Chapter 2 Hitt Black Porter Managing Change m a n a g e m e n t

Learning Objectives After studying this chapter, you should be able to: Explain why personal change is critical to managerial success Describe the general process of change Discuss three common failures of change Describe the general process of enhancing change success

Nature of Change It is easier to deal with predictable change than unpredictable change Change may be increasingly unpredictable 12% 28% 60% Highly unpredictable Unpredictable Predictable Highly predictable Adapted from Exhibit 2.1: Predictability of Change

Rate of Change If rate of change is increasing: managers benefit by increasing their ability to anticipate change If change is somewhat unpredictable: managers benefit from increasing their ability to respond quickly to changes 13% 87% Increase Decrease Stay the same Adapted from Exhibit 2.2: Rate of Change

Managerial Competency for Leading Change Excellent Good Fair Poor Does not have the leaders to do it 5% 35% 39% 20% 1% 0% 10% 20% 30% 40% Adapted from Exhibit 2.3: Prevalence of Change Management Capability

Managerial Competency for Leading Change Leading change is a critical managerial activity Senior executives do not see an ample supply of lower level managers with this skill

Forces for Change: External Forces New competition Technology Shift in customer preference Change in regulations Change in general economic environment

Forces for Change: Internal Forces Change in internal environment Change in leadership

Forces for Change: Three Conclusions At the micro level it is important to have an understanding of The general process of change The general forces for change failure The keys for successful change

Process of Change Change goes through three distinctive phases Unfreezing Movement Refreezing

Phase 1: Unfreezing Habits are strongly patterned ways behaving We can also have patterned ways of viewing and interpreting events To change a patterned way of behaving or thinking, that pattern must be “unfrozen”

Phase 2: Movement Major determinants of movement Level of certainty or uncertainty associated with the change Magnitude of the change

Phase 3: Refreezing Habitual behaviors and perceptions are strong Change may not be permanent After a change is made, actions should be taken to prevent reversion to old patterns Reinforce the change until it becomes more established

Forces for Failure Right Thing Wrong Thing Done well Done poorly 3. Refreeze 1. Unfreeze Done poorly 2. Movement Adapted from Exhibit 2.4: Change Failure Framework

Unfreezing: The Failure to See The power of past mental maps The longer a mental map has been successful, the harder it is to see the need for a new one Overly simplistic view of the past and future Difference in the context may not be seen Maintaining equilibrium People resist pressures to change in order to maintain equilibrium

Movement: The Failure to Move Change uncertainty Lacking clear alternatives, people may intensify their efforts doing what they know Outcome uncertainty Lacking clear answers are to questions, people are less likely to change

Movement: The Failure to Move Requirement uncertainty Believing they may lack essential skills, knowledge, or tools, people are unlikely to make a needed change, even if a great reward awaits them for changing

Refreezing: The Failure to Finish Most significant change does not produce instant, positive consequences The lack of reinforcement of the new behaviors allows old behaviors to reappear

Overcoming the Failure to See Create high contrast Focus people’s attention on key differences Focus on the core contrasts Help people see and remember those key differences (create images) Adapted from Exhibit 2.5: Declining Contrast

Overcoming the Failure to See Create confrontation Managers often have to confront their people with the key contrasts between the past, present, and future Present the contrasts repeatedly Inescapable experiences Involve as many of the senses—touch, smell, sight, sound, taste—as possible

Overcoming the Failure to Move Educate employees as to the desired change Help employees see the new destination Help them see the anticipated benefits of going there

Overcoming the Failure to Move Know and understand what it takes to execute the change Assess the level of employee capabilities Provide training, tools, or other resources

Overcoming the Failure to Finish Create early wins and reinforce desired behavior Help people see the progress of the change Inform them of their personal progress Inform them of collective progress Repeat messages of old and new maps often

Overcoming the Failure to Finish Create high impact, inescapable confrontations Involve as many of the senses as possible Physically assure experiences cannot be avoided