Unit 9 & 10 PDF

Unit 9 Stage Model: 1. Mobilize (create dissatisfaction, benchmark operations, diagnose internal barriers) 2. Move (redesign roles & structures, train for newly required skills) 3. Sustain (align reward system, reengineer control system, embed in culture) Punctuated equilibrium - Implies...

Unit 9 Stage Model: 1. Mobilize (create dissatisfaction, benchmark operations, diagnose internal barriers) 2. Move (redesign roles & structures, train for newly required skills) 3. Sustain (align reward system, reengineer control system, embed in culture) Punctuated equilibrium - Implies clear end stage B - Implies clearly plannable distance between A and B - Implies change is occasional, while normal is steady state Special characteristics of sustainable change - Levers only partially under control of a single organization - Only partially internally motivated (nowadays shifting social expectations) - Continuous change required / hard to determine and reach natural end-point Problems of hierarchies (inherently risk-averse and resistant to change): - Political: managers don’t like taking changes without permission form superiors - Cultural: people cling to habits and fear loss of power and stature (essential elements) - Crave stability: default to doing what they already know how to do Dual Operating System Model: A management-driven hierarchy (daily operations) working in concert with a strategic network (change enabler; continually assesses the business, the industry and the organization and reacts with greater agility, speed and creativity). 5 Principles of dual operating system: 1. Many change agents, not just the usual few appointees 2. A want-to and a get-to – not just a have-to – mind-set 3. Head & heart – not just head 4. Much more leadership, not just management 5. Two systems, one organization Challenges Dual Operating Sytem - How to ensure that two parts work together and don’t drift apart - How to build momentum: most important is to communicate. The 8 Accelerators that enables the strategy network to function: 1. Create a sense of urgency around a single big opportunity 2. Build and maintain a guiding coalition 3. Formulate a strategic vision & develop change initiatives designed to capitalize on the big opportunity 4. Communicate the vision & strategy to create buy-in and attract a growing volunteer army 5. Accelerate movement toward 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. Institutionalize strategic changes in the culture Kotter eight steps VS Kotter eight accelerators - Often used in rigid, finite and sequential ways in e_ect / responding to episodic change - Usually drive by small, powerful core group - Designed to function within traditional hierarchy VS - Concurrent & always at work - Pull in as many people as possible form throughout the organization to form ‘volunteer army’ - Require flexibility and agility of a network. Creating a Sense of urgency and a vision - Sustainability change challenge: Still not part of the key performance indicators. Framing the urgency becomes important, Two options: (1) Challenge (2) Opportunity - Opportunity: Sustainability o_ers meaning to many individuals and has emotive power Red Queen ENect: organizations compete and become stronger competitors by competing against similar organizations, but in doing so making their rivals likewise stronger as these respond to competitive moves Reactive change (Accelerated advocacy): Addressing performance gaps (No doubt about necessity of change, can start with rather disruptive change instruments) Proactive change (Gradual Persuasion): Addressing opportunity gaps (Not seen as truly necessary, need to create urgency, gradually move to disruption instruments) Individual readiness for change: - (D) Dissatisfied with status quo - (M) Accept new model for the future - (P) On board with process for change → Needs to be bigger than ‘Costs of change’ Possible Costs of Change: - Financial (reward systems, resources needed) - Political (reduced influence/ authority over organizational units) - Social (reduced status of function/ position of firm) - Psychological (uncertainty, anxiety, stress that’s associated with change) ACL 5 – Unit 9 Kimpton – Earth Care Kimpton Hotels (upscale hotel segment): Balancing Strategy and Environmental Sustainability Chief o_icer 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 a_ecting 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. Where to place the Earth Case Initiative on the SOI? Bottom middle: mostly technical operations are changed (but not a_ecting 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 e_ect 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, di_erentiation strategy (always have to preempt their strategy if they want to further di_erentiate from competitors as they quickly adapt) Vision and Mission: anchoring on operational optimization doing little less harm but stay with the same business model 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 sta_ might receive some training to understand that the material is also e_ective. Unit 10 Barriers to Organizational Change. Organizational Inertia: - Self-perpetuating tendencies of organizational structure and culture can lead to rigidities - Unlearning requirements of change - Lack of motivation to change - Uncertainty provokes strong emotions of anxiety → Succesful change: Structural Barriers to Change - Size, age, and complexity of an organization à Increasing rigidity (Solutions: Pilot- Projects / Corporate venturing) - Path dependencies in capability development à side-e_ects of Red Queen Evolution (Solutions: Acquisition / Alliances) - Metrics and organizational politics à Adverse incentive (Solutions: Turn-over / Coalition building) Principles of Persuasion (To overcome individual resistance to change) - Liking: uncover real similarities and o_er genuine praise - Reciprocity: give what you want to receive - Social Proof: use peer power whenever it’s available - Consistency: make commitments active, public, voluntary - Authority: expose your expertise; don’t assume it’s self-evident - Scarcity: highlight unique benefits and exclusive information Advocacy eNect: Nixon in China eNect: Organizational Change adds stress. Performance results under high stress: - Decreases attention span - High error rates - Diminished problem-solving ability - Lower creativity Overcomming barriers to change - Planning for small wins (help create buy-in) - Embedding change in culture (provides cues as to what is expected, accepted, encouraged and valued. Exerts conformity pressures through desire for acceptance) Cultivating organizational culture: - Recruitment & Selection (Rigorous, di_icult | Fit between person & Organizational values) - Socialization & Training (Training, mentoring | Folklore, legends, rituals | Public, visible commitment) - Rewards & Recognition (Tie to extrinsic reinforcements | public, visible commitment) Benefits of sustainability Culture: - Sense of identity and generates organizational commitment - Can create dedication and motivation among employees