BOH4M – Grade 12 Business Leadership – Change Leadership


Chapter 18: Change Leadership


Strategic Leadership & Innovation


  • Changing nature of business, driven by information technology and global competitiveness, have brought about radical changes in traditional corporations


What is strategic leadership?

  • Organizations that survive and prosper the best are learning organizations: Ones that mobilize people, values and systems to achieve continuous change, and performance improvements driven by the lessons of experience
  • Strategic leadership creates the capacity for ongoing strategic change
  • Strategic leaders are change leaders that build learning organizations and keep them competitive even in difficult uncertain times
  • Six components of strategic leadership:
  1. Determining the organization’s purpose or vision
  2. Exploiting and maintaining the organization’s core competencies
  3. Developing the organization’s human capital
  4. Sustaining an effective organizational culture
  5. Emphasizing and displaying ethical practices
  6. Establishing balanced organizational controls


Creativity and Innovation

  • Sustainable competitive advantage in a change environment is earned through organizational cultures and human capital that unlock the full powers of creativity and innovation
  • Creativity is the generation of a novel idea or unique approach that solves a problem or crafts an opportunity
  • One of the greatest assets of human capital. People possess ideas; people possess ingenuity; people have the capacity to invent
  • Creativity exerts its influence on organizations through innovation, the process of taking a new idea and putting it into practice


  • Two forms of innovation:
  1. Process – Results in better ways of doing things
  2. Product – Results in the creation of new or improved goods and services
  • Innovation requires both invention (the act of discovery; relates to the development of new ideas) and application (the act of use; the utilization of inventions to take the best advantage of ideas)


  • Hamel’s “Wheel of Innovation” – Leadership responsibilities for the innovation process:
  • Imagining – Think up new possibilities or modify existing ones
  • Designing – Test concepts, discuss them, build prototypes
  • Experimenting – Examine financial practicality, conduct feasibility studies
  • Assessing – Identify strengths/weaknesses, cost/benefits, possible markets
  • Scaling – Gear up and implement


  • Four steps of the innovation process that commercializes innovation: Turns new product development from ideas into economic value added:
    1. Idea creation
    2. Initial experimentation
    3. Feasibility determination
    4. Final application


Characteristics of innovative organizations

  • Corporate strategy and culture should emphasize an entrepreneurial spirit, expect innovation, accept failure, and be willing to take risks
  • Organization structure should be organic with lateral communications and cross-functional teams and task forces, and create numerous smaller divisions to allow creative teams to operate and encourage “intrapreneurial” ventures
  • Top management should support innovation by:
  • Understanding the innovation process
  • Being tolerant of criticism and differences of opinion
  • Taking all possible steps to keep goals clear
  • Maintaining the pressure to succeed
  • Breaking down barriers to innovation
  • Staffing should contain critical innovation roles, including:
  • Idea generators – Create new insights
  • Information gatekeepers – Serve a links between people, groups and external sources
  • Product champions – Advocate and push for change and innovation
  • Project managers – Perform technical functions keeping project on track
  • Innovation leaders – Encourage, sponsor, and coach others


Organizational Change


  • Change is intertwined with the process of creativity and innovation
  • Creativity fosters innovation; purposeful innovation results in positive changes


Change leaders

  • A change leader is a change agent who takes leadership responsibility for changing the existing pattern of behavior of another person or social system
  • A change leader is confident of ability, willing to take risks, seizes opportunities, expects surprise, and makes things happen
  • By contrast, a status quo manager is threatened by change, bothered by uncertainty, prefers predictability, is comfortable with habit, and waits for things to happen
  • New workplace demands change leadership at all levels of management


Models of change leadership

Top-down change:

  • Change initiatives come from senior management
  • Success depends on support of middle-level and lower-level workers
  • Can easily fail if implementation suffers from excessive resistance and insufficient commitment to change

Bottom-up change:

  • Initiatives for change come from all levels in the organization
  • Crucial for organizational innovation.
  • Made possible by employee empowerment, involvement, and participation

Integrated change leadership:

  • Most successful and enduring change leadership is that which can harness the advantages of both top-down and bottom-up change


Transformational and Incremental change

  • Unplanned change occurs spontaneously, largely in response to unanticipated events
  • Reactive change that responds to events as or after they occur
  • Planned change aligns the organization with anticipated future challenges
  • Occurs as a result of proactive leadership always alert for performance gaps or discrepancies between a desired and actual state of affairs


  • Two major types of planned organizational change:
    1. Transformational change: That which results in a major and radical redirection of the organization
    2. Incremental change: Type of change that bends and adjusts existing ways to improve performance


Forces and targets for change

  • External forces prompting change include globalization, market competition, local economic conditions, government laws and regulations, technological developments, market trends, and social forces
  • Internal forces arise when change in one part of the organizational system creates the need for change in another part of the system
  • Common, highly interrelated,  organizational targets for change include:
  • Tasks – the nature of the work
  • People – attitudes and competencies of human resources
  • Culture – value system of the organization
  • Technology – operations and information technology
  • Structure – configuration of the organization



Leading Planned Change


  • Many complications of change begin with human nature
  • People tend to act habitually and in stable ways over time; may not want change even when circumstances require it
  • Managers and change agents must recognize and deal with such tendencies in order to successfully lead planned change


Phases of planned change (Lewin)

  1. Unfreezing: A situation is prepared for change
  2. Changing: Planned change is actually implemented
  3. Refreezing: Change is stabilized, conditions are created for long-term continuity






Change strategies 

    • Managers use various strategies when trying to get others to adopt change:
    • Force-coercion strategy pursues change through formal authority and/or rewards and punishment
  • Direct forcing strategy “commands” that change take place
  • Political maneuvering works indirectly to gain advantage over other persons and make them change
    • On its own, produces limited and temporary results


    • Rational persuasion strategy pursues change through special knowledge, empirical data, and rational argument
    • Produces eventual compliance with reasonable commitment; longer lasting, internalized


  • Shared power strategy pursues change by engaging people in a collaborative process identifying values, assumptions, and goals
  • Likely to yield high commitment
  • Relies on empowerment and participation. Power shared by change agent and others as they work together to develop consensus to support change


Resistance to change

  • Planned change typically brings with it resistance for any number of reasons
  • People may resist change due to fear of the unknown, disrupted habits, loss of confidence or control, poor timing, work overload, loss of face, and lack of purpose
  • Resistance to change can be dealt with in several ways:
    • Educating and communicating with people beforehand
    • Allowing others to participate and contribute ideas
  • Facilitating training to overcome performance pressures
  • Providing incentives that appeal to resistors
  • Using manipulation and covert influence
  • Using explicit and implicit coercion threatening resistors with undesirable consequences






Challenges of technological change

  • Ongoing technological change that has become a way of life in today’s organizations brings special challenges to change leaders
  • Requires sensitivity to resistance, continual gathering of information, and willingness to customize new technology to best meet needs of situation


Organization Development (OD)


  • A comprehensive effort to improve an organization’s ability to solve problems and improve performance
  • Two goals are pursued simultaneously:
  1. Outcome goals that focus on task accomplishments
  2. Process goals that focus on the way people work together
  • OD is committed to improving organizations through freedom of choice, shared power, self-reliance, and knowledge about human behavior


OD and the planned change process

  • External OD consultant or internal facilitator must:
  1. Establish a working relationship with members
  2. Diagnosis – Gather and analyze data, setting change objectives (unfreezing)
  3. Intervention – Take action to implement desired change (changing)
  4. Evaluation – Follow up to reinforce and support change (refreezing)
  5. Withdraw to allow members to function on their own
  • A foundation of OD is action research: A collaborative process of collecting data, using it for action planning, and evaluating the results


OD interventions

  • Structured activities that are initiated to directly facilitate the change process
  • Individual OD interventions:
  • Sensitivity training – Sessions where participants learn to enhance interpersonal skills and increase sensitivity to others
  • Management training – Educational opportunities to develop important managerial competencies
  • Role negotiation – Interactions clarifying member’s role expectations
  • Job redesign – Realigning of task components to better fit individual needs and capabilities
  • Career planning – Discussion sessions to help plan career paths and programs of personal development


  • Team OD interventions
  • Team building – Activities that help team members set goals, improve interpersonal relationships and become a better functioning team
  • Process consultation – 3rd party observation/advice on critical team processes
  • Inter-group team building – Activities that help two or more teams set shared goals, improve relations, and become better coordinated


  • Organization-wide OD interventions
  • Survey feedback – Systematic data collection identifying workplace attitudes and needs
  • Confrontation meeting – One-day intensive meeting to gather data on workplace problems
  • Structural redesign – Realigning organization to meet existing needs
  • Management by objectives (MBO) – Formalizing MBO throughout organization to link individual, group and organizational objectives



Stress and Stress Management


  • Jobs people are asked to perform, and the relationships and circumstances under which they have to do them, are often causes of significant stress: A state of tension experienced by individuals facing extraordinary demands, constraints, or opportunities


Sources of Stress

  • Stressors: Anything that causes stress
  • Work factors that have the potential of serving as stressors include:
  • Excessively high work load
  • Role conflicts or ambiguities
  • Poor interpersonal relationships
  • Too slow or too fast career progress
  • Staff cutbacks and downsizing
  • Two common work-related stress syndromes:
  1. Set up to fail – Performance expectations are impossible or support totally inadequate to the task
  2. Mistaken identity – Individual in a job that does not match talents, or one that he simply does not like
  • Personal factors are also sources of potential stress for people at work
  • Individual characteristics such as need, capabilities, and personality can influence how one perceives and responds to work situations
  • A Type A personality is person oriented toward extreme achievement, impatience and perfectionism. More likely to create stress in circumstances that others find stress-free. Bring stress on themselves
  • Stresses from non-work factors can spillover to the workplace, including such things as family events, economics, or personal affairs


Consequences of stress

  • Destructive stress or distress breaks down a person’s physical and mental systems and can lead to:
    • Job burnout: Physical or mental exhaustion that can be incapacitating personally and with respect to work
    • Workplace rage: Overtly aggressive behaviour toward co-workers in a work setting
  • Stress does not always act as a negative influence. Constructive stress, acts in a positive way for the individual and may actually optimize performance in the workplace


Stress management strategies

  • Best stress management is to prevent it from reaching excessive levels in the first place
  • Stressors from personal, non-work factors must be identified so action can be taken to minimize their consequences
  • Among work factors with the greatest potential to cause excessive stress are role ambiguities, conflicts and overload
  • Role clarification through MBO offers opportunities to spot stressors and take action to reduce them
  • Personal wellness: The pursuit of personal and mental potential though a personal health-promotion program. A form of preventative stress management that enables people to be better prepared to deal with stress