1 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. MANAGING CHANGES
2 2 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Exit Rules
3 3 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Learning methods
4 4 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Course objectives Describe the nature of change Explain the role of managers in planning and implementing change Explain how to plan for a change project Explain how to run a persuasion campaign to implement a change project successfully Practice skills and techniques that are essential in the implementation process.
5 5 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Course content Session 1 – Change and the role of managers Session 2 – Planning for change Session 3 – Implementing change successfully
6 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 1 - Change and the roles of managers
7 7 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 1 - Objectives Describe the nature of change in an organization Explain the reasons behind resistance to change Explain the concept of change management Determine the role managers should play in a change project.
8 8 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 1 - Content The nature of change The role of managers in the change management process
9 9 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. 'There is only one constant in this universe, and that constant is… change.' Attributes of change Change is inevitable Change is complex Change is often opposed by people
10 10 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. External Factors Internal Factors Bottleneck in production Improvement in productivity or effectiveness Creation of a competitive advantage Threat Political Economic Social Technological Environmental Legal Change is inevitable
11 11 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Business process Company culture Interaction Political Company structure CHANGES Change is complex
12 12 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. What is change management Change management is how to deal with resistance to change Change management is how to initiate change continuously and incorporate that change into a managed corporate environment Which definition sounds right to you?
13 13 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. A successful change needs both The role of managers LEADER Inspires Motivates Directs Communicates Inspirational MANAGER Plans Organizes Monitors and evaluates Improves Practical
14 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 2 - Planning for change
15 15 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 2 - Objectives Explain 6 steps of planning for changes
16 16 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 2 - Content The 6-step model in the change planning process Activities in each step of the process
17 17 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Six steps of planning Define the change direction Analyze for change Identify change objectives PLANNING Plan tasks Readiness assessment Implemen- -tation
18 18 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Define the change direction Analyze for change Identify change objectives PLANNING Plan tasks Readiness assessment Implemen- -tation Six steps of planning
19 19 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Step 1 - define the direction of change Why do we need to define the change? To provide direction To understand why the change is needed To inspire people to support the change How do we do it? External factors: changes in the environment that create opportunities Internal factors: force change in a reactive way People: What excites and inspires them? Outcome Vision for change
20 20 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Vision of change Should have most, if not all, of the following characteristics: Be grounded on business knowledge Be concrete and specific Have a clear destination Present a clear contrast between current conditions and the preferred future Be focused on the medium to long-term 'Stretch' people Tie in with the needs and desires of others Provide a sense of significance
21 21 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Define the change direction Analyze for change Identify change objectives PLANNING Plan tasks Readiness assessment Implemen- -tation VISION OF CHANGE Six steps of planning
22 22 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Step 2 - Analyzing for the change Why do we need to analyze? To know what we have to change To understand the impact of the change To ensure that the envisioned change does not exceed the company’s capacity for change What needs to be analyzed? Company’s current capacity for change Company climate Stakeholders’ expectations Corporate culture and the impact of the change on the culture Risks
23 23 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Amount of change Capacity for change Analyzing a company’s capacity for change Key staff’s skills (technical and non-technical) Staff’s abilities to adapt to the new model Business system structure and procedures Managers’ degree of autonomy to make the changes required Resources Work procedures Budget OUTCOME: What do we have to change? Amount of change
24 24 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Company’s current climate How are individuals able to cope with change? How was change managed in the past? Is the staff under pressure? Will the pace of change be too fast for the staff? OUTCOME: Is it the right time to introduce the change plan?
25 25 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Internal External MD Department head Workers Chairman BoM Customers Finance department Shareholders Level of impact High Low Scope of impact Stakeholders’ expectations Why do their expectations matter? Who are they? What are their expectations? What are their concerns? OUTCOME: Stakeholders’ expectations matrix. Change plan included in stakeholders’ expectations.
26 26 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Assessing the corporate culture What is corporate culture? Why do we need to understand corporate culture? To understand how the change will impact corporate culture as well as peoples’ behaviors, habits, and ways of thinking To be able to convince people of the need for change How to assess corporate culture See the following slide
27 27 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. FORMAL ORGANIZATION Policies & procedures Organizational chart Job descriptions Pay and benefits INFORMAL ORGANIZATION Cultural norms Unwritten rules Relationships Values Informal leaders Behavior Understanding corporate culture
28 28 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Department head Provide necessary training Offer incentives to encourage Communicate with customers about the new structure Ensure a clear structure and set of procedures MMHMMH Key staff leave Staff do not follow new procedures Customers confused about who to contact ResponsibilityMitigating actionProbabilityKey risks Restructure the ‘customer service center’ Risk analysis
29 29 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Define the change direction Analyze for change Identify change objectives PLANNING Plan tasks Readiness assessment Implemen- -tation CAPACITY FOR CHANGE VISION OF CHANGE Six steps of planning
30 30 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Specific Measurable Achievable Result-oriented Time bound Clear and specific targets to achieve Yardsticks to measure performance Motivation is inventive and focused Coasting and complacency prevented Step 3 – Identify change objectives
31 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. End of Day 1 Review, questions and answers
32 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Managing Changes Day 2
33 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved.
34 34 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Define the change direction Analyse for change Identify change objectives PLANNING Plan tasks Readiness assessment Implemen- -tation CAPACITY FOR CHANGE VISION OF CHANGE PROJECT’S OBJECTIVES Six steps of planning
35 35 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Step 4 – Planning tasks Determine the scope of the change project Establish a timescale and budget Identify the project’s sponsors Identify change agents Schedule the tasks Build an infrastructure to support the change Establish a communication plan
36 36 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. IN OUT Determine the scope of change What is the scope of the change? Includes the work the project will deliver Why do we need to determine the scope of the change? To make clear the deliverables that capture the stakeholders’ expectations To ensure accurate estimates How to determine the scope of the change? Stakeholders’ expectations Timescale and budget Resources available
37 37 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Establish a timescale and budget What is the proposed timescale? Is it reasonable? Is it feasible? What is the budget needed for the project? Costs include development costs and operational costs. Do you have any financial constraints? Solutions?
38 38 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Identify a project’s sponsors Why sponsors are important for projects? Driving force behind the change Ensure required support when needed Create and reinforce commitment Who can be the sponsors? People who have persuasive power over the workforce People who are dedicated to the success of the project What they should do for the project? Communicate Create and reinforce buy-in and commitment
39 39 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Identify change agents Who are the change agents? Individuals at a team level who are respected by the workforce Those who have the power to influence their colleagues Why change agents are needed? To help sponsors/leader in communicating with staff about the change To provide staff’s feedback and concerns to leaders/sponsors How to ensure that change agents are effective? Provide training, coaching, and support Establish and maintain regular communication
40 40 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Scheduling the tasks Steps to follow: Breakdown of main tasks into subtasks Determine start and finish dates for each task Determine milestones/checkpoints for each task Identify resources needed for each task/subtask Establish the critical path for the project Do not forget: Dependencies Contingencies
41 41 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Critical path diagrams What is a critical path? The sequence of activities that must be completed on schedule for the entire project to be completed on schedule It is a useful tool for estimating precisely: (i) the time each individual task will take; (ii) the time needed for a project to be completed; and (iii) the relationships between tasks How to draw the critical path? Break main task into subtasks Calculate the time each task will take Organise the subtasks in the order required for the project to be complete (given the resource level available and the dependencies)
42 42 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Gantt charts The results of the critical path analysis are most commonly presented via a Gantt chart A Gantt chart is a bar chart that shows multiple, time-based activities It is an effective tool to communicate with stakeholders
43 43 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Ensure effective infrastructure to support the change Procedures should be redesigned to serve the new system Organizational structure should be designed to fit future needs Competencies for the new organization should be identified New set of values and behaviour should be conveyed to staff through training Performance management and reward systems should be redesigned to fit the new business structure Adequate IT system is needed to support the change
44 44 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. PurposesHowKey messageAudience When Launch event Presentation Why restructuring the customer service department is needed? All staff 1st January 2005 Provide information Use of change agents Sales staff & customer service department staff 31st December 2004 Create/ Reinforce commitment Seminar Benefits of the change All staff January to February 2005 New workflow in the customer service department Establish a communication plan
45 45 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Define the change direction Analyse for change Identify change objectives PLANNING Plan tasks Readiness assessment Implemen- -tation CAPACITY FOR CHANGE VISION OF CHANGE PROJECT’S OBJECTIVES DETAILED WORKPLAN Six steps of planning
46 46 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Readiness assessment Why? To ensure that all key players are well prepared for the change To know the riskiest factors to focus on before embarking on the change What to assess? Awareness Acceptance Ownership Commitment
47 47 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Examples of assessing readiness tools
48 48 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Define the change direction Analyze for change Identify change objectives PLANNING Plan tasks Readiness assessment Implemen- -tation CAPACITY FOR CHANGE VISIONCHANGE OBJECTIVES DETAILED WORKPLAN CHECKLIST BEFORE START Six steps of planning
49 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 3 - Implementing change successfully
50 50 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 3 - Objectives Explain how to run a persuasion campaign Share different persuasion techniques and practice them Examine strategies to effectively deal with resistance Demonstrate how to monitor and evaluate a change project List out critical success factors for a change project
51 51 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Session 3 - Content Persuasion campaign Persuasion skills and practise Resistance and strategies to deal with resistance Monitoring and improvement Critical success factors
52 52 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Persuasion campaigns
53 53 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. PHASE 1 Announcing the change PHASE 2 Creating the frame PHASE 3 Managing the mood PHASE 4 Reinforcing good habits Four phases of persuasion campaign
54 54 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Phase 1 – Announcing the change Goals To ensure that staff seriously listen to tough messages, question old assumptions, and consider new ways of working. How to announce the change effectively? Break past habits and old ways of thinking and doing things. Introduce the vision for the change. Use a moral purpose.
55 55 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Phase 2 – Creating the frame Purposes To ensure that staff understands and interprets the proposal for change in a consistent way in order to gain acceptance and favorable outcomes What does the frame consist of? Company-wide presentations Public media (example includes a press interview with the CEO) Internal communication channels (examples include news releases, emails, announcements, Q&A sessions, and FAQ on bulletins or intranet) Change agents Special assistance unit Suggestion box
56 56 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Phase 3 – Managing the mood Goals To preserve a receptive climate for change To minimize disruptions in performance due to peoples’ natural reaction to change What should be done? Acknowledge employees’ feelings and efforts Help employees look towards the future (use positive and encouraging messages; maintain a balance between good and bad news) Encourage and keep employees who focus on the continuing hard work ahead (use of incentives and rewards) How to do that? Use all communication channels of the 'frame‘ Hold an 'away day' or outdoor activities Use of motivating incentives and rewards (spot awards) Celebrate achievements
57 57 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Phase 4 – Reinforcing good habits Goals To avoid backsliding into dysfunctional routines and negative behaviors. To help employees maintain new behavior and practice new habits. What should be done? Reinforce the vision of the change and the new (desired) organizational values on a constant basis. Use formal and informal communication Set examples through day-to-day behavior Set examples through business decision and actions Encourage, reward, and punish
58 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Resistance and strategies
59 59 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. People do not resist change – they resist being changed Why change encounters resistance? 1.Lack of conviction that change is needed 2.Dislike of imposed change 3.Dislike of surprise 4.Fear of the unknown 5.Reluctance to deal with unpopular issues 6.Fear of inadequacy and failure 7.Disturbed practices, habits, and relations 8.Lack of respect for the people who initiate and lead the change
60 60 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Active Emotional response Passive Time Anger Bargaining Acceptance Exploring Depression Denial Immobilization This model is an adaptation of Elizabeth Kubler-Ross’s clinical work with terminally ill patients. Human reaction to change
61 61 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Minimise negative reactions Emotional stageStrategies Denial Avoid confrontation Strengthen relationships One step at a time approach Anger Do not take it personally Encourage open dialogue Bargaining Negotiate Stand ground Discuss rationales Depression Provide support and training Increase two way communication Encourage responsibility Exploration Acknowledge progress Build confidence Encourage further efforts Acceptance Recognize and reward Identify learning points
62 62 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Strategies to manage resistance Education and communication Educate people about change Participation Brainstorm ideas for creation and improvement Discuss views on the issues to address Support Training and/or coaching Counseling Discussion Negotiation Win-win solutions Find a benefit for everyone Co-opting Provide a desirable role for everyone
63 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Persuasion Skills
64 64 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Aggressive UnfriendlyApathetic Ignorant Sympathetic Supportive Indecisive Different types of people
65 65 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Monitoring and evaluating Purposes of monitoring and evaluating To ensure the project implementation is on the right track To make improvements and changes to the plan To communicate achievements to stakeholders What need to be monitored? Monitor the project’s progress (check against the Gantt chart and milestones) Monitor business performance (business results and objectives) Monitor employee morale
66 66 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Factors of success Involve people at all levels in the change effort in a way that suits them Coach the sponsors to be effective Measure progress and communicate with stakeholders Perform periodic assessments Keep the change plan flexible
67 67 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Applying the model of planning and implementing change This model helps managers to: make plans for new changes; or successfully lead and control a change project Attention: Communication skills are always the most important factor in successful change management
68 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Review of Day 2 Questions And Answers
69 69 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Review of achievement 1.Describe the nature of change 2.Explain the role of managers in planning and implementing change 3.Explain how to plan for a change project 4.Explain how to run a persuasion campaign to implement a change project successfully 5.Practice skills and techniques that are essential in the implementation process
70 70 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Materials for reference Caciope, Don. (1997). Implementing Successful Change. Journal of Management. George, Jr., C. S. & Kris Cole. (1992). Supervision in Action. Australia : Prentice Hall. Rye, Colin. (1996). Change Management Action Kit. UK : Kogan Page. Edmonds, Jane (2003). Managing Changes. Oxford, England: Butterworth-Heinemann. Adapted under licence by IFC Business Edge™ Institute of Leadership & Management (2003). Understanding Changes. Fourth Edition. UK: Pergamon Flexible Learning.
71 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Evaluation and end of course
72 72 We Complete Your Success Copyright © IFC on behalf of Business Edge™ 2008. All rights reserved. Contact details PEP-MENA, IFC, World Bank Group Nile City Towers - North Tower, Cornish El Nil 2005 C, 25th Floor, Ramlet Boulac, Cairo, Egypt WWW.ifc.org www.businessedge-me.com Tel : +(202) 24619140/50 Fax : +(202) 24619130/60