Prof. Samir V.

Charania Change Management Strategic Management

Synergy & Change Management

Introduction:
Business executives focused on company development often take a look at corporate synergy
This term refers to increasing productivity and output from existing branches, divisions, or units
within the company by streamlining practices. Synergy is the energy or force created by the
working combining two or more elements (or businesses) so that the performance of the
combination is higher than that of the sum of the individual elements (or businesses).The
enhanced result or more people, groups or organizations working together is called synergy
together of various parts or processes. Synergy in business is the benefit derived from

Types of Synergy
There are three types of business synergy for companies to focus on:
(i) Operational synergy: It deals with the production aspects of the business. Under this
synergy the organisation makes sure that two divisions of the organisation do not work
on the same product. Instead, they pool their resources to create one superior result
Operating synergies are those synergies that allow firms to increase their operating
income, increase growth or both.
(ii) Financial synergy: It ensures that monetary resources are being properly distributed
and cash is not being diverted to fund the same initiative twice. It can also guarantee
that a unit in a period of growth is properly financed while other divisions with excess
resources have their budget adjusted to reflect their true needs
(iii) Other synergies
(a) Managerial Synergy: It will put the proper leadership in place. Sometimes this means
moving an executive from one area that is thriving to an area that is struggling.
(b) Surplus Human Resource: Companies with skilled managers and staff can best utilize these
resource only if they have problems to solve. The acquisition of
inefficient companies is sometimes the only way of using skilled human resource

Change Management
Introduction
Change management is a systematic approach to dealing with change, both from the
perspective of an organization and on the individual level. A somewhat ambiguous term,
change management has at least three different aspects, including: adapting to change,
controlling change and effecting change. A proactive approach to dealing with change is at the
core of all three aspects. For an organization, change management means defining and
implementing procedures and/or technologies to deal with changes in the business
environment and to profit from changing opportunities.

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Prof. Samir V. Charania Change Management Strategic Management

Factors responsible for Change Management

Managers must recognize and respond to all factors that affect their organizations. There are
many factors which are responsible for the change in the organization, these may be due to the
internal forces or external forces. This lesson describes how the internal and external
environments of an organization drive change within the company.
(i) The Internal Environment/Internal Drivers of Change: The internal environment of
an organization refers to events, factors, people, systems, structures and conditions
inside the organization that are generally under the control of the company. The
company's mission statement, organizational culture and style of leadership are factors
typically associated with the internal environment of an organization. As such, it is the
internal environment that will influence organizational activities, decisions and
employee behavior and attitudes. Changes in the leadership style, the organization's
mission or culture can have a considerable impact on the organization.

(ii) The External Environment/External Drivers of Change: The external environment

are those factors that occur outside the company that cause change inside organizations
and are, for the most part, beyond the control of the company. Customers, competition,
the economy, technology, political and social conditions and resources are common
external factors that influence the organization. Even though the external environment
occurs outside an organization, it can have a significant influence on its current
operations, growth and long-term sustainability. Ignoring external forces can be a
detrimental mistake for managers to make. As such, it is imperative that managers
continually monitor and adapt to the external environment, working to make proactive
changes earlier on rather than having to take a reactive approach, which can lead to a
vastly different outcome

Phases of Change Management

The phases of change management is divided into three phases

1. Start Phase/Unfreeze Phase

2. Action/Move Phase

3. End Phase/Freeze Phase

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(i) Start phase/Unfreeze phase: The manager must try to engage and motivate the team, and
create understanding for the process as a whole. By doing this the manager is just trying to
make them at ease with the change by introducing a glimpse of that at the beginning only. This
is also called as the "Unfreeze phase

(ii) Action phase/Move phase: In this phase, the project is solved. This is called ‘The Move
Phase’. The move phase is special. It is repeated for each of the major tasks and phases.
Manager should repeat this phase for any task on the project plan repeating it for a number of
times, depending on the number of tasks. This phase ensures a successful foundation for the
work at hand.

(iii) End phase: Finishing the assigned task is called ‘The Freeze Phase’ This phase ensures a
proper ending and focuses on Evaluate the final result and the project as a whole. It attempts to
evaluate the overall changes & the impact of that changes.

John Kotter's Model of Change Management

There are many theories about how to "do" change. Many originate with leadership &
change management guru, John Kotter. There are eight steps for leading change:
Step 1: Create Urgency
If a company really needs change then this strategy really works. Develop a sense of urgency
around the need for change. This may help to spark the initial motivation to get things moving.
Here the manager needs to be honest to the employees about what's happening in the market
& about the tough competition and a need for change, the urgency if communicated in a
proper way can build up their mind a base for the change.

Step 2: Form a Powerful Coalition

Convince people that change is necessary. This often takes strong leadership and visible
support from the important people within the organization. Managing change isn't enough, one
has to lead it. Just follow a simple technique by finding out the effective change leaders
throughout the organization - they don't necessarily follow the traditional company hierarchy.
Once formed, your "change coalition" will now work as a team, continuing to build urgency and
momentum around the need for change.

Step 3: Create a Vision for Change

When you first start thinking about change, there will probably be many great ideas and
solutions floating around. Link these concepts to an overall vision that people can grasp easily
and remember. A clear vision can help everyone understand why you're asking them to do

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something. When people see for themselves what you're trying to achieve, then the directives
they're given tend to make more sense.

Step 4: Communicate the Vision

What you do with your vision after you create it will determine your success. Your message
will probably have strong competition from other day to day communications within the
company
so you need to communicate it frequently and powerfully, and embed it within everything that
you do.

Step 5: Remove Obstacles

If you follow these steps and reach this point in the change process, you've been talking
about your vision and building buy-in from all levels of the organization. Hopefully, your staff
wants to get busy and achieve the benefits that you've been promoting.

Step 6: Create Short-term Wins

Nothing motivates more than success, Give your company s taste of victory early
in the change process. Create short-term targets not just one long term goal. You want each
smaller target to be achievable, with little room for failure. Your change team may have to work
very hard to come up with these targets, but each "win" that you produce can further motivate
the entire staff

Step 7: Build on the Change

Kotter argues that many change projects fail because victory is declared ton early Real
change runs deep. Quick wins are only the beginning of what needs to be done to achieve long-
term change
Launching one new product using a new system is great. But if you can launch 10 products,
that means the new system is working. To reach that 10th success, you need to keep looking for
improvements.
Each success provides an opportunity to build on what went right and identify what you can
improve.

Step 8: Anchor the Changes in Corporate Culture

Finally, to make any change stick, it should become part of the core of your organization.
Your corporate culture often determines what gets done, so the values behind your vision must
show in day to day work.
Make continuous efforts to ensure that the change is seen in every aspect of your
organization. This will help give that change a solid place in your organization's culture

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Prof. Samir V. Charania Change Management Strategic Management

It's also important that your company's leaders continue to support the change. This includes
existing staff and new leaders who are brought in. If you lose the support of these people, you
might end up back where you started.

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