a powerful coalition
Ensure shared understanding & right attitude Ability to share vision Trustworthy Commitment to means and end
Has access to necessary resources Formal position power Expertise Reputation Leadership Informal network position
But look out for people
with big egos or “snakes”
Beer 2002, Kotter 1996
The small team that will lead
the change
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Who has informal power in the organization?
Teigland 2003
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3. Create (and operationalize) a vision
Create the vision To direct the change effort To coordinate across and outside
the organization
Develop a strategy to achieve the vision (operationalize) To engage people through
participation To find their “passion” To overcome forces for stability
Adapted from Kotter 1996
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4. Communicate the vision
How? Use multiple channels Regularly to reconfirm
What? Keep it simple Use metaphors and
success stories Who?
Walk the talk Identify key opinion
leaders
But listen as well!!
Adapted from Kotter 1996
Information + Involvementto build commitment & change
Increasin
g Commitment
Awarenessof desired change
Understandingof change direction
Translationto the work setting
Commitmentto personal change
Internalizationof new behavior
“Yeah, I saw the memo.”
“I understand where we need to go.”
“I know how we need to do our jobs differently.”
“OK, I’m ready to do it the new way.”
“This is the way we do things here.”
Stages of Individual
Behavior Change
Information with some involvement sufficient
here
Significant involvemen
t needed
Schreiber
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5. Empower others to act on the vision
1. Does the organizational culture encourage individuals to act?
2.Do people have the
necessary resources to
act?
3.Do people have the appropriate skills and training to act?
4.Do people have the authority to
act?
5.Are the organizational structure & systems aligned with the vision?
Adapted from Kotter 1996
Barriers to empowerment
42Kotter 1996
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6. Plan for and create short-term wins
1. Create obtainable
targets
2. Encourage & convince people that targets can be reached
3. Recognize and reward “winners”
Communicatethe wins
Adapted from Kotter 1996
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7. Consolidate improvements and produce more change
Change Project 1
Change Project 2
Change Project 3
Time
Scope of
change
Adapted from Kotter 1996
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8. Anchor new approaches
Company culture
Physical artifacts
activities and routines
Underlying values,assumptions,
beliefs, and expectations
Intangible
Adapted from Kotter 1996
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Kotter’s eight-stage process for change
Kotter 1996
2. Form a powerful guiding coalition
1. Establish a sense of urgency
3. Create a vision
8. Anchor new approaches
4. Communicate the vision
5. Empower others to act on the vision
6. Plan for and create short-term wins
7. Consolidate improvements and produce more change
Involving people in the change
48http://www.mckinseyquarterly.com/What successful transformations share
People don’t resist change – they resist being changed
From recipients of change to co-creators of change
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Your Iceberg Reflect on your organization. What is your iceberg and
what does it look like? Is it melting? Does it have fissures? Is there a clear and simple message about the future and
what it may look like that is understood by all? Are you and your team most concerned with success in
catching fish today or planning for what may come tomorrow?
What does your team look like? Reflect on who the Nonos, Freds, Alices, Buddies, etc. are. How well balanced is it in terms of having the “right” characters? Do you have enough/too many/too few? Who will adopt the necessary roles if no one else is doing it?
What do you have to do to lead/encourage/support the people 'stepping up'? What can you do about the Nonos?
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Agenda
Morning1. What is Change?
2. Kotter’s 8 Stages
3. Groupwork
Going Forward
Afternoon1. Live Project Groupwork
2. Some Change Tools
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In your groups …..
Choosing the Change Project
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Criteria for the Change Project
It should involve a real organizational issue or challenge that at least one group member is currently facing in his/her part of your organization.
It should lead to a real change in your organization.
The change should lead to improved business performance that is both identifiable and measurable.
The project should have a stakeholder.”This is something we would like to do!!”
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Change focus
Burnes 2004
Small-scale change
Large-scale change
Rapid changeSlow change
Level: The organizationFocus: Structures & processes
Level: The organizationFocus: Culture
Level: Individual/groupFocus: Tasks & procedures
Level: Individual/groupFocus: Attitudes/behavior
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Better to choose a more
narrow, specific focus!
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You will present your projects in Module 3
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Discuss in your groups today
What are the current & future pressures for the change? Internal External (PESTEL)
What is the sense of urgency for the change? For whom? How urgent? What can be done to strengthen the sense of urgency?
What is the vision or real change that your project will lead to?
How will the change improve business performance? Identifiable? Measurable?
How will you organize your work during the program? How will your coordinate with your Stakeholder?
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Kotter’s eight-stage process for change
Kotter 1996
2. Form a powerful guiding coalition
1. Establish a sense of urgency
3. Create a vision
8. Anchor new approaches
4. Communicate the vision
5. Empower others to act on the vision
6. Plan for and create short-term wins
7. Consolidate improvements and produce more change
65
Prioritize stakeholders
Low High
Low
HighLevel of interest•Visibility•Importance•Priority
Scholes 1998
Power•Formal•Informal
Keepinformed
Keyplayers
Minimaleffort
Keepsatisfied
http://www.mindtools.com/pages/article/newPPM_07.htm
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Stakeholder analysis
Stakeholder Bloc
kLet
Help
Make
Diagnosis of stakeholder position
Recommended action to move to desired position
Adapted from Nader, NTL
Current (C) & Desired (D) position regarding the Change
Involving people in the change
67http://www.mckinseyquarterly.com/What successful transformations share
People don’t resist change – they resist being changed
From recipients of change to co-creators of change
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Today’s Coaching Session
Each Group will present its Change Project to the others, max 10 minute presentation
One Review Group will be appointed to lead the following discussion, max 5 minutes: How well does the Project fulfill the Change
Project criteria? What challenges are foreseen for the Project? How could these challenges be overcome?
Promote learning through “Assess, Challenge, Support”!
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Your Live Project Iceberg
Reflect on your live project. What is the iceberg and what does it look like? Is it melting? Does it have fissures?
What is the clear and simple message about the future that may be understood by all?
What does the set of stakeholders look like? Reflect on who the NoNos, Freds, Alices, Buddies, etc. are. Do you have enough/too many/too few? Who will adopt the necessary roles if no one else is doing it?
What do you have to do to lead/encourage/support the people 'stepping up'? What can you do about the NoNos?
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Agenda
Morning1. What is Change?
2. Kotter’s 8 Stages
3. Groupwork
Going Forward
Afternoon1. Live Project Groupwork
2. Some Change Tools
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Tools to achieve the “transformation”
1. Conduct stakeholder analysis2. Develop clear project charter and roll out
plan3. Develop communication plan4. Conduct risk analysis5. Develop measurement plan
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Morning1. What is Change?
2. Kotter’s 8 Stages
3. GroupworkAfternoon
1. Live Project Groupwork 2. Some Change Tools
Agenda
Going Forward
Timeline
Sept 9 (8:00 am Stockholm): Change project statement, should be agreed with Project Stakeholder
Oct 7 (8:00 am Stockholm): Progress report Timeline to completion Progress to date, what achieved (Kotter, frameworks, method,
sources, etc.) Issues/challenges outstanding with project Ideas to overcome issues/challenges Update on communication with Stakeholder
Module 2: Respond to feedback and develop implementation plan
Nov 22 (8:00 am Stockholm): Progress report Communication plan Risk analysis Issues / challenges and how to overcome Update on communication with Stakeholder
Dec 5: Module 3 – presentation
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Moving forward
Coordinate with Stakeholder and invite to Module 3 presentation
Provide brief update Friday morning on Thursday evening’s progress (remember Kotter’s 8 stages!)
Prepare and submit inter-module progress report By email
Module 2 Scheduled working time during Module 2 Each team submits its presentation
● By email
Prepare and submit inter-module progress report Submit by email
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Moving forward
Coordinate with Stakeholder and invite to Module 3 presentation
Provide brief update Friday morning on Thursday evening’s progress (remember Kotter’s 8 stages!)
Prepare and submit inter-module progress report By email
Module 2 Scheduled working time during Module 2 Each team submits its presentation
● By email
Prepare and submit inter-module progress report Submit by email
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Module 3 - Final Presentation Each team has 15 minutes maximum to present its
Change Project, including the following (in ppt):● Purpose and rationale for change● Use of tools, eg stakeholder analysis, risk analysis, etc.● Measuring impact and preliminary results● Plan for moving forward● Lessons learned
One team will then lead feedback to the Presenting Team for 10 minutes maximum
● The purpose of this feedback is to spur lively debate and help advance each Change Project as much as possible
Faculty and Stakeholders will provide further comments Each team submits its presentation
● By email
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See you in Module 3!!
Good luck with your projects!!