Strategic Change Management - Research Paper Example

?Junior Walter Strategic Change Management 11/16/11 Table of contents Executive Summary 2 Literature Review 3 Strategic management 3 Strategic change 3 Carson’s change life cycle 4 Change acceptance 5 Communication 6 Rogers’ innovation-decision model 6 Lewin’s change management model 7 Organizational culture 8 Kotter’s model 8 Prosci’s ADKAR change model 10 Employees’ motivation 11 2. Change Management Model 12 3. Discussion and Conclusion 16 References 17 Appendix 20 Executive Summary The given paper is focused on strategic management and strategic change. In particular, it outlines some of the most popular change management models, as well as offers an alternative model to help managers to understand and manage change from both organizational and employees’ perspectives. In addition to providing explanatory models to be used in strategic change management, this paper provides information on what particular variables of organizational behavior can be used for measuring the success or effectiveness of the process. Among them are individual performance, job satisfaction, loyalty, motivation, commitment, involvement, and others. It has also been determined that success of a change is greatly dependent on preparatory stages of the process, such as realization of the need for change, building employees’ awareness, knowledge and desire for change, developing a strategic plan, and so on. All these findings can serve as a guide for managers to designing change management plans and managing change implementation processes effectively. 1. Literature Review Strategic management Strategic management is one if the most important aspects of business behavior because it is goals-oriented management that ensures that the major goals and objectives of an organization are clearly outlined. Furthermore, such well-outlined goals are realistic, achievable and measurable. If an organization is managed strategically, steps that have already been taken to reach the goals are carefully evaluated to make sure that they have been carried out in the most efficient manner possible, and that they are in line with the overall goals of the company. Such strategic planning and, thus, business strategy is one of the key factors that can ensure organizational excellence (Durbin, 2006). Strategic management, which starts with strategic planning, is to help companies in clarifying and arranging their goals and strategies, so that such goals are effective considering the available resources and existing business environment. It is especially important in situations when organizations have to introduce changes. Strategic change Strategic change involves designing and controlling the process of shifting organizational vision, mission, objectives and strategy to new ones. In case a company has to introduce changes to its operations, the first thing to accomplish is to develop a strategy of further operations of the organization (ibid). This strategy will, then, be a basis for all strategic solutions and actions to be taken in order to implement change successfully. The company’s mission, objectives and goals are to be redefined in the first place in order for management to have a clear vision of what particular changes are to be implemented. Change is given the opportunity to occur when three elements are in place simultaneously: dissatisfaction with the present situation, a compelling vision of how the change will create a better future and first steps for reaching the vision. However, in order to understand how to manage change strategically and effectively, it is important to understand the very process of change management. Carson’s change life cycle Carson and his colleagues (1999) present an explanatory model of change life cycle and outline several stages of the change management process. They are: invention, acceptance, disenchantment and decline. It is pointed out that invention and acceptance stages of Carson et al’s change life cycle model are the most important ones, because effective implementation of these stages is most likely to lead to adoption of innovation by the whole organization. On the other hand, the states of disenchantment and decline are where an ineffectively implemented or poorly designed change might be abandoned. So, these stages of the model can be considered predictive, because they determine – predict – whether the change will be implemented. Though all of the stages of change life cycle can be clearly determined in the process of change implementation, it takes different organizations different time periods to go through each of the stages. As a result, depending on time limits given to the change, employees adapt to such a change differently, though their level of acceptance also has a great impact on the overall process of change implementation. Change acceptance In relation to this fact and considering people’s reactions to changes, Rogers (1995) distinguishes five categories of employees that participate in the change process: innovators, early adopters, early majority, late majority and laggards. Furthermore, such a division can be applied to organizations as well. It is also important to review some of the major elements of effective change management. One of them, as Chreim (2002) observes, is the fact that accepting change employees are forced to change their psychological contract with the organization, attitudes and behavior. The result of changing the psychological contract might be a loss of the feeling of job security, uncertainty, fear of unknown, desire bring back the old ways, as well as feelings of anxiety and loss (Anderson and Schalk, 1998). These particular effects lead to employees’ potential resistance to change. Jimmieson Terry and Callahan (2004) categorize uncertainty caused by organizational change into the following groups: role conflict, role ambiguity, and role overload. Role expectations of employees have to change. In the worst case, post-change role expectations might be absent or not clear (Jimmieson, Terry & Callahan, 2004). These situations may lead to job dissatisfaction, lowered confidence and, consequently, poor performance and employee turnover. Therefore, in order for the process of change implementation to go smother, it is important for companies to make sure they have good communication channels and strategies before attempting to introduce any changes at all (Chreim, 2002). Communication Improved communication channels and strategies, as Chreim (2002) points out, should serve as tools for providing employees with background and meaning to change. Well-planned and thought over strategic communication, as well as a good rationale for change given to the employees will help to reduce uncertainty and confusion of the people (D’Aprix,1996). So, effective communication should be one of the prerequisites for change. Another important aspect of change management is, according to Kramer (2003), effective communication in the process of change management. Absent or ineffective formal communication, as the author writes, will lead to employee’s search for informal sources of information and, as a result, receipt of incorrect or incomplete information that might increase anxiety (Kramer, 2003). Rogers’ innovation-decision model In order for the communication process to be effective, it should undergo five stages: knowledge, persuasion, decision, implementation and confirmation (Rogers,1995). At the knowledge stage of the communication process the employees are informed about the upcoming change. In order to reduce people’s uncertainty about their future, they should be given explanations regarding why and how the change is to take place. At the persuasion stage the employees’ attitudes towards the change are being formed, so at this stage they should be provided with two-way communication that will ensure they understand the process correctly, and feel confident in relation to the innovation. The decision stage is the time when it should be decided whether to implement or abandon the change. This process may involve, for example, a small-scale testing of the new idea or approach. If the results are positive, the organization moves to the implementation stage, when all of the involved employees work under new, changed, conditions (Rogers,1995). The innovation-decision model of Rogers (1995) is somewhat similar to the stages of change management process described by Carson et al (1999). However, Rogers’ stages of persuasion, decision and implementation are united into one stage – of acceptance – of Carson. So, though Roger’s model was developed earlier, it seems to be more detailed. Lewin’s change management model One the first change management models was presented by Kurt Lewin in 1943. Lewin’s model consists of only three stages, which are unfreezing, changing and freezing. At the unfreezing stage employees are expected to realize that the old ways of working are not effective in the new environment, and should be changed. This means that the updated realities and alternative ways of working should be communicated to the people. The change stage of Lewin refers to actual implementation of change. At this stage the employees are taught, and get accustomed to comply with new practices. At the freezing stage the employees the new practices are being reinforced in day-to-day operations of the organization (Wikoff, 2011). So, in relation to strategic change, using Lewin’s model would mean that employees are, in some way, forced to the realization that there exist better ways. This can be done with the help of drawing their attention to the best practices of the industry, for example, or by focusing them on doing more of the positive. Organizational culture Communication, as it was discussed above, does play an important role in this process. However, it is also important to give some attention to organizational culture, which is, actually, one more tools and prerequisites for effective change management. Usually among the major attributes of organizational culture are company’s mission and vision. They outlines values and objectives of the organization and, to some extent, shape the behavior and work productivity of the employees. No matter what changes an organization is going through, they all should be supported by, and reflected in, organizational culture. The management should determine visions and goals to become common for all of the organization members. Such common vision of the innovations will be one of the motivating forces. An organizational vision that motivates is, in its turn, the secret to achieving an organization desired by their employees (Webb 2001). Kotter’s model It can be assumed, and Lewin’s model supports this idea, that company’s employees can be considered ready for change in case they are provided with proper and effective communication channels, as well as work in well-shaped and prepared for change organizational culture. However, strategic change management model presented by John Kotter (1996) suggests that incorporating change into corporate culture, and vision in particular, should be the third step in the process. Kotter’s model can be said to be initially based on Lewin’s approach, but is more detailed. The first step to be taken in the process of change management, according to Kotter, is to create a sense of urgency. This step is, according to the author, one of the most important ones, because it provides up to 75% of the change success. At this stage of change implementation management should develop in the employees the feeling of need for change. People should realize that some change is needed in order for their lives to become better. The second step is to create the guiding coalition – form a team of people who will be leading the change. The leaders will convince the employees in the importance of change, as well as provide support and guidance. Only after the team is formed and effectively works on enforcing the sense of urgency, comes the time for developing new vision and strategy of the company. At this stage the organization has to develop a strategic plan for guiding the change. The fourth step is, consequently, in communicating the change vision. This entails creating a communication strategy that will be consistently delivering the new message to the employees. Then Kotter advices to empower broad-based action and eliminate obstacles, such as resistance. The sixth stage is to create short-term wins. This means management should encourage and reward the innovators, promote the smallest achievements on the way to change implementation and, in such a way motivate everybody. The next thing to do is to consolidate gains and produce more change. In other words, at this stage comes the time for analyzing the results of the previous actions, making corrections, and enforcing the existing positive results. Finally, and the eighth step, new approaches are to be anchored in corporate culture. Thus, at this stage organizational culture should, in all of its aspects, be reflecting the change (Lunenburg, 2010). Prosci’s ADKAR change model A somewhat different approach to strategic change management was presented by Prosci in 1998. It is called ADKAR change model and is more focused on people who are to undergo change. Unlike the models of Kotter, Rogers, Lewin and others, which are more focused on managers as change agents and leaders, this approach is of special interest for the purpose of this work because it views changing employees as a basic step towards changing an organization. It can be said that in the previously discussed models change is imposed onto employees from the outside, while the ADKAR model suggests to do just the opposite – to make employees the facilitators of change. This model’s motto is “Successful change occurs when individual change matches the stages of organizational change” (Warrilow, 2011). In order to implement this model it is important to ensure that each individual goes through five stages: Awareness, Desire, Knowledge, Ability and Reinforcement. Awareness refers to individual’s knowledge about the fact that some change is needed. Organization identifies a need or opportunity for change at that time. Desire of a person to make the change happen should be accompanies by company’s defining the scopes and objectives of change. Employee’s knowledge about how to change should come when the company has created a strategic implementation plan. Individual’s ability to show new behaviors should come in force when new processes are developed by the company. Finally, employee’s reinforcement to retain the change comes when the company implants the change (Warrilow, 2011). Such an approach does make sense considering the fact that, as Barnett and Carroll (1995) point out, these days a great number of change management decisions of supervisors are influenced by employees. In this context it can even be assumed that employees, being one of the most valuable internal resources of a company, are the key to creating a competitive advantage through change and innovation (Teece, Pisano & Shuen, 1997). Employees’ motivation It is also worth noting that effectiveness of strategic change management is dependent on such factors as the effect of change management decisions on employees. In particular, employees’ motivation levels is one the predictive factors that can signify whether the change will be implemented effectively or not. On this matter Deery et al (1995) and Morrow (1983) write that employees’ job motivation has a positive impact on organizational commitment and, as a result, lower the change resistance levels within the company. This idea is also supported by the research conducted by Halbesleben and Bowler in 2007. These authors tend to prove that job motivation has a positive impact on performance. So, it can be assumed that in the process of strategic change higher emphasis on employees’ motivation will evoke people’s deeper realization of the need for change, stronger desire to change and, thus, improve performance. Finally, it seems important to point out that all of the presented above change management models are rather explanatory approaches to strategic change. Therefore, in the process of change implementation it is important to consider such predictive aspects of organizational behavior as employees’ motivation, organizational commitment, change resistance and acceptance levels, levels of employees’ involvement in the change process, etc. These aspects of employees’ behavior are worth monitoring and improving because they are, along with proper strategic planning and management techniques, determinant to the success of change implementation. It can be recommended that organizations gather and analyze employee’s feedback to the planned or implemented changes in order for the process to be two-way and, as such, have a positive effect on people’s job satisfaction and, consequently, individual and organizational performance. 2. Change Management Model Based on the presented above findings and examples of strategic change models, I would like to present a personal change model that unites some of the best existing approaches to managing change, and ensures the people affected by the change are involved in the process, so that their job satisfaction and productivity only improve in the process, thus improving the overall organizational performance. High employees’ involvement in the change management process is to be achieved with the help of effective and clear two-way communication, which includes receiving employees’ feedback on the change processes, so that the most important elements of both classical (Lewin’s, Kotter’s, etc.) and new (Prosci’s ADKAR) change models are effectively used in the process. To start with, I would like to settle my change management model onto the basis of clear two-way communication and strong leadership within the organization. So, before even attempting to talk about any changes, management should ensure that the existing systems of the organization are working well and effectively. These systems should, of course, be supported by organizational culture. Though this stage is not usually included into the popular change management model, it is important to understand that any strategic management decisions can be implemented effectively only if the organization’s systems are built and working effectively. So, just like the mentioned above authors, I will not be including this stage into the major change model, but rather make it an obligatory prerequisite for successful change management process. The change management itself should, in my opinion, start with identifying the need for change by the organization and determining what particular change should be implemented. In addition, as the very concept of strategic planning suggests, new goals and objectives of the organization should be identified by management in the fist place. Then specific methods and stages for implementing that change should be outlined. Whether the need for change comes from the inside (employees) or outside (external circumstances and environment) of the organization, it is important to carefully plan for all of the aspects of change management in advance. In this period the employees should be informed about the upcoming change (as in the knowledge stage of Rogers) so that they can provide vision and opinions on how to implement it in the best manner. So, on organizational side we have realization of the need for change, while on employees’ – knowledge about the upcoming change. It is now worth to communicate with the employees, to explain the reasons and benefits of the change, and ask for their feedback. Informing people on the details of the upcoming innovation is aimed at reducing uncertainty levels and, thus, maintaining positive job attitude and performance. Gathering feedback will help to build or maintain trust and involve employees in the process, thus ensuring they have enough sufficient knowledge as to understand and realize the need for change. This stage of my model incorporates some aspects of Prosci’s ADKAR awareness stage, unfreezing stage of Lewin, Rogers’ knowledge stage, and step one of Kotter. Then, on the basis of gathered feedback, company’s management develops new vision and practical steps for incorporating that vision into organizational culture and employees’ mindsets. This is the point at which strong leadership becomes the key to integrating new vision into the organization. This stage has much in common with Roger’s persuasion stage, but unites three change management steps of Kotter – creating the guiding coalition, developing new vision and communicating the change vision. However, unlike Kotter’s, my model entails developing the new vision and planning for change implementation in the first place. This is explained by the fact that, no matter how strong people’s realization for the need for change might be, or how good the leadership in an organization is, it is important for both leaders and employees to have some answers to the questions that might arise. The developed in advance strategic plan, thus, will ensure that the company has a clear vision and knows how to bring it into reality. Such a position of the organization will result in employees’ security and will lower the potential for fear of unknown, desire to bring back the old ways, as well as feelings of anxiety and loss. As a result, resistance to change will be lower. The next step would be actual practical implementation of the planned change. At this time all of the employees start following the new ways. This stage would correspond to Rogers’ implementation and Lewin’s change steps of the change process. Finally, positive results are to be reinforced and supported. People should be encouraged to work in new ways and show new behavioral patterns. At the same time, it is important to continue communicating with employees and receiving their feedback in order to analyze it and make conclusions for future work. In short, the given model can be presented as follows: Stage Company’s side Employee’s side Preparing for change Effective two-way communication channels and strategies, strong corporate culture, leadership 1. Identifying change Realize the need for change, determine what should be changed, inform employees, gather feedback. Produce or receive information on the need for change and its benefits, evaluate, provide feedback. 2. Designing a strategic plan Develop new vision, design a step-by-step implementation plan, provide leadership, communication and support. Receive explanations of the strategic plan, provide feedback. 3. Incorporating new vision into corporate culture Integrate new vision and mission into organizational culture, prepare employees for the change Understand the need for change better, favor the innovation. 4. Changing Implement the change on practice, provide guidance and support to employees. Follow new ways, show new behaviors. 5. Reinforcing and evaluating Support and encourage, reward for following the new rules, gather and analyze feedback. Provide feedback and recommendations. It is also worth noting that certain time limits should be set for each of the presented above phases. This will provide an opportunity for measuring results and effectiveness of each step in the process, and make corrections if necessary. In the whole process of change implementation it might be very useful to use such predictive variables of organizational performance as individual performance, job satisfaction, loyalty, motivation, commitment, involvement, and others. 3. Discussion and Conclusion Modern business environment is constantly developing and changing. For that reason companies that want their business processes to be adequately responding to the external changes, have to be continuously changing themselves. Changes and innovations, therefore, should be an integral part of normal business development and growth. I my understanding, strategic change is a set of activities, the need for which arises as a response to changes in internal or/and external environment of the organization. Leading change, thus, is a very specific and complex type of management. For that reason this paper has provided a number of approaches widely used in modern organizations for managing their change management processes. Definitely, any change management model cannot reflect all of the peculiarities of each particular organization. Therefore, such models can only serve as guides for managers to use when designing and implementing own processes and models. It can also be observed that most models for strategic change management devote much attention to preliminary stages of introducing innovations. As the conducted research suggests, the practical implementation of a change is not likely to succeed unless the company had prepared for it thoroughly. In any case, findings of this work will provide managers with guidance, options and advice on how to organize their management processes more effectively, and what particular variables of organizational behavior can be used for measuring the success or effectiveness of the process. References Anderson, N. and Schalk, R., 1998. The psychological contract in retrospect and prospect. Journal of Organizational Behavior, 19. Barnett, W.P. & Carroll, G.R. 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Teece, D.J., Pisano, G. & Shuen, A.A. (1997), ‘Dynamic Capabilities and Strategic Management’, Strategic Management Journal, 18: 7, pp. 504–534. Warrilow, S. (2011). ADKAR Change Model: An evaluation of its strengths and weaknesses. Available at: http://www.strategies-for-managing-change.com/adkar.html [Accessed 6 December 2011]. Webb, B. (2001) Elements of Motivation. Available at: http://motivation-tools.com/ [Accessed 2 December 2011]. Wikoff, D. (2011). The Increasing Pace of Change. SMRP Solutions, 6(4), p.15-19. Appendix Lewin’s change model (image retrived from Wikoff, D. (2011). The Increasing Pace of Change. SMRP Solutions, 6(4), p.15-19) Kotter’s change model (image retrieved from http://www.strategies-for-managing-change.com/john-kotter.html) ADKAR change model (image retrieved from http://www.strategies-for-managing-change.com/adkar.html) Read More