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Modern leadership styles. Transformations due to technological development

Seminar Paper 2016 35 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Table of Content

List of Abbreviations

List of Figures

List of Tables

1. Introduction
1.1. Definition of the Problem and Task Description
1.2. Aims, Objectives and Structure

2. Definition
2.1. Change
2.2. Innovation
2.3. Leadership

3. Leading innovative change to success
3.1. The innovative change process
3.1.1. Drivers and need for change
3.1.2. Models of change
3.2. Leading innovative change
3.2.1. Role of the Leader
3.2.2. Leadership Styles

4. Case Studies
4.1. Successful Change: Travelex‘s digital transformation
4.1.1. Company Review
4.1.2. Travelex‘s digital challenge
4.1.3. Leading Travelex’s digital transformation to success
4.2. Unsuccessful Change: BBC‘s digital transformation
4.2.1. Company Review
4.2.2. BBC’s digital transformation
4.2.3. Leading BBC’s digital transformation to failure
4.3. Successful vs. unsuccessful transformation program analysis

5. Conclusion

6. Bibliography

Appendix

List of Abbreviations

illustration not visible in this excerpt

List of Figures

Figure 1: The three-pillars of leadership

Figure 2: Drivers of Change

Figure 3: Lewin's three-step approach

Figure 4: Kotter's eight-step approach

Figure 5: The three levels of Travelex's change

Figure 6: Travellex's internal story

Figure 7: Delivery Plans for the Program

Figure 8: DMI's requirements

Figure 9: The ten types of innovation A

List of Tables

Table 1: Similarities of innovation

Table 2: Types of innovation

Table 3: Types of Organisational Change

Table 4: Change Leader vs. Change Manager vs. Change Controller

Table 5: Leadership-Theories

Table 6: Travelex's five tenets of digital transformation

Table 7: Travelex vs. BBC digital transformation

1. Introduction

1.1. Definition of the Problem and Task Description

Today’s organisations are facing the challenges of the 21st century. Globaliza- tion and radical transformation in structure, resources, and nature of expertise are leading to an increasing level of competition throughout all industries. (Keeley, et al., 2013) McKinsey’s business consultants analyzed that the av- erage lifespan of an organisation in 1935 was about 90 years. In 2010, the average lifespan dropped to only 14 years (Meany, 2014). This depicts that the speed of change has increased and organisations are struggling to keep up, especially when it comes to technological innovation surrounding their domain sectors.

Today’s potential technologies will no longer be peripheral phenomenons, they will be a part of daily life by the year 2025. (Leitl, 2013) These develop- ments become both opportunities and threads for all industries. To generate future competitive advantages and sustainable growth companies need to focus on technological innovations and assimilate them into their business model. It is imperative to create an atmosphere for innovation and change to define the process that will guide organisations through innovative change. Currently this is a shortcoming. In 2014, Meany (2014) emphasizes that 70% of all change processes are failing due to human and organisational factors. The changing framework is a challenge for both management and employ- ees. Both parties need to adapt to a faster and more efficient response to variety of rapid changing tasks. (Doppler & Lauterburg, 2014)

To deal with this rapid change, terms like change leadership (CL) and innova- tion leadership (IL) have become more identified within organisations. By identifying the problem, organisation can begin to deal with it, leading to suc- cessful fast technological change and its acceptance from the stakeholders.

1.2. Aims, Objectives and Structure

This assignment will examine innovative change due to fast technological developments. It will analyze the possibilities how organisations can cope with such a transformation and give recommendations for action as a result.

The assignment is divided into five main sections. First, it will consider a gen- eral definition for the terms change, innovation, and leadership. In this con- text, it will give explanations for CL and IL and emphasizes their growing im- portance for future change projects. Second, it will describe the need for change and the procedure itself, explaining change drivers and thereby focus the technological change. After that, it will give a review of Kotter and Lewin’s change models and consider their future usability. It will then focus Leader- ship in the transformation context. Thereby the leader’s role will be consid- ered and the key position of a change agent as well as the suitable leadership styles. The fourth part compares two case studies, a successful and another unsuccessful change process. Finally, some conclusions will be drawn that results into recommendations for action.

2. Definition

2.1. Change

Cambridge Dictionary defines change as “the process or result of making something different or becoming different”. (Cambridge Business English Dic- tionary , 2016) Although very general, this definition embraces a broad range of processes and actions. According to Isbouts (2012), change is happening everywhere all the time. Therefore, change itself is rapidly changing.

Today’s change is facing the challenges of the modern day era with global competition, rapid technological advances, and more demanding costumers. (Holbeche, 2006) In 2010, Anderson and Ackerman-Anderson (2010) be- lieved that change was a self-contained procedure that was easier to handle. Currently change is an unrestricted, profound, complicated, individual and regular procedure. This means change is inevitable and not easy to handle. About 60% of all change programs are failing resulting, in change becoming a demanding issue to organisation leaders. (Hayes, 2014) Now the demand is on them to adapt their behaviour s and strategies to meet the expanding re- quirements in their organisations. (Anderson & Ackerman-Anderson, 2010)

In this context, Kotter (2012) distinguishes between Change Management

(CM) and Change Leadership (CL). He postulates that a crucial difference exists between both functions. CM is seen as the current approach in which organisations are facing change today. It provides tools, mechanisms and processes to keep change under control. While CL, can be seen as an engine for a faster, smarter and more efficient change. Suggesting that it is not possible and not optimal to keep change under total control. Large changes need a focus on visions. It is about seeing the future of organisations and being able to lead people to co-create it. (Hayes, 2014)

2.2. Innovation

There is no single definition for the term innovation. (Adams, et al., 2006) By comparing 60 different definitions of innovation across all industries Baregheh, Rowley and Sambrook (2009) identified six similarities, as shown in table no. 1.

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Table 1: Similarities of innovation

Source: Own presentation. Following: (Bedenk & Kunert, 2016, pp. 257-258)

Innovation supports an organisation to define new ideas by working differently, finding new approaches, entering new categories or producing new products and services. (Isaksen & Tidd, 2006) It has a progressive and visionary attitude, which enables the establishment of new structures and provides the capacity for change. This suggests that innovation goes hand in hand with change, but not every change includes innovation. Hence, innovation without change will not lead to success. (Carnall, 2007)

For this reason, organisation’s strategy must fit to the chosen path of innova- tion. Each path involves different types of innovation and requires different sets of activities.1 Different types of innovation are illustrated in table no. 2.

Table 2: Types of innovation

illustration not visible in this excerpt

Source: Own presentation. Following: (Isaksen & Tidd, 2006, pp. 5-7)

There is no appropriate and universal solution for the development of innova- tion. However, innovation management (IM) as a systematic and process- orientated concept is connecting innovation characteristics with management aspects. (Möhrle, kein Datum) Today, organisations are focusing mainly inno- vation processes even though it does not follow a clear procedure from the beginning to the end. (Meyer, 2015). Meyer (2015) emphasizes that innova- tive capability as a future core-competence for organisations will lead to sus- tainable competitive advantages. Innovation Leadership (IL), in this context, generates an environment for innovation, provides innovative systems and tools and ensures innovative thinking throughout an organisation. (Horth & Buchner, 2014) Due to the increasing speed and complexity of today’s inno- vation IL is increasingly important to organisations to secure their competitive advantages in the future.

2.3. Leadership

Professor John P. Kotter coined the term Leadership. In 1982 he emphasized the visionary character of a leader. Kotter viewed a leader as proactive, in- spiring, and motivating person building the foundation for innovations, creativ- ity, and change within an organisation. (Hegele-Raih, 2004) By uncovering and implementing new solutions for an organisation, leadership is developing customer-oriented change processes to generate new values and satisfy all stakeholders.

Leadership is about inventing the future. (Cameron & Green, 2012) Unlike management, that is serving the current needs. Leaders are at the center of emotions, interests, and results within their organisations. It is important to pay attention to the people at the company’s receiving end, because they determine the success of the outcome of change. In this context Hinterhuber and Krauthammer (2015) describe the three-pillars of leadership as illustrated in figure no. 1.

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Figure 1: The three-pillars of leadership

Those pillars should ensure trust between a leader and its follower to improve the future competitiveness of the company. Thus leaders are creating stability within the social environment of an organisation, while satisfying the profit expectations of their strategic partners at the same time. (Simon, 2009)

3. Leading innovative change to success

3.1. The innovative change process

Change has many forms, but not all change is relevant. (Mills, et al., 2009) In the context of this assignment the focus will be on organisational change (OC).

OC has been distinguished into first and second order, as illustrated in table no.3. (Vahs, 2007) Change by an innovation due to fast technological evolu- tions, which will be the focus of this work, belongs to OC of the second order.

Table 3: Types of Organisational Change

illustration not visible in this excerpt

Source: Own presentation. Following: (Vahs, 2007)

3.1.1. Drivers and need for change

In Kotter’s (1996) assessment, the global markets and competition result from four environmental developments: Technological innovations, global economic assimilation, saturated domestic markets and collapse of communism, as shown in figure no. 2.

illustration not visible in this excerpt

Figure 2: Drivers of Change

Source: Own presentation. Following: (Kotter, 1996, p. 19)

Today companies’ economic activities have to become more dynamic as a result of fast technological change. (McDonald, 2013) In the Kowalkowski and Brehmer’s (2008) analysis, new technology is an important driver for change, leading to rapid transformation. However, many organisations cannot meet the environmental requirements due to their inability to change. Resistance and cultural socialization of organisational body cause this inability. Employ- ees are sceptical about innovations and offer resistance. So organisations do not recognise the need to adopt the environmental developments. (Zimmermann, 2011) If the organisation members are unwilling to accept the changes, it is first necessary to establish a sense of urgency. (Kotter, 1996) As a result, the management of organisational behaviour becomes a critical issue for companies, which need to alleviate fear and uncertainty of their members.

3.1.2. Models of change

Two of the most known models are Lewin’s three-stage approach and Kotter’s eight-step model. (Cameron & Green, 2012)

[...]


1 The “Ten types of innovation” approach is categorizing innovation as considered in Appendix I, p. A.

Details

Pages
35
Year
2016
ISBN (eBook)
9783668525283
ISBN (Book)
9783668525290
File size
1 MB
Language
English
Catalog Number
v375249
Institution / College
Buckinghamshire New University
Grade
1,3
Tags
Leadership Change Management Change Leadership Innovation Innovation Leadership

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Title: Modern leadership styles. Transformations due to technological development