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EXTENDED DIPLOMA IN STRATEGIC MANAGEMENT ANDLEADERSHIP

Title Page

BIRMINGHAM INTERNATIONAL COLLEGE

Module Assignment

Strategic Change Management

Prepared for: Dr. Steve Hill .

Prepared By: Asad Ali

Strategic Change Management Asad Ali

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Total Words (3,770)


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Table of ContentsTitle Page..........................................................1

Table of Contents...................................................2Model of Change.....................................................2

Kurt Lewin’s Change Model.........................................2Kubler Ross Five Stage Transition Cycle...........................2

ADKAR Change Model................................................2Examples of Change Models...........................................2

Strategic Interventions (Value).....................................2Need of Strategic Change............................................2

Factors Deriving Change.............................................2Economic Factors..................................................2

Technological Factors.............................................2Globalization.....................................................2

Quality & Innovation..............................................29/11 Attacks......................................................2

Investors Trust...................................................2Resource Implication (If not responding to change)..................2

System Development and Evaluation for Involvement of Stakeholder....2Stakeholder Analysis..............................................2

Evaluation........................................................2Stakeholder Circle................................................2

Evaluation........................................................2Strategy for Change Involving Stakeholders..........................2

Strategy for Managing Resistance....................................2Ongoing Change Models...............................................2

Kotter’s Eight Step Model.........................................2Action Research Model of Change...................................2

Steps For Implementing Change.......................................2


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Measures to Monitoring..............................................2References and Readings.............................................2

Model of Change

Kurt Lewin’s Change ModelKurt Lewin presents his three phase model for managing change.Three stages are unfreezing, change and refreeze or freeze. Thismodel seems to be very simple but it is possible to take is todifferent level of complexity too. It depends on the organizationand its structure.

In first stage the need of change is realized. This stage focusedthat we lived in a dynamic environment which is constantlychanging. It is emphasized that change is necessary for progressand a sense of urgency is created among the team members. Itstates that as early as we adopt the change it will beneficial atorganizational level and as well as at individual level.

The stage emphasis that changes is not an event rather it is aprocess. It is also called stage of transition. This is hardeststage as a lot of resistant may came from members. It is verydifficult to leave the existing methods of doing things and adoptthe new methods. It is actually the implementation stage.

In third stage the change is stabilized. The new ways of doingthings are made the part of routines of the organization. Theindividuals, departments and organization accept the change andit becomes the part of the norms. People become comfortable withthe change and new relations are developed.

Kubler Ross Five Stage Transition CycleIn contrast to Kurt Lewin’s model it is a five stage model. Thefive stages are Denial, Anger, Bargaining, Depression andacceptance.


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Denial is actually first stage of cycle and it is used by thepeople as initial defense for neglecting the change. In thisstage usually it happened that employee do not want to believethat change is going to happen. In second stage the individualsrealized that they cannot continue the denial. People shows angerand blame one and other for occurrence of the change. In thirdstage the people accept the change but want to postpone it and itis a natural fact. The individual starts bargaining in order topostpone the change. In fourth stage the individual understandsthat the bargain is not going to work anymore and he has to lossthe current practices. The level of motivation may drop foremployees and they might feel some sort of depression. Sickleaves and annual leaves are taken by the employees normallyduring this period. In last stage the people accept the changeafter knowing that the fight is not going to work. Theyunderstand the benefit of change and started to consider it as anew daily norm of work.

ADKAR Change ModelThis is five phase model. The stages are Awareness, Desire,Knowledge, Ability and Reinforcement. In first step awareness forneed of change is provided to members. In next step a desire isignited in member for change. The individual in this stage isable to reach at the stage where he found that there is a desirefor change inside him. In third stage knowledge regardingimplementation of change is provided – how to change? Afterproviding/ getting knowledge the skills required for change arebuild and this is the main difference between theory and itsimplementation. In last step main emphasis is put on theincorporation of change in daily routine and change become thenorm of day to day life.

Examples of Change ModelsWe can see that for gaining more control on several businessesunder GE, Cordiner bring bureaucracy to organization. Kurt


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Lewin’s three step change model is relevant to this change. Itrealized first that a change in structure of organization isrequired to gain more control over many businesses – it means theneed for change is realized. For streamlining the companypractices a team of consultants was developed for devisingstrategies and these strategies are implemented in organization –this relates to second step which represents that change is aprocess not an event. The change is than implemented permanentlyand this relates to third step.

We can see the implementation of ADKAR model in GE under Welchera. He has an idea that employee must be involved in company’squality process and for this organization is required change. Inorder to involve employees in quality process he chooses SixSigma. He spread awareness in GE by inviting Bossidy to presentthis idea in front of GE management. The management shows itswillingness to this idea and a desire for change is rise inorganization. Than the necessary training (Green Belt, Black Beltand Master Black Belt) was provided to employees and it is makesure that they are skilled enough to bring this change toorganization. In last step the change was made the part of dailylife.

Welch brings a change in organization that the bottom 10%performers need to leave the organizations. After implementationthis change the employees tried to neglect this change. But duethe firm attitude of Welch and removal of 10% employees, thestaff realized that they cannot continue denial. They tried tobargain but at last they adjusted with this change and try hardnot to be in the bottom 10%.

One more example can be drawn from the era of Borch. Kurt Lewin’sthree stage model is stands good for this change as he introducedStrategic Business Units (SBUs) in GE. He realized therequirement for change. He devised and implemented strategies.Finally, he made the change permanent.


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Strategic Interventions (Value)General Electric is a large company and working on more than 7000project at a time. The strategic intervention plays a vital rolein performance of company. The company uses several interventionsto gain many advantages. Following is a brief summary howstrategic interventions are valuable for GE.

Team building intervention can play role to gain highproductivity. The individuals and groups which are not performingwell can be well trained and become more productive. The conflictamong the team members can be resolved. The team can find barrierthat thwart creativity. Human interventions stabilize therelationships among the members and enhance the communicationlevel of individuals. It enables members to find their ownstrengths and weaknesses. It enables members to understandbehavior of each other and avoid conflicts. Individual can takedecision according to the situation faced by him. The decisionmaking power of individuals can be increased.

Need of Strategic ChangeGE is operating in a dynamic environment where change is takingplace at a high rate. At different time’s need of change isdifferent for GE. At initial times GE was not such a big company.At that time the need of change was the expansion. Two companieswere merged to form GE and in result of merger the organizationrequired certain changes.

The psychology, leadership style and management philosophy ofleaders was another factor that guide the change in organization.Expansion in diverse genre of business guides company to takefurther changes.

As we have seen coriander changes the structure to controlseveral businesses because GE was organized as holding from itsinitial times. In 1950s the businesses heads were operating thebusiness as their independent businesses.


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Need for involvement of employees in Quality process isrecognized by the Welch and change in shape of Six Sigma wasbrought. Another need for change is derived by communication gapbetween CEO and several business units.

For motivating the employees GE introduced several benefits forstaff. Staff was entitled for bonuses, pension, GP Fund, stockoptions, and insurance. GE brings change to their compensationand appraisal system for motivating its employees.

Factors Deriving Change

Economic FactorsOne big factor that brings change to organization is economicconditions of operating market. GE faces the same problem in1970s recession. GE diversified its business during the recessionin order to spread the risks. Welch introduced strategy “Fix it,sell it or close it” due to some non performing units. He closedseveral units during his era.

Technological FactorsTechnology has brought brisk changes in almost every industry.The fate of industries changed drastically by the use oftechnology. The same case was happened with GE. In 1972 Jonesshifted the company from electromechanical to electronictechnology. Heavy investments were made in office automation toincrease the productivity of GE.

GlobalizationGlobalization was another factor which forced Jones to broughtchanges to GE during the decade of 1980s. GE was facing toughcompetition from European and Japanese markets. Several changestook placed due to overseas competition.

Quality & InnovationSix sigma was introduced by Jack Welch. The requirement of SixSigma was highlighted for involvement of employees in innovation


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and quality system. The basic factor behind introducing programmewas the good quality products introduced by the Japanese andEuropean companies.

9/11 AttacksSome drastic changes to GE was made due to 9/11 attacks on twintowers. GE business faced a decline. Immelt enforced severalchanges to cop up the effect of the incident e.g. restricting ofbusiness, reorganization of business lines.

Investors TrustAfter the incident of Enron and WorldCom the trust of investorswere dwindled on large conglomerates. The Immelt made severalchanges for gaining back the trust of investors.

Resource Implication (If not responding to change)Several resource implications could harm GE if GE was notresponded to change.

If GE was not responded to change they may save some funds but itwas very difficult for them afterwards to maintain the level offunds. GE was facing competition from Europe and Japan. If thecompany did not make the changes the competition may eat up theGE and it may difficult for company to survive and maintain theirfunds.

The human resources were trained in order to bring the change.They performed more productive after training and involved in theprocess of quality and innovation. If the change in company wasnot made the employees may not able to participate in the processof innovation which might result in the company failure.

In 1970s the company shifted from Electromechanical to Electronictechnology and office automation was made during the tenure ofJones. It increased the company’s productivity and gave company acompetitive advantage. If the GE was not responded at that time


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the company may not able to acquire such a sophisticatedtechnology which they have now. It might result in a failure.

Knowledge is another resource for a company. By not responding tochange company may suffer lack of knowledge.

Infrastructure of company may not be such sophisticated whichthey have now if GE was not responded to change. 0044 77 806 806 00

System Development and Evaluation for Involvement of StakeholderThere several systems of involving stakeholders in the process ofchange because they are affected by the change made toorganization.

Stakeholder AnalysisStakeholder analyses provide a detailed look at several groups ofstakeholders and help the organization to understand the needs ofthose groups. It helps the organization to took a decision whichincorporate the thoughts of all groups.

Investors

Investors are affected by every business decision. It isnecessary to involve investors while taking the change decision.As we can see in case study that the confidence of stakeholderswas dwindled. It is very important to incorporate the thoughts ofstakeholders in change process.

Suppliers

Business change decision may affect the suppliers of businessalso so, it is necessary to consider the effects that can harmthe suppliers.

Employees

In change processes the employees are integral part because theyhave to implement and follow the system so the consideration must


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be made for involvement of employees’ suggestion in changeprocess.

Customers

In today’s dynamic era companies are more focused towardscustomers and customers are integral part while deciding thechange in organization. The effects of change can made a greatimpact on customers. It is necessary to involve the stakeholdersin change process.

Society and Government

Society and Government both are affected by the changes made incompany. It is necessary to make consideration for both in changeprocess.

Creditors

Last but not least creditors has interest in company’sperformance as the losses to company have direct impact on them.The need for involvement of creditors in change process ismandatory.

EvaluationGE is a huge company with lots of projects. The above mentionedsystem might work well for the organization because company haslots of stakeholders and each stakeholder have its ownrequirements and needs from the companies. The analyzing ofstakeholders will provide company a good opportunity to meet withthe demands of the stakeholders.

Stakeholder Circle


Identify Priotise Map Profiles

Develop Chnage

StrategyOptimise Support

Monitor Changes

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In this methodology the data regarding all stakeholders isgathers. The need and interest of each stakeholder inorganization is assessed. After gathering the data allstakeholders are prioritize according to need of organization andthe effect of change on each group of stakeholders. Thereprofiles are mapped by the organization. A categorized list isdeveloped in order to find the requirement of the stakeholdersand impact of change on them. The extent of support which can bereceived during change process is assessed. In consideration ofabove mentioned facts a change strategy is devised. Targetedcommunication plans are developed. In last the monitoring ofchanges has been done by the organization.

EvaluationAbove system holds goods for big companies like GE. It is asystematic process which involves the stakeholders in makingdecision for change. It will provide GE a solid method forprioritizing their stakeholders. It helps company to develop astrategy which will engage stakeholders in decision makingregarding change in organization. Mapping of stakeholders allowscompany to target the right stakeholder at right time and decideabout how much involvement is required from a specificstakeholder.

Strategy for Change Involving StakeholdersFollowing step may be followed in order to making change inorganization involving stakeholders.

1. First of All GE must understand the vision and changeinitiatives.

2. Leaders must engage the stakeholders in change process byusing above mentioned models.

3. Assessing the requirements and interest of stakeholders.4. Selection of change model.


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5. Expected reaction of stakeholders in response to change isanalyzed.

6. A dynamic and system communication track is developed inorder to make stakeholders well informed regarding change.

7. Tasks in regard of change are prioritized.8. Suitable time table is developed.9. Finally the change is implemented.10. The effect of change on stakeholder is monitored.11. Problem areas are highlighted by making discussions and

holding meeting with stakeholders.12. Highlighted problems are removed and change is made

permanent.

Strategy for Managing ResistanceThere are several strategies which can be used for managingresistance in organization.

1. Open communication may be promoted in GE in order to stopresistance against the change. The employees may have fullright to explain their problems which they facing due tochange. The problems then must be removed in order to makethe employees comfortable with change.

2. Necessary training (related to change) may be provided toemployees so they may feel comfortable while handling thenew methods which change bring to organization.

3. The employees must involve in the process of change ininitial stages because it is a fact that the processes arebetter understand by the people which are close to process.They might highlight some point which will help managementto reduce resistance in future.

4. Different forums may be developed to discuss the impact ofchange and problems faced by employees.

5. All stakeholders must listen in order to deal with theproblems faced by them after implementation of change.


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6. A 360 degree feedback culture may be developed in order toreduce the resistance.

7. The needs of stakeholders must be addressed so they find iteasy to adjust with change.

8. The employees involved in change may be rewarded andrecognized so that other employees may take some inspirationfrom them.

Ongoing Change ModelsThe two models mentioned below can be used for managing ongoingchange in GE.

Kotter’s Eight Step ModelStep 1 A sense of urgency can be created around the GE. Thediscussion on positive aspects of change can be made atmanagement level to realize that it is better to change quickly.Sincere group discussion can be made to explore opportunities andavoidance of threats.

Step 2 After creating sense of urgency the staff is convinced toparticipate in making the change a success. The true leaders arehighlighted in the organization. The working in team building canbe encouraged in order to control the member professionally andemotionally. Weak areas at individual level and team level arehighlighted and removed.

Step 3 The values relating to change are determined and matchedwith the organizational values and vision. The key points forfuture of organization are highlighted. The strategy formanagement of change is devised.

Step 4 Vision of change is conveyed to staff members. The teamsare made clear what they have to achieve in future. Regular teamdiscussions are made to talk about the change vision. The leadersmust lead by example so that the employees followed their paths.


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Step 5 A detailed reviews of organizational structure, jobdescription, performance and compensation systems can be made tocheck whether they are inline with the change vision or not. Therecognition and rewards are offered for the people making changehappen. Reduced the obstacles made by the people resisting changeand help them to understand the change.

Step 6 Implement short/ easy projects initially which can beimplemented without heavily help. The expensive/ resourceintensive projects may not be adopted early. The short term willboost the morale of persons involved in change process.

Step 7 After completion of each short term project evaluate theresults. Find the ways to improve the performance. Continue toimprove the momentum you have achieved. Try to make continuousimprovements to processes involved in change.

Step 8 Finally made the change permanent and part of dailyroutine. Discuss the success stories relate with the change.Recognize and reward the change agents publically so the otherscan also took inspiration and perform well for next change.


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Action Research Model of Change

For implementing Action Research model first of all GE must planthe required change. The aim of change is defined. It is checkthat the change is aligning with the vision of company or not.The leaders are identified and resources are allocated. Actionsare prioritized and leaders guide their teams regarding change.Leaders provide the teams members with necessary guidance andmotivate them. Leaders make them realized that change isbeneficial for organization and individuals. The new pattern ofperforming tasks and new things came in result of change are goodat every level.

Once the teams are ready, the change is implemented. Leaderswatch closely whether the new things are working good or not? Theobstacles in implementing the change are removed by the leaders.Leaders observe the performance of the team. The problems whileperforming tasks on new things are highlighted by the leaders.The plan is revised after removing the obstacles and problemsencountered by the processes. The revised plan is implemented andleaders observe the performance of the plan again if the plan issatisfactory the plan is implemented on permanent basis else it


Plan

Act & observe

Reflect

Revise

Plan

Act & observe

Reflect

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is again revised for removal of obstacles. After successfulcompletion of first plan the next plan can be implemented in thesame way. As GE is a large company and having ample resources GEcan implement several plans at a time for different areas ofbusiness.

Steps For Implementing Change

Step 1: Analyze the need of change First of all GE must analyzethe need of change. As GE is a large conglomerate, so theidentification of areas is also necessary where the change isrequired.

Step 2: Selection of Model The model of change can be selectedaccording to the requirements of the organization. The above twomodel can be selected as those are suitable for large number ofsituations.

Step 3: Analyzing probable reactions The expected reaction –whether internal or external - are analyzed. The reaction ofemployees, stakeholders and other parties are analyzed inresponse to change.

Step 4: Final Decision After analyzing the reactions, thesuitable actions are performed to make the stakeholdersunderstand that the change is beneficial. After gaining theconfidence of all parties the decision of change is finalized.

Step 5: Establishing Timetable Actions in regard of change areprioritized. As change is not an event time table is constructedfor implementation of change. The tasks which are less resourceconsuming performed first as they help the participants to gainconfidence.

Step 6: Implementation & Monitoring Finally the change isimplemented and the results of change are gathered. These results


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are compared with the expectations and room for improvement ishighlighted.

Step 7: Making the Change Permanent If required the plan isrevised and implemented with improvements. The change is madepermanent and part of daily routine life.

Measures to MonitoringFollowing steps may be followed in order to monitor the progressof change.

Step 1: Define Change Policies The rules and circumstance inwhich the change is going to be implemented. The Policies aredevised for managing the change. Different set of procedures canbe drawn for handling the change.

Step 2: Roles and Responsibilities Roles and responsibilities ofinvolved individual are defined. These responsibilities must beunderstandable to individuals.

Step 3: Target Setting: Targets are set for individual and teams.These targets must be SMARTER (Specific, Measurable, Achievable,Realistic, Time Bound, Extended and Rewarding) so thatindividuals can understand and perform accordingly.

Step 4: Monitoring Actions and Events The results of relevantevents and actions taken during the change process are monitored.If the results are inline with the set time table and Targetsthan the change process is doing well. Otherwise the problems arehighlighted.

Step 5: Conduct Meetings For understanding the problems faced bythe teams and individuals meetings can be arranged where memberscan openly share their views and thoughts. If the meetingsinvolved closed ended questions it will difficult for managementof GE to find out the progress of the change model. The solutionsfor highlighted problems should arrange.


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Step 6: Review Performance It is made sure that the performanceof change agents is measured at regular intervals and assessmentof achieved should be performed. The best performing employeesmay be recognized. The targets for next period may be assignedduring the meeting.

The above process may be followed after specific intervals oftime, so that the progress of change can be measuredcontinuously.

Task 6.1 Schedule for Implementing Strategic Plan

All initiatives included in plan must be cleared byanswering the five important points mentioned below;

o Who?o What?o Why?o When?o How?

After knowing the answer of above questions objectives ofstrategic plan will prioritized

A realistic time table will be developed for execution ofplan.

After than the plan will be communicated to relevantpersons.

Staff must be motivated and plan must be kept dynamic andongoing.

Milestones will set for staff in order to evaluate andmonitor the progress.

Quarterly meetings will be held to share the progress withkey personnel.

Problem areas will be highlighted and remedies forbetterment will be suggested.

The above mentioned schedule may be followed in order toimplement the strategic plan.


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Note: I have not mentioned the time duration required for eachstep because the time depends on the current situation andcircumstances.


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References and Readings

KOTTER, J. AND SCHLESINGER, L. (1979), Choosing Strategies for Change.Harvard Business Review. Vol. 57, pp. 106 – 114.

Mind Tools (2010), Implementing Change Powerfully And Successfully[Online] Available at:http://www.mindtools.com/pages/article/newPPM_82.htm [Lastaccessed 21-11-2010]

MORGAN, N. (1996), 9 Tips for Change Agents [online]Available at: http://www.fastcompany.com/magazine/05/changetips.html [Last accessed 21-11-2010]

SENIOR, B. (1997), Organisational Change London: Pitman Publishing

SOLID CORE (2006), Change Management + Control - Higher Availability [online]Available at: http://www.solidcore.com/assets/change-management-change-control.pdf [Last accessed 21-11-2010]

TICHY, N. (1997), Bob Knowling’s Change Manual [online]. Available at: http://www.fastcompany.com/magazine/08/change2.html[Last accessed 21-11-2010]
