Leading and Managing ChangeChapter 10

Ranae ReynoldsScott Smith

Leona TurnerLynn Wilhelm

LDR-686-SA – Organizational Design and Development – Dr. David B. LucasSiena Heights University-Southfield Campus

October 15, 2012

Lynn Wilhelm

Overview of Change Activities

Effective Change Management• Motivating Change• Creating A Vision• Developing Political Support• Managing the Transition• Sustaining Momentum

MOTIVATING CHANGE

• Creating Readiness for Change

a) sensitize organizations to pressures for change

b) real discrepancies between current and desired states

c) convey credible positive expectation for the change

• Overcoming Resistance to Change

a) empathy and support

b) communication

c) participation and involvement

Ranae Reynolds

CREATING VISION

Defined in two parts;

Describing the core ideology and

• Reason for being, what brings employees to work everyday;

Constructing the envisioned future

• Bold and valued outcomes

• Desired future state

Ranae Reynolds

DEVELOPING POLITICAL SUPPORT

J. Pfeffer says, “From a political perspective, organizations can be seen as loosely structured coalitions of individuals and groups have different preferences and interests”.

• Examples

• Shop Workers Marketing Departments

• Top Executives Production Departments

Leona Turner

RESULTS

• The groups wants and needs

• Competition increases

• Preservation of self interest

• Balance of power

Leona Turner

ASSESSING CHANGE AGENT POWER

• Evaluate the sources of power.

• Determine how to use the power.

• Identify areas that need to enhance power.

• Greiner and Schein says, “There are three sources of personal power in an organization which are knowledge, personality, and other support”.

Leona Turner

THREE KEY SOURCES

Knowledge Playing it Straight

Using Social

NetworksOthers’ Support

PersonalityGoing Around

the Formal System

Leona Turner

IDENTIFYING KEY STAKEHOLDERS• Identify powerful individuals and groups

• What groups will be affected?

• Gain broad-based support.

• Ask questions like, who can win from change?

• Create a map of whose influence may be useful.

• Get to know those who are involved or need to be involved.

Leona Turner

INFLUENCING STAKEHOLDERS• Three major strategies for using power to influence others in OD.

• Playing it straight

• Using social networks

• Going around the formal system

Leona Turner

MANAGING THE TRANSITION• Moving from an existing organization state to a

desired future state.

• Involves a transition period and some time

• Learn what it takes to make the changes

• Facilitating the change takes• Activity Planning

• Commitment Planning

• Change Management Structures

• Managing the Learning Process During Change

Leona Turner

LEARNING PROCESS• Change involves new knowledge and skills

• Stages 1 – 4 of the transition

• These four stages are held together by conversation and dialogue

• Discuss the changes and create shared meaning

• Discover how individuals fit into the change

• Discuss the change at all levels and the practices that will cause acceleration

Leona Turner

Lynn Wilhelm

Managing the Transition (cont.)

Activity PlanningBenchmarks, mid-point goals, direction

Lynn Wilhelm

Commitment Planning

Who’s on your side to make

change??

Lynn Wilhelm

Change-Management Structure

Lynn Wilhelm

Learning Processes

• Creating a system view • Create shared meaning • After action reviews • Local self-design

CONVERSATION & DIALOGUE ARE KEY TO SUCCESS

CHAPTER 10 TOPICS

SCOTT SMITH

Sustaining Momentum

• Providing Resources

• Building a Support System

• Developing New Competencies

• Reinforcing New Behaviors

• Staying the Course

HP-COMPAQ OVERVIEW

SCOTT SMITH

• 2002 merger to create $87B company

• Worldwide positions in servers, PCs and handhelds, and Imaging and Printing

• Leading positions In IT Services, Storage, Management Software

• Carly Fiorina will be chairman and CEO of the new HP

• Jeff Clark (Compaq CFO) and Webb McKinney (HP) to lead transition team

• Financial and human

• Training

• Consultation

• Data collection

• Meetings

• Performance buffer

• “Clean Team” integration group

• 500/900/1000 LL

• Adopt & Go cross-company

PROVIDING RESOURCES FOR CHANGE

SCOTT SMITH

• Psychological distance

• Network of change agents

• Mutual Learning and support

• Adopt & Go

• Cross-company LL pairs

• Escalation to Clark and McKinney

• Quick decisions

BUILDING A SUPPORT SYSTEM FOR CHANGE AGENTS

SCOTT SMITH

• Leadership styles

• Problem solving

• Multiple opportunities

• WBT

• OJT

• Technical and social

• Senior management inclusion

• Adopt & Go

• Cross-company LL pairs

• Escalation to Webb and McKinney

• Quick decisions

• Green/Yellow/Red

• Corporate Culture Team

• Cultural workshops

• Cultural differences

• Cultural synergies

• 650 “cultural consultants”

DEVELOPING NEW COMPETENCIES/SKILLS

SCOTT SMITH

• Awards

• Punishments

• Intrinsic rewards / early successes

• Adopt & Go

• Cross-company LL pairs

• Escalation to Webb and McKinney

• Quick decisions

• Product roadmaps in 4 months

REINFORCING NEW BEHAVIORS

SCOTT SMITH

• Change requires time

• New change

• Abandon change

• Decline

• Performance

• Productivity

• Satisfaction

• Focus

• “Next big idea”

• Day-One plans

• Customers

• Leadership and structure

• Administration

• Common email

• KT

• Customer contact buddies

STAYING THE COURSE

SCOTT SMITH

IAN FRIED ON MERGER:

SCOTT SMITH

Susan Bowick, HP's senior VP of human resources...had early conversations with HP CEO Carly Fiorina and Capellas to make sure the cultural issues were not overlooked.

Bowick likens mergers to an iceberg. The tip is made up of the sorts of financial goals and organizational structures that always get top billing. But the things below the surface, such as how workers communicate and what words they use, are just as important.

SCOTT MCNEALY ON MERGER:

SCOTT SMITH

Scott McNealy, chief executive of Sun Microsystems, Inc., predicted “a slow-motion collision of two garbage trucks.”

BEN ROSEN ON MERGER:

SCOTT SMITH

…the board hired Mark Hurd to replace Fiorina. Only then did the company acquire the management skills needed to take the raw material that was there and transform it into a world leader in technology. …since Hurd became CEO, the results have been truly remarkable. He took the pieces assembled by Fiorina, applied his management skills to them, and created a growing, profitable and increasingly valuable company.

Rosen, P.1

SCOTT SMITH

BETSY BURTON ON MERGER

SCOTT SMITH

There are a few twists...

First, one of the most-complex aspects...it is not initially obvious what the overriding benefit of this action will be for ...HP and Compaq, and the IT industry in general.

Second, ...there is significant overlap between HP's and Compaq’s products and services, and HP/Compaq will have a huge task before them to reconcile this overlap.

Third, there seems to be little support from the market as evident in the decrease in stock value...this lack of support may impact its fruition.

JONATHAN GIFFORD ON MERGER

SCOTT SMITH

It was a huge undertaking – rather effectively implemented by Carly Fiorina. But if the CEO and chairman of the board...doesn’t own the idea of such a momentous merger, then who on earth does? If Carly can’t stand up, even now, and say – ‘I decided to do it; I think it was the right decision and I believe that time will prove me right’ – then who is in charge here? And, more importantly, who was really in charge at the time? Did she really own this massive project while it was happening? Did she believe that she did own it at the time but is now keen to pass the buck?

MORE JONATHAN GIFFORD

SCOTT SMITH

There remains, for me, the nagging doubt that Fiorina was happy to own the idea of the merger, but never really stood up to be counted about the long-haul strategic implementation. If she had… maybe she would have kept her job. As it is, she obviously lost the confidence of the people who mattered most to her continued career – the board. We don’t know why, because the board have never given a full explanation and Fiorina isn’t telling. “I was mystified by the board’s recent behaviour,” she says, shortly before the meeting at which she is summarily sacked. At this meeting, she reads out a prepared statement, which includes the following: “The board has made and reconfirmed the most fundamental aspects of our strategy . . . My personal belief is that our strategy is sound and our greater issue is execution . . .”

AND YET MORE JONATHAN GIFFORD

SCOTT SMITH

So the board of HP made (and has just reconfirmed) the strategy? Strategy by consensus? Isn’t that what Fiorina thought was fundamentally wrong with the culture of HP?

A leader can’t afford not to stand up and be counted about the biggest business decision of their career. Saying, ‘The board decided to do it, they set the strategy’ really doesn’t wash.

And not knowing what the board of which you happen to be chairperson is doing

behind your back (planning to sack you) isn’t just foolish – it’s suicidal.

RUSS BANHAM ON MERGER

SCOTT SMITH

But, in the long run, they had very good execution, a consequence of HP’s sharp transition teams. Both companies also agreed to build one new company with one new culture, as opposed of pockets of this and that, and it worked.

Adair, J. (2006). Leadership and Motivation: The Fifty-Fifty Rule and the Eight Key Principles of Maintaining Others.

Great Britain: Kogan Page Limited

Banham, Russ. (April 16, 2012). M&A: Adding Up the Numbers. Retrieved on October 4, 2012 from

http://chiefexecutive.net/manda-adding-up-the-numbers

Babou. (2008). What is stakeholder analysis? Retrieved October 10, 2012 from

http://leadershipchamps.wordpress.com/category/stakeholder-management/

Burton, Betsy. (September 12, 2001). Untangling the HP/Compaq Acquisition. Retrieved on October 4, 2012 from

http://www.gartner.com/id=340754

Fried, Ian. (September 2, 2002). HP-Compaq merger: Worth the wait? Retrieved on October 4, 2012 from

http://news.cnet.com/HP- Compaq- merger-Worth-the-wait/2100-1001_3-956202.html

Gifford, Jonathan. Carly Fiorina and the HP Compaq merger. Retrieved on October 4, 2012 from

http://jonathangifford.com/carly-fiorina-and-the-hp- compaq-merger/

Greiner and Schein, Power and organization development.

References

Levy, P. E. (2010). Industrial Organizational Psychology. New York, New York: Worth Publishers.

Motivation Theory and Leadership. (2006-2010). Retrieved from Money-Zine: http://www.money-zine.com

Nadler. Effective management; Beckhard and Pritchard, Changing the Essence

Pfeffer,J.,(1982). Power in organizations. New York, Pitman

Rosen, Ben. (April 9, 2008). The Merger That Worked: Compaq and Hewlett-Packard. Retrieved on October 4, 2012 from

http://http://www.huffingtonpost.com/ben-rosen/the-merger-that-worked-co_b_95873.html

Schein, E. H. (2010). Organizational Culture and Leadership. San Francisco: Josey-Bass.

Worley, T. G. (2008). Organization Development and Change. Mason: South-Western Engage Learning.

References (cont.)