Leading change

Leading Change Through InnovationInnovation

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“God will not change people’s fate if they do not “God will not change people’s fate if they do not change it themselves” change it themselves” (Al(Al--Qur’an, ArQur’an, Ar--Ra’d: 11)Ra’d: 11)

LeadershipLeadership There is probably no topic more important to business success today than leadership

leadership occurs among people involves the use of influence is used to attain goals

Different leaders behave in different ways – style, need, situation

Nature of Leadership• The ability to influence people toward the attainment of organizational goals.• Leadership is reciprocal, occurring among people.• Leadership is reciprocal, occurring among people.• Leadership is a “people” activity, distinct from administrative paper shuffling or problem-solving activities.• Leadership is dynamic and involves the use of power.

What are the challenges of leadership, Change and innovation? Strategic leadership creates the capacity for ongoing strategic change. Components of strategic leadership:

– Determining the organization’s purpose or vision.– Exploiting and maintaining the organization’s core – Exploiting and maintaining the organization’s core competencies.– Developing the organization’s human capital.– Sustaining an effective organizational culture.– Emphasizing and displaying ethical practices.– Establishing balanced organizational controls.

Sustainable competitive advantage relies on creativity and innovation.

Creativity is the generation of a novel idea or

What are the challenges of leadership, Change and innovation?

Creativity is the generation of a novel idea or unique approach to solving problems or crafting opportunities.

Innovation is the process of creating new ideas and putting them into practice.

Leadership responsibilities for the innovation process:– Imagining.– Designing.


– Designing.– Experimenting.– Assessing.– Scaling.

In highly innovative organizations …– Corporate strategy and culture should:

• Emphasize an entrepreneurial spirit.• Expect innovation.• Accept failure.


• Accept failure. • Be willing to take risks.

– Organization structure should:• Be organic.• Have lateral communications. • Use cross-functional teams and task forces.

Building an Organization1. Education and leadership development is the effort to familiarize future leaders with the skills important to the company and to develop exceptional leaders among the managers you employ among the managers you employ 2. Perseverance is the capacity to see a commitment through to completion long after most people would have stopped trying 3. Principles are your fundamental personal standards that guide your sense of honesty, integrity, and ethical behavior

The Components of Organizational Alignment

Vision

Capabilities• Technical

Culture• Norms

Structure• Span of control• Team composition• Hierarchy

Systems• Accounting• HR

• Technical• Leadership

• Norms• Shared values

• Sales• IT

The Organization as an Iceberg Metaphor

Prentice Hall, 2002

Factors Used to Measure Organizational Performance

Copyright © 2005 South-Western. All rights reserved.

Organizational Health• Indicators of organizational health from Matthew Miles:

– Goal focus.– Communication adequacy.– Optimal power equalization.– Human resources utilization.

Copyright © Allyn & Bacon 2007

– Human resources utilization.– Cohesiveness.– Morale.– Innovativeness.– Autonomy.– Adaptation.– Problem-solving adequacy.

Shaping Organizational CultureShaping Organizational Culture•• PassionPassion, in a leadership sense, is a , in a leadership sense, is a highly motivated sense of highly motivated sense of commitment to what you do and want commitment to what you do and want to do to do •• Leaders also use reward systems, Leaders also use reward systems, symbols, and structure among other symbols, and structure among other means to shape the organization’s means to shape the organization’s means to shape the organization’s means to shape the organization’s culture culture •• Leaders look to managers they need to Leaders look to managers they need to execute strategy as another source of execute strategy as another source of leadership to accept risk and cope leadership to accept risk and cope with the complexity that change brings with the complexity that change brings about about

Recruiting and Developing Talented Operational Leadership

New leaders will each be global managers, change agents, strategists, motivators, strategic decision makers, innovators, and collaborators if the business is to survive and prosper Today’s need for fluid, learning Today’s need for fluid, learning organizations capable of rapid response, sharing, and cross-cultural synergy place incredible demands on young managers to bring important competencies to the organization

“The Twentieth and Twenty-first Century Organization Organization compared”Kotter, John P, Leading Change, pg.172

StructureTwentieth Century• Bureaucratic• Multileveled• Organized with the expectation

Twenty-First Century• Nonbureaucratic, with fewer rules and employees• Limited to fewer levels• Organized with the expectation • Organized with the expectation that senior management will manage

• Characterized by policies that create many complicated internal interdependencies

• Organized with the expectation that management will lead, lower-level employees will manage• Characterized by policies and procedures that produce the minimal internal interdependence needed to serve customers

SystemsTwentieth Century• Depend on few performance information systems• Distribute performance data to

Twenty-First Century• Depend on many performance information systems, providing data on customers especially• Distribute performance data • Distribute performance data to executives only

• Offer management training and support systems to senior people only

• Distribute performance data widely• Offer management training and support systems to many people

CultureTwentieth Century• Inwardly focused• Centralized• Slow to make decisions

Twenty-First Century• Externally oriented• Empowering• Quick to make decisions• Slow to make decisions

• Political• Risk averse

• Quick to make decisions• Open and Candid• More risk tolerant

Managers vs. Leaders

Covey, Stephen R., The 7 Habits of Highly Effective People, pg.101Kotter, John P., Leading Change, pg.165

Leadership versus ManagementManagementPromotes Promotes stability, order stability, order and problem and problem

LeadershipPromotes vision, Promotes vision, creativity, and creativity, and changechangeand problem and problem solving within solving within existing existing organizational organizational structure and structure and systemssystems

changechange

MM LL

Takes care of where you areTakes care of where you are Takes you to a new placeTakes you to a new place

Managers vs. Leaders• Managers know how to plan, budget, organize, staff, control, and problem solve• Managers deal mostly with the status quo• Management is a bottom

• Leaders create and communicate visions and strategies• Leaders deal mostly with change• Management is a bottom line focus: How can I best accomplish certain things?

• Management is doing things right

Leaders deal mostly with change• Leadership deals with the top line: What are the things I want to accomplish?• Leadership is doing the right things

Management and Leadership Compared

Source: Kotter, J. P. (1990). A Force for Change: How Leadership Differs from Management. New York: Free Press; Kotter, J. P. (1996). Leading Change. Boston: Harvard Business School Press.

Leader vs. Manager QualitiesManager QualitiesLeader Qualities

SOULVisionaryPassionateCreative

MINDRationalConsultingPersistent

Source: Genevieve Capowski, “Anatomy of a Leader: Where Are the Leaders of Tomorrow?” Management Review, March 1994, 12

CreativeFlexibleInspiringInnovativeCourageousImaginativeExperimentalInitiates changePersonal power

PersistentProblem solvingTough-mindedAnalyticalStructuredDeliberateAuthoritativeStabilizingPosition power

Management Processes and Levels of Management

TraitsTraits

• Traits - early efforts to understand leadership success focused on

Traits = personal characteristicsTraits = personal characteristics

leadership success focused on leader’s personal characteristics• Great man approach - early research focused on leaders who had achieved a level of greatness

– Find out what made them great– Find people with same traits

Personal Characteristics of LeadersPhysical CharacteristicsEnergyPhysical staminaSocial BackgroundEducation

PersonalitySelf-confidenceHonesty & integrityEnthusiasmDesire to leadIndependence

Social CharacteristicsSociability, interpersonal skillsCooperativenessAbility to enlist cooperationTact, diplomacyEducationMobilityIntelligence and AbilityJudgment, decisivenessKnowledgeIntelligence, cognitive ability

Work-related CharacteristicsAchievement driveDrive to excelConscientiousness in pursuit of goalsPersistence against obstacles, tenacitySource: Adapted from Bernard M. Bass, Stogdill’s Handbook of Leadership, rev. Ed. (New York: Free Press, 1981), 75-76. This adaptation appeared in R. Albanese and D. D. Van Fleet, Organizational Behavior: A managerial Viewpoint (Hinsdale, III.: The Dryden Press, 1983).

In highly innovative organizations …– Top management should:

• Understand the innovation process. • Be tolerant of criticism and differences of opinion.• Take all possible steps to keep goals clear.• Maintain the pressure to succeed.• Break down barriers to innovation. Break down barriers to innovation.

– Staffing should fulfill five critical innovation roles:• Idea generators.• Information gatekeepers.• Product champions.• Project managers.• Innovation leaders.

ChangeChange is the disruption of the status quo • A break in the continuities that represent the steady stream of our lives.

Change often makes for Change often makes for interesting times…• It may seem positive if you’re leading the change.• It may seem negative if you’re on the receiving end of it.

The Types of ChangeAnticipated Changes• Changes that are planned ahead of time and occur as intended according to a plan.Emergent Changes• Changes that arise spontaneously from local innovation • Changes that arise spontaneously from local innovation and that are not originally anticipated or intended.Opportunity-Based Changes• Changes that are not anticipated ahead of time, but are introduced during the change process in response to an unexpected opportunity, event, or breakdown.

Beer’s Model of Organizational Change

C = D x M x P > RD = followers’ dissatisfactionM = model for changeP = processR = resistanceC = amount of change

The Rational Approach To Organization Change and the Interactional FrameworkLeader

• Environmental scans• Vision• Goals• Change plan• Systems vs. siloed thinking• Leadership and management

capabilities

Followers Situation• Crisis• Consumer preferences• Market conditions • Societal shifts• Political and legal challenges• Competitive• Organizational structure• Organizational systems• Organization culture

• Dissatisfaction• resistance • SARA model• Loss of:

– Power– Competence– Identity– Rewards– Relationships

• Technical/functional capabilities

The Expectation-Performance Gap

Actual

Change initiative implemented Expectations

Actual performance

Time

Status quo Gap

The Four Levels of Every Organization

Infrastructure(management systems,

Physical(processes, tools,and structures)

Ability

to infl

uence o

r chang

e

Durabi

lity of

the cha

nge

Easiest Shortterm

©1997, Russell Consulting, Inc. Used with permission.

Cultural(values, beliefs, and norms)

Behavioral(what groups and individuals do)

(management systems,measurements, and rewards)

Mostdifficult Longterm

Ability

to infl

uence o

r chang

e

Durabi

lity of

the cha

nge

Common Losses with ChangeLoss of: Possible Leader ActionsPower Demonstrate empathy, good listening skills, and new

ways to build power. Competence Coaching, mentoring, training, peer coaching, job

aids, and so forth.aids, and so forth.Relationships Help employees build new relationships before

change occurs, or soon thereafter. Rewards Design and implement new reward system to support

change initiative.Identity Demonstrate empathy; emphasize value of new roles.

M. Beer, Leading Change (Boston: Harvard Business School Press, 1988).

What is the nature of organizational change? Change leader.

– A change agent who takes leadership responsibility for changing the existing pattern of behavior of another person or changing the existing pattern of behavior of another person or social system.Change leadership.

– Forward-looking.– Proactive.– Embraces new ideas.

Change leaders vs. status quo managers

– Fear of the unknown– Disrupted habits– Loss of confidence– Loss of control

Reasons for people resisting change

– Loss of control– Poor timing– Work overload– Loss of face– Lack of purpose

The Journey Through ChangeStability

1.Comfort

and ControlLookingBack

LookingForward

Chaos

3.Inquiry,

Experimentation,and Discovery

2.Fear, Anger,

and Resistance

Leading Change Training, Jeff and Linda Russell, 2003

What People Often Feel

1.

I’m safeI’m in controlI’m satisfiedI’m doing fine1.

Comfortand Control

I’m doing fineI’m being recognizedI’m working hard….. Hey, everything’s cool

* Adapted from Leading Change Training, Jeff and Linda Russell, 2003

What People Often FeelI’m anxiousI’m not in controlI’m angry and upsetI’m worried about …..

2.Fear, Anger, I’m worried about …..

I’m not appreciatedI’m frustrated Hey, everything’s in chaos

and Resistance


What People Often FeelI’m challengedI’m hopefulI’m dizzy from all the ….I’m encouraged

3.Inquiry,

Experimentation,and Discovery I’m encouraged

I’m searching for …..I’m excitedHey, progress is being made….

and Discovery


What People Often FeelI’m feeling betterI’m relievedI’m encouraged I’m confident4. I’m confidentI’m satisfiedI’m energized againHey, we made it!

4.Learning,

Acceptance, andCommitment


Reactions To Change

Anger Rejection

TimeShock Acceptance

Top leadersMiddle managersIndividual contributors

Methods for dealing with resistance to change

– Education and communication– Participation and involvement– Facilitation and support– Facilitation and agreement– Manipulation and co-optation– Explicit and implicit coercion

What is the nature of organizational change? Top-down change.

– Strategic and comprehensive change that is initiated with the goals of comprehensive impact on the organization impact on the organization and its performance capabilities.– Driven by the organization’s top leadership.– Success depends on support of middle-level and lower-level workers.

What is the nature of organizational change?Bottom-up change.

– The initiatives for change come from any and all parts of the organization, not just top management.– Crucial for organizational innovation.– Crucial for organizational innovation.– Made possible by:

• Employee empowerment.• Employee involvement.• Employee participation.

What is the nature of organizational change? Integrated change leadership.

– Successful and enduring change combines advantages of top-down and bottom-up approaches.

– Top-down:• Breaks up traditional patterns.• Implements difficult economic adjustments.

– Bottom-up:• Builds capability for sustainable change.• Builds capability for organizational learning.

What is the nature of organizational change? Transformational and incremental change.

– Unplanned change.• Response to unanticipated events.• Good leaders act on opportunities for reactive change.reactive change.

– Planned change• Aligning the organization with anticipated future challenges.• Activated by proactive leaders who are sensitive to performance gaps.• Transformational change major and comprehensive redirection.• Incremental change adjusting existing systems and practices.

Organizational targets for change:

– Tasks– People– Culture– Technology– Structure

A Leaders’ Vision Of the Future Can Align Efforts and Help Groups Accomplish More

Groups that lack vision

Groups with vision

Lewin’s three phases of planned organizational change.

The Change ProcessThe Change Process First work on changing how people think about their job

EDUCATION

The Five On-Going Elements of a Change Process

NewstructureChange of Thought

Change of BehaviorChange of Destiny

Reshape theorganization through people

Change Process

Drive Cultural ChangeChange of HabitsChange of Personality

Sustain and Stabilize Changes

Alternative change strategies and their leadership implications.

Fiedler’s Classification ofSituation FavorablenessLeaders needs to knowWhether they have a relationship- or task-oriented styleShould diagnose the situation and determine the favorableness of

Source: Fred E. Fiedler, “The Effects of Leadership Training and Experience: A Contingency Model Interpretation,” Administrative Science Quarterly 17 (1972), 455. Reprinted by permission of Administrative Science Quarterly.

Should diagnose the situation and determine the favorableness of the following three areas

Path-Goal Situations &Preferred Leader Behavior

Source: Adapted from Gary A. Yukl, Leadership in Organizations (Englewood Cliffs, N.J.: Prentice-Hall, 1981), 146-152.

Leading Organizational Change• Steps in the Change Process:

– Step 1: Establish a sense of urgency.– Step 2: Create the guiding coalition.– Step 3: Develop a vision and a strategy.

Copyright © 2005 South-Western. All rights reserved.

– Step 3: Develop a vision and a strategy.– Step 4: Communicate the change vision.– Step 5: Empower broad-based action.– Step 6: Generate short-term wins.– Step 7: Consolidate gains and produce more change.– Step 8: Anchor new approaches in the culture.

Leading ChangeTransactional Leaders Clarify the role and task requirements of requirements of subordinates Initiate structure Provide appropriate rewards Display consideration for subordinates Meet the social needs of subordinates

Leading ChangeCharismatic Leaders The ability to inspire Motivate people to do more than they would normally dowould normally do Tend to be less predictable than transactional leaders Create an atmosphere of change May be obsessed by visionary ideas

Leading Change• Transformational Leader Similar to charismatic leaders Distinguished by their special ability to bring about innovation and change byRecognizing followers’ needs and concernsHelping them look at old problems in new waysEncouraging them to question the status quo

Sources of Power Legitimate Power: power coming from a formal management position. Reward Power: stems from the authority to bestow rewards on other people.rewards on other people. Coercive Power: the authority to punish or recommend punishment. Expert Power: leader’s special knowledge or skill regarding the tasks performed by followers. Referent Power: personality characteristics that command subordinates’ identification, respect, and admiration so they wish to emulate the leader

What are Your TasksWhat are Your Tasks… … as as a Change Leadera Change Leader??Stability

Comfortand Control

Learning,Acceptance, and

CommitmentCreate aFelt Needfor Change

Stabilizeand Sustainthe Change

4

LookingBack

LookingForward

Chaos

Inquiry,Experimentation,

and DiscoveryFear, Anger,

and Resistance

Leader Actionsfor Change and Sustain

the Change

Revise andFinalize the

ChangePlan

Introducethe Change

3

2

1

From Leading Change Training, Jeff and Linda Russell, 2003

Leader’s Actions Phase 1: Comfort and Control

Create a Felt Need for Change


The Role of Change Leaders

• It is leadership’s job to define and articulate a vision for the organization and the need for organization and the need for change.......

“Implementing organizational change requires a compelling reason for change. Unless people see the need for change, it will just not happen.”-John Pepper (Former CEO) Proctor and Gamble

Characteristics of an Effective Change Vision

• Confronts and addresses a current or future threat• Describes a vivid picture of a positive end result• Focused on changes and outcomes that the process owners care about, and can see, feel, and affect.and affect.• Provides a method for evaluating staff actionssupporting the change• Links closely with the broader organizational vision

* Adapted from “Managing Change”, Jeff and Linda Russell, 1998

Leader’s Actions Phase 1: Comfort and Control• Acknowledge people’s past efforts and success.• Get people’s attention!• Immerse people in information about the change . . . customer complaints, • the change . . . customer complaints, budget data, increasing costs, competitive pressures.• Let people know it will happen — one way or another!• Give people time to let the ideas sink in.• Don’t sell the solutions . . . sell the problem!

* From Leading Change Training, Jeff and Linda Russell, 2003

Leader’s Actions Phase 1: Comfort and Control• Create and communicate a sense of urgency, and risks of not changing.• Create the fear of not changing, and sell that the change is necessary, achievable, and beneficial.• Communicate what will not change, and always be honest and • Communicate what will not change, and always be honest and consistent.• Tell the story as early as possible, tell the whole story as your know it to be, and tell it in as personal a way as possible try to ensure everyone hears and understands the “same story”.• The degree of “change readiness” is often inversely proportional to the closeness of the crisis.

Leader’s Actions Phase 2: Fear, Anger, and ResistanceIntroduce the Change

KAI – to break apart or disassembleKAI – to break apart or disassembleZEN – to feverishly improve

Must do the Kai first!

Leader’s Actions Phase 2:Fear, Anger, and Resistance• Communicate to co-create the vision.• Listen carefully to what people are saying.• Acknowledge people’s feelings (pain, perceived losses, anger, excitement, etc.)• Strive to address their perceived losses.losses, anger, excitement, etc.)• Strive to address their perceived losses.• Tell people what you know — and what you don’t know.• Don’t try to talk people out of their feelings.• Discuss ways to solve the problems that people see with the change.• Encourage discussion, dissent, disagreement, debate. . . keep people talking.


Leader’s Actions Phase 2:Fear, Anger, and Resistance• Create a coalition of influential upper level managers and stakeholders to guide and support the efforts promoted by the change leader.• Select the right coalition members with credibility, proven leadership abilities, credibility, proven leadership abilities, expertise in needed areas, and the power and prestige necessary to make things happen avoid people who lack in enthusiasm, integrity, and trust worthiness.• Trust among the members is critical.• Recognize that large scale change needs to be led from the top and supported/accomplished from the bottom.

The Role of Change LeadersThe Role of Change Leaders

The key prerequisite to successfully implementing change is Gaining employees’ acceptance and overcoming their resistance and fears to change.Must address people’s fears – not ignore them

Leader’s Actions Phase 3: Inquiry, Experimentation, and

Discovery• Affirm Why change is necessary and

How it will work….• Involve influential and resilient people in creating the solution (strategies and tactics) to accomplish the vision.and tactics) to accomplish the vision.• Emphasize the Win-Win aspects of the change to address the threats.• Create and follow a simple, yet detailed change implementation plan. A change plan gives time for

reflection and re-thinking of the options.

Components of a Change Plan1. Create a leading change design team. 2. Document the case for change. 3. Develop a preliminary vision for the change.4. Define the impacts on those affected by the change. 5. Create your preliminary strategy and action plan. 5. Create your preliminary strategy and action plan. 6. Identify measures of success. 7. Develop your communication strategy.8. Develop your training strategy.


Leader’s Actions Phase 4: Learning Acceptance, and CommitmentLeader’s Actions Phase 4: Learning Acceptance, and CommitmentStabilize and Maintain the Change


Leader’s Actions Phase 4: Learning Acceptance, and Commitment• Acknowledge people’s hard work.• Celebrate successes and accomplishments.• Reaffirm the vision.• Bring people together toward the vision.• Acknowledge what people have left behind.•• Acknowledge what people have left behind.• Develop long-term goals and plans.• Provide tools and training to reinforce new behaviors.• Reinforce and reward the new behaviors.• Create systems and structures that reinforce new behaviors.• Prepare people for the next change.


Stabilizing and Sustaining the Change *

• Establish staff commitment to the new direction by reinforcing new behaviors and beliefs.• Invest in the change through new skills training, new equipment and facilities, and new new equipment and facilities, and new performance/reward measures and management systems that are consistent with the change.• Prepare people for future changes and assure them that they have the capacity to address and solve future threats.* Adapted from “Managing Change”, Jeff and Linda Russell, 1998

Ten Governing Assumptions about Organizational Change1. Change is inevitable; growth is optional. 2. Change is difficult because it moves people out of their comfort zones. 3. People don’t resist change as much as they resist being changed.4. Resistance to change occurs for a reason. 5. People respond to change differently based on the personalities, histories, personal visions, or perceptions of the surrounding 5. People respond to change differently based on the personalities, histories, personal visions, or perceptions of the surrounding environment. 6. You can’t change people; only they can make the choice to change. 7. The complexity and size of change matters.8. You can never communicate too much during a difficult and complex change.9. Resilience is important.10. Leaders don’t control change; they guide, shape, and influence it.

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