Sensemaking and Performance During Change: Some Preliminary Ideas Scott Sonenshein and Scott Baggett Rice University

Research Question How does an employee’s sensemaking about change affect change implementation performance?

Change creates interruptions which trigger sensemaking (Weick, 1995) Starting Premises Change creates interruptions which trigger sensemaking (Weick, 1995) Employees have discretion to construct meaning of same “objective” event differently Employees matter--bias in literature that organizational adaptation is primarily (or even) solely driven by top managers

Quick Review of Sensemaking Literature Sensemaking research strong focus on processes (e.g., Weick et al., 2005), less on content Research on link between sensemaking and performance has emphasized top managers Thomas et al. (1993): top managers scanning and interpretation processes Theoretical models about links between cognitions and actions (e.g. Dutton and Jackson, 1987) with key focus on labeling of issues Threat/opportunity framing (Chattopadhyay et al, 2001; Staw et al., 1981) Little research on how employees make sense of change (Bartunek et al., 2006) Any studies that link employee sensemaking to unit/firm performance? Sensemaking primarily focused on cognitions Not much work on emotions and sensemaking (Maitlis and Vogus, 2008)

Main Contribution of Research Examine how employees’ sensemaking content (cognitions and emotions) influences change implementation performance As assessed by managers (subjective performance) As assessed by sales data (“objective” performance)

Subjective Performance: “Ideal Employee” hypothesis During change, managers want employees to construct meaning of change in particular ways and this will impact how they assess performance. Greater understanding of the strategy Create cognitive reorientation of the firm (Gioia & Chittipeddi, 1991) Transfer cognitions to employees (Lewis, L. & Seibold, 1998) More positive emotions Happy-productive worker hypothesis (Wright & Staw, 1999) Managers observe positive employees, assume things are going well. Less negative emotions Reduces resistance, something managers obsessed with (Dent & Goldberg, 1999)

“Objective” performance: But do manager’s know best? Competing Hypotheses Why would adopting managerial cognitions about the change  higher performance? Provides higher-order goals, which could increase knowledge about how to perform task objectives Reduces uncertainty about change, which could limit distractions Increases task significance (bigger picture of how tasks improve org) Others? But cognitions about change . . . Focuses on general strategy less relevant to employees’ work Could inundate employees with useless information (info overload)

“Objective” performance: But do manager’s know best? Competing Hypotheses Why would sensemaking that contains more positive emotions about the change higher performance? Increases motivation (George & Brief, 1996) and persistence (Burke et al. 1993) Builds thought-action repertoire (Fredrickson, 2001) Increases sense of efficacy (Forgas et al., 1990) Leads to more helpful behavior (George, 1991) Others? But positive emotions could . . . Reduce motivation because sends signals things going well (George and Zhou, 2002) Lead to too optimistic of an appraisal of situation

“Objective” performance: But do manager’s know best? Competing Hypotheses Why would sensemaking that contains less negative emotions about the change higher performance? Negative emotions associated with change resistance Negative emotions could reduce commitment to change But negative emotions could. . . Signal that greater effort is needed (George & Zhou, 2001) Reflect a more realistic appraisal of the change, allowing employees to adjust behaviors

Approach Context: Fortune 500 retailer integrating two divisions Collected sensemaking of employees implementing the change (n=143) at 46 units implementing same change Content analysis of sensemaking: Cognitive sensemaking: meaning constructions of what employees know about the core strategy of the change Emotional sensemaking: meaning constructions of emotions about the change Negative emotions: sad, worried, disappointment, frustration Positive emotions: excitement, happy, joy

Dependent Variables Performance of change implementation Subjective: Supervisor ratings of unit Overall performance of implementing the change Effort exerted at implementing the change “Objective”: Sales performance Change in sales after change, controlling for time of change

Aggregation Unit of analyses Aggregation tests Sensemaking data: employee level Performance data: unit level Aggregation tests Too much variability within units around sensemaking of change Examine individuals’ sensemaking as predictive of their group score vs. average sensemaking Group analysis Good apple, bad apple in the barrel approach Take the minimum and maximum values for each sensemaking variable for each unit

Individual Level Results Sales Performance (“Objective”) Supervisor Overall Assessment Supervisor Effort Control (square feet) -.11** 2.11** 2.40** Negative sensemaking emotions -.02 -0.21 -0.16 Positive sensemaking emotions .00 1.21* 0.88 Cognitive sensemaking .11* -.91 0.10 R2 F Test .08 3.07* .22 6.18** 0.17 4.50** more constructions of the meaning of change as containing core strategy leads to higher sales—mechanism is about having more knowledge of broader picture, what you are working on (supported by job design) Emotions play no role in true performance. ------ For supervisor ratings, higher positive emotions leads to being at a store rated higher by supervisors—effort does not have any effects. * p<.05; **p<.01

Individual Level Results Sales Performance (“Objective”) Supervisor Overall Assessment (Subjective) Supervisor Effort Control (square feet) -.11** 2.11** 2.40** Negative sensemaking emotions -.02 -0.21 -0.16 Positive sensemaking emotions .00 1.21* 0.88 Cognitive sensemaking .11* -.91 0.10 R2 F Test .08 3.07* .22 6.18** 0.17 4.50** more constructions of the meaning of change as containing core strategy leads to higher sales—mechanism is about having more knowledge of broader picture, what you are working on (supported by job design) Emotions play not role in true performance. ------ For supervisor ratings, higher positive emotions leads to being at a store rated higher by supervisors—effort does not have any effects. * p<.05; **p<.01

Aggregate Min Model Results Sales Performance Supervisor Overall Assessment Supervisor Effort Control (square feet) -.18* 2.06* 2.38t Negative sensemaking emotions -.20 -6.46* -1.07 Positive sensemaking emotions -.07 2.38 4.41t Cognitive sensemaking .42** -3.94 -1.63 R2 F Test .29 3.90** .46 4.04* 0.24 1.51, ns Now at the group level. When least knowledge employee is relatively high on knowledge of strategy, get stronger objective performance. The higher the lowest person’s score on cognitive sensemaking, the better the sales performance. In other words, if your lowest rated employee is relatively high on cognitive sensemaking, better performance. This suggests that you want your weakest link to be relatively strong, suggesting that everyone in group needs some cognitive sensemaking of strategy. T p<.10; * p<.05; **p<.01

Aggregate Min Model Results Sales Performance (“Objective”) Supervisor Overall Assessment (Subjective) Supervisor Effort Control (square feet) -.18* 2.06* 2.38t Negative sensemaking emotions -.20 -6.46* -1.07 Positive sensemaking emotions -.07 2.38 4.41t Cognitive sensemaking .42** -3.94 -1.63 R2 F Test .29 3.90** .46 4.04* 0.24 1.51, ns Now at the group level. The less negative, the least negative person in the store is, the higher the supervisor rating. The more positive the least positive person is, the better supervisor effort score. T p<.10; * p<.05; **p<.01

Aggregate Max Model Results Sales Performance (“Objective”) Supervisor Overall Assessment (Subjective) Supervisor Effort Control (square feet) -.14t 1.22 1.53 Negative sensemaking emotions -.02 .55 -.36 Positive sensemaking emotions .00 3.04* 3.00t Cognitive sensemaking .09 -1.53 R2 F Test .99, ns .34 2.46t 0.24 1.52, ns Weakest of the three models Nothing for sales performance. For overall supervisor and efforts, the more positive the most positive employee is, the higher the subjective ratings. T p<.10; * p<.05; **p<.01

Summary of Findings Employees’ sensemaking based on emotions influences supervisor ratings of change, but has no impact on sales performance. Employees’ sensemaking based on cognitions predicts sales performance but has no impact on supervisor ratings. More positive emotions and less negative emotions might get unit accolades (or store manager promoted), but does not affect “objective” unit performance. Group level: one bad apple spoils barrel; but one good apple can lead to higher subjective ratings.

Theoretical Implications Linked employee-level sensemaking to unit performance How employees make meaning of a change impacts performance The way managers’ subjectively make meaning of change performance not consistent with “objective” performance Resistance story—too much attention (Ford et al. 2008) Danger of subjective performance indicators hat dominate change research The importance (or lack thereof) of constructing positive meaning about one’s work on objective performance

Discussion What resonates most with you? How should I develop the subjective/objective story? Should I frame paper around this finding? Most of mechanisms theorized at individual level; ideas for unit level theorizing. Because of lack of ability to aggregate, have both individual and unit level (min and max) results. Build a multi-level theory? Aggregation problems

Other Ways I Can Use Your Help For “average model”, I use disaggregated results (ICC does not support aggregation) Main findings about emotions at group-level Main findings about cognitions at individual-level This does not seem elegant Any ideas?