Leadership and Strategic Change

Introduction

Change management is a discipline that provides oversight on how to prepare, empower, and support employees to successfully embrace and adopt a change to achieve organizational outcomes or success. Change management is a structured approach to preparing and supporting individuals and organizations in planning and implementing change. It comprises models, processes and techniques to help ease the impact change can have on a business.

Strategic change management is the process of managing change in a structured, thoughtful way in order to meet organizational goals, objectives, and missions.

Organizational change occurs when a company makes a transition from its current state to some desired future state. Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change effort.
Today’s business environment requires companies to undergo changes almost constantly if they are to remain competitive. Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to survive.

Strategic leadership
Strategic leadership means having the ability to anticipate, prepare and get positioned for the future. A leader must be ‘tuned in’ to the signals that provide insight about the needs and wants of team members, senior management and customers.

Strategic leadership is a practice in which executives, using different styles of management, develop a vision for their organization that enables it to adapt to or remain competitive in a changing economic and technological climate. Strategic leaders are able to use this vision to motivate employees and departments, fostering among them a sense of unity and direction in order to implement change within their organization.

LEVELS OF CHANGE
There are three main levels where change can occur in a business:

1. Individual-level change: Focuses on how to help employees to improve some active aspect of their performance or the knowledge they need to continue to contribute to the organization in an effective manner e.g., change in job assignment, transfer, change in job maturity level, etc.
2. Group-level change: Centers on the relationships between people and focuses on helping people to work more effectively together e.g., changes due to inefficiencies, lack of communication, etc.
3. Organization-level change: A change that affects an entire organizational system or several of its units e.g., changes due to relocation, restructuring, mergers, acquisitions, etc.

FORCES FOR CHANGE
Change can be triggered by both internal and external forces.

• Internal forces for change include employee dissatisfaction and industrial conflict, new leadership, new strategy, new structures, re-design of jobs, installation of new technology and deficiencies in the existing organization.
• External forces for change include the growth in the technological innovations, economic forces, legal forces, market competition, social trends and global politics.

TYPES OF STRATEGIC CHANGE

Generally, change is either proactive or reactive:

• Proactive change (Planned change) is change that an organization consciously thinks about and decides to engage in, which is designed to specifically change organizational outcomes. Planned change is often implemented with the aim of improving the way a business operates or achieving pre-defined goals. For example, introducing new products and services or carrying out organizational restructuring.
• Reactive change (Unplanned or emergent change) is change that the organization did not initiate or had no control over planning. Reactive change takes place in response to an event that is not anticipated and is outside of the organization’s control. For example, a fall in demand for a business’ product or service, or a crisis such as the COVID-19 global pandemic.

There are three major types of strategic change;

1. Restructuring

Implementing strategic change requires a complete deviation from the traditional structure and a switchover to a dynamic design capable of dealing with the requirements of a constantly changing the environment.
Structural change has to do with the changes in the overall formal relationships within an organization. Examples of structural change include reorganizing departments or business units, adding employee positions, or revising job roles and assignments. These changes should be made to support broader objectives such as to centralize or decentralize operations, empower employees, or find greater efficiencies.

2. Reengineering

The redesign of business processes and the associated systems to achieve a dramatic improvement in business performance. What is done in reengineering is that managers radically redesign the business processes. The objective is to reduce costs, improve quality, bring in superiority in service, and achieve dramatic improvements in speed (of doing things throughout the organization).

3. Innovation

Innovation is primarily an improvement of existing products or services. It requires extensive research and development efforts. Innovation implies that organizations are using their existing skills, competencies, and resources to create new goods or services or even new technology. This the organizations do to be able to better respond to the customers’ needs.

Other types of organizational change

• Incremental change is a small change introduced or implemented gradually and are adaptive in nature.
• Transformational change refers to changes that are typically much outstanding in scope than incremental, adaptive changes. It refers to a dramatic evolution of some basic structure of the business itself – its strategy, culture, organization, physical structure, supply chain, or processes.
• Radical or Quantum change affects the entire organization and involves a more generic organization-wide change programme such as business process engineering (BPR).

Types of change based on extent & speed

Balogun & Hope Hailey (2008) put forward four different classifications of change that map the extent of the change required and the nature (or speed) with which the change is to be achieved.

1. Adaptation – Change undertaken to realign the way in which the organization operates and implemented in a series of steps. It can be accommodated within the existing culture and can occur incrementally. Small, incremental adjustments that organizations and managers make to adapt to business challenges. These changes are often related to fine- tuning existing processes, products, and company culture, and don’t fundamentally change the organization as a whole.
2. Reconstruction – Change undertaken to realign the way in which the organization operates with many initiatives implemented simultaneously. It involves rapid change but without fundamentally changing the culture.
3. Revolution – Transformational change occurs via simultaneous initiatives on many fronts. It is more likely to be forced and reactive and involves fundamental changes in both strategy and culture.
4. Evolution – Transformational change implemented gradually through inter-related initiatives. It is where cultural change is required but this can be accomplished over time.

IMPLEMENTING CHANGE

The responsibility of implementing change lies with the strategic leader, hence they should have the ability to anticipate, prepare and get positioned for the future. Management must assess the need for change, the employee’s reaction to such change and craft a change program that will provide support as workers go through the process of accepting change.

LEVERS FOR STRATEGIC CHANGE

The levers for change represent seven aspects that require attention and planning for successful change management.

Organizations change when engaged employees recognize both why the change is needed and the potential of the proposed solution. Witnessing commitment from their leaders, having the necessary new tools and skills, and seeing support and rewards within the organization for making the change furthers their involvement. There are seven areas-seven levers of change- that set employee engagement in motion and give it momentum.

1. Fostering personal contacts between advocates of the change and others,
2. Prudently using mass exposure,
3. Hiring expertise only when required,
4. Listening to resisters and shifting resistance, if necessary,
5. Providing the requisite tools and infrastructure,
6. Leading by example or “walking the talk”, and
7. Rewarding successes in implementing the change.

The first two levers – mass exposure and personal contact deal with making sure everyone knows about the change. The next two levers of change deal with resistance and expertise. The final three levers of change deal with fostering an environment that supports the change. These are investing in infrastructure, such as tools and processes; recognizing the role of leaders to set an example; and rewarding and recognizing accomplishments.

NB: These levers provide a framework of interacting actions that leaders can use to organize any change implementation plan.

STAGES IN THE STRATEGIC CHANGE PROCESS

All organizations constantly experience change. Whether caused by new technology implementations, process updates, compliance initiatives, reorganization, or customer service improvements, change is constant and necessary for growth and profitability. A consistent change management process will aid in minimizing the impact it has on an organization and staff.
These change management stages will assist you to approach change in your organization in a systematic manner that will help you effectively implement the change.

Stage 1: Initiation

One or more people in the organization realize the need for change. There is a nagging feeling that something is not right. This awareness can come from many sources, both inside and outside of the organization. It can also occur at any level in the organization.

Stage 2: Investigation

People in the organization begin to investigate options for change. They begin to create a vision or picture of what the organization could look like after the changes. They should also determine, at this stage, the readiness of the organization to change.

Stage 3: Intention

The change agents in the organization decide upon the course of change. They create a vision of where the organization should be and could be in the future. Planning and definition of major strategies occur during this stage of the change process.

Stage 4: Introduction

The organization begins the changes. Leaders must begin the change by changing. Leaders and other change agents must establish clear expectations for changes. Involve as many of the employees in the organization as possible in initiating and implementing the change plan.

Stage 5: Implementation

The change is managed and moves forward.
The organizational systems must be redesigned to support the change. Provide recognition and rewards (positive consequences) for people who exhibit changed behaviors. Fire people who don’t participate in and support the changes sooner rather than allowing them to remain and poison the progress.

Stage 6: Integration

The changes become the norm and are fully adopted. When the changes have been successfully integrated into the organization, a new employee would not realize that the organization had changed.

 

MODELS OF CHANGE/ THEORIES OF CHANGE

Change management models are frameworks that provide specific guidelines to help organizations through the process of planning and implementing change more successfully.

I) John Kotter’s Change Model

John Kotter (1996), a Harvard Business School Professor and a renowned change expert, in his book “Leading Change”, introduced 8-Step Model of Change. The model proposes that managers lead employees through 8 critical steps when introducing change.

1. Create a sense of urgency – emphasize on the compelling reason to introduce change.
2. Build a guiding coalition – Identifying the effective change leaders in your organizations and also the key stakeholders, requesting their involvement and commitment towards the entire process.
3. Create vision & strategy – developing a picture of the future after the change. Determining the core values, defining the ultimate vision and the strategies for realizing a change in an organization.
4. Communicate the vision – explain the vision in a way that is easy to understand.
5. Enable/Empower – empowering employees throughout the company to take action by removing obstacles/barriers. Ensure that the organizational processes and structure are in place and aligned with the overall organizational vision.
6. Generating short term wins-creating small celebrations along the way to encourage success and buy-in. Create many short-term targets instead of one long-term goal, and reward the contributions of people who are involved in meeting the targets.
7. Accelerate/Consolidate-monitoring the change and learning from it and improving the change process in future.
8. Sustain/Stabilize –anchoring the change in the corporate culture to make it stick/permanent. Ensure that the support of the existing company leaders as well as the new leaders continue to extend their support towards the change.

II) Kurt Lewin’s change model

Kurt Lewin developed a change model involving three steps: unfreezing, changing and refreezing. For Lewin, the process of change entails creating the perception that a change is needed, then moving toward the new, desired level of behavior and finally, solidifying that new behavior as the norm (i.e., unfreezing habits or standard operating procedures, changing to new patterns and refreezing to ensure lasting effects). The three phases of the Kurt Lewin model guide how to go about getting people to change.

• Unfreezing – involves the preparation for the change. Involves overcoming inertia and dismantling the existing mind set. It involves getting over the initial defense mechanisms that people exhibit to avoid making a change. People eventually realize that change is necessary and urgent, and this realization allows them to move on to the next stage.
• Changing/Moving/Transition – entails moving into a new state by learning new behaviors, processes and new ways of thinking i.e., implementing the change. This is the stage where the real transition or change takes place. This is typically a period of confusion and transition in which people are unsure about the change and what may happen in the future.
• Refreezing or stabilizing the change – the process of establishing stability once the change has been made. It requires that the change is accepted as the new norm i.e., solidifying the change. The new mindset of the change begins to become the standard, and people’s comfort levels return to normal.

Lewin’s Force field analysis

Kurt Lewin also suggested/proposed a methodology for analyzing change which he called the “force field analysis”. According to him, managers should consider any change situation in terms of;

• Driving forces – factors affecting and facilitating change in a positive way.
• Restraining forces – factors that hinder change or obstacles to change.

According to Lewin, in order to move from the current state to a future desired state, the driving forces must be greater than the restraining forces. To introduce change therefore, the equilibrium must be destabilized by;

• Strengthening the driving forces
• Weakening the restraining forces, or both.

NB: The model encourages the identification of the various forces impinging on the target of change, to consider the relative strength of this forces and to explore alternative strategies for modifying the “force field”.

III) McKinsey 7s model
A change management framework used to evaluate how the different parts of an organization work together. The model identifies seven internal elements of an organization that need to align for it to be successful.

The goal of the model is to show how seven elements of the company: Structure, Strategy, Skills, Staff, Style, Systems, and Shared values, can be aligned together to achieve effectiveness in a company. The key point of the model is that all the seven areas are interconnected and a change in one area requires change in the rest of a firm for it to function effectively.
Companies use the 7s model when they implement changes in the organization and need to align different departments and processes.

1. Structure: the way in which a company is organized – chain of command and accountability relationships that form its organizational chart.
2. Strategy: the plan developed by a firm to achieve sustained competitive advantage and successfully compete in the market., reinforced by the company’s mission and values.
3. Systems: the business and technical infrastructure of the company that establishes workflows and the chain of decision-making.
4. Skills: the capabilities and competencies of a company that enables its employees to achieve its objectives.
5. Style: it is the management style of company’s leaders.
6. Staff: involves talent management and all human resources related to company decisions, such as training, recruiting, and rewards systems
7. Shared Values: They are the norms and standards that guide employee behavior and company actions i.e., the core values of the company that are evidenced in the corporate culture and the general work ethic.

III) Nudge Theory
The nudge theory is less a step-by-step model than employing a particular mindset to encourage change. Instead of issuing top-down change requests from senior executives and expecting people to fall in line, the nudge theory is about finding a persuasive way to nudge/encourage employees toward wanting the change on their own. This involves thinking about the change you want to make from your employees’ point of view, presenting it based on how it will benefit them, treating it as a recommendation more than a command, and listening to feedback throughout the process.
The theory is sophisticated in its approach and differs from other models as far as change is concerned. It removes the conventional change techniques such as direct instructions and punishment reinforcement.

A significant benefit of this model is that it factors in the differences in emotions, opinions, and personal knowledge and considers the reality of the circumstances. It also looks at the features of human behavior and nature. It reduces resistance from the company’s employees and is applicable in many industries.

III)  ADKAR Model

ADKAR model or theory of change is a goal-oriented tool or model which makes it possible for the various change management teams to focus on those steps or activities that are directly related to the goals it wants to reach to. The goals, as well as the results derived and defined using this model, are cumulative and in a sequence. This means that while using this model, an individual must get each of the outcomes or results in a certain orderly fashion so that the change can be sustained and implemented.

The model is a bottom-up method that focuses on the individuals behind the change. Rather than being a sequential method, ADKAR is a set of goals to reach (with each letter of the acronym representing one of these goals).

ADKAR stand for:

Awareness – of the need and requirement for change Desire – to bring about change and be a participant in it Knowledge – of how to bring about this change
Ability – to incorporate the change on a regular basis
Reinforcement – to keep it implemented and reinforced later on as well.

IV) ADKAR Model
ADKAR model or theory of change is a goal-oriented tool or model which makes it possible for the various change management teams to focus on those steps or activities that are

OVERCOMING RESISTANCE TO CHANGE

Part of unfreezing existing behaviour will be to break down resistance to change. Resistance to change is the action taken by individuals and groups when they perceive that a change that

is occurring is a threat to them. Resistance is ‘any attitude or behaviour that reflects a person’s unwillingness to make or support a desired change’.

Resistance may take many forms, including active or passive, overt or covert, individual or organized, aggressive or timid. For each source of resistance, management need to provide an appropriate response.

Reasons for resisting change
According to Kotter and Schlesinger (1979) there are four reasons that explain why certain people resist change.

• Parochial self-interest (some people are concerned with the implication of the change for themselves and how it may affect their own interests, rather than considering the effects for the success of the business).
• Misunderstanding (communication problems; inadequate information).
• Low tolerance to change (certain people are very keen on security and stability in their work).
• Different assessments of the situation (some employees may disagree on the reasons for the change and on the advantages and disadvantages of the change process).

LEADERSHIP STYLES (METHODS/TECHNIQUES/WAYS OF IMPLEMENTING CHANGE)

Kotter and Schlesinger set out the following change approaches to deal with resistance:

• Participation – aims to involve employees, usually by allowing some input into decision making. This could easily result in employees enjoying raised levels of autonomy, by allowing them to design their own jobs, pay structures, etc.
• Education and communication – This strategy relies upon the hopeful belief that communication about the benefits of change to employees will result in their acceptance of the need to exercise the changes necessary.
• Power/coercion – involves the compulsory approach by management to implement change. This method finds its roots from the formal authority that management possesses, together with legislative support.
• Facilitation and support – employees may need to be counseled to help them overcome their fears and anxieties about change. Management may find it necessary to develop individual awareness of the need for change.
• Manipulation and co-optation – both involve covert attempts to sidestep potential resistance. In manipulation, the information about the change is disseminated in a selective and distorted manner to only emphasize the benefits of the change. Co- optation involves giving key people access to the decision-making process i.e., giving influential resistors a seemingly desirable role in the change process.
• Negotiation – Simply, the process of negotiation is exercised, enabling several parties with opposing interests to bargain. This bargaining leads to a situation of compromise and agreement.