Learning Module 9 PDF

lOMoARcPSD|11364796 Learning Module 9 Reading: Accelerate Kotter While in the past changes occurred slowly and companies had time, today companies face changes at a very high pace. However, a manager cannot think about strategy all the time but also needs to take care of the daily business operati...

lOMoARcPSD|11364796 Learning Module 9 Reading: Accelerate Kotter While in the past changes occurred slowly and companies had time, today companies face changes at a very high pace. However, a manager cannot think about strategy all the time but also needs to take care of the daily business operations. Therefore, a company needs to form an additional operating system that addresses the challenges produced by mounting complexity and rapid change. This system continually assesses the business, the industry and the organisation and reacts with greater agility, speed and creativity. Thus, it complements the operating system rather than overburdening it. Accelerators, on which the strategy system runs are concurrent and always at work, pull in as many people as possible from throughout the organisation to form a volunteer army, requires flexibility and agility of a network. Today, companies must seek constantly competitive advantages without disrupting the daily operations. Therefore, the second operating system is needed which is more in form of a network. At the heart of such dual operating system there are five principles: 1. Many change agents, not just the usual few appointees: no full time workers but many volunteers 2. A want-to and get-to not just a have-to mind-set: if people don’t want to change, they won’t create the proper vibes 3. Head and heart, not just head: people don’t want to do a day job at the hierarchy and then a night shift in the network you must speak 40 / www.temagroningen.nl / [email protected] Gedownload door Bart S ([email protected])  lOMoARcPSD|11364796 to their desire to contribute to positive change and to take an enterprise in strategically smart ways into a better future 4. Much more leadership, not just more management: A network needs a lot of leaders; hence it operates with different processes and languages. It all about visions, opportunities, agility, inspired action, and celebration, not about project management or budget or so on 5. Two systems, one organisation: The hierarchy and the network must be inseparable with a constant flow of information The Eight Accelerators: These are process that enables the strategy network to function 1. Create a sense of urgency around a single big opportunity (central change accelerator): awareness needs to be created that the companies need continual strategic adjustment and that they should always be aligned with the biggest opportunity in sight 2. Build and maintain a guiding coalition (GC): GC is made of with volunteers from throughout the organisation, whereas each member is treated equally 3. Formulate a strategic vision and develop change initiatives designed to capitalise on the big opportunity 4. Communicate the vision and the strategy to create a buy-in and attract a growing volunteer army 5. Accelerate movement towards the vision and the opportunity by ensuring that the network removes barriers 6. Celebrate visible, significant short-term wins 7. Never let up. Keep learning from experience. Don’t declare victory too soon 8. Institutionalise strategic changes in the culture Video: Instigating Organisational Change for Sustainability Part 1 Stage models characterizes change processes, most change processes follow the certain phases. Even though the number of stages vary in literature there are three main stages: 41 / www.temagroningen.nl / [email protected] Gedownload door Bart S ([email protected])  lOMoARcPSD|11364796 Change is not a static stage, it is not having a clear start and ending point and the distance necessary to travel is not foreseeable Sustainability related change Levers only partially under control of single organization: collaborate with partners outside the organization Only partially internally motivated (shifting social expectations) external pressure o Response to reputational threat o Seeking of new market niches Continuous change required / hard to determine and end-point very hard to reach natural end point Video: Instigating Organizational Change for Sustainability Part 2 Most change related concepts were not created for sustainability change, hence applying them to it might be challenging. Creating a sense of urgency and a vision Urgency perceptions influence difficulty of change A clear vision provides directions and motivation Challenge in sustainability: Sustainability (often) is not core business (part of KPIs), hence it is rather hard to create a sense of urgency and a motivating vision around it. Therefore, it is important to frame the urgency so that the staff sees the importance of addressing it. There are two generic option to do so: 1. Challenge: Necessity because competitors are getting ahead 2. Opportunity: Get ahead of competition or to proactively drive regulations Sustainability is more and more becoming a means of market competition. Some markets (segments) are seeing a Red Queen Effect (companies 42 / www.temagroningen.nl / [email protected] Gedownload door Bart S ([email protected])  lOMoARcPSD|11364796 compete on sustainability and thus make their competitors also stronger as these respond to competition). Using this to frame sustainability-oriented change, change agencies can create a sense of urgency by either pointing out a performance gap that needs to be addressed (reactive change) or by pointing out an unexploited opportunity from competitors (proactive change). Sustainability also offers opportunities, as it has emotive power, and it thus might be easier to set up a volunteer army (especially millennials 43 / www.temagroningen.nl / [email protected] Gedownload door Bart S ([email protected])  lOMoARcPSD|11364796 want to be more meaningful work). Sustainable change seems to be especially successful if a company cooperates with a social organisation. Individual Readiness for Change D x M x P > Cost of Change Kimpton Hotels (upscale hotel segment): Balancing Strategy and Environmental Sustainability Chief officer of hotel chain had to advice a boutique hotel on environmental strategy. However, new products must not be more expansive than the product to be replaced. E.g., organic cotton pillows 100k more expansive, could start with only pillowcases, however would that make sense? Also PR wise? Same issue when deciding on sustainable carpets Recycling Could Pace find a way to create sustainability within Kimpton’s budget, and without adversely affecting the customer experience? Would Kimpton be able to keep the promises made by its new corporate brand? The entire US hotel industry has significant impacts on the environment, and hotel (such as Fairmont Hotels) can create considerable savings by implementing environmental programs. Kimpton hotels decided to roll out national environmental program to lower the environmental impact. 44 / www.temagroningen.nl / [email protected] Gedownload door Bart S ([email protected])  lOMoARcPSD|11364796 Live session 5 Case Study: Where to place the Earth Case Initiative on the SOI? Bottom middle: mostly technical operations are changed (but not affecting the behaviour of the customers). Mostly operational optimizer and doing less harm, by replacing chemicals, taking organic cotton and so on o Systematic: Only a little bit, as they have to collaborate with suppliers o Integrated: more integrated now, as they are rolling it out in the chain Diagnosing the “Earth Care” Initiative - Investments are relatively high as most hotels are still in phase 1, once they enter phase 3 renovations will be needed - Patient capital: received lots of investments - Expertise: new department to find new suppliers, marketing: need to be careful that they do not harm their customers expertise in green marketing - Culture: centralised sustainability approach even though the chain is rather decentralised organised however disruptions are rather low as they are only operational optimising - Shifting the burden: they are shifting the burden away from customers, but it does not make the hotel industry more sustainable. Customers can just continue their habits instead of reflect on them rebound effect How can Michael Pace create momentum for the change initiative (urgency, vision, volunteer recruitment, framing the initiative)? Proactive Change Kimpton outcompeted competitors: Unique (boutique hotel), having a home far from home, differentiation strategy (always have to preempt their strategy if they want to further differentiate from competitors as they quickly adapt) Vision and Mission: anchoring on operational optimization doing little less harm but stay with the same business model 45 / www.temagroningen.nl / [email protected] Gedownload door Bart S ([email protected])  lOMoARcPSD|11364796 Forming a Coalition and Volunteer Corps - The culture is already about caring for others, hence it is no coincidence that the program is called Earthcare”. What barriers to change does Michael Pace need to anticipate? What can he do about them? Resistance: From top rather from the bottom. Top is very decentralised, hence there might be some resistance: Incentive structure Cleaning staff might receive some training to understand that the material is also effective 46 / www.temagroningen.nl / [email protected] Gedownload door Bart S ([email protected])