1 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition. 1 Organizational Change C H A P T E R 7 S E V E N T E E N

2 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Change at Telus Corp. Telus, the Vancouver-based telecommunications firm, has been forced by deregulation and new technology to dramatically change its culture and practices. “I do think the employees of this organization understand the need for change,” says CEO Darren Entwistle (shown). CP/Kevin Frayer

3 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Desired Conditions Current Conditions Before Change After Change Driving Forces Restraining Forces Force Field Analysis Model During Change Driving Forces Restraining Forces Driving Forces Restraining Forces

4 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Forces for Change Resistance to Change Direct Costs Saving Face Fear of the Unknown Breaking Routines Incongruent Systems Incongruent Team Dynamics

5 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Creating an Urgency for Change Inform employees about driving forces Most difficult when organization is doing well Must be real, not contrived Customer-driven change –Adverse consequences for firm –Human element energizes employees

6 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Reducing Restraining Forces at Unilever Gary Calveley (right) brought in team coaches to train employees throughout the process of changing Unilever’s Elida Faberge factory into Europe’s best factory. A theatrical production helped to communicate the changes that Calveley was trying to achieve through coaching. Dean Smith/The Camera Crew

7 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Communication Highest priority and first strategy for change Improves urgency to change Reduces uncertainty (fear of unknown) Problems -- time consuming and costly Minimizing Resistance to Change

8 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Communication Provides new knowledge and skills Includes coaching and action learning Helps break old routines and adopt new roles Problems -- potentially time consuming and costly Minimizing Resistance to Change Training

9 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Communication Increases ownership of change Helps saving face and reducing fear of unknown Includes task forces, search conferences Problems -- time- consuming, potential conflict Minimizing Resistance to Change Training Employee Involvement

10 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Communication When communication, training, and involvement do not resolve stress Potential benefits –More motivation to change –Less fear of unknown –Fewer direct costs Problems -- time- consuming, expensive, doesn’t help everyone Minimizing Resistance to Change Training Employee Involvement Stress Management

11 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Communication When people clearly lose something and won’t otherwise support change Influence by exchange-- reduces direct costs Problems –Expensive –Increases compliance, not commitment Minimizing Resistance to Change Training Employee Involvement Stress Management Negotiation

12 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Communication When all else fails Assertive influence Firing people -- radical form of “unlearning” Problems –Reduces trust –May create more subtle resistance Minimizing Resistance to Change Training Employee Involvement Stress Management Negotiation Coercion

13 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Refreezing the Desired Conditions Realigning organizational systems and team dynamics with the desired changes –Alter rewards to reinforce new behaviours –Feedback systems Help employees learn how they are doing Provide support for the new behaviour patterns

14 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Strategic Vision & Change at CHC CHC Helicopter Corp.’s four strategic principles have helped its employees adapt to rapid growth at the St. John’s, Nfld. firm. These principles include safety first, quality service, teamwork, and profitable growth. Courtesy of CHC Helicopter Corp.

15 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Strategic Vision & Change Need a vision of the desired future state Minimizes employee fear of the unknown Clarifies role perceptions Courtesy of CHC Helicopter Corp.

16 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Change Agents Anyone who possesses enough knowledge and power to guide and facilitate the change effort Change agents apply transformational leadership –Help develop a vision –Communicate the vision –Act consistently with the vision –Build commitment to the vision Courtesy of CHC Helicopter Corp.

17 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Successfully Diffusing Change Successful pilot project Receives visibility Top management support Labour union involvement Diffusion strategy described clearly Pilot project people moved to other areas

18 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Action Research Philosophy Change needs both action and research focus Action orientation –Solve problems and change the organizational system Research orientation –Concepts guide the change –Data needed to diagnose problem, identify intervention, evaluate change

19 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition EstablishClient-ConsultantRelations DisengageConsultant’sServices Action Research Process Diagnose Need for Change IntroduceChangeEvaluate/StabilizeChange

20 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Appreciative Inquiry at Hunter Douglas The Hunter Douglas Window Fashions Division in Colorado relied on appreciative inquiry as well as a search conference to create a collective vision, re- instill a sense of community among employees, and build leadership within the company. Courtesy of Amanda Trotsen-Bloom

21 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Appreciative Inquiry Philosophy Directs the group’s attention away from its own problems and focuses participants on the group’s potential and positive elements. Reframes relationships around the positive rather than being problem oriented Courtesy of Amanda Trotsen-Bloom

22 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Appreciative Inquiry Process Discovery Discovering the best of “what is” Dreaming Forming ideas about “what might be” Designing Engaging in dialogue about “what should be” Delivering Developing objectives about “what will be”

23 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Parallel Learning Structure Philosophy Highly participative social structures Members representative across the formal hierarchy Sufficiently free from firm’s constraints Develop solutions for organizational change which are then applied back into the larger organization

24 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Organization Parallel Structure Parallel Learning Structures

25 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Cross-Cultural and Ethical Concerns Cross-Cultural Concerns –Linear and open conflict assumptions different from values in some cultures Ethical Concerns –Privacy rights of individuals –Management power –Individuals’ self-esteem –Consultant’s role

26 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition. 1 Organizational Change C H A P T E R 7 S E V E N T E E N

27 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Discussion of Activity 17.2 Strategic Change Incidents

28 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Scenario #1: “Greener Telco” Scenario #1 refers to Bell Canada’s Zero Waste program, which successfully changed wasteful employee behaviours by altering the causes of those behaviours. Courtesy of Bell Canada

29 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Bell Canada’s Change Strategy Relied on the MARS model to alter behaviour: Motivation -- employee involvement, respected steering committee Ability -- taught paper reduction, , food disposal Role perc. -- communicated importance of reducing waste Situation -- Created barriers to wasteful behaviour, eg. removed garbage bins Courtesy of Bell Canada

30 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Scenario #2: “Go Forward Airline” Scenario #2 refers to Continental Airline’s “Go Forward” change strategy, which catapulted the company “from worst to first” within a couple of years.

31 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Continental Airlines’ Change Strategy  Communicate, communicate, communicate  Introduced 15 performance measures  Established stretch goals (repainting planes in 6 months)  Replaced 50 of 61 executives  Rewarded new goals (on-time arrival, stock price)  Customers as drivers of change