Managing Change
By Anthony Coppel
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What will be covered?
• Definition of Change Management:
What it is and what it is not (slides 3-5)
• Thinking Exercise (slide 6)
• The Basic Elements of Change Management (slides 7-11)
• The Phases in Change Management (slides 12-19)
• A real-world Example (slides 20-26)
• Practice (slide 27)
• Summary (slide 28)
• Readings (slide 29)
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Look at the whole puzzle:
What is Change Management?
• Process, tools and techniques to
– manage people-side of change processes
– achieve the required outcomes
– realize the change effectively within
• the individual change agent
• the inner team
• the wider system
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Major Barriers to Effective
Organizational Change
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7 Myths that Undermine Effective Change
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Myth 1: It’s really not that big of a change.
Myth 2: This isn’t personal.
Myth 3: We don’t have to involve them.
Myth 4: We have smart people, they can figure that out.
Myth 5: We will figure it out as we go.
Myth 6: They are employees, they should just get on board.
Myth 7: My boss understands why I am doing this.
5
Thinking Exercise
• Think of the most difficult change you’ve recently
gone through in your work life.
• Briefly describe your first reaction and subsequent
reactions (evolution) to this change. Was it
positive? If not, why?
• Identify at least one thing that you wish you’d
done differently while going through this change.
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3 Fundamental Pieces of the Puzzle
• The environment scanning
• Five basic elements
• Three roles of the leader
7
Piece n°1: the environment
ENVIRONMENTAL SCANNING
Internal focus
External focus
- Competitive priorities
- Corporate culture
- Reward s ystems
- Relationships and networks
- Type of machines
- Etc.
Analysis
Strengths
Weaknesses
Five Forces Model
Others factors
- Competitive rivalry
- Power of suppliers
- Power of customers
- Threat of new
entrants
- Threat of substitutes
- legal
- political
- cultural
- economical
- societal
- technological
Analysis
Opportunities
Threats
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Piece n°2: 5 basic elements
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Strategy
Culture
Structure
Technology
Employees
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Piece n°3: Role of the leader
Charismatic
Missionary
Instrumental
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3 pieces or one piece?
The environment
5 basic elements
leader
11
Getting the puzzle together
12
Getting the puzzle together (cont.)
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Phase n°1: Map the Influence Landscape
Phase n°2: Identify the Type of Resistance
Phase n°3: Leverage Negotiation
Phase n°4: Overcome Resistance
Phase n°5: Assemble the Puzzle
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Phase n°1
Map the Influence Landscape
• Identify the key players
• Draw an influence map
• Identify supporters, opponents, and
convincibles
14
Phase n°2
Identify Type of Resistance
Sources of
Resistance to Change
Level One
Level Two
Lack of
Information
Personal
Reasons
Honest
Disagreement
Emotional
Issues
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Phase n°3
Leverage Negotiation
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Open both eyes
Open your mind
Put yourself in your opponent’s shoes
Think outside the box
Be creative
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Phase n°4
Overcome Resistance: 1 method & 5 tools
Coercion
Facilitation
Cooptation
Education
Participation
Negotiation
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Phase n°5
Assemble the Puzzle: Actions
1. Establish a sense of urgency
2. Create a guiding coalition
3. Develop a vision and strategy
4. Communicate the change vision
5. Empower broad-based action
6. Generate short-term wins
7. Consolidate gains and produce more change
8. Anchor new approaches in the culture
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Phase n°5 (cont.)
Assemble the Puzzle: Behaviors
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Each of those steps will help create a new behavior toward change.
Step 1: People start telling each other, “let’s go, we need to change things!”.
Step 2: A group powerful enough to guide a big change is formed and they start to
work together well.
Step 3: The guiding team develops the right vision and strategy for the change effort.
Step 4: People begin to buy into the change and this shows in their behavior.
Step 5: More people feel able to act, and do act, on the vision.
Step 6: Momentum builds, as more and more people try to fulfill the vision, while
fewer and fewer resist change.
Step 7: People make wave after wave of changes until the vision is fulfilled.
Step 8: People keep behaving in new ways despite the pull of tradition, turnover of
change leaders, etc.
19
A real-world example: ROLEX
Power of suppliers HIGH
Manpower: not enough qualified
watchmakers.
Suppliers: play a vital role in
providing vital parts of the watch.
Limi ted number of suppliers
worldwid e (essentially in
Switzerland)
Swatch: stop supplying to other
watchmakers with key components
of watchÕs movement.
Swis s made label: only for watches
whose movements are made in
Switzerland.
Threats of substitutes LOW
Other technology: cell phones,
pocket PC, but donÕtfulfill the same
needs.
Possibility of other luxury items
(lik e jewellery, bags, etc.) to fulfill
the function of social membership?
Threats of potential
new ent rants
LOW
LVMH Watches and Jewellery division: not
yet profitable; dissuasion for potential
entrants?
Potential threats of Chinese and Indian firms:
from disrup tive to main comp etitors?
Rivalry
Intense
Presence of French, Swiss and Italian groups.
2 groups: traditional independent watch
producers and mu ltinational luxury groups.
3 main segments:
- haut de gamme: price between $300 Š
2,000
- luxury: $2,000 Š 6,000
- prestige: more than $6,000
Patents: heavily used
Power of buye rs
MEDIUM
Customers: usually approved
retailers, in some cases mix
with wholly owned
boutiques.
Approved retailers:
increasing negotiation power
depending on proposedtypes
of watches, in tensity of
concurrence.
Reasons to buy: Very
diverse, but technicality,
materials, design, brand
ima ge play a big role. Low
sensitivity to price.
Differe nt trends of
consumption between man
and woman.
Growing i nterest and buying
power of the younger
generations.
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A real-world example: ROLEX (cont.)
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A real-world example: ROLEX (cont.)
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Six major trends
1) context of mergers and acquisition
2) emergence of new markets and new competitors;
3) growing importance of product innovation and
development
4) disproportion of competitors’ size & structure
5) vertical integration
6) culture of secrecy
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A real-world example: ROLEX (cont.)
• Most pressing challenge for ROLEX: internal.
• Externally: no leverage on economic conditions
and raw material’s price
• Internally: need to create a culture
– more customer– more innovation– more-delivery oriented.
The lack of financial pressure (private company) causes
that particular culture. Managers’ role to create the
impulse for change in order to be able to overcome the
weaknesses (major Supply Chain initiative on the way).
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A real-world example: ROLEX (cont.)
• Result: Supply Chain ROLEX Project
– Ambitious goals of reduction of inventory, of costs, of
time between order and delivery, etc.
– Implication of all departments of the firm
• Sense of Urgency: established by the CEO with a
strict deadline.
• Guiding Coalition: newly hired employee
– with extensive background in building world-class
supply chains
– did homework by identifying key players and influence
maps;
– sustained by a Supervisory Committee.
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A real-world example: ROLEX (cont.)
• New vision and strategy: developed
internally with consultants’ help.
• Communication: top-down approach with
incremental steps.
• Broader action: identification of priorities
and definition of an extensive test on a
limited area of the production; to be
extended to all areas.
• Short-term wins: concentration on MRP
updates and adjustments
25
A real-world example: ROLEX (cont.)
• Consolidation: through implication of more
departments, better communication; through
going deeper into the organization.
• Anchoring: new metrics defined for the
compensation system.
RESULT: ROLEX enters the industrial era,
with a thorough knowledge of its costs, its
production processes and reliable metrics.
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Practice
• Refer back to our initial exercise…(link)
• Revisit the most difficult change scenarios you
identified earlier
• Identify one key thing you’ve learned today which
would have helped you handle the change better
• What will you start doing differently—as early as
today—the next time you are confronted with
significant change?
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Summary
• Change Management is a difficult science
(because not exact) that succeeds best
when ingrained in the culture.
• The role of the change agent (leader) is crucial.
• He/she should master the tools that will help plan
the change. It is about observing and analyzing.
• Then comes the implementation of the 8-step
method where the negotiation skills are critical.
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Readings
•
Leading Change : Overcoming the Ideology of Comfort and the Tyranny of
Custom, by James O'Toole, 302pp., Jossey-Bass, April 1995
•
Leading Change: Why Transformation Efforts Fail, by John P. Kotter, 187pp.,
Harvard Business School Press, September 1996
•
The Heart of Change: Real-Life Stories of How People Change Their
Organizations, by John P. Kotter and Dan S. Cohen, 208pp., Harvard Business School
Press, August 2002
•
The First 90 Days: Critical Success Strategies for New Leaders at All Levels, by
Michael Watkins, Harvard Business School Press, 2003
•
Good to Great: Why Some Companies Make the Leap, and Others Don't, By Jim
Collins, 320pp., Harper Collins Publishers, Incorporated, October 2002
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Useful website with free tools: www.change-management-toolbook.com sign up for its free monthly newsletter!
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