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TMO1180 - Strategic Organizational

Diagnosis and Design

4th lecture -

Change Management after Design

Choices

Marko Rillo

Tallinn University of Technology

Tallinn School of Economics and Business Administration

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Contents

• Popular approaches to change– John Kotter - 8 steps for managing change

– David Ulrich - managing change in HR context

• Kurt Lewin - generic model for change

• What is "resistance to change"?– How change is viewed in the continuum:

• Change organizations

• Change changes

• Change individuals

• Saku Mantere - social roles during strategizing– i.e. preparation for change

– handling change

• Any final remarks to wrap up the course

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People do not usually like change.

Change does not care that he is not liked.

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Overcoming Resistance to Change

• Simple: provide information– If you manage to convince them they usually come on board

– Time-consuming

– Sometimes simply arguments are not enough

• Lots of time, confusing situation: participation– If you do not know your final destination

– People are motivated to participate

– Initially time consuming

– Might end up at a wrong place

• Lots of time, clear direction: moderate and coach– Direction might be myopic

– Time consuming

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Overcoming Resistance to Change

• Very different individuals: negotiations

– Frequently the easiest - work only with those whooppose and try to build coalition with your supporters

• Crisis: direct or indirect orders

– When you are under extreme time pressure

– Can create adverse reactions

• Sometimes: manipulate

– When other methods don't work - could be a simple fix

– However, is bound to create problems in the future

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Organizational Change - What are we

Talking About?• Organization-wide transformation, as opposed to

smaller changes such as replacing a single person.

• It may include changes to the organizationalstructure, basic design components, business processes, physical environment, entire ranks of individuals, job responsibilities, staff competencies, organizational culture etc.

• Can be provoked by any internal or external factorsthat we have discussed about during our previousclasses

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Change Management - Another Fad?

• Structured approach for managing change:

– Assess readiness - based on data and analytics

– Sponsorship - engaging change agents

– Communications - awareness for need of change

– Education and Training - developing competencies and

knowledge to support the change

– Coaching - helping to move through the transition

– Rewards and reinforcement - to sustain the change

• Various array of tools to help on all of the above

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Popular Approach - David Ulrich Model

for Accelerating Change

Leading

Change

Shared

Need

Shaping

Vision

Mobilizing

Commitment

Making It

LastMonitoring

Progress

Levers For

Change

Preparing

Executing

David Ulrich /via/ Kay Kendall - Baldrige-Coach.com

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Popular Approach - Change Processes

as Viewed by Consultants1. Leading Change (WHO)

– Having a champion who personally sponsors the change, who stands for the change, who makes the change part of his/her leadership agenda, and dedicates time to the change.

2. Creating a Shared Need (WHY)– Making sure that there is a reason to change (either danger or opportunity in the short or long term),

making sure that this is widely shared (through data, demonstration, or demand), and making sure the need for change exceeds the resistance to change.

3. Shaping a Vision (WHAT)– Making sure that the desired outcome of change is clear, legitimate, and widely understood and shared.

4. Mobilizing Commitment (WHO ELSE)– Making sure that there is a commitment from a strong network to make the change work, that the right

people are willing to invest in the change, that organizational “influencers” are involved, and that it gets management attention.

5. Using Levers for Change (HOW)– Making sure that the management practices are used to complement and reinforce change,

that the “systems” in the organization are congruent with the change.6. Monitoring Progress (HOW)

– Making sure that progress is real, that benchmarks are set and realized, and that indicators are established to ensure progress.

7. Making It Last (HOW)– Making sure that once change is started, it endures; that appropriate plans are made and

followed, and that learning in one part of the organization is shared throughout the organization.

David Ulrich /via/ Kay Kendall - Baldrige-Coach.com

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Identify Champions with a Simple

FrameworkConviction Courage Capability

Firm belief that (a)

change is needed, and

(b) the change

direction is right,

provides intellectual

commitment.

Willingness to "do the

right thing" and take

on the necessary

personal and

professional risks

The ability to act

effectively on

commitments, with

necessary talent,

skills, experience, and

supportTerry Johnson, (Purchasing

Mgr., critical to the success

of rollout of Product

Development process)

-- Sees no big issues in

product development process

-- Doesn‟t see how

purchasing has a role

-- Doesn‟t like the change

+ Good track record of

taking on tough projects,

including the reorganization

of the Purchasing Dept

+ Always speaks his mind

regardless of who is in the

room

+ 10 years of industry

experience

+ Knows supply base

capabilities probably better

than anyone in the company

-- Hasn‟t had any exposure to

world-class product

development processes

... ... ... ...

David Ulrich /via/ Kay Kendall - Baldrige-Coach.com

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Try to Identify all Individuals Involved in the Change Process

According to the Following RASIX - Framework

RASIX

Person responsible

Person with approval

authority

Person who needs to

be consulted on issue

Person who needs to

be informed

Person, who has no

role (X)

Decisions

and/or Areas

of

Accountability

Responsible Approval Consult Inform X - No role

David Ulrich /via/ Kay Kendall - Baldrige-Coach.com

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Do Stakeholder Analysis

• List the key stakeholders who can significantly impact the success or failure of the change effort and their current attitude toward it.–

–

• Prioritize the top 2 -3 stakeholders (from above) who are the most important to the overall success of the change effort.–

–

• Select a priority stakeholder and list his/her potential expectations, issues, and needs relative to the change effort.– Expectations

– Issues

– Needs

• Put a check mark by the items that must be met well to ensure the success of the change effort.

Example - John Smith, COO

• Expectations

– "Make the numbers"

• Issues

– Outsourcing problems

– Capability and willingness of the

Product Lines to pick up these

transferred responsibilities

– Role clarity

• Needs

– "Visibility"

– Credit vs. blame

– Career path options

David Ulrich /via/ Kay Kendall - Baldrige-Coach.com

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Start Tracking ...

Change Levers Key Questions

Performance Culture What paradigms/behaviors do we need to change or reinforce to

support the new change?

Change Metrics How should we track progress?

What measurable results should we expect?

Organizational Structure Are we organized to implement the change?

Are we organized to sustain the change?

Processes What management processes are needed to build and sustain

the change?

What work processes are needed to build and sustain the

change?

People Practices Do we need to acquire talent/capability?

How do we build critical competencies?

How will we train people to support the change?

Recognition/ Rewards How will we hold people accountable for implementing the new

change?

What changes do we need to make in our recognition and

rewards practices to promote the desired behaviors?

David Ulrich /via/ Kay Kendall - Baldrige-Coach.com

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Top Reasons for Initiative Failure - as

Viewed by Consultants• Allowing too much complacency [Leading Change]

• Failing to create a sufficiently powerful guiding coalition [Mobilizing Commitment]

• Underestimating the power of vision [Shaping a Vision]

• Undercommunicating the vision [Creating a Shared Need]

• Permitting obstacles to block the new vision [Using Levers for Change]

• Failing to create short-term wins [Using Levers for Change]

• Declaring victory too soon [Monitoring Progress]

• Neglecting to anchor changes firmly in the corporate culture [Making it Last]

David Ulrich /via/ Kay Kendall - Baldrige-Coach.com

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As you Could See - the Traditional

Approach is Mostly Rational Top-Down

Current situation Change New situation

Current situation

Managerial perspective of change

Employee perspective of the same thing ...

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Or Alternatively ...

www.pollingassociates.com/Change-management

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Come back to Classics - Kurt Lewin

• Psychologist, working on

group dynamics, coined

the term "action research"

(you cannot understand a

system until you try to

change it), but also wrote

several interesting papers

on change management:

– Force fields

– 3-stage change model

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Lewin‟s Force Field Model -

Conceptually

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Life space (Lewin)

• Within life space - individuals and groups are be seen in topological terms - i.e. they can be mapped

• Individuals participate in a series of life spaces (family, friends, work, school ...), and these were constructed under the influence of various force vectors

• Behavior is determined by totality of an individual‟s situation

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Driving and Restraining Forces

• Driving forces push in a

direction that causes change to

occur - cause a shift in the

equilibrium towards change.

• Ex. couple going to a party,

husband watching the football

game. Wife encourages with

free snacks at the party

• Restraining forces counter

driving forces. They oppose

change.

• Ex. one of the persons at the

party is going to be one whom

husband despises. The

husband also finds out that the

snacks are vegeritarian and

beer non-alcoholic

Equilibrium - where driving forces equal restraining forces

and no change occurs. If you want to create change, you

need to create disbalance between driving and restraining

forces.

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Force Field Analysis - Lewin's Model

that was Later Elaborated by Schein• Technique for looking at the forces

for and against a decision. Aspecialized method of weighing pros and cons– Identify (the most) important

stakeholder(s)

– Identify other allies and opponents

• The diagram helps its user picture the "tug-of-war" between forces around a given issue

• You can plan to strengthen the forces supporting a decision, and reduce the impact of opposition– How to influence any of the key

players?

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3-level model elements

• Unfreezing - finding a method of making it possible for people to let go of an old pattern that was counterproductive in some way

• Change - process of change in thoughts, feeling, behavior, or all three, that is in some way more liberating or more productive

• Refreezing - establishing the change as a new habit, so that it now becomes the "standard operating procedure". Without proper refreezing, it is easy to backslide into the old ways

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3-Stage Model for Changing the Field

• "Unfreeze"– Create motives for getting out of

comfort zone

– Encourage to get out of currentpractices

– "Buckle the seat belt" - otherwisethe people involved might getscared

• "Change"– Deliver information

– Help in learning: support, mentor and train

• "Refreeze"– Make sure that changed behavior

becomes a practice

– Create routines and stability

Restraining

forces

Driving

forces

Current

situation

Desired

state

Time

Unfreeze

Change

Refreeze

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How to Carry Out Force Field Analysis

Step-by-Step1. Describe current state.

2. Describe a problem.

3. Identify the situation where the organization will

end up if no corrective action is going to be taken.

4. Describe a desired state.

5. Brainstorm the positive and negative forces.

6. Review and clarify each force or factor. What is

behind each factor? What works to balance the

situation?

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... How to Carry Out Force Field

Analysis

7. List all forces for change in

one column, and all forces

against change in another

column

8. Assign a score to each force,

from 1 (weak) to 5 (strong)

9. Draw a diagram showing the

forces for and against, and

the size of the forces,

calculate the totals

10. List potential scenarios

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.ee Group task 1 - initiative "Transform management policy of a

small family business, which is not so small any more"

Bring professional management on board, earn more money

• Need for effective use of

resources - 3 (currently

micromanagement from

distance)

• Need for free time for owners

to think about long-term

vision - 5

• Employee's feel need for

change - 4

TOTAL: 12

• Old habits - 4

• Owner's fear of losing control

of the money (currently there

are personal guarantees) - 2

• CEO thinks that "only he can

run the business and others

are stupid" - 3

• Insecurity and uncertainty

among owners - 3

TOTAL: 12

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Group task 2 - initiative "Abolish studded tires in Estonia"

• Argue that the ST-s are destroyingroads - 5

• Argue that ST-s are eating upresources to build roads - 4

• Argue that ST-s are not good forenvironment - 4

• Argue that ST-s are noisy - 3

• New technologies providenormal winter tires better gripthan studded tires have - 3

TOTAL: 19

• People have strong prejudgementthat normal tires are not goodenough - 5

• People are against rising cost(excise duties on studded tires) - 4

• Tax collecting system needs to beestablished - 2

• No political force would like to takethis decision - 4

• Small roads are not cleanedduring winter regularly (studdedtires work in those places) - 3

TOTAL: 18

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.ee Group task 3 - initiative "Implement logistics software in

company"

Currently: implementation is slow.

• Increasing competition insector (competitors are doingand we must get better, too) - 4

• IT possibilities enablesoftware - 2

• Cost efficiency (saves usmoney when we implementit) - 5

• Top management will to pushthe initiative - 2

TOTAL: 13

• Cost of the software, licences and implementation- 1

• Employee resistance fromother departments - 5

• Weak vision and storybehind implementation - 4

• Organizational structuredoes not supportimplementation - 3

TOTAL: 13

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What is Resistance to Change?

• "...behavior which is intended to protect an individual from the effects of real or imagined change" (Alvin Sander, 1950)

• "...any conduct that serves to maintain the status quo in the face of pressure to alter the status quo" (Zaltman & Duncan 1974)

• Resistance to change can be a defense mechanism caused by frustration and anxiety

• Individuals may not be resisting the change as much as they are resisting a potential loss of status, pay, comfort, or power that arises from expertise

• In many case there is not a disagreement with the benefits of the new process, but rather a fear of the unknown future and about their ability to adapt to it

• There may be resentment in disgruntled employees due to a perceived unfairness of the change. This can be strong enough to lead to sabotage.

• Some employees may see the change as a violation of agreement management has with their employees. This can involve elements of mutual trust, loyalty and commitment and go very deep

• An employee may have a competing commitment that is incompatible with the desired change

Gary J. Evans

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Approach to Change and Resistance to

Change via Different LensChin &

Benne (1969)

House

(1981)

Sashkin &

Egermeier

(1992)

Contents

Empirical-

rational

Techno-

logical

"Fix parts of

change

solution"

Individuals are rational and will follow their rational self-

interest. If change is "good", then it is adopted.

In order to make change work - disseminate innovative

techniques and make people understand the value that

they get from change.

Normative-re-

educative

Cultural "Fix the

organization"

Individual is seen as actively in search of satisfying

needs and interests.

Hence individual must take part in change. You need to

involve change agents from organization and make

them actively change existing systems.

Power-

coercive

Political "Fix people" Influencing individuals to change through legislation and

external leverage via external power.

First negotiate through competing interests, use it as the

basis to change rulesand therafter try to make sure that

individual attitudes, beliefs, values, behaviors will follow.

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Saku Mantere - His PhD Dissertation on

Social Positions in Strategy ProcessChampion, citizen, cynic?

N=301

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Key constructs

• Sphere of sensemaking - individual‟s description of her sensemaking as an agent in the strategy process. – "Too small" means - sensemaking of strategy is hindered because there are

not enough „cues‟ to be extracted. Ex. member feels she does not know the direction her organization is taking because it has not been revealed

– "Too large" means that there are simply too many cues or too little support forinterpretation for successful sensemaking. Individual has failed to make sense of strategy or is overwhelmed by it.

• The sphere of influence represents the individual‟s conception of her possibilities of influencing issues she conceives as strategic.– “Too small” a sphere of power represents an account in which the agent feels

that the organization does not enable her to fulfill her role.

– “Too large” means that the agent feels that she has too much strategic responsibility.

• The sphere of activity consists of three sections, "cynic", "citizen" and "champion"

Mantere (2003)

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Social Roles - Champions

Mantere (2003)

• People who actively try to

participate as well as

influence the larger

sphere, e.g. other people‟s

opinions, larger

organizational systems,

etc.

• They are ready to act as

strategic agents.

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Champion - Data

Mantere (2003)

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Champion Typology

Mantere (2003)

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Empowered Champion vs

Discontent Champion

Mantere (2003)

Empowered

Champion

Discontent

Champion

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Social Roles - Citizens

Mantere (2003)

• Acting as a part of the

strategy process, but not

active on influencing the

organization in strategic

issues transcending her

own immediate working

sphere

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Citizens - Data

Mantere (2003)

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Citizen Typology

Mantere (2003)

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Two Extremes

Ideal State - Satisfied Citizens

Problem State - Troubled

Citizens

Mantere (2003)

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Social Roles - Cynics

• The cynic is a person who has given up on the very notion of the change.

• She regards it with occasional scorn, occasional disinterest.

• In most cases the cynics reportedpositive identification with their organizations, but did not feel anything useful could come out of organizational strategy

• While cynicism is often attributed a negative bias, many authors concur that cynics may also represent the "voice of conscience" for theorganization and, thereby, question the suitability of poor strategic choices in the organizational context (Dean et al., 1998; Cutler, 2000).

Mantere (2003)

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Cynics - Data

Mantere (2003)

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Cynic Typology

Mantere (2003)

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Role-players, role-seekers and

bystanders

1) Positions in which agents performed roles in the strategy processes

2) Positions in which agents sought for roles to play in the strategy process

3) Positions in which individuals did not play, nor desired strategic roles.

Mantere (2003)

N=101(ch)+

24(cit)=125

N=25(cyn)+

42(cit)=67

N=57(ch)+2

52(cit)=109

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Morale

• At first glance, it might be easy to label whomever disagrees with official strategy statements as a "dissident" or "troublemaker".

– The leadership of such individuals is easily conceptualized as the business of overcoming resistance to change.

– Instead, a question must be asked on how ambivalentattitudes can be cultured in organizations

• In such a case, the business of leadership becomes the business of empowering the individual to act as a strategic agent ...

– ... using dissent in crafting a better strategy.

Mantere (2003)

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Summary

• What have we learned?

• Reminder - Key Dates

– 21.10 - everybody presents their "elevator pitch" of the

course project

– 26.10 - final deadline for submission of course projects

– 28.10 - final presentations of the course projects