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LCM Notes

LCM Notes

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IGNOU MBA (RETAIL) : II SEMESTER Subject: Leadership and Change Management Course Code: MRS 013 Total learning

hours : 32 Total subject credits : 3 Total no. of assessments : Mid Semester and Semester end Examination Learning Objective :  To understand the concepts of Leadership and Change  To understand the styles of Leadership and traits and theories  To appreciate change and identifying tolls and strategies for managing change 1 Nature and Meaning of Leadership, Difference between Leadership and Management, Studies on Leadership: The Ohio State Studies; The University of Michigan Studies 2 Theories of Leadership: Trait versus Process Leadership; Assigned versus Emergent Leadership; Three-Skill - Approach of Leadership (Technical, Human and Conceptual Skills) 3 Theories of Leadership: Blake and Mouton’s Leadership Grid; Contingency Theory; Path-Goal Theory; Leader-Member Exchange Theory 4 Contemporary theories of Leadership: Charismatic and Visionary Leadership; Transformational Leadership; Servant Leadership; Fusion Leadership; E- Leadership. 5 Concept of Group, Significance of Group Behaviour. Synergy and its significance in organizational performance. 6 Development of Group, Group Cohesiveness, Group Structure and Norms, Group Dynamics and Group Decision Making. 7 Introduction to Team Building, Types of Teams. Team Processes. Benefits and costs of Teams 8 Leadership Competencies: Goal Setting and Decision Making. Decision making steps, models and framework 9 Conflict Management: Balancing Conflict and Cooperation; Managing Team Conflict; Cross Functional Appreciation and Collaboration 10 Managing Change and Innovation; Changing Workplaces in Turbulent Times; Model of Planned Organizational Change; Types of Changes (Technology Changes, New Product Changes, Structural Changes)

Leadership vs. Management
What is the difference between management and leadership? It is a question that has been asked more than once and also answered in different ways. The biggest difference between managers and leaders is the way they motivate the people who work or follow them, and this sets the tone for most other aspects of what they do. Many people, by the way, are both. They have management jobs, but they realize that you cannot buy hearts, especially to follow them down a difficult path, and so act as leaders too.

Managers have subordinates
By definition, managers have subordinates - unless their title is honorary and given as a mark of seniority, in which case the title is a misnomer and their power over others is other than formal authority. Authoritarian, transactional style Managers have a position of authority vested in them by the company, and their subordinates work for them and largely do as they are told. Management style is transactional, in that the manager tells the subordinate what to do, and the subordinate does this not because they are a blind robot, but because they have been promised a reward (at minimum their salary) for doing so. Work focus Managers are paid to get things done (they are subordinates too), often within tight constraints of time and money. They thus naturally pass on this work focus to their subordinates. Seek comfort An interesting research finding about managers is that they tend to come from stable home backgrounds and led relatively normal and comfortable lives. This leads them to be relatively risk-averse and they will seek to avoid conflict where possible. In terms of people, they generally like to run a 'happy ship'.

Leaders have followers
Leaders do not have subordinates - at least not when they are leading. Many organizational leaders do have subordinates, but only because they are also managers. But when they want to lead, they have to give up formal authoritarian control, because to lead is to have followers, and following is always a voluntary activity.

Charismatic, transformational style Telling people what to do does not inspire them to follow you. You have to appeal to them, showing how following them will lead to their hearts' desire. They must want to follow you enough to stop what they are doing and perhaps walk into danger and situations that they would not normally consider risking. Leaders with a stronger charisma find it easier to attract people to their cause. As a part of their persuasion they typically promise transformational benefits, such that their followers will not just receive extrinsic rewards but will somehow become better people. People focus Although many leaders have a charismatic style to some extent, this does not require a loud personality. They are always good with people, and quiet styles that give credit to others (and takes blame on themselves) are very effective at creating the loyalty that great leaders engender. Although leaders are good with people, this does not mean they are friendly with them. In order to keep the mystique of leadership, they often retain a degree of separation and aloofness. This does not mean that leaders do not pay attention to tasks - in fact they are often very achievement-focused. What they do realize, however, is the importance of enthusing others to work towards their vision. Seek risk In the same study that showed managers as risk-averse, leaders appeared as risk-seeking, although they are not blind thrill-seekers. When pursuing their vision, they consider it natural to encounter problems and hurdles that must be overcome along the way. They are thus comfortable with risk and will see routes that others avoid as potential opportunities for advantage and will happily break rules in order to get things done. A surprising number of these leaders had some form of handicap in their lives which they had to overcome. Some had traumatic childhoods, some had problems such as dyslexia, others were shorter than average. This perhaps taught them the independence of mind that is needed to go out on a limb and not worry about what others are thinking about you.

In summary
This table summarizes the above (and more) and gives a sense of the differences between being a leader and being a manager. This is, of course, an illustrative characterization, and there is a whole spectrum between either ends of these scales along which each role can range. And many people lead and manage at the same time, and so may display a combination of behaviors. Subject Essence Focus Have Horizon Seeks Approach Decision Leader Change Leading people Followers Long-term Vision Sets direction Facilitates Manager Stability Managing work Subordinates Short-term Objectives Plans detail Makes

Power Appeal to Energy Culture Dynamic Persuasion Style Exchange Likes Wants Risk Rules Conflict Direction Truth Concern Credit Blame

Personal charisma Heart Passion Shapes Proactive Sell Transformational Excitement for work Striving Achievement Takes Breaks Uses New roads Seeks What is right Gives Takes

Formal authority Head Control Enacts Reactive Tell Transactional Money for work Action Results Minimizes Makes Avoids Existing roads Establishes Being right Takes Blames

Blake and Mouton’s Managerial Grid
The treatment of task orientation and people orientation as two independent dimensions was a major step in leadership studies. Many of the leadership studies conducted in the 1950s at the University of Michigan and the Ohio State University focused on these two dimensions. Building on the work of the researchers at these Universities, Robert Blake and Jane Mouton (1960s) proposed a graphic portrayal of leadership styles through a managerial grid (sometimes called leadership grid). The grid depicted two dimensions of leader behavior, concern for people(accommodating people‟s needs and giving them priority) on y-axis and concern for production (keeping tight schedules) on x-axis, with each dimension ranging from low (1) to high (9), thus creating 81 different positions in which the leader‟s style may fall. (See figure 1

The five resulting leadership styles are as follows: 1. Impoverished Management (1, 1): Managers with this approach are low on both the dimensions and exercise minimum effort to get the work done from subordinates. The leader has low concern for employee satisfaction and work deadlines and as a result disharmony and disorganization prevail within the organization. The leaders are termed ineffective wherein their action is merely aimed at preserving job and seniority. Task management (9, 1): Also called dictatorial or perish style. Here leaders are more concerned about production and have less concern for people. The style is based on theory X of McGregor. The employees‟ needs are not taken care of and they are simply a means to an end. The leader believes that efficiency can result only through proper organization of work systems and through elimination of people wherever possible. Such a style can definitely increase the output of organization in short run but due to the strict policies and procedures, high labour turnover is inevitable. Middle-of-the-Road (5, 5): This is basically a compromising style wherein the leader tries to maintain a balance between goals of company and the needs of people. The leader does not push the boundaries of achievement resulting in average performance for organization. Here neither employee nor production needs are fully met. Country Club (1, 9): This is a collegial style characterized by low task and high people orientation where the leader gives thoughtful attention to the needs of people thus providing them with a friendly and comfortable environment. The leader feels that such a treatment with employees will lead to self-motivation and will find people working hard on their own. However, a low focus on tasks can hamper production and lead to questionable results. Team Management (9, 9): Characterized by high people and task focus, the style is based on the theory Y of McGregor and has been termed as most effective style according to Blake and Mouton. The leader feels that empowerment, commitment, trust, and respect are the key elements in creating a team atmosphere which will automatically result in high employee satisfaction and production.





Advantages of Blake and Mouton’s Managerial Grid
The Managerial or Leadership Grid is used to help managers analyze their own leadership styles through a technique known as grid training. This is done by administering a questionnaire that helps managers identify how they stand with respect to their concern for production and people. The training is aimed at basically helping leaders reach to the ideal state of 9, 9.

Limitations of Blake and Mouton’s Managerial Grid
The model ignores the importance of internal and external limits, matter and scenario. Also, there are some more aspects of leadership that can be covered but are not.

House’s Path Goal Theory
The theory was developed by Robert House and has its roots in the expectancy theory of motivation. The theory is based on the premise that an employee‟s perception of expectancies between his effort and performance is greatly affected by a leader‟s behavior. The leaders help group members in attaining rewards by clarifying the paths to goals and removing obstacles to performance. They do so by providing the information, support, and other resources which are required by employees to complete the task. House‟s theory advocates servant leadership. As per servant leadership theory, leadership is not viewed as a position of power. Rather, leaders act as coaches and facilitators to their subordinates. According to House‟s pathgoal theory, a leader‟s effectiveness depends on several employee and environmental contingent factors and certain leadership styles. All these are explained in the figure 1 below: Figure 1: Path-Goal Leadership


Leadership Styles
The four leadership styles are:

 Directive: Here the leader provides guidelines, lets subordinates know what is expected of them, sets
performance standards for them, and controls behavior when performance standards are not met. He makes judicious use of rewards and disciplinary action. The style is the same as task-oriented one.

 Supportive: The leader is friendly towards subordinates and displays personal concern for their needs,
welfare, and well-being. This style is the same as people-oriented leadership.

 Participative: The leader believes in group decision-making and shares information with subordinates.
He consults his subordinates on important decisions related to work, task goals, and paths to resolve goals.

 Achievement-oriented: The leader sets challenging goals and encourages employees to reach their
peak performance. The leader believes that employees are responsible enough to accomplish challenging goals. This is the same as goal-setting theory. According to the theory, these leadership styles are not mutually excusive and leaders are capable of selecting more than one kind of a style suited for a particular situation.

The theory states that each of these styles will be effective in some situations but not in others. It further states that the relationship between a leader‟s style and effectiveness is dependent on the following variables:

 Employee characteristics: These include factors such as employees‟ needs, locus of control, experience,
perceived ability, satisfaction, willingness to leave the organization, and anxiety. For example, if followers are high inability, a directive style of leadership may be unnecessary; instead a supportive approach may be preferable.

 Characteristics of work environment: These include factors such as task structure and team dynamics
that are outside the control of the employee. For example, for employees performing simple and routine tasks, a supportive style is much effective than a directive one. Similarly, the participative style works much better for non-routine tasks than routine ones. When team cohesiveness is low, a supportive leadership style must be used whereas in a situation where performance-oriented team norms exist, a directive style or possibly an achievement-oriented style works better. Leaders should apply directive style to counteract team norms that oppose the team‟s formal objectives.

The theory has been subjected to empirical testing in several studies and has received considerable research support. This theory consistently reminds the leaders that their main role as a leader is to assist the subordinates in defining their goals and then to assist them in accomplishing those goals in the most efficient and effective manner. This theory gives a guide map to the leaders about how to increase subordinates satisfaction and performance level.

Trait Theory of Leadership

The trait model of leadership is based on the characteristics of many leaders - both successful and unsuccessful - and is used to predict leadership effectiveness. The resulting lists of traits are then compared to those of potential leaders to assess their likelihood of success or failure.

Scholars taking the trait approach attempted to identify physiological (appearance, height, and weight), demographic (age, education and socioeconomic background), personality, self-confidence, and aggressiveness), intellective (intelligence, decisiveness, judgment, and knowledge), task-related (achievement drive, initiative, and persistence), and social characteristics (sociability and cooperativeness) with leader emergence and leader effectiveness. Successful leaders definitely have interests, abilities, and personality traits that are different from those of the less effective leaders. Through many researches conducted in the last three decades of the 20th century, a set of core traits of

successful leaders have been identified. These traits are not responsible solely to identify whether a person will be a successful leader o not, but they are essentially seen as preconditions that endow people with leadership potential. Among the core traits identified are:

 Achievement drive: High level of effort, high levels of ambition, energy and initiative  Leadership motivation: an intense desire to lead others to reach shared goals  Honesty and integrity: trustworthy, reliable, and open  Self-confidence: Belief in one‟s self, ideas, and ability  Cognitive ability: Capable of exercising good judgment, strong analytical abilities, and conceptually skilled

 Knowledge of business: Knowledge of industry and other technical matters  Emotional Maturity: well adjusted, does not suffer from severe psychological disorders.  Others: charisma, creativity and flexibility

Strengths/Advantages of Trait Theory
 It is naturally pleasing theory.  It is valid as lot of research has validated the foundation and basis of the theory.  It serves as a yardstick against which the leadership traits of an individual can be assessed.  It gives a detailed knowledge and understanding of the leader element in the leadership process.

Limitations of The Trait Theory
 There is bound to be some subjective judgment in determining who is regarded as a „good‟ or „successful‟

 The list of possible traits tends to be very long. More than 100 different traits of successful leaders in
various leadership positions have been identified. These descriptions are simply generalities.

 There is also a disagreement over which traits are the most important for an effective leader  The model attempts to relate physical traits such as, height and weight, to effective leadership. Most of
these factors relate to situational factors. For example, a minimum weight and height might be necessary to perform the tasks efficiently in a military leadership position. In business organizations, these are not the requirements to be an effective leader.

 The theory is very complex

Implications of Trait Theory
The trait theory gives constructive information about leadership. It can be applied by people at all levels in all types of organizations. Managers can utilize the information from the theory to evaluate their position in the organization and to assess how their position can be made stronger in the organization. They can get an in-depth understanding of their identity and the way they will affect others in the organization. This theory makes the manager aware of their strengths and weaknesses and thus they get an understanding of how they can develop their leadership qualities.

The traits approach gives rise to questions: whether leaders are born or made; and whether leadership is an art or science. However, these are not mutually exclusive alternatives. Leadership may be something of an art; it still requires the application of special skills and techniques. Even if there are certain inborn qualities that make one a good leader, these natural talents need encouragement and development. A person is not born with self-confidence. Self-confidence is developed, honesty and integrity are a matter of personal choice, motivation to lead comes from within the individual, and the knowledge of business can be acquired. While cognitive ability has its origin partly in genes, it still needs to be developed. None of these ingredients are acquired overnight.

Leadership-Member Exchange (LMX) Theory
Informal observation of leadership behavior suggests that leader‟s action is not the same towards all subordinates. The importance of potential differences in this respect is brought into sharp focus by Graen‟s leader-member exchange model, also known as the vertical dyad linkage theory. The theory views leadership as consisting of a number of dyadic relationships linking the leader with a follower. The quality of the relationship is reflected by the degree of mutual trust, loyalty, support, respect, and obligation. According to the theory, leaders form different kinds of relationships with various groups of subordinates. One group, referred to as the in-group, is favored by the leader. Members of in-group receive considerably more attention from the leader and have more access to the organizational resources. By contrast, other subordinates fall into the outgroup. These individuals are disfavored by the leader. As such, they receive fewer valued resources from their leaders. Leaders distinguish between the in-group and out-group members on the basis of the perceived similarity with respect to personal characteristics, such as age, gender, or personality. A follower may also be granted an in-group

status if the leader believes that person to be especially competent at performing his or her job. The relationship between leaders and followers follows three stages:

 Role taking: When a new member joins the organization, the leader assesses the talent and abilities of
the member and offers them opportunities to demonstrate their capabilities.

 Role making: An informal and unstructured negotiation on work-related factors takes place between the
leader and the member. A member who is similar to the leader is more likely to succeed. A betrayal by the member at this stage may result in him being relegated to the out-group The LMX 7 scale assesses the degree to which leaders and followers have mutual respect for each other‟s capabilities, feel a deepening sense of mutual trust, and have a sense of strong obligation to one another. Taken together, these dimensions determine the extent to which followers will be part of the leader‟s in-group or out-group. In-group followers tend to function as assistants or advisers and to have higher quality personalized exchanges with the leader than do out-group followers. These exchanges typically involve a leader‟s emphasis on assignments to interesting tasks, delegation of important responsibilities, information sharing, and participation in the leader‟s decisions, as well as special benefits, such as personal support and support and favorable work schedules.

Strengths of LMX Theory
LMX theory is an exceptional theory of leadership as unlike the other theories, it concentrates and talks about specific relationships between the leader and each subordinate.

LMX Theory is a robust explanatory theory.

LMX Theory focuses our attention to the significance of communication in leadership. Communication is a medium through which leaders and subordinates develop, grow and maintain beneficial exchanges. When this communication is accompanied by features such as mutual trust, respect and devotion, it leads to effective leadership.

LMX Theory is very much valid and practical in it‟s approach.

Criticisms of LMX Theory
LMX Theory fails to explain the particulars of how high-quality exchanges are created.

LMX Theory is objected on grounds of fairness and justice as some followers receive special attention of leaders at workplace and other followers do not.

According to many studies conducted in this area, it has been found that leaders definitely do support the members of the in-group and may go to the extent of inflating their ratings on poor performance as well. This kind of a treatment is not given to the members of the out-group. Due to the favoritism that the in-group members receive from their leaders, they are found to perform their jobs better and develop positive attitude towards their jobs in comparison to the members of the out-group. The job satisfaction of in-group members is high and they perform effectively on their jobs. They tend to receive more mentoring from their superiors which helps them in their careers. For these reasons, low attrition rate, increased salaries, and promotion rates are associated with the in-group members in comparison to that of the out-group members.

Transformational Leadership Theory
Creating high-performance workforce has become increasingly important and to do so business leaders must be able to inspire organizational members to go beyond their task requirements. As a result, new concepts of leadership have emerged - transformational leadership being one of them. Transformational leadership may be found at all levels of the organization: teams, departments, divisions, and organization as a whole. Such leaders are visionary, inspiring, daring, risk-takers, and thoughtful thinkers. They have a charismatic appeal. But charisma alone is insufficient for changing the way an organization operates. For bringing major changes, transformational leaders must exhibit the following four factors: Figure 1: Model of Transformational Leadership

Inspirational Motivation: The foundation of transformational leadership is the promotion of consistent vision, mission, and a set of values to the members. Their vision is so compelling that they know what they want from every interaction. Transformational leaders guide followers by providing them with a sense of meaning and challenge. They work enthusiastically and optimistically to foster the spirit of teamwork and commitment.

Intellectual Stimulation: Such leaders encourage their followers to be innovative and creative. They encourage new ideas from their followers and never criticize them publicly for the mistakes committed by them. The leaders focus on the “what” in problems and do not focus on the blaming part of it. They have no hesitation in discarding an old practice set by them if it is found ineffective.

Idealized Influence: They believe in the philosophy that a leader can influence followers only when he practices what he preaches. The leaders act as role models that followers seek to emulate. Such leaders always win the trust and respect of their followers through their action. They typically place their followers needs over their own, sacrifice their personal gains for them, ad demonstrate high standards of ethical conduct. The use of power by such leaders is aimed at influencing them to strive for the common goals of the organization.

Individualized Consideration: Leaders act as mentors to their followers and reward them for creativity and innovation. The followers are treated differently according to their talents and knowledge. They are empowered to make decisions and are always provided with the needed support to implement their decisions.

The common examples of transformational leaders are Mahatma Gandhi and Obama.

Criticisms of Transformational Leadership Theory
 Transformational leadership makes use of impression management and therefore lends itself to amoral self promotion by

 The theory is very difficult to e trained or taught because it is a combination of many leadership theories.  Followers might be manipulated by leaders and there are chances that they lose more than they gain.

Implications of Transformational Leadership Theory
The current environment characterized by uncertainty, global turbulence, and organizational instability calls for transformational leadership to prevail at all levels of the organization. The followers of such leaders demonstrate high levels of job satisfaction and organizational commitment, and engage in organizational citizenship behaviors. With such a devoted workforce, it will definitely be useful to consider making efforts towards developing ways of transforming organization through leadership.

Transactional Leadership Theory
The transactional style of leadership was first described by Max Weber in 1947 and then by Bernard Bass in 1981. This style is most often used by the managers. It focuses on the basic management process of controlling, organizing, and short-term planning. The famous examples of leaders who have used transactional technique include McCarthy and de Gaulle.

Transactional leadership involves motivating and directing followers primarily through appealing to their own self-interest. The power of transactional leaders comes from their formal authority and responsibility in the organization. The main goal of the follower is to obey the instructions of the leader. The style can also be mentioned as a „telling style‟. The leader believes in motivating through a system of rewards and punishment. If a subordinate does what is desired, a reward will follow, and if he does not go as per the wishes of the leader, a punishment will follow. Here, the exchange between leader and follower takes place to achieve routine performance goals. These exchanges involve four dimensions: Contingent Rewards: Transactional leaders link the goal to rewards, clarify expectations, provide necessary resources, set mutually agreed upon goals, and provide various kinds of rewards for successful performance. They set SMART (specific, measurable, attainable, realistic, and timely) goals for their subordinates.

Active Management by Exception: Transactional leaders actively monitor the work of their subordinates, watch for deviations from rules and standards and taking corrective action to prevent mistakes.

Passive Management by Exception: Transactional leaders intervene only when standards are not met or when the performance is not as per the expectations. They may even use punishment as a response to unacceptable performance.

Laissez-faire: The leader provides an environment where the subordinates get many opportunities to make decisions. The leader himself abdicates responsibilities and avoids making decisions and therefore the group often lacks direction.

Assumptions of Transactional Theory
 Employees are motivated by reward and punishment.  The subordinates have to obey the orders of the superior.  The subordinates are not self-motivated. They have to be closely monitored and controlled to get the
work done from them.

Implications of Transactional Theory
The transactional leaders overemphasize detailed and short-term goals, and standard rules and procedures. They do not make an effort to enhance followers‟ creativity and generation of new ideas. This kind of a leadership style may work well where the organizational problems are simple and clearly defined. Such leaders tend to not reward or ignore ideas that do not fit with existing plans and goals. The transactional leaders are found to be quite effective in guiding efficiency decisions which are aimed at cutting costs and improving productivity. The transactional leaders tend to be highly directive and action oriented and their relationship with the followers tends to be transitory and not based on emotional bonds. The theory assumes that subordinates can be motivated by simple rewards. The only „transaction‟ between the leader and the followers is the money which the followers receive for their compliance and effort.

Difference between Transactional and Transformational Leaders
Transactional leadership Transformational Leadership

Leadership is responsive

Leadership is proactive

Works within the organizational culture

Work to change the organizational culture by implementing new ideas

Transactional leaders make employees achieve organizational objectives through rewards and punishment

Transformational leaders motivate and empower employees to achieve company‟s objectives by appealing to higher ideals and moral values

Motivates followers by appealing to their own self-interest

Motivates followers by encouraging them to transcend their own interests for those of the group or unit

The transactional style of leadership is viewed as insufficient, but not bad, in developing the maximum leadership potential. It forms as the basis for more mature interactions but care should be taken by leaders not to practice it exclusively, otherwise it will lead to the creation of an environment permeated by position, power, perks, and politics.

Hersey Blanchard Model

According to this model, the leader has to match the leadership style according to the readiness of subordinates which moves in stage and has a cycle. Therefore, this theory is also known as the life-cycle theory of leadership. The theory, developed by Paul Hersey and Kenneth Blanchard, is based on the ‟readiness‟ level of the people the leader is attempting to influence. Readiness is the extent to which followers have the ability and willingness to accomplish a specific task. Ability is the knowledge, experience, and skill that an individual possesses to do the job and is called job readiness. Willingness is the motivation and commitment required to accomplish a given task. The style of leadership depends on the level of readiness of the followers. The readiness(R) is divided into a continuum of four levels which are: R1 - low follower readiness - refers to low ability and low willingness of followers i.e. those who are unable and insecure

R2 - low to moderate follower readiness - refers to low ability and high willingness of followers i.e. those who are unable but confident

R3 - moderate to high follower readiness - refers to high ability and low willingness of followers i.e. those who are able but insecure

R4 - high follower readiness - refers to high ability and high willingness of followers i.e. those who are both able and confident

The direction is provided by the leader at the lower levels of readiness. Therefore, the decisions are leader directed. On the other hand, the direction is provided by the followers at the higher levels of readiness. Therefore, the decisions in this case are follower directed. When the followers move from low levels to high levels of readiness, the combinations of task and relationship behaviors appropriate to the situation begin to change. For each of the four levels of readiness, the leadership style used may be a combination of task and relationship behavior.

 Task behavior: Extent to which the leader spells out the duties and responsibilities of a follower which
includes providing them direction, setting goals, and defining roles for them. Usually a one-way communication exists which is meant to provide the direction to the followers.

 Relationship behavior: Extent to which the leader listens to the followers, and provides encouragement
to them. Here, a two-way communication exists between the leader and the follower. By combining the task and the relationship behavior, we arrive at the following four different styles of leadership which correspond with the different levels of readiness as shown in the Figure 1. S1 - Telling: This style is most appropriate for low follower readiness (R1). It emphasizes high task behavior and limited relationship behavior.

S2 - Selling: This style is most appropriate for low to moderate follower readiness (R2). It emphasizes high amounts of both task and relationship behavior.

S3 - Participating: This style is most appropriate for moderate to high follower readiness (R3). It emphasizes high amount of

relationship behavior but low amount of task behavior.

S4 - Delegating: This style is most appropriate for high follower readiness (R4). It emphasizes low levels of both task and relationship behavior.

Fiedler’s Contingency Model
Fred E. Fiedler‟s contingency theory of leadership effectiveness was based on studies of a wide range of group effectiveness, and concentrated on the relationship between leadership and organizational performance. This is one of the earliest situation-contingent leadership theories given by Fiedler. According to him, if an organization attempts to achieve group effectiveness through leadership, then there is a need to assess the leader according to an underlying trait, assess the situation faced by the leader, and construct a proper match between the two.

Leader’s trait
In order to assess the attitudes of the leader, Fiedler developed the „least preferred co-worker‟ (LPC) scale in which the leaders are asked about the person with whom they least like to work. The scale is a questionnaire consisting of 16 items used to reflect a leader‟s underlying disposition toward others. The items in the LPC scale are pleasant / unpleasant, friendly / unfriendly, rejecting / accepting, unenthusiastic / enthusiastic, tense / relaxed, cold / warm, helpful / frustrating, cooperative / uncooperative, supportive / hostile, quarrelsome / harmonious, efficient / inefficient, gloomy / cheerful, distant / close, boring / interesting, self-assured / hesitant, open / guarded. Each item in the scale is given a single ranking of between one and eight points, with eight points indicating the most favorable rating.

Friendly 8 7 6 5 4 3 2 1


Fiedler states that leaders with high LPC scores are relationship-oriented and the ones with low scores are taskoriented. The high LPC score leaders derived most satisfaction from interpersonal relationships and therefore evaluate their least preferred co-workers in fairly favorable terms. These leaders think about the task accomplishment only after the relationship need is well satisfied. On the other hand, the low LPC score leaders derived satisfaction from performance of the task and attainment of objectives and only after tasks have been accomplished, these leaders work on establishing good social and interpersonal relationships.

Situational factor
According to Fiedler, a leader‟s behavior is dependent upon the favorability of the leadership situation. Three factors work together to determine how favorable a situation is to a leader. These are:

 Leader-member relations - The degree to which the leaders is trusted and liked by the group members,
and the willingness of the group members to follow the leader‟s guidance

 Task structure - The degree to which the group‟s task has been described as structured or unstructured,
has been clearly defined and the extent to which it can be carried out by detailed instructions

 Position power - The power of the leader by virtue of the organizational position and the degree to which
the leader can exercise authority on group members in order to comply with and accept his direction and leadership With the help of these three variables, eight combinations of group-task situations were constructed by Fiedler. These combinations were used to identify the style of the leader.

Figure 1: Correlation between leader’s LPC scores and group effectiveness

Leadership Effectiveness
The leader‟s effectiveness is determined by the interaction of the leader‟s style of behavior and the favorableness of the situational characteristics. The most favorable situation is when leader-member relations are good, the task is highly structured, and the leader has a strong position power. Research on the contingency model has shown that task-oriented leaders are more effective in highly favorable (1, 2, 3) and highly unfavorable situation (7, 8), whereas relationship-oriented leaders are more effective in situations of intermediate favorableness (4, 5, 6). Fiedler also suggested that leaders may act differently in different situations. Relationship-oriented leaders generally display task-oriented behaviors under highly favorable situations and display relationship-oriented behaviors under unfavorable intermediate favorable situations. Similarly, task-oriented leaders frequently display task-oriented in unfavorable or intermediate favorable situations but display relationship-oriented behaviors in favorable situations.

Likert’s Management System
Rensis Likert and his associates studied the patterns and styles of managers for three decades at the University of Michigan, USA, and identified a four-fold model of management systems. The model was developed on the basis of a questionnaire administered to managers in over 200 organizations and research into the performance characteristics of different types of organizations. The four systems of management system or the four leadership styles identified by Likert are:

 System 1 - Exploitative Authoritative: Responsibility lies in the hands of the people at the upper
echelons of the hierarchy. The superior has no trust and confidence in subordinates. The decisions are imposed on subordinates and they do not feel free at all to discuss things about the job with their superior. The teamwork or communication is very little and the motivation is based on threats.

 System 2 - Benevolent Authoritative: The responsibility lies at the managerial levels but not at the
lower levels of the organizational hierarchy. The superior has condescending confidence and trust in subordinates (master-servant relationship). Here again, the subordinates do not feel free to discuss things about the job with their superior. The teamwork or communication is very little and motivation is based on a system of rewards.

 System 3 - Consultative: Responsibility is spread widely through the organizational hierarchy. The
superior has substantial but not complete confidence in subordinates. Some amount of discussion about job related things takes place between the superior and subordinates. There is a fair amount of teamwork, and communication takes place vertically and horizontally. The motivation is based on rewards and involvement in the job.

 System 4 - Participative: Responsibility for achieving the organizational goals is widespread throughout
the organizational hierarchy. There is a high level of confidence that the superior has in his subordinates. There is a high level of teamwork, communication, and participation. The nature of these four management systems has been described by Likert through a profile of organizational characteristics. In this profile, the four management systems have been compared with one another on the basis of certain organizational variables which are:

 Leadership processes  Motivational forces  Communication process  Interaction-influence process  Decision-making process  Goal-setting or ordering  Control processes
On the basis of this profile, Likert administered a questionnaire to several employees belonging to different organizations and from different managerial positions (both line and staff). His studies confirmed that the departments or units employing management practices within Systems 1 and 2 were the lease productive, and the departments or units employing management practices within Systems 3 and 4 were the most productive.

With the help of the profile developed by Likert, it became possible to quantify the results of the work done in the field of group dynamics. Likert theory also facilitated the measurement of the “soft” areas of management, such as trust and communication.

According to Rensis Likert, the nearer the behavioral characteristics of an organization approach System 4 (Participative), the more likely this will lead to long-term improvementin staff turnover and high productivity, low scrap, low costs, and high earnings.if an organization wants to achieve optimum effectiveness, then the ideal system

Servant leadership
The leader has responsibility for the followers. Leaders have a responsibility towards society and those who are disadvantaged.

People who want to help others best do this by leading them.

The servant leader serves others, rather than others serving the leader. Serving others thus comes by helping them to achieve and improve. There are two criteria of servant leadership:   The people served grow as individuals, becoming 'healthier, wiser, more autonomous and more likely themselves to become servants' (Greenleaf, 1977). The extent to which the leadership benefits those who are least advantaged in society (or at least does not disadvantage them).

Principles of servant leadership defined by the Alliance for Servant Leadership are:         Transformation as a vehicle for personal and institutional growth. Personal growth as a route to better serve others. Enabling environments that empower and encourage service. Service as a fundamental goals. Trusting relationships as a basic platform for collaboration and service. Creating commitment as a way to collaborative activity. Community building as a way to create environments in which people can trust each other and work together. Nurturing the spirit as a way to provide joy and fulfilment in meaningful work.

Spears (2002) lists: listening, empathy, healing, awareness, persuasion, conceptualization, foresight, stewardship, commitment to growth of people, and building community. An excellent example of a servant leader is Ernest Shackleton, the early 20th century explorer who, after his ship became frozen in the Antarctic life, brought every one of his 27 crew home alive, including an 800 mile journey in open boats across the winter Antarctic seas. It took two years, but Shackleton's sense of responsibility towards his men never wavered.

Greenleaf says that true leadership "emerges from those whose primary motivation is a deep desire to help others." Servant leadership is a very moral position, putting the wellbeing of the followers before other goals. It is easy to dismiss servant leadership as soft and easy, though this is not necessarily so, as individual followers may be expected to make sacrifices for the good of the whole, in the way of the servant leader. The focus on the less privileged in society shows the servant leader as serving not just their followers but also the whole of society. Servant leadership is a natural model for working in the public sector. It requires more careful interpretation in the private sector lest the needs of the shareholders and customers and the rigors of market competition are lost. A challenge to servant leadership is in the assumption of the leader that the followers want to change. There is also the question of what 'better' is and who decides this. Servant leadership aligns closely with religious morals and has been adopted by several Christian organizations.

Group Dynamics
A group can be defined as several individuals who come together to accomplish a particular task or goal. Group dynamics refers to the attitudinal and behavioral characteristics of a group. Group dynamics concern how groups form, their structure and process, and how they function. Group dynamics are relevant in both formal and informal groups of all types. In an organizational setting, groups are a very common organizational entity and the study of groups and group dynamics is an important area of study in organizational behavior. The following sections provide information related to group dynamics. Specifically, the formation and development of groups is first considered. Then some major types or classifications of groups are discussed. Then the structure of groups is examined.

As applied to group development, group dynamics is concerned with why and how groups develop. There are several theories as to why groups develop. A classic theory, developed by George Homans, suggests that groups develop based on activities, interactions, and sentiments. Basically, the theory means that when individuals share common activities, they will have more interaction and will develop attitudes (positive or negative) toward each other. The major element in this theory is the interaction of the individuals involved. Social exchange theory offers an alternative explanation for group development. According to this theory, individuals form relationships based on the implicit expectation of mutually beneficial exchanges based on trust and felt obligation. Thus, a perception that exchange relationships will be positive is essential if individuals are to be attracted to and affiliate with a group. Social identity theory offers another explanation for group formation. Simply put, this theory suggests that individuals get a sense of identity and self-esteem based upon their membership in salient groups. The nature of the group may be demographically based, culturally based, or organizationally based. Individuals are motivated to belong to and contribute to identity groups because of the sense of belongingness and self-worth membership in the group imparts. Group dynamics as related to development concerns not only why groups form but also how. The most common framework for examining the "how" of group formation was developed by Bruce Tuckman in the 1960s. In essence, the steps in group formation imply that groups do not usually perform at maximum effectiveness when they are first established. They encounter several stages of development as they strive to become productive and effective. Most groups experience the same developmental stages with similar conflicts and resolutions. According to Tuckman's theory, there are five stages of group development: forming, storming, norming, performing, and adjourning. During these stages group members must address several issues and the way in which these issues are resolved determines whether the group will succeed in accomplishing its tasks.

1. Forming. This stage is usually characterized by some confusion and uncertainty. The major goals of the group have not been established. The nature of the task or leadership of the group has not been determined (Luthans, 2005). Thus, forming is an orientation period when members get to know one another and share expectations about the group. Members learn the purpose of the group as well as the rules to be followed. The forming stage should not be rushed because trust and openness must be developed. These feelings strengthen in later stages of development. Individuals are often confused during this stage because roles are not clear and there may not be a strong leader. 2. Storming. In this stage, the group is likely to see the highest level of disagreement and conflict. Members often challenge group goals and struggle for power. Individuals often vie for the leadership position during this stage of development. This can be a positive experience for all groups if members can achieve cohesiveness through resolution. Members often voice concern and criticism in this phase. If members are not able to resolve the conflict, then the group will often disband or continue in existence but will remain ineffective and never advance to the other stages. 3. Norming. This stage is characterized by the recognition of individual differences and shared expectations. Hopefully, at this stage the group members will begin to develop a feeling of group cohesion and identity. Cooperative effort should begin to yield results. Responsibilities are divided among members and the group decides how it will evaluate progress. 4. Performing. Performing, occurs when the group has matured and attains a feeling of cohesiveness. During this stage of development, individuals accept one another and conflict is resolved through group discussion. Members of the group make decisions through a rational process that is focused on relevant goals rather than emotional issues. 5. Adjourning. Not all groups experience this stage of development because it is characterized by the disbandment of the group. Some groups are relatively permanent (Luthans, 2005). Reasons that groups disband vary, with common reasons being the accomplishment of the task or individuals deciding to go their own ways. Members of the group often experience feelings of closure and sadness as they prepare to leave.

One common way to classify group is by whether they are formal or informal in nature. Formal work groups are established by an organization to achieve organizational goals. Formal groups may take the form of command groups, task groups, and functional groups.

Command groups are specified by the organizational chart and often consist of a supervisor and the subordinates that report to that supervisor. An example of a command group is an academic department chairman and the faculty members in that department.

Task groups consist of people who work together to achieve a common task. Members are brought together to accomplish a narrow range of goals within a specified time period. Task groups are also

commonly referred to as task forces. The organization appoints members and assigns the goals and tasks to be accomplished. Examples of assigned tasks are the development of a new product, the improvement of a production process, or the proposal of a motivational contest. Other common task groups are ad hoc committees, project groups, and standing committees. Ad hoc committees are temporary groups created to resolve a specific complaint or develop a process. Project groups are similar to ad hoc committees and normally disband after the group completes the assigned task. Standing committees are more permanent than ad hoc committees and project groups. They maintain longer life spans by rotating members into the group.

A functional group is created by the organization to accomplish specific goals within an unspecified time frame. Functional groups remain in existence after achievement of current goals and objectives. Examples of functional groups would be a marketing department, a customer service department, or an accounting department. In contrast to formal groups, informal groups are formed naturally and in response to the common interests and shared values of individuals. They are created for purposes other than the accomplishment of organizational goals and do not have a specified time frame. Informal groups are not appointed by the organization and members can invite others to join from time to time. Informal groups can have a strong influence in organizations that can either be positive or negative. For example, employees who form an informal group can either discuss how to improve a production process or how to create shortcuts that jeopardize quality. Informal groups can take the form of interest groups, friendship groups, or reference groups.

Interest groups usually continue over time and may last longer than general informal groups. Members of interest groups may not be part of the same organizational department but they are bound together by some other common interest. The goals and objectives of group interests are specific to each group and may not be related to organizational goals and objectives. An example of an interest group would be students who come together to form a study group for a specific class.

Friendship groups are formed by members who enjoy similar social activities, political beliefs, religious values, or other common bonds. Members enjoy each other's company and often meet after work to participate in these activities. For example, a group of employees who form a friendship group may have an exercise group, a softball team, or a potluck lunch once a month.

A reference group is a type of group that people use to evaluate themselves. According to Cherrington, the main purposes of reference groups are social validation and social comparison. Social validation allows individuals to justify their attitudes and values while social comparison helps individuals evaluate their own actions by comparing themselves to others. Reference groups have a

strong influence on members' behavior. By comparing themselves with other members, individuals are able to assess whether their behavior is acceptable and whether their attitudes and values are right or wrong. Reference groups are different from the previously discussed groups because they may not actually meet or form voluntarily. For example, the reference group for a new employee of an organization may be a group of employees that work in a different department or even a different organization. Family, friends, and religious affiliations are strong reference groups for most individuals.

Group structure is a pattern of relationships among members that hold the group together and help it achieve assigned goals. Structure can be described in a variety of ways. Among the more common considerations are group size, group roles, group norms, and group cohesiveness.

Group size can vary from 2 people to a very large number of people. Small groups of two to ten are thought to be more effective because each member has ample opportunity to participate and become actively involved in the group. Large groups may waste time by deciding on processes and trying to decide who should participate next. Group size will affect not only participation but satisfaction as well. Evidence supports the notion that as the size of the group increases, satisfaction increases up to a certain point. In other words, a group of six members has twice as many opportunities for interaction and participation as a group of three people. Beyond 10 or 12 members, increasing the size of the group results in decreased satisfaction. It is increasingly difficult for members of large groups to identify with one another and experience cohesion.

In formal groups, roles are usually predetermined and assigned to members. Each role will have specific responsibilities and duties. There are, however, emergent roles that develop naturally to meet the needs of the groups. These emergent roles will often replace the assigned roles as individuals begin to express themselves and become more assertive. Group roles can then be classified into work roles, maintenance roles, and blocking roles. Work roles are task-oriented activities that involve accomplishing the group's goals. They involve a variety of specific roles such as initiator, informer, clarifier, summarizer, and reality tester. The initiator defines problems, proposes action, and suggests procedures. The informer role involves finding facts and giving advice or opinions. Clarifiers will interpret ideas, define terms, and clarify issues for the group. Summarizers restate suggestions, offer decisions, and come to conclusions for the group. Finally, reality testers analyze ideas and test the ideas in real situations. Maintenance roles are social-emotional activities that help members maintain their involvement in the group and raise their personal commitment to the group. The maintenance roles are harmonizer, gatekeeper, consensus tester, encourager, and compromiser. The harmonizer will reduce tension in

the group, reconcile differences, and explore opportunities. Gatekeepers often keep communication channels open and make suggestions that encourage participation. The consensus tester will ask if the group is nearing a decision and test possible conclusions. Encouragers are friendly, warm, and responsive to other group members. The last maintenance role is the compromiser. This role involves modifying decisions, offering compromises, and admitting errors. Blocking roles are activities that disrupt the group. They make take the form of dominating discussions, verbally attacking other group members, and distracting the group with trivial information or unnecessary humor. Often times the blocking behavior may not be intended as negative. Sometimes a member may share a joke in order to break the tension, or may question a decision in order to force group members to rethink the issue. The blocking roles are aggressor, blocker, dominator, comedian, and avoidance behavior. The aggressor criticizes members' values and makes jokes in a sarcastic or semi-concealed manner. Blockers will stubbornly resist the group's ideas, disagree with group members for personal reasons, and will have hidden agendas. The dominator role attempts to control conversations by patronizing others. They often interrupt others and assert authority in order to manipulate members. Comedians often abandon the group even though they may physically still be a part. They are attention-getters in ways that are not relevant to the accomplishment of the group's objectives. The last blocking role, avoidance behavior, involves pursuing goals not related to the group and changing the subject to avoid commitment to the group. Role ambiguity concerns the discrepancy between the sent role and the received role, as shown in Exhibit 1. Supervisors, directors, or other group leaders often send (assign) roles to group members in formal groups. Group members receive roles by being ready and willing to undertake the tasks associated with that role. Ambiguity results when members are confused about the delegation of job responsibilities. This confusion may occur because the members do not have specific job descriptions or because the instructions regarding the task were not clear. Group members who experience ambiguity often have feelings of frustration and dissatisfaction, which ultimately lead to turnover. Role conflict occurs when there is inconsistency between the perceived role and role behavior. There are several different forms of role conflict. Interrole conflict occurs when there is conflict between the different roles that people have. For example, work roles and family roles often compete with one another and cause conflict. Intrarole conflict occurs when individuals must handle conflicting demands from different sources while performing the tasks associated with the same role.

Norms are acceptable standards of behavior within a group that are shared by the members of the group. Norms define the boundaries of acceptable and unacceptable behavior. They are typically created in order to facilitate group survival, make behavior more predictable, avoid embarrassing situations, and express the values of the group. Each group will establish its own set of norms that might determine anything from the appropriate dress to how many comments to make in a meeting.

Groups exert pressure on members to force them to conform to the group's standards. The norms often reflect the level of commitment, motivation, and performance of the group. Performance norms determine how quickly members should work and how much they should produce. They are created in an effort to determine levels of individual effort. They can be very frustrating to managers because they are not always in line with the organization's goals. Members of a group may have the skill and ability to perform at higher levels but they don't because of the group's performance norms. For example, workers may stop working a production machine at 20 minutes before quitting time in order to wash up, even though they produced fewer items that day than management intended. Reward-allocation norms determine how rewards are bestowed upon group members. For example, the norm of equality dictates equal treatment of all members. Every member shares equally so rewards are distributed equally to everyone. Equity norms suggest that rewards are distributed according to the member's contribution. In other words, members who contribute the most receive the largest share of the rewards. Members may contribute through effort, skill, or ability. Social responsibility norms reward on the basis of need. Members who have special needs therefore receive the largest share of the reward. The majority of the group must agree that the norms are appropriate in order for the behavior to be accepted. There must also be a shared understanding

Exhibit 1 Role Ambiguity and Role Conflict

that the group supports the norms. It should be noted, however, that members might violate group norms from time to time. If the majority of members do not adhere to the norms, then they will eventually change and will no longer serve as a standard for evaluating behavior. Group members who do not conform to the norms will be punished by being excluded, ignored, or asked to leave the group.

Cohesiveness refers to the bonding of group members and their desire to remain part of the group. Many factors influence the amount of group cohesiveness. Generally speaking, the more difficult it is to obtain group membership the more cohesive the group. Groups also tend to become cohesive when they are in intense competition with other groups or face a serious external threat to survival. Smaller groups and those who spend considerable time together also tend to be more cohesive.

Cohesiveness in work groups has many positive effects, including worker satisfaction, low turnover and absenteeism, and higher productivity. However, highly cohesive groups may be detrimental to organizational performance if their goals are misaligned with organizational goals. Highly cohesive groups may also be more vulnerable to groupthink. Groupthink occurs when members of a group exert pressure on each other to come to a consensus in decision making. Groupthink results in careless judgments, unrealistic appraisals of alternative courses of action, and a lack of reality testing. It can lead to a number of decision-making issues such as the following: 1. Incomplete assessments of the problem, 2. Incomplete information search, 3. Bias in processing information, 4. Inadequate development of alternatives, and 5. Failure to examine the risks of the preferred choice. Evidence suggests that groups typically outperform individuals when the tasks involved require a variety of skills, experience, and decision making. Groups are often more flexible and can quickly assemble, achieve goals, and disband or move on to another set of objectives. Many organizations have found that groups have many motivational aspects as well. Group members are more likely to participate in decision-making and problem-solving activities leading to empowerment and increased productivity. Groups complete most of the work in an organization; thus, the effectiveness of the organization is limited by the effectiveness of its groups.

A team is a collection of individuals organized to accomplish a common purpose, who are interdependent, and who can be identified by themselves and observers as a team. Teams exist within a larger organization and interact with other teams and with the organization. Teams are one way for organizations to gather input from members, and to provide organization members with a sense of involvement in the pursuit of organizational goals. Further, teams allow organizations flexibility in assigning members to projects and allow for cross-functional groups to be formed.

There are six major types of teams: informal, traditional, problem solving, leadership, self-directed, and virtual. Table 1 describes some of the characteristics of these six types of teams.


Informal teams are generally formed for social purposes. They can help to facilitate employee pursuits of common concerns, such as improving work conditions. More frequently however, these teams form out of a set of common concerns and interests, which may or may not be the same as the organization's. Leaders of these teams generally emerge from the membership and are not appointed by anyone in the organization.

Traditional teams are the organizational groups commonly thought of as departments or functional areas. Leaders or managers of these teams are appointed by the organization and have legitimate power in the team. The team is expected to produce a product, deliver a service, or perform a function that the organization has assigned.

Table 1 Six Types of Teams Informal
 

Social in nature Leaders may differ from those appointed by the organization


 

Departments/functional areas Supervisors/managers appointed by the organization

  

Temporary teams Frequently cross-functional Focused on a particular project

 

Steering committees Advisory councils

  

Small teams Little or no status differences among team members Have authority to decide how to get the work done

 

Geographically spread apart • Meetings and functions rely on available technology

Problem-solving teams or task forces are formed when a problem arises that cannot be solved within the standard organizational structure. These teams are generally crossfunctional; that is, the membership comes from different areas of the organization, and are charged with finding a solution to the problem.

Leadership teams are generally composed of management brought together to span the boundaries between different functions in the organization. In order for a product to be delivered to market, the heads of finance, production, and marketing must interact and

come up with a common strategy for the product. At top management levels, teams are used in developing goals and a strategic direction for the firm as a whole.

Self-directed teams are given autonomy over deciding how a job will be done. These teams are provided with a goal by the organization, and then determine how to achieve that goal. Frequently there is no assigned manager or leader and very few, if any, status differences among the team members. These teams are commonly allowed to choose new team members, decide on work assignments, and may be given responsibility for evaluating team members. They must meet quality standards and interact with both buyers and suppliers, but otherwise have great freedom in determining what the team does. Teams form around a particular project and a leader emerges for that project. The team is responsible for carrying out the project, for recruiting team members, and for evaluating them.

Technology is impacting how teams meet and function. Collaborative software and conferencing systems have improved the ability for employees to meet, conduct business, share documents, and make decisions without ever being in the same location. While the basic dynamics of other types of teams may still be relevant, the dynamics and management of virtual teams can be very different. Issues can arise with a lack of facial or auditory clues; participants must be taken at their word, even when videoconferencing tools are used. Accountability is impacted by taking a team virtual. Each member is accountable for their tasks and to the team as a whole usually with minimal supervision. Key factors in the success of a virtual team are effective formation of the team, trust and collaboration between members, and excellent communication.


Some characteristics of effective teams are clear direction and responsibilities, knowledgeable members, reasonable operating procedures, good interpersonal relationships, shared success and failures, and good external relationships.

Clear direction means that the team is given a clear and distinct goal. The team may be empowered to determine how to achieve that goal, but management, when forming the team, generally sets the goal. A clear direction also means that team outcomes are measurable.

Clear responsibilities means that each team member understands what is expected of her or him within the team. The roles must be clear and interesting to the team members. Each team member needs to be able to rely on all the other members to carry out their roles so that the team can function effectively. Otherwise, one or two team members come to feel that they are doing all the work. This is one of the reasons so many individuals are initially reluctant to join teams.

An effective team will be comprised of individuals who have the skills and knowledge necessary to complete the team's task. Cooperation is essential at an early stage in inventorying the skills and knowledge each member brings to the team, and working to determine how to utilize those skills to accomplish the team task.

All teams need a set of rules by which they operate. Sports teams for example, operate according to a clearly laid-out set of rules about how the game is played. Similarly, work teams need a set of procedures to guide meetings, decision making, planning, division of tasks, and progress evaluation. Setting, and sticking to, procedures helps team members become comfortable relying on one another.

Teams are composed of diverse individuals, each of whom comes to the team with his or her own set of values. Understanding and celebrating this diversity helps to make a stronger, more effective team.

Everyone wants to feel appreciated. Within a team, members should be willing to express their appreciation, as well their criticisms, of others' efforts. Similarly, the organization must be willing to reward the team for successful completion of a task and hold all members responsible for failure.

In the process of building a strong team, groups external to the team are frequently ignored. In order for the team to successfully complete its task, it cannot operate in isolation from the rest of the organization. Teams need help from people within the organization who control important resources. Establishing clear lines of communication with these people early on will facilitate the completion of the team's task.

The most successful teams go through five stages of development. Table 2 outlines these stages.

Table 2 Five Stages of Team Development Forming
 

Assess the ground rules Gather information about group goals Storming

 

Initiate conflict with other team members Find mutually acceptable resolutions Norming

 

Build cohesion Develop a consensus about norms Performing

 

Channel energy toward the task Apply problem-solving solutions generated in the previous stages Adjournment

 

Disengagement after successful completion of goals Regrets at team break-up

Forming is the stage when team members become acquainted with one another. They also assess the group task and the ground rules that will apply to that task. At this stage everyone is typically very polite and willing to go along with suggestions made by other team members. Team members try to avoid making enemies and are frequently more patient with one another than they might be later in the process.

As the novelty of being a member of the team wears off, conflict emerges. Members of the team emerge who want to exert greater influence over the process. Leadership struggles begin, as do interpersonal conflicts. Conflicts erupt over the task requirements and the best way to achieve that task. This is the stage at which listening and finding mutually acceptable resolutions to the conflict is most important. The team can either emerge united and ready to take on the assigned task, or divided, with some members taking a passive role.

In the norming stage team members make an effort to discover what standards of performance are acceptable. What do deadlines really mean? How high a level of quality is necessary? Does every member have to be at every meeting? What about developing sub-teams? If the team can establish harmonious relationships at this stage, they are ready to move on to the performing stage. Some teams, however, disband at this stage.

At this stage the team is ready to be productive and work on the task assigned. Team members' roles have been established and clarified. Group interaction should be relatively smooth as the team applies some of the problem-solving skills it learned in earlier stages to the task at hand. If the team has reached this stage without successfully working through the problems and issues of the earlier stages, it may disband or regress and work through those issues.

At some point almost all teams are disbanded, whether their task is completed or a team member leaves. On the one hand this can be a happy stage, with members congratulating one another on a job well done. On the other hand adjournment means the disruption of working arrangements that may have become comfortable and efficient, and possibly the end of friendships.

Forming an effective team is more complex than simply throwing a group of people together, assigning them a task, and hoping for the best. Potential team members need to be interviewed and their skills and knowledge should be assessed. Issues to consider in selecting team members include: the individual's motivation with respect to both the team and the task at hand; the attitudes and goals of potential team members; potential problems with intragroup relationships; and potential problems with relationships with external groups. The organization needs to first assess what the skills, knowledge, and attitudes of potential team members should be. What are the tasks that need to be accomplished for the team to be successful? Have managers analyzed the jobs and developed an inventory of required skills and knowledge? Once these steps have been completed, potential team members can be interviewed. Among the issues the interview process should cover are:
     

What strengths does the individual bring to the team? What is she or he is willing to work on improving? What problem solving style does the individual employ? Can she or he share information in an effective manner? Does the individual have good listening skills? Can the individual provide constructive feedback?

It is important to remember that effective teams are generally made up of a variety of personalities. The selection process needs to be structured so that it is not biased toward

one personality type. An effective team needs both the thoughtful, detail-oriented individuals, as well as the outgoing, insightful individuals. Additional considerations for building an effective team are being identified. There are four important factors to consider when selecting team members: 1. years of professional work experience; 2. frequency of team participation; 3. type of team training; 4. situational entry to team assignments (volunteered, assigned, requested). These factors can be effectively utilized by management when selecting team members to increase the opportunity for overall success.

The major impetus for organizations to embrace the team concept is the effort to improve productivity and quality. Teams are a key component of many total quality management programs. The QS 9000 program, which suppliers to the major automobile manufacturers have embraced, relies on the team approach to ensure quality while maintaining a low-cost approach to manufacturing. In addition to improved productivity and quality, some of an organization's major benefits from the use of teams are improved quality of work life for employees, reduced absenteeism and turnover, increased innovation, and improved organizational adaptability and flexibility. Effective implementation of teams can also improve office politics by improving the communication and trust between the team members.

Effective teams frequently improve the quality of work life for the employees. An effective team is generally one in which members are empowered to make decisions about how to get work done. Giving team members authority and control over the work processes reduces the amount of external control and increases the sense of ownership

and accountability for the work being done. This helps to create a satisfying and rewarding work environment.

A satisfying and rewarding work environment helps to lower absenteeism and turnover. Teams are particularly effective in this area. Membership in a work team gives an employee a sense of belonging, interaction with others on a regular basis, and recognition of achievements. All of these help to eliminate a sense of isolation within the organization. Team members identify with and feel pride in the work they are doing and come to rely on one another being there. At some companies, employees are evaluated based on their contribution to their team's efforts.

W.L. Gore & Associates is an excellent example of a firm that utilizes the team concept and has a strong record of innovation. Gore is a multinational company structured around the concept of small plants (no more than 250 employees) where everyone works in teams. Everyone is allowed to experiment with the products and develop new uses. The result is that Gore has a continuous stream of patent applications and has been successful in developing new products in areas as diverse as clothing, surgical supplies, and coatings for industrial use.

During the 1980s Ford was able to reduce its automobile design cycle by implementing Team Taurus. Through the early involvement of employees from planning, designing, engineering, and manufacturing, the company was able to eliminate some of the bottlenecks that had delayed the design process. The involvement of suppliers and assembly workers helped to decrease the number of parts involved and lower costs. Reducing the time from design to manufacture helped Ford to be more responsive to market changes and increase its market share in the 1980s and '90s. Teams are not appropriate for all organizations or in all types of businesses. Behavioral scientists are still working to determine exactly when teams will be most effective, what

motivates team members, what types of business can best benefit from the implementation of teams, and so on. The study of the philosophy and psychology of teamwork is still in its infancy. While effective teams can produce extraordinary results, studies have found that an estimated 50 percent of self-directed work teams culminate in failure. The introduction of effective and stable new technologies has greatly affected teams and teamwork. Collaborative software and other multimedia options are providing businesses with tools to conduct teamwork regardless of location or time. New issues of accountability, team structure, and team selection are arising for management to deal with and coordinate within the businesses overall goals and objectives. But as more and more businesses introduce the team concept, the wrinkles in the process are being ironed out and team popularity is growing. An increasing number of organizations are using teams to improve productivity and quality, and to solve a range of managerial problems. Improved quality of work life and a reduction in absenteeism and turnover all contribute to a positive impact on the bottom line. Involving employees in teams helps the organization remain open to change and new ideas. As long as teams are seen as a means of improving the organization's ability to meet competitive challenges, teams will be part of the business world.

13 Leadership Competency Model Competencies
These 13 competencies are going to lead you to the top of all. The 13 Competencies includes Drive for Results, Service Orientation, Quality Orientation, Planning & Organizing, Analysis &Problem Solving, Entrepreneurial Orientation, Risk Management, Relationship Management, Adaptability & Change Management, Team Leadership, People Development, Visionary & Strategic Thinking and Values & Ethics.

The 13 Leadership Competencies are:
• • • • • • • Drive for Results Service Orientation Quality Orientation Planning & Organizing Analysis & Problem Solving Entrepreneurial Orientation Risk Management

• • • • • •

Relationship Management Adaptability & Change Management Team Leadership People Development Visionary & Strategic Thinking Values & Ethics.

Leadership Competency 1 : Visioning and Strategic Thinking

The ability to Provide direction and communicate the vision to encourage alignment within the organization. Has the skill and mindset to address issues for sustaining competitive edge and provide the relevant organizational response. The issues addressed could cover a wide spectrum of areas including people, technology, products, market opportunities, competitivethreats and customers. Understands rapidly changing environmental trends at national and global levels.

Leadership Competency 2 : Adaptability and Change Management Is open and responsive to personal change. Changes the overall plan, goal or project to fit the situation. Personal willingness and ability to effectively work in, and adapt to change and adapts personal style/approaches to meet change requirements and is able to adjust to the changing needs. Leadership Competency 3 : Drive for Results Motivated by success and passionate about working and achieving higher results. Persists to complete tasks / responsibilities, even in the face of difficulties, is optimistic and tenacious all through. Operates with personal ownership and looks for ways and means to improve performance all the time.

Leadership Competency 4 : Team Leadership Competency

Set and champion a clear future direction and demonstrate the actions expected in others, including a high standard of performance. Takes responsibility not just for the deliverables of the department and its constituents, but also for enabling success of the business. Sets high standards of performance for self and others and provides a clear direction for the team to achieve objectives Leadership Competency 5 : People Development A desire to work to develop the long term capability of others. Fostering the growth of people allows them to better meet organizational needs, to be more efficient, and gives them greater satisfaction in their job.

Leadership Competency 6 : Entrepreneurial Skills The ability to sight business opportunities and take them to a logical end. This is done by generating creative ideas, applying sound commercial acumen. Takes an innovative approach to problem solving. It includes the ability to “think out of the box”, to go beyond the conventional, and a willingness to try out different solutions. At the Sr. VP and above, it is the ability to champion innovation and encourage new ideas from employees. Leadership Competency 7 : Values and Ethics

Abide by a strict code of ethics and behavior (i.e. chooses an ethical course of action and does the right thing, even in the face of opposition; encourages others to behave accordingly), Acting fairly (i.e. Treats others with honesty, fairness and respect; makes decisions that are objective and reflect the just treatment of others) and Taking responsibility (i.e. Takes responsibility for accomplishing work goals within accepted timeframes; accepts responsibility for one’s decisions and actions and for those of one’s group, team, or department; attempts to learn from mistakes). Understanding, Identifying, assessing and managing risk while striving to attain objectives. Conducting risk assessment when identifying or recommending strategic and tactical options. Also providing organizational guidance on risk Leadership Competency 8 : Service Orientation Understands and anticipates the needs of internal and external customers. Discovers and meets customer’s underlying needs. Partners with the customer to create value for them. Tracks and anticipates market trends and patterns, conceptualizes / customizes products and services to address and shape customer needs. Provides support and resources to his team members to serve their customers. Creates and manages a positive perception of own product / organization in the mind of the customer. Becomes a trusted advisor / educator to customers. Leadership Competency 9 : Relationship Management & Collaboration Leverages relationships with a diverse group of people across levels and functions for work and/or non work related goals. Gives equal attention to internal (within kotak) as well as externalcustomer requirements. Handles disagreements and conflicts and seeks to resolve them. Understands others’ underlying concerns, emotions and feelings. Focuses on building diversityas well as depth of relationship with associates and customers (internal & external). Sensitizes, educates and creates awareness in others towards the emerging needs to leverage relationships. Shows and encourages mutual respect Leadership Competency 10 : Planning And Organizing Effectively organizing and planning work according to organizational needs by defining objectives and anticipating needs and priorities. Efficiently manage their time and the time of others and effectively handle multiple demands and competing deadlines. Identify goals, develop plans, estimate time frames and monitor progress. Leadership Competency 11 : Quality Orientation Promotes and maintains high standards of quality at work. Applies discipline and a detail orientation to work activities and constantly looks for ways to improve the quality of products or services. Encourages others to have high quality standards in their work. Leadership Competency 12 : Analysis and Problem Solving Solves difficult problems through careful and systematic evaluation of information, possible alternatives and consequences. Considers many sources of information and evaluates the information against possible courses of action, and carefully deliberates before a final decision is made

Conflict Management Techniques
Conflict situations are an important aspect of the workplace. A conflict is a situation when the interests, needs, goals or values of involved parties interfere with one another. A conflict is a common phenomenon in the workplace. Different stakeholders may have different priorities; conflicts may involve team members, departments, projects, organization and client, boss and subordinate, organization needs vs. personal needs. Often, a conflict is a result of perception. Is conflict a bad thing? Not necessarily. Often, a conflict presents opportunities for improvement. Therefore, it is important to

understand (and apply) various conflict resolution techniques.

Also known as competing. An individual firmly pursues his or her own concerns despite the resistance of the other person. This may involve pushing one viewpoint at the expense of another or maintaining firm resistance to another person’s actions. Examples of when forcing may be appropriate     In certain situations when all other, less forceful methods, don’t work or are ineffective When you need to stand up for your own rights, resist aggression and pressure When a quick resolution is required and using force is justified (e.g. in a life-threatening situation, to stop an aggression) As a last resort to resolve a long-lasting conflict

Possible advantages of forcing:   May provide a quick resolution to a conflict Increases self-esteem and draws respect when firm resistance or actions were a response to an aggression or hostility

Some caveats of forcing:     May negatively affect your relationship with the opponent in the long run May cause the opponent to react in the same way, even if the opponent did not intend to be forceful originally Cannot take advantage of the strong sides of the other side’s position Taking this approach may require a lot of energy and be exhausting to some individuals

Win-Win (Collaborating)
Also known as problem confronting or problem solving. Collaboration involves an attempt to work with the other person to find a win-win solution to the problem in hand - the one that most satisfies the concerns of both parties. The win-win approach sees conflict resolution as an opportunity to come to a mutually beneficial result. It includes identifying the underlying concerns of the opponents and finding an alternative which meets each party's concerns. Examples of when collaborating may be appropriate:        When consensus and commitment of other parties is important In a collaborative environment When it is required to address the interests of multiple stakeholders When a high level of trust is present When a long-term relationship is important When you need to work through hard feelings, animosity, etc When you don't want to have full responsibility

Possible advantages of collaborating:        Leads to solving the actual problem Leads to a win-win outcome Reinforces mutual trust and respect Builds a foundation for effective collaboration in the future Shared responsibility of the outcome You earn the reputation of a good negotiator For parties involved, the outcome of the conflict resolution is less stressful (however, the process of finding and establishing a win-win solution may be very involed – see the caveats below)

Some caveats of collaborating:     Requires a commitment from all parties to look for a mutually acceptable solution May require more effort and more time than some other methods. A win-win solution may not be evident For the same reason, collaborating may not be practical when timing is crucial and a quick solution or fast response is required Once one or more parties lose their trust in an opponent, the relationship falls back to other methods of conflict resolution. Therefore, all involved parties must continue collaborative efforts to maintain a collaborative relationship

Compromising looks for an expedient and mutually acceptable solution which partially satisfies both parties. Examples of when compromise may be appropriate:      When the goals are moderately important and not worth the use of more assertive or more involving approaches, such as forcing or collaborating To reach temporary settlement on complex issues To reach expedient solutions on important issues As a first step when the involved parties do not know each other well or haven’t yet developed a high level of mutual trust When collaboration or forcing do not work

Possible advantages of compromise:    Faster issue resolution. Compromising may be more practical when time is a factor Can provide a temporary solution while still looking for a win-win solution Lowers the levels of tension and stress resulting from the conflict

Some caveats of using compromise:   May result in a situation when both parties are not satisfied with the outcome (a lose-lose situation) Does not contribute to building trust in the long run

May require close monitoring and control to ensure the agreements are met

Also known as avoiding. This is when a person does not pursue her/his own concerns or those of the opponent. He/she does not address the conflict, sidesteps, postpones or simply withdraws. Examples of when withdrawing may be appropriate: When the issue is trivial and not worth the effort When more important issues are pressing, and you don't have time to deal with it In situations where postponing the response is beneficial to you, for example  When it is not the right time or place to confront the issue  When you need time to think and collect information before you act (e.g. if you are unprepared or taken by surprise) When you see no chance of getting your concerns met or you would have to put forth unreasonable efforts When you would have to deal with ostility When you are unable to handle the conflict (e.g. if you are too emotionally involved or others can handle it better) Possible advantages of withdrawing:     When the opponent is forcing / attempts aggression, you may choose to withdraw and postpone your response until you are in a more favourable circumstance for you to push back Withdrawing is a low stress approach when the conflict is short Gives the ability/time to focus on more important or more urgent issues instead Gives you time to better prepare and collect information before you act   

Some caveats of withdrawing:   May lead to weakening or losing your position; not acting may be interpreted as an agreement. Using withdrawing strategies without negatively affecting your own position requires certain skill and experience When multiple parties are involved, withdrawing may negatively affect your relationship with a party that expects your action

Also known as accommodating. Smoothing is accommodating the concerns of other people first of all, rather than one's own concerns. Examples of when smoothing may be appropriate:     When it is important to provide a temporary relief from the conflict or buy time until you are in a better position to respond/push back When the issue is not as important to you as it is to the other person When you accept that you are wrong When you have no choice or when continued competition would be detrimental

Possible advantages of smoothing:   In some cases smoothing will help to protect more important interests while giving up on some less important ones Gives an opportunity to reassess the situation from a different angle

Some caveats of smoothing:     There is a risk to be abused, i.e. the opponent may constantly try to take advantage of your tendency toward smoothing/accommodating. Therefore it is important to keep the right balance and this requires some skill. May negatively affect your confidence in your ability to respond to an aggressive opponent It makes it more difficult to transition to a win-win solution in the future Some of your supporters may not like your smoothing response and be turned off

How Can an Organization Manage Change & Innovation in an Optimal Way?
Nothing is more certain than change. While many speak as if change is a reflection of the 21st century, the world has actually been changing for many, many years. The ability to manage that change effectively, especially in business organizations, is critical. The effects of change can be negative or positive. Successful management will ensure the latter.

Accept Change
In this technology-driven global economy, it is important to accept the inevitability of change and communicate this to employees. You do not want to raise expectations that the rate of change will eventually slow. Instead, companies serve their employees best when they acknowledge change is constant, but manageable.

Practice Openness
Organizations manage change most effectively when alert to its impact upon staff. Thus, commit to fostering an environment of openness. Establish an environment of trust through open-door policies, tools allowing two-way feedback and--most importantly--the willingness to listen non-defensively to all feedback, even when critical.

Solicit Input
Employees do not oppose change; they oppose change they have no opportunity to influence. If you welcome their input, they will better appreciate and accept the reasons for change. Also, your business just may benefit from their insights. After all, they are on the front lines with the best grasp of customer needs and preferences.

Provide Training
Organizations should first assess employee knowledge and skill level to determine their readiness for change. If they are found wanting, then they should first receive appropriate training to get better equipped to meet the demands of the new change or innovation. Adapting to change often requires mastery of new processes and skills.

Accept and Recognize
It is inevitable that some failure will occur as management and employees work to implement change. Accepting failure as an inevitable part of the learning process sends a positive message to employees. Organizations managing change and innovation most effectively are the ones taking time to recognize and celebrate success. They acknowledge change can be stressful, requiring long hours and extra effort. Recognizing this will go a long way toward motivating employees to continue responding positively.

Managing change and innovation Getting the most from the innovation funnel
As complexity increases, managing change and innovation becomes increasingly difficult. Despite (or because of) easy availability of information, the ability to project future outcomes has moved from an environment of manageable risk to rising degrees of uncertainty. The speed at which information is transformed into actionable knowledge is not keeping pace with changes in the business environment. Manageable risk implies that there is sufficient knowledge to at least quantify the probabilities of specific outcomes. Uncertainty, as characterized by Frank Knight (1921), suggests that the level of risk becomes unknowable. In this type of environment the time to learn becomes the fundamental restriction to effective innovation. New knowledge must be created to determine the changes (or improvements) that will provide benefit and meet goals.

Managing change and innovation to accelerate critical learning
Innovation inherently requires some level of change. Change requires learning. However, humans and organizations tend to learn as a reaction to events. Business incentives provide additional motivation to exploit existing knowledge. What change triggers will motivate the investment in new learning needed to innovate? Triggers come from both internal and external sources and include: External triggers
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Customer needs, desires or expectations Competitive offers New technology Changing demographics Economic cycle Geo-political events Environmental change Societal change Industry structural changes Regulation change

Internal triggers
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Decisions Problems in operations

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Company growth or decline Leadership and personnel change Changes to inter-organization alliances

Innovation provides a response to these change triggers. Types of innovationhelp characterize these responses, suggesting innovation that could provide a more effective response to a specific change environment or trigger. With high uncertainty and possibility, managing change and innovation effectively requires that learning investments be focused on the areas of change that represent the highest risk and/or opportunity for continued sustainability and growth of the business. Of this long list of change triggers, only decisions come fully under control of the firm. Innovation processes typically include external and internal scanning to provide early identification of change triggers, moving company responses into the strategic decision and innovation funnel.

Manage decision making to reduce resistance
Resistance and challenges to change develop in response to factors that increase emotions in decision making. These include:
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Self-Interest and fear of personal loss Lack of trust and understanding, particularly with regard to intentions and purpose Uncertainty and lack of information that makes it difficult to project likely future events Different goals and assessments by people who will be impacted by a change

Decisions need to be made at every level to support desired change. This implies that people with different decision making styles must get the information, communication and motivation needed to decide to align and respond positively. Managing change and innovation should also address questions important to business sustainability and growth.
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How much will innovation cost? How will it be measured? What is the return on innovation? Is the cost of failure predictable and acceptable? How many of the decisions fundamental to the current business model will need to change? What are the likely consequences of a failure to change?

In high uncertainty, the learning investment needed to address these questions becomes difficult to predict, and managing change will need to focus on learning that verifies potential. Stage gates, when used as learning milestones can help manage the learning investment.

Are gated processes still relevant?
When used appropriately, gated processes can provide an effective framework for managing change and innovation. However, gate review boards must represent true decision making bodies. For innovation, they must encourage accelerated, validated learning that reduces uncertainty with minimum investment. Decisions completed at each gate should inherently support the change process needed for the organization to encourage the success of an innovation. Consider the following innovation gate decisions:

1. Idea identification - Ideas are evaluated for further resourcing. Criteria will often demonstrate the ability to be accommodated in the current business model, although spinoffs may be supported. Balance must be developed that will promote promising ideas while preventing being overwhelmed by evaluation of too many ideas. 2. Concept validation - The concept is developed enough to determine the investment needed to validate key elements of viability such as value proposition, competitive advantage, and likely returns. 3. Demonstration development plan - A plan is developed to provide a proof of concept demonstration to customers. For startups, this could be a product that might be used with non-paying customers. This plan will seek to minimize investment needed to validate key hypotheses with targeted customers. A demonstration vehicle that can accommodate quick and low cost requirements changes will accelerate the learning process. 4. Customer value validation - The value to the customer is established through their interactions with the demonstration product. Metrics that show causality will provide the learning that will continue to reduce uncertainty. 5. Growth plan - commitment to commercialize - For businesses with an established business model, the plan for full commercialization is developed. This may be the entry business gate to the more predictable (knowable risks)

development process. For newer businesses, investment is made to develop a product that can scale as business grows. Each successive gate in the innovation funnel reduces uncertainty that would prevent additional investment. The decisions made provide evidence of meeting established factors needed for success. Factors that facilitate change are increased while factors that work to resist change are reduced. Needed communication and education are built into the process.

Managing change in the product innovation process
Adapting to uncertain environments with rapid change has encouraged adoption of agile methods in software development. Acceptance of this approach recognizes that cycle times for large scale development have not been able to meet the needs of the current change environment. Learning and adapting to changing priorities has been a key factor in choosing these methods. Similarly, the effectiveness of managing change and innovation will ultimately be constrained by the limits of an organization's learning and decision making processes. These processes should return more than they cost and facilitate the knowledge creation needed for decision making in uncertain environments.

Kotter's 8-Step Change Model
Implementing Change Powerfully and Successfully

"Change is the only constant." – Heraclitus, Greek philosopher What was true more than 2,000 years ago is just as true today. We live in a world where "business as usual" is change. New initiatives, project-based working, technology improvements, staying ahead of the competition – these things come together to drive ongoing changes to the way we work. Whether you're considering a small change to one or two processes, or a system wide change to an organization, it's common to feel uneasy and intimidated by the scale of the challenge. You know that the change needs to happen, but you don't really know how to go about doing delivering it. Where do you start? Whom do you involve? How do you see it through to the end? There are many theories about how to "do" change. Many originate with leadership and change management guru, John Kotter. A professor at Harvard Business School and world-renowned change expert, Kotter introduced his eightstep change process in his 1995 book, "Leading Change." We look at his eight steps for leading change below.

Step 1: Create 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.

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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.

Note: Kotter suggests that for change to be successful, 75 percent of a company's management needs to "buy into" the change. In other words, you have to really work hard on Step 1, and spend significant time and energy building urgency, before moving onto the next steps. Don't panic and jump in too fast because you don't want to risk further short-term losses – if you act without proper preparation, you could be in for a very bumpy ride.

Step 2: Form a Powerful 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 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.

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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.

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 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.

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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.

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. 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.

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Openly and honestly address peoples' concerns and anxieties. Apply your vision to all aspects of operations – from training to performance reviews. Tie everything back to the vision. Lead by example.

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. 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.

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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).

Step 6: Create 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.

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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 initiative. Reward the people who help you meet the targets.

Step 7: Build on the Change
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.

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Set goals to continue building on the momentum you've achieved. Learn about kaizen, the idea of continuous improvement. Keep ideas fresh by bringing in new change agents and leaders for your change coalition.

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. 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.

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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.

Key Points
You have to work hard to change an organization successfully. When you plan carefully and build the proper foundation, implementing change can be much easier, and you'll improve the chances of success. If you're too impatient, and if you expect too many results too soon, your plans for change are more likely to fail. Create a sense of urgency, recruit powerful change leaders, build a vision and effectively communicate it, remove obstacles, create quick wins, and build on your momentum. If you do these things, you can help make the change part of your organizational culture. That's when you can declare a true victory. then sit back and enjoy the change that you envisioned so long ago.

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