If we all agree that change is happening all around us, and it's not going away, then how can we organize the company to best address change? And if change management is all about people, then what sorts of organizational strategies can we implement to institutionalize change management? Let's look at a couple of ideas. JOHN Kotter also applied on how an organizational structure needs to be reconfigured to adapt to this constant change. hierarchical structures were an invention of the 20th century and worked wonderfully well for improving efficiency and emphasizing focus. This is exactly what a stable market environment dictates.

But as we all know, the market environment is much less stable and getting less so with one global crisis after another. We also see evidence of change in financial statements. More and more companies have separate lines on the income side statement for restructuring charges. Worse yet, those lines never seem to go away. Proof the companies are constantly repositioning themselves to capture market opportunities or defend against threats. According to Kotter, the problem with the hierarchal structure is that it's not well suited to dealing with change.

So is there a better alternative? his suggestion is to consider a network structure. A network structure is a flexible virtual structure that readily adapts to change in a network organization, any business function can be contracted out, and management spends most of their time coordinating and controlling all these external relationships. This sort of structure enables the company to easily and quickly attack new market opportunities. And if things don't pan out, this aspect of the structure can just as easily be quickly severed. The organization itself is largely virtual, for instance, h&m, a clothing retailer outsources all of its clothing production to a network of 700 suppliers.

The majority of which are based in Asia, hmm avoids the cost of owning and operating plants, which helps them fulfill their low cost strategy. More and more government services are adopting a network structure, allowing the government to leverage the efficiencies and innovation of the private sector, and avoiding the need to make costly upfront investments to establish new monolithic systems have political web changes, but the service can be discontinued without fuss or muss. And that's the network structure. Another idea for embedding change management into the organization's DNA is to think of change management like we might risk management. enterprise risk management is a holistic function that exists in manage risk across the entirety of the organization. enterprise management would then have the same scope for change management initiatives.

Organizations that are thinking along these lines have created a change management office or cmo and the CMO contains a permanent set of dedicated resources which older implement change management methodology for the organization. effectively managing the people side of change becomes more than a business practice, it becomes a core competency. A competitive differentiator had a cultural value of the organization. rather than allowing each project to address change management on its own. The cmo establishes an organization to address change management from an enterprise perspective, using a common language, a common toolset and dedicated resources. This can result in a more consistent application, a shortening of the learning curve, and allow the organization to continuously improve and adapting to change itself.

The foundational belief is that the change management is done more efficiently and effectively when there is an organizational standard in place. The Change Management Office may also be combined or aligned to work with the project management office. As there's often a high degree of overlap between the change initiatives and the need for strong project management discipline, both are designed to manage different aspects of this transition phase. The Change Management Office focuses on the employees impacted by the initiative by preparing them for Change Management during the transition period, and then reinforcing change after the completion. Project Management manages the tasks and activities associated with implementing the change initiative. The process breaks down somewhat differently into project initiation, project planning, project execution, monitoring, controlling and project closing.

In other words, the Change Management Office focuses on the people side of the business and the project management office focuses on the technical side of change management. The common and shared objectives of both of these offices is to improve the performance of the organization by reaching the desired future state Project Management and change management are complementary disciplines because each of them provide focus processes and tools for moving through this transition state. However the tools use differ. As you would expect, the Change Management Office deploys a toolkit directed at managing the people dimension, things such as communication plans, coaching plans and training plans. Whereas the project management office tools focus on the technical delivery of the initiative. And the tools use reflect this requirement.

Think of things like the project charter, the work breakdown structure, Gantt charts scheduling a tracking a successful change is characterized by a solution that is effectively designed, developed and delivered that is embraced and adopted and used by impacted employees. So now that I've just spent five lessons talking about how to achieve excellence and change management, let me bring in one other finding that I found interesting during my research In the book, great by choice written by Hansen and Collins, the author study pair comparison companies in similar industries. So like Southwest Airlines versus, say American Airlines. This research discovered that the more successful company or the Southwest Airlines had developed a highly disciplined recipe, which was found to be one of the factors leading to their success. The author's nicknamed this recipe, the smack, which stands for standard methodical and consistent, we talk more about this strategy tool in the strategize this course, if you were interested.

But the interesting aspect of their findings was that for all the change that has occurred in the airline industry call is enhanced and discovered that more successful company actually changed less not more than their rivals. To make this determination. They looked at how much each company had changed their smack, which you can think of broadly as their corporate strategy, through the decades of operation Southwest has only modified the SMAP that you see on The right of your screen by 20%. That means only two of these 10 strategic policies have changed since the early 1970s. This not only reinforces the importance of developing a sound strategic policy, but also and more importantly to this course, the fortitude to stick with it. Change for the sake of change is not what makes a successful company as a basis for comparison.

The study found that the less successful rival change their strategy policies three to four times as much as their more successful rivals. Think about that for a moment. Conventional wisdom says that change is hard. But if change is so difficult, why do we see more evidence of radical change and less successful comparison companies Collins and Hansen surmise that it was because change is not the most difficult part far more difficult than actually implementing change is figuring out what works, understanding why it works grasping when to change, and more importantly, knowing when not to change. Now that's food for thought. This brings us to the end of this lesson.

And in this lesson we looked at two ways in which organizations structure themselves to adapt to the ever shifting environment. A network organizational structure is rapidly evolving as a virtual structuring enabling a nimble organization. But hierarchical structures are well ingrained in today's business methodology. So banding them all together is not realistic in the short and medium term. For those organizations change management methodology can be embedded in the organization by establishing a center of excellence dedicated to facilitating change initiatives. In other words, the change management office.

This lesson also marks the end of this course. And we've looked at change from many different perspectives. We look at the challenges of change, we discover How hard it is for organizations to do successfully and for employees to adapt. We talked about the Add car model and the progressive stages for the employees to achieve as they deal with change. We studied a network structure and an enterprise change management model for permanently making change a part of the business. Part of the challenges simply initiating change.

Remember my fishing company story and how hard it was just to get started. And finally, don't forget cotters eight steps for transformation, which gives us a roadmap for delivering or next change initiative. Lots to think about no doubt. For more information be sure to check out the links provided in the resource section of the course page at the finance Learning Academy COMM And until your next course and until next time, remember, don't stop to get to the top and get to the top. Don't stop