Shaping Implementation strategies THEORY PRACTICE OF CHANGE MANAGEMENT

Shaping Implementation strategies THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 1

The trap of success One of the paradoxes of organizational life is that success often sets the stage for failure THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 2

Prolonged period of success The trap of success Source: Nadler & Shaw, 1995: 11 Outcomes Success Syndrome Complacency Arrogance Learning disabled Decreased customer focus Increased Cost Environmental Disturbance Poor external alignment Declining performance Less innovation Codification Internal focus Death spiral Do more of the same Denial & rationalisation THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 3

The trap of success Most organisations, at some point, will be faced with the need to transform themselves in order to survive Even organizations that invest heavily in continuous improvement can become victims of strategic drift. While they change, they may not change fast enough to keep up with the pace of change in their environment. THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 4

Effective change strategies Ø Beer, a leading US consultant and professor at Harvard Business School, refers to two well tried change strategies (Economic and OD) but argues that the most effective strategy is a third way that combines the best of both. THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 5

Economic strategies Ø Focus on the drive for economic value through tough, top-down, results driven action. Ø They involve the imposition of technical solutions to problems that undermine organizational effectiveness. Ø Solutions/interventions include: ØRestructuring ØReengineering ØDrives for efficiencies Ølayoffs THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 6

Organization Development (OD) strategies Ø Focus on creating the capabilities required to sustain competitive advantage and high performance. Ø These capabilities include: ØCoordination and team work ØCommitment and trust ØCompetencies (technical and leadership) ØOpen communications ØThe capacity for constructive conflict ØLearning THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 7

Beer’s third way – a combined Economic/OD strategy Change strategies that are capable of delivering sustained high performance require: 1. The development of a vision that offers a compelling and balanced business and OD direction 2. The management of key stakeholders to buy time to develop organizational capabilities 3. The adoption of a socio-technical approach that involves the development of down-the-line managers. THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 8

Top management are often reluctant to adopt a combined strategy Economic strategies tend to be favoured when the top team have a mind set dominated by: • Shareholder interests • The assumption that the organization’s technical (rather than social) systems determine performance • The assumption that there is little to be gained from dialogue with employees. THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 9

The main differences between economic, OD and combined strategies 1. 2. 3. 4. 5. Leadership Focus Process Reward systems Use of consultants THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 10

Shaping implementation strategies Implementation strategies need to be internally consistent and compatible with key situational variables THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 11

Impact of situational variables Directive Collaborative Urgent requirement for change. Non-urgent requirement for change. Desired end state clearly specified from the start. What needs to be done to resolve problem or exploit opportunity not clear from the start. Little resistance anticipated Great resistance anticipated Change managers have access to all the information they need Change managers need information from other stakeholders Others have high trust in change managers. Others have low trust in change managers. Implementation is not dependant on the Implementation is highly dependant on the commitment of others. THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 12

Summary 1. Three approaches to implementation • Economic (drive) strategies • OD (development) strategies • Combined drive and develop strategies 2. The strategies favoured by CEOs 3. Situational variables that need to be considered when shaping implementation strategies THEORY & PRACTICE OF CHANGE MANAGEMENT 3 rd Edition, John Hayes, Palgrave, 2010 13