Leadership & Change

Why Change is needed?

The volatility in world market and intense competition in dynamic workplace indicates that change is now a normal state of business to survive and succeed in an unpredictable environment (Peccei, Giangreco and Sebastiano 2011). Organisation need to face changes in technology innovation, change in competitive strategy and internal organisational changes. Market leaders who did not change successfully are nowhere today (Birkinshaw 2013).


Capture

 

Referring to the statement by Mullins and Christy (2013), I agree that change is inevitable and it is depends on individual’s personality. People who remain status quo and refuse to change might be knocked out by society. Corporate Leadership Council (2009) reported that organisational performance can be improved if only the changes are effectively delivered by managers to employees. Communication act as a key when you want employees to change and it must be effectively done so that employees understand the need to change. Therefore, the future of the organisation may be influenced by the willingness of employees’ decisions on whether remains status quo or seek to change (Dobre 2013).  This is well-explained by the examples of organisations found in this blog.


Why People Resist to Change?

Organisational’ view

There is possible to fail. Pieterse, Caniels and Homan (2012) asserted that 70% of all change efforts fail, leading to disappointed expectations and losses millions of dollars in time and resources. This is because the failed organisation does not take the correct approach to see the change through such as allowing too much complacency, underestimating the power of vision, neglecting to stick to changes firmly in the culture and etc. (Foster 2010).

Individual’s view

In view of individual who is inertia, the reason behind are due to job insecurity, anxiety or loss of control (Oreg 2006). This happened when staffs are promoted that favour performance over seniority.  Conflict and sense of insecurity occurred causing disengaged counterparts among employees and eventually jeopardise organisation’s overall performance (Lucky, Minai and Rahman 2013).


Role of Manager in Managing Change

Managers play a vital role to avoid and overcome the resistant to change. Managers can inspire others to change by identifying the problems, delineation of clear goal and build consensus with employees by seeking advice from them (Zenger and Folkman 2015). All these required long time implementation, training and commitment from senior management. Employees are critically important to change initiatives because they act as change implementers and their commitment might determine the desire goal of initiatives (Fugate, Prussia and Kinicki 2012). Thus, strength of relationship between manager and employees are vital to support change programmes.


Models of Change Management

a)    John Kotter’s 8 Step Organisational Change Model

Kotter (1996) introduced an emergent approach which consists of Eight-Stage Process for Successful Organisational Transformation. The eight-steps shown in Figure 1 are required for large scale change in an organisation.

Firstly, leader needs to tell employees that it is time to change and then gather the most powerful employees to form a team. Vision is then developed together with right strategy by effective communication. Barriers are identify and removed subsequently. A win achieved and more people willing to change after seeing the result. Wave of changes is created until the vision is realised. Lastly, stick to the change by continues the new and winning behaviour despite the pull of tradition.The stages are well-explained in Table 1.kotter

Figure 1: Kotter’s Eight-step Process in Leading Change (Kotter 1996)

Steps Explanation
Step 1

Establish a sense of urgency

The organisation must have gut enough to determine the move. Leader must drive people out of comfort zones and patience is required to inspire and motivate them to greatness.
Step 2

Create a guiding coalition

No one can create a successful change without a team of effective people. Getting the right people in a right place is important to get productive decisions.
Step 3

Create a change vision

Vision is linked with feasible strategies, plans and budgets to achieve goals within the agreed time frame. Guidance is needed to support and lead the team in the correct pathway.
Step 4

Communicating the change vision

Effective communication with members to gather information and provide opportunity to ask questions. Opinion and concern are taken seriously to ensure vital messages are highly visible and understood across the entire organisation.
Step 5

Empower Action

Barriers that undermine the vision are removed to unleash the potential of people to do their best. People who are resists to change are known and honest dialogue is carried out to change their mindset and let them know they are needed for change.
Step 6

Create short-term wins

The win is visible and unambiguous and acts as an evidence to show their sacrifices are paying-off. People are optimistic with the change and feel motivated to move on.
Step 7

Consolidate improvements and producing more change

Maintain the momentum and sustain change. Analyse what went right and what needs to improve after win. New change agents and leaders are introduced for change coalition.
Step 8

Anchor to the change

Change does not stop here and win behaviour continues. Culture is build up by shared values and norm of behaviour.  New employees are reinforced with new norms and values such as incentives, rewards and promotions.

Table 1: John Kotter’s 8 Step Organisational Change Model with Explanation (Kotter 1996)

Limitations of Kotter’s Eight-step Change Process

On the downside, there are few drawbacks to Kotter’s model. Bamford and Forrester (2003) argued that the model lacks coherence and a diversity of techniques. They mentioned that there is no one model can be fit by all organisations in all situations and at all times. Burnes (1996) asserted that Kotter’s model is beneficial to large organisation but not for small enterprises.


b)   Kurt-Lewin’s 3 Steps Change Model

As shown in Figure 2, the organisational change is explained by creating and understands the motivation to change and what to change (unfreeze). Secondly, flexibility of action plan is implemented and change process required effective communication and empowering people to embrace new values, attitudes and behaviours in work. Lastly, organisation return to the state of stability and the change is anchored into the culture (Refreeze). Thus, support and training is necessary while praise and rewards on individual level are needed for more effective performance at an organisational level. However, this model does possess its limitations. The model is very rational, goal and plan oriented. It lacks moral emotions and bypass employees’ feelings (Lapsley and Hill 2009). Thus, some employees might not get adapted to the change and leave the team when changes are carried on.

change-management-models-by-operational-excellence-consulting-6-638

Figure 2: Kurt Lewin’s 3 Steps Change Process (Lewin 1947)


Example of Organisation that Embrace Change Successfully

In 1994, CEO of Continental Airlines, Gordan Bethune (Figure 3) successfully transformed the organisation from worst carrier to fifth-largest airlines (Klein 2002).  Before the organisation became the market leader in aviation industry, Continental Airlines was forced to file for two bankruptcies prior to 1991.  The significant change was initiated by the implementation of “Go Forward Plan” that utilise steps in Kurt Lewin’s three step change model. The employees were told to understand the need for change. Employees were then empowered and involved in meetings to motivate them more engaged in the plan (Brenneman 1998). The change took five years to make the airlines back to the top placement.

51aR7KqTJ9L._SX331_BO1,204,203,200_

Figure 3: Gordon Bethune sharing his experiences in saving Continental Airline (Bethune 1999)


Example of Organisation that Fail to Change

Research In Motion (RIM) was failed to embrace change due to unwillingness to adopt Android operating system which is getting more popular and more functionality than Blackberry’s existing operating system (Bala, Sharma and Kaur). Mr. Heins, ex-CEO of blackberry was so confident that Blackberry’s proprietary operating system would stand out as sustainable advantage and occupied a government segment of the market (Beatty 2012). Internally, the change management was not effectively implemented. Employees were not empowered to make decision or raise their opinions due to autocratic leadership style and high controllability of leaders adopted in organisation (Castaldo 2012). The suppression of leaders along with intimidating management style caused the business fail to thrive (Figure 4). By 2016, Blackberry’s market share was reduced to a rounding error, amounting to 0.0% market share (Vincent 2017).

Screen_Shot_2017_02_16_at_10.48.25_AM

Figure 4: Worldwide Smartphone Sales in the Fourth Quarter of 2016. (Vincent 2017)

BlackBerry-handsets-008

Figure 5: The unsold units of Blackberry phones in market (Source: The Guardian 2013)


Conclusion and Recommendations for Managers 

In conclusion, change is inevitable as it is part of individual growth or sustainability of organisation due to the dynamically and challenging market in business environment. The reason in resistance to change is understandable, but it would not bring business to sustain longer. Therefore, it is responsibilities of managers to incorporate the need of change with their employees to create a sustainable business model whenever any circumstances occurred in future.

(840 words)


References

Bala, K., Sharma, S. And Kaur, G. (2015) ‘A Study on Smartphone based Operating System’. International Journal of Computer Applications 121(1), 17-22

Bamford, D.R. and Forrester, P.L. (2003) ‘Managing Planned and Emergent Change within an Operations Management Environment’. Internationl Journal of Operations & Production Management 23(5), 546-564

Beatty, C. (2012) RIM CEO Confident to Claim No.3 Spot [online] available from < http://www.kitguru.net/lifestyle/mobile/colin-beatty/rim-ceo-confident-to-claim-no-3-spot/> [19 March 2017]

Bethune, G. (1999) ‘From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback’. New Jersey: Wiley

Birkinshaw (2013) Why Corporate Giants Fail to Change [online] available from <http://fortune.com/2013/05/08/why-corporate-giants-fail-to-change/&gt; [23 March 2017]

Brenneman, G. (1998) ‘Right Away and All at Once: How We Saved Continental’. Harvard Business Review [online] September-October. available from < https://hbr.org/1998/09/right-away-and-all-at-once-how-we-saved-continental> [15 March 2017]

Burnes, B. (1996) ‘No Such Thing As …A “One Best Way” to Manage Organizational Change’. Management Decision 34(10), 11-18

Castaldo, J. (2012) How Management Has Failed at RIM [online] available from < http://www.canadianbusiness.com/technology-news/how-management-has-failed-at-rim/> [20 March 2017]

Corporate Leadership Council (2009) Preparing for the Turnaround: Engaging the Workforce for Future Growth [online] available from <http://www.hreonline.com/pdfs/01012010Extra_CorpExecBoard.pdf&gt; [10 March 2017]

Dobre, O. (2013) ‘Employee Motivation and Organizational Performance’. Review of Applied Socio-Economic Research 5(1), 53-60

Foster, R.D. (2010) ‘Resistance, Justice and Commitment to Change’. Human Resource Development Quarterly 21(1), 3-39

Fugate, M., Prussia, G.E. and Kinicki, A.J. (2012) ‘Managing Employee Withdrawal during Organisational Change: The role of Threat Appraisal’. Journal of Mangement 38 (3), 890-914

Klein, D.S. (2002) Smart Business [online] available from < http://www.sbnonline.com/article/from-worst-to-first-continental-airlines-ceo-gordon-bethune-s-forward-thinking-philosophy-set-the-standard-for-corporate-turnarounds/> [15 March 2017]

Kotter, J. (1996) The 8-Step Process for Leading Change [online] available from <https://www.kotterinternational.com/8-steps-process-for-leading-change/> [15 March 2017]

Lapsley, D.K. and Hill, P.L. (2009) The Development of the Moral Personality. London: Cambridge

Lewin, K. (1947) ‘Frontier in Group Dynamics: Concept, Method and Reality in Social Science; Social Equilibria and Social Change’. Human Relations 1(1), 5-41

Lucky, E.O.I., Minai, M.S. and Rahman, H.A. (2013) ‘Impact of Job Security on the Organisational Performance in a Multiethnic Environment’. Research Journal of Business Management 7(1), 64-70

Mullins, L., and Christy, G. (2013) Management & Organisational Behavior. Harlow: Pearson

Oreg, S. (2006) ‘Personality, Context and Resistance to Organisational Change’. European Journal of Work and Organisational Psychology 15 (1), 73-101

Peccei, R., Giangreco, A. and Sebastiano, A. (2011) ‘The Role of Organisational Commitment in the Analysis of Resistance to Change’. Personnel Review 40 (2), 185-204

Pieterse, J.H., Caniels, M.C. and Homan, T. (2012) ‘Professional Discourses and Resistance to Change’. Journal of Organisational Change Management 25 (6), 798-818

Vincent, J. (2017) 99.6 Percent of New Smartphones Run Android or IOS. [online] available from <http://www.theverge.com/2017/2/16/14634656/android-ios-market-share-blackberry-2016> [19 March 2017]

Zenger, J. and Folkman, J. (2015) 7 Things Leaders Do to help People Change [online] available from <https://hbr.org/2015/07/7-things-leaders-do-to-help-people-change&gt; [11 march 2017]

Advertisements

Effective Leadership & Management Styles & Approaches

Leadership vs. Management

Leadership and management do not differ from one another as both involved in engagement with their subordinates on what they need to be done as the power of authority lies in their hand.  Besides that, leadership and management are needed to align people and resources so that the competencies can be used effectively to achieve strategic alignment of an organisation.

In work environment, leadership and management are often interrelated and used interchangeably. However, leadership and management do possess differences intrinsically. Table 1 shows the differences that distinguish between leadership and management.

Leadership (Kotter 1990)

Management (Fayol 1916)

Sets a direction Plans and budgets
Aligns people Organises and staffs
Motivates and inspires Controls and solve problems
Mastery of the context Control of the environment

Table 1: Key aspect of differences between leadership and management.


Effective Approach to Managing the Work of Subordinates

It is important to leader to possess an effective way to lead subordinates in achieving goals of an organisation.  Nahavandi (2002) has proven that different leadership styles may affect organisational effectiveness or performance. I personally agree that transformational leadership is the best approach to manage work of subordinates. Figure 1 shows the four basic components that underlie transformational leadership.

 

1

Benefits of Transformational Leadership

Transformational leadership encourages broadening and elevating the ideas of subordinates for the sake of the organisation or team besides concerning individualised consideration for subordinates (Bass 1985). This will heightened capacity and commitment of subordinates to produce greater productivity to the group thus enhance business competitiveness (Barbuto 2005).

Limitations of Transformational Leadership

Abuse of power emerged such as escalating demands from leaders might causing subordinates having stress-related problems in workplace (Hall et al 2002). Therefore, leaders must create a work-life balance with subordinates to solve this issue. Besides that, Bass (1997) asserted that transformational leadership do not foster moral rectitude as subordinates are exploited for ideas regardless positive morale value. Thus, in his further research, Bass (1998) suggested that an authentic transformational leadership must obligate the values of fairness, loyalty and human rights.


A research done by CMI (2013) found out that ‘there is no single ideal, as the best approach may vary according to circumstances and individual characteristics’. This statement is agreeable mainly because leadership style can be varied by situation, depending on the needs of the team. Best leaders do not adopt just a style of leadership; they have the flexibility to switch between styles as the circumstances dictate. Studies found out that flexible and adaptive leadership is essential to enhance organisational performance (Yukl and Mahsud 2010). This is important because organisation need to encounter challenges of diverse workforce, increasing globalisation and rapid technological change.


Examples of Good Leadership Skills have on Subordinates

One of the examples is Tan Sri Tony Fernandes (Figure 2), Director of AirAsia Bhd. Tony known for his credibility in turning AirAsia to one of the well known airline brands in the world. He practices good organisational culture as there is no bureaucracy involved in his office because he believed that too much bureaucracy could impede the growth of the business. His is easily approachable and accessible to his staff and stressed the importance of working as a team to archive organisational goal (Schien 2004). Under his wings, employees are treated as family and management will reward to those contributing ideas to the organisation. By practising good leadership in organisation, he gained trust and respect among his dedicated employees (Tracey and Hinkin 1994).

AirAsia-Group-CEO-Tony-Fernandes-receives-6th-consecutive-Worlds-Best-Low-Cost-Airline-award-from-Skytrax

Figure 2: Tony and his employees received Skytrax World’s Airline Awards held at the Paris Air Show in Le Bourget (Source: AirAsia 2017)


Examples of Bad Leadership Skills have on Subordinates

Enron’s top management set as a bad example of leadership when most of the top executives were tried for fraud in November 2001 and caused 4,000 job losses (Fox News 2001). The moment Enron filed for bankruptcy, employees were instructed to leave the building on the same day (Figure 3). Top management lack of integrity, insatiable spirit of success and arrogance that leads to failure (Clegg and Cooper 2009). Executives only concerning on their self interests but not for the interests of others as many of them made decisions to achieve their goal of maximizing profits. Enron’s stock was collapsed to worthless compared to $83 in early 2001 and subsequently resulted 62% of 15,000 employees were sufferings from losses as their saving plan which relied on Enron’s stock were practically worthless after the scandal (Ayala and Giancarlo 2006). In short, employees and shareholders received limited returns in lawsuits, losing their pensions and stock prices.

ENRON-copy
Figure 3: Enron’s swift collapse left the prospects of 21,000 employees in doubt and wiped out what was left of the holdings of stock investors

How People would like to be led?

Followers expect to be led by leaders who have commitment and have his/her own set of vision and strategy and capable to bring the team and organisation to reach desire goals. Transformational leadership would be more preferable in the extent to which it creates valuable and positive change in the followers to reach desire goals. In return, leader gain trust and respect from followers.


Conclusion

In conclusion, I would prefer transformational leadership styles as I think this style is more suitable in dynamic workplace environment and enhance motivation between subordinates and leaders and would be more perfect if morality is inculcated into it. As a member of a team, I would like to be led or manage by not just in one leadership styles but more fluid switch to adopt other styles under different circumstances and needs. This is also agreed by CMI that there is no one single style that can fit all situations.

(770 words)


References

Ayala, A. and Giancarlo, I.S. (2006) ‘A Market Proposal for Auditing the Financial Statements of Public Companies’. Journal of Management of Value, 41-70

Barbuto, J.E. (2005) ‘Motivation and Transactional, Charismatic and Transformational Leadership: A Test of Antecedents’. Journal of Leadership and Organisational Studies 11(4), 26-40

Bass, B.M. (1985) Leadership and Performance Beyond Expectations. Collier: McMillan

Bass, B.M. (1997) ‘Does the Transactional-Transformational Leadership Paradigm Transcend Organizational and National Boundaries?’ American Psychologist 52(2), 130-139

Bass, B.M. (1998) Transformational Leadership: Industry, military and Educational Impact. New Jersey: Lawrence Erlbaum Associates

Chartered Management Institute (2013) Understanding Management Styles Checklist 236 [online] available from < https://www.managers.org.uk/~/media/Files/ Campus%20CMI/Checklists%20First%20Management%20Role/Understanding%20management%20styles.ashx> [2 March 2017]

Clegg, S.R. and Cooper, C.L. (2009) The SAGE Handbook of Organizational Behavior. London: SAGE

Drucker, P.F. (1998) ‘The Discipline of Innovation’. Harvard Business Review 76(6), 149-157

Fayol, H. (1916) ‘General and Industrial Management‘. London: Pitman

Fox News (2001) Enron Releases 4,000 Employees [online] available from < http://www.foxnews.com/story/2001/12/03/enron-releases-4000-employees.html&gt; [3 March 2017]

Hall, J., Johnson, S., Wysocki, A., Kepner, K., Farnsworth, D. and Clark, J.L. (2002) Transformational Leadership: The Transformational of Managers and Associates [online] available from < http://edis.ifas.ufl.edu/hr020&gt; [2 March 2017]

Kotter, J. (1990) ‘What Leaders Really Do’. Harvard Business Review  68(3), 103-111

Kotterman, J. (2006) ‘Leadership vs Management: What’s the difference?’. Journal for Quality and Participation 29(2), 13-17

Longenecker, C.O. and Ariss, S.S. (2002) ‘Creating Competitive Advantage through Effective Management Education’. The Journal of Management Development 21(9), 640-654

McBain et al (2012) The Business Benefits of management and Leadership Development, CMI and Penna

Mullins, L.J. (2010) Management and Organisational Behaviour. England: Pearson

Nahavandi, A. (2002) The Art and Science of Leadership. New Jersey: Prentice Hall

Schien, E.H. (2004) Organisational Culture and Leadership. San Francisco: Jossey-Bass

Tracey, J.B. and Hinkin, T.R. (1994) ‘Transformational Leaders in the Hospitality Industry’. Cornell Hotel and Restaurant Administration Quarterly 35(2), 18-24

Yukl, A.G. (2010) Leadership in Organizations. New Jersey: Prentice Hall