Managing Strategic Change through Lewin's Change Management Model and McKinsey's 7-S Model - Essay Example

Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Managing strategic change is fundamental to business success Strategic change refers to the restructuring of the scope, organizational structure, resource deployment, synergy and the competitive advantages of an organization as defined in its strategy (Hofer and Schendel, 1978). Strategic change management is the process by which these changes are managed in a structured and a well-thought way so as to achieve the organizational goals, objectives and mission. The business environment is characterized by dynamic changes brought about by economic, technological, political and social changes. Given these, strategic change by an organization is inevitable. It is extremely important for an organization to adopt change so as remain a going concern and cut a competitive edge in the industry by meeting and exceeding competition needs. It is therefore crucial for the managers of an organization to develop the capabilities to plan, implement and steer strategic change in the advantage of the organization. Managing strategic change has become a rapidly growing discipline that is being deployed in almost all organizations in a global scale. The process by which an organization adapts to change or manages change has drawn many schools and systems of change, leading to the development of theories and models to explain strategic change in organizations(Hofer and Schendel, 1978). Effective strategic change management requires a clear understanding of the model of change. The theories and models of strategic change define the building blocks by which change is built. Some of the earliest known models applied to managing strategic change include Lewin’s three-phase model, Kotter’s eight-stage change model and McKinsey 7-S model(Joyce, 2004). Lewin’s change Management Model was developed in the 1947 by a physicist and social scientist called Kurt Lewin. It is known as Unfreeze-Change-Refreeze model, describing the three main stages of change (Lewin and Gold, 1999). The model postulate that most organizations and people tend to change and operate within certain safety zones. The psychologist categorized the zones of change into three. In the Unfreeze stage, most people tend to put active effort to resist change. Hence, a period of unfreezing is necessary to initiate change in the organization through motivation to prepare the organization members to accept the fact that change is necessary for the organization (Lewin and Gold, 1999). The stage involves breaking down the status quo of the firm and building a new methodology of operation by convincing the members that the existing way of doing things is unsuitable for company. The organizational values, attitudes, behaviors and beliefs are challenged at this stage, with expectations of uncertainty due to the strategic change (Lewin and Gold, 1999). The second stage this model is change (Lewin and Gold, 1999). The uncertainty in the previous stage is resolved by adoptingnew ways of doing things. The people in the organization need to understand the importance of change, and the management realizes that not everyone falls for the support of change and its benefits. The third stage of the model is Refreezing (Lewin and Gold, 1999). In this stage, changes begin to take shape within the organization as people embrace the new ways of operation in the organization. Indicators of change are visible, such as a new stable organizational chart, consistent job and role description. The strategic changes in the organization are internalized and integrated through incorporation in the routine activities. The second model is the McKinsey 7-S model which was developed in 1978 by Robert Waterman, Richard Pascale and Anthon Athos. The model has been used extensively by practitioners and academicians as planning tool for strategic change management in various organizations. The seven elements of a company used in this model are: structure, strategy, skills, staff, style, systems and shared values and they can be put together to achieve efficiency and effectiveness in managing strategic change of a company(Hanafizadeh and Ravasan, 2011). The main emphasis of this model is that all the seven elements are interrelated, and strategic change in one of the elements requires change in all other elements so that the firm can function in an effective manner. The seven factors are categorized into either hard or soft factors. The hard ones are those which are can be easily identified and influenced by the management and include strategy, structure and systems. The soft ones on the other hand are less tangible and more difficult to describe and are mostly determined by organizational culture. They include skills, style, shared values and staff. The model can be used to understand how these elements are interrelated and interdependent in managing strategic change, and the impact of change of one element on the others(Hanafizadeh and Ravasan, 2011). The third model is Kotter’s eight-stage change model developed by John Kotter and introduced in his book “Leading Change” in 1995. He summed up what he referred to the eight essential steps for successful management of strategic change in an organization. The first step is to establish a sense of urgency by examining the market and competitive forces so as to identify the potential threats and opportunities and then create a catalyst for change(Kotter, 1996). This incorporates convincing the various shareholders on the need for change by motivating them. The second step of this model is to form a powerful coalition by creating a team of influential people that can help in building a strong momentum for change and develop a vision to be realized. The third step is to create a vision to lead the change, and the fourth stage is to communicate the vision and strategies to all stakeholders. The fifth step is to empower others to act on the vision by removing any obstacles to change altering any structures that might undermine the vision. The sixth step is to create short term wins on which the successes of the change can be seen by the stakeholders. The seventh step is to build on the change by increasing credibility to policies, structures and systems that develop the change. The eighth and last step is to institutionalize new approaches to ensure leadership development and succession to make the change stick into and become part of the organization(Kotter, 1996). A case application of the Kotter’s eight-stage change model is used here for a well-established state-owned organization in Sydney, Australia to illustrate the use of the model in managing strategic change. The corporation had been slowly changing its operational structures in accordance to the trends in the public sector. The organization used Kotter’s eight-stage change model to manage its strategic change, utilizing the eight steps of the model guided by a consultancy firm. In the first step of establishing a sense of urgency, everyone in the firm was involved in a series of strategic conversations to help them understand the positive results of accepting change. This was facilitated by discussions with staff and customers as well as performing a SWOT analysis for the company. In the second step of forming a powerful coalition, an influential team was select from managers and informal leaders that would lead a campaign for change. In the third step of defining the change implementation strategy, a clear vision was defined that would be used as a roadmap for the change. A concise and powerful statement was developed to brand the change, and all staff were actively involved in providing input for the vision or critiquing it. In the fourth stage which involved the communication of the vision, the coalition communicated the vision to the key internal stakeholders through two-way discussions and obtained feedback to bring the vision to live. In step five, the management led supporting pillars and supporting initiatives for the change through a plan with schedules, deadlines and reports. In the sixth step, the management and the consultancy firm formulated short-term goals that would demonstrate that progress was being made. Forums were organized to communicate progress and milestones for success. In the seventh step of building the real change, the company was guided by a twelve-month development plan that was an effective and a balanced strategy map, combined with participative approaches to generate feedback. In the eighth and the final step, the change was anchored into the organization by developing a structural blueprint of the service delivery of the firm and a series of knowledge management initiatives was implemented as the basis of learning culture. This case demonstrates the use of Kotter’s eight-stage change model in managing strategic change. The model has advantages such as being an easy step-by-step approach and focuses on preparing for and accepting change. However it has limitations such as: none of the steps can be skipped; and it is a time consuming approach to managing strategic change. In conclusion, the concept of strategic change management is very common today in many business organizations given the rapid dynamics in the business environment. The success of managing strategic change depends on the nature of the firm, the people, the change and the model used. Effective strategic change management requires a management team with excellent communication and analytical skills and result-oriented. Thus, managing strategic change is fundamental to business success. References; Hanafizadeh, P. and Ravasan, A. (2011). A McKinsey 7S Model-Based Framework for ERP Readiness Assessment. International Journal of Enterprise Information Systems, 7(4), pp.23-63. Hofer, C. and Schendel, D. (1978). Strategy formulation. St. Paul: West Pub. Co. Joyce, P. (2004). Public sector strategic management: the changes required. Strat. Change, 13(3), pp.107-110. Kotter, J. (1996). Leading change. Boston, Mass.: Harvard Business School Press. Lewin, K. and Gold, M. (1999). The complete social scientist. Washington, DC: American Psychological Association. Read More