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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Bateman Snell
Management
5thEdition
Competingin theNew Era
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Part FiveChapter 18 - Managing and Creating Change
Chapter OutlineBecoming World ClassManaging ChangeShaping the Future
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Learning ObjectivesLearning Objectives
After studying Chapter 18, you will know: what it takes to be world class how to manage change effectively how to best prepare for the future
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Becoming World ClassBecoming World Class
Sustainable, great futures essential characteristics of enduringly great companies
strong core valuesdriven by stretch goalschange continuously
drive for progress via adaptability, experimentation, trial and error, opportunistic thinking, and fast action
focus primarily on beating themselves in sum, great companies have core values, know what they
are and what they mean, and live by them
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Becoming World Class (cont.)Becoming World Class (cont.)The tyranny of the ‘or”
the belief that things must be either A or B, and cannot be both belief that only one goal but not another can be attained often is invalid
always is constraining
The genius of the “and” ability to pursue multiple goals at once
deliver multiple competitive values to customersperform all management functionsreconcile hard-nosed business logic with ethicslead and empower
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Managing ChangeManaging Change
Organizational change is managed effectively when: organization is moved from its current state to a planned
future state the change works as planned the transition is accomplished without excessive costs to the
organization or to individual organizational membersPeople are the key to successful change
people must take an interest and active role in helping the organization as a whole
permanent rekindling of individual creativity and responsibility should be a consequence of change
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Managing Change (cont.)Managing Change (cont.)
Motivating people to change people must be motivated to change
people often resist change General reasons for resistance
Inertia - people don’t want to disturb the status quoTiming - managers should introduce change when people are receptive
Surprise - resistance is likely when change is sudden, unexpected, or extreme
Peer pressure - work teams may band together in opposition to change
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Managing Change (cont.)Managing Change (cont.)
Motivating people to change (cont.) Change-specific reasons for resistance
Self-interest - care less about the organization’s best interest than they do about their own best interests
Misunderstanding - people may resist because they don’t fully understand the purpose of the change
Different assessments - employees receive different - and usually less - information than management receives
such discrepancies cause people to develop different assessments of proposed changes
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Reasons For Resistance To Change
Reasons For Resistance To Change
Resistance to Change
General Reasons For Resistance
Change-specific Reasons for Resistance
Self-Interest MisunderstandingDifferent
Assessments
Inertia Timing SurprisePeer
Pressure
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Implementing ChangeImplementing Change
Unfreezing(breaking fromthe old ways ofdoing things)
Moving(instituting
the changes)
Refreezing(reinforcing andsupporting the
new ways)
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Managing Change (cont.)Managing Change (cont.)Motivating people to change (cont.)
General model for managing resistanceUnfreezing - realizing that current practices are inappropriate and the new behavior must be enacted
performance gap - important contributor to unfreezing the difference between actual performance and the performance
that should or could exist can apply to the organization as a whole or to departments,
groups, or individualsMoving - instituting the change
begins with a vision of where the company is headingRefreezing - strengthening new behaviors that support change
implementing controls that support the change
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Managing Change (cont.)Managing Change (cont.)Motivating people to change (cont.)
Specific approaches to enlist cooperationEducation and communication - communicate not only the nature of the change but its logic
Participation and involvement - listen to the people who are affected by the change
should be involved in the change’s design and implementationFacilitation and support - make the change as easy as possible
provide resources and training needed to carry out the change listen patiently to problems
Negotiation and rewards - change may be resisted until management agrees to one or more concessions
rewards should be restructured to reinforce the change
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Managing Change (cont.)Managing Change (cont.)
Motivating people to change (cont.) Specific approaches to enlist cooperation (cont.)
Manipulation and cooptation - resisting individual given a desirable role in the change process
Coercion - apply punishment or the threat of punishment to those who resist change
each approach has advantages and disadvantages change leaders need to build in stability throughout the
process
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Managing Change (cont.)Managing Change (cont.)
Harmonizing multiple changes total organization change - introducing and sustaining
multiple policies, practices, and procedures across multiple units and levels
such change affects the thinking and behavior of everyone change efforts usually are simultaneous but not coordinated
companies introduce new changes constantly many are perceived to be fads change efforts helped by avoiding fads
management needs to “connect the dots” integrate the various efforts into a coherent picture that people can
see, understand, and get behind
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Leading ChangeLeading Change
Empowering broad-based action
Generating short-term wins
Communicating the change vision
Establishing a sense of urgency
Creating the guiding coalition
Developing a vision and strategy
Consolidating gains and producing more change
Anchoring new approaches in the culture
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Managing Change (cont.)Managing Change (cont.)
Leading change establish a sense of urgency - examine current realities and
pressures in the marketplaceidentify both crises and opportunitiesurgency is driven by compelling business reasons for change
create a guiding coalition - put together a group with enough power to lead the change
over time, support must expand outward and downward developing a vision and strategy - determine the idealized,
expected state of affairs after the change is implementedimage will be a target that can clarify expectations, dispel rumors, and mobilize people’s energies
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Sources Of ComplacencySources Of Complacency
The absence of a majorand visible crisis
Too much happy talkfrom senior management
Too many visible resources
Human nature, with its capacityfor denial, especially if people
are already busy or stressed
Low overall performancestandards
A kill-the-messenger-of-bad-news, low candor, low-
confrontation culture
Organizational structures thatfocus employees on narrowfunctional goals
A lack of sufficientperformance feedback from
external sources
Internal measurement systemsthat focus on the wrongperformance indexes
Complacency
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Managing Change (cont.)Managing Change (cont.)Leading change (cont.)
communicating the change vision - use every possible channel and opportunity
empowering broad-based action - get rid of obstacles to success
encourage risk takingempower people
generate short-term wins - create small victories to demonstrate progress
consolidate gains and produce more change - keep changing things in ways that support the vision
anchor new approaches in the culture
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Shaping The FutureShaping The Future
Reactive change response that occurs when events in the environment have
already affected the firm’s performanceproblem-driven change
Proactive change response that is initiated before a performance gap has
occurredExercising foresight
impossible to the know the future with certainty create core competencies that will allow the firm to respond
to changing customer demands
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Shaping The Future (cont.)Shaping The Future (cont.)
Learning continuously a vital route to renewable competitive advantage requires:
a clear, strategic goal to learn new capabilitiesa commitment to constant experimentation
relentless drive to be better in every way everyone engages in exploration, discovery, and action process generates learning on a more individual level
leads to personal growth and development
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Discover, Act Learning Cycle: Explore,
Discover, Act
Discover
Discover
Discover
Discover
Discover
Explore
Act
Explore
Explore
Explore
Explore
Act
Act
Act
Act
DiscoverAs reality becomes clearer, issues and choices become clearer.People see with new eyes.
ExploreExplore current reality.The aim is to open and honest aboutwhat is happening at present
ActTest solutions, implement a plan,evaluate results, celebrate success,recognize problems.
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Discover, Act (cont.)Learning Cycle: Explore,
Discover, Act (cont.)Pursuing growth
cost cutting sooner or later reaches its limits must be able to go for growth by increasing revenues
easier to get a dollar of profit growth by cutting costs than by raising revenues
Seizing advantage ultimate form of proactive change is to create new markets
and transform industries create new competitive arenas, transform your industry, and
imagine a future that others don’t see
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23 Learning Cycle: Explore,
Discover, Act (cont.)Learning Cycle: Explore,
Discover, Act (cont.)Creating the future
different strategic postures to prepare to compete in an uncertain future
adapters - take the current industry structure, and its future evolution, as givens
choose where and how to competeused by companies in fairly predictable environments
shapers - try to change the structure of their industriescreate a future competitive landscape of their own designrequires high-stake bets
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Vast OpportunityVast Opportunity
Customer typesUnservedServed
Unarticulated
Articulated
Needs
Unexploredopportunities
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Adding Value, PersonallyAdding Value, Personally
Go beyond your job description:• volunteer for projects;• identify problems;• initiate solutions.
Seek out others and share ideas and advice.Offer your opinions and respect those of others.Take an inventory of your skills every few months.Learn something new every week.Discover new ways to make a contribution.Engage in active though and deliberate action.Take risks based on what you know and believe.Recognize, research, and pursue opportunity.Differentiate yourself.
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Discover, Act (cont.)Learning Cycle: Explore,
Discover, Act (cont.)Shaping your own future
Into the futurecommit to lifelong learningrequires occasionally taking risks
moving outside of your “comfort zone”being open to new ideas
Success in the future will come from: shaping the future and adapting to the worldbeing clear about what you want to change and being responsive to others’ perspectives
pursuing your vision and understanding current realitiesleading and learning