Chapter 15: Leading Change
Your Leadership Challenge
After reading this chapter, you should be able to:
Recognize social and economic pressures for change in today’s organizations. •
Implement the eight-stage model of planned change.
Use appreciative inquiry to engage people in creating change by focusing on the positive and learning from success. •
Expand your own and others’ creativity and facilitate organizational innovation. •
Use techniques of communication, training, and participation to overcome resistance to change. •
Effectively and humanely address the negative impact of change. Chapter Outline
Change or Perish
A Framework for Leading Change
Leading for Innovation
In the Lead
Cathy Lanier, Washington, D.C., Metropolitan Police
Jim (Gus) Gustafson, U.S. Cellular
Raytheon Missile Systems
How Innovative Are You?
Are You a Change Leader?
Do You Have a Creative Personality?
The Game Changer: How You Can Drive Revenue and Profit Growth With Innovation Leadership at Work
Organizational Change Role Play
Leadership Development: Cases for Analysis
American Tool & Die
Riverside Pediatric Associates
including customers, strategic partners, suppliers, and other outsiders directly in the innovation process O
ver a recent two-year period, financial services companies laid off 400,000 employees in the United States, with nearly 150,000 of those being let go in the fourth quarter of 2008 alone, when the economic crisis hit its peak.1 Some banks, like IndyMac, were seized and restructured by the U.S. Federal Deposit Insurance Corporation (FDIC). Others, like the giant Citigroup, remained intact but received billions of dollars of bailout funds from the U.S. government—and the scrutiny and meddling that came with it. The long-term future of the firm that a decade ago rewrote the rules of finance by creating a global financial supermarket is uncertain. The one thing that is clear is that Citigroup has to change. After decades of expansion, Citi’s leaders are now trying to shrink the company to a manageable size. They are returning to the use of the name Citicorp, and going back to the core business of banking. “Citigroup . . . was put together in a random fashion that wasn’t market based,” said one banking expert. Citi’s executives, currently led by CEO Vikram Pandit (under pressure from the FDIC to step down), are struggling to cut costs, decrease the percentage of risky assets, get the right mix of leadership talent, and come up with a focused strategy to get the organization back on track.2 Citigroup is not alone. Most companies in the financial services industry are facing a need for dramatic change after the mortgage crisis and the Wall Street meltdown. Complicating the challenge for the big U.S. financial firms is that many expert managers and traders are turning away from these established firms to take their chances with innovative start-up companies or foreign banks that don’t face the tighter government regulations being imposed on the big institutions.3 This chapter explores how leaders in companies such as Citigroup facilitate change, creativity, and innovation. We first look briefly at the need for change in today’s organizations and examine a step-by-step framework for leading change. We explore the appreciative inquiry technique and how it can be used to lead both major changes and ongoing, everyday change. Next, the chapter examines how leaders facilitate innovation by fostering creative people and organizations. The final sections of the chapter consider why people resist change and how leaders can overcome resistance and help people cope with the potentially negative consequences of change. Change or Perish
Recall from our definition used throughout this book that leadership is about change rather than stability. In recent years,...
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