Chapter 14 Managing Change

Managing Change Change is a critical uncertainty facing the organization, and the ability to manage change is a valuable skill. Organizations are becoming more change-oriented, responding to various forces in increasingly dynamic environments. Change is difficult, and may not always be good. Change may often be necessary, but it may also be painful. People may differ in the degree to which they resist change and in their motivations to change.

Forces for Change Some external forces for change: globalization the growing diversity of the workforce the explosion of the Internet new legislation changing customer desires and expectations heightened levels of competition Some internal forces for change: performance gaps new leadership a new mission employee pressures

Planned Versus Reactive Change Managers can respond to change either by planning or reacting. Planned change occurs when managers develop and install a program that serves to alter organizational activities in a timely and orderly way. Reactive change occurs when managers simply respond to the pressure for change when that pressure comes to their attention. Planned change is typically regarded as superior to reactive change.

The Change Process -- Lewin’s Change Model (Figure 14-1) Create High Felt Need for Change Minimize Resistance to Phase 1 Unfreezing Change People, Tasks, and Structure Encourage Ongoing Support Phase 2 Changing Reinforce Outcomes Constructive Modification Phase 3 Refreezing

Targets of Change (Figure 14-2) Structural Technological Purpose or Task Human

Web Wise: Robot Information Central The installation of robots is a good example of technological change. For a huge listing of robotic links, go to Robot Information Central at the website of Arrick Robotics. http://www.robotics.com/robots.html

Sources of Resistance to Change (Figure 14-3) Uncertainty Lack of Understanding and Trust Self-Interest Resistance to Change Differing Perceptions Habit Rejection of Change Source Lack of Tolerance for Change

Focus on Management: Trust Building at Eastman Chemical Earnest Deavenport, CEO of Eastman Chemical, credits the company’s substantial success to the way in which Eastman has retooled the traditional contract between company and employees. One element of Eastman’s trust-building strategy is an incentive and compensation system, Eastman’s Performance Plan, that encourages employees worldwide to become stewards of the company. Through the system, Eastman employees will soon own 20% of the company’s stock.

Lighten Up: Bad Fads While change is often desirable, people may implement change for questionable reasons. For example, some change efforts are essentially impression management, attempts to give the appearance of progress or to detract attention from other problems. In addition, change may sometimes take the form of blindly following fads. Check out the Bad Fads museum at: http://www.badfads.com

Change Approaches (Figure 14-4)

The Rhetorical Triangle (Figure 14-5) Logos Pathos Ethos

Logos Logos refers to convincing another person to accept change through reason, logic, and data. When people are told about a change at work that will affect them, they normally first react by asking “Why?” When you initiate change, be prepared to provide a clear rationale in a direct, well-supported manner, using education and communication as your persuasive method.

Logos Guidelines Do your homework, gathering relevant facts that prove that a real problem exists. Identify sources of help. Anticipate questions and objections. Sell the benefits of the change in terms of the perspective of those who will have to go through it. It is easiest to sell the need for change when there is a “burning platform.” A burning platform is a dramatic, vivid demonstration that the current situation is unacceptable.

Logos Guidelines (Continued) Use catalytic mechanisms to reinforce the change; catalytic mechanisms help to translate objectives into performance by making “stretch” goals reachable. They generally involve a dramatic policy that requires people to act in new ways that further the overarching goal. Listen in depth to concerns, questions, and fears. Create an implementation plan that answers the key questions most people have when faced with change: who, what, where, when, why, and how.

Wingwalking General Dennis Reimer, the U.S. Army’s Chief of Staff, explained that the army is now in a different world and has to be able to change to serve the nation’s needs. He noted that the army is a conservative organization that believes in “the first rule of wingwalking: You don’t let go of what you’ve got in your hands until you’ve got something else in your hands.” As such, change can best be “sold” when the present situation is unacceptable and there is something else to hold on to -- some promising new beginning.

Short Pay at Granite Rock The copresidents of Granite Rock, a century-old California company that sells crushed gravel and related products set an audacious goal: Granite Rock would provide total customer satisfaction and achieve a reputation for service that met or exceeded that of Nordstrom. To achieve this goal, Granite Rock implemented a radical new policy: “short pay.” Every Granite Rock invoice contains the words, “If you are not satisfied for any reason, don’t pay us for it. Simply scratch out the line item, write a brief note about the problem, and return a copy of this invoice along with your check for the balance.” The policy impells managers to identify the root causes of problems to prevent repeated short payments. It also signals to employees and customers the sincerity of the company’s commitment to customer satisfaction.

Ethos Ethos refers to convincing another person to accept a change through the strength of your moral character and the trust that followers have in you. People tend to cooperate with a leader who has high credibility, a combination of competence and trustworthiness. When faced with a persuasive argument, the audience asks, “Does this person know the truth?” They ask if the person is informed, skilled, and intelligent. They also ask, “Does this person tell the truth?” To answer this, they consider the person’s trustworthiness: one’s character, moral fiber, and personal integrity.

Pathos Pathos refers to convincing others to accept a change through appeals to emotional and psychological needs. One effective way to satisfy people’s emotional needs and to stimulate high motivation is to get them actively involved in the change itself. When people feel they have had a voice and a hand in shaping the change and its implementation, they tend to adopt ownership of it. Using participation in planning and implementing changes enriches people’s work, raises self-esteem and self-confidence, and hones problem-solving skills.

Deciding When to Use the Change Approaches (Figure 14-6)

Bottom Line: Overcoming Resistance to Change Identify Potential Sources of Worker Resistance to a Change Involve Workers in The Design of The Change Develop and Implement A Comprehensive Communications Plan For Educating Workers About the Change Reinforce the Change By Realigning Jobs, Processes, Systems, and Organization Culture with the Change Provide Support for Workers Who Will Be Implementing the Change (e.g., Training, Budget, Direction) Offer Rewards to Workers for Successfully Implementing a Change

Managing Difficult Transitions Clearly explain the reasons for the transition: Show how endings ensure continuity. Explain why the transition is occurring in the way it is occurring. Minimize uncertainty: Define what is over and what is not. Identify who is losing what. Acknowledge losses openly and sympathetically. Expect and accept signs of grieving.

Managing Difficult Transitions (Cont.) Provide fair compensation for losses. Facilitate the coping of those with losses. Mark the endings. Treat the past with respect. Plan for new beginnings.

Signs of Grieving (Figure 14-7) Anger Depression Bargaining SIGNS OF GRIEVING Disorientation Anxiety Sadness

Organizational Development (OD) Organizational development (OD) has been defined as “an effort (1) planned, (2) organization-wide, and (3) managed from the top, to (4) increase organizational effectiveness and health through (5) planned interventions in the organization’s ‘process,’ using behavioral science knowledge.”

OD Assumptions and Values People as individuals: people in the organization seek to satisfy higher-order needs people desire to make a contribution to the organization people have the potential to make a contribution to the organization People as group members: the nature of group relationships will determine the satisfaction and contribution of individual members of the group. It is important that group members feel that acceptance in the work group is meaningful and that the group is capable of generating trust, support, and cooperation among members. The nature of the group should be such that members are capable of acting both as leaders and as followers when necessary.

OD Assumptions and Values (Continued) People as members of the organization: organization structures have an impact on member attitudes and behaviors win-lose conflict strategies are not healthy in the organization upper management must have a long-term commitment to change within the organization

Identify a Need for Change The OD Process Identify a Need for Change Select a Technique for Change Gather Top Management Support Plan the Change Process Overcome Resistance to Change Evaluate the Change Process

OD Intervention Techniques Diagnostic techniques Team building Survey feedback Education Intergroup activities Third-party peacemaking

OD Intervention Techniques (Continued) Sociotechnical activities Process consultation Life and career planning Coaching Planning and goal setting

Conditions for Successful OD Programs Recognition by managers and members that the organization has problems. Use of an external change agent to start the process. Support from top management for the change process. Involvement of work group leaders. Early success with the change effort. Understanding of the change process and its goals.

Conditions for Successful OD Programs (Continued) Support of managerial strengths. Inclusion of human resource managers in the OD program. Development of internal OD resources. Effective management of the OD program. Measurement and evaluation of results.

The Learning Organization According to Peter Senge, in learning organizations “people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people continually learn how to learn together.” Learning organizations develop specific learning capabilities not present in traditional organizations. Peter Senge

The Five Disciplines of Learning Organizations (Figure 14-8) Systems Thinking Personal Mastery Learning Capabilities Mental Models Team Learning Shared Vision

The Seven Learning Disabilities “I am my position.” People often identify with their jobs rather than with the larger enterprise. “The enemy is out there.” We have a tendency to “externalize,” finding someone or something outside ourselves to blame when things go wrong. “The illusion of taking charge.” All too often, proactiveness is just reactiveness in disguise. “The fixation on events.” We are conditioned to see life as a series of events and to believe that there is one obvious cause for each event.

The Seven Learning Disabilities (Cont.) “The parable of the boiled frog.” We often fail to notice gradual change. It is critical to remain attuned to the gradual processes that often pose the greatest threats. “The delusion of learning from experience.” We never experience the consequences of our most important decisions; these have system-wide consequences that play out over years. “The myth of the management team.” Members of management teams, instead of battling these disabilities, often fight for turf, try to avoid blame, and work to give the appearance of a cohesive team.

Developing Learning Organizations Cultures Learning Leaders Learning Organizations Leadership Communities Learning Infrastructures

Bottom Line: Developing a Learning Organization Leaders Generate “Creative Tension” by Convincing Workers That a Significant Gap Exists Between the Status Quo and a Future Vision Leaders Provide Support for a Wide Range of Learning Activities Throughout Various Units in an Organization to Create Learning Communities Leaders Help to Create and Establish Formal Systems and Processes to Support Learning Activities Throughout the Organization Leaders Model Behaviors That Support a Learning Organization and Foster a Culture That Values Learning Leaders Evaluate the Performance of Workers, Units, and The Organization Based on Learning- Related Outcomes