The Impact of Leadership on Change Management

This assignment examines the relationship between leadership and change management within organizations. It delves into various aspects, including transformational leadership styles, the influence of psychological contracts, and the impact of leadership on knowledge management, organizational learning, and innovation. The assignment analyzes research studies and theoretical frameworks to understand how effective leadership can facilitate positive change outcomes and contribute to overall organizational success.

CHANGE MANAGEMENT

1
EXECUTIVE SUMMARY
In the present business environment there are several changes that are done by the
firm so as to assure that their growth of the firm remains on the higher side. It is essential that
firm manage these changes so that it does not pose any negative impact on their operations.
Managers and leaders have to face many kinds of challenges or resistance while these
changes are taking place. Various approaches are adopted by leaders for making changes.
Success of organisation generally depends on the leader’s attitude and methods to lead as
well as manage and direct this change process. In this report the change management done by
McFarlane inside ANZ bank has been illustrated.

2
Contents
EXECUTIVE SUMMARY...........................................................................................................................1
Contents................................................................................................................................................2
INTRODUCTION.....................................................................................................................................3
Organisational transformation during McFarlane’s tenure at ANZ bank...........................................3
Challenges for managers in implementing transformational strategies............................................5
Attributes of leadership.....................................................................................................................7
Conclusion.............................................................................................................................................9
REFERENCES........................................................................................................................................10

3
INTRODUCTION
In any organisation there are several kinds of changes that take place from time to
time. It becomes essential that all companies manage their changes in an effective manner
(Cameron and Green, 2015). This is due to the reason that most of the people do not want
changes to be done. It is the role of the management to check it so that changes can be
effectively incorporated and hence do not pose any kind of difficulty in the production or
efficiency. Other than this there are many kinds of challenges that are faced by the companies
all these have to be properly taken care of so that there must not be downfall in the
productivity of the firm (Harvard Business review, 2018). Australia and New Zealand
Banking group is one of the five biggest banks in Australia and proved them to be one of the
most successful companies in the country. This report highlights various kinds of
transformation in ANZ bank. It also showcases the hardship manager face while
implementing change strategies.
Organisational transformation during McFarlane’s tenure at ANZ bank
At the time when McFarlane was appointed as the leader of the company this firm
was facing several kinds of challenges like bad debts, branch closures and financial loss. He
came and understands some of the facts regarding some of the bad policies of the company
like there were lack of Women at the senior position of the branches. This company was
performing badly in terms of CSR responsibilities. Apart from this there were many closures
that have been done by the firm. All these had negative impact on the employees and
community that ANZ bank’s performance is on the lower side. Some of the transformation
that he brought to the organisation is as follows:
 Cost cutting drive: He assured that branches makes cost cutting in a better way. For
this purpose he made employee retrenchment in which thousands of workers lost their
jobs. He believed that in place of reducing wages of employees, it is better to reduce
the volume of staffs as he supported increase productivity and pay them well.
 Reducing bank risk profile: He reduced the bank’s risk profile by bailing out the
investments that is done in the emerging markets.

4
 Restructuring organisational operations: He made changes in the operations of head
office as well as streamlining, outsourcing and vacating headquarters of hundreds of
staffs.
 Chasing retail consumers: He started concentrating on the retail consumers apart from
focusing on corporate clients. Their main focus was on well off retail consumers.
 Developing values based on employee input: He believed that bank must develop
values that are based on the inputs received from worker as opposed to that dreamed
up by senior managers so that decisions can be made using common language and
sharing vision of success. This also included the decision of involving stakeholders
especially employees in the decision making.
 Breakout and cultural transformation team: This was a team that drives three major
initiatives namely Breakout charter, Breakout workshop and breakout consulting.
Breakout workshop concentrates on personal and emotional development in which
participants examine values and thoughts that drives their behaviour. Breakout
charters focused on making changes that supports cultural transformation. On the
other hand breakout consulting gave a range of consulting and diagnostic services for
assisting business units and teams in living the desired culture. There programs were
run for every employee in every business unit. This was carried out to develop
encourage employees and enhance their motivational levels.
 Reward and appraisal system: One of the most important decisions that were taken by
McFarlane is related to the performance assessment. Rewards were given on the basis
of performance at the end of the year where business reviews were conducted
throughout the year. This helped in increasing the performance of the employees as
they get highly motivated by this.
 Training and development program: This Company established a structure that was
used for identifying, assessing and developing talents. It helped employees in
developing opportunities for them (Doppelt, 2017). It was a beneficial process for
managing quality at the organisation. Suitable talent management program was
established throughout the firm in addition to the strong line management plans. It
also ensured that right kind of learning reached to right people.
 Program for leadership management was implemented: Basic idea behind
implementing this program is to develop new leaders and understand the potential of
staffs in becoming leaders and developing it for the company. Through its graduate

5
program it attracts larger number of new talents. This helped employees in having
better understanding of the business.
 Employee engagement: This was introduced by McFarlane so as to enhance
satisfaction level of employees which helped them in enhancing their confidence
level. Various kinds of timely survey were promoted employee satisfaction level.
All these transformational changes played a decisive role in increasing the performance of the
firm. By doing this they staff engagement, consumer satisfaction and recognition in
community. Apart from this it also made financial performance turnaround as well as helped
in delivering its promises to shareholders. His implementation of Breakout strategy to
culturally transform ANZ bank played a very important role in marking success of the
company. There were many long term strategic plans that were made in his tenure as a leader.
It was considered as the golden era for the business of ANZ bank.
Challenges for managers in implementing transformational strategies
Changes are unacceptable at various levels of organisation (Hargis, Watt and Piotrowski,
2011). This is due to the fact that employees do not want change in their working
methodology as well as organisational internal cultural change. All these strategies aim to
improve the corporate brand image of the firm through internal cultural changes. There were
many kinds of challenges that were faced by the managers of ANZ bank. Some of them are as
follows:
 Poor performance of company: This was the biggest problem that is faced by the
company. As in the times of poor financial performance it is difficult for managers to
take any difficult or risky decisions as it may negatively affect the performance of the
company (Hayes, 2014).
 Financial constraints: Due to large amount of bad debts and poor performance of the
company in the past there were financial barriers in front of the firm which restricted
them from making many kinds of changes that required large amount of monetary
values (Mayfield, Mueller and Kumar, Bmc Software, Inc., 2015).
 Reluctance of employees towards change: It is one of the biggest barriers in front of
the company that more number of employees does not want internal cultural changes
at the workplace as it will change the way of working inside the firm (Benn, Dunphy
and Griffiths, 2014). Employees get used to a working methodology and persuading
them to help in the organisational transformational program was one of the biggest

6
challenges for the managers. They have used various kinds of approaches for this
purpose.
 Motivation of employees: All these organisational changes lower down the
motivational level of employees especially the decision of making job cuts reduces
confidence of other staffs in the firm (Wang, Oh, Courtright and Colbert, 2011). This
was one of the biggest challenges in front of the managers as it reduces productivity
of the firm. In order to combat this, managers took use of motivational theories by
various researchers.
 Employee’s involvement: Since there are many kinds of discrepancies in managing
changes hence it was important that employees were also involved in big decision
making (Cummings and Worley, 2014). It is always difficult for managers to make a
plan about how the employee engagement in the process will be ensured. It is also to
be taken care of that involving an employee is not an easy task and too much control
given to them cannot be given by managers and hence it was decided smartly
(Kuipers, Higgs, Kickert, Tummers, Grandia and Van der Voet, 2014).
 Providing training: With any kind of transformational change within workplace, it has
become essential for the workers to take care of the fact that employee needs training
on the applied changes. It is always challenging for the managers to train employees
about various aspects of changes especially in case of cultural and ethical changes
(McDermott, Conway, Rousseau and Flood, 2013). This helps in bringing boost to the
change initiatives as employees also contribute to the change management procedure.
Use of emotional strategy helps in attracting the attention of people who will be
influenced by changes.
 Aligning the pace of change: It is always difficult for managers to make changes at
the pace that is needed by the organisation (Noruzy, Dalfard, Azhdari, Nazari-
Shirkouhi and Rezazadeh, 2013). Without doing this any change is unable to produce
same outcomes. Changes must be first made at the top of the management level.
Changes must be done by making a plan so that the continuity in change mechanism
can be ensured that too at the pace what is required by the firm. For this process it is
always necessary that collective efforts is made which can only be possible when all
conflicts present between different levels of organisation is resolved.
 Removing all the confusion: It is essential for the managers to eliminate all the
confusions present in the minds of different stakeholders especially investors
(Aguirre and Alpern, 2014). This is a bigger challenge for managers to reduce any

7
kind of confusion in the minds of employees so that they can positively add to the
change management process.
Attributes of leadership
In the last two decades company has seen several change of leadership. Every leader
has different style of leadership as well as a distinct set of attributes were present in them.
They have different set of role in directing, influencing and managing process of change at
ANZ. Out of them there were two main key leaders named McFarlane and Michael smith.
Attributes of McFarlane
 An individual that balances work and family commitments.
 He likes to keep himself fit as well as he enjoys enjoy music, films, reading and
modern art.
 Long experience in banking industry.
 Far sighted leader who understands the need of taking transformational decisions.
 A leader that believes in taking risky decisions for the benefit of the firm.
Attributes of Smith
 An outstanding all-round banker with an excellent professional tract record in
many type of business and geographies with large experience in corporate and
retail banking.
 Controlled decision maker in difficult situations.
 An experience problem solver in the industry which is necessary in difficult times
of the firm.
There are various kinds of roles that are played by the leaders especially in terms of
influencing, directing and managing the change process at ANZ. The way of dealing with
such situation differed from leader to leader. In any process role of leadership is very
extensive. Some of them are as follows:
 Making plan: For implementing any kind of changes within an organisation it is
essential that changes must be planned (Raineri, 2011). It helps to assure that the
change will give positive results and helps firm in facing all the strategic challenges.
Without such kind of plans change process cannot be ensured for the longer time.

8
 Leading through the front: It is necessary that leaders lead from the front (Sandkuhl,
Smirnov and Shilov, 2011). They can do this by setting example by being part of
every change that is done at the firm. Other than this they need to set example in case
the company is making any cost cuts. This enhances the confidence level of other
workers to become part of the process and effectively completing it.
 Directing: It is essential that leaders direct staffs at all the levels of the organisation in
terms of what they have to do for making the change process effective and fruitful
(SEO, Taylor, Hill, Zhang, Tesluk and Lorinkova, 2012). For this they take use of the
plan that was previously made by the organisation or the vision that was cited before
planning for the change. There are other ways in which they direct following changes.
For example they monitor the whole process of change management so that any
discrepancy in the process gets removed at the time when it is generated.
 Provide infrastructure: They build infrastructure in such a way that changes can be
easily incorporated. This includes maintaining communication system. Effective
communication system always helps in reducing the amount of confusion that is
present in the change process (Smith, 2011). It helps in bringing smoothness to the
whole mechanism. Apart from this they also have the role in changing organisational
structure accordingly so that changes are incorporated in a desired manner.
 Motivating employees for the change process: It is essential for the employees to stay
motivated towards change. This is the role of the managers to motivate their employee
by removing all the confusions related to the change by resolving all the queries of the
employees (Buzzacott, 2016).
 Evaluation of environment: It is essential for the managers to make sure that changes
are made according to the environment persisting around ANZ. This helps in
enhancing the quality of the change process. For doing so they need to analyse each
and every factor associated with change process (Abbas and Asghar, 2010).
 Facing hurdles: There are many kinds of hurdles that come in front of the company
while they are incorporating or implementing changes (Van der Voet, 2014). This
helps to ensure that all the changes are conducted at the required pace. Leaders need
to remove all the resistance or barriers that came in front the change process. For
example if the change process is not in the favour of employees they may go on strike
which can lead to huge losses hence company needs to make plans for avoiding such
incidents.

9
Conclusion
From the above based report it can be concluded that there are various kinds of changes that
place within an organisation from time to time as per the requirement of the firm. It is
essential for the company of the scale of ANZ bank to manage all changes so that it does not
affect the firm in the negative sense. In ANZ there were many kinds of changes were done by
McFarlane which helped company in facing situations that came across the company.
Manager had to face many kinds of challenges that come in front of them while
implementing such kind of changes. Apart from this it is the role of the leader to direct, lead
and manage all the changes inside the firm.

10
REFERENCES
Abbas, W. and Asghar, I. 2010, The role of leadership in organizational change. [Online].
Available at: https://www.diva-portal.org/smash/get/diva2:326289/fulltext01.[Accessed on:
15th January 2018].
Benn, S., Dunphy, D. and Griffiths, A., 2014. Organizational change for corporate
sustainability. Routledge.
Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to
the models, tools and techniques of organizational change. Kogan Page Publishers.
Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage
learning.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Hargis, M.B., Watt, J.D. and Piotrowski, C., 2011. Developing leaders: Examining the role of
transactional and transformational leadership across business contexts. Organization
Development Journal, 29(3), p.51.
Harvard Business review, 2018. [Online]. Available at: https://hbr.org/2017/11/what-
everyone-gets-wrong-about-change-management.[Accessed on: 15th January 2018].
Hayes, J., 2014. The theory and practice of change management. Palgrave Macmillan.
Kuipers, B.S., Higgs, M., Kickert, W., Tummers, L., Grandia, J. and Van der Voet, J., 2014.
The management of change in public organizations: A literature review. Public
Administration, 92(1), pp.1-20.
Mayfield, R., Mueller, D. and Kumar, N., Bmc Software, Inc., 2015. System and method for
resource reconciliation in an enterprise management system. U.S. Patent 9,137,115.
McDermott, A.M., Conway, E., Rousseau, D.M. and Flood, P.C., 2013. Promoting effective
psychological contracts through leadership: The missing link between HR strategy and
performance. Human Resource Management, 52(2), pp.289-310.
Noruzy, A., Dalfard, V.M., Azhdari, B., Nazari-Shirkouhi, S. and Rezazadeh, A., 2013.
Relations between transformational leadership, organizational learning, knowledge

11
management, organizational innovation, and organizational performance: an empirical
investigation of manufacturing firms. The International Journal of Advanced Manufacturing
Technology, pp.1-13.
Aguirre, D. and Alpern, M. 2014. 10 Principles of Leading Change Management. [Online].
Available at: https://www.strategy-business.com/article/00255?gko=9d35b.[Accessed on: 15th
January 2018].
Raineri, A.B., 2011. Change management practices: Impact on perceived change
results. Journal of Business Research, 64(3), pp.266-272.
Sandkuhl, K., Smirnov, A. and Shilov, N., 2011, October. Information logistics in
engineering change management: Integrating demand patterns and recommendation systems.
In International Conference on Business Informatics Research(pp. 14-25). Springer, Berlin,
Heidelberg.
SEO, M.G., Taylor, M.S., Hill, N.S., Zhang, X., Tesluk, P.E. and Lorinkova, N.M., 2012.
The role of affect and leadership during organizational change. Personnel Psychology, 65(1),
pp.121-165.
Smith, I., 2011. Organisational quality and organisational change: interconnecting paths to
effectiveness. Library Management, 32(1/2), pp.111-128.
Buzzacott, 2016. The role of leadership in organisational change. [Online]. Available at:
http://www.buzzacott.co.uk/getattachment/ceee5293-d1e1-463f-aaa5-788e58c4c7c7/the-role-
of-leadership-in-organisational-change.[Accessed on: 15th January 2018].
Van der Voet, J., 2014. The effectiveness and specificity of change management in a public
organization: Transformational leadership and a bureaucratic organizational
structure. European Management Journal, 32(3), pp.373-382.
Wang, G., Oh, I.S., Courtright, S.H. and Colbert, A.E., 2011. Transformational leadership
and performance across criteria and levels: A meta-analytic review of 25 years of
research. Group & Organization Management, 36(2), pp.223-270.