April 6 was the date chosen for "Leading strategic change", the Refresher Programme talk by Professor Pedro Parada (PhD 03) and academic collaborator Ignasi Ferrer (Lic&MBA 92 / VV 04 / GEMBA 09).
Changes are necessary for business survival but they are fraught with difficulties and often fail to achieve their goals – mainly because people resist change and are reluctant to step outside their comfort zone.
According to Ignasi Ferrer, since 2008 we have been immersed in constant change involving a great deal of unknown territory. In this instance, many people regard change as negative, but change is positive for people who see it as a process that generates opportunities. Either way, professor Pedro Parada believes that the important thing is to remember that "everyone has different circumstances and views a single stimulus in different ways".
According to a survey by Fortune, only 20% of change processes are deemed successful. Between 66% and 80% of change initiatives fail to meet their goals (according to McKinsey only 20% did not manage to create one third of the value envisaged for the company), even though more than 95% had reasonable solutions. This shows, according Parada, that the difficulty lies not in how the strategy is formulated but in how it is implemented. "The basic elements for success are the leader’s credibility and appeal", he said.
How can this contradiction be remedied?
Professor Parada mentioned several well-known change models including the classic Kotter model, ADKAR, change acceleration, Lewin, Bridge transition model and Switch and then explained his basic seven-step model (understand, enlist, envisage, motivate, communicate, act and consolidate), five of which are based on preparing for change. "The process does not have to be linear but certain steps must be completed before carrying on. Therefore, a continuous improvement process is better than a radical change. All these models have a common denominator", added Ferrer, "they change people, not organisations".
In this respect, the vision must be stimulating, credible and inclusive (i.e. people must feel they are part of the project) and must be conveyed by formal and informal channels. Many change processes fail due to lack of communication, not only at the outset but also during the process and at the end, so it is essential to communicate and listen constantly, taking care not to rely too heavily on written communications (emails) that can be misinterpreted and fail to convey much of the information about how the message is received. "One good practice is to walk around and listen and talk to people in different areas. This will give us an insight into the origins of problems, although if resistance to change is detected and cannot be remedied, decisions must be taken", said Ferrer.
It is also important to pinpoint informal leaders who influence their surroundings: they are sometimes the best people to promote change. The speakers recommended seeking out such leaders in companies and listening to them.
Types of change
Professor Parada explained that there are forward-looking changes (further away in time, more available resources, less obviously needed), reactive changes, and crisis changes (little time, few resources, very obviously needed). "To get people out of their comfort zone, we must create an impression of crisis and need for change", he commented, "but without going over the top to avoid making people frustrated".
"Goals should be achievable with small, short-term milestones to avoid motivation fizzling out, because one of the main causes of resistance to change is a lack of tangible results", said professor Ferrer.
"We must, however, tread carefully because the vision and how it is conveyed, and the resistance found along the way are not well-defined stages but a continuous, circular process. In any case, this process requires a great deal of energy, so we must try to make it fun and easy to assimilate. It helps maintain the impression that changes are constantly happening around the company, and this helps create a culture of change inside the company", concluded the speaker.
ESADE Alumni invites you to another great talk in its Refresher Programme entitled "Leading Strategic Change", by Pedro Parada (PhD 03) and Ignasi Ferrer (Lic&MBA 92 / VV 04 / GEMBA 09). Mr Parada is a professor in ESADE’s Strategy & General Management Department and Mr Ferrer is an academic assistant in ESADE’s Strategy & General Management Department.
We all know that people and organisations resist change. Despite it being difficult to change, we know that change is necessary in order for companies to survive and be successful. How can we deal with this contradiction? How can we make people and companies change when resistance to change is a natural reaction? This talk will examine key concepts in change management. Should change be top-down or bottom-up? Who should take part in the process of change? Is it necessary to have a vision? What vision should it be? How should we design it? How should we convey our vision? How much information should we share? When? With whom? How should we manage resistance to change? How can we ensure that changes last in the long run? Who said it was easy to change a company?
Pedro Parada, director and professor in ESADE’s Department of Strategy & General Management, is currently the Academic Co-Director and professor in the Global Executive MBA offered jointly with Georgetown University. He is also a visiting professor at the HEC School of Management in Paris and SDA Bocconi Milan. In addition, he has coordinated and taught courses in the international electives offered at Babson College. He has written articles, case studies and chapters of books in English, Spanish, Catalan, French, German, Chinese and Portuguese. Pedro holds a PhD in Management, a Master in Public Policy and Management and an undergraduate degree in economics. He has worked in the cement industry and the UN Ministry of Finance.
Ignasi Ferrer is an academic assistant in ESADE’s Department of Strategy & General Management. He has been the CEO of one of the leading groups in the Spanish foodservice sector for the last 13 years (2002-2015), operating more than 500 restaurants under 4 core brands (Pans & Company, FrescCo, Ribs and Dehesa Santa Maria). He joined the company back in 1994 as Franchise Manager, and he has developed his career in the areas of Marketing, Operations and Development. Ignasi Ferrer holds an MBA from ESADE, an MIM from Thunderbird, and in 2009 he graduated from Georgetown University (Global Executive MBA). He is member of various advisory boards in both the retail sector (Congelados La Sirena) and sector-related organisations (EFSS, AECOC), as well as start-up companies (Worldcoo) and social entrepreneurship initiatives (Fundación Ship2B, Fundació Futur, Fundació CRAM, Things 2Help). In 2015 he started a new professional venture as Managing Partner and Founder of AMURA, a strategy and senior management advisory firm.
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