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Bateman
Snell
Management
Competing
in the
New Era
5th
Edition
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Part Five
Chapter 18 - Managing and Creating Change
Chapter Outline
Becoming World Class
Managing Change
Shaping the Future
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Learning 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 Class
Sustainable,
 essential
great futures
characteristics of enduringly great companies
strong
core values
driven by stretch goals
change 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
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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
The
is constraining
genius of the “and”
 ability
to pursue multiple goals at once
deliver
multiple competitive values to customers
perform all management functions
reconcile hard-nosed business logic with ethics
lead and empower
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Managing Change
Organizational
 organization
change is managed effectively when:
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 members
People
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.)
Motivating
 people
people to change
must be motivated to change
people
 General
often resist change
reasons for resistance
- people don’t want to disturb the status quo
Timing - 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
Inertia
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Managing Change (cont.)
Motivating
people to change (cont.)
 Change-specific
reasons for resistance
- 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
Self-interest

such discrepancies cause people to develop different assessments
of proposed changes
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Reasons For Resistance To
Change
General Reasons For Resistance
Inertia
Timing
Surprise
Peer
Pressure
Resistance to Change
Self-Interest
Misunderstanding
Different
Assessments
Change-specific Reasons for Resistance
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Implementing Change
Unfreezing
(breaking from
the old ways of
doing things)
Moving
(instituting
the changes)
Refreezing
(reinforcing and
supporting the
new ways)
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Managing Change (cont.)
Motivating
 General
people to change (cont.)
model for managing resistance
Unfreezing
- 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 individuals
Moving

- instituting the change
begins with a vision of where the company is heading
Refreezing

- strengthening new behaviors that support change
implementing controls that support the change
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Managing Change (cont.)
Motivating
 Specific
people to change (cont.)
approaches to enlist cooperation
Education
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 implementation
Facilitation
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
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Managing Change (cont.)
Motivating
 Specific
people to change (cont.)
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.)
Harmonizing
multiple changes
 total
organization change - introducing and sustaining
multiple policies, practices, and procedures across multiple
units and levels
such
 change
change affects the thinking and behavior of everyone
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
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Leading Change
Establishing a sense of urgency
Creating the guiding coalition
Developing a vision and strategy
Communicating the change vision
Empowering broad-based action
Generating short-term wins
Consolidating gains and producing more change
Anchoring new approaches in the culture
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Managing Change (cont.)
Leading
change
 establish
a sense of urgency - examine current realities and
pressures in the marketplace
identify
both crises and opportunities
urgency 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 implemented
image
will be a target that can clarify expectations, dispel
rumors, and mobilize people’s energies
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Sources Of Complacency
The absence of a major
and visible crisis
Too much happy talk
from senior management
Human nature, with its capacity
for denial, especially if people
are already busy or stressed
Too many visible resources
Low overall performance
standards
Complacency
A kill-the-messenger-of-badnews, low candor, lowconfrontation culture
A lack of sufficient
performance feedback from
external sources
Organizational structures that
focus employees on narrow
functional goals
Internal measurement systems
that focus on the wrong
performance indexes
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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 taking
empower 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 Future
Reactive
change
 response
that occurs when events in the environment have
already affected the firm’s performance
problem-driven
Proactive
change
change
 response
that is initiated before a performance gap has
occurred
Exercising
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.)
Learning
continuously
a
vital route to renewable competitive advantage
 requires:
a
clear, strategic goal to learn new capabilities
a 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
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Learning Cycle: Explore,
Discover, Act
Explore
Explore
Explore current reality.
The aim is to open and honest about
what is happening at present
Explore
Discover
As reality becomes clearer,
issues and choices become clearer.
People see with new eyes.
Explore
Explore
Discover
Explore
Discover
Discover
Act
Act
Act
Act
Act
Discover
Discover
Act
Test solutions, implement a plan,
evaluate results, celebrate success,
recognize problems.
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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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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 compete
used by companies in fairly predictable environments
 shapers
- try to change the structure of their industries
create
a future competitive landscape of their own design
requires high-stake bets
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Vast Opportunity
Unarticulated
Unexplored
opportunities
Needs
Articulated
Served
Unserved
Customer types
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Adding 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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Learning Cycle: Explore,
Discover, Act (cont.)
Shaping
 Into
your own future
the future
commit
to lifelong learning
requires occasionally taking risks

moving outside of your “comfort zone”
being
 Success
open to new ideas
in the future will come from:
shaping the future and adapting to the world
being clear about what you want to change and being responsive
to others’ perspectives
pursuing your vision and understanding current realities
leading and learning

Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.