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Topic 2: Develop a change management strategy © State of New South Wales, Department of Education and Training, 2008 Version 1 Contents Introduction 1 Undertake cost benefit analysis 2 Undertake risk analysis, identify barriers and mitigation strategies 4 Obtain approvals to confirm the change management process 8 Develop a change management plan, assign resources and agree reporting protocols 10 References/More resources 19

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Topic 2: Develop a change management strategy

© State of New South Wales, Department of Education and Training, 2008 Version 1

Contents

Introduction 1

Undertake cost benefit analysis 2

Undertake risk analysis, identify barriers and mitigation strategies 4

Obtain approvals to confirm the change management process 8

Develop a change management plan, assign resources and agree reporting protocols 10

References/More resources 19

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IntroductionIt is not the strongest of the species that survives nor the most intelligent. It is the one that is the most adaptable to change.

Charles Darwin

About this topic

In this topic the proposed change moves from the planning phase into the

implementation phase. The plans and goals of the proposed change are developed

after consideration of the probable barriers and how they may be dealt with. This

introduces the models of change; Hubbard et al (2004: 431) gives us six examples of

these models which have been researched and tested, so provide a good basis for

planning the change.

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Undertake cost benefit analysisFollowing the review and priority-setting of the change requirements/opportunities, we

now need to ensure the selected change has a net benefit to the organisation before

implementation commences.

Costs and benefits fall into two categories: quantifiable and unquantifiable. Suppose a

Head teacher identified the highest priority change is to increase enrolments in a

specific course. They may identify various costs and benefits as follows.

Quantified Unquantified

BenefitsFive additional enrolments at $900

each = $4,500

Greater awareness of the market

for this course and others in the

future

CostsAdvertisements in the local

newspaper = $1,000

Stress on section staff of this

additional activity (sources of

stress include resistance to

change)

Net benefit = benefits minus costs

$3,500 Probably a net unquantified benefit

Overall this particular change should proceed, based on a net benefit in both

quantifiable and unquantifiable categories. A few points must be made about the above

analysis:

Benefit and cost estimates are often ‘guesstimates’ only as there is little

historical information as a basis.

Unquantifiable costs/benefits can often far exceed the quantifiable ones so the

basis for a decision is in qualitative terms only.

Sometimes there is a net direct benefit but a net unquantified cost so the

decision is more difficult.

An unquantifiable benefit often overlooked is that the recognition that the team

can make successful change is, in itself, significant.

Managers often fail to plan, so they (hence) plan to fail! The above analysis

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may be flawed in the validity of its numbers but it is the process of thinking

about the issues (planning) that results in the benefit to the organisation. The

above table provides a framework/stimulus for the planning process.

Activity

WorkplaceConduct an analysis similar to the one above for the highest priority change selected in the previous sub-topic.

Case study and discussionFor your identified case study, were other project considered? Why?

PortfolioRecord your cost/benefit analysis and judgement about whether or not the change/project should proceed. If the highest priority is not feasible at this stage review and analyse your remaining priorities similarly.

Websites

MindTools – Cost/Benefit Analysis

Find out more about cost benefit analysis.

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Undertake risk analysis, identify barriers and mitigation strategiesThis sub-topic builds on the results of your cost-benefit analysis, particularly in the area

of unquantified risk. This sub-topic is one of the most significant parts of your learning

since it incorporates one of the most influential change theories produced: Lewin’s Force Field Theory. Related to the development of ‘mitigation strategies’ the principles

of internal marketing will also be discussed.

Remember the analogy given in the introduction of the previous topic of the fierce tug

of war related to a change process? Not all changes are so ferocious but even lesser

ones contain elements of extreme change situations. Essentially there were two

‘families’ battling for supremacy — ‘the Blocks’ and ‘the Forces’. Both are battling within

‘a system’; in that case the ‘grass is slippery’ and it is hot. Remember the descriptions

of how difficult systems can be to operate in? (In one an employee flips a light switch in

one building and a toilet flushes in another. Spectators of each event did not

understand how that happened because of the complexities of the system.)

Carrying on the analogy, suppose The Blocks have been training hard and are

obviously much stronger than The Forces but the ground had been saturated the night

before on The Blocks side. They would probably lose the contest and The Forces

would drag them (sliding) relatively easily over the line. The watering activity is

equivalent to a ‘mitigation strategy’. It is one way of ‘winning’ the battle for now!

Kurt Lewin’s Force Field Theory

Kurt Lewin is quoted as having said ‘If you want to truly understand something, try to

change it.’

Force Field Theory is not conceptually difficult. Essentially Lewin said that a change will

proceed if the forces in the positive direction (trying to achieve the change) are greater

than those opposing the change. The organisation may identify the main forces in both

directions and conclude that the change will not be successful. It remains to work out

how to increase the forces working to achieve the change and decrease the forces

opposing it. The following focuses on reducing (mitigating) the opposing forces,

although a superior approach may be to work on both sides of the equation

simultaneously.

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Barriers to change

A barrier to change may be a financial barrier, such as no budget allocation for all

required costs, or could be a simple reluctance of staff (perhaps due to fear of the

unknown) to change. There may be little management support, etc. Barriers can come

in many different forms including:

Emotional — People have a fear of the unknown and feel threatened which may be

expressed as overt or covert hostility. This may be expressed in any of four ways:

against people at varying distance from them, the system, the organisation and/or in

power grabs (political).

Cultural — The culture of an organisation is expressed in the commonly held beliefs

by the majority of employees. For example in the 3M organisation employees are

taught that change is essential to the survival of the organisation and this is one of the

beliefs that are widely held. Another organisation may have a negative view of

customers and this will be expressed in the service and probably in the balance sheet

as well. Of particular benefit to your learning is reflection and discussion on the widely

held attitudes to change in your work area and in your organisation.

Cognitive — Often people are not informed about the change, why it should happen

and the picture of the organisation after the change, and this creates a barrier to

successful change.

Perceptual — This barrier arises from the perception (perhaps unrealistic) of the

situation. Bad change experiences can be a source; inability to see other perspectives

and a narrow focus are others. These types of barriers are related to cognitive blocks.

Environmental — These barriers arise from a lack of support from others (including

managers) and not involving others in decision making.

Many of these categories of resistance are intertwined so classification is not critical to

identifying resistance. The categories are merely used as a start on brainstorming

possible resistance areas.

Internal marketing

Internal marketing follows the same principles of the tremendously successful

marketing discipline which has provided the basis for many successful businesses,

only the principles are modified slightly to apply to employees of the organisation rather

than the target market external to the organisation. Internal marketing seeks to find a

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way around rather than through or over the top of employees who demonstrate

resistance to a proposed change. Internal marketing has, at its core, a ‘win-win’

outcome. Internal marketing consists of two steps:

1. Identify the needs of the internal customers.

2. Work out how the organisation may be able to meet these needs, while

achieving organisational objectives.

Needs of employees may be determined by observation, talking with them and/or

predicting needs based on past behaviour. While needs of employees may be

identified, it does not necessarily follow that the organisation will cater to them;

remember that an organisation is also responsible to its shareholders and/or the public.

Sometimes employees do not want the organisation (or their boss) to know what their

needs are. Individual needs are many and varied, and may include a need for

power/position, a need to achieve things and a need for healthy relationships with

others. However, expected satisfaction of a need can reduce resistance to change.

Internal marketing can be summed up in the saying ‘You scratch my back and I’ll

scratch yours’.

Activity

Group discussion

How might each of the ‘blocks’ or resistance areas above be overcome? Consider your own examples of change priorities, rather than thinking about blocks in a general sense. Which block do you consider the most difficult to overcome?

Case study and discussionFor your identified case study, what barriers to change were encountered?

Portfolio

Identify two of the major barriers to the change you identified in the previous sub-topic and how they may be reduced, using the above ideas (or any other strategy).

WebsitesField Theory – Kurt LewinMore about Kurt Lewin and his work. Source: Wilderdom

Internal Marketing – Lesson

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Learn about internal marketing as an ‘implementation tool’ to help communicate and overcome resistance to change. Source: Marketing Teacher

Kurt LewinA Wikipedia entry on Lewin with links to more information and references about force field analysis.

Negotiating Win/Win dealsInformation to help develop your negotiation skills.

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Obtain approvals to confirm the change management process

This sub-topic emphasises the importance of the involvement of people in the change,

particularly upper management. The broad term for people who are impacted by a

change is ‘stakeholders’. It is almost impossible to achieve change without the support

of this (management) group, although strong union groups have been able to achieve

their objectives in the face of active management objection. This phase of the process

follows naturally from the previous step, in that management are more likely to lend

their support if barriers to change have been identified along with ways to overcome

them. This sub-topic connects with the next (to develop a plan for the change) because

the plan that is ultimately developed to achieve the change should conform to the

needs of managers of the organisation, as well as other stakeholders.

Apart from management the most important ‘stakeholder’ is the customer. The general

assumption is that all organisations are trying to meet the changing needs of

customers. Further, it is presumed that the change will be received by customers

favourably and that they will regard it as adding value to the service they receive. If not,

the proposal may need to be reviewed.

The relevant authorities to be involved will depend on the extent of the change and its

impact on others in the organisation. For example, a change in the way customers are

enrolled will involve the Head Teacher’s manager, who may need to discuss with their

manager. Depending on the proposed type of change to enrolment, the section that

advertises enrolments may need to be consulted and this will need to be done in a

timely fashion since enrolment dates and procedures are often advertised well before

the event. The sections in the college that create the enrolment forms and processes

the enrolment may also need to be consulted.

In the bigger picture the immediate supervisor will not only need to approve the

proposed change per se but will also need to agree on the way the change process is

to be managed. The immediate supervisor will probably want to critically examine the

proposals to overcome resistance. For example, the immediate supervisor may be able

to suggest alternative approaches to internal marketing so that people are not confused

with the new approach.

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Activity

Workplace

With respect to a specific change, identify the stakeholders (groups and people impacted by the change). Identify the party most affected and discuss it with them, recording the result of the meeting.

Case study

In terms of your case study, who are the stakeholders?

Portfolio

Record your notes from your meetings with stakeholders.

WebsitesBenefit Realisation ManagementAn online book covering areas of change management. Under ‘contents’ go to ‘Stakeholders’ for in-depth reading and practical ideas on working with stakeholders

during change.

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Develop a change management plan, assign resources and agree reporting protocols

This sub-topic will end with a plan to make the change but first we’ll address the very

practical aspect of resources and their availability to support the proposed change. For

example, is there a provision in the budget to support the change? The third aspect to

this sub-topic relates to the monitoring of how the change is progressing. For example,

is it conforming to the goal in the implementation plan? If not, management needs to

take action to get it back on track. You’ll find the setting of a goal for the change project

rewarding and challenging.

Resources

Resources include money (usually a budget allocation), people to carry out the change,

equipment to support the change and spaces to work in. Because budget allocations

are often made annually it may be that money has not been specifically allocated (and

approved) within your budget. In this case, funds may be able to be reallocated to the

project. In terms of the ‘people’ aspect to resources it may be possible to use ‘related

duty’ hours specifically for the project, or to merely pay the staff hours required. Equipment may be able to be borrowed from another part of the organisation if they are

not available from ‘within’. Similarly the ‘space’ requirements may be available by

‘begging and/or borrowing’ internally, if they are not naturally available.

The third part of this sub-topic (reporting protocols) is important because it can make

the difference between the change goals being achieved or their not being achieved.

Of course, if one is to determine whether or not objectives are achieved, the change

objectives need to be set in a very specific way. This point is illustrated below.

Setting change objectives

Suppose the change objective agreed between the stakeholders was ‘To improve the

enrolment process’. Most people would have some idea of what this is but when it

comes to developing an improvement plan there may be half a dozen or more ways of

achieving the objective. Further, after the change is made, how would the

organisational managers know that the resources applied to the change have been

effectively employed, ie could they have been used to make a more effective

improvement to the organisation if applied in another area?

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The answer of course lies in the development of SMART objectives for the change.

The SMART objective will shape the implementation plan. SMART objectives define

very specifically the expected outcome of the change process and, once set, provide a

strong guidance on the plan to achieve the objective. They are used to determine if the

process is on track and the success (or otherwise) of the project.

SMART is an acronym that is used to test the quality of a written objective. Let’s

compare our original objective (above) with a SMART objective of:

‘In a survey of enrolees immediately after enrolment in February 2010, 90% will

say that they are (at least) very satisfied with the time taken to complete the

process.

Aspect of the goal

Initial change goal: To improve the

enrolment process

SMART change goal: In a survey of enrolees

immediately after enrolment in February 2009,

90% will say that they are (at least) very satisfied

with the time taken to complete the process

S = Specific

terms used

The initial goal did not specify the part of the enrolment process to be

improved whereas the SMART goal does, so all stakeholders know what

they need to focus upon.

M = The

measurable goal

The initial goal was not measurable whereas the SMART goal can be

measured when students return to the enrolment area. They can be

asked about their satisfaction level with the time it took to enrol. It allows

for a ‘margin of error’ in the enrolment process, in that not 100% of

students will give a favourable report.

A = Agreed1

between the

stakeholders

The initial goal may have been agreed between stakeholders, although

they would not really know what (specifically) they were agreeing to,

whereas they would know if they agreed with the SMART goal.

R = Realistic

goal

The initial goal could have been realistic, although (again) it is hard to

know when it is not specific. Whether or not the SMART goal is realistic is

up to the stakeholders to decide, based on possible improvements to the

time taken for a student to enrol. The ‘90%” target’ could be renegotiated

with stakeholders, depending on past satisfaction levels and possible

improvements to the processing time to enrol. This aspect to a SMART

goal is also designed to make the goal motivating — if it’s too easy or too

difficult to achieve then people will have less than optimum motivation to

1 Many websites and authors assign the principle of ‘Achievable’ to this letter. This is incorrect since it would merely duplicate the meaning in the term ‘Realistic’.

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achieve it, hence the term ‘realistic’ being ‘just right’ for the people

involved in achieving it2.

T = Time

constrained

The initial goal does not say when the improvements are due whereas the

SMART goal says that they are due in the next enrolment period, so

stakeholders know they need to act quickly and will prioritise their tasks

appropriately.

SMART goal setting

Here are a few more points about SMART goal setting:

1. SMART goal setting is a generic management principle that should apply to all

management activities, not just change management.

2. You may have heard the saying ‘It’s the planning that’s important, not the

plans’. What this means is that a change of circumstances can change the

plans but they are much more easily changed (accommodated) if a robust

planning process has been undertaken. That is, in thinking through the way a

SMART goal may be achieved, it’s easier to modify an existing process than to

invent it ‘from scratch’. The setting of a SMART goal requires a lot more in-

depth thought and planning for the outcome and the process to achieve it.

3. One aspect of a well-set goal that is not addressed specifically in the acronym

SMART is that people who are responsible for the achievement of the goal

have been given sufficient control over resources (money, people etc) to

achieve the goal. One way to discourage an employee is to not give them

sufficient authority over required resources, frustrating their attempts to achieve

it.

4. One defining feature of a SMART goal is that it is measurable. The other

significant feature is that the goal is agreed between stakeholders. Apart from

setting a goal that is more realistic, the process of agreement involves others

and increases their commitment to achieving it. Most people, once they agree

to a reasonable target, will make the effort to do their part in achieving it. This

improves the chance that the change goal will be achieved.

5. Setting a measurable goal allows the section to check if they have been

successful. People are inspired by success, particularly if they know that they

2 In relation to this aspect of a SMART goal remember the story of Goldilocks and the various temperatures of the porridge she tasted!

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have been successful against an objective measurement. This feeling of

success inspires people towards more projects, hoping for more success (we

love it!).

Reporting protocols

Let’s turn to the third part of this sub-topic: agreement of ‘reporting protocols’ to

management. This requirement is interpreted in the context of the above example of a

desired change in the enrolment process. Quite simply, when the first enrolees return

to the enrolment location and they are asked about their satisfaction with the time taken

to enrol3, if the first few say that ‘it was a problem’ or ‘too long’ then action should be

immediately taken to find out what is causing the delays. It may be possible to rectify

the situation by communication with the processing section; perhaps there is a simple

explanation and it is relatively easy to rectify.

Note that the above solution is implemented by the HT of the section rather than the

immediate supervisor, because of the way the goal has been written. After the

enrolment process is completed (over a few days) the immediate supervisor could

contact a sample of the customers the next day to confirm their impression of

enrolment time, although the section should have a good idea of the result before it

happens.

One further point — because the goal of the change process was very specific about

the expected result (in terms of satisfaction with the time it took to enrol) it enables the

stakeholders to come up with all sorts of suggestions in relation to obtaining a

favourable outcome. For example, people are more aware of the passage of time when

they are bored, so entertainment may be organised at the enrolment processing area,

reducing the perception of the amount of time taken to enrol. So, even though the time

was significant, they didn’t notice it. Of course, this particular idea (entertainment)

associated with the change process would require expenditure on the entertainment

(whatever that may be). You probably have other ideas on how this goal could be

achieved, other than this idea to provide ‘entertainment’.

Developing a change management plan

Setting a SMART goal is a major step towards achieving a successful change. The

3 These ‘sub-goals’ have a technical term in management – key performance indicators or KPIs. They are indicators (hence the name) as to whether the goal is likely to be achieved and allow for corrections to ensure success is achieved. As a management tool they are even more important than goals.

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next step is to draft a plan with dates (milestones), who is involved, sub goals

associated with the milestones and resources required. Project Management is the

discipline that formalises this planning process.

There is no shortage of models on which the plan can be based, eg Hubbard 2008 p.

431 gives six examples. A suggested model is the eight-step model by John Kotter,

although we’ll initially consider a simple ‘everlasting’ model by Lewin, the originator the

Force Field Theory. The issue of change models is finalised with a composite model

from Fulop and Linstead.

Lewin’s three-step model of change

While Lewin’s model is an oversimplification of the change process, it does serve as an

anchor in the early stages of your learning:

Unfreeze the

organisation Make the change

Re-freeze the

organisation

Unfreeze the situation

Lewin recognised that people become fixed in their ways and they won’t change easily

so he recommended a phase where the organisation tries to ease (or jolt) employees

out of their malaise, preparing them for a change. ‘Unfreezing’ is very situation-specific

but (as an example) may be accomplished by making people aware that, unless they

change, they may have to move from their current position. This is quite a strong force

and probably represents an extreme end of the range of situations people face.

Make the change

Most of Kotter’s above model fills in this gap, although Lewin did not envisage this

since his model predated Kotter’s.

Re-freeze the situation

Lewin recognised that the organisation had to ensure that employees would not revert

to the former situation (before the change) so it may provide incentives to remain in the

changed state, or disincentives (like losing a bonus) for returning to the former state.

Readings on the three steps of Lewin’s change model are provided below under

‘Websites’. Lewin’s model suffered from a lack of guidance and it seemed to

emphasise the focus on the people who were (potentially) affected by the change.

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Kotter’s model (below) was better in these respects.

Kotter’s eight-step change model

Kotter’s model undoubtedly arose out of his identification of the reasons why change

fails and the eight reasons are detailed in Hubbard et al 2008 pp. 430-432.

1. Establish a sense of urgency — This is the first, most important and most

neglected step. (Many of the Hubbard models stress this point.) The foundation

for this first step lies in the recognition that people are rational, they don’t come

to work merely to pick up their pay, and they have a deep connection with their

work. Most people need to have a good reason to change and if you can show

them a good reason why they should change then you’ll stand a good chance of

making a successful change.

2. Create a guiding coalition — Most people need a sense of belonging in an

organisation. If an organisation is large and diverse then they will find a group

local to them to which they feel they belong and are accepted. These various

groups affected by the change (stakeholders) are a good start to getting a

‘coalition’ together to guide and lead the change. Each group could be

represented by members who attend meetings of ‘the guiding coalition’.

3. Develop a vision and strategy (exactly what is to change) — If the direction of

the organisation is very clear then people will not have an excuse to not follow

and hence support this change. This step should describe exactly what the

organisation will be after the change is made.

4. Communicate the vision — Many organisations fail to communicate a

carefully constructed plan and that’s where they fail in the process of change.

It’s one thing to have a carefully constructed vision of the future organisation but

it must be communicated to be of any value.

5. Empower people — If you give authority to employees to control the change,

particularly in their own environment, they will become committed to the

change. You are empowered if you believe that you can influence the outcome

of the change. Many people in the organisation may not believe they can

influence decisions.

6. Generate short-term wins – ‘Nothing breeds like success’ is an old saying.

What it means is that if people see the change as being successful, even in its

earliest stages, they are inclined to ‘go with a winner’. They will be cooperative

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and the feeling of achieving progress can be motivating.

7. Consolidate gains and produce more wins — The early wins, well

publicised, will be a foundation for more wins. This is one of the many strengths

in Kotter’s Model; don’t expect an overnight success, it takes time.

8. Anchor new approaches in the culture — Culture is difficult to change and

you know you have achieved a successful change if the employees change

their way of thinking. Essentially, culture is the ‘automatic’ way of thinking about

a particular issue which employees have as a result of working in one

organisation. That view is generally held (at least on a superficial level).

Kotter’s model is designed to be used where there is a likelihood of resistance to a

change, eg it may require a change in the way people think. It does not contain a

specific step related to working out possible areas of resistance and how they may be

overcome, although it contains many steps which are likely to lower traditional

objections, such as providing a logical reason, clarifying direction, communication,

empowerment and recognition of established practices (cultural forces).

11 step model – Fulop et al

Fulop et al developed a model which draws on the many models of change and

contains 11 steps as follows:

1. Recognise the need for change (internal and external scanning).

2. Diagnose organisational readiness.

3. Identify likely sources of resistance.

4. Set overall goals and vision for change.

5. Educate and enthuse people about the change with special attention to step 3.

6. Get involvement.

7. Identify specific change targets.

8. Clarify and decide on specific change approaches/techniques.

9. Implement change.

10. Support change (pickup the disaffected early, reenergise the change

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agents).

11. Evaluate change.

Step by step models are, in some ways, like the board game ‘snakes and ladders’

when applied to real situations. One problem with a step by step approach is that you

will often find that a change process is at, say, step 5 and something happens which

makes it revert to, say, step 3. The reverse can also occur, where you have landed at

the bottom of ‘a ladder’ and you can jump a few steps ahead. One way or another, you

may feel that sometimes you are ‘chasing your tail’.

The main point to keep in mind is that the best approach to take with managing

anything (change, operations etc) is to select the process which best matches the

needs of the situation (contingency theory of management) and, even then, adapt the

process to the situation. A customised approach is often the best, with the steps of a

model just being suggestions.

Activity

Workplace

For your priority change project develop the SMART goal to be achieved. Draft a plan for implementation which includes milestones and resources required. You may wish to depict your planning in a Gantt Chart — if so, see ‘Gantt Charts’ under ‘Websites’ below. Hint: The activities/stages in the Gantt Chart could be Kotter’s eight steps or Fulop’s 11 steps).

Case study

In respect of the case study, what milestones can you identify?

Portfolio

Record copies of your SMART objectives and project plan.

Websites

Appreciative inquiryA Wikipedia entry and links to readings about this approach which engages individuals within an organisational system in its renewal, change and focused performance.

Collaborative frameworks: a TAFE Queensland case study Michelle Spuler (2005). This paper details relevant strategies and models utilised in the planning and execution of the Networked Learning Project which utilises Kotter's change management model, communities of practice and virtual teaming. AVETRA

Gantt Charts

Learning guide 2: Develop a change management strategy Version 1 17© NSW DET 2008

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An explanation of Gantt Charts at the Mind Tools website.

Gantt Chart ExcelHow to draw a Gantt Chart using Microsoft Excel

Kotter’s 8 Step Change ModelDetail on this change model. Source: Mind Tools

Lewin’s three-step model of change – strategies for implementing the model in detail. Source: Changing Minds

Unfreezing techniques

Make the change

Refreezing techniques

Prince 2A process-based method for effective project management.

Project management methodology explainedPractical advice and tools for planning and managing projects.

Project management simply explainedA background to modern project management.

SMART GoalsGet detailed information about devising SMART goals. Source: Project Smart

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References

Bolman, L and Deal, T (1997) Reframing Organisations Jossey Bass San Francisco

Hubbard, G, Rice, J and Beamish, P (2008) Strategic Management Pearson Ed Aust

3rd Ed. ISBN 978 07339 8675 8

Oshry, B (1995) Seeing Systems: Unlocking the Mysteries of Organisational Life

Berrett-Koehler San Francisco

More resources

Innovation & Business Skills Australia (IBSA)

Order resources for learners and facilitators on topics related to VET organisational

innovation, leadership and business skills at the IBSA website. Relevant resources

include:

New Leadership for Innovative Organisations: Models, Ideas & Challenges

Ideas for practitioners: a professional development guide to growth and change in

the VET sector

Innovation and Entrepreneurship in VET: a professional development guide for the

Australian vocational education and training sector

Learning guide 2: Develop a change management strategy Version 1 19© NSW DET 2008