Unit 2 Session 6.pptx

Online MBA Semester I ORGANIZATIONAL BEHAVIOUR & HUMAN RESOURCE MANAGEMENT Course Code - (OMBA-103) Unit 2: ORGANIZATIONAL BEHAVIOUR Lesson 6 : Organizational Change Management (Part II) LEARNING OUTCOMES At the end of the session you will know about: 1. The conditions required to effectively mana...

Online MBA Semester I ORGANIZATIONAL BEHAVIOUR & HUMAN RESOURCE MANAGEMENT Course Code - (OMBA-103) Unit 2: ORGANIZATIONAL BEHAVIOUR Lesson 6 : Organizational Change Management (Part II) LEARNING OUTCOMES At the end of the session you will know about: 1. The conditions required to effectively manage change (John Kotter’s Model) 2. The sources of complacency 3. Resistance to change 4. IBM’s Study on Change Management 2 WHY COMPANIES FAIL OR SUCCEED IN THEIR CHANGE APPROACHES ? 3 Transformation efforts fail because certain things are not kept in mind John Kotter: The Guru of Change Management Book - Leading Change (1996) 4 Eight Recommendations for Successful Change 1. 2. 3. 4. 5. 6. 7. 8. Establishing a sense of urgency Creating the guiding coalition Developing a vision and strategy Communicating the change vision Empowering broad-based action Generating short-term wins Consolidating gains and producing more change Anchoring new approaches in culture 5 Sources of Complacency • Too much happy talk from senior management • A kill-the-messenger-of-bad-news, low confrontation culture • Too many visible resources (Everything is great, world is fine) • A lack of sufficient performance feedback from external sources • Low overall performance standards 6 Sources of Complacency • Organizational structures that focus employees on narrow functional goals • Internal management systems that focus on wrong performance indices • The absence of a major and visible crisis • Human nature, with its capacity for denial, especially if people are already busy or stressed 7 How do you communicate the change to be brought about? “We will shut down your department We have been acquired We will stop producing the product we were producing for a decade.” The above are examples of poor communication 8 Resistance to Change • A natural human reaction to disruptive events (fear of losing control) • Change seen differently by different people according to their individual frames of reference • Resistant employees are often seen as non-rationally thinking trouble-makers • Resistance of informal opinion leaders is of greater power than those of formal leaders • There is always a mixture of overt and hidden resistance • Active involvement is probably the best way to deal with resistance 9 KURT LEWIN’S MODEL OF CHANGE The process of change includes 3 stages: 1. Unfreezing 2. Moving 3. Refreezing 10 Lessons from IBM’s Study on Change Management IBM’s Global Business Services’ Change Management Research Carried out with the following goals in mind: Customer satisfaction Sales training for revenue growth Reducing costs (Lean Mgt.) Innovation Implementing technology (Capital intensive) Entering new markets (Expansion) 11 Lessons from IBM’s Study on Change Management Technology-Based change needed to survive in today’s competitive environment Managing change must be a core competence for companies to survive 12 The CEOs of companies surveyed by IBM said: • Change is essential • Despite the company focusing on continuous change, there is a huge gap between actual change capability and needed change capability. • The gap leads to failed change initiatives which impact the budget, customers and employees RESULTS OF THE SURVEY: Organizations largely fail in change efforts. The top 20% organizations are successful 80% of the time. The bottom 20% only manage to achieve their change objectives 8% of the time 13 BARRIERS TO CHANGE (as per the study) 1. Changing mindsets and attitudes 2. 3. 4. 5. 6. 7. Corporate culture Underestimating complexity Shortage of resources Lack of commitment of the higher management Lack of change know-how Lack of transparency because of missing or wrong information 8. Lack of motivation of involved employees 9. Technological barriers 14 INGREDIENTS FOR SUCCESSFUL CHANGE (as per the study) 1. Management sponsorship 2. Employee involvement 3. Honest and timely communication 4. Corporate culture that motivates and promotes change 5. Change agents 6. Flexible culture 7. Efficient training programme 8. Efficient organizational structure 9. Monetary and non-monetary incentives 15