MANCOSA: MBA (GENERAL) YEAR 2
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ASSIGNMENT 4: MANAGING STRATEGIC CHANGE DUE DATE: 09 SEPTEMBER 2013
Read the extract below and answer the questions that follow.
Finding the right place to start change
Changing an entire large organisation is never easy; only about a third of all such transformations succeed. One problem many organizations run into as they implement a change program is faltering momentum because employees just don't change the way they work. Sometimes they don't want to, and sometimes the reason is a poorly structured plan that makes change harder. Our recent experience at a European retail bank shows the benefits of starting to implement change by focusing on the employees who have the most influence over the daily work that needs to change. This approach can ensure that a successful transformation happens faster and that employees remain engaged in the long term.
That's what eventually happened at a national bank, which had more than 6,000 branches and was facing increasing competition from local banks that were perceived as more attuned to local-customer needs. In an attempt to close the gap, the bank developed a new organizational model that was designed to remove layers of centralization and supervision and give branch managers much more authority to tailor bank offerings, marketing, and other promotions to local interests. The bank's top managers rapidly communicated to the whole staff the principles behind the new organizational model and the model itself, including how roles, such as those Of branch managers and their supervisors, were supposed to change. The top managers did this through a series of road shows, along with other traditional methods, such as memos, articles on the bank's Intranet, and a stand-alone publication that featured all the new organizational charts. Everyone received the same information, and everyone was expected to adopt the new model at the same time.
When the top managers assessed progress a few months later, they realized that most employees simply hadn't changed how they worked. For example, the new structure simplified how credit decisions were made: branch managers were supposed to send their recommendations directly to the final decision maker (one of a series of committees with the autonomy to authorize different levels of credit) instead of through several intermediate intervening layers (as many as five, depending on risk). But the managers, afraid of making mistakes or annoying colleagues in the intervening layers, were still using the old structure. What's more, the regional-level supervisors of the branch managers now weren't supposed to tell branch managers what to do instead they were to act solely as coaches, but neither the supervisors nor the managers had made this change successfully. Many supervisors didn't have the skills they needed to coach, and many branch managers similarly didn't have the skills they needed, such as time planning and communications, to run things on their own.
The bank's leaders realized that they didn't have the right model for delivering a transformation: they were seeking to change too much at once instead of scaling up after seeing how the new methods worked in practice. Knowing the bank needed a different approach to reach its goal of greater local autonomy, it decided to shift focus to the employees who could facilitate change the fastest.
Starting change in the middle Who were those people? The bank's leaders looked at three criteria: • Which roles have a direct, substantial impact on the desired business results? • Which roles are connected with a large number of different subgroups in the organization? • Which roles can decide how people get the relevant things done?
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COURSE AND ASSIGNMENT HANDBOOK; JANUARY 2013 INTAKE