Management Of Change (leading Change by John P. Kotter) could work alongside project management
 Part 1: The Change Problem and Its Solutions
Chapter 1: Transforming organizations: Why firms Fail.
Change Management meaning – is the structured process of aligning an organization's people and
culture with changes in business strategy, organizational structure, technology, and business processes. It
concerned with the people side of change.
Project Management, PM – Technical sides (design, develop, deliver)
Change management, CM – people side of change (engage, adopt, use)
Reasons for change (current state >> transition state >> future state) = PM + CM = success
Examples of organizational change





Mergers and Acquisitions
Downsizing
Restructuring
The launch of a new product
Departmental reorganization
Why firms fail – Week 1 discussion
Resistance to change
Complacency – external environment





New incentive systems
Shutting particular manufacturing lines
Opening new branches
Introducing new ways of doing things
Introducing new technologies
Poor leadership
Lack of training
Change readiness
Managing risks
Cost & scope of change
Main types of change: Planned and unplanned changes
Chapter 2: Successful change and the force that drives it.
Strategy, Change Management and Business Results
People Side of Change: Type of Fear
“When we request change” … we also need to address what is to be given up (what they currently value
– change management addresses the emotional impact of these issues) achieving that change.
Forces of Resistance:
Organizational:
• Structured inertia(bureaucracies)
• Limited focus on change
• Group inertia
• Threat to power relationships
• Treat to resource allocation
Individual:
• Habits
• Lack of acceptance/lack of tolerance
• Fear
• Economic factors
• Selective processing of information
Two Approaches to organizational change:
Reactive:
• Respond to a threat or opportunity after it has
already occurred
• Usually in response to an outside force
• Closing a performance gap
• Often requires urgent action
• Responds to immediate symptoms of a
situation
Proactive:
• Implements change before factors in the
environment cause problems to performance
• Anticipate factors that will create opportunities
or future threat
• Planned change
• Often uses a more coordinated and purposeful
approach
Types of organizational changes:


Adaptive Changes: Small, incremental changes. Evolve over time.
Transformational Changes: Large in scale and scope. Major shifts in mission, strategy, structure &
processes
Change comes from examining: External Factors >>> Strategic Opportunities <<< Internal Factors
Environmental forces Driving Change: PESTEL analysis
P – Political (
E – Economic (GDP, Exchange rate, Inflation rate,
S – Socio-cultural (Demographic, cultural factor, education level, lifestyle changes, etc.)
T – Technology (Government spending, Tech. access, tech. tends, rate of obsolescence, etc.)
E – Environmental (Environmental Policies, waste, Natural risks, etc.)
L – legal (wages, Employee Rights, job security, regulations, legislation)
PESTEL is one tool that can be used to identify drivers shaping the future. IMPORTANT: Many of
these factors are linked together!*
VUCA
Note: All is connected... no one thing can change by itself. By Paul Hawken
Context Factors of change project
Strategic tool to identify issues that are impacting alignment,
Making the connection: The change context
How do we determine what needs to change?
1. Analyze the current situation of the organization
• External Factors
• Internal Factors
2. Recognize the need for change
3. Identify expected goals/objectives
4. Understand the change context to help shape change approach
• How complex is the change situation
5. Identify the components that need to change as a result of the change
• McKinsey 7S
The best PM ever...SAP Implementation “SPORTS”
• Site: Changes at physical sites, business continuity
• Process: What processes are changing, what are the implications
• Organization & People: Organization structure, communications (formal/informal), culture, decision
making processes, skills and capabilities
• Regulatory & Legal: contract implications, legal reporting requirements
• Technology: User acceptance testing, infrastructure changes & support, existing technology,
performance tracking
• Service Relationship Management: customers, external partners
How to Change
The change equation: C=(V*D*KS) > R
V=VISION, D=DISSATISFACTION(declining performance, employee complaints, customer feedback,
external factor), KS=KNOWLEDGE OF SLOPS(Achievable known steps to reach the vision), R=RESISTANCE
Lewin’s Theory of Change
Phase 1: Unfreeze
Phase 2: Change
Phase 3: Refreeze
The Kubler-ross Model (The Change Curve)
Kotter’s eight stage process
Stage 1-4: unfreeze (help ‘defrost the hardened status quo’)
Stage 5-7: change (Introduces new practices)
Stage 8: Refreeze (makes change stick)
Kotter’s eight stage process: Common mistakes
Do things right, and in the right order!




Each step builds on the next
Errors in one step will create problems in later steps.
In complex changes, stages can overlap.
Do not underestimate the difficulty of change!!
How to Change: Step 1 Creating a Sense of Urgency
Why do we need urgency?
1. Capabilities become rigidities. Four dimensions of a core capability:
 Core capabilities are institutionalized. That is, they
are a part of the organization’s taken for granted
reality.
 An organization’s strength in the resource, make
people reluctant to any changes that moves away
from its core
 Some of the situations where organizational
capabilities can turn into rigidities include:
• Changes in technology
• Changes in customer demands
2. We Get Complacent: Complacency is an instance of usually unaware or uninformed selfsatisfaction
3. We see what we want to see.
Assumptions, conventions, blind-spots...
How to Create a Sense of Urgency
1. Building a case for change: Clearly identify the gap between current organization performance and
desired performance.
1. Highlight performance gaps
2. Gather information about the organization’s revenues, expenses, income, stock price,
customer complaints, competitive situation and employee morale and turnover
3. Develop clear indicators or measurements
4. Benchmark performance measures again the competition
5. Obtain powerful testimonials from important customers, employees, and shareholders who
have left or are dissatisfied
6. Collect data about the organization’s errors, failures and missed opportunities
7. Gather information about trends developing in the market, the industry, or economy that
contribute to the changing landscape of the organization
- To be compelling, the case for change must portray: the situation, problem, and benefit.
- Connecting Emotion and logic to build a case of change
2. Identify the sources of organizational complacency.
• No obvious, specific and compelling rationale for the change effort that is shared by the entire
organization
• Overall performance standards are too low or relaxed
• Performance feedback that comes almost entirely from internal systems
• A culture that avoids confrontation and kills the messenger
• A culture of denial, managers ignoring what they don’t want to hear
• Too much ‘happy talk’ from senior management describing achievements based on past
successes
3. Clarifying the roles of leaders and managers
Leaders and managers have a critical role to play in establishing a sense of urgency
Management
• Planning and budgeting
• Organizing and staffing
• Controlling and problem solving
Leadership
• Establishing direction
• Aligning People
• Motivating and inspiring
Successful transformation is 70-90% leadership.
Class 4: Creating a climate for change: Form a guiding coalition.
Characteristics of a guiding coalition
•
•
•
Right composition (Position power, Expertise, Leadership, Credibility)
Level of trust
Shared objective
Power: The ability to individuals or groups to persuade, induce, or ccoerce others into following certain
courses of action. In other words: getting people to do what you want them to do.
Power dynamics in organizations
•
•
•
•
The power to do things is critical to achieving change.
In most organizations power is unequally shared between various stakeholders.
Power is a crucial resource to influence actions and reactions of others.
“Formal vs. informal” power.
Sources of individual power
1. Position power: Legitimate, Reward Power, Coercive Power
2. Personal power: Expert Power, Information Power, Referent (Personality) Power, Persuasive Power
Visible signs that stakeholder have been
able to exploit power.
Remember, power will vary in relation to
the strategy or change under
consideration.
Forcefield analysis: The approach
1. Define your proposed change
2. Identify forces for change
•
•
Internal drivers for change
External drivers for change
3. Identify forces against change
•
•
Internal factors
External factors
4. Assign scores
5. Analyse and apply
•
•
Decide whether to move forward.
Think about what actions you can put in place to strengthen forces or moderate resistance.
Stakeholder Management
Stakeholder is the people, groups, or organizations that could impact, influence or be impacted
by a change.
Stakeholder management
• The process to understand the needs and expectations of stakeholder, addressing issues as they occur
• Managing conflicting interests
• Fostering appropriate stakeholder engagement in decisions and activities
• It is important to understand different stakeholder expectations and their relative influence (need to
understand the power and interest of different groups)
• Do this early and seek input from organizational experts
Why is this important?




For organizations to change, individuals must change.
Buy-in from key stakeholders is essential.
Supporters can be powerful champions.
Resistors can obstruct progress.
Four key stages of stakeholder analysis:
1. Stakeholder identification - Create a comprehensive list of stakeholders
2. Stakeholder analysis - Group stakeholders by category, Prioritize stakeholders
Key interest concerns: factor driving resistance, what isn’t changing, what is in it for me, how
does this impact me? Do not ignore the resister of change.
Impact/influence matric :





•
•

Prioritize stakeholders through stakeholder mapping.
Assess the impact of the project and their overall
power/influence on the change.
The matrix helps in thinking through stakeholder influence
on the change.
It also helps in identifying the strategy for managing the
stakeholder group.
Mapping:
High influence – High Impact/interest
o Biggest impact on project success
High influence – Low impact/interest
o Need to be kept in the loop
o They may use their power in a way that is undesirable to your change if they become
unsatisfied.
Low influence – High impact/interest
o Keep these people adequately informed
o Ensure no major issues
Low influence – Low impact/interest
o Monitor the situation
3. Stakeholder planning
Develop the stakeholder engagement plan.
•
•
•
•
•
•
•
How will you engage?
Information requirements (think back to the what!
What will you need to communicate)
Time frame and frequency of communication
Communication channels
Identified interrelationships
Scope and impact of change to stakeholder
Should be built into the broader project plan*
4. Stakeholder engagement – implement
Purpose of guiding teams – Significant change needs several powerful guiding teams who:
•
•
•
•
Actively champion the effort
Take necessary actions to overcome barriers
Build on their credibility to influence stakeholders
Engage and guide the organizations through change
Elements of building guiding teams
•
•
•
•
1. Engage the right people
The Sponsor – Typically a senior leader in the organization,
Provides executive level support, Provides resources needed to
drive the change effort.
The Senior Guiding Team – Individuals who have sufficient
influence and authority in their area to: Make decisions,
Assemble resources and support needed, Remove blockers.
Field Guiding Teams – Lead the change initiative to completion.
Change Teams – Responsible for making sure that tasks are
completed properly and on time. Provide assistance in the design
and development of the change program
2. Set clear team goals
A sense of shared purpose:
1. Aligned with the organization’s direction
2. Clearly stated and shared by all
3. Effectively manage team dynamics
1. Clear roles
2. Effective team processes
3. Strong relationships
4. Effective management
5. A Climate of trust and commitment
Class 5: Creating a Climate Change & Enabling the Organization: Developing and Communicating a
Change vision.
Vision: Three important purposes
1. Clarifying the general direction; simplifying more detailed decisions
2. Motivates people to take action in the right direction
3. Coordinates the actions of different people; quickly and efficiently
Vision – an important factor in a larger system


Leadership creates:
Vision >>> A sensible and appealing picture of the future. TO
Strategies >>> A logic for how the vision can be achieved.
Management creates:
Plans >>> Specific steps and timetables to implement change. TO
Budgets >>> Plans converted into financial projections and goals.
Characteristics of an effective vision
 Imaginable: Conveys a picture of what the future will look like
 Desirable: Appeals to the long-term interests of employees, customers, and other stakeholders
Is it desirable?
1. If the vision is made real, how will it affect customers?
2. How will this vision impact stockholders?
3. How will this vision affect employees?
 Feasible: Comprises realistic, attainable goals
“If transformation goals seem impossible, they will lack credibility and fail to motivate action”
• Great leaders know how to make ambitious goals look doable
• The vision is grounded in a clear and rational understanding of the organization, its market and
competitive trends. Recall, McKinsey 7s Framework, PESTEL, Porters 5 Forces
 Focused: Is clear enough to provide guidance decision making
 Flexible: General enough to allow for alternatives in changing conditions
 Communicable: Is easy to be communicated and can be successfully explained in a short time.
Focus, flexibility, and ease of communication
1. Balance the two extremes of being ‘impossibly vague and meticulously detailed’.
2. Visons that need constant readjustments lose their credibility.
3. Need to be simplistic enough to communicate to many people.
Note: If you change your vision to many time you lose your credibility.
Communicating the vision




Main objective: Create a common understanding of the goals and direction.
To influence people to think and act in accordance with the new direction.
To realize the vision, the communication needs to reach all stakeholders.
Getting feedback about the level of understanding and acceptance is crucial.
Risks of ineffective communication
Common scenarios:
 Change doesn’t filter down!
 Communication is inconsistent
 Vision is poorly communicated
Linking to the previous steps in Kotter’s framework
 Sense of urgency isn’t high enough; people don’t listen
 Guiding coalition isn’t the right group
 Vision is blurry (or the idea is just bad..)
Key elements to communicating the vision
•
•
•
•
•
1. Simplicity
Keep it simple – Use short statements, Avoid jargon specific to a profession
Get back to basics:
o Language people can identify with and understand,
o Language people can do something with and focus upon,
o Vision that engages and energizes and is not abstract and ambiguous.
2. Metaphor, analogy and example – Well-chosen words can make a message memorable.
3. Multiple forums – Use many different forums to spread the message.
4. Repetition – Continue to reinforce the messages throughout the entire change process.
5. Leadership by example – Telling people one thing and doing another undermines
communication efforts.
6. Explanation of seeming inconsistencies - Unaddressed inconsistencies undermine the credibility
of the change.
7. Give and take 1
Direction of communication
o One-way speech – Presentation, Newsletter, Marketing.
o Two-way communication – Q&A, surveys, focus groups.
o Multi-way dialogue – workshops, small group discussions.
The guiding teams need continuous dialogue with stakeholders to:
Address questions
Respond to concerns before ambivalence turns into resistance.
Detect resistance and address it.
Obtain feedback as change develops.
Prepare stakeholders to absorb the change.
Develop a compelling story: paint the picture https://www.youtube.com/watch?v=GCgK5M3hY8Y
• Provide a context for the change
• Focus on why, why now, what, and how
• Need to think about project stages and phases in complex projects and organizational transformations
• Develop high-level messages that capture the gist of the comprehensive vision
• “Everyone can see what you are building”
Developing a communications plan
1.
2.
3.
4.
5.
6.
7.
8.
Stakeholder analysis
Communication stages & objectives
Key messages
Communication methods, frequency
Senders* (this is important!)
Communication workflow
Risks related to communications (and mitigations)
Evaluating communication effectiveness
Key communication principles – things to think about






Awareness: If stakeholders who are impacted, directly or indirectly, are not informed of the
program imperatives, objectives, expectations, and outcomes as well as the impacts on them,
they will not be prepared for, understand, or support the outcomes and potential changes facing
them.
Timeliness: Information must be shared in a timely and organised manner to allow stakeholders
opportunities to digest messages and react.
Content: Communication must be relevant, meaningful, and at an appropriate level of detail for
the targeted audience.
Context: All communications should demonstrate and reinforce leadership support and
commitment.
Format: All communications must be developed and delivered in a format that is efficient,
understandable, and easily accessible.
Frequency: Messages need to be communicated frequently enough to promote open dialogue.
Communicate for buy-in
Successful communications are
•
•
•
•
Honest
Frequent and constant through the whole lifecycle of the change program
Consistent
Transparent
• Think about the following when developing a communications plan:
What are the goals of the communication:
•
•
•
•
•
Inform
Educate
Involve
Motivate
Support