Excerpt
Table of Contents
„LEADERSHIP
CHANGE MANAGEMENT“
List of Illustrations
1 . Introduction
2 . Driving organizational transformation requires
a well-orchestrated change management program capsuled by strong leadership and business acumen
– A critical assessment by the author 2
3 Critical evaluation of Fiat’s business model: 7
3.1. Leadership Style
3.2. Underlying Complexities
3.3. Paramount Challenges
4 . Change Management: future recommendations to
make the business model more sustainable
5 . Conclusion
Bibliography
List of Illustrations
Illustration 1: Evaluation of successful transformations
Illustration 2: Integrated Transformation Approach
Illustration 3: Kotter’s 8-step change model
Illustration 4: Leadership style and its dependencies
Illustration 5: A stylized mbottom-up performance odel of capability formation and performance
1. Introduction
The two cornerstones of the term paper are on the one side “Leadership” and on the other side “Change Management”. Leadership is simply the ability to influence others towards joint targets in a way that motivates these others and leads to the desired results. Change Management is rather difficult to describe in one glance. Nonetheless, it is meant to be a process, tool or technique to manage the people side of change in order to achieve a desired outcome cf. (Prosci, no date).
What Change Management really depicts is going to be clarified in the course of the term paper.
The following term paper constitutes a critical assessment by the author whether organizational transformations require a well-orchestrated change management program, strong leadership and business acumen. In the following, the outlined theoretical background is going to be applied regarding a case study about the Italian car manufacturer “FIAT”. Thereby, special emphasis will be put on the observed leadership style, underlying complexities and paramount challenges. Ultimately, the last chapter will consist of future recommendations to make the business model more sustainable.
2. Driving organizational transformation requires a well- orchestrated change management program capsuled by strong leadership and business acumen – A critical assessment by the author
Organizational transformations are inherently complicated and multidimensional processes. There is no single truth for the effective design of organizational transformations. If a CEO would ask his or her management team what a good business plan looks like he or she would get plenty of different point of views. A CFO will pretend to create new financial measures, an operations VP, on installing a quality program, an HR specialist, on revising compensation and training and a marketing executive would insist on getting everyone to be more customer focused. Due to these circumstances, the CEO of a company facing transformational change must be able to be, by definition, the driver and facilitator of just this sort of top management conversation. If leaders are unaware of translating these individual beliefs into reliable pillars for conversation and learning within their leadership group, the chances of developing an effective, tangible and manageable program of change are limited cf. (Dichter, Gagnon, Ashok, 1993).
The most important initiatives to design organizational transformation involve four key actions:
- Role modeling
- Fostering understanding and conviction
- Reinforcing changes through formal mechanisms
- Developing talent and skills
In the following Illustration 1, it can be observed that executives rate the effort a success, the more actions a transformation consisted.
Illustration 1: Evaluation of successful transformations
Abbildung in dieser Leseprobe nicht enthalten
Source: (McKinsey, 2015)
As mentioned earlier, there is no real single truth for the effective design of transformation initiatives. Regarding the results from McKinsey’s survey, some characteristics affecting the overall odds of transformation success were identified. Besides the use of multiple actions to change mindsets and behaviors, transformations have a higher probability to be successful when the initiatives complement one another and align with the broader organizational context.
The survey’s results also convey that simply repeating old initiatives won’t lead a company to its desired results. Therefore, 64 percent of the conducted transformations were successful when companies used totally new approaches.
Furthermore, McKinsey’s survey lead to the assumption that initiatives focusing on weaknesses achieve less effective results than those focused on strengths. Moreover, transformations focusing on both weaknesses and strengths appear to be the best approach.
Moreover, transformation’s involving people all across the organization are more likely to be successful than others, as indicated by McKinsey’s survey outcomes cf. (McKinsey 2015).
The transformation triangle, as demonstrated in Illustration 2, outlines the necessity for tight interdependencies between the three elements:
- Top-down direction setting to create focus throughout an organization and develop the conditions for performance improvement
- Broad-based, bottom-up performance improvement to get people at all levels to take a fresh approach to solving problems and improving performance
- Cross-functional core process redesign to link activities, functions, and information in new ways to achieve breakthrough improvements in cost, quality, and timeliness.
Illustration 2: Integrated Transformation Approach
Abbildung in dieser Leseprobe nicht enthalten
Source: (Dichter, Gagnon, Ashok, 1993)
Successful developed and implemented transformations can only be achieved, when efforts along all three axis are coordinated and aligned.
Otherwise, if bottom-up involvement is lacking, motivation will decrease, improvement will be overlooked and new skills and behavior will not be developed. Furthermore, ignorance of core processes leads to efforts, which are unaware of adding any value or contributing to a successful change management process.
After getting a feeling for an organizational transformation’s intense complexity and variety of challenges, it became obvious that the process requires a stable framework in terms of an appropriate change management approach supported by strong leadership and business acumen.
In the business world, plenty of different change management concepts have been applied, with more or less successful results. In terms of organizational transformation, especially two approaches seem to possess the appropriate characteristics.
Already in 1990, Michael Beer developed his “Six steps to effective change”. While other models believe change to be a move from one static point to another static point, Beer’s approach emphasizes on a six-step process to achieve effective change by concentrating on task alignment, whereby employees' roles, responsibilities and relationships are meant to be the main component to bringing about effective change cf. (UKessays, 2015).
This goes in one hand with the view, as mentioned earlier, that transformations involving people all across the organization are more likely to be successful than others. The before mentioned steps are:
1. Mobilize commitment to change through joint diagnosis of business problems
2. Develop a shared vision of how to organize and manage for competitiveness
3. Foster consensus for the new vision, competence to enact it and cohesion to move it along
4. Spread revitalization to all departments without pushing it from the top
5. Institutionalize revitalization through formal policies, systems and structures
6. Monitor and adjust strategies in response to problems in the revitalization process Another useful approach constitutes Kotter’s Eight-Step Plan for Implementing Change, as shown in Illustration 3.
Illustration 3: Kotter’s 8-step change model
Abbildung in dieser Leseprobe nicht enthalten
Source: (Kotter Cohen, 2012)
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