Seminar Paper, 2015
11 Pages, Grade: 1,00
1. HBR Case Study: Getting Employees Excited About New Directions
1.1 Connect organizational purpose with individual meaning
1.2 Embrace leadership as a collective accountability
1.3 Find your collective voice
1.4 Unleash new energy
2. Change Management at its Best: A literary approach
2.1 The Problem of successful Change Management
2.2 A long Road to successful Change Management
2.3 Making Change Management Stick
2.4 Leading Change Management
3. A practical approach to the HBR Case Study
3.1 The Right Attempt in the very beginning of Change Process
3.2 Suggestions for Sustainable Success
3.3 Solution for Sustainable Success
Change is the norm and flexibility is a requirement, so be prepared to deal with it. A very meaningful sentence nowadays. Organizations and companies all over the world are confronted with change and the question, how to manage it.
Threatening external influences force organizational culture to arrange themselves with permanent change processes. Even if there are no evident problems brewing. Imminent external disruptions, like new competitors or technology, the own cost structure or economy depression, can take the organization by surprise too fast. One way to deal with change is to prevent problems that weren’t tangible but could arise from different change processes in- and outside the organization.
This individual seminar paper is structured in by comparing the academically approach from well-known economics literature with an actual case study with a practical approach. In this context it is about a Harvard Business Review article of November 20th 2015 called “Getting Employees Excited About a New Direction” by Douglas A. Ready. The main goal will be to analyse the change process with a reference to different theories and perspectives following by a practical transfer with possible suggestions or solutions.
“Change is the law of life.
And those who look only to the past or present are certain to miss the future.”
John F. Kennedy
The Harvard Business Review Case Study “Getting Employees Excited About New Directions” of November 20th 2015 is about the challenge, Dave McKay - CEO of the Royal Bank of Canada (RBC), faced when he was newly nominated as President to the highly regarded financial service giant.
Despite he was already a much esteemed part of the company before this promotion and the company was actually profitable, highly regarded and emerged from the financial crisis relatively unscathed, he insisted that staying the course wasn’t an option for him by commenting: “I want RBC to matter - to our clients, to our people, an in our communities - both here in Canada and around the world, wherever we do business.”
The case study points out that the difference in how some companies came through the crisis even stronger was, that they build up three organizational capabilities simultaneously - being purpose-driven, performance-oriented, and principles-led - a process the author Douglas A. Ready calls “creating collective ambition”. (Ready 2015, Getting Employees Excited About a New Direction)
The setting of an agenda wasn’t an easy matter for the new CEO. There were, as usual, plenty of issues that can attract the attention and consume oneselfes energy by pulling you in a variety of different directions. The key point therefore was for McKay to focus the organization on finding the core purpose of RBC, by knowing this wasn’t a journey to be travelled in a half-spirited manner. (Ready 2015, Getting Employees Excited About a New Direction)
Shaping the RBC collective ambition was a remarkable effort by involving and socializing the group executive board. By creating a mixed work stream of key business and functional executives who were opinion leaders and should become important culture carriers. (Ready 2015, Getting Employees Excited About a New Direction)
A Vision and Values Jam for all employees (80.000) was established for searching its collective ambition. First RBC had to reflect on their own history of being paternalistic and quite agreeable - almost to a fault. By giving such a culture, launching the process that would probably invite inputs and even potential criticism from every single member of the company was quite frightening for most of the board members - and this was exactly the core purpose what the vision and values should be about.
The effort was recompensed - over 20.000 employees with even more comments and replies found a collective voice for the organizations by contributing ideas, suggestions and opinions what has been done well and what should be improved. (Ready 2015, Getting Employees Excited About a New Direction)
The result was implemented in thousands of conversations, dozens of interviews and focus group sessions led by the general executives mentioned before. Through this very engaging dialogue RBC was able to encourage important leadership programs and employee input. “Helping Clients Thrive and Communities Prosper” was the drafted powerful purpose statement of the organization and the newly articulated vision “To be among the world’s most trusted and successful financial institutions!” This was directly based on the most powerful currencies of all - The Importance of Trust. (Ready 2015, Getting Employees Excited About a New Direction)
The problem for organizations today is that stability is no longer the norm - therefore experts all agree that over the past decades business environment had changed and had become more volatile. As John P. Kotter describes in his book “Leading Change” there are lots of errors people do whenever human communities are forced to adjust to shifting conditions. This would be avoidable by considering the following the most common errors:
- Allowing too much compliancy
- Failing to create a sufficiently powerful guiding coalition
- Underestimating the power of vision
- Under-communicating the vision
- Permitting obstacles to block the new vision
- Failing to create short-term wins
- Declaring victory too soon
- Neglecting to anchor changes firmly in the corporate culture
None of these change errors would be that overpriced in a slower-moving and less competitive world. Making any of these eight errors common to transformation efforts can have serious consequences. Probably these errors are not inevitable in whole and every time change is needed, but with the awareness and skill that they can be avoided or at least mitigated. It is about the conscious understanding why organizations resist to change and what exactly could be the process to overcome destructive lethargy. Furthermore how the leadership that is supposed to drive this process can manage it in a social healthy way. (Kotter 1996, p. 4-16)
Methods that are used in successful change processes are all based on a fundamental insight - major change will not happen easily. Even if there is an objective observer that is able to uncover huge organizational problems and change is apparently needed. Change can still be hold up because of inwardly focused cultures, paralysing bureaucracy parochial politics, a low level of trust, lack of teamwork, arrogant attitudes, lack of leadership in middle management and the general human fear of the unknown. (Kotter 1996, p. 20)
To be effective it is necessary to address these barriers well by using methods, strategies and reengineer processes and improve the quality of change management:
- Establishing a Sens of Urgency: Examining the market and competitive realities by identifying and discussing crises, potential crises or major opportunities.
- Creating the Guiding Coalition: By creating a group together with enough power for leading change and the ability to work as a team.
- Developing a Vision and Strategy: By creating a vision to help direct the change effort and developing strategies for achieving that vision.
- Communicating the Change Vision: By using every vehicle possible to constantly communicate the new vision and strategies in having the guiding coalition role model the behaviour expected of employees.
- Empowering broad-based Action: By getting rid of obstacles, changing systems or structures that undermine the change vision by encouraging risk taking and non-traditional ideas, activities, and actions.
- Generating short-term Wins: By planning for visible improvements in performance or wins. Creating those wins and visibly recognizing and rewarding people who made the wins possible.
- Consolidating Gains and producing more Change: Using increased credibility to change all systems, structures, and policies that don’t fit together and don’t fit the transformation vision. Hiring, promoting and developing people who can implement the change vision. Reinvigorating the process with new projects, themes and change agents.
- Anchoring new Approaches in the Culture: Creating better performance through customer- and productivity-oriented behaviour, more and better leadership, and more effective management. Articulating the connections between ne behaviours and organizational success. Developing means to ensure leadership development and succession.
As recognized changing anything of significance in highly interdepend organizational systems can often mean changing nearly everything that leads to a huge exercise in business transformation.
(Kotter 1996, p. 21-143)
Leaps into the future can slide back into the past. Change can be placed by helping to create a new, supportive, and sufficiently strong organizational culture. A supportive culture can provide new roots for the upcoming ways of operating.
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