CRACKING THE CODE OF CHANGE

By: MICHAEL BEER AND NITIN NOHRIA

GROUP MEMBERS:
DANIAL ZIKER
MUHAMMAD AHMED AHSAN
TABINDA RAFAT




What is organizational
change?
Company or organization going through
a transformation. Organization change occurs
when business strategies or major sections of
an organization are altered. Also known
as reorganization, restructuring and turnaround.


Why change fails ?
Failure results from not having a new work environment well
defined.
Not updating the skills and attitudes of employees to take
advantage of that new environment.
Not adapting the structure of the organization to the new ways of
working.
Not revising incentives and rewards to emphasize new goals.
Keeping the old cultural practices in place even when they impede
the new ways of working.

Two Theories of change
There are two theories of change:

1. Theory E

2. Theory O
THEORY
Aims for a dramatic and rapid increase in
shareholder value

It is driven from the top of the
organization and makes heavy use of
outside consultants

It relies heavily on cost cutting,
downsizing, and asset sales to meet its
objectives.



SCOTT PAPER FOLLOWING THEORY

1. Fired 11000 employees and sold off several businesses.
2. The goals were set without input from lower levels.
3. Dunlap outsourced many of Scott papers corporate
functions.
4. They had a common plan of action.
5. Dunlap own compensation package was tightly linked to
shareholders interest.
6. The huge team of consultants was hired.



THEORY
Aims to create higher performance by fostering a
powerful culture and capable employees.

It is characterized by high levels of employees
participation and flatter organizational structure.

It attempts to build bonds between the enterprise
and its employees.

This approach to change is a long-term proposition.


CHAMPION INTERNATIONAL FOLLOWING
THEORY
1. Efforts were made to restructure corporate culture around a
new vision called the Champion Way.
2. Efforts were made to get employees emotionally
committed.
3. Employees were encourage to reexamine their work
practices and behaviors.
4. Top management encouraged experimentation.
5. They had a skill based pay system.
6. They relied less on consultants.
COMBINING THEORIES OF CHANGE
ASDA
How ASDA resolved the conflicts of E and O along the six dimensions of
change.

1. Explicitly confront the tension between E and O goals.

For example: Norman started his tenure by stating, our no 1
objective is to secure value for our shareholders and we need a
culture built around common ideas . And listening, learning and
speed of response from the stores upwards.






2. Set direction from the top and engage
people below.

FOR EXAMPLE: Norman unilaterally set a new pricing strategy and
shifted power from the headquarters to stores. His forthright Tell
Archie program encouraged dialogue with all employees. He hired
warm, accessible Allan Leighton to complement his own theory O
leadership style and stregthened emotional commitment to the new
ASDA.



3. Focus simultaneously on the hard and
soft sides of the organization.

For example: Norman set out to win both hearts and minds. He
boosted economic value through hard, structural changes, e.g.,
removing top layers of hierarchy and freezing all wages. He paid
equal attention to the soft side by spending 75% of his early months
as HR director creating a more egalitarian and transparent
organization--- a great place for everyone to work.


4. Plan for spontaneity.

For example: Norman encouraged experimentation, setting
up three risk free stores where employees could fail
without penalty. Managers experimented with store layout,
product range, employee roles. A cross functional team
redesigned ASDAs entire retail organizationand
produced significant innovations.



5. Let incentives reinforce change, not
drive it.

For example: ASDA applied theory E incentives in an o- like way. It
encouraged all employees to participate actively in changing
ASDA. And it rewarded their commitment with stock ownership
and variable pay based on corporate and store performance.

6. Use consultants as expert resources who
empower employees.

For example: In ASDA the engagement of consultants was cut short
by Norman to prevent ASDA and its managers from becoming
dependent on the consultants. For example, an expert in store
organization was hired to support the task force assigned to renew
ASDAs first few experimental stores, but later stores were renewed
without his involvement.


How The Idea Is Applicable
To Pakistan??

FOR EXAMPLE:
Pakistan Cricket Team


How the idea is
implemented in personal life
?
For example:
PARENT CHILD RELATION
Hadiths That Will Change Your
Life

"This world is the prison of the believer and the
paradise of the unbeliever." [Muslim]
"The strong man is not the one who throws
people in wrestling. The strong man is the one
who has control of himself when he is angry.
"If someone does not show mercy to people, Allah
will not show mercy to him.
"Anyone who shows the way to something good
has the same reward as the person who does it."
[Muslim]