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Transcript

Strategic Approaches to Change

ILM Unit 504 - Leading Innovation and Change

START

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Index

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Creating an environment that encourages innovation

SWOT and PESTLE analysis

Methods for decision-making

Reflect

Kotter's 8-step change model

01

04

03

03

02

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Let's begin

01: Creating an environment that encourages innovation

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"A new idea is delicate. It can be killed by a sneer or a yawn. It can be stabbed to death by a joke or worried to death by a frown on the wrong person’s brow” - Charles Browder

Creating an environment that encourages innovation

Laughter is a natural physiological reaction to a novel connection in the mind. In fact, someone initially laughing at an idea is often a good signal that it is, indeed, creative!

To shift away from a negative, worst-case-scenario mindset, establish new conversation practices when innovative ideas are presented. Often, people may quickly highlight potential issues, demand strong evidence, or dismiss ideas based on certain conditions. As a manager, take the initiative to change this behaviour by responding differently and encouraging your team to adopt a more open and constructive approach when evaluating new ideas.

Encouraging a Positive Mindset: Shifting Conversations Around Innovative Ideas

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Creating an environment that encourages innovation

Support techniques: Do's

Support techniques: Dont's

Acknowledge and Reward Innovation

Go out of your way to provide emotional support for innovators

Language and behaviours

Some things are just not funny

Feed the rumour mill to positive effect

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02: SWOT and PESTLE analysis

Let's begin

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SWOT and PESTLE analysis

Identifying forces for change We have discussed that changes within organisations are usually a response to threats or opportunities in the external environment and that these are future oriented. To a large degree, being good at strategic change requires the ability to anticipate what may happen in the future, in the external environment and then adapt to those challenges early. Change allows organisations to survive and/or to take advantage of new opportunities likely leading to growth.One way of anticipating where change and innovation will be necessary/beneficial is to conduct a PESTLE analysis and a SWOT analysis. The PESTLE is entirely focused on future external drivers of change whereas SWOT concentrates on the organisation’s internal strengths and weaknesses along with external threats and opportunities.

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SWOT Analysis

The SWOT methodology can be applied in two ways: as a quick tool to bring people together and kick-start strategy development, or as a more comprehensive management approach. Often, the quick application evolves into the more in-depth version. This versatility is one reason for its widespread use. However, despite its apparent simplicity, conducting a truly effective and meaningful SWOT analysis requires significant time and resources. When you're looking to move forward, SWOT can help identify opportunities you’re well-positioned to leverage, and by understanding your weaknesses, it allows you to manage potential threats more effectively.

Expanding the Scope of SWOT: Recognising Internal Opportunities and Threats

Activity: SWOT Analysis

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PESTLE Analysis

A PESTLE analysis is a useful tool for understanding the ‘big picture’ of the environment in which an organisation is operating. There are six factors which can aid brainstorming:

  • Political forces – politics operates on international, national and local levels.
  • Economic forces – such as, unemployment, inflation, price changes, interest rate changes, sources of funding, expansion in the economy, recession and austerity.
  • Social forces – come from the society in which we live, and include changes in the way people behave and the attitudes they hold, and the way that the population as a whole is made up.
  • Technological forces – there may be pressure on your organisation to introduce new technology.
  • Legal framework – changes in legislation can have a huge impact on organisations.
  • Environmental – issues include climate change, sustainability, transport, infrastructure, availability/location of raw materials. Ethics and Ecology sometimes added or substituted for the category Environmental.

Activity: Factors which impact your organisation

Utilising PESTLE Analysis

Activity: Reflection

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These two activities are supposed to make it easy for us to identify a change that could be attempted. To what extent was this your experience? Sometimes it can be helpful to create a gap between the analysis itself and the reflection on the analysis. Since starting this unit, you may have already identified changes to make within your organisation. Do they still look like important changes, or do new ones appear to suggest themselves? The more speculative the analysis, the more necessary it may be, at the identification stage, to collect data, in order to make informed decisions about changes to propose. Identifying changes using SWOT and/or PESTLE analyses may be something that happens at very senior levels in companies and other organisations. However, there is nothing to stop you from using these tools to identify appropriate changes at the operational level. This can also be done at the individual level.

SWOT and PESTLE analysis

Reflective questions

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03: Methods for decision-making

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Identifying, Evaluating Options and Justifying Improvements

Reflection: What tools or methods do you use currently to generate options and appraise options to make judgements & decisions (recommendations)? ‘What, where, when, how and why’ relates to asking questions to broaden the range of options and to draw in all the implications such as:

  • What have we missed?
  • How do other organisations do this?
  • Why are we doing it that way
  • What if we…?
  • Where could we do that…?
  • How would we do that?
  • What would be involved?
  • What would or might happen if….?

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Identifying, Evaluating Options and Justifying Improvements

Techniques for comparing and evaluating alternative propositions critically Having generated ideas and considered the various options, the next stage would be to evaluate and justify the preferred solution. This typically involves setting out the viable options that are available and making a recommendation for one strategy. One option that should be considered is the ‘do nothing’ option: that is, maintaining the ‘status quo’.

What, why, where, where, how?

Issue or problem

Options

Decisions

Judgements and recommendations

Implications

Implementation

A pathway to decisions

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The following Force Field Analysis pearl of wisdom® discusses a tool built by Kurt Lewin that analyses the different forces that influence change; either helping or hindering successful change in organisations.By watching this pearl of wisdom® you will be able to:

  • Identify two types of force that influence change
  • List the steps in using the tool to determine if a proposed change is viable

Activity: Watch the 'Force Field Analysis' pearl of wisdom®

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Developed by Kurt Lewin Force Field Analysis is a tool for analysing the opposing forces involved in change. It can be used at any level (personal, team, organisational) to identify the forces that may work against change initiatives. Lewin viewed organisations as systems in which the present situation was not a static pattern but a dynamic balance of forces working in opposite directions. Force Field Analysis is a technique for identifying forces which may help or hinder achieving a change or improvement. Once these forces have been identified and analysed, it is possible to determine if a proposed change is viable. If it is, then plans can be developed to overcome resisting forces

Force Field Analysis

Proposed change

Activity: Force field analysis

Transforming resistance into opportunity

Forces for change

Forces resisting change

The chart explained

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04: Kotter's 8 Step Change Model

Let's begin

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The following Kotter's 8 Step Change Model pearl of wisdom® describes the relevant actions at each stage and how applying the model can make the change happen in reality. By watching this Pearl of Wisdom® you should be able to:

  • Identify the eight stages of the model
  • Describe how to deal with change effectively

Activity: Watch the 'Kotter's 8 Step Change Model' pearl of wisdom®

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Kotter proposed that there were eight crucial steps for implementing a change programme in an organisation, split into three sections. As leaders you may well have a role in influencing the vision as it is created. At the very least, you will need to be able to communicate that vision and to make it relevant to the work of your team and to draw the ‘Golden Thread’ between that vision and the objectives of your team and team members.Many organisations have taken and used Kotter’s model and they will often tailor the steps to create a bespoke model that fits with their internal culture.

Kotter's 8 Step Change Model

1. Increase urgency

2. Build coalitions

3. Create a vision

4. Communicate vision

5. Enable action

6. Quick wins

7. Don't let up

8. Make it stick

Creating conditions for change

Introducing new practices

Maintaining the momentum

Leading Successful Organisational Change -Kotter's 8-Step Model for Lasting Transformation

Explore questions on each of the following steps which will help you to implement Kotter's change model:

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05: Reflect

Let's begin

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Planning for change: choose one of the project planning tools and techniques we looked at for this topic and apply it to your project. Why did you choose this tool? Was it helpful?

Exercise: Reflect

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Complete!

Well done! You have completed this section. Head back to your course page and continue working through the unit.

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Resistance is feedback. When leading a change we do not set out to crush the resistance by increasing the driving forces, instead we look to reducing the resistance, listen to the feedback, educate and inform those who are digging their heels in of the need to change. In the enthusiasm to carry out a change we can be tempted to overlook, or underplay potential resistance. That’s dangerous and unrealistic and can derail your plans. By taking time to honestly accept and assess the resistance your change will face, you are in a much stronger position to react well to that resistance (score out and put feedback) and win people round.

  • Kotter suggests that it starts with increasing the urgency. He estimates that 75% of management need to back an initiative for it to be successful.
  • The next step is to build the guiding team. It’s not enough simply to try and push through major change by itself, you need support. So identify the true leaders in your organisation and ask for emotional commitment from these key people.
  • Step 3 is setting a clear vision of how you see the future organisation looking and why that’s beneficial.
  • This leads to step 4, communicate for buy-in. Without credible communication the hearts and minds of those you’ll need to execute the change will not be won.
  • Step 5 is empower action. Now it’s time to remove any barriers so that the team can get on with implementation. You need to create a structure so that the work gets done. Set up a reward system and keep an eye on those who may be resistant to change.
  • Step 6 is creating short term wins. Nothing motivates more than success so to keep up motivation find quick wins to give your organisation a taste of victory early in the change process.
  • Step 7 is don’t let-up. Real change takes a long time and rarely happens without pain. Consequently there’s a high risk of people reverting to the old way of doing things.
  • Step 8 is make change stick. Your job isn’t done until the change has roots and becomes part of the core culture of your organisation. So you need to make absolutely sure you have the continuity of behaviour and the results that you need to help that new culture grow.

Leading Successful Organisational Change: Kotter's 8-Step Model for Lasting Transformation

In larger organisations, many decisions taken are subject to a formal process of evaluation: known as an Options Appraisal. This approach may be enshrined in a change or project management process. It is also worth reflecting on whether options that are presented are consistent with the company or organisation’s vision or mission statement. Each of the options needs to be carefully considered so that a full appreciation of the pros and cons (the implications) can be used in appraisal and in making a judgement as to which strategy to adopt.Usually a significant change would require a Business Case in which the options would be set out in business terms and a recommendation made to the decision maker(s) on the basis of the business interest; it is likely that a major shift in strategy will require a change project to be initiated.

PESTLE analysis acts as an audit of an organisation's environmental influences with the purpose of using this information to guide strategic decision-making. It’s particularly useful for understanding risks associated with market growth or decline, and consequently the position, potential and direction for an individual business or organisation. The importance of the factors varies depending on the nature of the industry and the company. For example environmental factors are more important to tourism or the farming sector whereas economic and political factors might be more important for the finance sector.By understanding these environments, it is possible to take the advantage to maximise the opportunities and minimise the threats to the organisation, and PESTLE is commonly used alongside a SWOT analysis in this regard.

Acknowledge and Reward Innovation It’s one of the oldest axioms of human nature – people repeat behaviours they get rewarded for.

  • Does leadership in your organisation give employees continual feedback on the results of their efforts?
  • Do you privately acknowledge the efforts of individuals?
  • Do you recognise them publicly?
  • Do you continually communicate your commitment to innovation at all levels of the organisation?
  • Most important, do you demonstrate that commitment by your actions and behaviours as well as the words you say?
Talking about innovation is good. Putting it to work in your organisation is even better. For best results, link innovation to your strategy and think of creating ongoing innovation as a long-term process rather than a short-term goal especially if you are used to reacting to change rather than creating it. Most of all, innovation requires an organisational culture that nourishes and supports it as a way of life rather than as a short-term band-aid for current business problems. Failure should be seen as valuable feedback; establish a process to openly share and learn from ideas that don't succeed. Normalise discussions around initiatives that didn't work as planned, embracing the mindset that true failure lies in not learning from these experiences. Not sharing these lessons leads to wasted opportunities and lost productivity.

Force Field Analysis is shown with arrows, with the ‘Drivers’ arrows pushing left and ‘Resisting’ arrows pushing right, and you can use the thickness or length of each arrow to show the relative strength of that force.

8. Anchor the change in culture

  • What success stories might you share and what are your opportunities to share these stories?
  • How would you embed the change in planning and learning?

At its simplest, the SWOT is presented as grid inviting the gathering, structuring and presenting of planning data. Often the grid is presented with the top row – Strengths and Weaknesses – labelled as ‘internal’ factors and the bottom row – Opportunities and Threats – being ‘external’. Whilst Strengths and Weakness are likely to be internal, this model doesn’t cater for internal opportunities and threats, and these can be common and often significant – for example the opportunities for cost-saving or process improvement, or the threat of loss of major contracts or key staff.

6. Create short-term wins

  • What are some simple and inexpensive things this organisation can do to make the change process yield quick-wins?

2. Form a powerful coalition Who would you choose to be part of the coalition or collaboration to champion the change?

Activity: Think about a recent change that has happened in your organisation.

  • What were the external drivers that made this change necessary or desirable?
  • How were those external drivers communicated?
  • What was the impact of the change? What adaptations did your company make?
  • How successfully was the change planned and implemented?
  • What difference does it make if the change was chosen vs imposed?

7. Build on the change

  • If progress was being made as a result of the changes, how might you build on this momentum?
  • Who might be new supporters of change to add to the coalition? And who might they influence?

5. Enable action and remove obstacles

  • What barriers exist to implementing the change?
  • What would you do to remove these barriers?

For example, when presented with new ideas:

  • Recognise that the new idea may not work for every situation. However, ensure that any decision is made on the benefits for the majority rather than not using the idea because it does not benefit everyone in every situation. Design for 80% rather than 20% of your organisation and recognise that you will need to support some areas differently
  • Create a rule that the benefits of the idea are listed first before any discussion about what could go wrong
  • Ask for the evidence that supports the status quo approach. Ask that the new idea be judged fairly to the same standard of evidence that we allow for the status quo practice

Feed the rumour mill to positive effect As you try some of these tips realise that, your new behaviour is likely to take others by surprise. Invariably, this will start a buzz around the organisation. This will have a positive effect in terms of improving the conditions for innovation, for it has been said that the ‘rumour mill’ is often the most efficient internal communications vehicle in any organisation.

Go out of your way to provide emotional support for innovators Leaders who understand and recognise the potential in staff make it their business to know the individuals and teams who are doing innovative things and personally connect with them. Go out to the person’s work area, or to the department or team, and take an interest. Show that you know what they are doing, ask what they are learning, and ask what you can do to help. Keep the lines of communication open through periodic walk-arounds or telephone calls.

1. Create a sense of urgency

  • What threats exist if changes are not made?
  • What are the benefits to making changes?
  • Identify the top 3 reasons to make a change.

Activity: Undertake a PESTLE analysis of your own. Consider all the factors which could impact your organisation. The following example has been provided.

  • Based on your reflections on the PESTLE and SWOT analyses, what changes now appear to be necessary?
  • What do you think will happen if these changes do not take place?

Reflective questions

  • What is the vision of success? Be specific!
  • What will be different after the change?

3. Create a vision for change

Language and Behaviours

  • Many organisations have built-in language patterns and behaviours that do not support innovation. Seemingly innocuous phrases like...“Don’t bother, we’ve already tried that” and “Nice idea, but management will never go for it” can instantly shoot down any good ideas that may arise.
  • Use language that encourages employees to contribute ideas and stay open to new possibilities. Do not tolerate gossiping, politicking or ridiculing new ideas, no matter how far-fetched. If employees don’t feel safe voicing their ideas and opinions, innovation will never happen.
  • Don’t use humour to lighten the mood when discussing the risks associated with an innovative idea
  • It almost never works and often has the opposite effect. The examples below describe all-too-often-heard comments meant to be light-hearted in approaching the risk taking associated with innovation.

Activity: Force Field Analysis

  • Firstly, state the current situation and then go on to describe the ideal situation. Think about where the current situation will go if no action is taken.
  • Now list all the forces driving change toward your ideal situation, and get help for this – Force Field Analysis is a great tool to use with a group. Once that’s captured look at the other side and list all the forces resisting change toward your ideal situation.
  • With these two lists in front of you, interrogate all of the forces: Are they valid? Can they be changed? Which are the critical forces? Allocate a score to each of the forces using a 1 to 5 scale with 1 being weak, 5 being very strong.
  • Chart the forces by listing the driving forces on the left and resisting forces on the right.
  • The chart allows you to visualise the forces at work and determine whether change is viable and progress can occur. Where the resistance out-weighs the driving factors your change will struggle.

Activity: SWOT analysisTake 10 minutes to do a SWOT analysis in your own work area.

  • What do you see as the operations strengths and weaknesses?
  • Where do you see opportunities and threats coming from in the next 6 – 18 months?
  • How does this help you to identify areas where change may be necessary?
  • What differences do you notice when you conduct a SWOT analysis at varying organisational levels, e.g. group, company, department, team?

4. Communicate the vision

  • How would you communicate or demonstrate the vision?
  • Who are the key audiences for the vision?
  • How can you make this vision matter to the whole organisation

Some things are just not funny

  • “Jane tells us she is sure it will work, and we’ve told her we are sure she can find work elsewhere if it doesn’t (ha ha ha).”
  • “Yes, I can remember we learned a lot from a past failure of an innovative idea. Of course that person no longer works here (ha ha ha).”
The reaction is often nervous laughter and people making eye contact with one another around the room. This affirms that they believe that this gallows humour is actually true about the organisation. Don’t do this! If you are in a room where someone does, immediately speak up and say something in a serious tone like, “Actually, Jane’s confidence in leading the way on this innovative idea is exactly the sort of thing we support around here, and we certainly wouldn’t want people like her to leave”.