What is Organizational Change?

 An alteration of an organization’s environment, structure,

culture, technology, or people
 A constant force
 An organizational reality
 An opportunity or a threat
 Change agent
 A person who initiates and assumes the responsibility for
managing a change in an organization
 Prerequisites for Change

 Vision: Develop, articulate and communicate a shared

vision of the desired change
 Need: A compelling need has been developed and is shared
 Means:The practical means to achieve vision: planned,
developed and implemented
 Rewards: Aligned to encourage appropriate behavior
compatible with vision and change
 Feedback: Given Frequently
FORCES FOR CHANGE
NATURE OF THE WORKFORCE
More cultural diversity
Aging population and many new entrants with limited skills
TECHNOLOGY
Faster, cheaper, more mobile computers
Understanding and manipulating the genetic code
ECONOMIC SHOCKS
Stock market fluctuations
Record low interest rates
COMPETITION
Global competitors
Mergers, consolidations, and growth of e-commerce
SOCIAL TRENDS
Internet chat rooms
Retirement of Baby Boomers and more “Singles”
WORLD POLITICS
War on terrorism
Opening of markets in China
PERFORMANCE GAPS
Disappointing results
Stockholder expectations
Forces for Change
External Forces Internal Forces
Competition Laws and Strategy modifications
regulations
New technologies New equipment
Labor market shifts New processes
Business cycles Workforce composition
Social change Job restructuring
Compensation and
benefits
Labor surpluses and
shortages
Employee attitude
 Introduction
Part II: The Nature of Change

Change in business is not new — it’s just accelerating

due to…
 New technology.
 Global competition.
 Growth & increased complexity.

The result: Change or die

 What to expect from change
 Sense of loss, confusion.
 Mistrust and a “me” focus.
 Fear of letting go of that which led to success in the past.
 People hold onto & value the past.
 High uncertainty, low stability, high emotional stress
 Perceived high levels of inconsistency.
 High energy — often undirected.
 Control becomes a major issue.
 Conflict increases — especially between groups.
 Individual prerequisites for change to occur
Why should I change?
Thinking &
What’s in it for me?
Emotional/
understanding Motivational

Head Heart

Behavioral

Hands

What do I do differently?
 The Effective Management of Change Involves An
Integrated Approach In Each Of These Three Arenas

Change management

Effective Change

Equals

Altering Harnessing Shaping

Mind-set Motivation Behavior
Stages of change management
“Coming to Grips with the Problem”

“Working through the Change”

“Attaining and Sustaining Improvement”

 Strategy/change implementation
Arenas of
Change
Mind-set Motivation Behavior
Stages (Thinking/ (Emotional/ (Capability)
of Change Understanding) Intuitive Dynamics)
Management

1. “Coming to
Grips with
the Problem” Breaking the Dealing with Changing
Conventional Reactions to Behavior and
Mind-set and Loss and Developing
2. “Working Generating a Creating the Competency
through the Picture of the Will to and Capability
Change”
Future Succeed

3. “Attaining and
Sustaining
Improvement”
Part III: Leading Others
through Change

1. Identify (roughly) the stage person/group is in.

2. Determine obstacles/arenas:
a. Head
b. Heart
c. Hands
d. All of the above
3. Use tools to move through obstacles.
 May need several simultaneously.

4. Recognize and acknowledge steps forward.

5. Cycle back to Step 1.
Understanding what stage of change
they’re in
Questions Stage

 Do they see a need for change? One:

 How uncomfortable are they with the status quo? Coming to grips
 Do they have any sense of urgency about changing? with the problem.
 Are they struggling with making the change work?
 Are they looking for ways to make it work? Two:
Working through
 Are they communicating with others involved in the the change.
change, to get salutations to problems, share Best
Practices, etc.
 Are they looking for ways to leverage the change?
To enhance it? Three:
Attaining &
sustaining
improvement.
A stepped approach to change
Success

A journey of a thousand miles

occurs one step at a time.

X
Start
Three Categories of Change

Organizational Culture
Model for Planned Organizational Change
 LEWIN’S CHANGE MODEL

PRESSURE FOR CHANGE RESISTANCE TO CHANGE

-------------------------------------- -----------------------------------------

-------------------------------------- -----------------------------------------

-------------------------------------- -----------------------------------------

NORMALLY THESE FORCES BALANCE EACH OTHER OUT,

MAINTAINING THE STATUS QUO

SUCCESSFUL CHANGE INVOLVES THREE STEPS:

Unfreezing
TENSION IS RAISED, NEED FOR CHANGE IS RECOGNIZED & ACCEPTED
Movement
THE CHANGE IS IMPLEMENTED
Refreezing
INTERNALIZING (LOCKING-IN) THE NEW PATTERNS OF BEHAVIOR
 Two Views of the Change
Process

 “Calm waters” metaphor

 A description of traditional practices in and theories about
organizations that likens the organization to a large ship making
a predictable trip across a calm sea and experiencing an
occasional storm
 “White-water rapids” metaphor
 A description of the organization as a small raft navigating a
raging river
Change in “Calm Waters”
 Kurt Lewin’s Three-Step Process
 Unfreezing
 The driving forces, which direct behavior away from
the status quo, can be increased
 The restraining forces, which hinder movement
from the existing equilibrium, can be decreased
 The two approaches can be combined
 Implementation of change
 Refreezing
Change in “White-water
Rapids”
 Change is constant in a dynamic environment
 The only certainty is continuing uncertainty
 Competitive advantages do not last
 Managers must quickly and properly react to unexpected
events
 Be alert to problems and opportunities
 Become change agents in stimulating, implementing and
supporting change in the organization
 KOTTER’S EIGHT-STEP PLAN FOR
IMPLEMENTING CHANGE
KOTTER (96)

UNFREEZING
Create a sense of urgency – offer a compelling reason why change is needed
Form a coalition with enough power to lead the change
Create a new vision to direct the change, and strategies for its achievement
Communicate the vision throughout the organization

MOVEMENT
Empower others to act by encouraging risk-taking and creative problem-solving
Plan for, create, and reward short-term “wins” that move toward the new vision
Consolidate improvements, reassess changes, and make adjustments

REFREEZING
Reinforce the changes, show relationships between new behaviors and success
Is a New Structure Really Required?

When you identify a problem with

your design, first look for ways to
fix it without substantially altering
it. If that doesn’t work, you’ll have
to make fundamental changes or
even reject the design. Here’s a step-
by-step process for resolving
problems.
Is a New Structure Really Required?
(cont’d)
A Nine-step Process For Leading
Organizational Change
1. Create a Sense of Urgency
2. Decide What to Change
3. Create a Guiding Coalition
and Mobilize Commitment
4. Develop and Communicate a
Shared Vision
5. Empower Employees to Make
the Change
6. Generate Short-Term Wins
7. Consolidate Gains and
Produce More Change
8. Anchor the New Ways of
Doing Things in the
Company Culture
9. Monitor Progress and Adjust
the Vision as Required
Why People Resist Change
DEALING WITH RESISTANCE TO CHANGE
KOTTER (79)

EDUCATE & COMMUNICATE

DISCUSSION, DEMONSTRATION & PERSUASION

PARTICIPATION & INVOLVEMENT

INPUT & ADVICE FROM AFFECTED PARTIES

NEGOTIATION & AGREEMENT

OFFERING INCENTIVES FOR COOPERATION

FACILITATION & SUPPORT

PROVIDING TRAINING, HELP & ENCOURAGEMENT WHEN NEEDED

MANIPULATION & COOPTATION

COVERT ATTEMPTS TO INFLUENCE (LITTLE LIES & POWER GAMES)

EXPLICIT & IMPLICIT COERCION

USE OF FORCE, THREATS & PUNISHMENT
Dealing with Change

G.Dessler, 2003
ASSESSMENT OF CHANGE EFFECTIVENESS

ATTITUDES & OPINIONS

How do those affected “feel” about it?

KNOWLEDGE GAINED
What was really learned? Do we have proof?

BEHAVIORAL CHANGES
Are people behaving and acting differently now?

RESULTS ACHIEVED
Have outcomes improved? Have performance gaps narrowed?
WHY CHANGE IS RESISTED

VESTED INTERESTS THREATENED

ECONOMIC LOSS --- LOSS OF WAGES, LAYOFFS
SOCIAL LOSS --- STATUS AND POWER ERODED
INCONVENIENCE --- HABITS MUST CHANGE
INTERPERSONAL DISRUPTIONS --- IT WILL BREAK UP THE GROUP
LACK OF TRUST
WHAT ARE MANAGEMENT’S TRUE INTENTIONS?
PAST INCIDENTS WHERE THE COMPANY TOOK UNFAIR ADVANTAGE
UNCERTAINTY & AMBIGUITY
MISUNDERSTANDING OF THE PURPOSE FOR CHANGE
A FEAR OF THE UNKNOWN
PEOPLE WITH LOW TOLERANCE FOR CHANGE OR RISK
PREVIOUS COMMITMENT TO THE STATUS QUO
INFORMAL AGREEMENTS AMONG WORKERS
CONTRACTS
PROMISES WERE MADE
ORGANIZATIONAL SOURCES OF RESISTANCE TO CHANGE

GROUP NORMS

UNIONS

POWER STRUCTURE AND DEPARTMENTATION

ORGANIZATIONAL CULTURE

REWARD & EVALUATION SYSTEM

Basic Questions for Change Agents
 What are the forces acting upon me?
 What are the pressures I should take into consideration as I
decide what to change and how I should change it?
 What should we change?
 Should the changes be strategic and companywide or relatively
limited?
 How should we change it?
 How should we actually implement the change?
ROLE OF A CHANGE CONSULTANT
ARGYRIS

1. GENERATE VALID, USEFUL INFORMATION

Investigate…have the clients help with this process

2. HELP CLIENTS DEVELOP INTERNAL COMMITMENT TO THEIR CHOICE

Help clients make a free, informed choice…it’s their decision

3. MAINTAIN SYSTEM AUTONOMY

The clients must assume ownership…they must feel responsible

IMPLICATIONS

1. CHANGE IS NOT THE PRIMARY OBJECTIVE…YOU’RE JUST THERE TO

HELP THEM
2. FREE CHOICES MUST BE MADE AT ALL LEVELS
3. MUST HAVE A TRUSTING ORGANIZATIONAL SYSTEM IF CHANGE IS TO BE
EFFECTIVE
4. LEAVE CLIENTS WHO CAN MAINTAIN THE SYSTEM WITHOUT OUTSIDE
HELP…MAKE YOURSELF DISPENSIBLE!