ACADEMIA DE STUDII ECONOMICE din BUCURETI MASTERAT APROFUNDAT ADMINISTRAREA AFACERILOR COMERCIALE

Leading change in todays business world

BUCURETI 2011

Content

Introduction..........................................................................................................................2 The abilities of a leader........................................................................................................3 The changes in the business environment............................................................................8 Leading change: the 8-Step Change Model.......................................................................10 Conclusion.........................................................................................................................14 Bibliography......................................................................................................................15

Introduction

The ability to think critically and solve problems is important for todays business world. Critical thinking or thinking about thinking is fundamental for leadership and it is a way to develop imagination and vision. The reason for choosing this subject is the fact that the best word that defines nowadays business world is CHANGE and The simplest definition of leadership is the ability to produce change ", says Peter Senge1. People of our parents generation or older did not grow up in an era when transformation was common. With less global competition and a slower-moving business environment, the norm back then was stability and the ruling motto was: If it aint broke, dont fix it. The challenges we now face are different. In todays business world there are both more hazards (more competition, increased speed) and more opportunities (bigger markets, fewer barriers) for everyone, forcing companies to make dramatic improvements not only to prosper and compete, but also to merely survive. In my project I will speak about the abilities of a leader and how to lead change successfully, because nowadays the companies must keep up with technology changes and the latest fashion in every domain to be and to stay on top in the future.

The abilities of a leader

American scientist and the director of the Center for Organizational Learning at the MIT Sloan School of Management

A leader is a person who influences a group of people towards the achievement of a goal. The most important in this definition are the 3P's - Person, People and Purpose as illustrated by the following diagram: Figure 1. Schematic representation of the definition of a leader

Source: The figure is taken from www.vtaide.com/gleanings/leader.htm PERSON: a leader by its meaning is the one who goes first and leads by example, so that others are motivated to follow him. This is a basic requirement. To be a leader, a person must have a strong commitment to the goal that he seeks to achieve, even if nobody follows him. PEOPLE: to be a leader, one must have followers. To have followers, one must have their trust. Why are some individuals more effective than others at influencing people? Effectiveness in leadership has been attributed to: persuasion skills, leadership styles and personal attributes of the leader. I consider that the critical element of leadership (influence) is the love for people. PURPOSE: a requirement for leadership is personal vision, the ability to visualize ones goal as an accomplished fact; a thing that is already achieved. "The very essence of leadership is that you have to have vision. You can't blow an uncertain trumpet.", says Theodore M. Hesburgh2. Seth Godin in his book Linchpin: Are you indispensable? has expressed 7 attributes which he feels are what indispensable leaders need to possess:

Theodore M. Hesburgh is the 15th President of the University of Notre Dame. More info at: en.wikipedia.org/wiki/Theodore_Hesburgh.

I.

The ability to provide a unique interface between the

members of the organization: the organization is a network. What holds it together and why? Making sure that everybody is there for the right reasons. A missionthe tribe knows where they are going and they are racking up accomplishments along the way. An indispensable leader connects his tribe with the organization. II. Being able to deliver unique creativity: creativity is personal, original, unexpected and useful. It requires knowledge and trust. Being able to deliver unique creativity is the most challenging part: it helps the organization to grow and it also allows the leader to continue being indispensable. III. The courage to manage a situation or organization of great complexity: in the case of complex situations, there is no manual, no map. Indispensable leaders make their own maps and find the way as they continue to focus on the tribes objectives. IV. Demonstrating the ability to lead customers: we are living in times when markets are shifting; consumers are seeking engagement, they are looking for people to follow. Every person that interacts with a consumer, a business or even other team members needs to be focused on marketing as he is on leadership. There is no script, no manual, just the ability to lead. V. Inspiring staff: a team that is at rest, tends to stay like this, but this is not the default state of any group of people, especially of large groups. When there are many levels of management everything seems to slow down due to excessive process. A good leader should inspire his subordinates to work, working alongside them. VI. Providing domain knowledge: combining knowledge with smart decisions and generous contributions can change the way things are done. Strategy and motivation, combined with emotion and confidence allow the map-makers of our society to be able to contribute in the organizations in ways that allow everyone to deeply understand the meaning/ the common goal.

VII.

Possessing a unique talent: leaders are able to

see things that their subordinates dont see. Possessing a unique talent/ skill allows the leader to collaborate creatively and effectively with the team. When seeds are planted, beautiful things begin to grow. An interesting example of a leader is, in my opinion, this one: At the age of seven, a young boy and his family were forced out of their home. The boy had to work to support his family. At the age of nine, his mother passed away. When he grew up, the young man was keen to go to law school, but had no education. At 22, he lost his job as a store clerk. At 23, he ran for state legislature and lost. The same year, he went into business. It failed, leaving him with a debt that took him 17 years to repay. At 27, he had a nervous breakdown. Two years later, he tried for the post of speaker in his state legislature. He lost. At 31, he was defeated in his attempt to become an elector. By 35, he had been defeated twice while running for Congress. Finally, he did manage to secure a brief term in Congress, but at 39 he lost his re-election bid. At 41, his four-year-old son died. At 42, he was rejected as a prospective land officer. At 45, he ran for the Senate and lost. Two years later, he lost the vice presidential nomination. At 49, he ran for Senate and lost again. At 51, he was elected the President of the United States of America. The man in question: Abraham Lincoln." Examples of leaders from Romania: Neagoe Basarab who was an admirable leader because in troublesome times he managed to have a relatively peaceful rule, with a lot of accomplishments in the economy and the social life of the country. He contributed to the re-organization of the army and mainly to the cultural development of Wallachia. His decisions led to a population increase, higher incomes and an improvement in the standard of living of his people. He was careful to maintain good relations with most of his neighbors as

well as with the Pope. He was considerate towards the Ottomans regularly paying his dues in order to avoid being overthrown from power3. George Becali, commonly known in Romania as Gigi Becali. He can be considered a good leader because, even though he isnt a scholar, he didnt even finish a University, he is successful in the business world and he is appreciated in his political career. Why? Because he is close to the people that need help: after the 2005 floods, he used $4 million of his personal money to fund the reconstruction of about 200 houses in the Vulturu village (Vulturu commune, Vrancea county) that was destroyed by the overflow of the Siret river. However, he is still the legal owner of the 200 houses. The villagers wanted to rename it Vulturu Becali (Becali Vulture) in his honor. Traian current Romania. Bsescu, president the of

Bsescu

graduated from the Naval Institute of Constana in 1976 and became marine a merchant deck

officer at Navrom, the Romanian state-owned shipping company. Between 1981 and 1987 he served as Captain on Romanian commercial ships. Basescu is a good leader because he knows how to persuade people to do as he wishes. As Mircea Badea said: Basescu has a great talent: to fool the fools and there are lots of
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Nicolae, M., Business Communication in English 2, Lecture Notes, 2010-2011, p. 22

them everywhere. We need to admit that he has the abilities of a leader: he has his goals and he knows how to achieve them, he sees things that his subordinates dont and even if people criticize him, he was voted a second time.

The changes in the business environment

As Robert Kiyosaki (2007, p. 12-15) says, the business environment is changing day by day. It isnt enough to study a lot and have good grades to become a good leader or to successfully face the changes. Tom Peters affirms that the A students work for the B students, the C students run the businesses and the D students get the buildings named after them4. In the case of some leaders I mentioned earlier what Peters said seems to be true. Every business owner and their employees have to deal with some type of change in the workplace. And an employer can do a lot to help their employees deal well with the changes that will occur so that the employees can continue to be productive and the business can be successful. Some small changes that may take place in the workplace may not be that big of a deal to some of the employees. But there are also some employees who feel that any time of change is, well, life changing. It is important that employers help their employees deal with even the slightest of changes in the workplace. For example, supposed it is time for the employees in the office to change the location of their desk. Some offices do this on a regular basis to give people a chance to sit by other employees or to be in a different location in the office. Though the reason for changing desk may be a valid one, some employees may be upset by the change. Perhaps they have grown accustomed to their location and the people they sit by. Or maybe they like their computer better than the one they will be switching to. To help an employee deal with a small change like this one, it is a good idea for the employer to give sufficient notice of the seating change. Telling employees a week or
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Tom Peters, Educate for a Creative Society: www.youtube.com/watch?v=h_w4AfflmeM

two before the change will help eliminate the element of surprise. It is also a good idea for the employer to explain to the employees their reason for changing desks. This way, even if the employee prefers their current desk location, they may at least have a better understanding that their employer would like them to sit at a different location for awhile and might be more willing to cooperate with the change. Helping the employees' actual move to be a comfortable one can also be a good way to help them deal with the change. If they can keep the same computer or keyboard without too much trouble then that can help them better deal with the change. And sometimes an employee just wants to make sure they are heard. It might be a good idea for an employer to take time to listen to the concerns an employee may have about the change, no matter how small. The big changes can be harder for employees to deal with and generally more employees will be upset or more affected by the larger changes in the workplace. When big changes occur it is essential that employers do all that they can to help their employees deal with change. For example, if a business is toying with the idea of layoffs, they need to help prepare their employees for this change. They should let employees know about the possible idea of employees getting laid off as early as they can. If they do not tell the employees know right up front, rumors are bound to start and there can be problems throughout the office. If layoffs become a reality it might also be a good idea for the business owner or manager to post the criteria that a person would have to meet to be considered for layoffs. By doing this some employees will be able to feel relieved since they are not in the group who might get laid off. Of course some employees (who are in the group being considered for layoffs) will be concerned, but that is better than having every employee concerned that they may get laid off. After a big change, such as layoffs, occur, a business owner will need to do their best to return order to the office and help employees to deal with this big change. Some employees will have lost not only coworkers, but friends as well. Having a councilor available for employees to talk to is not a bad idea. It might also be nice for the business

owner and managers to hold a meeting to discuss what has happened and let the employees have a chance to be heard. Sometimes changes are for the best, and sometimes they may not be very good at all. But change in the workplace is inevitable. When an employer helps their employees deal with change they can have a healthy and happy workplace.

Leading change: the 8-Step Change Model

John Paul Kotter is a professor at the Harvard Business School and author; he is regarded as an authority on leadership and change. He outlines eight steps that organizations need to implement to achieve successful change: 1. Create a sense of urgency: for change to happen, it helps if the whole company really wants it. Develop a sense of urgency around the need for change. This may help you spark the initial motivation to get things moving. This isn't simply a matter of showing people poor sales statistics or talking about increased competition. Open an honest and convincing dialogue about what's happening in the marketplace and with your competition. If many people start talking about the change you propose, the urgency can build and feed on itself. What you can do: identify potential threats and develop scenarios showing what could happen in the future, examine opportunities that should be or could be exploited, start honest discussions and give dynamic and convincing reasons to get people talking and thinking, request support from customers, outside stakeholders and industry people to strengthen your argument. 2. Develop a guiding coalition: Convince people that change is necessary. This often takes strong leadership and visible support from key people within your organization. Managing change isn't enough you have to lead it. You can find effective change leaders throughout your organization they don't necessarily follow the traditional company hierarchy. To lead change, you need to bring together a coalition, or team, of influential people whose power comes from a variety of sources, including job title, status, expertise, and 10

political importance. Once formed, your "change coalition" needs to work as a team, continuing to build urgency and momentum around the need for change. What you can do: identify the true leaders in your organization, ask for an emotional commitment from these key people, work on team building within your change coalition, check your team for weak areas and ensure that you have a good mix of people from different departments and different levels within your company. 3. Develop 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 something. When people see for themselves what you're trying to achieve, then the directives they're given tend to make more sense. What you can do: determine the values that are central to the change, develop a short summary (one or two sentences) that captures what you "see" as the future of your organization, create a strategy to execute that vision, ensure that your change coalition can describe the vision in five minutes or less, practice your "vision speech" often. 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. Don't just call special meetings to communicate your vision. Instead, talk about it every chance you get. Use the vision daily to make decisions and solve problems. When you keep it fresh on everyone's minds, they'll remember it and respond to it. It's also important to "walk the talk." What you do is far more important and believable than what you say. Demonstrate the kind of behavior that you want from others. What you can do: talk often about your change vision, openly and honestly address peoples' concerns and anxieties, apply your vision to all aspects of

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operations from training to performance reviews; tie everything back to the vision, lead by example. 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. But is anyone resisting the change? And are there processes or structures that are getting in its way? Put in place the structure for change, and continually check for barriers to it. Removing obstacles can empower the people you need to execute your vision, and it can help the change move forward. What you can do: identify, or hire, change leaders whose main roles are to deliver the change, look at your organizational structure, job descriptions, and performance and compensation systems to ensure they're in line with your vision, recognize and reward people for making change happen, identify people who are resisting the change, and help them see what's needed, take action to quickly remove barriers (human or otherwise). 6. Generate short-term wins: nothing motivates more than success. Give your company a taste of victory early in the change process. Within a short time frame (this could be a month or a year, depending on the type of change), you'll want to have results that your staff can see. Without this, critics and negative thinkers might hurt your progress. 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. What you can do: look for sure-fire projects that you can implement without help from any strong critics of the change, don't choose early targets that are expensive. You want to be able to justify the investment in each project, thoroughly analyze the potential pros and cons of your targets. If you don't succeed with an early goal, it can hurt your entire change process, reward the people who help you meet the targets.

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7.

Don't let up: Kotter argues that many change projects fail because victory is declared too 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. What you can do: after every win, analyze what went right and what needs improving, set goals to continue building on the momentum you've achieved, keep ideas fresh by bringing in new change agents and leaders for your change coalition.

8.

Make it stick in the organizational 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. 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. What you can do: talk about progress every chance you get. Tell success stories about the change process, and repeat other stories that you hear, include the change ideals and values when hiring and training new staff, publicly recognize key members of your original change coalition, and make sure the rest of the staff new and old remembers their contributions, create plans to replace key leaders of change as they move on. This will help ensure that their legacy is not lost or forgotten.

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Our Iceberg Is Melting is a simple fable about doing well in an ever-changing world. Based on the that award-winning has been of fable used work to of help and a Harvard's John Kotter, it is a story thousands organizations. The group of is about penguin colony in Antarctica. A beautiful emperor penguins live as they have for many years. Then, one curious bird discovers a potentially devastating problem threatening their home, and pretty much no one listens to him. The characters in the story, Fred, Alice, Louis, Buddy, the Professor, and NoNo, are like people we recognize even ourselves. Their tale is one of resistance to change and heroic action, seemingly intractable obstacles and clever tactics for dealing with those obstacles. It's a story that is occurring in different forms all around us today but the penguins handle the very real challenges a great deal better than most of us. Our Iceberg Is Melting is based on pioneering work that shows how the 8 Steps produce needed change in any sort of group. It's a story that can be enjoyed by anyone while at the same time providing invaluable guidance for a world that just keeps moving faster and faster. people

Conclusion

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As a conclusion to the subject I am speaking about, the best word that defines nowadays business world is change and The simplest definition of leadership is the ability to produce change". A leader is a person who influences a group of people towards the achievement of a goal. The main words in this definition are the 3P's: Person, People and Purpose. I enlarged upon this topic in the first chapter of my project. Then, I spoke about the impossibility of avoiding the changes in todays business world. Our journey into leading change ends up with the eight steps that organizations need to implement to achieve successful change: create a sense of urgency, develop a guiding coalition, develop a vision for change, communicate the vision, remove obstacles, generate short-term wins, don't let up and make it stick in the organizational culture. I will finish my project Leading change in todays business world with the quote: The key to change... is to let go of fear. (Rosanne Cash)

Bibliography
1. 2. Kotter, J., Rathgeber, H., Our Iceberg is Melting: Changing and Succeeding Under Any Conditions, St. Martins Press ed., United States of America, 2005 Kiyosaki, R., Lechter, S., Tat bogat, tat srac, Curtea Veche ed., Bucharest, 2007

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3.

Nicolae, M., Business Communication in English 2, Lecture Notes 2nd term, 2010-2011

4. ***books.google.com/books? printsec=frontcover&id=ib9Xzb5eFGQC#v=twopage&q&f=false 5. ***businessknowledgesource.com/blog/helping_employees_deal_with_chang e_in_the _workplace_030139.html#more 6. ***edutail.com/buzz/a-leader-who-could-motivate-a-generation-to-believein-him/883 7. *** en.wikipedia.org/wiki/Gigi_Becali 8. *** en.wikipedia.org/wiki/Leadership 9. *** en.wikipedia.org/wiki/Peter_Senge 10. *** en.wikipedia.org/wiki/Theodore_Hesburgh 11. *** search.barnesandnoble.com/Linchpin/Seth-Godin/e/9781101196311 12. *** www.alumni.hbs.edu/bulletin/2001/february/leader.html 13. *** www.geoffsnyder.com/7-abilities-of-the-indispensable-leader/ 14. *** www.kotterinternational.com/kotterprinciples/OurIceberg.aspx 15. *** www.merriam-webster.com/dictionary/leaders?show=0&t=1305975310 16. *** www.mindtools.com/pages/article/newPPM_82.htm 17. *** www.thechangeforum.com/Change%20Leadership.htm 18. *** www.vtaide.com/gleanings/leader.htm

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