Leadership (II) PDF

Leadership (II)  Different styles for different contexts Clearly different styles of change → different managers’ personality types. → strategic leaders with the greatest capability to manage change have the ability to adopt different styles in different circumstances Time and scope....

Leadership (II)  Different styles for different contexts Clearly different styles of change → different managers’ personality types. → strategic leaders with the greatest capability to manage change have the ability to adopt different styles in different circumstances Time and scope. where transformational change is required, more centralised control or directive approaches may be more appropriate. Capability and readiness for change. leadership styles need to differ according to the ability and willingness of employees to change. styles of change leadership will need to differ → f (extent of capability; readiness for strategic change in the organisation) Where there is low readiness and capability for change → direction may be the most appropriate style. Where there is high readiness but low capability then education → training and coaching may be appropriate. Where capability is high but readiness is low → involving people in the change process whilst retaining overall central control (participation) may make sense. Where both readiness and capability are high → collaboration may be possible and top management may be able to delegate much of the change agenda. 2  Different styles for different contexts (ctd) Power. In organisations with hierarchical power structures a directive style may be common and it may be difficult to break away from it, not least because people expect it. In ‘flatter’ power structures, a more networked or learning organisation described it is likely that collaboration and participation will be common, indeed desirable. Styles of managing change are not mutually exclusive. clear direction on overall vision might aid a more collaborative approach to more detailed strategy development. Education and communication may be appropriate for some stakeholders, such as financial institutions; participation may be appropriate for groups in parts of the organisation where it is necessary to build capability and readiness; if there are parts of the organisation where change has to happen fast, timing may demand a more directive style. 3 Styles of change leadership according to organisational capability and readiness 4 A compelling case for change Whichever style of management is adopted a convincing case for change has to be presented. McKinsey & Co, the consultants→ too often the case for change is made in terms of top management’s perception of what is important: for example meeting expectations of shareholders or beating competition. factors that motivate: the impact on society, on customers, on the local working team, or on employees’ personal well-being. A compelling case for change needs to speak to these different bases of motivation, not just to top-management perceptions of change needs. It may be difficult for top management to understand and relate to these different needs→it may make sense to involve employees in the creation of stories of change that ‘translate’ corporate imperatives of change into local motivating messages. It is also important that the case for change does not just focus on the understanding of why change is needed, but the action required to deliver it. 5 Challenging the taken-for-granted A major challenge in achieving strategic change can be the need to change often long-standing mindsets or taken-for-granted assumptions sufficient evidence in the form of careful strategic analysis will itself serve to challenge and therefore change the paradigm. → where longstanding assumptions have persisted, they can be very resistant to change + People find ways of questioning, reconfiguring and reinterpreting such analysis to bring it in line with the existing paradigm. (Others argue that encouraging people to question and challenge each other’s assumptions and received wisdom by making them explicit is valuable) Scenario planning → a way of overcoming individual biases and cultural assumptions by getting people to see possible different futures and the implications for their organisations. senior managers in particular can be too far removed from the realities of their organisations and need to be brought face-to-face with them. (train in economy) 6 Changing operational processes and routines In the end, strategies are delivered through day-to-day processes and routines of the operations of the organisation. formalised and codified or less formal ‘ways we do things around here’ which tend to persist over time and guide people’s behaviour. The relationship between strategic change and day-to-day processes and routines is therefore important to consider in at least four aspects: 1. Planning operational change. The planning of the implementation of an intended strategy requires the identification of the key changes in the routines required to deliver that strategy → strategic change needs to be considered in terms of the re-engineering of organisational processes. 2. Challenging operational assumptions. Changing organisational processes and routines may also have the effect of challenging the often taken-for-granted assumptions underpinning them. getting people to question and challenge deep-rooted beliefs and assumptions in the organisation. Richard Pascale argues: it is easier to change behaviour and by so doing change taken-for-granted assumptions than to try to change taken-for-granted assumptions as a way of changing behaviour. (→ education and communication to persuade people to change may be less powerful than involving people in the activities of changing). 7 Changing operational processes and routines 3. Operation-led change. Operational change may be the outcome of planned strategic change + opportunities for operational change → innovation and new strategic thinking. Michael Hammer→ managers do not consider changes at the operational level sufficiently radically. Typically they benchmark best practice against industry standards rather than looking for best practice wherever it can be found 4. Bottom-up changes to routines. people do change in routines as result in wider strategic change. → this can occur proactively through managers deliberately ‘bending the rules of the game’. This could give rise to resistance, but persistent bending may eventually achieve enough support from different stakeholders such that new routines become acceptable. When sufficient questioning of the status quo is achieved, those seeking change may actively subvert existing ways of doing things so as to make clear a fundamental change from the past. approach adopted by middle managers in seeking to carry with them both people who work for them and more senior managers, both of whom may be resistant to change. → incremental, experimental process that is, however, likely to suffer setbacks and require persistence and political acume 8 Symbolic changes Change levers may also be symbolic in nature. Symbols are objects, events, acts or people which express more than their intrinsic content. everyday things which are nevertheless especially meaningful in the context of a particular situation or organisation. →the organisational processes and routines are symbolic in nature. Changing symbols can help reshape beliefs and expectations because meaning becomes apparent in the day-to- day experiences people have of organisations (e.g. office layout and décor, the type of language and technology used and organisational rituals) New rituals can be introduced or old rituals done away → ways of signalling or reinforcing change. Changes in physical aspects of the work environment are powerful symbols of change→ change of location for the head office, relocation of personnel, changes in dress or uniforms, and alterations to offices or office space. The behaviour of managers, particularly strategic leaders, is perhaps the most powerful symbol in relation to change. →it is vital that the visible behaviour of change agents be in line with change. The language used by change agents →Either consciously or unconsciously, language and metaphor may be employed to galvanise change. →danger that strategic leaders whilst espousing change use language that signals adherence to the status quo, or personal reluctance to change. 9 Organisational rituals and change 10 Power and political systems need to consider strategic change within the political context. This can be important because it may be necessary to build a political context for change. To effect change powerful support may be required from individuals or groups or a reconfiguration of power structures may be necessary, especially if transformational change is required. 11 mechanisms associated with managing change from a political perspective Acquiring resources or being identified with important resource areas or areas of expertise. the ability to withdraw or allocate such resources can be a valuable tool in overcoming resistance or persuading others to accept change or build readiness for change. Association with powerful stakeholder groups (elites), or their supporters, build a power base or help overcome resistance to change Or a manager facing resistance to change may seek out and win over someone highly respected from within the very group resistant to change. It may also be necessary to remove individuals or groups resistant to change. Building alliances and networks of contacts and sympathisers may be important in overcoming the resistance of more powerful groups. There may be parts of the organisation, or individuals, more sympathetic to change than others with whom support for change can be built. Marginalisation of those resistant to change may also be possible. the danger is that powerful groups in the organisation may regard the building of support coalitions, or acts of marginalisation, as a threat to their own power, leading to further resistance to change. 12 Political mechanisms in organisations 13 Hazard in political aspects In overcoming resistance, the major problem may simply be the lack of power to undertake such activity. Trying to break down the status quo may become so destructive and take so long that the organisation cannot recover from it. If the process needs to take place, its replacement by some new set of beliefs and the implementation of a new strategy is vital and needs to be speedy. in implementing change, gaining the commitment of a few senior executives at the top of an organisation is one thing; it is quite another to convert the body of the organisation to an acceptance of significant change. 14 Change tactics: Timing Building on actual or perceived crisis is especially useful the greater the degree of change needed. If there is a higher perceived risk in maintaining the status quo than in changing it, people are more likely to change. Indeed, it is said that some chief executives seek to elevate problems to achieve perceived crisis in order to galvanise change. For example, a threatened takeover may be used as a catalyst for strategic change. Windows of opportunity The arrival of a new chief executive, the introduction of a new, highly successful product the arrival of a major competitive threat on the scene Since change will be regarded nervously, it may also be important to choose the time for promoting such change to avoid unnecessary fear and nervousness. For example, if there is a need for the removal of executives, this may be best done before rather than during the change programme. In such a way, the change programme can be seen as a potential improvement for the future rather than as the cause of such losses. The symbolic signalling of time frames may be important. conflicting messages about the timing of change should be avoided. For example, if rapid change is required, the maintenance of procedures or focus on issues that that signal long time horizons may be counter-productive. 15 Visible short-term wins A strategic change programme will require many detailed actions and tasks. It is important that some are seen to be successful quickly →‘low-hanging fruit’– changes that may not be big but can be made easily and yield a quick payoff – In themselves, these may not be especially significant aspects of a new strategy, but they may be visible indicators of a new approach associated with that strategy. The demonstration of such wins can therefore galvanise commitment to the wider strategy. One reason given for the inability to change is that resources are not available to do so.→ identify ‘hot spots’ on which to focus resources and effort. William Bratton, famously responsible for the Zero Tolerance policy of the New York Police Department, began by focusing resource and effort on narcotics-related crimes. Though associated with 50–70 per cent of all crimes he found they only had 5 per cent of the resources allocated by NYPD to tackle them. Success in this field led to the roll-out of his policies into other areas and to gaining the resources to do so. 16  MANAGING STRATEGIC CHANGE PROGRAMMES There are a variety of change levers that change agents may use. Choosing the appropriate levers, rather than following a set formula for managing strategic change, is important. F (the change context; the skills and styles of those managing change) if the need is to overcome resistance to achieve fast results, then the emphasis may have to be on changing elements of the strategy itself from the top and achieving behavioural compliance to a change programme. if there is a need and the time to ‘win hearts and minds’ then there will need to be a focus on changing people’s values and a much greater emphasis on their involvement in changing the culture. 17 Turnaround strategy There are circumstances where the emphasis has to be on rapid reconstruction, in the absence of which a business could face closure, enter terminal decline or be taken over. This is commonly referred to as a turnaround strategy, where the emphasis is on speed of change and rapid cost reduction and/or revenue generation and managers need to prioritise the things that give quick and significant improvements. Typically it is a situation where a directive approach to change required. 18 main elements of turnaround strategies Crisis stabilisation.→ regain control over the deteriorating position→ short-term focus on cost reduction and/or revenue increase There is nothing novel about these steps → many of them are good management practice→ The differences are the speed at which they are carried out and the focus of managerial attention on them. The most successful turnaround strategies focus on reducing direct operational costs and on productivity gains. Less effective approaches pay less attention to these and more on the reduction of overheads. often turnarounds are seen as no more than cost-cutting exercises when a wider alignment between causes of decline and solutions may be important. →where the business decline is principally a result of changes in the external environment it may be folly to expect that cost-cutting alone can lead to renewed growth. Management changes. Changes in management may be required, especially at the top. →introduction of a new chairman or chief executive/ as well as changes to the board ( especially in marketing, sales and finance) for three main reasons. because the old management may well be the ones that were in charge when the problems developed and be seen as the cause of them by key stakeholders. because it may be necessary to bring in management with experience of turnaround management. because, if new management come from outside the organisation, they may bring different approaches to the way the organisation has operated in the past. 19 main elements of turnaround strategies Gaining stakeholder support. Poor quality of information may have been provided to key stakeholders. In a turnaround situation it is vital that key stakeholders, perhaps the bank or key shareholder groups, and employees are kept clearly informed of the situation and improvements as they are being made. Clarifying the target market(s) and core products. → ensuring clarity on the target market or market segments most likely to generate cash and grow profits. →getting closer to customers and improving the flow of marketing information, especially to senior levels of management, so as to focus revenue-generating activities on key market segments. →Clarifying the target market also provides the opportunity to discontinue or outsource products and services that are not targeted on those markets Financial restructuring. The financial structure of the organisation may need to be changed.→ changing the existing capital structure, raising additional finance or renegotiating agreements with creditors, especially banks. 20 Turnaround: revenue generation and cost reduction steps 21 Managing revolutionary strategic change Revolutionary change differs from turnaround (or reconstruction) in two ways 1. the need is not only for fast change but also cultural change. (Ahi!) it may be that the need for change is not as evident to people in the organisation as in a turnaround situation; or that they see reasons to deny the need for change. This situation is a result of many years of relative decline in a market, with people wedded to products or processes no longer valued by customers – the problem of strategic drift. 2. Or it could be that the problems of the organisation are visible and understood by its members, but that people cannot see a way forward. 22 Managing revolutionary strategic change is likely to involve: Clear strategic direction. the need for the articulation of a clear strategic direction and decisive action in line with that direction is critical. → individual CEOs who are seen to provide such direction are often credited with making a major difference. →They become the symbol of such change within an organisation and externally. Combining rational and symbolic levers.→ Very likely some of the hard decisions outlined for turnaround will be taken ( portfolio changes, greater market focus, top management changes and perhaps financial restructuring).→ these are also employed to send major symbolic messages of change. (replacement of very senior executives/ major changes in board structure/ introduction of new managers, often at a senior level) Consultants may also be used to provide a dispassionate analysis of the need for change but also to signal how meaningful the change process is. Multiple styles of change management. a directive style of change management is likely to be evident → accompanied by other styles + supported by determined efforts to educate about the need for change and the use of participation to involve people in aspects of change in which they have specific expertise Working with the existing culture. It may be possible to work with elements of the existing culture rather than attempt wholesale culture change. →identifying aspects of culture that can be built upon and developed and those that have to be changed– Monitoring change. →it requires the setting and monitoring of unambiguous targets that people have to achieve. (Often linked to overall financial targets) 23  Managing evolutionary strategic change Managing change as evolution involves transformational change, but incrementally. It can be thought of in two ways. In terms of the creation of an organisation capable of continual change→ learning organisation organisational ambidexterity Empowering the organisation. →the need for people throughout the organisation to accept the responsibility for contributing strategic ideas, for innovating, and for accepting change as inevitable and desirable. A clear strategic vision. →provide very clear guidelines – vision, mission or ‘simple rules’ – around which those ideas can cohere Continual change and a commitment to experimentation in organisational processes throughout the organisation 24 Trying to achieve this in practice it requires: A second way of conceiving of strategic change as evolution is in terms of the movement from one strategy to a changed strategy but over perhaps many years. Stages of transition. →Identify interim stages in the change process is important→ in terms of the change context there may be insufficient readiness or an insufficient capacity to make major changes initially→important to establish these conditions before other major moves are taken. Irreversible changes. It may be possible to identify changes that can be made that, whilst not necessarily having immediate major impact, will have long-term and irreversible impacts. Changing the criteria for appointment of partners/seniors members Sustained top management commitment will be required. →The danger → the momentum for change falters because people do not perceive consistent commitment to it from the top. Winning hearts and minds. Culture change is likely to be required in any transformational change. This may be more problematic than for revolutionary change because people may simply not recognise that there are problems with regard to the status quo. → multiple levers for change should be used consistently the signalling of the meaning of change in ways that people throughout the organisation understand both rationally and emotionally; and levers that signal and achieve improved economic performance. 25  Why change programmes fail Death by planning. The emphasis is put on planning the change programme rather than delivering it. continuous stream of proposals and reports, each one requiring agreement amongst managers affected by the changes. Sub-committees, project teams and working groups may be set up to examine problems and achieve buy-in. The result can be ‘analysis paralysis’ and a discourse about change rather than the delivery of change. + politicisation of the change programme where meetings about change become forums for debate and political game-playing. Loss of focus. Change might require an ongoing series of initiatives, maybe over years. the risk is that these initiatives are seen by employees as ‘change rituals’ signifying very little. the risk that the original intention of the change programme becomes eroded by other events taking place Reinterpretation. The attempted change becomes reinterpreted according to the old culture. For example, an engineering company’s intended strategy of adding value in ways that customers valued was interpreted by the engineers within the firm as providing high levels of technical specification which they, not customers, determined. 26 Why change programmes fail (ctd) Disconnectedness. People affected by change may not see the change programme connecting to their reality. Senior executives, as proponents of the change, might not be seen to be credible in terms of understanding the realities of change on the ground. Behavioural compliance. → the danger that people appear to comply with the changes being pursued in the change programme without actually ‘buying into’ them. Misreading scrutiny and resistance.→ Those promoting change in the organisation are likely to face either resistance to the change programme or critical scrutiny of it. Often the response to this is to see such behaviour as negative and destructive. →resistance that is explicit is more capable of being addressed than that which is passive or covert. Broken agreements and violation of trust. → if senior management fail to provide honest assessments of the situation or provide undertakings to employees on which they subsequently renege, then they will lose the trust and respect of employees and, very likely, ensure heightened resistance to change. 27