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Leading Change Through
InnovationInnovation
www.humanikaconsulting.com
“God will not change people’s fate if they do not“God will not change people’s fate if they do not
change it themselves”change it themselves”
(Al(Al--Qur’an, ArQur’an, Ar--Ra’d: 11)Ra’d: 11)
LeadershipLeadership There is probably no topic
more important to business
success today than leadership
leadership occurs among people
involves the use of influence
is used to attain goals
Different leaders behave in different ways – style, need, situation
Nature of Leadership
• The ability to influence people toward the attainment
of organizational goals.
• Leadership is reciprocal, occurring among people.• Leadership is reciprocal, occurring among people.
• Leadership is a “people” activity, distinct from
administrative paper shuffling or problem-solving
activities.
• Leadership is dynamic and involves the use of power.
What are the challenges of leadership, Change
and innovation?
 Strategic leadership creates the capacity for ongoing
strategic change.
 Components of strategic leadership:
– Determining the organization’s purpose or vision.
– Exploiting and maintaining the organization’s core– Exploiting and maintaining the organization’s core
competencies.
– Developing the organization’s human capital.
– Sustaining an effective organizational culture.
– Emphasizing and displaying ethical practices.
– Establishing balanced organizational controls.
Sustainable competitive advantage relies on
creativity and innovation.
Creativity is the generation of a novel idea or
What are the challenges of leadership, Change
and innovation?
Creativity is the generation of a novel idea or
unique approach to solving problems or
crafting opportunities.
Innovation is the process of creating new
ideas and putting them into practice.
Leadership responsibilities for the innovation
process:
– Imagining.
– Designing.
What are the challenges of leadership, Change
and innovation?
– Designing.
– Experimenting.
– Assessing.
– Scaling.
 In highly innovative organizations …
– Corporate strategy and culture should:
• Emphasize an entrepreneurial spirit.
• Expect innovation.
• Accept failure.
What are the challenges of leadership, Change
and innovation?
• Accept failure.
• Be willing to take risks.
– Organization structure should:
• Be organic.
• Have lateral communications.
• Use cross-functional teams and task forces.
Building an Organization
1. Education and leadership
development is the effort to
familiarize future leaders with the
skills important to the company
and to develop exceptional leaders
among the managers you employamong the managers you employ
2. Perseverance is the capacity to see
a commitment through to
completion long after most people
would have stopped trying
3. Principles are your fundamental
personal standards that guide your
sense of honesty, integrity, and
ethical behavior
The Components of Organizational Alignment
Vision
Capabilities
• Technical
Culture
• Norms
Structure
• Span of control
• Team composition
• Hierarchy
Systems
• Accounting
• HR
• Technical
• Leadership
• Norms
• Shared values
• Sales
• IT
The Organization as an Iceberg Metaphor
Prentice Hall, 2002
Factors Used to Measure Organizational Performance
Copyright Š 2005 South-Western. All rights reserved.
Organizational Health
• Indicators of organizational health from Matthew Miles:
– Goal focus.
– Communication adequacy.
– Optimal power equalization.
– Human resources utilization.
Copyright Š Allyn & Bacon 2007
– Human resources utilization.
– Cohesiveness.
– Morale.
– Innovativeness.
– Autonomy.
– Adaptation.
– Problem-solving adequacy.
Shaping Organizational CultureShaping Organizational Culture
•• PassionPassion, in a leadership sense, is a, in a leadership sense, is a
highly motivated sense ofhighly motivated sense of
commitment to what you do and wantcommitment to what you do and want
to doto do
•• Leaders also use reward systems,Leaders also use reward systems,
symbols, and structure among othersymbols, and structure among other
means to shape the organization’smeans to shape the organization’smeans to shape the organization’smeans to shape the organization’s
cultureculture
•• Leaders look to managers they need toLeaders look to managers they need to
execute strategy as another source ofexecute strategy as another source of
leadership to accept risk and copeleadership to accept risk and cope
with the complexity that change bringswith the complexity that change brings
aboutabout
Recruiting and Developing Talented Operational
Leadership
 New leaders will each be global
managers, change agents, strategists,
motivators, strategic decision makers,
innovators, and collaborators if the
business is to survive and prosper
 Today’s need for fluid, learning Today’s need for fluid, learning
organizations capable of rapid
response, sharing, and cross-cultural
synergy place incredible demands on
young managers to bring important
competencies to the organization
“The Twentieth and
Twenty-first Century
OrganizationOrganization
compared”
Kotter, John P, Leading Change, pg.172
Structure
Twentieth Century
• Bureaucratic
• Multileveled
• Organized with the expectation
Twenty-First Century
• Nonbureaucratic, with fewer
rules and employees
• Limited to fewer levels
• Organized with the expectation• Organized with the expectation
that senior management will
manage
• Characterized by policies that
create many complicated internal
interdependencies
• Organized with the expectation
that management will lead,
lower-level employees will
manage
• Characterized by policies and
procedures that produce the
minimal internal
interdependence needed to serve
customers
Systems
Twentieth Century
• Depend on few performance
information systems
• Distribute performance data to
Twenty-First Century
• Depend on many performance
information systems, providing
data on customers especially
• Distribute performance data• Distribute performance data to
executives only
• Offer management training and
support systems to senior people
only
• Distribute performance data
widely
• Offer management training and
support systems to many people
Culture
Twentieth Century
• Inwardly focused
• Centralized
• Slow to make decisions
Twenty-First Century
• Externally oriented
• Empowering
• Quick to make decisions• Slow to make decisions
• Political
• Risk averse
• Quick to make decisions
• Open and Candid
• More risk tolerant
Managers vs. Leaders
Covey, Stephen R., The 7 Habits of Highly Effective People, pg.101
Kotter, John P., Leading Change, pg.165
Leadership versus Management
Management
PromotesPromotes
stability, orderstability, order
and problemand problem
Leadership
Promotes vision,Promotes vision,
creativity, andcreativity, and
changechangeand problemand problem
solving withinsolving within
existingexisting
organizationalorganizational
structure andstructure and
systemssystems
changechange
MM LL
Takes care of where you areTakes care of where you are Takes you to a new placeTakes you to a new place
Managers vs. Leaders
• Managers know how to
plan, budget, organize, staff,
control, and problem solve
• Managers deal mostly with
the status quo
• Management is a bottom
• Leaders create and
communicate visions and
strategies
• Leaders deal mostly with
change• Management is a bottom
line focus: How can I best
accomplish certain things?
• Management is doing things
right
Leaders deal mostly with
change
• Leadership deals with the
top line: What are the
things I want to accomplish?
• Leadership is doing the right
things
Management and Leadership Compared
Source: Kotter, J. P. (1990). A Force for Change: How Leadership Differs from Management. New York: Free Press;
Kotter, J. P. (1996). Leading Change. Boston: Harvard Business School Press.
Leader vs. Manager Qualities
Manager QualitiesLeader Qualities
SOUL
Visionary
Passionate
Creative
MIND
Rational
Consulting
Persistent
Source: Genevieve Capowski, “Anatomy of a Leader: Where Are the Leaders of Tomorrow?” Management Review, March 1994, 12
Creative
Flexible
Inspiring
Innovative
Courageous
Imaginative
Experimental
Initiates change
Personal power
Persistent
Problem solving
Tough-minded
Analytical
Structured
Deliberate
Authoritative
Stabilizing
Position power
Management Processes and Levels of Management
TraitsTraits
• Traits - early efforts to understand
leadership success focused on
Traits = personal characteristicsTraits = personal characteristics
leadership success focused on
leader’s personal characteristics
• Great man approach - early
research focused on leaders who
had achieved a level of greatness
– Find out what made them great
– Find people with same traits
Personal Characteristics of Leaders
Physical Characteristics
Energy
Physical stamina
Social Background
Education
Personality
Self-confidence
Honesty & integrity
Enthusiasm
Desire to lead
Independence
Social Characteristics
Sociability, interpersonal skills
Cooperativeness
Ability to enlist cooperation
Tact, diplomacy
Education
Mobility
Intelligence and Ability
Judgment, decisiveness
Knowledge
Intelligence, cognitive
ability
Work-related Characteristics
Achievement drive
Drive to excel
Conscientiousness in pursuit of goals
Persistence against obstacles, tenacity
Source: Adapted from Bernard M. Bass, Stogdill’s Handbook of Leadership, rev. Ed. (New York: Free Press, 1981), 75-76. This adaptation appeared in R. Albanese and D. D. Van Fleet,
Organizational Behavior: A managerial Viewpoint (Hinsdale, III.: The Dryden Press, 1983).
In highly innovative organizations …
– Top management should:
• Understand the innovation process.
• Be tolerant of criticism and differences of opinion.
• Take all possible steps to keep goals clear.
• Maintain the pressure to succeed.
• Break down barriers to innovation.Break down barriers to innovation.
– Staffing should fulfill five critical innovation
roles:
• Idea generators.
• Information gatekeepers.
• Product champions.
• Project managers.
• Innovation leaders.
Change
Change is the disruption of the
status quo
• A break in the continuities that represent
the steady stream of our lives.
Change often makes forChange often makes for
interesting times…
• It may seem positive if you’re
leading the change.
• It may seem negative if you’re
on the receiving end of it.
The Types of Change
Anticipated Changes
• Changes that are planned ahead
of time and occur as intended
according to a plan.
Emergent Changes
• Changes that arise
spontaneously from local innovation
• Changes that arise
spontaneously from local innovation
and that are not originally
anticipated or intended.
Opportunity-Based Changes
• Changes that are not anticipated
ahead of time, but are introduced
during the change process in
response to an unexpected
opportunity, event, or breakdown.
Beer’s Model of
Organizational Change
C = D x M x P > R
D = followers’ dissatisfaction
M = model for change
P = process
R = resistance
C = amount of change
The Rational Approach To Organization Change
and the Interactional Framework
Leader
• Environmental scans
• Vision
• Goals
• Change plan
• Systems vs. siloed thinking
• Leadership and management
capabilities
Followers Situation
• Crisis
• Consumer preferences
• Market conditions
• Societal shifts
• Political and legal challenges
• Competitive
• Organizational structure
• Organizational systems
• Organization culture
• Dissatisfaction
• resistance
• SARA model
• Loss of:
– Power
– Competence
– Identity
– Rewards
– Relationships
• Technical/functional
capabilities
The Expectation-Performance Gap
Actual
Change initiative implemented
Expectations
Actual
performance
Time
Status quo
Gap
The Four Levels of Every Organization
Infrastructure
(management systems,
Physical
(processes, tools,
and structures)
Abilitytoinfluenceorchange
Durabilityofthechange
Easiest Short
term
Š1997, Russell Consulting, Inc. Used with permission.
Cultural
(values, beliefs, and norms)
Behavioral
(what groups and individuals do)
(management systems,
measurements, and rewards)
Most
difficult
Long
term
Abilitytoinfluenceorchange
Durabilityofthechange
Common Losses with Change
Loss of: Possible Leader Actions
Power Demonstrate empathy, good listening skills, and new
ways to build power.
Competence Coaching, mentoring, training, peer coaching, job
aids, and so forth.aids, and so forth.
Relationships Help employees build new relationships before
change occurs, or soon thereafter.
Rewards Design and implement new reward system to support
change initiative.
Identity Demonstrate empathy; emphasize value of new roles.
M. Beer, Leading Change (Boston: Harvard Business School Press, 1988).
What is the nature of
organizational change?
 Change leader.
– A change agent who takes
leadership responsibility for
changing the existing pattern of
behavior of another person or
changing the existing pattern of
behavior of another person or
social system.
Change leadership.
– Forward-looking.
– Proactive.
– Embraces new ideas.
Change leaders vs. status quo managers
– Fear of the unknown
– Disrupted habits
– Loss of confidence
– Loss of control
Reasons for people resisting change
– Loss of control
– Poor timing
– Work overload
– Loss of face
– Lack of purpose
The Journey Through Change
Stability
1.
Comfort
and Control
Looking
Back
Looking
Forward
Chaos
3.
Inquiry,
Experimentation,
and Discovery
2.
Fear, Anger,
and Resistance
Leading Change Training, Jeff and Linda Russell, 2003
What People Often Feel
1.
I’m safe
I’m in control
I’m satisfied
I’m doing fine1.
Comfort
and Control
I’m doing fine
I’m being recognized
I’m working hard…..
Hey, everything’s cool
* Adapted from Leading Change Training, Jeff and Linda Russell, 2003
What People Often Feel
I’m anxious
I’m not in control
I’m angry and upset
I’m worried about …..
2.
Fear, Anger,
I’m worried about …..
I’m not appreciated
I’m frustrated
Hey, everything’s in chaos
and Resistance
* Adapted from Leading Change Training, Jeff and Linda Russell, 2003
What People Often Feel
I’m challenged
I’m hopeful
I’m dizzy from all the ….
I’m encouraged
3.
Inquiry,
Experimentation,
and Discovery I’m encouraged
I’m searching for …..
I’m excited
Hey, progress is being made….
and Discovery
* Adapted from Leading Change Training, Jeff and Linda Russell, 2003
What People Often Feel
I’m feeling better
I’m relieved
I’m encouraged
I’m confident4. I’m confident
I’m satisfied
I’m energized again
Hey, we made it!
4.
Learning,
Acceptance, and
Commitment
* Adapted from Leading Change Training, Jeff and Linda Russell, 2003
Reactions To Change
Anger Rejection
Time
Shock Acceptance
Top leaders
Middle managers
Individual contributors
Methods for dealing with resistance to change
– Education and communication
– Participation and involvement
– Facilitation and support
– Facilitation and agreement
– Manipulation and co-optation
– Explicit and implicit coercion
What is the nature of organizational change?
 Top-down change.
– Strategic and comprehensive
change that is initiated with
the goals of comprehensive
impact on the organizationimpact on the organization
and its performance
capabilities.
– Driven by the organization’s
top leadership.
– Success depends on support
of middle-level and lower-
level workers.
What is the nature of organizational change?
Bottom-up change.
– The initiatives for change come from any and all
parts of the organization, not just top
management.
– Crucial for organizational innovation.– Crucial for organizational innovation.
– Made possible by:
• Employee empowerment.
• Employee involvement.
• Employee participation.
What is the nature of organizational change?
 Integrated change leadership.
– Successful and enduring change combines advantages of
top-down and bottom-up approaches.
– Top-down:
• Breaks up traditional patterns.
• Implements difficult economic adjustments.
– Bottom-up:
• Builds capability for sustainable change.
• Builds capability for organizational learning.
What is the nature of organizational change?
 Transformational and incremental
change.
– Unplanned change.
• Response to unanticipated events.
• Good leaders act on opportunities for
reactive change.reactive change.
– Planned change
• Aligning the organization with anticipated
future challenges.
• Activated by proactive leaders who are
sensitive to performance gaps.
• Transformational change  major and
comprehensive redirection.
• Incremental change  adjusting existing
systems and practices.
Organizational targets for
change:
– Tasks
– People
– Culture
– Technology
– Structure
A Leaders’ Vision Of the Future Can Align Efforts
and Help Groups Accomplish More
Groups that lack
vision
Groups with vision
Lewin’s three phases of planned organizational
change.
The Change ProcessThe Change Process First work on
changing how people
think about their job

EDUCATION
The Five On-Going Elements of a
Change Process
New
structure
Change of
Thought
Change of
BehaviorChange of
Destiny
Reshape the
organization
through people
Change Process
Drive
Cultural
Change
Change of
HabitsChange of
Personality
Sustain and Stabilize
Changes
Alternative change strategies and their
leadership implications.
Fiedler’s Classification of
Situation Favorableness
Leaders needs to know
Whether they have a relationship- or task-oriented style
Should diagnose the situation and determine the favorableness of
Source: Fred E. Fiedler, “The Effects of Leadership Training and Experience: A Contingency Model Interpretation,” Administrative Science Quarterly 17 (1972), 455. Reprinted by permission
of Administrative Science Quarterly.
Should diagnose the situation and determine the favorableness of
the following three areas
Path-Goal Situations &
Preferred Leader Behavior
Source: Adapted from Gary A. Yukl, Leadership in Organizations (Englewood Cliffs, N.J.: Prentice-Hall, 1981), 146-152.
Leading Organizational Change
• Steps in the Change Process:
– Step 1: Establish a sense of urgency.
– Step 2: Create the guiding coalition.
– Step 3: Develop a vision and a strategy.
Copyright Š 2005 South-Western. All rights reserved.
– Step 3: Develop a vision and a strategy.
– Step 4: Communicate the change vision.
– Step 5: Empower broad-based action.
– Step 6: Generate short-term wins.
– Step 7: Consolidate gains and produce more change.
– Step 8: Anchor new approaches in the culture.
Leading Change
Transactional Leaders
 Clarify the role and task
requirements ofrequirements of
subordinates
 Initiate structure
 Provide appropriate
rewards
 Display consideration for
subordinates
 Meet the social needs of
subordinates
Leading Change
Charismatic Leaders
 The ability to inspire
 Motivate people to
do more than they
would normally dowould normally do
 Tend to be less
predictable than
transactional
leaders
 Create an
atmosphere of
change
 May be obsessed by
visionary ideas
Leading Change
• Transformational Leader
 Similar to charismatic leaders
 Distinguished by their special ability to bring about innovation
and change by
Recognizing followers’ needs and concerns
Helping them look at old problems in new ways
Encouraging them to question the status quo
Sources of Power
 Legitimate Power: power coming from a formal
management position.
 Reward Power: stems from the authority to bestow
rewards on other people.rewards on other people.
 Coercive Power: the authority to punish or recommend
punishment.
 Expert Power: leader’s special knowledge or skill
regarding the tasks performed by followers.
 Referent Power: personality characteristics that
command subordinates’ identification, respect, and
admiration so they wish to emulate the leader
What are Your TasksWhat are Your Tasks…… asas a Change Leadera Change Leader??
Stability
Comfort
and Control
Learning,
Acceptance, and
Commitment
Create a
Felt Need
for Change
Stabilize
and Sustain
the Change
4
Looking
Back
Looking
Forward
Chaos
Inquiry,
Experimentation,
and Discovery
Fear, Anger,
and Resistance
Leader Actions
for Change
and Sustain
the Change
Revise and
Finalize the
Change
Plan
Introduce
the Change
3
2
1
From Leading Change Training, Jeff and Linda Russell, 2003
Leader’s Actions
Phase 1: Comfort and Control
Create a Felt Need for Change
From Leading Change Training, Jeff and Linda Russell, 2003
The Role of Change Leaders
• It is leadership’s job to define
and articulate a vision for the
organization and the need fororganization and the need for
change.......
“Implementing organizational change requires a compelling reason for change.
Unless people see the need for change, it will just not happen.”
-John Pepper (Former CEO) Proctor and Gamble
Characteristics of an Effective
Change Vision
• Confronts and addresses a current or future
threat
• Describes a vivid picture of a positive end result
• Focused on changes and outcomes that the
process owners care about, and can see, feel,
and affect.and affect.
• Provides a method for evaluating staff actions
supporting the change
• Links closely with the broader organizational
vision
* Adapted from “Managing Change”, Jeff and Linda Russell, 1998
Leader’s Actions
Phase 1: Comfort and Control
• Acknowledge people’s past efforts and
success.
• Get people’s attention!
• Immerse people in information about
the change . . . customer complaints,
•
the change . . . customer complaints,
budget data, increasing costs,
competitive pressures.
• Let people know it will happen — one
way or another!
• Give people time to let the ideas sink in.
• Don’t sell the solutions . . . sell the
problem!
* From Leading Change Training, Jeff and Linda Russell, 2003
Leader’s Actions
Phase 1: Comfort and Control
• Create and communicate a sense of
urgency, and risks of not changing.
• Create the fear of not changing, and
sell that the change is necessary,
achievable, and beneficial.
• Communicate what will not change,
and always be honest and
• Communicate what will not change,
and always be honest and
consistent.
• Tell the story as early as possible,
tell the whole story as your know it
to be, and tell it in as personal a way
as possible  try to ensure
everyone hears and understands the
“same story”.
• The degree of “change readiness” is
often inversely proportional to the
closeness of the crisis.
Leader’s Actions
Phase 2: Fear, Anger, and Resistance
Introduce the Change
KAI – to break apart or
disassemble
KAI – to break apart or
disassemble
ZEN – to feverishly improve
Must do the Kai first!
Leader’s Actions
Phase 2:Fear, Anger, and Resistance
• Communicate to co-create the vision.
• Listen carefully to what people are saying.
• Acknowledge people’s feelings (pain, perceived
losses, anger, excitement, etc.)
• Strive to address their perceived losses.
losses, anger, excitement, etc.)
• Strive to address their perceived losses.
• Tell people what you know — and what you
don’t know.
• Don’t try to talk people out of their feelings.
• Discuss ways to solve the problems that people
see with the change.
• Encourage discussion, dissent, disagreement,
debate
. . . keep people talking.
From Leading Change Training, Jeff and Linda Russell, 2003
Leader’s Actions
Phase 2:Fear, Anger, and Resistance
• Create a coalition of influential upper
level managers and stakeholders to guide
and support the efforts promoted by the
change leader.
• Select the right coalition members with
credibility, proven leadership abilities,credibility, proven leadership abilities,
expertise in needed areas, and the power
and prestige necessary to make things
happen  avoid people who lack in
enthusiasm, integrity, and trust
worthiness.
• Trust among the members is critical.
• Recognize that large scale change needs to
be led from the top and
supported/accomplished from the
bottom.
The Role of Change LeadersThe Role of Change Leaders
The key prerequisite to successfully implementing change is Gaining employees’
acceptance and overcoming their resistance and fears to change.
Must address people’s fears – not ignore them
Leader’s Actions
Phase 3: Inquiry, Experimentation, and
Discovery
• Affirm Why change is necessary and
How it will work….
• Involve influential and resilient people
in creating the solution (strategies
and tactics) to accomplish the vision.and tactics) to accomplish the vision.
• Emphasize the Win-Win aspects of
the change to address the threats.
• Create and follow a simple, yet
detailed change implementation plan.
 A change plan gives time for
reflection and re-thinking of the
options.
Components of a Change Plan
1. Create a leading change design team.
2. Document the case for change.
3. Develop a preliminary vision for the change.
4. Define the impacts on those affected by the change.
5. Create your preliminary strategy and action plan.5. Create your preliminary strategy and action plan.
6. Identify measures of success.
7. Develop your communication strategy.
8. Develop your training strategy.
* From Leading Change Training, Jeff and Linda Russell, 2003
Leader’s Actions
Phase 4: Learning Acceptance, and Commitment
Leader’s Actions
Phase 4: Learning Acceptance, and Commitment
Stabilize and Maintain
the Change
* From Leading Change Training, Jeff and Linda Russell, 2003
Leader’s Actions
Phase 4: Learning Acceptance, and Commitment
• Acknowledge people’s hard work.
• Celebrate successes and accomplishments.
• Reaffirm the vision.
• Bring people together toward the vision.
• Acknowledge what people have left behind.
•
• Acknowledge what people have left behind.
• Develop long-term goals and plans.
• Provide tools and training to reinforce new behaviors.
• Reinforce and reward the new behaviors.
• Create systems and structures that reinforce
new behaviors.
• Prepare people for the next change.
* From Leading Change Training, Jeff and Linda Russell, 2003
Stabilizing and Sustaining the
Change *
• Establish staff commitment to the new direction
by reinforcing new behaviors and beliefs.
• Invest in the change through new skills training,
new equipment and facilities, and newnew equipment and facilities, and new
performance/reward measures and management
systems that are consistent with the change.
• Prepare people for future changes and assure
them that they have the capacity to address and
solve future threats.
* Adapted from “Managing Change”, Jeff and Linda Russell, 1998
Ten Governing Assumptions about
Organizational Change
1. Change is inevitable; growth is optional.
2. Change is difficult because it moves people out of their comfort zones.
3. People don’t resist change as much as they resist being changed.
4. Resistance to change occurs for a reason.
5. People respond to change differently based on the personalities,
histories, personal visions, or perceptions of the surrounding
5. People respond to change differently based on the personalities,
histories, personal visions, or perceptions of the surrounding
environment.
6. You can’t change people; only they can make the choice to change.
7. The complexity and size of change matters.
8. You can never communicate too much during a difficult and complex
change.
9. Resilience is important.
10. Leaders don’t control change; they guide, shape, and influence it.
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Leading change

  • 2. “God will not change people’s fate if they do not“God will not change people’s fate if they do not change it themselves”change it themselves” (Al(Al--Qur’an, ArQur’an, Ar--Ra’d: 11)Ra’d: 11)
  • 3. LeadershipLeadership There is probably no topic more important to business success today than leadership leadership occurs among people involves the use of influence is used to attain goals Different leaders behave in different ways – style, need, situation
  • 4.
  • 5. Nature of Leadership • The ability to influence people toward the attainment of organizational goals. • Leadership is reciprocal, occurring among people.• Leadership is reciprocal, occurring among people. • Leadership is a “people” activity, distinct from administrative paper shuffling or problem-solving activities. • Leadership is dynamic and involves the use of power.
  • 6. What are the challenges of leadership, Change and innovation?  Strategic leadership creates the capacity for ongoing strategic change.  Components of strategic leadership: – Determining the organization’s purpose or vision. – Exploiting and maintaining the organization’s core– Exploiting and maintaining the organization’s core competencies. – Developing the organization’s human capital. – Sustaining an effective organizational culture. – Emphasizing and displaying ethical practices. – Establishing balanced organizational controls.
  • 7. Sustainable competitive advantage relies on creativity and innovation. Creativity is the generation of a novel idea or What are the challenges of leadership, Change and innovation? Creativity is the generation of a novel idea or unique approach to solving problems or crafting opportunities. Innovation is the process of creating new ideas and putting them into practice.
  • 8. Leadership responsibilities for the innovation process: – Imagining. – Designing. What are the challenges of leadership, Change and innovation? – Designing. – Experimenting. – Assessing. – Scaling.
  • 9.  In highly innovative organizations … – Corporate strategy and culture should: • Emphasize an entrepreneurial spirit. • Expect innovation. • Accept failure. What are the challenges of leadership, Change and innovation? • Accept failure. • Be willing to take risks. – Organization structure should: • Be organic. • Have lateral communications. • Use cross-functional teams and task forces.
  • 10. Building an Organization 1. Education and leadership development is the effort to familiarize future leaders with the skills important to the company and to develop exceptional leaders among the managers you employamong the managers you employ 2. Perseverance is the capacity to see a commitment through to completion long after most people would have stopped trying 3. Principles are your fundamental personal standards that guide your sense of honesty, integrity, and ethical behavior
  • 11. The Components of Organizational Alignment Vision Capabilities • Technical Culture • Norms Structure • Span of control • Team composition • Hierarchy Systems • Accounting • HR • Technical • Leadership • Norms • Shared values • Sales • IT
  • 12. The Organization as an Iceberg Metaphor Prentice Hall, 2002
  • 13. Factors Used to Measure Organizational Performance Copyright Š 2005 South-Western. All rights reserved.
  • 14. Organizational Health • Indicators of organizational health from Matthew Miles: – Goal focus. – Communication adequacy. – Optimal power equalization. – Human resources utilization. Copyright Š Allyn & Bacon 2007 – Human resources utilization. – Cohesiveness. – Morale. – Innovativeness. – Autonomy. – Adaptation. – Problem-solving adequacy.
  • 15. Shaping Organizational CultureShaping Organizational Culture •• PassionPassion, in a leadership sense, is a, in a leadership sense, is a highly motivated sense ofhighly motivated sense of commitment to what you do and wantcommitment to what you do and want to doto do •• Leaders also use reward systems,Leaders also use reward systems, symbols, and structure among othersymbols, and structure among other means to shape the organization’smeans to shape the organization’smeans to shape the organization’smeans to shape the organization’s cultureculture •• Leaders look to managers they need toLeaders look to managers they need to execute strategy as another source ofexecute strategy as another source of leadership to accept risk and copeleadership to accept risk and cope with the complexity that change bringswith the complexity that change brings aboutabout
  • 16. Recruiting and Developing Talented Operational Leadership  New leaders will each be global managers, change agents, strategists, motivators, strategic decision makers, innovators, and collaborators if the business is to survive and prosper  Today’s need for fluid, learning Today’s need for fluid, learning organizations capable of rapid response, sharing, and cross-cultural synergy place incredible demands on young managers to bring important competencies to the organization
  • 17. “The Twentieth and Twenty-first Century OrganizationOrganization compared” Kotter, John P, Leading Change, pg.172
  • 18. Structure Twentieth Century • Bureaucratic • Multileveled • Organized with the expectation Twenty-First Century • Nonbureaucratic, with fewer rules and employees • Limited to fewer levels • Organized with the expectation• Organized with the expectation that senior management will manage • Characterized by policies that create many complicated internal interdependencies • Organized with the expectation that management will lead, lower-level employees will manage • Characterized by policies and procedures that produce the minimal internal interdependence needed to serve customers
  • 19. Systems Twentieth Century • Depend on few performance information systems • Distribute performance data to Twenty-First Century • Depend on many performance information systems, providing data on customers especially • Distribute performance data• Distribute performance data to executives only • Offer management training and support systems to senior people only • Distribute performance data widely • Offer management training and support systems to many people
  • 20. Culture Twentieth Century • Inwardly focused • Centralized • Slow to make decisions Twenty-First Century • Externally oriented • Empowering • Quick to make decisions• Slow to make decisions • Political • Risk averse • Quick to make decisions • Open and Candid • More risk tolerant
  • 21. Managers vs. Leaders Covey, Stephen R., The 7 Habits of Highly Effective People, pg.101 Kotter, John P., Leading Change, pg.165
  • 22. Leadership versus Management Management PromotesPromotes stability, orderstability, order and problemand problem Leadership Promotes vision,Promotes vision, creativity, andcreativity, and changechangeand problemand problem solving withinsolving within existingexisting organizationalorganizational structure andstructure and systemssystems changechange MM LL Takes care of where you areTakes care of where you are Takes you to a new placeTakes you to a new place
  • 23. Managers vs. Leaders • Managers know how to plan, budget, organize, staff, control, and problem solve • Managers deal mostly with the status quo • Management is a bottom • Leaders create and communicate visions and strategies • Leaders deal mostly with change• Management is a bottom line focus: How can I best accomplish certain things? • Management is doing things right Leaders deal mostly with change • Leadership deals with the top line: What are the things I want to accomplish? • Leadership is doing the right things
  • 24. Management and Leadership Compared Source: Kotter, J. P. (1990). A Force for Change: How Leadership Differs from Management. New York: Free Press; Kotter, J. P. (1996). Leading Change. Boston: Harvard Business School Press.
  • 25. Leader vs. Manager Qualities Manager QualitiesLeader Qualities SOUL Visionary Passionate Creative MIND Rational Consulting Persistent Source: Genevieve Capowski, “Anatomy of a Leader: Where Are the Leaders of Tomorrow?” Management Review, March 1994, 12 Creative Flexible Inspiring Innovative Courageous Imaginative Experimental Initiates change Personal power Persistent Problem solving Tough-minded Analytical Structured Deliberate Authoritative Stabilizing Position power
  • 26.
  • 27. Management Processes and Levels of Management
  • 28. TraitsTraits • Traits - early efforts to understand leadership success focused on Traits = personal characteristicsTraits = personal characteristics leadership success focused on leader’s personal characteristics • Great man approach - early research focused on leaders who had achieved a level of greatness – Find out what made them great – Find people with same traits
  • 29. Personal Characteristics of Leaders Physical Characteristics Energy Physical stamina Social Background Education Personality Self-confidence Honesty & integrity Enthusiasm Desire to lead Independence Social Characteristics Sociability, interpersonal skills Cooperativeness Ability to enlist cooperation Tact, diplomacy Education Mobility Intelligence and Ability Judgment, decisiveness Knowledge Intelligence, cognitive ability Work-related Characteristics Achievement drive Drive to excel Conscientiousness in pursuit of goals Persistence against obstacles, tenacity Source: Adapted from Bernard M. Bass, Stogdill’s Handbook of Leadership, rev. Ed. (New York: Free Press, 1981), 75-76. This adaptation appeared in R. Albanese and D. D. Van Fleet, Organizational Behavior: A managerial Viewpoint (Hinsdale, III.: The Dryden Press, 1983).
  • 30. In highly innovative organizations … – Top management should: • Understand the innovation process. • Be tolerant of criticism and differences of opinion. • Take all possible steps to keep goals clear. • Maintain the pressure to succeed. • Break down barriers to innovation.Break down barriers to innovation. – Staffing should fulfill five critical innovation roles: • Idea generators. • Information gatekeepers. • Product champions. • Project managers. • Innovation leaders.
  • 31.
  • 32.
  • 33. Change Change is the disruption of the status quo • A break in the continuities that represent the steady stream of our lives. Change often makes forChange often makes for interesting times… • It may seem positive if you’re leading the change. • It may seem negative if you’re on the receiving end of it.
  • 34. The Types of Change Anticipated Changes • Changes that are planned ahead of time and occur as intended according to a plan. Emergent Changes • Changes that arise spontaneously from local innovation • Changes that arise spontaneously from local innovation and that are not originally anticipated or intended. Opportunity-Based Changes • Changes that are not anticipated ahead of time, but are introduced during the change process in response to an unexpected opportunity, event, or breakdown.
  • 35. Beer’s Model of Organizational Change C = D x M x P > R D = followers’ dissatisfaction M = model for change P = process R = resistance C = amount of change
  • 36. The Rational Approach To Organization Change and the Interactional Framework Leader • Environmental scans • Vision • Goals • Change plan • Systems vs. siloed thinking • Leadership and management capabilities Followers Situation • Crisis • Consumer preferences • Market conditions • Societal shifts • Political and legal challenges • Competitive • Organizational structure • Organizational systems • Organization culture • Dissatisfaction • resistance • SARA model • Loss of: – Power – Competence – Identity – Rewards – Relationships • Technical/functional capabilities
  • 37. The Expectation-Performance Gap Actual Change initiative implemented Expectations Actual performance Time Status quo Gap
  • 38. The Four Levels of Every Organization Infrastructure (management systems, Physical (processes, tools, and structures) Abilitytoinfluenceorchange Durabilityofthechange Easiest Short term Š1997, Russell Consulting, Inc. Used with permission. Cultural (values, beliefs, and norms) Behavioral (what groups and individuals do) (management systems, measurements, and rewards) Most difficult Long term Abilitytoinfluenceorchange Durabilityofthechange
  • 39. Common Losses with Change Loss of: Possible Leader Actions Power Demonstrate empathy, good listening skills, and new ways to build power. Competence Coaching, mentoring, training, peer coaching, job aids, and so forth.aids, and so forth. Relationships Help employees build new relationships before change occurs, or soon thereafter. Rewards Design and implement new reward system to support change initiative. Identity Demonstrate empathy; emphasize value of new roles. M. Beer, Leading Change (Boston: Harvard Business School Press, 1988).
  • 40. What is the nature of organizational change?  Change leader. – A change agent who takes leadership responsibility for changing the existing pattern of behavior of another person or changing the existing pattern of behavior of another person or social system. Change leadership. – Forward-looking. – Proactive. – Embraces new ideas.
  • 41. Change leaders vs. status quo managers
  • 42. – Fear of the unknown – Disrupted habits – Loss of confidence – Loss of control Reasons for people resisting change – Loss of control – Poor timing – Work overload – Loss of face – Lack of purpose
  • 43. The Journey Through Change Stability 1. Comfort and Control Looking Back Looking Forward Chaos 3. Inquiry, Experimentation, and Discovery 2. Fear, Anger, and Resistance Leading Change Training, Jeff and Linda Russell, 2003
  • 44. What People Often Feel 1. I’m safe I’m in control I’m satisfied I’m doing fine1. Comfort and Control I’m doing fine I’m being recognized I’m working hard….. Hey, everything’s cool * Adapted from Leading Change Training, Jeff and Linda Russell, 2003
  • 45. What People Often Feel I’m anxious I’m not in control I’m angry and upset I’m worried about ….. 2. Fear, Anger, I’m worried about ….. I’m not appreciated I’m frustrated Hey, everything’s in chaos and Resistance * Adapted from Leading Change Training, Jeff and Linda Russell, 2003
  • 46. What People Often Feel I’m challenged I’m hopeful I’m dizzy from all the …. I’m encouraged 3. Inquiry, Experimentation, and Discovery I’m encouraged I’m searching for ….. I’m excited Hey, progress is being made…. and Discovery * Adapted from Leading Change Training, Jeff and Linda Russell, 2003
  • 47. What People Often Feel I’m feeling better I’m relieved I’m encouraged I’m confident4. I’m confident I’m satisfied I’m energized again Hey, we made it! 4. Learning, Acceptance, and Commitment * Adapted from Leading Change Training, Jeff and Linda Russell, 2003
  • 48. Reactions To Change Anger Rejection Time Shock Acceptance Top leaders Middle managers Individual contributors
  • 49. Methods for dealing with resistance to change – Education and communication – Participation and involvement – Facilitation and support – Facilitation and agreement – Manipulation and co-optation – Explicit and implicit coercion
  • 50. What is the nature of organizational change?  Top-down change. – Strategic and comprehensive change that is initiated with the goals of comprehensive impact on the organizationimpact on the organization and its performance capabilities. – Driven by the organization’s top leadership. – Success depends on support of middle-level and lower- level workers.
  • 51. What is the nature of organizational change? Bottom-up change. – The initiatives for change come from any and all parts of the organization, not just top management. – Crucial for organizational innovation.– Crucial for organizational innovation. – Made possible by: • Employee empowerment. • Employee involvement. • Employee participation.
  • 52. What is the nature of organizational change?  Integrated change leadership. – Successful and enduring change combines advantages of top-down and bottom-up approaches. – Top-down: • Breaks up traditional patterns. • Implements difficult economic adjustments. – Bottom-up: • Builds capability for sustainable change. • Builds capability for organizational learning.
  • 53. What is the nature of organizational change?  Transformational and incremental change. – Unplanned change. • Response to unanticipated events. • Good leaders act on opportunities for reactive change.reactive change. – Planned change • Aligning the organization with anticipated future challenges. • Activated by proactive leaders who are sensitive to performance gaps. • Transformational change  major and comprehensive redirection. • Incremental change  adjusting existing systems and practices.
  • 54. Organizational targets for change: – Tasks – People – Culture – Technology – Structure
  • 55. A Leaders’ Vision Of the Future Can Align Efforts and Help Groups Accomplish More Groups that lack vision Groups with vision
  • 56. Lewin’s three phases of planned organizational change.
  • 57. The Change ProcessThe Change Process First work on changing how people think about their job  EDUCATION The Five On-Going Elements of a Change Process New structure Change of Thought Change of BehaviorChange of Destiny Reshape the organization through people Change Process Drive Cultural Change Change of HabitsChange of Personality Sustain and Stabilize Changes
  • 58. Alternative change strategies and their leadership implications.
  • 59. Fiedler’s Classification of Situation Favorableness Leaders needs to know Whether they have a relationship- or task-oriented style Should diagnose the situation and determine the favorableness of Source: Fred E. Fiedler, “The Effects of Leadership Training and Experience: A Contingency Model Interpretation,” Administrative Science Quarterly 17 (1972), 455. Reprinted by permission of Administrative Science Quarterly. Should diagnose the situation and determine the favorableness of the following three areas
  • 60. Path-Goal Situations & Preferred Leader Behavior Source: Adapted from Gary A. Yukl, Leadership in Organizations (Englewood Cliffs, N.J.: Prentice-Hall, 1981), 146-152.
  • 61. Leading Organizational Change • Steps in the Change Process: – Step 1: Establish a sense of urgency. – Step 2: Create the guiding coalition. – Step 3: Develop a vision and a strategy. Copyright Š 2005 South-Western. All rights reserved. – Step 3: Develop a vision and a strategy. – Step 4: Communicate the change vision. – Step 5: Empower broad-based action. – Step 6: Generate short-term wins. – Step 7: Consolidate gains and produce more change. – Step 8: Anchor new approaches in the culture.
  • 62. Leading Change Transactional Leaders  Clarify the role and task requirements ofrequirements of subordinates  Initiate structure  Provide appropriate rewards  Display consideration for subordinates  Meet the social needs of subordinates
  • 63. Leading Change Charismatic Leaders  The ability to inspire  Motivate people to do more than they would normally dowould normally do  Tend to be less predictable than transactional leaders  Create an atmosphere of change  May be obsessed by visionary ideas
  • 64. Leading Change • Transformational Leader  Similar to charismatic leaders  Distinguished by their special ability to bring about innovation and change by Recognizing followers’ needs and concerns Helping them look at old problems in new ways Encouraging them to question the status quo
  • 65. Sources of Power  Legitimate Power: power coming from a formal management position.  Reward Power: stems from the authority to bestow rewards on other people.rewards on other people.  Coercive Power: the authority to punish or recommend punishment.  Expert Power: leader’s special knowledge or skill regarding the tasks performed by followers.  Referent Power: personality characteristics that command subordinates’ identification, respect, and admiration so they wish to emulate the leader
  • 66. What are Your TasksWhat are Your Tasks…… asas a Change Leadera Change Leader?? Stability Comfort and Control Learning, Acceptance, and Commitment Create a Felt Need for Change Stabilize and Sustain the Change 4 Looking Back Looking Forward Chaos Inquiry, Experimentation, and Discovery Fear, Anger, and Resistance Leader Actions for Change and Sustain the Change Revise and Finalize the Change Plan Introduce the Change 3 2 1 From Leading Change Training, Jeff and Linda Russell, 2003
  • 67. Leader’s Actions Phase 1: Comfort and Control Create a Felt Need for Change From Leading Change Training, Jeff and Linda Russell, 2003
  • 68. The Role of Change Leaders • It is leadership’s job to define and articulate a vision for the organization and the need fororganization and the need for change....... “Implementing organizational change requires a compelling reason for change. Unless people see the need for change, it will just not happen.” -John Pepper (Former CEO) Proctor and Gamble
  • 69. Characteristics of an Effective Change Vision • Confronts and addresses a current or future threat • Describes a vivid picture of a positive end result • Focused on changes and outcomes that the process owners care about, and can see, feel, and affect.and affect. • Provides a method for evaluating staff actions supporting the change • Links closely with the broader organizational vision * Adapted from “Managing Change”, Jeff and Linda Russell, 1998
  • 70. Leader’s Actions Phase 1: Comfort and Control • Acknowledge people’s past efforts and success. • Get people’s attention! • Immerse people in information about the change . . . customer complaints, • the change . . . customer complaints, budget data, increasing costs, competitive pressures. • Let people know it will happen — one way or another! • Give people time to let the ideas sink in. • Don’t sell the solutions . . . sell the problem! * From Leading Change Training, Jeff and Linda Russell, 2003
  • 71. Leader’s Actions Phase 1: Comfort and Control • Create and communicate a sense of urgency, and risks of not changing. • Create the fear of not changing, and sell that the change is necessary, achievable, and beneficial. • Communicate what will not change, and always be honest and • Communicate what will not change, and always be honest and consistent. • Tell the story as early as possible, tell the whole story as your know it to be, and tell it in as personal a way as possible  try to ensure everyone hears and understands the “same story”. • The degree of “change readiness” is often inversely proportional to the closeness of the crisis.
  • 72. Leader’s Actions Phase 2: Fear, Anger, and Resistance Introduce the Change KAI – to break apart or disassemble KAI – to break apart or disassemble ZEN – to feverishly improve Must do the Kai first!
  • 73. Leader’s Actions Phase 2:Fear, Anger, and Resistance • Communicate to co-create the vision. • Listen carefully to what people are saying. • Acknowledge people’s feelings (pain, perceived losses, anger, excitement, etc.) • Strive to address their perceived losses. losses, anger, excitement, etc.) • Strive to address their perceived losses. • Tell people what you know — and what you don’t know. • Don’t try to talk people out of their feelings. • Discuss ways to solve the problems that people see with the change. • Encourage discussion, dissent, disagreement, debate . . . keep people talking. From Leading Change Training, Jeff and Linda Russell, 2003
  • 74. Leader’s Actions Phase 2:Fear, Anger, and Resistance • Create a coalition of influential upper level managers and stakeholders to guide and support the efforts promoted by the change leader. • Select the right coalition members with credibility, proven leadership abilities,credibility, proven leadership abilities, expertise in needed areas, and the power and prestige necessary to make things happen  avoid people who lack in enthusiasm, integrity, and trust worthiness. • Trust among the members is critical. • Recognize that large scale change needs to be led from the top and supported/accomplished from the bottom.
  • 75. The Role of Change LeadersThe Role of Change Leaders The key prerequisite to successfully implementing change is Gaining employees’ acceptance and overcoming their resistance and fears to change. Must address people’s fears – not ignore them
  • 76. Leader’s Actions Phase 3: Inquiry, Experimentation, and Discovery • Affirm Why change is necessary and How it will work…. • Involve influential and resilient people in creating the solution (strategies and tactics) to accomplish the vision.and tactics) to accomplish the vision. • Emphasize the Win-Win aspects of the change to address the threats. • Create and follow a simple, yet detailed change implementation plan.  A change plan gives time for reflection and re-thinking of the options.
  • 77. Components of a Change Plan 1. Create a leading change design team. 2. Document the case for change. 3. Develop a preliminary vision for the change. 4. Define the impacts on those affected by the change. 5. Create your preliminary strategy and action plan.5. Create your preliminary strategy and action plan. 6. Identify measures of success. 7. Develop your communication strategy. 8. Develop your training strategy. * From Leading Change Training, Jeff and Linda Russell, 2003
  • 78. Leader’s Actions Phase 4: Learning Acceptance, and Commitment Leader’s Actions Phase 4: Learning Acceptance, and Commitment Stabilize and Maintain the Change * From Leading Change Training, Jeff and Linda Russell, 2003
  • 79. Leader’s Actions Phase 4: Learning Acceptance, and Commitment • Acknowledge people’s hard work. • Celebrate successes and accomplishments. • Reaffirm the vision. • Bring people together toward the vision. • Acknowledge what people have left behind. • • Acknowledge what people have left behind. • Develop long-term goals and plans. • Provide tools and training to reinforce new behaviors. • Reinforce and reward the new behaviors. • Create systems and structures that reinforce new behaviors. • Prepare people for the next change. * From Leading Change Training, Jeff and Linda Russell, 2003
  • 80. Stabilizing and Sustaining the Change * • Establish staff commitment to the new direction by reinforcing new behaviors and beliefs. • Invest in the change through new skills training, new equipment and facilities, and newnew equipment and facilities, and new performance/reward measures and management systems that are consistent with the change. • Prepare people for future changes and assure them that they have the capacity to address and solve future threats. * Adapted from “Managing Change”, Jeff and Linda Russell, 1998
  • 81. Ten Governing Assumptions about Organizational Change 1. Change is inevitable; growth is optional. 2. Change is difficult because it moves people out of their comfort zones. 3. People don’t resist change as much as they resist being changed. 4. Resistance to change occurs for a reason. 5. People respond to change differently based on the personalities, histories, personal visions, or perceptions of the surrounding 5. People respond to change differently based on the personalities, histories, personal visions, or perceptions of the surrounding environment. 6. You can’t change people; only they can make the choice to change. 7. The complexity and size of change matters. 8. You can never communicate too much during a difficult and complex change. 9. Resilience is important. 10. Leaders don’t control change; they guide, shape, and influence it.
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