Strategic Change Management

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Strategic Change Management:

Why strategic change management is important? Tendency towards inertia and

resistance to change

Important factors in managing a strategic change:

Diagnosis
Types of change
Context of change The broader context
The cultural web Kinds of blockages and vice versa (Covered
in the previous discussion)
Forcefield analysis Facilitators and vice versa

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Strategic Change Management:

Important factors in managing a strategic change:

Change agents
Change agent roles Roles played
Change agent styles Styles adopted

Levers for change

Challenging the taken for granted
Changing routines
Symbolic systems
Political systems
Other change tactics

Managing change programmes

Turnaround or Reconstruction
Revolutionary
Evolutionary
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 Strategic Change Management:

Diagnosis Type of Change

Extent of Change

Realignment Transformation
Incremental Adaptation Evolution

Nature of
Change
Big Bang Reconstruction Revolution

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Strategic Change Management:

Diagnosis Type of Change

Nature of Change: This can be incremental or big bang

If the change is incremental, the chances are that it can be easily understood
and win commitment

On the contrary, a big bang approach is more suited to a company facing a

crisis or in need of a quick change

Extent of Change: This can involve a realignment to existing strategy /

culture or a transformational change

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Strategic Change Management:

Diagnosis Types of Change

Taking inputs from the previous slide, four types of strategic change are
identified

a. Adaptation A common form of change within companies. Change will be

incremental and can take place within the existing culture

b. Reconstruction The change is sudden and disruptive. However, it can be

realigned and there is no major modifications of culture

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Strategic Change Management:

Diagnosis Types of Change

c. Revolution The extent of change in this scenario is transformational and

the change is also rapid. The scenario can be that a company is sceptical about
its continued existence because of a takeover

d. Evolution Evolution within a company might happen because of a

continued learning. In such a case, the nature of change is not fast.
Nevertheless, the existing culture / strategy will have to be altered in a
transformational way

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Strategic Change Management:

Context of Change

Managing change in a SME or a large company Is the company long-

established or new?

Change is context-specific or company-specific

Approaches to strategic change management are non-transferable

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Strategic Change Management:

Context of Change
Time: Slow
or Fast

Power: Scope: Depth

Needed for and Breadth
change

Strategic Preservation:
Readiness:
Change Competences
Need for
Programmes that need to
change
be preserved

Capacity: Diversity:
Resource Diverse or
Availability Homogeneous
Capability:
Managerial
and Personal

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Strategic Change Management:

Force Field analysis

Kurt Lewins force field change model can be used to identify driving and
restraining forces in a strategic change process

DRIVING RESTRAINING

S
Supportive Management T Departmental Silos
D
A
E
T
S
U
Commitment of Employees I
S Lack of Transparency
R
E
Q
D
U
Strong Work Ethics O No past experience of change

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Strategic Change Management:

Change Agents Roles

A change agent is the individual or group that helps effect strategic change in
an organisation

Note: It is not necessary that the creator of a strategy will be a change agent

Role Players Strategic leaders, middle managers and outsiders

Strategic leaders or Strategic leadership:

Generally, the management of change is linked with a leader

He / She can be a person at the top but necessarily A change agent can
simply be a leader because of his / her influential position

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Strategic Change Management:

Change Agents

Middle Managers:

Middle managers play a role of an implementer when the strategic change is

top-down By undertaking this role, they become a bridge between the top
management and people at lower levels

Their role is to make a strategy more understandable within the company

Outsiders:

These members can be a new chief executive or new management from

outside

Note: Generally, the companies take the help of consultants in order to facilitate a
change process
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Strategic Change Management:

Change Agents Styles

Styles of change agents can take five different forms Remember: These styles
are not mutually exclusive

a. Education Imparting knowledge about the reasons for and means of a

strategic change

This practice is useful when the problem is an outcome of lack of information

or misinformation

Advisable to use this when the company is facing an incremental change

Issue with this: It is time consuming

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Strategic Change Management:

Change Agents Styles

Styles of change agents can take five different forms:

b. Collaboration or Participation Involving people in development and planning if

change is incremental

This style of change increases ownership of a decision

Issue with this: This is also time consuming

c. Intervention There is control and coordination of activities in an incremental

or non-crisis transformational change In a way, the processes are guided

Issue with this: Risk of perceived manipulation

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Strategic Change Management:

Change Agents Styles

Styles of change agents can take five different forms:

d. Direction It is a top-down approach of managing strategic change There is

clarity, speed and a specific agenda to follow

Good for transformational change

Issue with this: Limited acceptance

e. Coercion Authority is imposed in an extreme form The change is rapid and

transformational

Issue with this: Advisable to use only when a company is facing a crisis Otherwise,
the success of this style is very limited
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Strategic Change Management:

Change Levers

Key Authors: Michael Beer and Nitin Nohria

Their study examined corporate change programmes Based upon that study, they
have come up with two theories Theory E and Theory O

Theory E The change levers are hard The approach is top-down and the pursuit
of economic value is very significant The reward system is financially incentivised

The emphasis is on changing systems and structures

There can be layoffs, downsizing and massive restructuring

Corporate success is determined on the basis of shareholder value

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Strategic Change Management:

Change Levers

Theory O Here, the emphasis is on development of organisational capabilities In

other words, the soft factors

Focus areas are culture change; learning and participation; employee behaviours,
attitudes and capabilities

It allows bottom-up approach to change management

Theory E and Theory O Combined Both of these approaches can be combined, that
is, embracing economic value and organisational capability

The companies can begin with Theory E approach and then move on to Theory O
approach Direction from the top and participation from the below

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Strategic Change Management:

Managing Strategic Change Programmes

a. Reconstruction and Turnaround Change / Strategy: This programme is adopted

when a company wants to cut down costs or generate revenue Efforts are
directed towards improving a deteriorating market position

b. Revolutionary Change / Strategy: Change of corporate culture is necessary in

this programme.

The problem of strategic drift The second phase of the theory

c. Evolutionary Change / Strategy: This programme is all about allowing idea

generation from below and evolving together

Note: The styles of managing a strategic change programme can be directive, participative
or interventionist. It can also be a combinations of all different styles of change
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Strategic Change Management:
Boston Consulting Group (BCG) 1994 Four key factors to follow:
Milestones for Review
Change team
Commitment and Straight Talking
Resources (Financial / Non-Financial)
Can be undertaken bi-monthly by senior
management
Mix of skills needed. To be selected by
senior management
Commitment exhibited by top
management and the ways in which
change is explained
Availability of resources
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Strategic Change Management:

Prosci ADKAR Model:

ADKAR Model Created by Jeff Hiatt Prosci founder

A = Awareness (Need to change)

D = Desire (To participate and support)

K = Knowledge (How to change)

A = Ability (To implement new behaviour and skills)

R = Reinforcement (To keep the change in place)

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