Professional Documents
Culture Documents
WHAT
IS CHANGE?
A modification of the status quo
A movement from one state to another
Change, in its broadest sense, is a planned or unplanned response to pressures and
forces (Jick and Peiperl, 2011)
o Can you change without planning to change?
Difference between studying organizational change and studying organizational
development (known as the OD approach)
AND APPROACH
OD tends to involve an incremental change, managed from the top
Need to deal with conflict in an open manner
o Conflict can improve innovativeness
o Taking a problem solving approach: seeks consensus
o Encouraging people to articulate their points of view, while considering other points
of view
Process consultation: OD consultants
o Play a role in process facilitation
o Work on building trust and open dialogue
o Introduce frameworks for organizational diagnosis
o Favour a participative approach
SOME COMPONENTS
OF A CHANGE SITUATION
Forces for change (or change drivers)
o technological, economic, social, regulatory, political, competitive, etc
Stakeholders affected: management, employees, suppliers, customers, shareholders,
etc
Change agents (leaders of change) and change targets (those who are subject to
change)
Magnitude of change: how deep is the change?
Breadth of change: how far reaching is the change?
Level of change: change can occur at the individual, group, organizational or industrial
sector level
Content and process
o Content: what is being changed?
o Process: how does change occur?
TYPES
OF CHANGE
Planned, unplanned (emergent)
Top-down, bottom up, pilot sites with lateral diffusion
Developmental
Transformational
Incremental
Radical
Evolutionary
Revolutionary
Convergent
Frame-breaking
First-order
Second-order
WHEN
TO CHANGE
Changing proactively due to:
o anticipation of problems in the future and desire for orderly process
o the belief that not changing routinely leads to complacency
Changing reactively, in response to an encountered problem, e.g. entry of new competitor
Changing under pressure of a crisis situation: major decline in profits, withdrawal of a
major account
Each situation has advantages and disadvantages
RESPONSES
TO CHANGE
Responses can be individual and collective in nature
Readiness for change
o Willingness to adopt the change and to commit physical and psychological energy
to make it happen
Resistance to change
o Passive resistance: lack of commitment
o Active resistance: explicit opposition
EVALUATION CRITERIA
GENERAL REFLECTIONS
Change
o Permeates modern organizations
o Is often a continuous process, likely to prevail in either its transformational or
developmental form at any point in time
o Often implicates the manager as a target and an agent
Change can be messy and there are few prescriptions that can be made about change
management
o Need to adopt a contingency view
o The approach used depends on the context
SESSION #2 VISION
READING: THE VISION THING
CHARACTERISTICS
OF A GOOD VISION
Clear, concise, easily understandable
Memorable
Has emotional appeal
o Exciting, inspiring and challenging
Excellence centered
Stable but flexible
Implement-able and tangible: can be used as a guide in making decisions and taking
action
Creates pride and a sense of identification for members
A good vision is not a shallow slogan
IMPORTANCE
CEO/leader visioning: usually not a solo endeavor, but is specially effective with visionary
CEOs who:
o Motivate employees to embrace vision through constant persuasion and contact
with employees
o Set an example by applying the vision in their decisions and actions
o Measure organizational success in terms of fulfillment of the vision
Only 10% of managers think of themselves as inspiring
More than 10% of managers are successful in
o Appealing to a common purpose
o
o
Communicating expressively
Sincerely believing in what they say
BOTTOM-UP VISIONING
Soliciting input from middle management and/or lower level employees increases
commitment
When lower levels are not invited to participate:
o Complaints emerge about lack of clarity of vision
o Vision influencers may emerge
Influencers:
o Generate new ideas
o Gather support for ideas by influencing those around them
o Take every opportunity to express their views
o Tenaciously support processes that facilitate the change
TO
FIRED UP
Focus of reading
o Initial stages of change
At initial stage, there is a need
o To create readiness for change
o To overcome escalating commitment that results from a sense of self-justification
In other words, there is a need to create dissatisfaction with the status quo (Discrepancy)
DISSATISFACTION
AND CHANGE
Major change in organizations usually occurs when top managers become dissatisfied with
the status quo
Top management dissatisfaction is not sufficient to mobilize the energy for, and to sustain
real change
Dissatisfaction has to be diffused to all parts of the organization, especially those parts
involved in implementation of the change
o There is a need to know at what stage of change different levels/groups in the
organization are
Dissatisfaction helps the unfreezing process and creates readiness for change
When leaders jump from being dissatisfied to imposing new operating models, they fail to
generate real commitment to change
STRATEGIES
FOR
DIFFUSING DISSATISFACTION
STRATEGIES
BENEFITS
OF
PARTICIPATION
SESSION #3 RE-ENERGIZING
READING: RE-ENERGIZING
AND CHANGE
At this stage, the company has overcome many difficulties successfully
It is often assumed that the values, structures, systems, policies that led to success in the
past will lead to success in the future
Mindsets are formed and organizational inertia sets in
This is problematic since competition heats up at the maturity stage and there is minimal
growth in the market
PRINCIPALS
OF RENEWAL
Instill a customer perspective and focus on customer demands
Increase capacity for change
Alter systems and structures as well as behavior and patterns of interaction
Instill empowered leadership at all levels of the organization
INSTILL
A CUSTOMER PERSPECTIVE
Need to move away from a product/service definition and to think in terms of customer
needs to be satisfied
o Examples
IBM
Hallmark
Think in terms of establishing collaborative relationships with customers
Institute programs designed to learn about customer needs
o Focus groups and simulations
o One-on-one meetings and interviews with customers
Include customer satisfaction into employee performance appraisal
Instilling a culture where employees spend time linking with customers rather than
worrying about internal policies and politics
INCREASE
ALTER STRUCTURES
AND BEHAVIOURS
Change efforts often begin by instituting new structures and systems
o Example: relationships with suppliers
Changes in employee behavior are also needed
o Changing the structure without changing employee mindset and behavior is not
sufficient
o Changing employee behavior requires, among others
Providing training and workshops focused on new behaviors
Rewarding employees for exhibiting the new behaviors (performance-based
rewards)
AT ALL LEVELS
A new inspirational vision needs to be articulated and communicated
This sometimes requires change at the top level of the organization
Different levels of leadership in the organization need to subscribe to the vision
LEADERSHIP ACTIVITIES
Restructuring
Discrediting the past bureaucratic structures and policies
Empowering employees
Instilling continuous improvement
Working on culture change
TRANSFORMATIVE
AND
COERCIVE STRATEGIES
RESOURCES, PROCESS,
AND
VALUES
Resources
o Tangible: cash, equipment
o Intangible: brands, relationships with suppliers and customers
Processes
o Are patterns of interaction, communication and decision making that employees use
to transform resources into goods and services
o Tend to have a routine nature: they are in place to allow work to be done
consistently and efficiently
o Difficulty in coping with disruptive change may be due to processes related to how
budgets are negotiated internally, how market research is done
Values
o Are standards by which employees set priorities that enable them to judge whether
an idea for a new product is more or less attractive, whether a customer is more or
less important
VALUES
SUSTAINING
Ex: Computer industry example: from integrated firms focused on mainframes (IBM,
DEC, Wang) to companies focusing on different segments of the value chain of PCs
(Microsoft, Intel, Dell)
Disruptive innovations are intermittent; there are no routine processes for handling such
changes in organizations
o
WHY
DO INCUMBENTS DECLINE
Incumbents
o take a myopic view of new technology
o listen closely to their customers who do not want new technology (initially)
o ask the wrong question instead of would you be interested in new technology if it
improves its functionality over time?
New technology increases in functionality fast and long-established customers of
incumbents shift to the new entrants
New networks of suppliers and distributors grow around new technology leading to demise
and the replacement of the established value chain
Even when incumbents undertake investments in disruptive technology, they fail to
commercialize it because of internal inertia
Limited capital funneled into new technology because of its marginal revenue; more funds
are earmarked for established and successful business segments
New technology often requires a different value chain and business model from the
established businesses; co-existence of two different business models in the same firm is
difficult
Fear that sales from the new technology will cannibalize sales from established businesses
IMPLICATIONS
FOR INCUMBENTS
Need to appreciate impact of disruptive technologies and ask customers the right
questions
Recognize that it is better to develop a new technology that cannibalizes the established
sales base than to have this sales base taken away by new entrants
Invest in newly emerging technologies
o Create capabilities internally or
o Through acquisitions
acquisitions made to obtain resources work better when integrated
if acquisitions are done to obtain processes and values, they are better left as
stand alone companies
Separate the disruptive technology and place it in an autonomous division
o Create capabilities through a spin-out organization
must receive sufficient resources
does not entail abandonment of old organization, technology or products
IMPLICATIONS
IS INNOVATION
Traditionally, a limited view of innovation was held
o In tech firms: focus on product innovation
o In oil & gas firms: focus on process innovation
Authors talk about business innovation which requires
o Anchoring discussion on customer outcomes
o Thinking holistically about all possible dimensions through which organization can
innovate
Business innovation: creation of substantial new value for customers and the firm by
creatively changing one or more dimensions of business systems
Authors propose the innovation radar, with 12 dimensions of business innovation
THE 12 DIMENSIONS
OF
BUSINESS INNOVATION
CHANGE
OR
DIE?
OF CHANGE
The article addresses change from the perspective of the changee, (change target) but
the ideas addressed are useful for change agents as well
No organization can institute change if its employees will not, at the very least, accept the
change
There is a gap between real experience of change (feelings of loss, shock & anger) and
prescriptions of responses to change (being flexible & thriving on the challenge of change)
Two basic assumptions made in the article
o The change addressed is transformational and not incremental
o Recipients are assumed to fall in the most common category
Most people are neither set in their ways,reacting strongly to small changes
in routine nor daredevils, looking for the next major change challenge
o Most people are somewhere between these two extremes
REACTION
TO CHANGE
Shock
o Feeling threatened by the change, attempt at self-protection
o Denying existence of change, becoming immobilized
Defensive retreat
o Holding on to the past & accustomed ways of doing things
o Anger at what is happening
Acknowledgment
o Cessation of denial, mourning the past and letting go
o Experimentation with the new situation begins; success builds confidence
Adaptation and change
o Comfort with change, new modes become internalized
o Acknowledgment that change is for the best
IMPLICATIONS
OF THE
STAGES MODEL
FOR THE
MANAGEMENT
OF
CHANGE
Organizations often attempt to push people to the last stage of the change process
without allowing adequate time for the psychological work needed for the transition to be
completed
Adequate time should be allowed to mourn the past, move through the neutral zone and
embrace the new situation
Employees expect empathy as they struggle with change and as they progress through
the stages
EVALUATION
INDIVIDUAL COPING
WITH CHANGE
Accept feelings as natural
o recognize that strong and unpleasant emotions are associated with change
o give yourself permission to mourn
o time is needed to progress & adapt to the new situation
Establish a sense of control in the organization and in different areas of your life
o seek information about the organizational change
o loss of control over the situation at work can be countered by maintaining control in
other areas of your life (diversified emotional investing)
Manage stress
o maintaining physical and psychological well-being otherwise is important
o seek support
o get proper sleep, exercise & diet; relax with family and friends, engage in hobbies
Develop a sense of objectivity with respect to change; exercise responsibility
o people have choices in how they perceive change
o develop the capacity to see benefits and not just losses in new situations
o inventory your strengths
o learn new skills and learn from losses
o participate in the change
INDIVIDUAL RESPONSES
TO CHANGE
An individuals response to change can fall on a continuum ranging from resistance to
readiness
As the stages models indicate, the individual response tends to evolve with time
The goal is to help recipients achieve readiness for change
Readiness for change
Willingness to adopt the change and to commit physical and psychological energy
to make it happen
o Organizations can be proactive in helping individuals to achieve readiness
o See reading on Readiness for Change
Resistance - the other end of the continuum - needs to be better understood
o
UNDERSTANDING RESISTANCE
TO CHANGE
Resistance can be covert or overt and is exerted on behalf of maintaining the status quo
o Responses to change range on a continuum
Resistance can be
o An individual phenomenon psychological roots
o A group phenomenon social (and psychological) roots
Managers can create the conditions for resistance by mishandling change management
CONTINUUM
OF INDIVIDUALS
RESPONSES
TO
CHANGE
FOR CHANGE
Creating a climate in which people take risks
Rewarding successes and suspending judgment of failures
Considering the need to negotiate and compromise with recipients; accepting participation
Studies show that continuous change may have one of two effects
1) employees become cynical of change efforts
2) employees exhibit a learning curve, becoming more capable of dealing with change
with successive experiences
The answer may partly revolve around
The outcome of previous change efforts, and whether they were successful or not
Expectations and the psychological contract
in some organizations and industries, the expectation is that employees will be subject to
frequent changes in positions, responsibilities & locations
this leads to self-selection: employees who thrive in this environment will apply for
employment and the company will hire those who show a person-organization fit
CONCLUDING REFLECTIONS
The article deals with recipients of change as though they were not in managerial
positions
Often managers are subject to similar experiences as the employees
Sometimes, managers experiences are more complex because they need to deal with
their own emotions as well as those of their subordinates
FOR
CHANGE
Readiness
o is the cognitive precursor to the behaviors that support the change effort
o indicates a willingness to commit physical and psychological energy to the change
Readiness may act to pre-empt the likelihood of resistance to change
Creating readiness
o is a proactive attempt by change agents
o aims at influencing the beliefs, attitudes, and behaviors of change targets in order
to motivate them to change
FOR CHANGE
Organizational level attributes, such as:
o the availability of support structures (ex: training)
Change agent attributes, such as:
o credibility, trustworthiness, experience
Interpersonal dynamics, such as:
o availability of opinion leaders who support the change
o availability of role models who can be emulated
Individual level factors
Discrepancy
o A rationale should be evident to change targets in terms of how the organizations
current performance differs from the desired end-state
o the expressed sense of urgency should be one that makes the status quo seem
more dangerous than launching into the unknown
o Information such as the organizations deteriorating competitive situation or
financial performance can be communicated to show the urgency
Appropriateness
o Understanding that a discrepancy exists is not sufficient
o Understanding that the end-state intended is the most appropriate response to the
discrepancy is important
o In other words, alternative solutions to the discrepancy need to be ruled out
Personal valence
o Employees often ask the question whats in it for me? when they are expected to
adopt a change
o They are concerned with how they benefit from the change
o The assurance that the change will have a positive impact on the employee aids in
the creation of readiness
Fairness
o Fairness speaks to two aspects of justice: distributive and procedural
o Distributive justice is the perceived fairness of the outcome of the change
o Procedural justice relates to the perceived fairness of the process of the change
o A fair process of change may include consultations. Fair outcomes may involve the
just distribution of responsibilities and of rewards
Self-efficacy
o Is the belief in ones capabilities to mobilize the motivation, cognitive resources, and
courses of action needed to meet situational demands
o Individuals
perform activities that they believe they are capable of
avoid those activities that they judge to surpass their coping abilities
o Change agents can enhance efficacy of employees by
providing information
building targets confidence in their ability to successfully implement change
providing training programs when the change requires the application of skills
not previously possessed by employees
Readiness factors should be considered when
o changes are being planned
o communications about the changes are being drafted