Strategy 14

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Johnson, Whittington and Scholes, Exploring Strategy, 9th
Edition, © Pearson Education Limited 2011
Slide 14.1
Strategy in Action
14: Leadership and
Strategic Change

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Learning outcomes (1)
• Identify types of required strategic change.
• Analyse how organisational context might
affect the design of strategic change
programmes.
• Undertake a forcefield analysis to identify
forces blocking and facilitating change.

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Learning outcomes (2)
• Identify and assess the different styles of
leading and managing strategic change.
• Assess the value of different levers for
strategic change.
• Identify the pitfalls and problems of managing
change programmes.

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Key elements in managing
strategic change
Diagnosis
Leading and
managing
change
Levers
for
change
Managing
change
programmes

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Managing change – key issues
Four key premises:
 Strategy matters – in identifying the need for
change and the direction of change.
 Context matters – the right approach to change
depends on the circumstances.
 Inertia and resistance – getting people to
change from existing ways of doing things is
essential.
 Leadership matters – good leadership of
change at all levels is needed.

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Diagnosing the change context
Types of change Context of change
Forcefield analysis

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Types of strategic change
Figure 14.2 Types of change
Source: Adapted from J. Balogun and V. Hope Hailey, Exploring Strategic Change, 3rd edition, Prentice Hall, 2007

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Types of strategic change
Four types of strategic change:
 Adaptation – can be accommodated with the
existing culture and can occur incrementally.
 Reconstruction – rapid change but without
fundamentally changing the culture.
 Revolution – fundamental changes in both
strategy and culture.
 Evolution – cultural change is required but this
can be accomplished over time.

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The importance of context
Figure 14.3 The Change Kaleidoscope
Source: Adapted from J. Balogun and V. Hope Hailey, Exploring Strategic Change, Prentice Hall, 2007

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Forcefield analysis
A forcefield analysis provides an initial view of
change problems that need to be tackled by
identifying forces for and against change.
Various concepts and frameworks are useful
here:
 Mapping activity systems.
 Stakeholder mapping.
 The culture web.
 The 7-S framework.

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A forcefield analysis for the UK forestry
commission
Illustration 14.2

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Strategic leadership roles
Leadership is the process of influencing an
organisation (or group within an organisation) in
its efforts towards achieving an aim or goal.
Three key roles in leading strategic change:
 Envisioning future strategy.
 Aligning the organisation to deliver that strategy.
 Embodying change.
N.B. Middle managers have a key role in leading change as
well as senior managers.

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Newcomers and outsiders
‘Outsiders’ can also play an important role in
strategic change.
These could include:
• A new chief executive from outside the
organisation can bring a new perspective.
• New management from outside can also
increase the diversity of ideas.
• Consultants are used to help formulate
strategy or to plan the change process.

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Styles of strategic leadership
Situational leadership – successful strategic
leaders are able to adjust their style of leadership to
the context they face.
Two approaches:
• Theory E: the pursuit of economic value; top-down; ‘hard’
levers of change; emphasis on changes of structures and
systems, financial incentives, portfolio changes,
downsizing.
• Theory O: the development of organisational capability;
emphasis on culture change, learning, participation in change
programmes and experimentation.
• A combination of the two approaches may be required and
can be beneficial.

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Styles of managing change
Education/
Delegation
Participation Collaboration
Direction Coercion
Styles of
Managing
Change

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Styles of managing change (1)
Education and delegation – Small group
briefings to discuss and explain things. The aim
is to gain support for change by generating
understanding and commitment.
Advantages – Spreads support for change.
Ensures a wide base of understanding.
Disadvantages – Takes a long time. For radical
change it may not be enough to convince people of
the need for change. Easy to voice support, then do
nothing.

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Collaboration – Widespread involvement of the
employees on decisions about what and how to
change.
• Advantages – Spreads not only support but
ownership of change by increasing levels of
involvement.
• Disadvantages – Time-consuming. Little control
over decisions made. May lead to change within
existing paradigm.

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Participation – Involvement of employees in
how to deliver the desired changes. May include
limited collaboration over aspects of ‘how’ to
change as well as ‘what’ to change.
Advantages – Spreads ownership and support
of change, but within a more controlled
framework. Easier to shape decisions.
Disadvantages – Can be perceived as
manipulation.

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Direction – Change leaders make the majority
of decisions about what to change and how.
Use of authority to direct change.
Advantages – Less time-consuming. Provides
a clear change of direction and focus.
Disadvantages – Potentially less support and
commitment, and therefore proposed changes
may be resisted.

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Coercion – Use of power to impose change.
Advantages – Allows for prompt action.
Disadvantages – Unlikely to achieve buy-in
without a crisis.

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Levers for change
A compelling case for change
Challenging the taken-for-granted
Changing operational processes and routines
Symbolic changes
Power and political systems

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Organisational rituals and change
Table 14.2 Organisational rituals and change

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Political mechanisms in organisations
Table 14.3 Political mechanisms in organisations

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Change tactics
• Timing:
 Building on an actual or perceived crisis.
 Exploiting windows of opportunity.
 Symbolic signalling of time frames.
• Visible short-term wins – the demonstration
of such wins can galvanise commitment to
the wider change strategy.

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Turnaround strategy (1)
A turnaround strategy is where the emphasis
is on speed of change and rapid cost reduction
and/or revenue generation.

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Turnaround strategy (2)
Elements of turnaround strategies:
 Crisis stabilisation.
 Management changes.
 Gaining stakeholder support.
 Clarifying the target market(s) and core
products.
 Financial restructuring.

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Turnaround strategy
Table 14.4 Turnaround: revenue generation and cost reduction steps

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Managing revolutionary change
Managing change in such circumstances is likely
to involve:
• Clear strategic direction.
• Combining rational and symbolic levers.
• Multiple styles of change management.
• Working with aspects of the existing culture.
• Monitoring change.

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Managing evolutionary change
Managing change as evolution involves
transformational change, but implemented
incrementally. This requires:
 An empowering organisation.
 Clear strategic vision.
 Continual change and commitment to
experimentation.
 Identifying interim stages and targets.
 Use of irreversible changes.
 Sustained top management commitment.
 Winning hearts and minds.

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Why change programmes fail
Research into why change programmes fail
indicates seven main failings:
Death by planning.
Loss of focus.
Reinterpretation of change in terms of current
culture.
Disconnectedness.
Behavioural (only) compliance.
Misreading scrutiny and resistance.
Broken agreements and violation of trust by
management.

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Summary (1)
• Types of strategic change differ in terms of:
– extent of culture change required;
– incremental change or urgency
• Aspects of organisational context (as shown in the
Change Kaleidoscope) include:
 the resources and skills that need to be preserved,
 the degree of homogeneity or diversity in the
organisation,
 the capability, capacity and readiness for change,
 the power to make change happen.
• Different approaches to managing change are likely
according for different types of change and context.
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Summary (2)
• Forcefield analysis is a useful means of identifying
blockages to change and potential levers for change.
• Situational leadership suggests that strategic leaders need
to adopt different styles of managing strategic change
according to different contexts and in relation to the
involvement and interest of different groups.
• Levers for managing strategic change need to be
considered in terms of the type of change and context of
change. Such levers include building a compelling case for
change, challenging the taken-for-granted, the need to
change operational processes, routines and symbols, the
importance of political processes, and other change tactics.

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