Unit 9 & 10

Stage Model of Change

• Consists of three stages: Mobilize, Move, Sustain.
• Mobilize: Creating dissatisfaction with the current state, benchmarking operations, and diagnosing internal barriers to change.
• Move: Redesigning roles and structures, training for new skills needed for the new state.
• Sustain: Aligning reward systems, reengineering the control system, embedding change in the organization's culture.

Punctuated Equilibrium

• Implies a clear end state (B) and a plannable distance between the starting state (A) and the end state (B).
• Suggests change is occasional, with normal operations being steady state.

Sustainable Change

• Levers for change are only partially under the control of a single organization.
• Motivation for change is only partially internal (often driven by shifting social expectations).
• Requires continuous change, making determining and reaching a natural endpoint difficult.

Problems of Hierarchies

• Political: Managers may be unwilling to take risks without approval from superiors.
• Cultural: People may resist change due to comfort with existing habits and fear of losing power or status.
• Crave Stability: Tend to default to doing what they know, hindering change.

Dual Operating System Model

• Proposes a management-driven hierarchy for daily operations working alongside a strategic network for change.
• Strategic network functions as a change enabler, continually assessing the business, industry, and organization with agility and creativity.
• Five Principles:
  • Multiple change agents, not just appointed few.
  • A "want-to" and "get-to" mindset, not just a "have-to."
  • Engaging both head and heart in change.
  • Emphasize leadership, not just management.
  • Two systems within one organization.

Dual Operating System Challenges

• Ensuring the two systems work together and don't drift apart.
• Building momentum through communication.

Eight Accelerators for the Strategy Network

• Create a sense of urgency around a single big opportunity.
• Build and maintain a guiding coalition.
• Formulate a strategic vision and develop change initiatives.
• Communicate the vision and strategy to increase buy-in.
• Remove barriers to accelerate movement toward the vision.
• Celebrate short-term wins.
• Continue learning from experiences and avoid declaring victory too early.
• Institutionalize strategic changes in the culture.

Kotter's Eight Steps VS. Kotter's Eight Accelerators

• Kotter's Steps: Often applied rigidly, sequentially, and in response to episodic change. Driven by a small, powerful core group, and designed for traditional hierarchies.
• Kotter's Accelerators: Operate concurrently and continuously. Pull in more people from throughout the organization, forming a "volunteer army." Require flexibility and agility of a network.

Sustainability Change Challenge

• Sustainability is not yet a key performance indicator, making framing urgency critical.
• Two options for framing:
  • Challenge: Emphasizing the need to address a sustainability problem.
  • Opportunity: Highlighting the meaning and emotive power of sustainability.

Red Queen Effect

• Organizations compete and become stronger by competing against similar organizations.
• This competition makes rivals stronger as they respond, creating a cycle of continuous improvement.

Reactive and Proactive Change

• Reactive Change (Accelerated Advocacy): Addresses performance gaps, with a clear need for change and the potential for disruptive instruments.
• Proactive Change (Gradual Persuasion): Addresses opportunity gaps, requiring urgency creation and gradual movement toward disruptive instruments.

Individual Readiness for Change

• Three factors:
  • Dissatisfaction with the status quo (D).
  • Accepting a new model for the future (M).
  • Being on board with the process for change (P).
• Individual readiness needs to outweigh the perceived "Costs of Change."

Costs of Change

• Financial: Reward systems, required resources.
• Political: Reduced influence or authority over organizational units.
• Social: Reduced status of function or position within the firm.
• Psychological: Uncertainty, anxiety, stress associated with change.

Kimpton Hotels - Earth Care

• Kimpton Hotels, an upscale hotel chain, aims to balance strategy with environmental sustainability.
• Face challenges in replacing existing products with more sustainable alternatives due to higher costs and PR implications.
• Focuses on operational optimization with minimal customer impact.
• Places the Earth Care Initiative on the Strategic Operations Initiative (SOI) map, focusing on technical operations and minimizing environmental impact.
• Systematic implementation is limited, requiring supplier collaboration.
• Integration is increasing through chain-wide rollout.

Diagnosing the Earth Care Initiative

• High investments are required, especially in the early phases.
• Patient capital is essential for achieving the desired results.
• Expertise in sourcing sustainable alternatives and green marketing is crucial.
• Decentralized culture with centralized sustainability approach creates minimal disruption.
• Shifting the burden of sustainability away from customers may not necessarily lead to overall environmental gains.

Creating Momentum for Change

• Kimpton's competitive advantage lies in its unique and differentiated boutique hotel experience.
• Strategy focuses on operational optimization while minimizing environmental impact.
• Vision and mission anchor on doing "less harm" without drastically changing the business model.

Forming a Coalition and Volunteer Corps

• Kimpton's existing culture of caring for others supports the Earth Care program.
• Potential resistance could come from the top due to the decentralized nature of leadership.
• Incentive structures for employees are essential to ensure buy-in and acceptance of change.

Barriers to Organizational Change

• Organizational Inertia: Self-perpetuating tendencies of organizational structures and cultures can lead to rigidities.
• Structural Barriers:
  • Size, age, and complexity of an organization can increase rigidity, solvable through pilot projects or corporate venturing.
  • Path dependencies in capability development resulting from the Red Queen effect are addressable through acquisitions or alliances.
  • Metrics and organizational politics can create adverse incentives, requiring turnover or coalition building.

Principles of Persuasion (Overcoming Resistance to Change)

• Liking: Uncover similarities and offer genuine praise.
• Reciprocity: Give what you want to receive.
• Social Proof: Use peer power when available.
• Consistency: Make commitments active, public, and voluntary.
• Authority: Demonstrate expertise, don't assume it's obvious.
• Scarcity: Highlight unique benefits and exclusive information.

Organizational Change and Stress

• Change adds stress, leading to decreased attention span, increased error rates, diminished problem-solving ability, and reduced creativity.

Overcoming Barriers to Change

• Plan for small wins to create buy-in.
• Embed change in the culture through clear expectations, acceptance, encouragement, and values. Conformity pressure arises from the desire for acceptance.

Cultivating Organizational Culture

• Recruitment & Selection: Rigorous, emphasizing fit between the individual and organizational values.
• Socialization & Training: Ongoing training, mentoring, sharing folklore and legends, and publicly visible commitment to the culture.
• Rewards & Recognition: Tied to extrinsic reinforcements, publicly displayed, and visible.

Benefits of a Sustainability Culture

• Provides a sense of identity and organizational commitment.
• Creates dedication and motivation among employees.