Change Leadership. Main Theoretical Approaches

Table of Contents

List of Abbreviations

List of Figures

List of Tables

1. Problem Statement

2. The Definition of Change

3. Challenges and general Conditions of Change

4. The leadership of Change
4.1. Change Management vs. Change Leadership
4.2. Dimensions
4.3. Models (elements of effective leadership)

5. Strategic Approaches

6. Conclusion

Bibliography

List of Abbreviations

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List of Figures

Figure 1: The management/leadership matrix (Kotter, John P., Cohen, D., 2014, p. 50)

Figure 2: Dimensions of change, in-house publication ERICSSON (Graetz, F., 2000, Appendix V, Figure A2)

List of Tables

Table 1: Types of Change (Luecke, R., 2013, pp. 8-9)

Table 2: Management tasks versus leadership tasks

Table 3: Keys to successful change

Table 4: Leadership Styles (LSI), (Reardon, Dr. Kathleen K., Reardon, Dr. Kevin J., Rowe, Dr. Alan J., 1998, p. 132)

Table 5: Senior Manager Leadership Styles for the Five Phases of Radical Change

Table 6: Steps to transform an organization (Kotter, John P., 2007)

1. Problem Statement

Some credible empirical findings conclude that we currently live in a fast paced world. Buzzwords like globalization, deregulation and innovation characterize this condition. Against a backdrop, the business world is exposed change and its challenges. Scholars argue that change is somewhat like an essential constant of the business world and for companies (Pechlaner, H., 2010, Foreword). Based on the profit-orientation of almost every corporation questions arise how it is the best way to recognize change betimes and to react pro-active and appropriately. Recent research and case studies therefore dealing with the issue of change and how it is managed for being adaptive and flexible in a macroeconomic environment (Ovadje, F., 2014, Introduction). While a numerous recommendations have been made on specific strategies and activities managers should use to implement, a lack of precise definitions or at least a common understanding of leadership or rather management in a changing environment still exists (Liu, Yi, 2010, Summary). The interpersonal dimension which becomes critical in an environment of change is often neglected. For this reason John Paul Kotter, a leading scientist and professor from the Harvard Business School, distinguishes management and leadership clearly in the context of change (Kotter, John P., 2013, p. 6). To provide more clarity in the meaning of change and leadership, the main theoretical approaches should be examined. The leadership theory provides distinct dimensions and requirements which are essential to handle change appropriate. These consequences are finally affecting the entire scope of strategy for steering missions and visions of every corporation. A conclusion finally should provide key findings and recommendations for leadership that can be successfully introduced and sustained for the requirements of change.

2. The Definition of Change

To analyze the meaning of management and leadership in context of change, it is appropriate to be aware of change, its definition and characterization. It is not about the change of everything. Change leadership and change management deals with "[...] the process of taking an organization (or a nation) on a journey from its current state to a desired future state and dealing with all the problems that arise along the journey [...]" (Gill, R., 2003, p. 307). The literature typically investigates and inspects the details of change regarding the business performance. Luecke (2003), for example, uses four categories to classify change in the context of corporations.

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Table 1: Types of Change (Luecke, R., 2013, pp. 8-9)

Luecke (2003) furthermore distinguishes two different approaches of change. His organizational capabilities approach is focused on the shareholder value. Here, the change is driven from the top of the organization and aims a dramatic and rapid increase of the shareholder value. This approach or theory relies heavily on cost cutting, downsizing, and asset sales to meet its objectives (Luecke, R., 2013, p. 15). The other approach is focused on a higher performance. This should be reached by fostering a powerful culture and capable employees. A high level of employee participation, flatter organizational structure, and attempts to build bonds between the enterprise and its employees are typical characteristics (Luecke, R., 2013, p. 15). Although his focus in clarifying the meaning of change is clear on corporations, some aspects can also be adopted in defining change in context of other organizations, such as authorities, associations or even society. Even though, the latter is more a scientific theme of social and political science.

3. Challenges and general Conditions of Change

To be more specific in clarifying the meaning of change for this research, the aforementioned theoretical approaches should be enhanced by explicit and tangible samples from everyday life. Kotter (2014) mentions that our world is moving into a territory with unpredictable turmoil and exponentially growing change (Kotter, John P., 2014, Preface). Groth (2011) even states this more precise by claiming that the technological progress runs exponentially and is largely influenced by growing computer performance, new dimensions of scientific research and even the demographic change. Megatrends such as globalization and connectivity, where more and more people have access to information and education shape our professional environment. Due to mergers and acquisitions almost every part of a company or corporation is affected by changes regarding workflows, attitudes and even motivation. For Groth (2011) the human factor is the most critical. In such a complex environment we are often not prepared for change. In addition, we behave almost always different than planned regarding change. Many managers are clamped as motionless between the upper and lower hierarchy level. The upper management wants to implement extensive changes and often has unrealistic expectations. On delay it responds often with incomprehension and increased pressure. In contrast, the employees see no reason to change or convert efficient processes (Groth, A., 2011, p. 8). If the manager is not even convinced about the change itself, he possibly feels torn. In such a situation, managers often experience massive resistance. Measures that are altogether or partly not understandable for employees and therefore experienced as imposed will generate such resistance. Groth (2011) even states that emotions such as fear, anger and sadness are not only present in unpleasant change. Even obvious winner of change show irrational resistance and often block the implementation. Another crucial factor is the lack of consciousness about the use of emotions. To manage difficult processes such as restructuring or even downsizing, managers need knowledge of how groups and individuals react emotionally during the change. And lastly, many executives feel strongly impacted by the additional transformation projects. The development of the last decade meant that managers today have to execute more in the same position and have more responsibility than it was previously the case. The 10 to 12-hour day is now used for most managers the rule, not the exception. Many are working on their own and the family limit. However, the economy and free market are not the only affected and influenced areas regarding a rapid development and change. Public Service Organizations for instance are increasingly affected by social, political and technological change. Tom Karp and Thomas I. T. Helgø state that "Economic crises, privatization, budget cuts, the continuing evolution of e-government and increasing scrutiny from citizens mean that the public services’ organizations have embraced change." (Karp, T., Helgø, Thomas I., T., 2008, Introduction). It remains to note that the already very demanding normal workflow is massively disrupted by the current change (Groth, A., 2011, p. 10).

4. The leadership of Change

For some scholars, "the most difficult challenge facing leaders today are making sure that people in the organization can adapt to change and that leaders can envisage where the organization is currently placed in the market and where it should be in the future." (Gill, R., 2003, p. 310). The importance of follower commitment to change has furthermore been highlighted extensively in the literature (Liu, Yi, 2010, ix, Higgs, M., Wren, J., 2005, Abstract). Nevertheless, managers are traditionally focused on the technical or operational dimension of management. However, a second interpersonal dimension becomes critical for being effective in an environment of change. John G. Bruhn (2004) even states that leading change is more art than science, which he underpins by the fact that every organization and leader is unique. Somewhat contrary to this is the more general assumption of the literature that change leadership is a capability that can be measured in an organization and can be improved over time. But before change leadership can be scaled it is necessary to clarify the difference between management and leadership in this context.

4.1. Change Management vs. Change Leadership

The literature of change management shows that change programs often fail because of poor management. Poor planning, monitoring and control, lack of resources and know-how, and incompatible corporate policies and practices are only a few examples how change management could be failed (Gill, R., 2003, p. 308). Human and political aspects of change are often not considered sufficient in this context. Philip Sadler, a widely recognized authority in the field of management studies states in his book about Leadership: "[...] we have observed dramatic transformations in British industry in recent times which appear to be more due to inspirational leadership than to good management as traditionally conceived. British Airways under Colin Marshall and ICI under John Harvey-Jones are oft-quoted examples." (Sadler, P., 2003, p. 2). From this point of view change, therefore, is primarily about leadership. Not least, because good management of change is a sine qua non (Gill, R., 2003, p. 308). If leadership matters for change, John P. Kotter can be recognized as the leading advocate for a consequent separation between management and leadership regarding change. From his point of view the definition of management in context of change is quite simple: "Management is about coping with complexity. Good management brings order and consistency to key dimensions like the quality and profitability of products. Management makes systems of people and technology work well." (Kotter, John P., 2013, p. 6). Following this definition leadership creates the systems that managers manage. For him it is about changing and mobilizing people and their organizations with creating enterprises in the first place (Kotter, John P., Cohen, D., 2014, p. 49). To be more specific Table 2 shows key tasks of leadership and management coping with change. Kotter (2014) argues furthermore that organizations that meet challenges of change need high competencies in management and leadership. Companies are unable to change when management exists without leadership and vice versa when leadership exists without management the corporation is only as strong as its charismatic leader. If leadership is something like a short supply in forming organizations, and management tends to reign supreme, organizations gradually transition to a complacent mentality. From his experience organizations today are over managed and underled (Kotter, John P., 2013, p. 6). But the challenge remains to combine strong leadership and strong management. Using this statement, a theoretical cause-effect approach for management and leadership can be introduced. Figure 1 shows Kotter’s assumption visualized as a matrix regarding the functionality of an organization.

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