Strategy in Action

Strategy in action
Now that a strategy has been selected, what next?
Practicalities associated with implementation of chosen strategy!

1. Enabling success through organizing: Organizational structures and internal relationships: types of org structures that
can be adopted,
2. Enabling success through performance excellence and talent management: Improving performance: The Baldrige
model, empowerment, talent management
3. Strategic change: key issues related to strategic change incl process redesign and project management
Enabling success: organizing

Organizational structures
Organizations are set up in specific ways to accomplish different goals, and the structure of an organization can help or
hinder its progress toward accomplishing these goals. Organizations large and small can achieve higher sales and other
profit by properly matching their needs with the structure they use to operate.
Functional (people are Also commonly called a bureaucratic organizational structure, the functional structure divides
organized according to the company based on specialty. This is your traditional business with a sales department,
the type of work they marketing department, customer service department, etc.
do) The advantage of a functional structure is that individuals are dedicated to a single function. These
clearly defined roles and expectations limit confusion. The downside is that it’s challenging to facilitate
strong communication between different departments.
One of the most common types of organizational structures, the functional structure
Appropriate for: departmentalizes an organization based on common job functions.
Company growing,
simple structure not So an organization with a functional structure would group all of the marketers together in one
appropriate, need for department, group all of the salespeople together in a separate department, and group all of
specialist skills in the customer service people together in a third department.
a number of
areas
The functional structure allows for a high degree of specialization for employees, and is easily
scalable should the organization grow.
The downsides: The structure also has the potential to create barriers between different
functions -- and it can be inefficient if the organization has a variety of different products or
target markets.
Divisional Divisional structure typically is used in larger companies that operate in a wide geographic area
( can be based on or that have separate smaller organizations within the umbrella group to cover different types of
geography, product or products or market areas.
market)
The divisional structure refers to companies that structure leadership according to different products
Appropriate for: or projects. Gap Inc. is a perfect example of this. While Gap is the company, there are three
Larger companies with a different retailers underneath the heading: Gap, Old Navy, and Banana Republic. Each operates as
diverse range of an individual company, but they are all ultimately underneath the Gap Inc. brand.
strategies.
Another good example is GE, which owns dozens of different companies, brands, and assets
across many industries. GE is the larger brand, but each division functions as its own
company.
Holding company structure: These divisions are separate legal entities.

Matrix The matrix structure is a bit more confusing, but pulls advantages from a couple of different
formats. Under this structure, employees have multiple bosses and reporting lines. Not only do
Appropriate for: they report to a divisional manager, but they also typically have project managers for specific
Organizations which projects.
have lots of project
work. While matrix structures come with a lot of flexibility and balanced decision-making, this model is
also prone to confusion and complications when employees are asked to fulfill conflicting responsibilities is
a hybrid of divisional and functional structure. Typically used in large multinational companies,
the matrix structure allows for the benefits of functional and divisional structures to exist in one
organization. This can create power struggles because most areas of the company will have a dual
management--a functional manager and a product or divisional manager working at the same level
and covering some of the same managerial territory.
Transnational structure Combines some independence for national units with certain functions that are run globally. For
example, R&D may be based in one country but used across all territories.
Corporate parenting style

Many businesses end up with a corporate structure that comprises a head office and various SBUs (strategic business units);
although the legal nature of these may vary, some may be set up as divisions, while others may be subsidiaries with a
group structure.
Corporate parenting looks at the relationships between head office and SBUs and how these relationships add value to
individual SBUs. These questions are particularly important if growth has been achieved through acquisition rather than
organically.
Goold and Cambell identified 3 broad approaches or parenting styles reflecting the extent to which the management at the head
office becomes involved in the process of business strategy development. The approach will have a significant impact on the
role of central departments such as accounts & finance.
Strategic planning style (Cadbury and BP): Under this style the role of the corporate parent is to enhance synergies across the
business units. This may be achieved through: envisioning to build a common purpose, facilitating cooperation across
businesses and providing central services and resources.
Strategic control style (ICI): Under this style the corporate parent leverages its resources and competences to build value for
its businesses. For example a corporate could have a valuable brand or a specialist skill. The corporate parent uses its
parenting capabilities to seize opportunities for growth.
Financial control style ( Marconi/GEC): Under this style the role of the corporate parent is to monitor and evaluate the financial
performance of investment portfolio of the respective business units. The corporate managers act as agents on behalf of
shareholders and financial markets to identify and acquire viable assets and businesses. The business unit managers are given
the autonomy to carry out business activities and make decisions at their level. However the corporate parent sets
performance standards for control purposes.
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Emergent Structures
Boundary-less organizations: organizations which have structured their operations to allow for collaboration with external parties
Hollow structure: the management will separate core and non-core functions of the business and focus on core functions
while outsourcing all non-core functions.
Modular structure: Certain production processes are outsourced to specialist outsourcers. The core company then
assembles outsources components to produce the final product ( e.g. in aircraft manufacture).
Virtual structure: Here, the main organization is linked to outside firms (such as vendors, clients, associates) with a
computer connection to achieve collective growth and profitability. This structure allows them to work as a unit.
Networks: Groups of organizations/individuals who co-operate to deliver services to customer ( e.g. a building contractor).
Other important terms

Outsourcing & Offshoring: Outsourcing and offshoring involve external providers taking on activities previously carried out in-house.
Offshoring involves using external providers in different countries.
Shared servicing: An alternative to outsourcing is shared servicing, where shared service centres consolidate the
transaction- processing activities of many operations within a company. Shared service centres aim to achieve significant cost
reductions whilst improving service levels through the use of standardized technology and processes. Many large organisations
have moved to centralise their IT support functions.
It is common now for one IT helpdesk to serve the entire organisation, as opposed to individual divisions or departments having
their own designated IT support.
Global business services: For more than two decades, organisations around the world have been using shared services and
outsourcing to improve service delivery and reduce costs within defined parts of their businesses. Now leading organisations are
taking the next step. Instead of operating numerous shared service centres and managing outsourcing vendors independently,
they are implementing Global Business Services (GBS), providing integration of governance, locations and business practices to
all shared services and outsourcing activities across the enterprise.
Human resource as a strategic asset
There are several approaches to human resource management based on the view
that employees are an important strategic asset that can be managed to produce a
competitive advantage.
Two such approaches are:
 Empowerment; and
 Talent management.
Empowering organisations
Employee empowerment is a strategy whereby powers previously held by

managers are delegated to those that they used to manage. Employee
empowerment helps employees own their work and take responsibility for their
results. In recent years many large organisations have removed layers of
management and empowered lower level employees.
Delayering is a planned reduction in the number of layers of a management
hierarchy. It is often accompanied by employee empowerment.
The following are necessary in order for empowerment to be effective:
 Employees must buy into it. For this to happen they must have real
authority to make decisions and be able to control their area of
responsibility.
 Employees must share in corporate ethos and be committed to the
strategic objectives of the company
 Employee must be provided with information for decision making
 Employee performance must be appraised fairly
Management information
There is a need to provide information at a different level than previously provided.
Information reports may need to be restructured to provide the employee with
appropriate decision making and control information.
New performance measures and management processes will be required in order to
appraise the employee. Information collection and processing might need to be
refocused to allow this.
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Strategic Business Leader (SBL)
Talent management
Talent management is a business strategy which aims to recruit, hire, retain, and
develop the most talented workforce available in the job market.
It comprises processes and systems related to the recruitment, development and
retention of a workforce that is superior to that of an organisation’s competitors.
Talent management is particularly important for industries that require a highly
skilled and educated workforce.
An organisation might incur a considerable expense in recruitment of workers and
then training them to a high level of skill. This investment is lost if the highly skilled
worker leaves to join an organisation that the worker believes to be a more attractive
employment proposition. Talent management is an approach which tries to
minimise this impact.
Key features of talent management
The workforce is viewed as a source of competitive advantage.
Recruitment is based on potential of the employee rather than previous experience
and qualifications.
Training and education of the workforce:
 is a key management responsibility;
 is viewed as an investment rather than as a cost;
 is viewed as a strategic tool and changed to meet changing needs
The employer’s commitment to employee development is expected by employees
and a key recruitment and retention factor.
Enabling success: performance management
We now move on to see how organizations can ensure high levels of performance.
6 Performance excellence
The Baldrige model (the Baldrige Excellence Framework)
Organisations look for ways to effectively and efficiently meet their missions and
achieve their visions. Baldrige provides a framework to improve an organisation's
performance and achieve sustainable results.
The Baldrige framework allows an organisation to assess its performance in critical
areas and thus take action to make improvements and achieve excellence.
The Baldrige framework allows organisations to reach their goals, improve results,
and become more competitive by managing all the components of the organisation
as a unified whole, so that plans, processes, measures, and actions are consistent.
Performance excellence
This term refers to an integrated approach to organisational performance
management that results in:
 delivery of increasing value to customers and stakeholders, contributing
to organisational sustainability;
 improvement of overall organisational effectiveness and capabilities; and
 organisational and personal learning

Overview of the model
The model views organisations as a series of processes which are integrated to

generate results. The processes together with the results are described as “criteria
items” and are subjected to thorough analysis in the model.
The processes are bounded by an organisational profile and built on a foundation of
core values and concepts.
The above diagram shows that the model has the following components:
 Organisational profile
 Processes:
 Leadership
 Strategy
 Customers
 Measurement, analysis, and knowledge management
 Workforce
 Operations
 Results
 Core values and concepts
Organisational profile
The organisational profile provides critical insight into the key internal and external
factors that shape the operating environment.
The organisational profile helps organisations to better understand the context in
which it operates; the key requirements for business success; and the needs,
opportunities, and constraints placed on the management systems.
646 © Emile Woolf International Limited

Chapter 20: Enabling success: organising
The model covers:

 Organisational description: the key characteristics and relationships
that shape an organisational environment; and
 Organisational situation: the competitive environment in which an
organisation operates, including key strategic challenges and
advantages.
Core values and concepts

The model describes these as the embedded beliefs and behaviours that are found
in high-performing organisations.
They include:
 visionary leadership;
 customer-focused excellence;
 organisational learning and agility;
 managing for innovation;
 ethics and transparency; and
 delivering value and results.
Processes
The six processes are evaluated along four dimensions as follows:
Approach: How do the organisation’s work carried out?

How effective are its key approaches?
Deployment How consistently are key processes used in relevant parts of
the organisation?
Learning: How well have the key approaches been evaluated and
improved?
How well have improvements been shared within
the organisation?
Integration: How well are the approaches aligned with current and
future organisational needs?
How well are processes and operations harmonized across
the organisation?
Leadership
This category asks how the governance systems and actions of senior leaders
guide an organisation.
It covers:
 Senior leadership (role and responsibilities); and
 Governance and societal responsibilities
Strategy
An organisation’s long-term organisational success and competitive environment
are key strategic issues that need to be integral parts of overall planning.
Making decisions about an organisation’s core competencies and work systems is
an integral part of ensuring the organisation’s success.
This category encourages an organisation to examines how it develops strategic
objectives and action plans, implements them, changes them if circumstances
require, and measures progress.
Customers
This category encourages an organisation to analyse and understand how it
engages with customers.
Measurement, analysis, and knowledge management

This criterion is about key information on effectively measuring, analysing, and
improving performance and managing organisational knowledge to drive
improvement, innovation, and organisational competitiveness.
This category encourages an organisation to consider how data and information is
selected for performance measurement, analysis, and review in support of
organisational planning and performance improvement.
Workforce
This category addresses workforce practices directed toward creating and
maintaining a high performance environment.
Operations
This category encourages an organisation to consider the focus on its work, product
design and delivery, innovation, and operational effectiveness to achieve
organisational success.

Chapter 20: Enabling success: organising
Results
Results are evaluated along four dimensions as follows:
Levels What is the current performance?

Trends Are the results improving, staying the same, or getting worse?
Comparisons How does performance compare with that of other
organisations, or with benchmarks or industry leaders?
Integration Are results that are important to the organisation being
tracked?
Do the results take into account the expectations and needs
of key stakeholders?
Are the results used in decision making?
This category provides a systems focus that encompasses all results necessary to sustaining
an enterprise including:
 Product and process results (which demonstrate product and service
quality and value that lead to customer satisfaction and engagement);
 Customer-focused results (information on how well customers have
been satisfied and engaged);
 Workforce-focused results (how well the organisation has been creating
and maintaining a productive and learning environment for the workforce);
 Leadership and governance results (which demonstrate the extent to which
an organisation is fiscally sound, ethical, and socially responsible);
 Financial and market results.
The Baldrige Criteria (can be used for NFPO as well as for profit organizations)
The framework does not tell how an organization should operate. It is used to ASSESS the performance so tha strengths
and opportunities for improvement can be identified and prioritized.
Organizations that have demonstrated that they applied the Baldrige Criteria have reported improved performance across a range
of areas; better financial results, customer satisfaction and loyalty, improved product and services and a engaged workforce.
Organizations can assess their performance in relation to the following core values and concepts:
Leadership: How the org’s leadership guides, governs, sustains org performance.
Examines how senior executives guide and sustain the organization and how the organization addresses Governance, ethical,
legal and community responsibilities
Strategy/strategic planning: the ability to plan, develop, implement strategies successfully
Examines how the organization sets strategic directions and how it determines and deploys key action plans
Customers/customer focus: success in building and sustaining strong lasting relationship with customers.
Examines how the organization determines requirements and expectations of customers and markets; builds relationships with
customers; and acquires, satisfies, and retains customers
Measurement, analysis and knowledge management: systems to provide feedback to strategic leaders about the
performance results.
Examines how data and information are used, managed, analyzed, and improved to support key organization processes as
well as how the organization reviews its performance
Workforce focus
Examines how the organization engages, manages, and develops all those actively involved in accomplishing the work
of the organization to develop full potential and how the workforce is aligned with the organization’s objectives
Operations/process management
Examines aspects of how key production/delivery and support processes are designed, managed, and improved
Results – The above six shape org’s ability to achieve results!
Examines the organization’s performance and improvement in its key business areas: customer satisfaction, financial and
marketplace performance, workforce, product/service, and operational effectiveness, and leadership. The category also
examines how the organization performs relative to competitors
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Empowering organizations
Empowerment means workers are made responsible for achieving work targets with the freedom to make decisions about how
the targets are achieved.
Jack Welch, former CEO of General Electric, focused his years at GE transforming the company into an empowered
organization, what he called a “boundaryless organization.” Welch aimed to remove anything that got in the way of the flow of
information and ideas within the company. Instead of sales, research and production divisions operating separately under
directives sent from higher executives, Welch encouraged teamwork across divisions and autonomy in deciding operations,
maintenance and results. This type of empowered company structure enables a trust-based work environment where meeting
customer needs and creating opportunities to advance the company are part of everyone’s job.
Chiefs Create
As head of an empowered organization, you pave the way for the company by plotting its course, and keeping all
managers and employees going in the same direction. The CEO trains managers to take over day-to-day company operations.
Managers might regularly report progress, and get insight from the CEO, but the CEO isn’t micro-managing every daily detail. For
example, according to Entrepreneur, an empowered organization’s CEO might require managers to implement their own department plans
and budgets as well as hire their own employees. The CEO’s role is also to create a safe work environment and provide the resources
needed to let decision-making thrive.
Managers Lead
Managers are leaders in an empowered organization. The role of a manager in an empowered organization is to guide the
direction of the company by enabling employees to create, take risks and work interdependently with other parts of the
organization. A manager in this environment is less a person of authority and more a person of support. For example, according
to Harvard Business Review, Roger Sant, founder and former chairman of Applied Energy Services, organized his company
around small teams to avoid levels of hierarchy. Under his leadership, each of the company’s power plants had one manager overseeing
five to 20 teams, with each team completely self-directed, but working interdependently with all other teams.
Employees Decide
Empowered organizations are driven by teamwork. Employees proven to be capable are made responsible for making decisions
that impact the company, and are held accountable for the results of their decisions. In larger empowered organizations,
employees form teams to control various aspects of the organization. Employees may move around to different teams over time,
which can increases their expertise in various roles and their value as employees overall. An empowered work environment
attracts future leaders who are trustworthy, self-confident, always learning, and passionate about helping customers and
the company overall.
Talent management
The CIPD (Chartered Institute of Personnel and Development, UK) defines talent management as “…Systematic
attraction, identification, development, engagement, retention and deployment of those individuals who are of particular value to an
organisation, either in view of their ‘high potential’ for the future or because they are fulfilling business/operation-critical roles.”
Johns Hopkins University defines talent management as, “a set of integrated organizational HR processes designed to attract, develop,
motivate, and retain productive, engaged employees.”
Human resource management would ideally include talent management, however some organisations have human resource
departments, which are highly transactional, instead of also being strategic and transformational. This means that organisations
might be meeting immediate needs, however are not allocating time to strategically predicting what their people needs will be in
the future.
Talent management is a business strategy that organizations hope will enable them to retain their top most talented and
skilled employees.
Below are some of the top reasons why talent management is important and why origanisations need to invest in it.
- Employee motivation: create more reasons for employees to be attracted to the organization, such as a higher
purpose or meaning for employees.
- Attract top talent: Recruit the most talented and skilled employees available. When you have strategic talent management,
you are able to create an employer brand, which organically attracts your ideal talent, and in turn contributes to higher
levels of business performance and results.
- Continuous coverage of critical roles: an organization will be prepared for gaps in critical skills and have a plan to
address the critical roles and highly specialized roles in the workforce. This means that an organization will have a
continuous flow of employees to fill critical roles, which ensures operations run smoothly and your clients and
stakeholders are satisfied. It also means that other employees are not left with extra workloads, which could
eventually lead to burnout.
- Increase employee performance: It is easier to identify ‘good fit’ employees, rather than making decisions in recruitment which
do not work towards the ideal organizational strategy. This can lead to less performance management issues and
grievances. It will also ensure that the top talent within the organization stays longer.
- Engaged employees: an organization can make systematic and consistent decisions about development of staff, ensuring
that the people you require it have the skills and development necessary, and saving money on unnecessary development.
Additionally, when there is a fair process for development, employees feel more engaged and this again increases
retention rates and also ensures that the organization can meet its operational requirements..
- Retain top talent: well-structured on-boarding practices create higher levels of retention. This means that an organization
saves on recruitment and performance management costs in the long run.
- Improve business performance: when employees are engaged, skilled and motivated, they will work towards your business
goals, which in turn increases client satisfaction and business performance.
- Higher client satisfaction: a systematic approach to talent management means that there is organizational wide integration
and a consistent approach to management1. This in turn translates to general communication and dissolving of silos
within the business. When systems are more integrated, client satisfaction rates are usually higher, since they are dealing
with less people and their needs are met faster.
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Talent Management Model
Talent management can include; talent acquisition (and recruitment), learning and development, organisational values and vision,
performance management, career pathways and succession planning.
While there are many talent management models, the elements of talent management can generally be categorised into five areas;
planning, attracting, developing, retaining and transitioning.
Strategic change
The need for change may arise due to:
- Changes in environment
- A review of strategic capability
- A decision to implement a new strategy etc.
Change can be discussed in terms of:

1. Type of change required: Balogun and Hope Hailey
2. Wider context of change: Balogun and Hope Hailey, POPIT
3. Implementing change: Lewin’s 3 stage model
Types of change
Balogun and Hope Hailey: contextual features model
Creating lasting change in an organisation can be a difficult and complex process. In

order to introduce strategic change successfully, there has to be a clear plan of
action. In addition, the entity must have the capacity to achieve the desired end-
result.
Julia Balogun and Veronica Hope Hailey have suggested a model for change. The
management of organisational change can be seen as a process with the following
steps:
1 Analyse the current position

2 Decide on the type of change required
3 Identify the future position that should be

reached after the change
4 Analyse the change context
5 Identify the critical features of the

change
6 Consider the options for making the change

and select from these options
7 Design the process of making the

change (the ‘change levers’ and
‘change mechanisms’
8 Manage the change process. Make the

change
9 Evaluate the change outcomes

Chapter 21: Managing strategic change
The nature of the change and the end result of the change (Steps 1 – 3)
The nature of the change might be gradual, or the change might be introduced suddenly,
all in one go. Change can therefore be described as either:
- gradual or incremental, or
- a ‘big bang’: this is change that happens all at once and quickly.
The desired end-result of the change might be either:

 a transformation: this is a fundamental change in the organisation, or
 a realignment: this type of change is less fundamental than a transformation,
but is still a major change.
Transformational change calls for a change in aspects of the culture of the entity, and so
is more difficult to introduce successfully. Realignment does not require any cultural
change, and so is more easily accepted by the individuals affected.
The nature and extent of the change can therefore be defined by a combination of two
issues:
 Whether the change will be gradual or a ‘big bang’ and
 Whether the nature of the change will be transformational or realignment.
Balogun and Hope-Hailey were therefore able to identify four categories of change.
Realignment, whether introduced incrementally or all at once, does not alter the
fundamental beliefs and culture of the organisation. Realignment is therefore usually
much easier to achieve successfully than transformation. It might be either:
 incremental, and introduced gradually (‘adaptation’), or
 introduced all at once (a ‘reconstruction’).
Evolution, which is the incremental introduction of a transformational change, can take

long time to accomplish.
Revolution is the introduction of transformational change quickly and all at once. This calls
for several simultaneous measures by the change managers in order to introduce the
change successfully. It is the most difficult type of change to accomplish successfully.
The managers responsible for making the change need to be aware of the implications of
the type of change they are trying to achieve (adaptation, reconstruction, evolution,
revolution).
Analysing the context within which the change will occur (Steps 4 and 5)
Balogun and Hope-Hailey suggested that the following features can be used to assess the
context, and identify the crucial features of the change situation:
1 Time scale How quickly is the change needed? Will the change be
incremental or ‘big bang’?
2 Scope of change How extensive is the change? Is it a transformation or a

realignment?
3 Preservation What resources and characteristics of the organisation

need to be preserved? What do we want to keep maintained,
unaffected by the change?
4 Diversity Are the employees affected by the change a

homogeneous group of similar people with similar views and
culture, or are there diverse groups who will be affected?
5 Capability What is the capability of the entity’s management and

employees for implementing the change? Do they have the
capability to make the change?
6 Capacity What resources are available for making the change?

What resources – money, staff time – can be invested in
making the change work?
7 Readiness How ready for change are the employees who will be
affected by it? Are they aware of the need for change? Do
they agree with the proposed change? Are they motivated to
make the change?
8 Power What power do the managers responsible for the

change have? Do they have the power to make the change?
Or does someone else have power over the ability of the
entity to make the change?
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Contextual features of change
There is no one right for the management of change. The success of managing change will also be dependent on
the wider context in which that change is taking place. Balogun and Hailey therefore build a number
of important contextual features that need to be taken into account in designing change programmes.
The Four-view POPIT Model-closely linked to process redesign and project management
The POPIT model is a quick and easy tool used to ensure that that all internal business aspects are considered at the
outset and throughout any business change.
The POPIT model can be used to ensure that a holistic approach has been taken to the change process and considered other
aspects of the business, in addition to the more obvious business processes and IT systems. In so doing, it is easier to uncover
where problems lie and what improvements might be possible.
The model should be viewed as a simple and quick approach to understand the business and its operating environment.
 During the investigation of potential changes, it provides an analysis framework, highlighting the areas where problems
and/or opportunities for improvement may be found.
 During the definition and development of solutions, it indicates the areas in which changes may be needed and helps to
identify the projects within the overall change programme.
The different aspects noted below can be considered when identifying areas for improvement:
People: (Roles, job description, skills, competence, management activities, culture and communication) think about the staff in
the organisation. For example, think about what kind of skills they have or whether they are motivated.
Organisation: (business model, external environment, capabilities) Think about the organisation itself. For example, think about
what the culture is like or whether teams collaborate well.
Processes: (Value proposition, value chain and core business processes) Think about the business processes. For example, think
about whether the processes are documented well or whether people stick to them. Do they need updated?
Information Technology: Think about the information and technology aspects of the organisation. For example, think about
whether the systems provide the right information the business requires.
For each of the four aspects above, you should consider how change will affect the current situation.
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Implementing change
3 Managing strategic change
Guidelines for change management: change levers and management skills
A general guideline for managing strategic change is as follows:

 When change is planned, managing the change involves deciding how to
get from where we are to where we want to be, and recognising the
changes that are necessary to get there.
 The change process consists of planning the changes, implementing
them and then maintaining the change, so that there is no ‘going back’ to
former ways and methods of operating.
 There are several requirements for successful change. These are often
referred to as levers of change.
Levers of change
The following requirements are needed for successful implementation of change.
 A clear understanding of the need for change, and what will be the
desired result of the change.
 The commitment of the entity’s leaders to the change.
 Effective communication with everyone affected by the change. This
should be two-way communication. Management should listen as well as
explain.
 Management should have the required qualities to implement change
successfully. Leadership qualities for managing change are described
later.
 The organisation structure and relationships within the organisation
should be adapted to meet the requirements of change.
 Reward systems should be amended, so that rewards to managers
and other employees are based on performance targets that are
consistent with the requirements of the change.
 Critical success factors and key performance indicators should be
revised, so that they are consistent with the requirements of the change.
 Employees should be given education in the purpose of change and
training to meet the operational requirements of the change.

Skills for managing change

Rosabeth Moss Kanter suggested that a manager in a change-adept entity should
have the following skills:
 Tuning in to the environment. Managers need to be aware of changes
in the environment that will make change by the entity necessary or
desirable. Kanter suggested that managers should create a network of
‘listening posts’ that they should use to monitor environmental change.
She commented: ‘Pay special attention to customer complaints, which
are often your best source of information about an operational weakness
or unmet need. Also search out broader signs of change – a competitor
doing something differently or a customer using your product or service in
unexpected ways.’
 Challenging the prevailing organisational wisdom. Change managers
should be prepared to challenge the ’conventional wisdom’ and question
accepted views about what is necessary or the way that things should be
done.
 Communicating a compelling aspiration. A change manager should
have a clear idea of what he wants to achieve and should communicate
this ‘vision’ to everyone he deals with. The manager must have personal
conviction that the change is necessary. Without this sense of purpose,
he will not be able to ‘sell’ the need for change to others.
 Building coalitions. Managers cannot make change happen through
personal effort alone. They need to win the support and co-operation of
all the individuals with the knowledge, influence or resources to make
change happen. Making change happen is therefore a process of
building alliances and support.
 Learning to persevere. Managers should continue with the process of
change even though there are likely to be setbacks and ‘defeats’ on the
way.
 Making everyone a hero. The manager should give full credit to
everyone who helps to introduce change successfully, and should make
them feel that their efforts are fully appreciated. If possible, individuals
who help to introduce changes successfully should be rewarded.
Politics and change

Within an organisation, politics involves the use of power and influence to exploit
power structures and networks of influence. Being aware of, and using, political
tools can assist managers in effecting (or even resisting!) change.
Johnson, Scholes and Whittington describe three objectives of political activity:
 Building a power base
 Overcoming resistance, and
 Achieving compliance.
In order to exert influence towards political objectives, Johnson, Scholes and
Whittington describe a number of political mechanisms (strategies) that can be used
to help achieve the aims:
 Manipulation of resources
- Building a power base could involve the acquisition (or identification)
of expertise and additional resources
- Overcoming resistance might involve the withdrawal (or threat of

withdrawal) or resources and use of ‘counter-intelligence’
- Achieving compliance may involve the provision (or promise) of
additional resources.
 Relationships with elites – these are powerful groups and influential
individuals who can enhance the personal status of the change agent
through being associated with them.
 Building alliances – a power base can be built by establishing networks
and alliances amongst sympathisers. These networks can then be used
to help counter resistance to change.
Models for managing change

There have been several different suggestions about how transformational change
might be managed. Several of these ‘models’ for change are described in the
remainder of this section.
Lewin: force field analysis
Kurt Lewin was a social psychologist. He developed a theory, which he called force
field analysis, to describe the forces that came into conflict over planned changes.
He suggested that there are two opposing forces:
 the driving forces that support the need for change, and
 the restraining forces that oppose and resist the change.
Any of the following factors might be a driving force or a restraining force:

 the people involved in the change, and what they want for themselves
 the habits and customs of the individuals
 their attitudes
 the relationships between the people involved
 organisation structures within the entity
 vested interests
 the entity’s policies
 the resources available to make the change
 regulations
 events (happenings).
Lewin argued that each driving force or restraining force has a strength, which
might be measured on a scale of 1 to 5. The strength of the total driving forces and
the strength of the total restraining forces can therefore be measured.

Force field
analysis Ideal state
(Target for change)
Current state
Driving forces Restraining forces
Lewin also argued that:

 Change will not occur if the forces resisting the change are stronger than
the driving forces for change.
 Change is only possible when the driving forces for change are stronger
than the restraining forces against change.
A key task of the change manager is therefore to ensure that the strength of the
driving forces is stronger than the strength of the restraining forces. There are two
ways that this might be done:
 Strengthen the driving forces for change
It might seem that the best answer is to strengthen the driving forces for change.
However, Lewin argued that by increasing the driving forces, management run
the risk that the restraining forces against the change will also grow stronger.
 The best approach is therefore to try to reduce the restraining forces
against change. Management should therefore:
 identify the main restraining forces against change and
 consider ways of reducing their strength, for example by discussing
the issues and difficulties with the individuals concerned, or by trying
to win the support of key individuals who currently oppose the change.
Lewin: unfreeze, change, re-freeze
Lewin also suggested an approach to introducing planned transformational change,

which is sometimes called ‘prescriptive planned change theory’.
He suggested that a planned process for change should begin with:

 identifying the cause of the problems, and the reasons why change is
needed, and
 identifying the opportunities of making improvements through
transformational change.
The change process then needs to go through three stages:

 unfreeze
 movement (change)
 re-freeze.

Unfreeze
The process of ‘unfreezing’ is persuading employees that change is necessary.
Individuals will not want to change anything if they think that the current situation is
acceptable. Employees should therefore be encouraged to recognise what is wrong
with the current system or current situation and management should encourage
employees to feel dissatisfaction. Employees should be ‘unfrozen’ out of their
acceptance of the current situation
However, this is not enough. It is also necessary to offer employees an attractive

alternative for the future that can be reached by changing the current situation.
Management must therefore have a clear vision about what changes they want to
make, and they should encourage employees to want these changes to happen.
Management must therefore discuss the problems with the employees affected, and
communicate their ideas.
Unfreezing is therefore the process not only of making employees dissatisfied with
the current situation, but also persuading them about the nature of the changes that
should be made.
Movement (change)
The changes should then be made.
To introduce change successfully, the support for change must be strong enough to
overcome the opposition. This is consistent with Lewin’s force field analysis.
Management should be given sufficient resources to implement the changes.

(Having sufficient resources to make a change can be a driving force for change.)
The change managers should try to involve the employees affected and get them to
participate in making the changes. Participation in making changes helps to reduce
the resistance to change.
Re-freeze
Lewin argued that even if change is implemented, there is a risk that before long,
employees will go back to their old ways of doing things, and the benefits of the
change might be lost.
It is therefore essential that once change has happened, employees should be

encouraged to carry on with the new way of doing things.
One way of doing this might be to reward employees for performance based on the
desired behaviour and results.
The process of getting employees to carry on with the new system is called re-
freezing.

The ‘change agent’
When a transformational change is implemented, there has to be a ‘change agent’ who

drives the change and is responsible for its successful implementation. Often the change
agent is an outside consultant. This individual must have certain skills.
 He must explain the reasons for the change, and provide employees with
reliable information. This will help to reduce the risk of false rumours
spreading.
 As far as possible, he should involve the individuals affected, and get them to
participate in making the changes. When individuals are involved in the
change process, they are less likely to resist it.
 He should maintain communications with employees at all time, monitoring the
progress of the change and providing information to others about the
progress.
 Where appropriate, he should provide training to the employees affected.
 He should emphasise the benefits of the change to the individuals affected.
A consultant is often used because:

 An outside consultant is perceived to be independent and fair.
 The consultant will have experience in managing the change process.
 The consultant will have experience of many organisations and should be able
to advise on which changes are desirable
 Large-scale changes can easily go wrong. Management will want all the help
and advice available.
Lewin’s three-stage model

Kurt Lewin
Argued that, in order for change to occur successfully, organisations need to progress through three stages.
The process of change comprises three stages.
Unfreezing: unfreeze current state of affairs and create motivation to change
In this stage, managers need to make the need for change so obvious that most people can easily understand and accept it.
Unfreezi ng also involves creating the initial motivation to change by convincing staff of the undesirability of the present
situation. Ways of de
-stabilising the present stability could include:
 Identifying and exploiting existing areas of stress or dissatisfaction.
 Creating or introducing additional forces for change, such as tighter budgets and targets or new personnel in favour of the
chan ge.
 Increasing employee knowledge about markets, competitors and the need for change.
 Removing individuals from routines, social relationships so that old behavior is not reinforced
 Confronting the perceptions and emotions of worker about change
 Consulting individuals about proposed changed
 Reinforcing a willingness to change, validating efforts and suggestions with praise and maybe added responsibility in the
change process.
Change: learning new ways of working/the transition stage

The change process itself is mainly concerned with identifying what the new behaviour or norm should be. This stage will often
invol ve
 Identifying new patterns of behavior or norms
 Communicating them clearly and positively
 Setting up new reporting relationships
 Creating new reward / incentive scheme
 introducing a new style of management
It is vital that new information is communicated concerning the new attitudes, culture and concepts that the organization
wants to b e adopted, so that these are internalised by employees.
Refreezing: set policies to embed new behaviours , establish new standards.

Refreezing or stabilising the change involves ensuring that people do not slip back into old ways. As such it involves
reinforcement of the new pattern of work or behaviour by:
• Larger rewards (salary, bonuses, promotion) for those employees who have fully embraced the new culture
• Publicity of success stories and new "heroes" – e.g. through employee of the month
Process redesign
1 Business processes
What is a business process?
A business process is a set of linked tasks or activities performed by individuals,

groups, departments or other organisational units within a business entity. A
business process:
 consumes inputs/resources
 adds value, and
 produces an output that has value to either an ‘internal customer’ within
the entity or to an external customer.
High-level business processes (and many lower-level processes) involve activities

by more than one department or more than one business function.
Business processes make up the value chain of an entity. The operations of most
business entities can be defined as a small number of processes, typically
somewhere between 6 and 12. Typical high-level processes might include:
 product development
 distribution
 manufacturing
 order processing
 customer service
 procurement.
High-level processes can be divided into a number of sub-processes, perhaps about

30–40 in number. It may also be useful to sub-divide the sub-processes into sub-
sub- processes. Processes at a ‘lower level’ contribute to the value chain by
producing output which becomes the input to another process.
For example, in a manufacturing company, there are processes of procurement

and managing inventory, and these add value to the manufacturing process
(which uses the output from the procurement and warehouse management
processes).

Chapter 22: Business process change
Process redesign as an aspect of strategy in action

Processes might be changed or introduced as a result of implementing planned or
emergent strategies.
 New processes might be needed for new work.
 Existing processes might be improved. The purpose of improving
processes is to make them more efficient or make them add more value.
It is useful to think of process redesign adding value in the value chain.
Process change exists at various levels:

 Automation – This means making existing operations more efficient by
automating work or computerising work previously done by hand. For
example, using a computer system to calculate wages and producing
payslips. Computer systems usually play a large part in automation.
Automation might also be improved by replacing an ‘old’ computer
system with a ‘new’ one.
 Rationalisation – This involves streamlining standard operating
procedures, so that procedures become more efficient. For example,
using electronic data interchange to place orders with suppliers.
 Business process redesign or design – This is the major redesign of
business processes. It might combine radical changes in processes to cut
waste, and eliminating repetitive paper-intensive tasks in order to improve
costs, quality and service. The aim is to make major changes to a
process in order to achieve improvement in critical measures of
performance such as cost, quality, service and speed. An example of
major change is allowing suppliers access to your inventory records so
that the suppliers become responsible for your inventory management
and decide when items should be repurchased and resupplied. (Note
that the term ‘business process re-engineering’ has fallen out of favour,
being replaced by ‘business process redesign’.).
Technological change and process change
Technological change, particularly new IT systems and methods of communication

and processing, often contribute to business process redesign. Here are some
examples:
Old methods and Disruptive technology New methods and

assumptions (IT developments that options
led to process
redesign)
Sales representatives E-mails and attachments Sales representatives
do
spend most of their time can be sent by mobile not need an office of
away from the office, phone to and from their own. They can
laptop
visiting customers. computers. receive and send
However, they need information anywhere.
offices where they can
receive, store and deliver
information
Old methods and Disruptive technology New methods and

assumptions (IT developments that options
led to process
redesign)
Information can only be Shared databases, People can share
in one place at a time group ware and data and work
and can only be used networks collaboratively.
by one person at a time
Businesses need high EPOS, extranets, Just-in-time
levels of inventory to electronic data purchasing and
produce a reliable interchange. inventory
service to customers management. High
that avoids ‘stock-outs’ inventory levels are
no longer needed.
Only a limited range of Ordering and product Customers can
standard products can specification over the ‘design’ their own
be made available internet. Automated products, and these
economically (at a cost manufacturing can be manufactured
that is low enough to techniques economically.
provide a profit)
Only managers have the Decisions support Decision-making is a
information, skills and systems, expert part of the job of
judgement to make systems, shared many employees, not
decisions information and just managers.
networks
The scope and focus of process change: Harmon’s process-strategy matrix
In order to make changes to business processes, decisions have to be made about:

 which processes to change (the focus of change), and
 how radical or extensive the process redesign should be (the scope of
the change).
The Harmon process-strategy matrix provides a useful framework to help
managers decide what type of process change or redesign might be appropriate in
the circumstances.
Harmon suggested that two factors should be considered:

 the complexity of the process (a complex process cannot be subject to a
high degree of automation, whereas a simple process can be largely
automated)
 the strategic importance of the process to the company: a process has
strategic importance when it provides competitive advantage.
Processes can be placed in a 2 × 2 matrix according to the complexity of the

process and their strategic importance to the entity.
 ‘Process complexity and dynamics’ is measured on the vertical axis. This
ranges from low complexity/dynamics to high complexity/dynamics.
Dynamics refers to how often the process changes. (A dynamic process
can be compared with a stable process, which does not change.)
 ‘Strategic importance of the process to the entity’ is measured on the

horizontal axis. This ranges from low to high strategic importance.
A highly complex process which changes frequently will be difficult to perform
competently and could be subject to high error rates. The process is likely to require
employees with specialist or expert knowledge to do the work efficiently. A complex
process cannot be extensively automated.
The strategic importance of the process can be assessed by asking how much the
process adds value to the products or services sold. Is the process a necessary
administration-type task (low strategic importance) or is it a process in which the
entity has a core competence and so can provide competitive advantage (high
strategic importance)?
A Harmon process-strategy matrix is shown below. The four quartiles of the matrix
indicate the type of process and the scope of process change that might be required
if it is redesigned.
Strategic importance
Low High
High
Complex and dynamic Complex and
processes, but of low dynamic processes
strategic importance that provide
competitive
Might be better advantage
Process to outsource
complexity Business process redesign
and and improvement
dynamism
Simple, stable, routine, Processes that are simple
ordinary processes and stable, but provide
competitive advantage
Should be capable of a Should be capable of high

Low high degree of degrees of automation to
automation improve efficiency/add
value
Analysing the matrix

The matrix can be used to assess the scope and focus for process redesign.
 Processes in the bottom left quadrant are simple and stable. These are
just the conditions needed for automation of the process. The process is
a ‘necessary evil’: it has to be performed but it does not add value or
provide competitive advantage. The company should aim to make it as
efficient as possible. An example of a routine administrative process in
this quadrant is the payment of wages and salaries.
 Processes in the bottom right quadrant are also simple and stable. These
qualities make them suitable for automation. However, the process is
strategically important. An example of a process in this quadrant might be
the assembly work in a manufacturing process. Quality initiatives
might be

important here also to ensure that the strategically important long-term process
is carried out to a very high standard.
 Processes in the top left quadrant are complex and change rapidly.
However, they are not strategically important and so they are not part of
the company’s core competences. An example might be the process of
calculating the company’s tax liability, or the process of writing some
bespoke software. It would make sense to outsource these activities to
experts (assuming, of course, that the company is not a firm of software
engineers or a firm of tax consultants, in which case these processes
would be part of their core competences).
 Processes in the top right quadrant are complex and dynamic. They are
also important and provide the entity with a core competence. They
cannot be automated because they are too complex and dynamic. They
should not be outsourced because they are part of the firm’s core
competences and are crucial for adding value and making profit. These
processes should be carefully investigated and analysed. Where
necessary, they should be redesigned to create even more value.
Business process redesign patterns
Business process redesign can be classified into a number of patterns. The basic
process redesign patterns are:
 Re-engineering. This is a radical redesign of the process.
 Simplification. This is redesign that simplifies the processes, for
example by removing unnecessary activities.
 Value-added analysis. This is process redesign that focuses on adding
value in the process and removing activities that do not add value.
 Gaps and disconnects analysis. This analyses a process with a view to
identifying parts of the process where there are gaps in the activities or
where there are inefficiencies or breakdowns in the transfer of output
from one department or function to another.
Pattern Driver Description
Re- Major reorganisation Design process from scratch. This

engineering is needed. New will take much time and effort and
technology is to be is a high risk/high return pattern.
introduced
Simplification Remove Ask if each step in a process is

unnecessary needed and what it achieves. This
activities and pattern can achieve relatively
duplication modest improvements, but is
relatively low risk.

Pattern Driver Description
Value-added Eliminate activities Ask how each activity adds value

analysis that do not add value to the product or service. What
does it do for the customer? Does
it transform the product or
service? This pattern usually
achieves modest improvements.
Gaps and Information or Look at each interface between
disconnects materials are not processes and analyse what needs
passed correctly to pass and what needs to happen.
between This pattern usually achieves
departments modest improvements.
Process diagrams (see later)
should help in identifying potential
gaps and disconnects.
Example
A supermarket chain has the following processes and sub-processes. Place these
processes on a Harmon process-strategy matrix.
(a) Calculation and payment of wages and salaries for staff.
(b) Running of the company’s own-name credit card operations.
(c) Developing products, predicting demand, monitoring competitors.
(d) Sourcing and ordering and receiving goods.
Answer
Strategic importance
Low High
High
Credit card operations Developing products,
predicting demand,
monitoring
Process competitors
complexity and
dynamism Processing wages and Sourcing, ordering,
salaries receiving
(procurement and
Low inward logistics)
(a) Calculation and payment of wages and salaries for staff. Simple,
stable, not of strategic importance.
(b) Running the company’s own-name credit card operations. Fairly

complex process, but routine and possibly not strategically important.
(You might disagree with this view!) Probably should be sub-contracted
to a bank.
(c) Developing products, predicting demand, monitoring competitors.
Dynamic and complex process. Also of great strategic importance.
(d) Sourcing and ordering and receiving goods. Stable routine process, but
it is strategically important that shelves in supermarkets are filled with
the correct goods.
Decisions about process redesign can be made using this analysis as a basic
framework.
Methodology of business process redesign
The approach to business process redesign advocated by Harmon and others is as

follows.
There must be a clear strategic goal for the process and for the process
redesign. This goal must be identified and understood. For example the goal of a
process might be to meet the needs of customers and the goal of the redesign
might then be to meet customer needs better. The goal of a process might be to
complete a set of tasks efficiently, and the goal of the redesign might be to
reduce costs and/or improve efficiency.
The focus for process redesign should be on the value chain rather than on
functional (departmental) activities. Processes are often multifunctional. For
example, process redesign might focus on processing customer orders, rather than
on the functions of the warehousing and delivery department.
The value chain should be analysed into lower-level processes, and

lower-level processes further analysed etc, down to the level of individual
activities.
A measure must be established for the outputs of the process. This measure is
for comparison with the objectives of the process or process redesign. For example
if the objective of the customer order handling process is speed of completion, the
process output measure should be the time taken to process orders.
The methodology of business process redesign includes the use of process

diagrams, also called process maps. Process maps are used to create a ‘model’ or
description of the process:
 ‘is’ diagrams or ‘is’ maps show the current process (= the process that ‘is’
now)
 ‘could’ diagrams or ’could’ maps should a possible new way of
performing the process (= a process that ‘could’ be used)
 ‘should’ diagrams or ‘should’ maps show the process redesign that has
been selected (= the process as it ‘should’ be).
The purpose of ‘is’ diagrams is to provide an easy-to-understand description of

the process that exists at the moment, and they can be used to analyse
weaknesses and inefficiencies in the current process that should be removed by
the process redesign. Business process redesign is not simply a matter of
changing activities. It might involve human reorganisation and IT systems
changes. It is useful to think of the 7S model.
Business process re-engineering
The term ‘business process re-engineering’ was first mentioned in an article by

Michael Hammer in the Harvard Business Review in 1990. Hammer and Champy
went on to define business process re-engineering as ‘the fundamental rethinking
and radical redesign of business processes to achieve dramatic improvements in
critical, contemporary measures of performance, such as cost, quality, service and
speed.’
There are three important elements in their definition:

 Fundamental. The redesign of a process should be fundamental, and old
assumptions about the way things are done must be questioned.
 Radical. The redesign of the process results in a completely different
way of doing things.
 Dramatic. The improvements resulting from process change are not
small. They are dramatic, in terms of lower cost, better quality, better
service or improved speed.
The BPR approach is based on the view that value for a customer is created by the
total process, not by individual operational functions that contribute to the overall
process. To make improvements in operations, the appropriate approach is to look
for ways of improving the entire process and not to focus on individual functional
areas or individual parts of the process separately. By considering changes to the
entire process, BPR can result in a radical business process redesign.
The main principles of BPR have been described (by Hammer 1990) as follows:
 There must be a complete re-think of business processes in a cross-
functional manner. The work should be organised around the natural flow
of information, or materials or customers (in other words, around the
natural flow of the transformed inputs). The work should be organised
around the outcomes from the process, not around the tasks that go into
it.
 The objective should be to achieve dramatic improvements in
performance through a radical re-design of the process.
 Where possible, the number of links in the chain of activities should be
reduced. ‘Internal customers’ within a process should be required to act
as their own suppliers, rather than depending on someone else to do the
work for them. If an internal customer can be its own internal supplier,
this will simplify and speed up the process.
For example, the routine maintenance of equipment might be carried out by a
specialist team of maintenance engineers. These maintenance engineers would
be an internal supplier to the equipment users, the internal customers.
A

suggestion for re-engineering the equipment maintenance process might be for

the equipment users to carry out their own maintenance work, at times to suit
their own convenience. The internal customer would become its own supplier.
 The decision points for controlling the process should be located where
the work is done. There should not be a division or separation between
the people who do the work and the people who manage and control it.
 In a BPR process, there should be a review of critical success factors for
the organisation and a re-engineering of the critical processes so as to
achieve targets for the CSFs and improve customer satisfaction.
Example
An example of business process re-engineering is a computer manufacturing

company that used to sell hardware through sales representatives. Customers
wishing to buy a computer might ask for financing arrangements and the company
would provide credit subject to a satisfactory credit check.
The request for credit went to the credit department. If the decision was to
approve the financing terms, a financing agreement would be drawn up by a
person in another department. The agreement then went to yet another
department for pricing – to decide the interest rate to charge on the finance. The
administration department then set out the offer of finance in a formal letter to
the customer.
The entire process of receiving a request for finance and sending out an offer took
six days on average.
An analysis of the process found that although it took six days, the actual amount of
work done took about one to two hours. The rest of the time was caused by delays
in sending the transaction from one department to another.
The BPR solution was to give the entire responsibility to one individual for checking
credit, drawing up the agreement, pricing the finance and sending a formal letter to
the customer. The new process time became four hours instead of six days.
Business change lifecycle
The business change lifecycle is a useful high-level model that can be used to
assess the key stages in business change projects such as business process
redesign and business process re-engineering. The lifecycle provides an overall
framework within which other methodologies can operate.

Business change lifecycle:
Alignment
Realisation Definition
Business case
Implementation Design
Alignment
Business change initiatives are necessary to ensure that businesses remain aligned
with the external environment. Changes in the environment drive business change
and necessitate a business to re-align to an ever-evolving environment.
For example, the largest UK supermarket, Tesco, undertook a strategic review in
2015. Tesco recognised that consumer habits were gradually moving away from the
traditional model of weekly family shopping trips to large out-of-town stores catering
for multiple markets such as groceries, clothes and electronics, towards more
frequent visits to smaller convenience outlets and online shopping. Tesco
subsequently re-positioned itself in order to re-align with the changing social
environment which it then implemented through a number of business change
initiatives.
Techniques such as PESTEL analysis and Porter’s five forces can be used to
understand the external environment as the basis for alignment.
Definition and business case

Having identified the need for change through the alignment process, ‘definition’
involves establishing the desired aims and objectives of the change process.
Current position (resource) analysis will then enable ‘gap analysis’ to be performed
in order to understand the ‘gap’ between current state and desired future state.
The ‘definition’ phase of the business change lifecycle will involve establishing a
‘business case’ for change. The structure and size of an organisation will impact on
how formal the business case process will be. Large organisations might use a
business change project assessment panel comprising representatives from
different

parts of the business. Each business case is presented to the assessment panel
who then decide whether a project should proceed or not based on the supporting
evidence presented. Details in a business case typically include:
 Project owner and sponsor
 Costs
 Benefits of change
 Risks of change
 Timeline.
The business case assessment process is likely to be much more informal in a
smaller organisation.
Design (including POPIT)

The project team needs to design a solution for implementing change once the
decision has been made to proceed with a particular change project. Change design
has traditionally focused on the process and information technology aspects of a
project. However, there is a growing awareness that other areas and stakeholders
within the business are also important to consider. This has led to the development
of the holistic POPIT model which helps project teams take a much broader view
when designing business change solutions.
POPIT model (also known as the four view model):
Organisation
Information
Technology
People Processes
 Organisational context: this requires thinking about how the changes fit
into the wider organisation. Is there management support across all
areas impacted by the change? Will cross-functional teams be
necessary to implement the change and how will they be managed? Are
people aware of the transition from existing to future roles and
responsibilities? Does the proposed business change fit within the
organisations overall mission and business model?
 ‘Processes’ refers to analysing existing processes to establish exactly
what needs to change and where new processes and procedures need to
be introduced. This phase involves the project change team identifying
duplicate and redundant processes and looking for ways to streamline
processes to make them more
efficient. They will need to consider the value and supply chains as well as considering
core competencies and business processes.
 ‘People’ requires an analysis and understanding of existing human resource
including skills, experience and capability. This will enable the change project
team to design strategies for motivating and communicating staff throughout
the change process. The resource audit will also help identify gaps in human
resources that need filling through a combination of training, recruitment and
selection procedures. Culture is also relevant when considering people.
 Information Technology is one of the most visible components of business
change and requires the consideration of information systems and underlying
software, hardware and networks. IT impacts all levels of the organisation from
the board of directors to the most junior of operational staff. Business change
should consider IT from both an internal and external perspective.
Implementation
Once the business change has been designed the next phase is implementation. A
number of models you encountered earlier are relevant to implementation such as:
 Recognising, communicating and managing change triggers and levers
 Lewin’s force field analysis and unfreeze/change/re-freeze models
 Gemini 4Rs model
 The 7s model.
New IT systems might need testing and launching. Reward systems may need adjusting
in order to motivate staff to accept change (re-freeze). Staff may also need training in new
processes and systems to ensure they are implemented and operate as intended.
Realisation
The final phase of the business change lifecycle involves assessing whether the intended
benefits of the change process have been realised. The realisation assessment might take
the form of a post-implementation review which considers both financial and non-financial
benefits. The benefits achieved can be compared to the intended benefits as specified in
the initial business case and contribute to understanding whether value for money and
success has been achieved.
The realisation phase may also identify refinements that are required such as minor
adjustments to new processes and perhaps further staff training needs.
Process redesign: how processes can be improved and made more effective
Modern organisations face a lot of competition in delivering innovative products every year. Take the smartphones
manufacturers for example. Imagine if these companies have inefficient processes with many reject parts that needs to be
reworked after many hours of valuable factory time in producing them in the first place. This could result in months of delay
of the product rollout to the market. This would give its competitors enough room to take up their market share during the
period of delay. In conclusion, there are three "quality mantra" of organisation's of the day which are to provide 1. Quality
products valued by customers; 2. Done right the first time; and 3. Introduce products fast to the market.
Business processes are fundamental to an organisation’s success in producing its goods and services. For an organisation to maximize
its competitiveness it needs to have processes which are both well designed and which work effectively.
Alongside the overall goal of delivering value for the customer, the process improvement contributes to the strategic
impact of a business in four ways:
1. Cost control – keeping costs under control by ensuring process efficiency.
2. Revenue – enhancing a business’s ability to generate revenue through the quality of the products and services it produces.
3. Investment – maximising the return on investments by ensuring that they operate as they are intended to.
4. Capabilities – embedding the capabilities that will form the basis of the business’s ongoing future competitiveness.
Process-oriented organisations also break down the barriers of structural departments and try to avoid functional ‘silos’ (that is, each
department concentrating only on its own function rather than understanding how it contributes to overall value creation in
an organisation).
However, the strategic value of a process perspective comes from not only analyzing current processes, but also identifying
areas where they can be improved. Business process improvement – aligning processes in order to realise organisational goals
– lies at the heart of the process perspective. As we have already identified, business processes should be designed to add
value and so should not include unnecessary activities. The outcome of a well-designed business process is increased
effectiveness (value for the customer) and increased efficiency (lower costs for the business).
Process improvement is often seen as being synonymous with automation and job losses. But this is not necessarily the case.
Even if they are outcomes of process improvement, they should not ultimately be the reasons for it.
Once the need for process redesign has been established, a gap analysis will need to be done between the current
position of the processes and the targeted state.
Page 130
Harmon Process-Strategy Matrix: Which processes to change and how to change
them
Harmon’s Process Strategy Matrix provides very useful guidance about which processes can be safely outsourced and which should be kept
in-house, but subject to automation or other improvement.
It uses two axes:
 Complexity/dynamism of the process. Dynamism is a measure of how much the process changes.
 Strategic importance of the process
Notice that in the right-hand pair of quadrants, where strategic importance of the process is high, outsourcing is not
recommended. If a process is strategically important it is likely to be a source of competitive advantage. If that were to be
outsourced, then the company would be telling the supplier about its most valuable secrets and competences. What
would then be left for the outsourcer to do? If a process is relatively stable and non-complex, then automation would be
feasible and worthwhile. If, however, the process were very complex and subject to many changes, then automation will be
difficult to achieve and even more difficult to keep up to date.
Process redesign options
A process redesign pattern is an approach or solution that has often worked in the past. There are several patterns that have
proved popular in redesign efforts. For example:
• Re-engineering – start with a clean sheet of paper and question all assumptions.
• Value-added analysis – try to eliminate all non-value-adding activities.
 Simplification – try to simplify the flow of the process, eliminating duplication and redundancy.
Gaps and disconnects – a process redesign pattern that focuses on checking the handoffs between departments and functional
grou ps in order to assure that flows across departmental lines are smooth and effective. Many of the problems affecting
process performance result from a failure in communication between functions or business departments. The focus of this
redesign pattern is to ensure that the appropriate checks and controls are in place so that efforts are coordinated between
functions and departments. For example, if the production department builds a product and ships it to the customer, then
the finance department needs to be aware of this so that they can raise an invoice to the customer.
BPR
Process re-engineering – this is used at the strategic level, when major threats or opportunities in the business’s external environment
prompt a fundamental re-think of the large-scale core processes critical to the operation of the value chain.
Business Process Reengineering (BPR) is the structured, process-driven approach to improving the performance of a company in
areas such as cost, service, quality, and speed. This radical change methodology starts at the highest level of companies, and works
down to the minutest details to overhaul the system in a short time. This complete redesign distinguishes BPR from other
methodologies where incremental improvements are made through regular process improvements. Companies performing BPR must
reassess their fundamentals and reform their processes to standardize and simplify them. Ambitious companies that start BPR do
so with the intent of doing whatever it takes to improve performance in all aspects of the business. Some examples of
company-specific goals through BPR include:
 Taking a decentralized process and making one person responsible for it
 Redeveloping the company’s goals so improvement plans are consistent
 Taking a department-specific process and assigning it to coordinate and integrate cross-functionally
 The term “reengineering” suggests that something has already been developed and is being re-developed. In most businesses,
change to a pre-existing process happens relatively slowly and incrementally. Within the context of BPR however, the most
modern tools are put to use in a way that uses them from the ground up. The fundamentals of already existing processes,
ideas, and designs are rethought.
 The term process focuses on how things are done, not on the specific people, their job descriptions, or the specific tasks that they
perform. BPR is more interested in the series of steps that produce the product or service, from its conceptual stage
through the final creation.
 Business Process Reengineering (BPR) is also known as business process redesign, business transformation, or business process change
management.
Process redesign – this is an intermediate scale of change operation, appropriate for medium-sized processes that require
extensive improvement or change. Redesign efforts often result in changed job descriptions and the introduction of some
automation.
Process improvement – this is a tactical level, incremental technique that is appropriate for developing smaller, stable,
existing processes.
Page 132
The feasibility of re-design options will need to be assessed.
Technical feasibility: will innovation be needed in technology or maybe it exists but just needs further development.
Social feasibility: impact on employee motivation, project teams will need to be created, training and work patterns might
change, and there may be staff redundancies etc.
Environmental concerns: environmental footprint needs to be
considered Financial feasibility: cost-benefit analysis
Process redesign methodology

1. Planning a process redesign effort  Identify goals
 Define scope
 Identify personnel
 Develop plan and schedule
2. Analysis of an existing process  Document workflow
 Identify problems
 Devise a general plan for the redesign
3. Design of a new or improved  Explore alternatives and choose best redesign to achieve goals
process
4. Development of resources for  Make products better, easier to manufacture and maintain
an improved process  Redesign managerial and supervisory jobs and develop measurement
system to monitor new process
 Redesign jobs, work environment and incentive systems; develop training;
hire new employees if necessary
5. Managing the implementation of  Integrate and test

the new process  Train employees, arrange management
 Maintain process and modify as needed

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Strategy in action

Now that a strategy has been selected, what next?

Practicalities associated with implementation of chosen strategy!

Enabling success: organizing

Holding company structure: These divisions are separate legal entities.

Corporate parenting style

Other important terms

Employee empowerment is a strategy whereby powers previously held by

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Enabling success: performance management

The Baldrige model (the Baldrige Excellence Framework)

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Overview of the model

The model views organisations as a series of processes which are integrated to

646 © Emile Woolf International Limited

The model covers:

Core values and concepts

The six processes are evaluated along four dimensions as follows:

Approach: How do the organisation’s work carried out?

Measurement, analysis, and knowledge management

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Results are evaluated along four dimensions as follows:

Levels What is the current performance?

Results – The above six shape org’s ability to achieve results!

Change can be discussed in terms of:

Balogun and Hope Hailey: contextual features model

Creating lasting change in an organisation can be a difficult and complex process. In

1 Analyse the current position

3 Identify the future position that should be

4 Analyse the change context

5 Identify the critical features of the

6 Consider the options for making the change

7 Design the process of making the

8 Manage the change process. Make the

9 Evaluate the change outcomes

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The desired end-result of the change might be either:

Evolution, which is the incremental introduction of a transformational change, can take

2 Scope of change How extensive is the change? Is it a transformation or a

3 Preservation What resources and characteristics of the organisation

4 Diversity Are the employees affected by the change a

5 Capability What is the capability of the entity’s management and

6 Capacity What resources are available for making the change?

8 Power What power do the managers responsible for the

Guidelines for change management: change levers and management skills

A general guideline for managing strategic change is as follows:

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Skills for managing change

Politics and change

- Overcoming resistance might involve the withdrawal (or threat of

Models for managing change

Lewin: force field analysis

Any of the following factors might be a driving force or a restraining force:

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Driving forces Restraining forces

Lewin also argued that:

Lewin: unfreeze, change, re-freeze

Lewin also suggested an approach to introducing planned transformational change,