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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