Leading Change Through

Innovation

www.humanikaconsulting.com
“God will not change people’s fate if they do not
change it themselves”

(Al--Qur’an, Ar
(Al Ar--Ra’d: 11)
 Leadership There is probably no topic
more important to business
success today than leadership

leadership occurs among people

involves the use of influence
is used to attain goals

Different leaders behave in different ways – style, need, situation

 Nature of Leadership

• The ability to influence people toward the attainment

of organizational goals.
• Leadership is reciprocal, occurring among people.
• Leadership is a “people” activity, distinct from
administrative paper shuffling or problem-solving
activities.
• Leadership is dynamic and involves the use of power.
What are the challenges of leadership, Change
and innovation?
 Strategic leadership creates the capacity for ongoing
strategic change.
 Components of strategic leadership:
– Determining the organization’s purpose or vision.
– Exploiting and maintaining the organization’s core
competencies.
– Developing the organization’s human capital.
– Sustaining an effective organizational culture.
– Emphasizing and displaying ethical practices.
– Establishing balanced organizational controls.
What are the challenges of leadership, Change
and innovation?

 Sustainable competitive advantage relies on

creativity and innovation.
 Creativity is the generation of a novel idea or
unique approach to solving problems or
crafting opportunities.
 Innovation is the process of creating new
ideas and putting them into practice.
What are the challenges of leadership, Change
and innovation?

 Leadership responsibilities for the innovation

process:
– Imagining.
– Designing.
– Experimenting.
– Assessing.
– Scaling.
What are the challenges of leadership, Change
and innovation?
 In highly innovative organizations …
– Corporate strategy and culture should:
• Emphasize an entrepreneurial spirit.
• Expect innovation.
• Accept failure.
• Be willing to take risks.
– Organization structure should:
• Be organic.
• Have lateral communications.
• Use cross-functional teams and task forces.
 Building an Organization
1. Education and leadership
development is the effort to
familiarize future leaders with the
skills important to the company
and to develop exceptional leaders
among the managers you employ
2. Perseverance is the capacity to see
a commitment through to
completion long after most people
would have stopped trying
3. Principles are your fundamental
personal standards that guide your
sense of honesty, integrity, and
ethical behavior
The Components of Organizational Alignment

Vision

Capabilities Culture
• Technical • Norms
• Leadership • Shared values

Systems Structure
• Accounting • Sales • Span of control
• HR • Team composition
• IT • Hierarchy
The Organization as an Iceberg Metaphor

Prentice Hall, 2002

 Factors Used to Measure Organizational Performance

Copyright © 2005 South-Western. All rights reserved.

 Organizational Health
• Indicators of organizational health from Matthew Miles:
– Goal focus.
– Communication adequacy.
– Optimal power equalization.
– Human resources utilization.
– Cohesiveness.
– Morale.
– Innovativeness.
– Autonomy.
– Adaptation.
– Problem-solving adequacy.

Copyright © Allyn & Bacon 2007

 Shaping Organizational Culture
• Passion, in a leadership sense, is a
Passion,
highly motivated sense of
commitment to what you do and want
to do
• Leaders also use reward systems,
symbols, and structure among other
means to shape the organization’s
culture
• Leaders look to managers they need to
execute strategy as another source of
leadership to accept risk and cope
with the complexity that change brings
about
Recruiting and Developing Talented Operational
Leadership

 New leaders will each be global

managers, change agents, strategists,
motivators, strategic decision makers,
innovators, and collaborators if the
business is to survive and prosper
 Today’s need for fluid, learning
organizations capable of rapid
response, sharing, and cross-cultural
synergy place incredible demands on
young managers to bring important
competencies to the organization
“The Twentieth and
Twenty-first Century
Organization
compared”
Kotter, John P, Leading Change, pg.172
 Structure
Twentieth Century Twenty-First Century

• Bureaucratic • Nonbureaucratic, with fewer

rules and employees
• Multileveled • Limited to fewer levels
• Organized with the expectation • Organized with the expectation
that senior management will that management will lead,
manage lower-level employees will
manage
• Characterized by policies that • Characterized by policies and
create many complicated internal procedures that produce the
interdependencies minimal internal
interdependence needed to serve
customers
 Systems
Twentieth Century Twenty-First Century

• Depend on few performance • Depend on many performance

information systems information systems, providing
data on customers especially
• Distribute performance data to • Distribute performance data
executives only widely

• Offer management training and • Offer management training and

support systems to senior people support systems to many people
only
 Culture
Twentieth Century Twenty-First Century
• Inwardly focused • Externally oriented
• Centralized • Empowering
• Slow to make decisions • Quick to make decisions
• Political • Open and Candid
• Risk averse • More risk tolerant
Managers vs. Leaders

Covey, Stephen R., The 7 Habits of Highly Effective People, pg.101

Kotter, John P., Leading Change, pg.165
Leadership versus Management

Management Leadership
Promotes Promotes vision,
stability, order creativity, and
and problem change
solving within
existing
organizational M L
structure and
systems

Takes care of where you are Takes you to a new place

 Managers vs. Leaders
• Managers know how to • Leaders create and
plan, budget, organize, staff, communicate visions and
control, and problem solve strategies
• Managers deal mostly with
the status quo • Leaders deal mostly with
• Management is a bottom change
line focus: How can I best • Leadership deals with the
accomplish certain things? top line: What are the
• Management is doing things things I want to accomplish?
right • Leadership is doing the right
things
 Management and Leadership Compared

Source: Kotter, J. P. (1990). A Force for Change: How Leadership Differs from Management. New York: Free Press;
Kotter, J. P. (1996). Leading Change. Boston: Harvard Business School Press.
 Leader vs. Manager Qualities

Leader Qualities Manager Qualities

SOUL MIND
Visionary Rational
Passionate Consulting
Creative Persistent
Flexible Problem solving
Inspiring Tough-minded
Innovative Analytical
Courageous Structured
Imaginative Deliberate
Experimental Authoritative
Initiates change Stabilizing
Personal power Position power

Source: Genevieve Capowski, “Anatomy of a Leader: Where Are the Leaders of Tomorrow?” Management Review, March 1994, 12
Management Processes and Levels of Management
 Traits
Traits = personal characteristics

• Traits - early efforts to understand

leadership success focused on
leader’s personal characteristics
• Great man approach - early
research focused on leaders who
had achieved a level of greatness
– Find out what made them great
– Find people with same traits
 Personal Characteristics of Leaders

Physical Characteristics Personality Social Characteristics

Energy Self-confidence Sociability, interpersonal skills
Physical stamina Honesty & integrity Cooperativeness
Enthusiasm Ability to enlist cooperation
Desire to lead Tact, diplomacy
Social Background Independence
Education
Mobility

Intelligence and Ability Work-related Characteristics

Judgment, decisiveness Achievement drive
Knowledge Drive to excel
Intelligence, cognitive Conscientiousness in pursuit of goals
ability Persistence against obstacles, tenacity

Source: Adapted from Bernard M. Bass, Stogdill’s Handbook of Leadership, rev. Ed. (New York: Free Press, 1981), 75-76. This adaptation appeared in R. Albanese and D. D. Van Fleet,
Organizational Behavior: A managerial Viewpoint (Hinsdale, III.: The Dryden Press, 1983).
 In highly innovative organizations …

– Top management should:

• Understand the innovation process.
• Be tolerant of criticism and differences of opinion.
• Take all possible steps to keep goals clear.
• Maintain the pressure to succeed.
• Break down barriers to innovation.
– Staffing should fulfill five critical innovation
roles:
• Idea generators.
• Information gatekeepers.
• Product champions.
• Project managers.
• Innovation leaders.
Change
Change is the disruption of the
status quo
• A break in the continuities that represent
the steady stream of our lives.

Change often makes for

interesting times…
• It may seem positive if you’re
leading the change.
• It may seem negative if you’re
on the receiving end of it.
 The Types of Change
Anticipated Changes
• Changes that are planned ahead
of time and occur as intended
according to a plan.

Emergent Changes
• Changes that arise
spontaneously from local innovation
and that are not originally
anticipated or intended.

Opportunity-Based Changes
• Changes that are not anticipated
ahead of time, but are introduced
during the change process in
response to an unexpected
opportunity, event, or breakdown.
 Beer’s Model of
Organizational Change

C=DxMxP>R

D = followers’ dissatisfaction
M = model for change
P = process
R = resistance
C = amount of change
The Rational Approach To Organization Change
and the Interactional Framework
Leader

• Environmental scans
• Vision
• Goals
• Change plan
• Systems vs. siloed thinking
• Leadership and management
capabilities

Followers Situation
• Dissatisfaction
• resistance
• SARA model • Crisis
• Loss of: • Consumer preferences
– Power • Market conditions
– Competence • Societal shifts
– Identity • Political and legal challenges
– Rewards • Competitive
– Relationships • Organizational structure
• Technical/functional • Organizational systems
capabilities • Organization culture
The Expectation-Performance Gap
Expectations
Change initiative implemented

Actual
Gap
Status quo performance

Time
 The Four Levels of Every Organization
Easiest Short
term

Physical
(processes, tools,
and structures)
Ability to influence or change

Infrastructure
(management systems,

Durability of the change

measurements, and rewards)

Behavioral
(what groups and individuals do)

Cultural
Most (values, beliefs, and norms) Long
difficult term

©1997, Russell Consulting, Inc. Used with permission.

 Common Losses with Change

Loss of: Possible Leader Actions

Power Demonstrate empathy, good listening skills, and new
ways to build power.
Competence Coaching, mentoring, training, peer coaching, job
aids, and so forth.
Relationships Help employees build new relationships before
change occurs, or soon thereafter.
Rewards Design and implement new reward system to support
change initiative.

Identity Demonstrate empathy; emphasize value of new roles.

M. Beer, Leading Change (Boston: Harvard Business School Press, 1988).

 What is the nature of
organizational change?

 Change leader.
– A change agent who takes
leadership responsibility for
changing the existing pattern of
behavior of another person or
social system.
 Change leadership.
– Forward-looking.
– Proactive.
– Embraces new ideas.
Change leaders vs. status quo managers
 Reasons for people resisting change

– Fear of the unknown

– Disrupted habits
– Loss of confidence
– Loss of control
– Poor timing
– Work overload
– Loss of face
– Lack of purpose
 The Journey Through Change
Stability

1.
Comfort
and Control
Looking Looking
Back Forward
2. 3.
Fear, Anger, Inquiry,
and Resistance Experimentation,
and Discovery

Chaos

Leading Change Training, Jeff and Linda Russell, 2003

 What People Often Feel

I’m safe
I’m in control
I’m satisfied

1. I’m doing fine

Comfort I’m being recognized

and Control I’m working hard…..
Hey, everything’s cool

* Adapted from Leading Change Training, Jeff and Linda Russell, 2003
 What People Often Feel

I’m anxious
I’m not in control
2.
I’m angry and upset
Fear, Anger,
and Resistance I’m worried about …..
I’m not appreciated
I’m frustrated
Hey, everything’s in chaos

* Adapted from Leading Change Training, Jeff and Linda Russell, 2003
 What People Often Feel

I’m challenged
3.
Inquiry, I’m hopeful

Experimentation, I’m dizzy from all the ….

and Discovery I’m encouraged
I’m searching for …..
I’m excited
Hey, progress is being made….

* Adapted from Leading Change Training, Jeff and Linda Russell, 2003
 What People Often Feel

I’m feeling better

I’m relieved
I’m encouraged
4. I’m confident
Learning, I’m satisfied
Acceptance, and I’m energized again
Commitment
Hey, we made it!

* Adapted from Leading Change Training, Jeff and Linda Russell, 2003
 Reactions To Change

Anger Rejection

Shock Acceptance

Time
Top leaders
Middle managers
Individual contributors
Methods for dealing with resistance to change

– Education and communication

– Participation and involvement
– Facilitation and support
– Facilitation and agreement
– Manipulation and co-optation
– Explicit and implicit coercion
What is the nature of organizational change?

 Top-down change.
– Strategic and comprehensive
change that is initiated with
the goals of comprehensive
impact on the organization
and its performance
capabilities.
– Driven by the organization’s
top leadership.
– Success depends on support
of middle-level and lower-
level workers.
 What is the nature of organizational change?

 Bottom-up change.
– The initiatives for change come from any and all
parts of the organization, not just top
management.
– Crucial for organizational innovation.
– Made possible by:
• Employee empowerment.
• Employee involvement.
• Employee participation.
 What is the nature of organizational change?

 Integrated change leadership.

– Successful and enduring change combines advantages of
top-down and bottom-up approaches.
– Top-down:
• Breaks up traditional patterns.
• Implements difficult economic adjustments.
– Bottom-up:
• Builds capability for sustainable change.
• Builds capability for organizational learning.
What is the nature of organizational change?

 Transformational and incremental

change.
– Unplanned change.
• Response to unanticipated events.
• Good leaders act on opportunities for
reactive change.
– Planned change
• Aligning the organization with anticipated
future challenges.
• Activated by proactive leaders who are
sensitive to performance gaps.
• Transformational change  major and
comprehensive redirection.
• Incremental change  adjusting existing
systems and practices.
Organizational targets for
change:
– Tasks
– People
– Culture
– Technology
– Structure
A Leaders’ Vision Of the Future Can Align Efforts
and Help Groups Accomplish More

Groups that lack

vision

Groups with vision

Lewin’s three phases of planned organizational
change.
The Change Process First work on
changing how people
New of
Change think about their job
Thought
structure 
EDUCATION

Change of
Change of Behavior
Destiny The Five On-Going Elements of a
Change Process

Reshape the
Drive organization
Cultural through people
Change
Change of
Change of Habits
Personality

Sustain and Stabilize

Changes
Alternative change strategies and their
leadership implications.
 Fiedler’s Classification of
Situation Favorableness
Leaders needs to know
Whether they have a relationship- or task-oriented style
Should diagnose the situation and determine the favorableness of
the following three areas

Source: Fred E. Fiedler, “The Effects of Leadership Training and Experience: A Contingency Model Interpretation,” Administrative Science Quarterly 17 (1972), 455. Reprinted by permission
of Administrative Science Quarterly.
 Path-Goal Situations &
Preferred Leader Behavior

Source: Adapted from Gary A. Yukl, Leadership in Organizations (Englewood Cliffs, N.J.: Prentice-Hall, 1981), 146-152.
 Leading Organizational Change
• Steps in the Change Process:
– Step 1: Establish a sense of urgency.
– Step 2: Create the guiding coalition.
– Step 3: Develop a vision and a strategy.
– Step 4: Communicate the change vision.
– Step 5: Empower broad-based action.
– Step 6: Generate short-term wins.
– Step 7: Consolidate gains and produce more change.
– Step 8: Anchor new approaches in the culture.
Copyright © 2005 South-Western. All rights reserved.
Leading Change

Transactional Leaders
 Clarify the role and task
requirements of
subordinates
 Initiate structure
 Provide appropriate
rewards
 Display consideration for
subordinates
 Meet the social needs of
subordinates
 Leading Change

Charismatic Leaders
 The ability to inspire
 Motivate people to
do more than they
would normally do
 Tend to be less
predictable than
transactional
leaders
 Create an
atmosphere of
change
 May be obsessed by
visionary ideas
 Leading Change
• Transformational Leader
 Similar to charismatic leaders
 Distinguished by their special ability to bring about innovation
and change by
Recognizing followers’ needs and concerns
Helping them look at old problems in new ways
Encouraging them to question the status quo
 Sources of Power

 Legitimate Power: power coming from a formal

management position.
 Reward Power: stems from the authority to bestow
rewards on other people.
 Coercive Power: the authority to punish or recommend
punishment.
 Expert Power: leader’s special knowledge or skill
regarding the tasks performed by followers.
 Referent Power: personality characteristics that
command subordinates’ identification, respect, and
admiration so they wish to emulate the leader
What are Your Tasks…
Tasks… as a Change Leader
Leader??
Stability

Learning,
Comfort Acceptance, and
and Control Commitment
4
Create a Stabilize
Felt Need and Sustain
for Change the Change
Looking 1 Looking
Leader Actions
Back Forward
3
Revise and
Introduce
Finalize the
the Change
Change
2 Plan

Inquiry,
Fear, Anger, Experimentation,
and Resistance and Discovery

Chaos
From Leading Change Training, Jeff and Linda Russell, 2003
 Leader’s Actions
Phase 1: Comfort and Control

Create a Felt Need for Change

From Leading Change Training, Jeff and Linda Russell, 2003

The Role of Change Leaders

• It is leadership’s job to define

and articulate a vision for the
organization and the need for
change.......

“Implementing organizational change requires a compelling reason for change.

Unless people see the need for change, it will just not happen.”
-John Pepper (Former CEO) Proctor and Gamble
 Characteristics of an Effective
Change Vision
• Confronts and addresses a current or future
threat
• Describes a vivid picture of a positive end result
• Focused on changes and outcomes that the
process owners care about, and can see, feel,
and affect.
• Provides a method for evaluating staff actions
supporting the change
• Links closely with the broader organizational
vision

* Adapted from “Managing Change”, Jeff and Linda Russell, 1998

 Leader’s Actions
Phase 1: Comfort and Control

• Acknowledge people’s past efforts and

success.
• Get people’s attention!
• Immerse people in information about
the change . . . customer complaints,
budget data, increasing costs,
competitive pressures.
• Let people know it will happen — one
way or another!
• Give people time to let the ideas sink in.
• Don’t sell the solutions . . . sell the
problem!

* From Leading Change Training, Jeff and Linda Russell, 2003

 Leader’s Actions
Phase 1: Comfort and Control

• Create and communicate a sense of

urgency, and risks of not changing.
• Create the fear of not changing, and
sell that the change is necessary,
achievable, and beneficial.
• Communicate what will not change,
and always be honest and
consistent.
• Tell the story as early as possible,
tell the whole story as your know it
to be, and tell it in as personal a way
as possible  try to ensure
everyone hears and understands the
“same story”.
• The degree of “change readiness” is
often inversely proportional to the
closeness of the crisis.
 Leader’s Actions
Phase 2: Fear, Anger, and Resistance

Introduce the Change

KAI – to break apart or
disassemble

ZEN – to feverishly improve

Must do the Kai first!

 Leader’s Actions
Phase 2:Fear, Anger, and Resistance

• Communicate to co-create the vision.

• Listen carefully to what people are saying.
• Acknowledge people’s feelings (pain, perceived
losses, anger, excitement, etc.)
• Strive to address their perceived losses.
• Tell people what you know — and what you
don’t know.
• Don’t try to talk people out of their feelings.
• Discuss ways to solve the problems that people
see with the change.
• Encourage discussion, dissent, disagreement,
debate
. . . keep people talking.
From Leading Change Training, Jeff and Linda Russell, 2003
 Leader’s Actions
Phase 2:Fear, Anger, and Resistance
• Create a coalition of influential upper
level managers and stakeholders to guide
and support the efforts promoted by the
change leader.
• Select the right coalition members with
credibility, proven leadership abilities,
expertise in needed areas, and the power
and prestige necessary to make things
happen  avoid people who lack in
enthusiasm, integrity, and trust
worthiness.
• Trust among the members is critical.
• Recognize that large scale change needs to
be led from the top and
supported/accomplished from the
bottom.
 The Role of Change Leaders

The key prerequisite to successfully implementing change is Gaining employees’

acceptance and overcoming their resistance and fears to change.
Must address people’s fears – not ignore them
 Leader’s Actions
Phase 3: Inquiry, Experimentation, and
Discovery

• Affirm Why change is necessary and

How it will work….
• Involve influential and resilient people
in creating the solution (strategies
and tactics) to accomplish the vision.
• Emphasize the Win-Win aspects of
the change to address the threats.
• Create and follow a simple, yet
detailed change implementation plan.
 A change plan gives time for
reflection and re-thinking of the
options.
 Components of a Change Plan

1. Create a leading change design team.

2. Document the case for change.
3. Develop a preliminary vision for the change.
4. Define the impacts on those affected by the change.
5. Create your preliminary strategy and action plan.
6. Identify measures of success.
7. Develop your communication strategy.
8. Develop your training strategy.

* From Leading Change Training, Jeff and Linda Russell, 2003

 Leader’s Actions
Phase 4: Learning Acceptance, and Commitment

Stabilize and Maintain

the Change

* From Leading Change Training, Jeff and Linda Russell, 2003

 Leader’s Actions
Phase 4: Learning Acceptance, and Commitment

• Acknowledge people’s hard work.

• Celebrate successes and accomplishments.
• Reaffirm the vision.
• Bring people together toward the vision.
• Acknowledge what people have left behind.
• Develop long-term goals and plans.
• Provide tools and training to reinforce new behaviors.
• Reinforce and reward the new behaviors.
• Create systems and structures that reinforce
new behaviors.
• Prepare people for the next change.

* From Leading Change Training, Jeff and Linda Russell, 2003

 Stabilizing and Sustaining the
Change *

• Establish staff commitment to the new direction

by reinforcing new behaviors and beliefs.
• Invest in the change through new skills training,
new equipment and facilities, and new
performance/reward measures and management
systems that are consistent with the change.
• Prepare people for future changes and assure
them that they have the capacity to address and
solve future threats.

* Adapted from “Managing Change”, Jeff and Linda Russell, 1998

 Ten Governing Assumptions about
Organizational Change
1. Change is inevitable; growth is optional.
2. Change is difficult because it moves people out of their comfort zones.
3. People don’t resist change as much as they resist being changed.
4. Resistance to change occurs for a reason.
5. People respond to change differently based on the personalities,
histories, personal visions, or perceptions of the surrounding
environment.
6. You can’t change people; only they can make the choice to change.
7. The complexity and size of change matters.
8. You can never communicate too much during a difficult and complex
change.
9. Resilience is important.
10. Leaders don’t control change; they guide, shape, and influence it.
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