Change Management Lecture Notes PDF

TrEC - Accounting, Finance and Information Systems Organization and Information System Prof. Diego Campagnolo - Prof. Massimiliano Oleotto Implementig ERP: change management Materials - a.y. 2024-2025 3...

TrEC - Accounting, Finance and Information Systems Organization and Information System Prof. Diego Campagnolo - Prof. Massimiliano Oleotto Implementig ERP: change management Materials - a.y. 2024-2025 3 Latest classes with prof. Oleotto Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 4 Latest classes with prof. Oleotto Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 5 Organizational Change Organizational change is the movement of an organization away from its present state and toward some desired future state to increase its effectiveness · you have to win over hearts and minds · concentrate on the emotional part of the brain to change people to have · behaviour you http://www.youtube.com/watch?v=1NKti9MyAAw make people feel role modeling · we have to consider what's in going · on people's mind. What did you get from the video? 5 minutes discussion · the erational part is the hardest to affect · Never talk about cost adv. · incentives Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 6 External Forces for Change Competitive Economic and political Global Demographic and social Ethical Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 7 Categories of Change Evolutionary change is change that is gradual, incremental, and narrowly focused § Socio-technical systems theory - importance of optimizing the work of an organization’s technical system with its social system. § Total quality management, or kaizen – ongoing to find new ways to improve the quality of the organization’s goods and services. Revolutionary change is change that is rapid, dramatic, and broadly focused § Reengineering - fundamental rethinking and radical redesign of business processes § Restructuring - reducing differentiation and integration by eliminating divisions, departments, or levels in the hierarchy § Innovation - use of skills and resources to create new technologies or new goods Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  a creates anxiety 8 Kotter’s change management model 1. Establishing a Sense of Urgency 2. Build the Guiding Team 3. Developing a Vision & Strategy associated with the change 4. Communicating the Change Vision 5. Empowering Broad-Based Action 6. Generating Short-Term Wins and everyone tell 7. Consolidating Gains & Producing More Change 8. Anchoring New Approaches in the C Culture Make current situation feel less better Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Estabilishing a Sense of Urgency 9 1. Establishing a Sense of Urgency § Find ways to communicate information broadly and dramatically § Examining market or demographic realities § Identifying and discussing crises, potential crises or major opportunities ü Create a crisis: highlight major weaknesses, allow errors to compound § Showing others the need for change with a compelling object that they can actually see, touch, and feel ü Force interaction with unsatisfied customers, suppliers, shareholders. § Bombard people with information on future opportunities, rewards for capitalize on those opportunities, & potential “lost opportunities.” Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Estabilishing a Sense of Urgency 10 1.Establishing a Sense of Urgency WHAT DOES NOT WORK § Focusing exclusively on building a “rational” business case, getting top management approval, and racing ahead while mostly ignoring all the feelings that are blocking change § Ignoring a lack of urgency and jumping immediately to creating a vision and strategy § Believing that without a crisis or burning platform you can go nowhere § Thinking that you can do little if you’re not the head person Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Building the guiding team 13 2. Build the guiding team A single individual who feels great urgency usually pulls in the first people. Individuals are selected to have the right combination of capabilities within the team: § Relevant knowledge about what is happening outside the enterprise or group (essential for creating vision) § Credibility , connections, and stature within the organization (essential in communicating vision) § Valid information about the internal workings of the enterprise (essential for removing the barriers that disempower people from acting on the vision) § Formal authority (needed to create the short-term wins) § The leadership skills associated with vision, communication, and motivation Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Building the guiding team 14 2. Build the guiding team The team (3-5 people) is created by pulling people in and occasionally pushing people out As change progresses throughout large organizations, additional groups are formed at lower levels § From guiding team to guiding coalition Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Building the guiding team 15 2.Build the guiding team WHAT DOES NOT WORK § Guiding change with weak task forces, single individuals, complex governance structures, or fragmented top teams § Not confronting the situation when momentum and entrenched power centers undermine the creation of the right group § Trying to leave out or work around the head of the unit to be changed because he or she is “hopeless” Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Developing a vision and strategy 16 3. Developing a vision and strategy An effective vision § Imaginable: Conveys a picture of what the future will look like § Desirable: Appeals to the long-term interests of employees, customers, stakeholders. § Feasible: Comprises realistic, attainable goals § Focused: Is clear enough to provide guidance in decision making § Flexible: Is it general enough to allow individual initiative & alternative responses in light of changing condition. § Communicable: Is easy to communicate, can be successfully explained within 5 minutes. Developing strategies for achieving that vision Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Developing a vision and strategy 17 3.Developing a vision and strategy WHAT DOES NOT WORK § Assuming that linear or logical plans and budgets alone adequately guide behavior when you’re trying to leap into the future § Overly analytic, financially based vision exercises § Visions of slashing costs, which can be emotionally depressing and anxiety creating Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Communicating the Change Vision 18 4. Communicating the Change Vision People’s reactions to change § “I don’t see why we need to change that much,” § “They don’t know what they’re doing,” § “We’ll never be able to pull this off,” § “Are these guys serious or is this a part of some more complicated game I don’t understand?” § “Are they just trying to line their pockets at my expense?” § “Good heavens, what will happen to me?” Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Communicating the Change Vision 19 4. Communicating the Change Vision Leading change is usually impossible unless large numbers of people are willing to help § How? Organizational newsletters, Quarterly management meetings… § Use every possible channel, especially those that are being wasted on non-essential information Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Communicating the Change Vision 20 4. Communicating the Change Vision Key elements in communicating the vision: § Simplicity. All jargon & technobabble must be eliminated. § Metaphor, Analogy & Example. A verbal picture is worth a thousand words. § Multiple Forums. Big meetings & small, memos, newspapers, formal and informal meetings…. § Repetition. Ideas sink in only after they have been heard many times § Leadership by Example. Behavior by important people that is inconsistent with the vision overwhelms other forms of communication. § Explanation of Seeming Inconsistency. Unaddressed inconsistencies undermine the credibility of all communications. § Give & Take. Two way communication is always more powerful and one- way communication. Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Communicating the Change Vision 21 4. Communicating the Change Vision Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Communicating the Change Vision 22 4.Communicating the Change Vision WHAT DOES NOT WORK § Undercommunicating, which happens all the time § Speaking as though you are only transferring information § Accidentally fostering cynicism by not walking the talk Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Empowering Broad-Based Action 24 5. Empowering Broad-Based Action Getting rid of obstacles Changing systems or structures that undermine the change vision Finding individuals with change experience who can bolster people’s self-confidence with we-won-you-can-too anecdotes (skills) Recognition and reward systems that inspire, promote optimism, and build self-confidence § Feedback that can help people make better vision-related decisions Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Empowering Broad-Based Action 25 Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Empowering Broad-Based Action 26 5. Empowering Broad-Based Action WHAT DOES NOT WORK § Ignoring bosses who seriously disempower their subordinates § Solving the boss problem by taking away their power (making them mad and scared) and giving it to their subordinates § Trying to remove all the barriers at once § Giving in to your own pessimism and fears Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Generating short-term wins 27 6. Generating short-term wins Planning for visible performance improvements § Real transformation takes times… efforts risk losing momentum if there are no short-term goals to meet and celebrate § Most people will not go on the long march unless they see compelling evidence within 12 to 24 months that the journey is producing expected results ü Increase in quality indicators ü Increase in market share § Helps keep the urgency level up Recognizing and rewarding employees involved in the improvement Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Generating short-term wins 28 6. Generating short-term wins that… § come fast § are as visible as possible to as many people as possible § penetrate emotional defenses by being unambiguous § are meaningful to others § speak to powerful players whose support you need and do not yet have § can be achieved cheaply and easily, even if they seem small compared with the grand vision Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Generating short-term wins 29 6. Generating short-term wins WHAT DOES NOT WORK § Launching fifty projects all at once § Providing the first win too slowly § Stretching the truth Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Reinforce the change 30 7. Reinforce the change Until change sinks in deeply into a company’s culture, which can require years, new approaches are fragile and subject to regression § Using increased credibility to change systems, structures and policies that don’t fit § Hiring, promoting, and developing employees who can implement the vision § Reinvigorate process with new projects and themes Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Reinforce the change 31 7. Reinforce the change WHAT DOES NOT WORK § Developing a rigid four-year plan § Convincing yourself that you’re done when you aren’t § Convincing yourself that you can get the job done without confronting some of the more embedded bureaucratic and political behaviors § Working so hard you physically and emotionally collapse Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Institutionalizing new approaches 32 8. Institutionalizing New Approaches Using new employee orientation to compellingly show recruits what the organization really cares about Using the promotions process to place people who act according to the new norms into influential and visible positions § May involve turnover Telling vivid stories over and over about the new organization, what it does, and why it succeeds Articulating the connections between the new behaviors and organizational progress/success Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto  Leading Change Model – Institutionalizing new approaches 33 8. Institutionalizing New Approaches WHAT DOES NOT WORK § Relying on a boss or a compensation scheme, or anything but culture, to hold a big change in place § Trying to change culture as the first step in the transformation process Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 34 Impediments to Change Individual -> absenteeism, turnover, inertia Uncertainty/insecurity § Fear of losing status, unemployment § Perceived threat to the professional identity § Economic reason (firm specific experience, salary, demotion…) Selective perception § Employees perceive only information consistent with their schemas (how the change is going to affect me?) § Low self-efficacy Habit § Routines, heuristics Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 35 Impediments to Change Group Group norms § Change disrupts group norms and the expectations members have of one another Group cohesiveness § Group members are slow in recognizing opportunities to change and adapt § Resist attempts by others to change what the group does or its members § Protect group interests at the expense of other groups Groupthink/escalation of commitment Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 36 Impediments to Change Organizational Power and conflict Differences in functional orientation Mechanistic structure § tall hierarchies, centralized decision making, standardization of behavior through rules and procedures – mechanistic structure § flat, decentralized, mutual adjustment – organic structure Organizational culture Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 37 Kotter J., Schlesinger L., 2008, Choosing strategies for Change, Harvard Business Review, July-August, 130-138 Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto 38 source Kotter, J.P., Leading Change. Why Transformation Efforts Fail, Harvard Business Review, January 2007, pp. 96-103 Organization and Information Systems | a.y. 2024-2025 | Diego Campagnolo – Massimiliano Oleotto