Introduction to Change Management for MBAs

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Information about Introduction to Change Management for MBAs
Business & Mgmt

Published on March 1, 2014

Author: paulgibbons



A three hour lecture covering resistance, resilience, stakeholders, complexity, and involvement. The complexity section is somewhat more advanced than the rest - covering technical, social and dynamic complexity.

University of Wisconsin-Madison Evening MBA Strategic Leadership MHR 765 Session Eleven Paul Gibbons, BS, MA, MSc Future Considerations LLC Gibbons Associates LLP June 21, 2010

My background • UW graduate • 10 years as investment banker or derivatives expert on Wall Street • 8 years at PwC as change ‘guru’ (innovation/ change/ leadership/ learning organizations/ transformation) • 9 years founding and running my own change management consulting firm • • • © 2010 Paul Gibbons

Today’s agenda • Introduction to Change Management • Concept overview • Break • Tools and practice • Questions/ discussion 18:15 - 18:30 18:30 – 19:30 19:30 – 19:45 19:45 – 20:00 20:00 – 20:30 © 2010 Paul Gibbons

Introduction to Change Management

Change Challenges • 70% of mergers fail to deliver expected • • • • • shareholder value* 60 – 80% of re-engineering efforts fail* Reports in drawers Strategies on shelves Shhhh…. Don’t mention Project Phoenix… Hundred million dollar overruns To be taken with a grain of salt! However, the US M&A market ALONE was about $1.7 trillion in 2007 so even if out by a factor of 2… © 2010 Paul Gibbons

Change Management • Vast academic subject • Two year Masters program • Five year PhD program • Substantial even for practitioners • PwC: 5 – day, 2 – day, 4 – day and 4 – day for basics • Why so hard? © 2010 Paul Gibbons

Thought exercise • Think about a personal change (diet, lifestyle, relationship status, employment status) • Human psychological frailty • Think about a change to a small system (family, community) • Social system resistance • Think about a change to a business (say a merger) • Social and technical system resistance • Think about a change to an ecosystem (multiple businesses, state and federal government, diverse communities, mixed ideologies…) • All of the above plus political and ideological © 2010 Paul Gibbons

Definitions • Change management is a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state. ... • Activities involved in (1) defining and instilling new values, attitudes, norms, and behaviors within an organization that support new ways of doing work and overcome resistance to change; (2) building consensus among customers and stakeholders on specific changes designed to better meet their ... • WARNING…. some people mean this…  The change management process in systems engineering is the process of requesting, determining attainability, planning, implementing, and evaluating of changes to a system. ... © 2010 Paul Gibbons

Key concepts • Resilience • Resistance • Stakeholder • Involvement • Complexity © 2010 Paul Gibbons


Resilience: definition • Resilience in psychology is the positive capacity of people to cope with stress and catastrophe. It also includes the ability to bounce back to homeostasis after a disruption. ... © 2010 Paul Gibbons

Why resilience is important • Whether you are CEO, VP, middle manager, new hire, or administrator, how you respond emotionally to change will determine (at the very least) your level of enjoyment/ happiness/ satisfaction and your performance… • BUT, as senior change leader, the effect of your mood, disposition, orientation (how you are handling stress) will be multiplied many many times over Why? © 2010 Paul Gibbons

Developing resilience #1 • ‘Inside job’  Don’t sweat the small stuff  Grant me the serenity to accept the things… courage to change the things…wisdom to know the difference • ‘Western’… Change is:  Personally difficult, conflict ridden, stressful  Elizabeth Kubler-Ross on grieving/ loss  Inventory of ‘stressors’ (divorce, death, birth, becoming rich, becoming poor) • ‘Eastern’… life is all change  ‘You can never step in the same river twice’ (Heraclitus)  All is flux, cycles, ebbs and flows  Permanence is an illusion  Attachment to status quo is what makes life difficult © 2010 Paul Gibbons

Developing resilience #2 • Support  Things that enhance personal well-being  Aristotle’s ‘friendship of virtue’ – friends don’t ‘co-sign your BS’ (they challenge, tell you the truth) • Question:  What sort of support mechanisms do you have?  What do you need to remember to do? © 2010 Paul Gibbons


Structure of resistance  Individual      Rational/ analytical Social (friendships, communities, solidarity) Political (alliances, coalitions, power, control) Ideological (ethics, worldview, religion) Emotional (loss, anxiety, resentment)  Group  Culture (norms, values, unwritten rules)  Authority structures/ leader attitudes/ behaviour  Group dynamics (group think, in-group, Abilene…)  Systemic  “Hard” aspects of system that determine behaviour (reward, structure, processes, systems, etc) © 2010 Paul Gibbons

Symptoms of resistance • Distancing  Missing meetings/ un-returned calls  Missing deadlines, breaking agreements  Denial, “checking out” – emotional distancing  Absenteeism/ turnover • Dissent  Overt disagreement – disputation, argumentation  Covert disagreement – gossip, slander, rumour, dishonesty  Organised resistance – strikes, union intervention • Delay  Intentional slowdown (like filibuster)  Prevarication (endless discussion & planning)  Procrastination • Destruction  Sabotage © 2010 Paul Gibbons

Dealing with resistance • Complicated, not one size fits all • Appreciate perspective: Shopfloor doesn’t care about an extra .5% ROI! • It rarely works to steamroller over people and groups unless you have a very big stick • Engage, engage, engage • If it isn’t rational, then more facts and analysis won’t help • Most change is under communicated by a factor of ten (Kotter) • High-touch communication essential for people/ groups with power (not posters, emails…) • Keep your friends close, but your enemies closer (Lao Tzu, Vito Corleone, Machiavelli or Tony Soprano) © 2010 Paul Gibbons


Stakeholder • Someone who will benefit from, be harmed by, or take an interest in…  When change fails, it is often the case that a powerful stakeholder or stakeholder group has been neglected, or alienated • The stakeholder map is the simplest and most underused change tool… • Once mapped, then…  How much power do they have?  How much do they benefit (harmed)?  How do they feel now? How do we need them to feel? By when?  What influence strategies need to be used? © 2010 Paul Gibbons

The commitment curve Change can be achieved through commitment or compliance Compliance “ I have to do it this way! It is not as bad as it looked” Reaction “Experience of change and of consequences" Testing “What are the consequences? Testing the consequences.” Negative perception "I feel threatened by this change"  Each stage requires energy  At each stage there is a price for –continuing / staying –for dropping off Embodiment “This is natural for me – how else could I do it? Action “ I am acting for this change, but sometimes it is hard”" Testing "I will put myself at stake for this change. I want to do something." Positive perception "I see the opportunity in this change" Engagement "I see the implications for me / us" Understanding "I know why and what will change Awareness "I am being told about something" © 2010 Paul Gibbons


The most important model Increasing Involvement. Commitment, Creativity and Decision Making (and time and complexity) © 2010 Paul Gibbons


Complexity: technical © 2010 Paul Gibbons

Complexity: dynamic Newtonian view Cause and effect are  uni-directional  linear Y = M * X  capable of isolation (reductionism)  close in time and space Leading to…  simplistic solutions  quick fixes  unrealistic expectations about benefits flow © 2010 Paul Gibbons

Complexity: social complexity • Not such a big issue where power is concentrated in hierarchies such as a single branch of the military • However, where power is diffused…  Improving school performance  Teachers/ teachers unions  Property tax payers  School board representatives  Legislators: local, state and federal  Parents  Children  Social services © 2010 Paul Gibbons

Complexity: take-away • Knee-jerk reactions may be jerk reactions  Automatic reactions are based on ‘old-school’ way of thinking • Test hypotheses about cause and effect  Most common error = changing the organization structure • Try to model the system  Cannibalizing own market share • Identify the blockage/ leverage point  Example: throughput and reward • Become an observer © 2010 Paul Gibbons


Practice • Identify key stakeholders • Prioritize 3-5 • Analyze (power, benefits, risks) • Resistance: why might they? • How do they see the situation? • Do I need commitment or compliance? How much? What can I afford? What happens if I’m wrong (risks)? • Involvement • To gain commitment, which approach is appropriate? © 2010 Paul Gibbons

Discussion • Identify key themes and learning with neighbor • Come up with two questions.. © 2010 Paul Gibbons

Further questions? • Paul Gibbons  Leading and managing change  Leadership development  Innovation  Culture change  Coaching • • +1 608 512 5916 © 2010 Paul Gibbons

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