Chapter 10 Management of Change Managing the Information Technology Resource Jerry N. Luftman

Chapter Outline Change is complex organization concept Why people resist change How IT is player in change management Successful planning of change Global factors in change management

Using Lewin-Schein for Managing Change Through IT Source: Adapted from Lewin and Schein, CHristin Bullen.

Pain As a Motivator Possible Sources: Inability to see critical information about business trends, competition, customers Discovery that competition has IT that provides data being sought Directly from customer(s) Need to integrate disparate systems resulting from acquisition Individuals’ inability to perform their work due to IT constraints

Unfreezing Planning a Change to Address the Issues Pain As a Motivator Becomes clear organization is failing Missing potentially advantageous opportunities Real Job Benefits as Motivator Improves way individual carries out job Charismatic Leader as Motivator If champion of change is respected, others will follow IT As Changer and Changee

IT As Changer Targets Hardware Systems Software Applications Software Connected Information/NWs Personnel Processes

IT As Changee Anticipate or react to opportunities or problems: Change in objectives, processes, regulation, economy, “innocent” bystander Scarcity of labor, raw materials, etc. Mergers and acquisitions Customer demands Actions of competitors

Five Phases of Positive Cycles Uninformed Optimism At beginning of change effort Believe everything will go as planned Informed Pessimism Begin to learn difficulties, doubt and concern Hopeful Realism Visible progress and support is received Informed Optimism Confidence is built as completion nears Completion Satisfaction of succeeding and reaching objective

Conner’s Stages of Positive Change Source: Conner, Daryl, Managing at the Speed of Change, Random House (1992).

Conner’s Negative Response to Change Immobilization Information shocks the system Denial Assume position will fade away Anger Feeling of helplessness Bargaining People voice concerns and become involved Depression Feel helpless to change destiny Testing Confidence is built and can adjust Acceptance Embrace and work to support change

Conner’s Stages of Negative Responses Source: Conner, Daryl, Managing at the Speed of Change, Random House (1992).

Organization Change Process Build Sense of Urgency Reinforce the New Behavior Create a Clear Tomorrow Develop a Migration Plan Source: Belasco, James, Teaching the Elephant to Dance, http://www.belasco.com/elephant

Implementing Change Leadership Plus Facilitation Get Right People Involved Team Building Secure Resources

Leadership Plus Facilitation All levels participate to create value Get other’s creativity, cooperation, support Front line employees are closest to the work Listen to their ideas Consider alternatives Envision how technology can enable solutions

Benefits of Getting Right People Involved Benefits from creativity and innovation Best people provide role models for others Gains respect by virtue of talent involved More likely to remain on budget and on time Successful process become model for others Achieved goal is respected

Characteristics of High Performing Teams Clear Elevating Goal Results-Driven Structure Competent Team Members Unified Commitment Collaborative Climate Standards of Excellence External Support and Recognition Principled Leadership

Secure Resources Focus resources on accomplishing strategy Time People Money Careful study of required resources Ensure allocation of resources

Stakeholder Roles in Change Change sponsor Top management initiating program of change Change agent or champion Responsible for implementing change in middle- or lower-level management Change target Individuals or groups directly affected by change Influence Help target through process of change

Reasons People Resist Change Loss of Face Loss of Control Excess Uncertainty Surprise “Difference” Effect “Can I Do it?” Ripple Effect More Work Past Resentments Real Threats Competing Commitments

Refreezing Institutionalize processes and systems to become organizational norm Information system needs to be adequate Managers may need to change old habits May threaten individual’s power, status, income

Understanding Resistance to Change Listening to what people are and are not saying Communicate so people feel knowledgeable and involved Address concerns so real issues of resistance are surfaced and managed Apply 80/20 rule putting effort into preparing for the change

80/20 Rule Determine people in target population who are in top 20 percent of business producers Spend 80 percent of time for people issues with top 20 percent Spend 80 percent of personnel development budget on top 20 percent Study work and determine what 20 percent of job results in 80 percent of returns Train assistant to do remaining 80 percent Enlist top 20 percent to do on-the-job training for next 20 percent

Overcoming Resistance to Change Expect resistance Find the resistance Understand the motivations of resistance Use reward system/incentives Build in benefits to the users Knowledge Intervention techniques Indoctrination and coercion

Why Improvement Efforts Fail Source: Brynjolfsson, Erik, http://ebusiness.mit.edu/erik/

Elements of Planning Change Guidance, Structure, and Process Shared Vision Backers and Supporters Symbols, Signals, and Rewards Standards, Measures, and Feedback Local Participation and Innovations Policy and Systems Review Communication, Education, & Training

Elements of Planning Change

Mistakes in Managing Change Management assumes employees know how to behave as company wants Do not allow for change to take time and persistence Trapped in thinking if focused, cooperation of target population is ensured Do not plan adequate time for managerial tasks Resort to coercive management techniques Believe change will increase shareholder value

Localization Barriers Authority National and regional protectionism Laws, regulations, tariffs Communications weakness Labor unions Transportation Quality of labor New technology Organization Languages Cultures, values Business practices Taste Competitors Proximity to local customer Risk Cost Pace Food

Tasks for Focus Outside Country Research on stakeholder’s city and country Learn pronunciation of names Research political, economic, religious, social, intellectual, and artistic contexts Learn customs and taboos Seek advice from others who have interacted from same location Find out about individuals Assess own prejudices about people/location

Cross-Cultural Stereotypes

“Who Moved My Cheese?” Lessons Having cheese makes you happy. The more important your cheese is to you, the more you want to hold on to it. If you do not change, you can become extinct. What would you do if you weren’t afraid? Smell the cheese often so you know when it is getting old. Movement in a new direction helps you find new cheese.

“Who Moved My Cheese?” Lessons When you move beyond your fear, you feel free. Imaging myself enjoying new cheese even before I find it, leads me to it. The quicker you let go of old cheese, the sooner you can enjoy new cheese. It is safer to search in the maze than remain in a cheeseless situation. Old beliefs do not lead you to new cheese.

“Who Moved My Cheese?” Lessons When you see that you can find and enjoy new cheese, you change course. Noticing small changes early helps you adapt to the bigger changes that are to come. Move with the cheese and enjoy it!

“Who Moved My Cheese?” Lessons Handwriting on the Wall Change happens They keep moving the cheese Anticipate change Get ready for the cheese to move Monitor change Smell the cheese often so you know when it is getting old Adapt to change quickly The quicker you let go of old cheese, the sooner you can enjoy new cheese

“Who Moved My Cheese?” Lessons Handwriting on the Wall Change Move with the cheese Enjoy change Savor the adventure and the taste of new cheese Be ready to change quickly and enjoy it again They keep moving the cheese