CHANGE

MANAGEMENT :
Facts and
Contemporary Issues
 Outline of
Presentation CHANGE
MANAGEMENT
I. Objectives
II. Theories and Change Models
VI. Trends, Issues and Empirical
Studies and Cases
I. Objectives:
1. To present key theories,
models and concepts involved
CHANGE
in managing change
MANAGEMENT
2. To raise interest, discussion
and awareness on
contemporary issues and
trends affecting the
organization and its people
3. To concretize such theories
and issues through
presentation of an actual
experience in change
management
V. THEORIES AND CHANGE MODELS

CHANGE
a. The Need for Change: MANAGEMENT

An Overview
In recent years, billions of
money have been utilized to
address productivity and CHANGE
effectiveness issues among MANAGEMENT
many organizations.

A statistical result of a study

made from 1990-95 showed
that 85% of U.S.-based
corporations engaged in some
variety of restructuring.

Joyce,Megachange (1999)
“There is a relentless emphasis on
cost competition, and quality –
once the “holy grail” in many CHANGE
industries – is now expected by MANAGEMENT
consumers and is ceasing to be a
point of differentiation…There has
been a fundamental quantitative
and qualitative shift in competition
that is requiring organizational
change on an unprecedented
scale.”
William F. Joyce, in his new book,
MEGACHANGE
a new scenario called
“hypercompetition” is shaping
the business landscape. He
defines hypercompetition as a CHANGE
MANAGEMENT
“state in which the rate of
change in the competitive
rules of the game are in such
flux that only the most
adaptive, fleet, and nimble
organizations will survive.”
Richard D’ Aveni
 “Technological change demands an
even greater measure of adaptability
and versatility on the part of
management in a large organization.
CHANGE
Unless management remains alert, it MANAGEMENT
can be stricken with complacency –
one of the most insidious dangers we
face in business. In most cases it’s
hard to tell that you’ve even caught
the disease until it’s almost too late. It
is frequently most infectious among
companies that have already reached Thomas J.
the top. They get to believing in the Watson,Jr.
(IBM)
infallibility of their own judgments.”
 Late-Twentieth- Twenty-First Century
Century Paradigm Paradigm
Culture Stability, Efficiency Change, problem
solving
Technology Mechanical Electronic Change
Tasks Physical Mental, idea-based Management
Hierarchy Vertical Horizontal
Power/Control Top Management Widely Dispersed
Career Goals Security Personal
Growth/Mastery
Leadership Autocratic Transformational
Workforce Homogenous Culturally diverse
Doing Work By Individuals By teams
Markets Local, Domestic Global
Focus Profits Customers
Resources Capital Information
Quality What’s affordable No exceptions
John A. Byrne, “Paradigms For Postmodern Managers,” Business Week/Reinventing America (1992), 62-63; and
George Land and Beth Jarman, Breakpoint and Beyond (New York: Harper Business, 1992).
Organizational Change is
defined as the adoption of a new
idea or behavior by an
organization. (Richard Daft)
Change
Management
Operational Change, based on
organizational efforts to improve basic
work and organizational processes in
different areas of the business

Transformational Change, which

involves redesign and renewal of the
total organization.
ENVIRONMENTAL
FORCES

NEED FOR INITIATE IMPLEMENT

CHANGE CHANGE CHANGE

INTERNAL
FORCES

MODEL OF PLANNED CHANGE SEQUENCE OF EVENTS

Management, Daft
 FOUR ROLES IN ORGANIZATIONAL CHANGE

INVENTOR CHAMPION SPONSOR CRITIC

Develops and Believes in High-level Provides reality

understands idea manager who test
technical removes
aspects of Visualizes organizational Looks for
idea benefits barriers shortcomings

Does not Confronts Approves and Defines hard-

know how to organizationa protects idea nosed criteria
win support l realities of within that idea must
for the idea cost, benefits organization pass
or make a
business of it Obtains
financial and
political
support

Overcomes
obstacles
“Innovative companies are
especially adroit at continually
responding to change of any sort
in their environment…When the
environment changes, these
companies change too…As the CHANGE
need of their customers shift, the MANAGEMENT
skills of their competitors improve,
the mood of the public THE NEED
perturbates, the forces of FOR CHANGE
international trade realign, and within the
government regulations shift, Organization
these companies tack, revamp,
adjust, transform, and adapt. In
short, as a whole culture, they
innovate.”
Waterman and Peters
B. CHANGE MODELS
• Force Field Analysis
CHANGE
• Reengineering MANAGEMENT

• Kaizen
• Benchmarking
• McKinsey’s 7S Framework Model
 LEWIN’S MODEL/ ACTION
RESEARCH (AR) MODEL
CHANGE
• Kurt Lewin developed Force Field Analysis MANAGEMENT

• organizations may be in a state of equilibrium--

change is a result of competition between driving
and restraining forces
• management should analyze the change forces--
removing and/or mitigating restraining forces;
creating and/or strengthening the driving forces
• by altering above forces, a new state of
equilibrium is attained
 KAIZEN
 Japanese word that means continuous
improvement
culture of sustained continuous improvement
focusing on eliminating waste in all systems CHANGE
MANAGEMENT
and processes
 strategy that begins and ends with people
where the leader guides people to continuously
improve their ability to meet expectations of
high quality, low cost, and on-time delivery
 motivates people through the achievements
they experience within the process
 Two Elements of KAIZEN
improvement and change for the better
ongoing continuity
Four Steps of Successful Shop-Floor Kaizen
STEP 1 STEP 2&3 STEP 3 STEP 3&4

LEARN HIT THE HIT THE

HIT FLOOR
FLOOR RUNN
ORGANIZE THE ING BOAST
FLOOR RUNNING
RUNNING AND BRAG

PRE-KAIZEN DAY ONE DAY TWO DAY THREE

1. ORGANIZE. Include securing top mgmt
commitment and the setting of ambitious
goals.
2. LEARN and HIT THE FLOOR CHANGE
MANAGEMENT

RUNNING. Condensed learning with

immediate application.
3. HIT THE FLOOR RUNNING. Occurs
entirely on the gemba (shop floor).
4. HIT THE FLOOR RUNNING and
BOAST AND BRAG. Concludes with
presentations and recognition.
 Basic Tips for KAIZEN
Discard conventional fixed ideas.
Think of how to do it, not why it CHANGE
MANAGEMENT
cannot be done
Do not make excuses. Start by
questioning current practices.
Do not seek perfection. Do it right
away even if for only 50% of target.
Correct it right away, if you make
mistake.
Do not spend money for KAIZEN, use
your wisdom.
Wisdom is brought out when faced
with hardship. CHANGE
MANAGEMENT

Ask “WHY?” five times and seek root

causes.
Seek the wisdom of ten people rather
than the knowledge of one.
KAIZEN ideas are infinite.
 BENCHMARKING
 the art of finding out how and why some
companies can perform tasks much better than
other companies
 critical marketing tool to uncover the secrets to CHANGE
MANAGEMENT

success of world-class companies

 analytical process for measuring a company’s
products and operations against those of its
competitors
 enables the company to reassess itself vis-à-vis
competition and understand the technology or
processes that make their competitors’ products
click more to the market than theirs
 GOALS OF BENCHMARKING
identify key performance areas for
measurement
measure one’s performance against the CHANGE
MANAGEMENT
competitor’s
compare the competitive advantages and
disadvantages
implement programs to close the gap
 SEVEN STEPS TO DO BENCHMARKING
1. Determine which functions to benchmark.
2. Identify the key performance variables to
measure.
3. Identify the best-in-class companies. CHANGE
MANAGEMENT

4. Measure performance of best-in-class

companies.
5. Measure the company’s performance.
6. Specify programs and actions to close the gap.
7. Implement and monitor results.
 REENGINEERING
“ the fundamental rethinking and radical
redesign of business processes to achieve
dramatic improvements in critical contemporary
measures of performance, such as cost, quality,
service and speed”. (Michael Hammer) CHANGE
MANAGEMENT

“the rapid and radical redesign of strategic,

value-added business processes - and systems,
policies and organizational structures that
support them - to optimize the work flows and
productivity in an organization.”(The
Reengineering Handbook, AMACOM, 1994)
Principles of Reengineering
Organize around outcomes, not tasks.
Have one person perform all the steps in a
process. Design that person’s job around
an objective or outcome instead of a CHANGE
MANAGEMENT
single task.
Have those who use the output of the
process perform the process. Now that
computer-based data are more readily
available, opportunities exist to
reengineer processes so that the
individuals who need the result of a
process can do it themselves.
Merge information-processing work into
the real work that produces the information.
The unit or department that produces the
information to also process it. CHANGE
MANAGEMENT

Treat geographically dispersed resources as

though they were centralized. Companies can
use databases, telecommunication networks,
and standardized processing systems to get
the benefits of scale and coordination while
maintaining the benefits of flexibility and
service.
Link parallel activities instead of
integrating their results. Coordinate
parallel functions while activities are in
process rather than after they are
completed. CHANGE
MANAGEMENT

Put the decision point where the work is

performed, and build control into the
process. The people who do the work
should make the decisions and that the
process itself can have built-in controls.
Capture information once and at the
source.
The Reengineering Process
Six Steps for an effective process
reengineering
State a case for action. The proponent
of reengineering process must clearly CHANGE
MANAGEMENT

communicate the need for such radical

approach to take effect in their firm.
Identify the process for reengineering.
The leaders of the company must
carefully analyze which processes need
to be radically changed and be part of
the reengineering process.
Evaluate enablers of reengineering. Two key
enablers in a reengineering process are
information technology and human resource or
organizational issues. The current IT system must
be thoroughly reviewed, analyzed and studied
towards redesigning the IT system towards
CHANGE
supporting the reengineering endeavor. MANAGEMENT

Understand the current process. Only a sound

understanding of the current situation would pave
the way for an effective reengineering
undertaking. The current situation of the firm
provides the most important information.
Create a new process design. The
reengineering team should now be ready to map
out and strategize the new process designs to be
implemented after identifying problem areas.
Benchmarking with other successful firms will
be useful.
CHANGE
MANAGEMENT
Implement the reengineered process. Critical
issues to be addressed are: 1) orientation of new
systems to be undertaken to the people, 2) skills
training for the new demands of work from the
workers, and 3) the impact of leadership
throughout the reengineering process. Inspiring
leadership is needed so that the workers would
be motivated to pursue the changes despite the
anxieties and difficulties along the way.
Reengineering Success Factors

1. Top Management Sponsorship

2. Strategic Alignment
3. Business Case for Change
4. Proven Methodology CHANGE
MANAGEMENT

5. Change Management
6. Line Ownership
7. Reengineering Team Composition
 McKinsey’s 7S
• Carrying out changes in any
organization involves
attention to many interacting CHANGE
MANAGEMENT

elements.
• The interaction
between/among these
elements makes the
organization both dynamic
and complex.
 McKinsey’s 7S
• One way to deal with
complexity while looking for
improvement is to consider CHANGE
MANAGEMENT

specific areas for change.

• This model was used to
diagnose areas ripe for
change.
 McKinsey’s 7S
• The model provides a
way to describe the CHANGE
MANAGEMENT

current system as well

as a way to prescribe
recommendations for
change in seven major
areas.
McKinsey’s 7S
Strategy

Structure Systems CHANGE

MANAGEMENT

Shared Values

Staff Skills

Style
 Shared Values
Super-ordinate Goals
• Purpose, mission, organizational
values, fundamental principles, and
broad goals CHANGE
MANAGEMENT

• Why the organization or entity

exists.
• Clarity about shared values and
goals provided not only a sense of
the organization's purpose or
missions, but also a broad notion of
its future direction.
 Shared Values
Super-ordinate Goals
• An organization's vision,
purpose, and mission CHANGE
MANAGEMENT

statements express shared

organizational values and
Super ordinate goals.
• Provides meaning to the
member of the organization.
 Structure

• Most visible and perhaps

obvious change element CHANGE

• Denotes the way people are

MANAGEMENT

organized to accomplish work

• Expressed in organization charts,
tasks, reporting relationships,
formal policies, roles,
responsibilities, and functions
 Structure
• When organizational
structure is clear, people are
clear about their own and CHANGE
MANAGEMENT

other's roles and

responsibilities -- who does
what.
• An organizational wiring
diagram reflects its
structure.
 Staffing
• Describes the number & types of
people required to perform
organizational tasks, missions, CHANGE
MANAGEMENT

roles, and responsibilities for

each organization level.
• Staffing guidelines clarify where
talent should be placed or
deployed.
• Manpower documents and
position descriptions
 Skills
• The specific type of expertise,
knowledge, talent or competency
required to perform organizational
tasks and roles
CHANGE
MANAGEMENT

• Selection and training systems

specify job-related skills needed to
succeed in a job.
• Capability is set by the level of
skills and knowledge among the
members if the organization.
 Strategies
• The generic approaches and
intentions adopted to accomplish
work, to achieve desired outcomes, CHANGE

and to plan for the future constitute

MANAGEMENT

strategies.
• These may be formal and explicit or
information yet acceptable norms for
"doing business“
• as such, strategies are related to
organizational style.
 Systems
• Systems are the backbone of the
organization.
• Comprise the processes,
CHANGE
MANAGEMENT

procedures, mechanisms,
programs, and means to
accomplish organizational goals
and objectives.
• Systems coordinate levels of effort.
 Systems
• “Infrastructure" or the
organization
• These are recruitment, selection,
CHANGE
MANAGEMENT

placement, training, reward and

punishment, resource
management, information,
communication, and planning
evaluation systems.
 Style
• Reflects the personality of the
organization
• Embodies in the culture, tone of
CHANGE
MANAGEMENT

interactions among members,

attitudes, leadership, management
style, history, tradition, symbols,
command climate of the
organization.
 Style
• How people spend their time, what
they pay attention to, and what
they reward all communicate an CHANGE

organization's style.
MANAGEMENT

• The most mundane routines of

daily life may "speak" louder that
formal pronouncements,
manipulating these thus provides
key leverage points for change.
McKinsey’s 7S Framework Model
“THE HAPPY ATOM”

CHANGE
MANAGEMENT
VII. CHANGE:
Contemporary Issues and
Trends
• CHANGE: Management and Leadership

CHANGE
MANAGEMENT
 CHANGE:
MANAGEMENT VIS. LEADERSHIP
• We commonly think of how to manage change
but many gurus and authors contend that we tend
to over-manage when we really should provide
more leadership.
• This view is share by John Kotter, Warren Bennis,
Peter Drucker and John Shtogren among others.

CHANGE
MANAGEMENT
 CHANGE:
MANAGEMENT VIS. LEADERSHIP
John P. Kotter
A Force for Change: How Leadership Differs from Management
• Our management and leadership roles are
different, but we need to do both very well.
• The function of management is to cope with
complexity.
• The function of leadership is to cope with change.

CHANGE
MANAGEMENT
 CHANGE
MANAGEMENT CHANGE:
MANAGEMENT VIS. LEADERSHIP
John P. Kotter
A Force for Change: How Leadership Differs from Management
• Coping with complexity and coping with change--
management and leadership-- are both required.
• However, we need to rebalance the management-
leadership mix with a clear shift to the leadership
side.
• The more things change, the greater the need for
leadership.
 CHANGE
MANAGEMENT CHANGE:
MANAGEMENT VIS. LEADERSHIP
When managing we When leading we
• Deal with what needs to be • Envision what is possible
done
• Minimize the fear of • Maximize the excitement
change & challenge of change
• Strive for simplicity, clarity • Embrace complexity and
and continuity welcome disorder
• Emphasize accuracy and • Emphasize honesty and
efficiency--Do it right! integrity-- Do what’s
right!
 CHANGE:
MANAGEMENT VIS. LEADERSHIP
Peter Drucker:
We are in one of those great historical periods that
occur every 200-300 years when people don’t understand
the world anymore, and the past is not sufficient to
explain the future.
Normal people don’t behave well when everything
they’ve known is coming apart, when the center won’t
hold, when their best guess about the future is that it
won’t be as good as the past. When change is
threatening, they withdraw and seek shelter.

CHANGE
MANAGEMENT
 CHANGE:
MANAGEMENT VIS. LEADERSHIP
Peter Drucker:
A stay-low-and-cover-your-assets strategy makes good
sense. Initiative, risk-taking, cooperation-- not likely
when survival is the best you can hope for.

CHANGE
MANAGEMENT
 CHANGE:
MANAGEMENT VIS. LEADERSHIP
John A. Shtogren
Skyhooks for Leadership
Downsizing, reengineering, globalization and other
euphemisms for all-bets-are-off don’t do much for
anybody’s sense of well-being.
If chaos on the job weren’t bad enough, our basic
values, social, political and religious institutions, and
family structures all seem to be in a state of flux, if not
downright disintegration.

CHANGE
MANAGEMENT
 CHANGE:
MANAGEMENT VIS. LEADERSHIP
John A. Shtogren
Skyhooks for Leadership
Leadership can help people act bravely in the face of
uncertainty.
Instead of taking cover, leadership helps us stand up,
face the future and realize we can take charge of our
destiny, that change really can be an opportunity for
growth, not loss.

CHANGE
MANAGEMENT
 CHANGE
MANAGEMENT CHANGE:
MANAGEMENT VIS. LEADERSHIP
John A. Shtogren
Skyhooks for Leadership
The leader’s job is to put up “skyhooks,” enduring
anchor points, that provide a sense of heightened purpose,
continuity and stability.
Skyhooks help us transcend the immediate sense of
dislocation and deal creatively with change.
In mine shafts, skyhooks keep the ceiling from caving in.
In changing organizations, leadership skyhooks do the
same job-- keep the sky from falling when it feels like it
just might.
 CHANGE
MANAGEMENT CHANGE:
MANAGEMENT VIS. LEADERSHIP
John A. Shtogren
Skyhooks for Leadership
Seven Skyhooks:
• Vision: Develop and communicate a picture of an
attractive future
• Trust: Convey confidence and respect for coworkers’
abilities, values and aspirations
• Open Communication: Share information widely
• Meaningful Work: Make work more than just a job by
appealing to the heart
 CHANGE
MANAGEM
ENT CHANGE:
MANAGEMENT VIS. LEADERSHIP
John A. Shtogren
Skyhooks for Leadership
Seven Skyhooks:
• Empowerment and Self-determination: Strengthen
individuals & teams thru education, autonomy and
accountability
• Teamwork & Involvement: Make people partners by
giving them significant role in core business activities
• Transformational Style: Face change with optimism and
a conviction that apparent differences can be reconciled
in mutually satisfying ways
 CHANGE:
MANAGEMENT VIS. LEADERSHIP
Niccolo Machiavelli
Florentine diplomat/writer (1469-1527)
There is nothing more difficult to take in hand, more
perilous to conduct, or more uncertain of success, than to
take the lead in initiating changes…
The innovator makes enemies of all those who
prospered under the old order and only lukewarm
support is forthcoming from those who would prosper
under the new.

CHANGE
MANAGEMENT
 CHANGE:
MANAGEMENT VIS. LEADERSHIP
Robert Goizueta
Former Chairman, Coca-Cola
What it takes to be a leader in the 1990s and beyond is
really handling change.

David Kearns
Former Chairman, Xerox
As business leaders we have to find out how to make
change a satisfier rather than a dissatisfier.

CHANGE
MANAGEMENT
 CHANGE MANAGEMENT

END OF REPORT.
Thank you very much.