Managing strategic change
Elements of change
We need to understand that
We participate in change ut we can also be the originators of change
We can be the recipients of change but we also have the ability to recognise change
A change in the direction and scope of of an organisation over the long term (Johnson et al 2017)
Recognition and awareness of change
It is often suggested that the volatility, uncertainty, complexity and ambiguity of today's world requires a constant awareness of the implicit and explicit changes that impact upon us
Aside from the recognition that change is a perpetual requirement, throughout the lifecycle of any organisation there will be points that bring a particular pressure for change
There is a need for an organisation to think holistically about the strategic impact of all change
Pressure points
Process: the need to adapt and amend the core operational function of the organisational
Product: the need to ensure that the output of the organisation continues to meet the changing demands of the customer, both internal and external
Position: the need for a constant awareness of the strategic and economic positioning of the organisation against its competition
People: the need to include the right people in the right way within all change processes
Kaufman et al (2003)
The biggest single mistake that is often made in managing and creating strategic change is the attempt to implement a change too quickly without the appropriate buy in from stakeholders and without integrating the change with everything else that is going on in the organisation at that point
Three levels of change
Mega level
changes involving a long-term perspective, including future generations and their survival, self-sufficiency and their overall quality of life
Change at this level is complex as it is required to deal with a range of relationships across the underlying systems that we are able to influence
This type of change is described as being 'holistic, profound and deep'
Macro level
Changes involving the inputs and outputs of the main organisational system, affecting and being affected by a wide range of different external stakeholders
Micro level
Changes to the key results and performance indicators that can be achieved by individuals, teams and processes within an organisation
Circumstances of change
Martin (2001) suggested that there are four differing ways in which change can be recognised and controlled within an organisation
Surprise
Unplanned but the organisation is able to adapt to the emerging strategy
Crisis
Unplanned and then has a potentially fracturing impact upon the organisation
Incremental
Results from the building of small, planned changes in the gradual evolution of the organsiation
Strategic
A result of planning but has a fundamental impact upon the organisation
Balogun and Hope Hailey (2004)
In any organisation, change will be driven from two different perspectives
Evolution: steady incremental change envisaged by Johnson building through a gradual strategic approach and enabling the organisation to develop and adapt with rare transformational changes
Revolution: the occasional Big Bang which will require significant structure reorganisation
Suggest that all organisational change needs to be considered within 8 differing contexts
Time
How urgent is the change?
Is there time for lengthy consideration or is there the need for immediate action?
Scope
Will the change impact the entire organisation?
Preservation
Does everything need to change?
Diversity
Have sufficient different and relevant opinions been explored?
Capability
Are the people within the organisation able to deliver the required change or are new people or external consultants required?
Capacity
Does the organisation have sufficient accessible resource, in particular financial?
Readiness
Has the appropriate level of preparation been undertaken?
Power
Where does the power lie to drive the perceived change? Is it dependent upon one or more people acting appropriate?
Internal and external drivers of change
Tichy (1983) identified four main triggers for strategic change
Environment: the need to adapt to differing economic conditions, legislation and new or changing competition
Business relationships: the need for frequent review of customer and supplier impact and their respective competence
Technology: the need to decide how rapidly or otherwise to follow and lead the technological revolution
People: the recognition of how It can sometimes require only one person to change the organisation and also to require the organisation to change
Kanter et al (1992) recognised the influence of the environment but suggested that two different dynamics existed to drive real strategic change within organisation
Lifecycle differences
Nature of change in consumer demand at the ultimate end of all supply chains intrinsically linked to the changes in individual people's expectations
Politcal power changes
Largely within an organisation as individuals and stakeholders compete for the ability to make and implement strategic decisions to suit their own particular ambitions and vision
Robbins and Judge (2016)
People
A significant single issue with regard to people is increased longevity and therefore an ageing workforce with an expectation to be required to be working longer and to have benefits for a markedly longer period of time
Technology
Many describe the current age as being one of the Fourth Industrial Revolution and the potential impact of this has to be considered when planning any sort of strategic change
Economy
The financial crisis of 2008 has had a significantly longer strategic impact upon the world economy than originally expected - most major world economies continue to dip in and out of a state of recession
Competition
All organisations now operate within a global market driven not least by the immediacy of knowledge that is available through the internet
Social
People are often influenced by and contribute to social media networking; the growing awareness of environmental issues has led to a greater demand and expectation that action will be taken by governments, companies and individuals
Politics
Much greater distrust and challenge than politicians have been accustomed to
Lewin - force-field analysis
He researched the forces that restrain desired change within organisations and contested these with the forces that drive the desired change. His theory of force field analysis argues that restraining forces need to be reduced to enable the desirable change to happen naturally; this requires a mapping of both dimensions
The model recognises that we are on a journey from today into the future and that the driving forces will be a mixture of external and internal forces that want to influence the strategic direction however there is an equal likelihood that there will be external and internal forces that are restraining the strategic change that is required
Lewin's concept is that by understanding these forces we are able to offset the restraining forces by use of the driving forces
Culture change
When we are planning strategic change, it is essential that we consider the impact of such change upon the varying aspects of culture within the organisation
Pettigrew and Whipp (1991) recognised a number of core factors at play in the management of cultural change
Environmental assessment
Strategic change always needs to be placed within the setting of the organisational environment - macro and micro
Environmental understanding has to be part of the learning concept of the organisation so that all players understand its signficance - it is not a specialist function
Leading change
Leadership will be driven by and drive the context of strategic change and it requires the ability to recognise and link the differing skills of a wide group of players and stakeholders
Strategy and operation
An organisation can be viewed as a complete entity in itself
Although strategy making might be a focused task, it only becomes relevant as it impacts the organisation as the vision starts to be realised
Human Resources as assets and liabilities
Strategic change requires the effective oversight and control of the strengths and weaknesses of people and their often seemingly irrational behaviour
Competitive performance can often be optimised with the alignment of knowledge, skills and attitudes within an organisation
Coherence in the management of change
Whatever happens has to make sense within the context of the other factors; a vision must be realistic; the people within the organisation have their current mix of skills, behaviours, values and biases; the organisation already ha an existing mode of operation and culture
The strategic change needs to be characterised by consistency, consonance, advantage and feasibility
Stakeholders need to be aware of and be able to anticipate likely strategic changes within the organisation where they hold a stake
Risk and reputation
To recognise the repetitional impact, the organisation will need to have implemented a structured system to enable
Identification of the nature and extent of the risks, including principal risks, facing or being taken by the company, which are regarded as necessary, desirable or acceptable
An understanding of the likelihood of the risks concerned materialising and their potential impact
The ability to reduce the likelihood of the risks materialising by mitigation and possible application of sourcing further resources
How such risks are being monitored and controlled with an awareness of the appropriateness of the control processes
An iterative process for the reporting on a periodic basis from the control level to the governance level