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Published on January 21, 2008

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Leading Through Disruption and Transformation :  Leading Through Disruption and Transformation Larry Olmstead South Bay Organizational Development Network April 5, 2007 Today’s discussion:  Today’s discussion Dynamics of disruptive change The leader’s role in driving change initiatives What are the key skills necessary to lead change in a disrupted industry? How do we help people – and organizations – develop those skills? About Leading Edge Associates:  About Leading Edge Associates Leading Edge helps organizations improve their capacity to lead and manage. We do this through organizational and strategic change efforts; executive coaching; management training and development programs; diversity consulting, and help with effective communications Core team: Jerry Ceppos, Marty Claus, Larry Olmstead and Robyn Parmley, formerly of Knight Ridder; veteran executive coach and consultant Rafael Gonzalez; Rebecca Kuiken, a Presbyterian clergywoman and former community non-profit agency director Founded July 2006 Based in San Jose, CA www.leadingedgeassociates.net Newspapers face unprecedented challenges:  Newspapers face unprecedented challenges Newspapers face unprecedented challenges:  Newspapers face unprecedented challenges Circulation has been sliding now more than three decades Online options challenge print dominance in classified advertising (especially auto, help-wanted; think craigslist, CareerBuilder, cars.com) Major advertisers like department stores, groceries, drugstores etc. are consolidating Advertisers want to target their audiences more precisely, and want proof that their ads are driving traffic Barriers of entry to journalism and mass publishing have eroded, if not disappeared Steady decline with each generation:  Steady decline with each generation Percentage of respondents who “read a newspaper yesterday” Source: Pew Research Center Biennial News Consumption Survey Characteristics of disrupted industries:  Characteristics of disrupted industries Innovation comes from the low end of the market, especially targeting infrequent or non-consumers New product or service offers a consumer benefit: Simplicity, ease of use, convenience, low price “Never can the industry leader succeed if it tries to address the disruptive innovation from within its existing business model” Industry leader must focus on “jobs to be done,” rather than customer or product characteristics Examples: Toyota, PCs, discount airlines, commuter newspapers, steel SOURCE: Innosight LLC Disruption at work: Department stores:  Disruption at work: Department stores In 1960, there were more than 300 department store chains in the United States In responding to the challenge from discount retailers, only Minnesota-based Dayton Hudson created a discount subsidiary -- Target Today, there are about 10 major department-store chains in the United States Many feel the survival of the industry is at stake:  Many feel the survival of the industry is at stake “They really need to understand that it’s now or never. They’ve got to innovate, or die.” Dr. Clayton Christensen, Harvard Business School; founder, Innosight No. 2 publisher gets out:  No. 2 publisher gets out Sacramento, CA-based McClatchy Co. acquired Knight Ridder in June 2006 in a $6.5 billion stock-and-cash transaction and replaced KR as the nation’s second-largest newspaper publisher. In December 2006, McClatchy sold its largest newspaper, the Minneapolis Star Tribune, to an investment firm for $530 million to help pay down debt from the KR transaction. McClatchy paid $1.2 billion for the Star Tribune in 1998. No. 3 publisher gets a new owner:  No. 3 publisher gets a new owner On Monday, Tribune Co. – owners of the Chicago Tribune, Los Angeles Times, Long Island Newsday, TV holdings and the Chicago Cubs baseball team – announced it was being sold to real estate mogul Sam Zell for $8 billion Sound familiar?:  Sound familiar? Take a minute to jot down a few notes about anything said in this presentation thus far that triggers thoughts about your own company and industry Leading through transformation: What’s needed:  Leading through transformation: What’s needed The psychology of change:  The psychology of change Please take a pen and piece of paper and sign your name using your non-dominant hand. How does it feel? Change – a jolt:  Change – a jolt Anger Disorientation Feeling of inadequacy Feeling of incompetence Frustration It’s being forced on you – lack of control Doing things differently takes longer Doing things differently takes practice Change provokes a cycle of grief:  Change provokes a cycle of grief Shock: Initial paralysis at hearing the bad news Denial: Trying to avoid the inevitable Anger: Frustrated outpouring of bottled-up emotion Bargaining: Seeking in vain for a way out Depression: Final realization of the inevitable Testing: Seeking realistic solutions Acceptance: Finding the way forward Descriptions from www.changingminds.org Dr. Elisabeth Kubler-Ross, a Swiss psychiatrist, wrote On Death and Dying, widely considered as the most authoritative work on the subject. The roller-coaster ride … this, too, shall pass:  The roller-coaster ride … this, too, shall pass Credit: www.changingminds.org Don’t be afraid:  Don’t be afraid Change is inevitable Change provides opportunities In the business arena, if we stand still, the competition moves ahead If we don’t drive change ourselves, we become vulnerable to moves by competition and changing customer habits Leader’s role in driving change:  Leader’s role in driving change Establish urgency Create and maintain coalition Develop “destination” and “roadmap” Mobilize everyone Align procedures and systems Align individual competencies. Right people? Right skills? Execute, inspect, learn and improve Change, leaders and culture:  Change, leaders and culture Remember that big change in organizations is either enabled by the culture; resisted by the culture, or it changes the culture – and that the behavior of top executives is the most powerful driver of culture What does it take to lead in a disrupted industry?:  What does it take to lead in a disrupted industry? __________________________________________________________________ Leading Edge Associates, partnering with Bigby, Havis & Associates, was hired by the Newspaper Association of America to research these questions and report on the findings: What are the competencies – skills, traits and knowledge – needed by managers to effectively lead change in disrupted industries? What are the behaviors associated with those competencies that will lead to success? How does management assess, select for and develop those skills in key leaders? Methodology:  Methodology Review existing research and case studies Interviews with change agents and other key industry leaders and experts Conduct online surveys of publishers and other newspaper executives Working with Bigby Havis, we created a competency model with input from focus groups of industry experts Final report, “New Styles for Newspaper Leaders,” can be viewed at www.naa.org/fusion Key findings from interviews, research:  Key findings from interviews, research Biggest need for followers: What’s the vision? Resilience is a must Optimism and passion are desperately sought The “hero leader” style is history The best leaders are engaged with employees, provocative, ask questions and get out of their offices. Passive, low-key leaders are disadvantaged in current setting Critical leadership skills for transforming media:  Critical leadership skills for transforming media Vision Identifies long-term goals and champions innovation Listening to new voices and perspectives:  Listening to new voices and perspectives Critical leadership skills for transforming media:  Critical leadership skills for transforming media 2. Customer focus Anticipates new markets; identifies customer needs, and delivers products and services that exceed customers’ expectations Critical leadership skills for transforming media:  Critical leadership skills for transforming media 3. Championing change Acts effectively to support and implement change initiatives Critical leadership skills for transforming media:  Critical leadership skills for transforming media 4. Drives results Pushes him/herself and the organization to excel and achieve measurable results Critical leadership skills for transforming media:  Critical leadership skills for transforming media 5. Interpersonal communication Communicates clearly and effectively with people inside and outside the organization Critical leadership skills for transforming media:  Critical leadership skills for transforming media 6. Relationship management Develops and maintains positive relationships inside and outside the organization to accomplish business objectives Critical leadership skills for transforming media:  Critical leadership skills for transforming media 7. Coaching and developing Encourages and inspires others to develop their work-related competencies and achieve long-term career growth Critical leadership skills for transforming media:  Critical leadership skills for transforming media 8. Integrity Upholds a high standard of fairness and ethics in everyday words and actions Critical leadership skills for transforming media:  Critical leadership skills for transforming media 9. Business acumen Understands general business and financial concepts and the company’s business, and uses both general and specific knowledge to be effective Critical leadership skills for transforming media:  Critical leadership skills for transforming media 10. Learning agility Continuously adapts and improves his/her skills and performance Critical leadership skills for transforming media:  Critical leadership skills for transforming media Vision Customer focus Championing change Drives results Interpersonal communications Relationship management Coaching and developing Integrity Business acumen Learning agility Critical leadership skills:  Critical leadership skills Vision Customer focus Championing change Drives results Interpersonal communications Relationship management Coaching and developing Integrity Business acumen Learning agility How many of these are strengths for the executive team in YOUR organization? How to use the competencies:  How to use the competencies Determine which competencies are most relevant to you, and most relevant to your organization How do candidates for supervisory/management jobs stack up against this list? Devise interview questions for the candidates, and questions for their references, that help answer the questions How do your current supervisors stack up against the competencies? Choose two or three that are most relevant to their current job expectations and work with the supervisors to craft development and/or training activities that help improve their skills Create or seek training programs that emphasize these skills Some current managers, well-regarded, may not be suited for leading change. Determine if their shortcomings can be developed or accommodated; if not, can they find a better fit within the organization? Or do they need to be managed out? Leading change: A tool for individual growth:  Leading change: A tool for individual growth ASSESS helps executives answer these questions: What is your leadership personality profile? How does it measure against the change leadership competencies? What are steps you might consider to further develop your skills in these key areas? What is ASSESS?:  What is ASSESS? A web-based “Expert System” Used to aid in the selection and development of managers and professionals Interprets well-researched, widely used tests - Intellectual Abilities - Work-related Personality Models the judgment of a psychologist Looks at the “Total Picture,” not just isolated traits ASSESS Results:  ASSESS Results The Graphic Profile Quickly see where the respondent “stands out” from other managers and professionals Helps the respondent understand the implications for job effectiveness Development reports give insight, tips:  Development reports give insight, tips ASSESS Standard Development Reports provide a detailed narrative based on a general assessment model of Thinking, Working and Relating. They can be mapped against the change competencies The leader’s role:  The leader’s role “Effective leaders are capable of reframing the thinking of those they guide, enabling them to see that significant changes are not only imperative, but achievable.” Daryl R. Conner, “Managing at the Speed of Change” Villard Books 1992 Last comments or questions?:  Last comments or questions? Contact us:  Contact us Larry Olmstead (408) 997-2905 larryo@leadingedgeassociates.net Rebecca Kuiken (408) 960-9472 rebeccak@leadingedgeassociates.net www.leadingedgeassociates.net Leading Through Disruption and Transformation :  Leading Through Disruption and Transformation Larry Olmstead South Bay Organizational Development Network April 5, 2007

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