Change is a natural part of the business life cycle and managers play a very important role in leading change effectively. While some leaders fully embrace new challenges and treat it as an opportunity for learning, growth and innovation, others tend to resist changes and prefer having a sense of security and consistence instead (Mullins 2010:753).
A Leader’s Role in Change
I disagree with Mullins’ statement that “there is little management can do about resistance to change” (Mullins 2010:753). First of all, organisational changes start with a leader’s vision. In order to implement change successfully, effective leaders need to plan, execute and communicate their change strategy effectively across the organization (Wilson 2014). Furthermore, leaders should also make themselves accessible at all time and communicate openly their vision for change with their employees (Trapp 2015). BCG, cited by Trapp (2015) added that employees need their leaders to be visible especially during challenging times.
Change Models
One of the widespread models managers can use to manage organizational change effectively is the McKinsey 7-S Framework. Developed in the late 1970s by Robert Waterman and Tom Peters, the model offers a holistic approach by addressing the critical role of coordination, rather than structure, in managing change (McKinsey 2008). The framework is based on the theory that, in order to achieve effectiveness in a workplace, seven different elements need to be aligned (McKinsey 2008). These 7Ss are: strategy, structure, style, staff, skills, systems and shared values (McKinsey 2008). To better explain how the seven elements work together, the following illustration has been included.
Figure 1: The McKinsey 7-S Framework (McKinsey 2008)
Nowadays, more than ever, coordination plays an important role as organizations are growing in size and structure alone isn’t organization. Thus, the McKinsey model provides a successful framework that can be applied by managers today regardless of the nature of change – be it merger and acquisition, a new process or change of leadership (Mourifield 2014). Despite it being very successful in managing change in large corporations, the McKinsey model has met with high incidences of failure among smaller firms. One of the main reasons is due to its complexity to understand and apply, as changes in one element will trigger changes in other areas (Normandin 2012).
PEARSON – embracing change
Giant education publisher Pearson went through a major change in 2012, when John Fallon took the CEO position from long-time leader Marjorie Scardino (Pearson 2016). Fallon announced an entirely new game plan and named it the “Global Education Strategy” (Cavanagh 2016). He emphasized that the company’s goal is to help students succeed and, by listening to teachers’ needs, he sought to bring innovation in classrooms (Cavanagh 2016). Apart from changing the vision, he also grouped the workforce into six distinct business units, each unit having a clear and distinct goal (Cavanagh 2016). Today, Pearson’s reach extends to “open” education resources, language training, virtual schools, testing and various other areas (Pearson 2016).
Figure 2: Pearson Changed Its Traditional Business Model by Introducing Digital Platforms (Pearson 2016)
Nevertheless, employee resistance to change is normal. For every action has an equal opposite reaction Newton said (Quotefancy.com 2016). Change creates anxiety and uncertainty as it requires new skills, new ways of thinking and doing things (Heathfield 2016). Resistance to change can be minimized by forming an employee-oriented and trusting work environment prior to the change (Heathfield 2016). Next, managers have to wholeheartedly communicate the change to employees, encouraging them to provide feedback for improvement of processes (Heathfield 2016).
BORDERS – resisting change
When companies are too late to implement change, they lose important momentum. While Amazon has been investing in new technology, Borders, the second largest bookstore in US, resisted change by failing to recognize the need of having an online sales platform. Instead, they decided to outsource online sales to Amazon which was a colossal mistake (Bomey 2011). Therefore, in 2011, Borders declared that it was closing its 399 stores and laying off 11,000 workers (Wang 2014).
“As someone once said, the Internet is the comet that killed the dinosaur. I’m afraid Borders is one of those dinosaurs.” Said David Dykhouse, General Manager of Borders (Bomey 2011).
In conclusion, leadership plays the main role in organizational change. Both tangible and intangible elements of organizational culture share a connection to the vision and mission of an organization (Hodgetts 2005). Profit for instance, is a tangible element while employee morale and team spirit is intangible, but they are all linked by a strong vision set by leadership (Hodgetts 2005). In other words, leaders who combine both tangible and intangible elements in managing change, with high level of trust and transparent communication, will have a huge advantage.
REFERENCES:
- Bomey, N. (2011) Borders Plans To Liquidate, Ending 40-Year-Old Bookstore Chain [online] available from <http://www.annarbor.com/business-review/borders-liquidation-chapter-11-ann-arbor-bookstore-chain-borders-group-e-books/> [11 November 2016]
- Cavanagh S. (2016). Pearson CEO Fallon Talks Common Core, Rise of “Open”Resources. [online], available from <https://marketbrief.edweek.org/marketplace-k-12/pearson-ceo-fallon-talks-common-core-rise-open-resources/> [11 Oct. 2016]
- Heathfield, S. (2016) How To Manage Resistance To Change In The Workplace [online] available from <https://www.thebalance.com/how-to-reduce-employee-resistance-to-change-1918992> [11 November 2016]
- Hedgetts, L. (2005) International Management. 5th edn. McGraw Hill
- Llopis, G. (2014) Change Management Requires Leadership Clarity And Alignment [online] available from <http://www.forbes.com/sites/glennllopis/2014/06/30/change-management-requires-leadership-clarity-and-alignment/#5ac5fbce5074> [11 November 2016]
- McKinsey & Company (2008). Enduring Ideas: The 7-S Framework. [online] available from <http://www.mckinsey.com/insights/strategy/enduring_ideas_the_7-s_framework> [11 Nov. 2016]
- Mourfield, R. (2014) Organizational Change: A Guide To Bringing Everyone On Board [online] available from <https://spea.indiana.edu/doc/undergraduate/ugrd_thesis2014_mgmt_mourfield.pdf> [11 November 2016]
- Normandin, B. (2012) Three Types Of Change Management Models | The Fast Track [online] available from <http://www.quickbase.com/blog/three-types-of-change-management-models> [11 November 2016]
- Pearson (2016) Board Of Directors [online] available from<https://www.pearson.com/about-pearson/board-of-directors.html> [11 November 2016]
- Trapp, R. (2015) How Effective Leaders Keep Change Management Programs On Track [online] available from <http://www.forbes.com/sites/rogertrapp/2015/08/25/how-effective-leaders-keep-change-management-programs-on-track/#18b60bab42a6> [11 November 2016]
- Wang, D. (2014) Successful Organizational Change Examples You Need To Copy [online] available from <https://www.tinypulse.com/blog/sk-successful-organizational-change-examples> [11 November 2016]
- Wilson, J. (2014) Managing Change Successfully [online] available from <http://www.journalofaccountancy.com/issues/2014/apr/change-management-20139196.html> [11 November 2016]
Excellent blog as it is a very detailed blog. I especially like how you apply Mckinsey 7s framework as a change management model. Borders as your company of choice that resisted change and how they were late in implementing change is exceptional . Overall, great effort and keep up the good work.!!
Thank you for your comment MiKi. I particularly like how the McKinsey model combines both the ‘hard’ elements (strategy, structure and systems) with the ‘soft’ elements (skills, staff, style and shared values). This is important to identify these elements to understand the effects of change on each aspect of the organization. Hard elements are easier to identify and management is able to directly influence them. Soft elements however are more difficult to identify because they are less tangible and often influenced by culture.
True enough that you disagree with the statement proposed by Mullins that “there is little management can do about resistance to change” because living in this face changing society, change is indeed inevitable and is required by many organizations. I surely learnt a lot because you used a framework other that the common frameworks other blogger used which is the McKinsey 7-S Framework. But nevertheless, do spend so time looking into Lewin’s change model because it really is a good model to represent stages for change. Great examples you have given there and I got to learn so much between two big companies, one willing to change and one resisting change.
Thank you for your advice Ivan. As we studies Lewin’s Change Management Model in our Leadership class, I have found that McKinsey 7S model provides a holistic approach to change management compared to the Lewin 3 steps model. However, I do not deny that Lewin’s model is a simple and easy-to-understand framework for managing change. By recognising the three distinct stages of change, unfreezing, changing and refreezing are effective tactics for creating the confidence from which to embark on the next, inevitable change.
Your article enlightened me with a lot of things that I wasn’t aware off ! Really very significant article.
Thank you for your comment and reassurance Adil. Is there anything I should improve in this blog?
I have learnt that McKinsey 7-S Framework can be another change management model apart from the famous Lewin’s 3-step and Kotter’s 8-step change models. Great use of organisational examples, one embracing change whilst the other one resisting change. Overall, great effort and keep it up!
I’m glad that my blog has helped you to learn a different technique in managing change. According to Harvard Business Review (2015), about 70-80% of mergers fail every year. One of the main challenges for a successful merger is the synergy of cultures and employees resistance to change due to fear of losing their jobs, and unknown future. I believe that nowadays with the conglomerates growing even more powerful by acquiring smaller competitors, change management is very crucial to a successful transition.
The Mckinsey 7-S Framework is an interesting sharing and definitely provide another angle in learning about change. The identification between hard and soft elements do piece everything into perspective. Nonetheless, it is my opinion that leaders should take an active role in addressing issues before the change to ensure smoother transition and employees are also happier to comply when fears are turned into positive energy.
I agree with your comment that leadership should take an active role in predicting the change and take early steps to prepare a smooth transition.The success of future businesses, depends on how well business leaders can anticipate change and create a sustainable and flexible organization.
Excellent blog, you always have a special view of leadership and give me a fresh impression. I really learn a lot from your blogs.
Thanks Huang! I appreciate your kind feedback. Hope you have understood my view on leadership role in change management.Thanks!