Strategic Orientation In Change Management

Theories applicable

Discuss About The Strategic Orientation In Change Management?

Organizations often undergo changes in their structure, management and leadership within the course of doing business. In order to meaningfully undertake such changes, they are called upon to make use of the different models and theories on change management. The theories are helpful in several different considerations for such organizations. They help to assess the organization at the macro level in order to give the leaders a clear direction on the expected change. The driving force that drives the change is also revealed and how the change process will occur in terms of stages, timing and the characteristics of the process.

The process of change is also defined in the different models and this address issues such as change content, outcomes and measurements. Organizational change at ANZ bank began by employing the Lewin’s management of change theory where the organization underwent the process of unfreezing, change and freezing again. The changes undertaken at ANZ banking group was teleological in nature as it was change that was planned. This model of change emphasizes on organizational norms, values and attitudes (George 2016). The change model instituted can best be understood as organizational development strategy that utilized the McKinsey 7S model of change while the leaders involve employed different styles and traits of leading.

Lewin’s theory is posited on three stages of change which are: unfreeze, change and freeze. The unfreeze stage prepares the organization for the expected change and to remove the barriers that impede it. At ANZ, McFarlane instituted changes that not only prepared the employees but also the community and customers for change. He “freezed” the ongoing bank closure directive that was being implemented and this was followed by a drive to cut costs. The resultant thousands of jobs lost was a signal the bank would undergo change. The actual change process began in 2007 when McFarlane and the leadership team decided to implement an organizational strategy of change (Skalik 2016). This was known as Perform, Grow and Breakout.

This strategy was intended to increase shareholder value and increase financial performance. It was also focused on strengthening the brand, leadership and revenue. Building the foundation for leadership that is sustainable aimed at long-term success was also incorporated within the strategy of change ( Vladimir-Codrin 2014).The parameters that would guide the change and allow for employee input came after undertaking a performance ethic and assessment of values survey. The change was actualized through three initiatives that involved breakout workshops, breakout consulting and charters. The breakout program was essentially focused on cultural transformation at the institution.

Lewin’s theory

After the change, McFarlane undertook the last process which was to consolidate the gains made during the process of change. This was done within the consideration of performance management that would “freeze” the new paradigm expected of the employees. The consolidation stage is intended to ensure that the result of the process is long lasting and permanent (Langley, Smallman, and Tsoukas & Van De Ven 2013).  The process factored in four critical key result areas (KRA’s): community measures, people, customers and financial performance. It would be carried out practically in three phases which include Performance planning, coaching and assessment. 

The McKinsey 7S model can also be used to analyze the transformation at the bank with more detail at the component level. The model is underpinned by seven stages which guide the process of change (Nielsen & Abdilgaard 2013).  These are: strategy, structure, systems, shared values, style, skills and staff. The strategy embraced by the leadership of ANZ bank was named as Perform, Grow and Breakout. The structure of ANZ is split into five divisions which work in collaboration as one. These are the Shared services, Institutional and those based in New Zealand, Asia Pacific and Australia. The structure of reporting is interactive with the line managers through the Performance Assessment that is done yearly.

The process of change focused on developing the skills of the employees through programs such as the Emerging Leader Radar Talent which is run by line and HR managers. Additionally, the bank runs a graduate trainee program which allows for the graduate to develop a skill set that is broad in order to have a better understanding of the business. The focus is to develop leadership potentials of the employees (Campbell 2014).  Staff considerations are based on controlling the volume while increasing productivity based on the banks balance sheet paying for performance. The philosophy on staff is to have fewer employees who are better paid and more productive.

The style taken by the managers at the higher echelons is the one of coaching the employees. The managers are expected to implement long-term development plans for the employees in order to ensure they have learning opportunities and support in order to succeed in their jobs (Farrell 2015). The process of change resulted in shared organizational values which include integrity, collaboration and accountability. Other values espoused are respect and excellence both at the organizational and personal level. Quantz et al (2017), states that these values drive the organizational culture where the employee is expected to perform at their best and factor in the best interests of all stakeholders.

The McKinsey 7S model

One of the challenges that managers are confronted with is the resistance to change experienced with an organization. The bias against the change that prefers to maintain the status quo originates due to several fears amongst the employees. Jiang, Probst & Benson (2014), state that the fear could that of losing employment, working more for less pay or transfer to divisions which may be far away.  The resistance may be active or passive amongst the employees. Smollan (2017), states that one approach for the manager would be to take time in informal sittings where they can listen to the employees, communicate the intended change and prepare them psychologically.

Another challenge is ineffective communication that results in the manager being misinterpreted or misunderstood. This also leads to distrust with the employees. The lack of effective communication may also affect the senior management. The remedial measure that managers may be undertaken is to have a clear internal corporate communication strategy that is clear in order to l address issues such as employee complaints and grievances, conflict which is interpersonal and discipline during the process of change ( Nielsen & Randall 2012).  Feedback from employees should be appropriately communicated to the senior management and the organizational leadership.

Another challenge is the strategy which focuses on cost cutting which may be beneficial in the short- run but may prove to be short sighted in hindsight. An example is McFarlane who bailed out of emerging markets in order to lower the risk profile of the bank.  The bank was left behind by its competitors in wealth management by the banks that had made significant acquisitions. While trying to avoid making errors, there is the potential problem of being risk averse which ultimately turns out to be negative in its outcomes. The change came at the cost of avoiding stepping out of the comfort zone that is established by focusing on cultural change alone.

The cultural web can be used in the process of cultural change within an organization. The new paradigm can be symbolized by changing the company logo, office layout and the code of dressing. This creates a visual representation that is set out by the organization in the process of change. Rituals and routines can also play a vital role in instilling into the employee certain actions expected of them on a daily basis. The meetings also serve as the point to reinforce the statements of the commitment to change (Christofilos, DeMatteo & Penciner 2015). The power structure that invests real authority in one or two persons is important during the process of change. The persons with power should act as the champions of change and should have influence.

Challenges for managers in implementing transformation strategies

The style of leadership they chose is critical in leading the process of change. The work life balance of the leader is important in motivating the employees to adopt change. Transformational leadership is the ideal style of leading in transformation and can be seen in McFarlane who championed himself as a well rounded individual (Kezar 2001).  It is this human face a leader that he proposed to bring to the bank- a bank with a human face. This is important for the employees in balancing their personal and professional life as well as identifying whether they are square holes or round holes. The change champion embodied in the leader is critical in helping employees make the right choices.

The ADKAR (awareness, desire, knowledge, ability and reinforcement) model of change is helpful in aligning the business side of change with the people concerned within the organization. Kiani & Shah (2014), state that it begins with awareness as to why there is need for change and is followed by the desire to change and engage in participation which is the result of management to the resistance. Knowledge about the outcomes of change should come from education, coaching and training. The ability to implement the change should be the goal that targets the performance level of the employee. Reinforcement which fits with the Lewin’s “freeze” stage is meant to ensure that the change is permanent and results from action that is corrective.

The leadership at ANZ can be narrowed down to four principle people: McFarlane, the managers, Michael Smith and Charles Goode. McFarlane’s style of leading is both visionary and transformational.  The visionary aspect can be seen in the approach taken together with his leadership team in unveiling the Perform, Grow and Breakout strategy. He does not exclusively set out to give direction alone but works with a team in setting out the vision which is then presented to the employees (Al-Ali, Singh, Al-Nahyan & Sohan 2017). His visionary leadership is built on the expertise he gained having worked successfully at senior postings in Ford, Citibank and Standard Chartered Bank. At this critical stage of change, the bank needed new vision which McFarlane brought onboard.

He also exhibits the transformational leadership style that embodies qualities that inspire change. The quality of individualized consideration probes the employee to question whether they are round holes or square ones within the organization and sets them on the course of self development (Arif, Kashif & Sindu 2007).  Inspirational motivation is manifest in providing the meaning for the expected change. Employees will be remunerated according to their input to the balance sheet and this gives them the sense of purpose in embracing change. This style is delivered within traits that show social boldness and being tough minded. He reverses the decision to close down branches and retreat from rural areas. He also implements cost cutting measures that result in the loss of thousands of jobs.

The Cultural Web

The managers within the framework of change are expected to meet regularly with the employees and coach them. This is part of the Performance Coaching phase that ensures they have the support and opportunity to actualize their roles. The managers employ the coaching leader style of leading that connects the employee’s values, goals with the organizational objectives (Gandolfi & Stone 2017).  The managers focus on developing the emotional intelligence of the staff under them for success in the future that is long-term in orientation (Jensen & Bojeun 2017). The common trait needed by the managers is the emotional stability to deal with levels of stress and frustration that is attendant with coaching. Psychological maturity is critical in order to deal with challenges that may arise as they coach their juniors.

The fourth leader in the case study is Michael Smith whose style of leading is the pacesetting approach (Kezar 2001). After taking over the reins, he immediately faced challenges in 2008 which necessitated shedding off some jobs in further restructuring that right sized the bank. He moved some operations to Bangalore, restructured in order to improve focus on the customer and strengthen the balance sheet. He also sets to fix the shortcomings within the equity finance side of the bank which involved taking disciplinary action against some employees. His trait is one of dominance and being tough minded with low attachment to sentimental value. Apparently the equity business had no real value but was sentimental to the bank.

The last leader for analysis is the chairman, Charles Goode whose style of leading is the affiliative approach (Landis, Hill & Harvey 2014). Having been present during the time of change, he witnessed high ranking individuals exit the bank under the tenure of McFarlane. Realizing that new blood was needed in order to come and mend the fences and bad blood in the upper management, he took the approach that people should come first. Having come through a period that was stressful for all employees, re-mending trust and dissipating tension called for this style of leading (Choi Sang, Lim Zhi & Tan Wee 2016).  The trait exhibited is to be conscientious to be bound by duty as the chairman to ensure continuity which is harmonious for the bank. He therefore used his position to push for new leadership despite objections from the shareholders on the timing.

Conclusion

Organizations often undergo changes in their structure, management and leadership within the course of doing business. Meaningfully changes that are transformative often require the use and of different models and theories on change management. The process of change at ANZ bank under the leadership of McFarlane utilized two concepts and theories of change management at the organizational level.  The Lewin’s model was used to catalyze the organization to change using broad parameters. The McKinsey 7 S model offers more depth and insight into the component aspects that were targeted for change. The change resulted in right sizing the human resource component coupled with cultural change that espoused new organizational values.

The process of change is fraught with challenges such as the resistance by employees to change. Other challenges include lack of clear communication which requires change managers to come up with proactive solutions. Some models that can be employed within organizations to facilitate a smooth transition of change are the cultural web and ADKAR models. These models help the employee to align their values and goals to that of the organization. Leaders and their style of management coupled with personality traits affect the process of change. Each leader and manager will adopt the style relevant to the stage of change. Collectively, the different leadership styles and models adopted in the process of change ensure that the change is transformational, beneficial and long-lasting

References

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