STRATEGICALLY MANAGING CHANGE

Planning & Implementing Change Initiatives

J. Michael (Mike) Geringer, Ph.D.O’Bleness Professor of International Strategy

Director, Center for International Business – College of BusinessOhio University, Athens Ohio, USA

email: geringer@ohio.edu

Materials in this packet copyright © by Geringer & Associates, Inc. Do not quote, cite, reproduce or otherwise infringe without written permission.

We can't solve problems by using the same kind of thinking we used when we created them. Albert Einstein

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THE CHALLENGE OF STRATEGY IMPLEMENTATION & CHANGEChange in one major component can require change in any or all other components

Thus, strategy formulation, implementation & evaluation activities should be performed on continual basis, not just at yearend or semi-annually

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STRATEGY IMPLEMENTATION & CHANGE

A Challenge: How to Translate & Communicate Strategic Vision & Produce Successful Implementation within Your Organization?– How to obtain the knowledge, skills &

assets needed?• e.g., technology developments, distinctive

competencies, distribution channels, service networks….?

– How to get your organization to successfully apply these elements?

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BUILDING A STRATEGY IMPLEMENTATION/CHANGE PLAN Step 1: Analyze starting conditions

– Urgency: Am I dealing with anticipatory, reactive or crisis change?

– Personal readiness: How ready am I to lead the change process?

– Organizational readiness: • Who will be most affected by change? • How ready are they?

–Awareness of need for change? –Skills required for the change? –Commitment to the desired change?

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STRATEGY IMPLEMENTATION/ CHANGE & COMPLACENCY“While it is difficult to change a company that is struggling, it is next to impossible to change a company that is showing all the outward signs of success.

Without the spur of a crisis or a period of great stress, most organizations -- like most people -- are incapable of changing the habits and attitudes of a lifetime.”

John F. McDonnell, McDonnell Douglas Corp.

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THE STRATEGIC CHANGE CURVE

Good

Poor

StrategicPerformance

Time

Source: Nick Fry and Peter Killing, Strategic Analysis and Action,Fourth Edition, Prentice Hall Canada, 2000

When to begin the change

process?

AnticipatoryReactive

Crisis

Good

Poor

StrategicPerformance

Time

Source: Nick Fry and Peter Killing, Strategic Analysis and Action,Fourth Edition, Prentice Hall Canada, 2000

Things aregoing well.

Do we reallyneed to change?Can we

experiment?

AnticipatoryReactive

Crisis

THE STRATEGIC CHANGE CURVE

Good

Poor

StrategicPerformance

Time

Source: Nick Fry and Peter Killing, Strategic Analysis and Action,Fourth Edition, Prentice Hall Canada, 2000

AnticipatoryReactive

CrisisWhat needsto change?

Where do westart?

Can we findan early win?

THE STRATEGIC CHANGE CURVE

Good

Poor

StrategicPerformance

Time

Source: Nick Fry and Peter Killing, Strategic Analysis and Action,Fourth Edition, Prentice Hall Canada, 2000

AnticipatoryReactive

CrisisWe need tomove fast.

Who can ITrust?

Where do westart?

THE STRATEGIC CHANGE CURVE

Good

Poor

StrategicPerformance

Time

Source: Nick Fry and Peter Killing, Strategic Analysis and Action,Fourth Edition, Prentice Hall Canada, 2000

AnticipatoryReactive

Crisis

THE STRATEGIC CHANGE CURVE: IMPLICATIONS BY STAGE

•Clarity of change needed

•Resources available (human, financial, etc.)

•Time available for developing & implementing change

BUILDING A STRATEGY IMPLEMENTATION/CHANGE PLAN

Step 2: Determining required strategic & organizational changes

• What Changes Must Be Made?Depends on your firm’s vision,competencies & capabilities

• What is special about your firm?• Why is “uniqueness” important in the

marketplace?

• How Urgent is the Required Change?

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BUILDING A STRATEGY IMPLEMENTATION/CHANGE PLAN

Step 3: Establish conditions for action– Targets: Which groups should I influence?

– Action priorities: What issues to attack 1st, 2nd, 3rd?

– Change Process-Tactics: • What leadership style & tactics should I employ?

• How to achieve shared understanding, commitment, & action?

• What structures, systems, processes must change, & how?

• What resources will be needed to enable change & where/how do I obtain them?

• Can I find visible, early successes to help promote the process?

– Pace: How fast should I move?

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STRATEGY ALIGNMENT & IMPLEMENTATION/CHANGE PLAN

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Implementation/ Change Target

Priority Desired Behavior/ Outcome

Tactics to Utilize

Sequencing & Pace of Change Efforts

STRATEGY IMPLEMENTATION

Implementation Process Questions:

– Who are the people to carry out the strategic plan?

– What must be done to align operations with new direction?

– How is work going to be coordinated?

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KEY FEATURES OF LEADING CHANGE

Explain basic purpose behind the change•‘What was the problem?’•Who said so & on what evidence?•What would occur if no one acted to solve problem?•What could happen to us if that occurs?

Purpose Picture Plan Part

Paint picture of how the outcome will look & feel•What is the outcome going to look, feel & sound like?•How are people going to get their work done & interact with each other?•How will a day be organized?

Lay out plan for phasing in the outcome

•Outline steps & schedules for people to receive info, training & support they need to make transition

•People oriented to tell employees how & when their worlds will change

•Start with where people are & work forward to leave the past behind & emerge with new attitudes, behaviors & identity

Establish each person’s part in plan & outcome

•Show employees the role & their relationship to others. Until they see it they can’t adjust hopes & fears to the new reality

•Show employees what part they play in the outcome & the transition process

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WHAT INHIBITS EXECUTION?

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• More time than planned• Unanticipated problems• Activities ineffectively coordinated• Crises deferred attention away• Employees without capabilities• Inadequate employee training• Uncontrollable external factors• Inadequate leadership• Poorly defined tasks• Inadequate information systems

SURFACE POTENTIALBARRIERS EARLY ON

• Strategy

• Structure

• Process

• Operating principles

• Culture/behavior

• Jobs

• People

Change gets bogged because barriers are not dealt with soon enough or openly enough to keep change process moving Barriers may exist anywhere & everywhere – even the difficult-to-see places…

• Leadership

• Management

• Resources

• Systems

• Rewards

• Values/Beliefs

• Capabilities

Consider how this change effort will

affect…

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IDENTIFY MECHANISMS FOR PROMOTING INTEGRATION

• Relationship between differentiation & integration

• Forms of integrating mechanisms– Direct contact– Interdepartmental liaison roles– Temporary task forces– Permanent teams– Integrating roles– Integrating departments– Matrix structure

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PLAN FOR THE UNEXPECTED

• Implementation & change efforts are attempted under uncertainty (& often high levels of stress)

• Unexpected events & outcomes WILL occur

• Develop – appropriate monitoring systems – suitable metrics– contingency plans

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Take the time to make this work …

and it will take time.

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