Exploring Corporate
Strategy
FIFTH EDITION
Johnson & Scholes
Chapter 11
MANAGING STRATEGIC CHANGE
PRENTICE HALL EUROPE
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
Types of strategic change
Diagnosing strategic
change needs
Managing strategic change
processes
Structure and
control
Change tactics
Styles of
managing change
Communicating
change
Changing
routines
Political
processes
Symbolic
processes
Roles in the change process
Exhibit 11.1 A framework for managing strategic change
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
NATURE OF CHANGE
Incremental
change
Transformational
change
Proactive
Tuning
Planned
transformational
Reactive
Adaptation
Forced
transformational
MANAGEMENT
ROLE
Exhibit 11.2 Types of strategic change
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
ORGANISATIONAL
‘SYMPTOMS’
STAGES
 Questions and challenges
Unfreezing
mechanisms
Organisational
anticipation
 ‘Felt need’ for change
 Competing views of causes
of problems and remedies
Organisational flux
 Information collection
 Political ‘testing’ of support
Information building
 New ideas tested out
Experimentation
Refreezing (the signalling
or confirmation of change)
or
PRESSURES FOR
CONFORMITY
 Early signals made sense of
within paradigm
 Political pressures not to
‘rock the boat’
 Attempts to reconcile
competing views within
current paradigm
 Information made sense of
within paradigm
 Resistance to new ideas
Sustaining change
Exhibit 11.3 ‘Unfreezing’ and the management of change
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
Forces for change
Forces acting against change


Job evaluation as 'core'

Individualism of consultants

Complacency about change

Lack of co-ordinated information

Inadequate induction processes

Over-complicated structure

Too many meetings and memos

Individual, not team, incentives
and controls
Client-focused organisation and
closeness to clients

Flexible approach and structure

Change is normal

Informality and networking


Working hard
Fun place to work
Exhibit 11.4 An example of forcefield analysis (based on the Hay cultural webs)
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
The zone of
comfortable debate (ZOCD)
The zone of
uncomfortable debate
(ZOUD)
Core
assumptions:
The paradigm
Exhibit 11.5 The zone of uncomfortable debate (ZOUD)
Source: Adapted from C. Bowman ‘Strategy workshops and top team commitment to strategic change’, Journal of Managerial Psychology, Vol. 10 (1995) pp. 42-50
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
STYLE
MEANS/CONTEXT
BENEFITS
PROBLEMS
CIRCUMSTANCES OF
EFFECTIVENESS
Education and
communication
Group briefings assume
Overcoming lack of
internalisation of strategic (or mis)information
logic and trust of top
management
Time consuming
Direction or progress
may be unclear
Collaboration/
participation
Involvement in setting the
strategy agenda and/or
resolving strategic issues
by taskforces or groups
Increasing ownership
of a decision or
process May improve
quality of decisions
Time consuming
Solutions/outcome
within existing
paradigm
Intervention
Change agent retains
co-ordination/control
delegates elements of
change
Process is
guided/controlled
but involvement
takes place
Risk of perceived
manipulation
Incremental or non-crisis
transformational change
Direction
Use of authority to set
direction and means of
change
Clarity and speed
Risk of lack of
acceptance and illconceived strategy
Transformational change
Coercion/edict
Explicit use of power
through edict
May be successful in
crises or state of
confusion
Least successful
unless crisis
Crisis, rapid
transformational change
or change in established
autocratic cultures
Incremental change or
long-time horizontal
transformational change
Exhibit 11.6 Styles of managing strategic change
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
TYPES OF RITUAL
ROLE
EXAMPLES
Rites of passage
Consolidate and promote social roles
and interaction
Induction programmes
Training programmes
Rites of enhancement
Recognise effort benefiting organisation
Similarly motivate others
Awards ceremonies
Promotions
Rites of renewal
Reassure that something is being done
Focus attention on issues
Appointment of consultants
Project teams
Rites of integration
Encourage shared commitment
Reassert rightness of norms
Christmas parties
Rites of conflict reduction
Reduce conflict and aggression
Negotiating committees
Rites of degradation
Publicly acknowledge problems
Dissolve / weaken social or political roles
Firing top executives
Demotion or 'passing over'
Rites of sense making
Sharing of interpretations and sense
making
Rumours
Surveys to evaluate new practices
Rites of challenge
'Throwing down the gauntlet'
New CEO's different behaviour
Rites of counter-challenge
Resistance to new ways of doing things
Grumbling
Working to rule
Exhibit 11.7 Organisational rituals and culture change
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
MECHANISMS
ACTIVITY
AREAS
RESOURCES
Building the Control of resources
power base Acquisition
of/identification
with expertise
Acquisition of
additional resources
Overcoming Withdrawal of
resistance
resources
Use of
‘counter-intelligence’
Achieving
compliance
Giving resources
ÉLITES
SUBSYSTEMS
SYMBOLIC
KEY PROBLEMS
Sponsorship by an Alliance building
élite
Team building
Association with an
élite
Building on
legitimation
Time required for
building
Perceived duality of
ideas
Perceived as threat
by existing élites
Breakdown or
division of élites
Association with
change agent
Association with
respected outsider
Foster momentum
for change
Sponsorship/reward
of change agents
Attack or remove
legitimation
Foster confusion
conflict and
questioning
Striking from too low
a power base
Potentially
destructive: need for
rapid rebuilding
Removal of
resistant élites
Need for visible
‘change hero’
Partial
implementation and
collaboration
Implantation of
‘disciples’
Support for ‘Young
Turks’
Applause/reward Converting the body
Reassurance
of the organisation
Symbolic
Slipping back
confirmation
Exhibit 11.8 Political mechanisms in organisations
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
COUNTERMOVES TO CHANGE




Divert resources
Exploit inertia
Keep goals vague and complex
Encourage and exploit lack of organisational
awareness




‘Great idea - let’s do it properly’
Dissipate energies
Reduce the change agent’s influence and credibility
Keep a low profile
Exhibit 11.9a Political manoeuvres and change
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
COUNTERING COUNTERMOVES
TO CHANGE








Establish clear direction and objectives
Establish simple, phased programming
Adopt a fixer - facilitator - negotiator role
Seek and respond to resistance
Rely on face to face
Exploit a crisis
Co-opt support early
The meaningful steering committee/task force/project
team
Exhibit 11.9b Political manoeuvres and change
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
CHANGES
Routine
Face to face
(one to one or group)
TYPE
OF
MEDIA
Interactive
(e.g. telephone, video
conferencing)
Personal 'memoing'
(e.g. tailored memos, letters)
General bulletins
(e.g. circulars, announcement
on notice boards)
Complex
Overly rich
communication
causes confusion
Rich communication
for complex changes
EFFECTIVE
COMMUNICATION
Routine communication
for routine change
Too little information and
sensitivity leads to mistrust
and lack of commitment
Exhibit 11.10 Effective and ineffective communication of change
Source: Based on R.H. Lengel and R.L. Daft, ‘The selection of communication media as an effective skill’, Academy of Management Executive, vol.2, no. 3 (1988) pp. 225–232
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
Goals
1.
Sensitivity to changes in key
personnel, top management
perceptions and market conditions
2.
Clarity in specifying goals
3.
Flexibility in responding to
changes
Roles
4.
Team building abilities
5.
Networking skills
6.
Tolerance of ambiguity
Communication
7.
Communication skills
8.
Interpersonal skills
9.
Personal enthusiasm
10. Stimulating motivation and
commitment in others
Negotiation
11. Selling plans and ideas to others
12. Negotiating with key players
Managing up
13. Political awareness
14. Influencing skills
15. Helicopter perspectives
Exhibit 11.11 Fifteen key competences of change agents
Source: From D. Buchanan and D. Boddy, The Expertise of the Changing Agent: Public performance and backstage activity , Prentice Hall, 1992, pp. 92-3
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
SYMPTOMS OF STRATEGIC DRIFT







Highly homogenous paradigm/culture
Strong power blockages to change
Lack of market information
Little toleration of questioning/challenge
“We’ve tried this before and it didn’t work”
Deteriorating performance
Reliance on price/cost /competition
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
CHANGE AND THE LEARNING
ORGANISATION
Learning Organisations:
 Are not hierarchies
 Encourage processes which unlock the knowledge of individuals
 Encourage sharing of information and knowledge
 So that each individual:
 becomes sensitive to changes around them and helps identify
opportunities and required changes
 becomes capable of taking an holistic (strategic) view of its
environment rather than a functional or operational view
 avoids power plays and blocking routines
 works on the basis of a shared vision of the future
 supports other organisational members
 can cope with ambiguity and contradictions
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
MAPPING REQUIRED CHANGE
FROM
WHAT IS
TO
WHAT IS NEEDED
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
SYMBOLIC PROCESSES IN
MANAGING CHANGE
Symbolic activity includes:
 the use of rituals
 changes in organisational systems
 changes in physical aspects of work environments
 the behaviour of leaders and change agents
 organisational stories
 language and terminology
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
MANAGING EVERYDAY ASPECTS OF
STRATEGIC CHANGE
FORMAL SYSTEMS
Senior executives
are often over reliant on
structure and control
to effect change
MANAGING
STRATEGY
Means
MANAGING
CHANGE
Managing everyday
aspects of
organisational life
is central to
effecting change
EVERYDAY
REALITIES
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
CHANGE TACTICS
 Timing




triggers and crises
windows of opportunity
signalling time frames
sequencing change activities
 Involvement and partial implementation
 Achieving short term wins
 The use of outsiders
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
CONTEXT
LEVERS /
MECHANISMS
OF CHANGE
CHANGE
AGENT
STRATEGY
PERFORMANCE
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
Gemini’s four R’s of transformation
Renew
Reframe
TRANSFORMATION
Revitalise
Restructure
Illustration 11.1 Gemini’s framework for planned strategic change
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
Stories
Symbols
• Rivalry/competition
within organisation
• ‘Lone rangers’
• Working hard
• Fun place to work
• Salary levels
Rituals
and routines
• Rushing about looking
busy
• Having an office (but
others use it)
• Conferences at
prestigious locations
• Open untidy work
areas
• Job evaluation
terminology
Paradigm
• Consultants are with clients
• Minimal induction process
• Impromptu gatherings and
parties
• Many meetings
• Little bottom-up
communications
• Non-communication
by memo
Power
• Core business is job
evaluation
• Individualism and
autonomy
• Generalist HR expertise
• institutionalised
incremental change
Controls
• Meeting individual
billing and selling
targets
• Control job evaluation
procedures
• Financial incentives
• Based on access to clients
• Plus position, expertise and
interpersonal networks
Organisation
• Complex matrix
• Flexible, responsive to
clients
• Informal networks
• But unclear
accountabilities
(a) The cultural web in 1994
Illustration 11.2a Forces blocking and facilitating change in Hay Management
Consulting
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999
Stories
Symbols
• Successful Hay
teams
• Working hard
• Fun place to work
• Big change
managers
• Salary levels
• Informal interaction
styles
• Having an office (but
others use it)
• Few consultants in
office
• Conferences at
prestigious locations
• Open untidy work
areas
Rituals
and routines
Paradigm
•
•
•
•
•
•
Consultants are with clients
Excellent induction process
Bottom-up communication
Fewer memos
Fewer meetings
Info flows across
depts/networks
• Impromptu gatherings
and parties
Power
• Client focus
• Core business = HR
consultancy
• High expertise in HR
• Team orientated
Controls
• Meeting billing and
selling targets
otherwise high
autonomy
• Team targets
• Team incentives
• Meeting quality
objectives
Based on:
• Client management
• Expertise
• Interpersonal networks
Organisation
• Clear matrix
• Flexible, responsive to
clients
• Informal networks
• Clear accountabilities
• Informal networks
(b) The cultural web aspired to
Illustration 11.2b Forces blocking and facilitating change in Hay Management
Consulting
From: Gerry Johnson and Kevan Scholes Exploring Corporate Strategy 5th Edition 1999