Managing Change ENQUIRYANDACTION Australasian Edition ManagingChange:EnquiryandAction AustralasianEditionoffers afreshperspective ofchangetheory,withcontemporaryexamplesprovidingstudentswiththetoolsthey needtonavigatethecomplexitiesofchangewithinorganisations.Thebookfeatures notionsofinnovation,disruptionandagilelearningthatarenecessaryinanintensi- fiedbusinessworld. Using an enquiry–action framework, the text is separated into three main parts – diagnosing, enacting and explaining – to combine theory with the practical tools needed to understand and manage change. Cases reinforce student understanding and focus on actions and outcomes whilst a selection of 15 extended cases bring differentconceptstogether. Written by leading professionals, Managing Change is an essential resource for studentslookingtodevelopastrongskillsbasethatcanbeemployedinpractice. NicBeechistheVicePrincipal,AcademicPlanningandPerformanceattheUniversityof DundeeandChairoftheBritishAcademyofManagement. RobertMacIntoshisHeadoftheSchoolofManagementandLanguagesatHeriot-Watt University. PaulKrustisDirectorofQualityatExcelsiaCollege. SelviKannanisaLecturerintheCollegeofBusinessatVictoriaUniversity. AnnDadichisaSeniorLecturerintheSchoolofBusinessatWesternSydneyUniversity. Managing Change ENQUIRY AND ACTION Australasian Edition NIC BEECH ROBERT MACINTOSH PAUL KRUST SELVI KANNAN ANN DADICH UniversityPrintingHouse,CambridgeCB28BS,UnitedKingdom OneLibertyPlaza,20thFloor,NewYork,NY10006,USA 477WilliamstownRoad,PortMelbourne,VIC3207,Australia 4843/24,2ndFloor,AnsariRoad,Daryaganj,Delhi–110002,India 79AnsonRoad,#06–04/06,Singapore079906 CambridgeUniversityPressispartoftheUniversityofCambridge. ItfurtherstheUniversity’smissionbydisseminatingknowledgeinthepursuitof education,learningandresearchatthehighestinternationallevelsofexcellence www.cambridge.org Informationonthistitle:www.cambridge.org/9781316639252 ©CambridgeUniversityPress2017 Thispublicationiscopyright.Subjecttostatutoryexception andtotheprovisionsofrelevantcollectivelicensingagreements, noreproductionofanypartmaytakeplacewithoutthewritten permissionofCambridgeUniversityPress. Firstpublished2012byCambridgeUniversityPressUK Australasianeditionfirstpublished2017 CoverdesignedbyLoupeStudio TypesetbySPiGlobal PrintedinSingaporebyMarkonoPrintMediaPteLtd,May2017 AcataloguerecordforthispublicationisavailablefromtheBritishLibrary ACataloguing-in-Publicationentryisavailablefromthecatalogueofthe NationalLibraryofAustraliaatwww.nla.gov.au ISBN978-1-316-63925-2Paperback Additionalresourcesforthispublicationatwww.cambridge.edu.au/academic/changemanagement Reproductionandcommunicationforeducationalpurposes TheAustralianCopyrightAct1968(theAct)allowsamaximumof onechapteror10%ofthepagesofthiswork,whicheveristhegreater, tobereproducedand/orcommunicatedbyanyeducationalinstitution foritseducationalpurposesprovidedthattheeducationalinstitution (orthebodythatadministersit)hasgivenaremunerationnoticeto CopyrightAgencyLimited(CAL)undertheAct. FordetailsoftheCALlicenceforeducationalinstitutionscontact: CopyrightAgencyLimited Level15,233CastlereaghStreet SydneyNSW2000 Telephone:(02)93947600 Facsimile:(02)93947601 E-mail:[email protected] CambridgeUniversityPresshasnoresponsibilityforthepersistenceoraccuracy ofURLsforexternalorthird-partyinternetwebsitesreferredtointhispublication anddoesnotguaranteethatanycontentonsuchwebsitesis,orwillremain, accurateorappropriate. Contents Listoffigures pagevii Listoftables ix Listofcases x Acknowledgements xi PartA: Foundations 1 1. Practisingchangemanagement 3 2. Changeapproach:conceptsandframework 12 3. Innovation 29 PartB: Diagnosing 41 4. Understandingthechangecontext:internalandexternalfactors 43 5. Clarityandambiguity 68 6. Engagementandvitality 78 7. Stakeholderpositioninganddynamics 86 8. Culture,habitsandunlearning 98 PartC: EnactingChange 115 9. Choosing/adoptinganapproachtochange 117 10. Changingstructure 148 11. Identityandchange 163 12. Choosingcustomersandcompetitors 175 13. Changingprocesses 195 14. Aligningpeopleandactivities 204 15. Learninganddeveloping 217 16. Conversationsandstories 233 PartD: Explaining 251 17. Developingandinterpretingevidence 253 18. Theenquiry–actionframeworkinpractice 266 PartE: ExtendedCases 281 Twostart-ups:NetflixandLush 283 v CONTENTS Greenheck 287 Isuzu:Thesolutiontoharmoniousengagementbetweenengineeringandsales 291 Kodak 296 SmileSolutions 300 Nokia 308 Sanitarium 316 ConsultBiz/ServiceCo 321 Zappos 328 ABB 335 AustralianRedCross 344 PowerProvisionLtd 353 LezhangTechnology:Leadingdisruptivechange 358 Alawyer’sstory:Respondingtochangethroughinnovation 363 CityofMayfair 367 Index 375 vi Figures 1.1 Theenquiry–actionframework page7 2.1 VandeVenandPoole’sframeworkofchange 14 2.2 Burnes’sframeworkofchange 18 3.1 Acausalmodeloforganisationalperformanceandchange 34 3.2 Keyorganisationalcomponents 34 4.1 Strategyimplementationframework 56 4.2 DifferentviewpointsontheMcKinsey7S 59 4.3 7S-e:thefullsetof497Ssharedcombinations 60 5.1 Theproblem-framingcycle 72 5.2 ClosedproblemframingusingWXYZ 73 7.1 Basicstakeholdermap 89 7.2 Initialanalysis 92 7.3 Actionsbyseniormanagerstoencouragestakeholder movement 93 7.4 Targetstakeholdermapforachangeinmarketingstrategy 94 8.1 Diagnosingculturalaspectsofchange 106 8.2 Sharedvalues(culture)atthecentralreferencepointofthe7S framework 108 8.3 Single-loopanddouble-looplearning 109 9.1 Fourgenericposturesinrelationtoapproachestochange 135 10.1 Levelofdiversity 151 10.2 Questionsofhowtostructurepromptedbydifferent environments 152 11.1 Amodelofidentitywork 168 12.1 TheadaptedAnsoffmatrix 179 12.2 TheGE–McKinseymatrix 186 12.3 TheGE–McKinseymatrix:decisionimplications 188 12.4 Stepsinstrategicgroupanalysis 189 12.5 StrategicgroupanalysisfortheAccountingandAdvisoryServices IndustryinAustralia 189 13.1 Asimpleprocessmap 197 13.2 Processmappingusingstructuredtechniques 198 13.3 Changingprocesses 200 15.1 Learningfortechniqueandinsight 220 17.1 CustomerreactionstoTrainingCo.’snewmaterial 258 18.1 Theprocess/contentbalanceinchangemanagementpractices 273 18.2 Theenquiry–actionframework 274 18.3 Theexpandedenquiry–actionframework 275 vii FIGURES Extended Cases Greenheck Figure1Greenheck’sinnovationframework page290 Isuzu Figure1DIASataglance 295 Figure2DIASinterrelationswithothersystems 295 SmileSolutions Figure1Registereddentalservicetypes–generalandspecialist 302 Zappos Figure1Holacracy™framework 331 ABB Figure1ABB’ssharepricevsStandardandPoor’s500Index 341 viii Tables 4.1 Stakeholderdiagram:externalandinternal page55 4.2 7S-d:interdependenciesofthe7Selements(7Sor7S+21S-S) 60 4.3 Frameworksoforganisationalcontext 61 4.4 Positiveandnegativeexpectationsofcontextualanalysis 63 9.1 GoogleandGoogleScholarsearchresults,October2016 124 9.2 SearchenginehitsforPopularBusinessSystems 128 12.1 Examplesofroundsofsubstitutions 184 12.2 Impactofincreasingrivalryonrevenuesandcosts 185 12.3 Exampleoffactorratinganalysisofattractiveness 187 16.1 SummaryanalysisofNSCFinance 244 17.1 Classifyingevidence 256 17.2 Diagnosticmodels 261 Extended Cases Zappos Table1KeydifferencesbetweentraditionalcompaniesandHolacracy™ page330 ABB Table1ABB’sfinancialperformance,1988–2015 337 CityofMayfair Table1CityofMayfair:participants’responsestoQ.1 369 Table2CityofMayfair:participants’responsestoQ.2 370 Table3CityofMayfair:participants’responsestoQ.3 371 Table4CityofMayfair:participants’responsestoQ.4 371 Table5CityofMayfair:participants’responsestoQ.5 372 Table6CityofMayfair:participants’responsestoQ.6 373 Table7CityofMayfair:participants’responsestoQ.7 374 ix