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Managing Organizational Change. Why do most organizational change attempts fail and what can managers do about it?. Program Structure. Session I: Organizational Change – Concepts and Problems What is organizational change? Why do managers fail in organizational change?

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managing organizational change

Managing Organizational Change

Why do most organizational change attempts fail and what can managers do about it?

program structure
Program Structure

Session I: Organizational Change – Concepts and Problems

  • What is organizational change?
  • Why do managers fail in organizational change?

Session II: Executing Organizational Change

  • What are the critical elements of executing change?
  • What are some of the practical aspects of implementing change?
what is organizational change
What is Organizational Change?
    • ERP and IT Changes
    • Visioning
  • Strategic Plans
  • Portfolio Consolidation/Diversification
  • New Business Models
  • M&As / Alliances
  • Restructuring
  • High Performance Work Systems
slide4

Scale of

Organizational Change

Large-Scale

Organizations generally underestimate the scale of change.

Incremental

(Greenwood & Hinings, 1996)

pace of organizational change
Pace of Organizational Change

Gradual

Rapid

Organizations generally overestimate how quickly they can make change happen.

types of change
Types of Change

Scale

Incremental Large-Scale

Gradual Rapid

Pace

academic oriented literature on organizational change
Academic-Oriented Literature on Organizational Change
  • Rational Adaptation Models in the 1970sOrganizations respond (change) readily to contingencies
  • Limits to Organizational Change in the 1980s
    • Isomorphism – Change largely limited to conforming to what other organizations do
    • Strong inertial tendencies of organizations “The probability that organizations will be able to succeed at core change is very low.”
  • TODAY: Focus on understanding limits and how to counter them
common organizational change failures
Common Organizational Change Failures
  • Innovative HRM programs are not fully adopted and implemented
  • ERP and IT initiatives regress backwards
  • Visions don’t stick
  • Strategic plans remain as plans
  • Restructuring leads to restructuring….
  • Change programs don’t generate benefits
  • M&As don’t add value for acquiring firms
organizational change failure rates
Organizational ChangeFailure Rates
  • Between 60-90% organizational change plans don’t succeed
    • “In a recent Bain survey, 70% of the companies said their change management initiatives did not deliver the expected results.” (www.bain.com; Dec. 2010)
academic research understanding limits to change
Academic Research: Understanding Limits to Change
  • Large, longitudinal analyses of innovation and change across organizations
  • Case studies and process tracing looking at internal dynamics of change in organizations
making change happen a leadership view
Making Change Happen: A Leadership View

John Kotter (1996) – Leading Change

  • Process View
    • Trace missteps leaders make
  • Prescriptive
    • Emphasize key steps leaders need to make change happen
missteps
Missteps

Error 1: Leaders don’t sufficiently address complacency [to get urgency]

  • Assume people are on board
  • Believe facts are enough
  • Rely on anxiety and fear
  • Don’t appeal to heart - “See-Feel-Change”
slide13

Error 2: Leaders fail to get key influencers on board

  • Diversity matters: People with title, opinion leaders, needed expertise, etc.
slide14

Error 3: Leaders underestimate the power of Vision

  • Simple
  • Sensible
  • Provides imagery
  • See benefits
  • Passes the test of Elevator Ride
slide15

Error 4: Leaders under-communicate the vision

  • GEs Jack Welch: “Real communication takes countless hours of eyeball to eyeball, back and forth….And, it must be absolutely relentless.”*

*Tichy, N. & R. Charan. 1989. “Speed, simplicity, self-confidence:

An interview with Jack Welch, Harvard Business Review, Sept-Oct: pp. 113.

slide16

Error 5: Allowing obstacles to block the new vision

  • Identifying, isolating, and silencing resistors
  • Removing or modifying organizational practices that act as barriers
slide17

Error 6: Failing to build in short-term wins

  • Not just hoping, actually building in wins

Error 7: Failing to institutionalize organizational change

  • Making the meaning and value of change part of fabric of organization

Error 8: Declaring victory too soon

basic hurdles to overcome
Basic Hurdles to overcome

Cognitive

Hurdle

Putting managers face-to-face with problems and customers; Finding new ways to communicate

Political

Hurdle

Identifying and silencing internal opponents; isolating external ones

Resource

Hurdle

Focusing on the hot spots and bargain with other critical parties

Motivational Hurdle

Putting the stage lights on and frame the challenges to get engagement

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