Managing Organizational Change and Innovation Chapter 17 Managing Organizational Change and Innovation

Learning Objectives Define what is meant by organizational change management Identify the major steps in undertaking organizational change effort Describe how appreciative inquiry is conducted Discuss the role of problem diagnosis in organizational change management Identify a number of change methods and the relative depth of intervention each represents

Learning Objectives Recognize the impediments and conditions that may limit change management effectiveness Discuss the ethical implications of change management Understand how adapting innovation is a natural outcome in organizations that effectively manage change

Change Pervasive Persistent Permanent Accelerating

To survive, organizations must be… Introduction To survive, organizations must be… Flexible Creative Responsive

Organizations best suited for success Introduction Organizations best suited for success Relatively small Compete in industries where R&D expenditures are high, barriers to entry low

Alternative Change Management Approaches Power Reason Reeducation

Learning Principles in Change Management Unfreezing Deals with resistance to change Management must show employees why they want to change Movement Training Demonstration Empowerment Refreezing Receiving positive rewards, information, or feelings for doing something

Change Agents: Forms of Intervention A change agent Brings a different perspective Challenges the status quo Success of the program Rests on the relationship between the change agent and key decision makers

Change Agents: Forms of Intervention External Change Agents Internal Change Agents External- Internal Change Agents

The more significant the change, the more intense the… Resistance to Change The more significant the change, the more intense the… Fear Anxiety Resistance Resistance is often triggered by a change in routing, patterns, and habits

Individual Resistance Behaviors

Reasons for Individual Resistance Perceived loss of position, power, status, quality of life, authority Economic insecurity Alteration of social friendships and interactivity Fear of the unknown Failure to recognize the need for change Cognitive dissonance due to new people, processes, systems, technology, expectations Fear of a lack of competence Believing the proposed change is wrong or bad

Coping With Resistance Ways to Cope With Resistance Increase communication Have people participate in the change process Let change champions within the group be facilitators Negotiating the type and pace of change Few long-term benefits from coercion, threats, manipulation

Organizational Resistance Organizational barriers to change Professional and functional orientation of a department, unit, or team Structural inertia Perceived threats to the power balance Previous change failure

Strategies for Overcoming Resistance Give people and organizations a reason to change Get more people involved Increase communication Identify & guide champions/supporters of change Obtain upper-level management support Create a learning organization

Characteristics of a Learning Organization Open discussions and accessibility to information Clear vision expressed at all levels Strong emphasis on interdependence, worth, and importance of each person and unit Clear goals and concepts of performance expectations Commitment to learning, improving, personal growth Concern for measurable results whenever possible Curiosity to try new methods and experiment Acceptance of failure

Model for Managing Organizational Change

Managing Organizational Change Forces for change continually act on the organization It’s the manager’s responsibility to determine the magnitude of the change They must diagnose the problem and identify techniques for dealing with it They must implement the change and then monitor the process and results

Forces for Change External Forces Beyond the control of management Economic forces Technological forces Social forces Political forces Internal Forces Generally within management’s control Process problems Behavioral problems

Change agents facilitate diagnostic phase Diagnosis of a Problem Change agents facilitate diagnostic phase They gather, interpret, and present data

Questions to help pinpoint a diagnosis Diagnosis of a Problem Questions to help pinpoint a diagnosis What is the problem versus the symptoms? What must be changed to resolve the problem? What outcomes are expected from the change? How will those outcomes be measured?

Obtaining answers to the questions Diagnosis of a Problem Obtaining answers to the questions Review data in the firm’s information system Generate ad hoc information through committees or task forces Direct observation Hold meetings with managers and employees Interview key personnel Conduct an attitude survey

Choosing a Development Method The development method depends on The nature of the problem The depth of the intended change

Approaches to Change Management Common Approaches People Structural Task & Technological

Structural Approaches to Change Management by Objectives (MBO) Objective setting Subordinate participation Feedback Evaluation Reengineering Efforts Streamlining Integrating Transforming

Task and Technological Approaches These approaches focus on the work being performed Task changes job design changes and job enrichment Technological approaches changes in work flow Training is integral to the process

People Approaches Team Building Mentorship Programs Ethics Training Introspection

Introspection Development Goals Developing Objectivity Learning Improving Self-confidence Achieving life balance Egolessness More creativity and intuition Increased sense of personal responsibility More tolerance for ambiguity and paradox Action taking

TQM: A Multifaceted Approach Key TQM components Goal Definition of quality Nature of the environment Role of management Role of employees Structural rationality Philosophy toward change

A method of focusing on positive aspects or potential opportunities Appreciative Inquiry A method of focusing on positive aspects or potential opportunities

Impediments and Limiting Conditions Leadership Climate Organizational Culture Formal Organization Choice of a change method is tempered by the conditions that exist at the time

Implementing the Method Implementation of a change method has two dimensions Timing: selection of the appropriate time at which to initiate the intervention Scope: selection of the appropriate scale

Evaluating Program Effectiveness Bringing about change An expenditure of organizational resources In exchange for some desired result Evaluating the program has two problems Obtaining data that measure the desired results Determining the trend of improvement over time

Evaluating Program Effectiveness Six steps of evaluative research Determine the objectives of the program Describe the activities taken to achieve the objectives Measure the effects of the program Establish baseline points Control extraneous factors Detect unanticipated consequences

How Effective are Change Interventions? Critical Test of Change Intervention Whether it improves organization effectiveness Multimethod approaches are more successful than single-method ones

Significant Changes Can Occur Significant changes occur when All employees participate in goal setting, decision making, and job redesign Employee collaboration is developed through team building The organizational structure is reorganized to accommodate the new levels of participation and collaboration

Steps to Take When Managing Change Management and all involved must have high and visible commitment to the effort People involved need advance information that tells them what is to happen, and why they are to do what they are to do The effort must be connected to other parts of the organization The effort must be directed by line managers and assisted by a change agent if necessary

Steps to Take When Managing Change The effort is based on good diagnosis and is consistent with the conditions in the organization Management must remain committed to the effort through all its steps Evaluation is essential and must be more than asking people how they feel about the effort People must see the relationship between the effort and the organization’s mission and goals Any change agent must be clearly competent

Guidelines for Managing Change Organizational change is a significant undertaking that managers should go about in a systematic way