Managing organizational change
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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

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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


  • Managing organizational change

    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”


    Managing organizational change

    Error 2: Leaders fail to get key influencers on board

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


    Managing organizational change

    Error 3: Leaders underestimate the power of Vision

    • Simple

    • Sensible

    • Provides imagery

    • See benefits

    • Passes the test of Elevator Ride


    Managing organizational change

    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.


    Managing organizational change

    Error 5: Allowing obstacles to block the new vision

    • Identifying, isolating, and silencing resistors

    • Removing or modifying organizational practices that act as barriers


    Managing organizational change

    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


    Contrasting assumptions about change

    Contrasting Assumptions About Change


    How do we accomplish change

    How do we accomplish change?


    But how do we do the change are there any practical strategies

    But how do we do the change?Are there any practical strategies?


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