Chapter 10 Management of Change Managing the Information Technology Resource Jerry N. Luftman © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 1

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 2

Using Lewin-Schein for Managing Change Through IT Source: Adapted from Lewin and Schein, CHristin Bullen. © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 3

Pain As a Motivator Possible Sources: Inability to see critical information about business trends, competition, customers Discovery that competition has information technology 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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 4

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 5

IT As Changer Targets Hardware Systems Software Applications Software Connected Information/NWs Personnel Processes © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 6

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 7

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 8

Conner’s Stages of Positive Change Source: Conner, Daryl, Managing at the Speed of Change, Random House (1992). © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 9

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 10

Conner’s Stages of Negative Responses Source: Conner, Daryl, Managing at the Speed of Change, Random House (1992). © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 11

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 12

Implementing Change Leadership Plus Facilitation Get Right People Involved Team Building Secure Resources © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 13

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 14

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 15

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 16

Secure Resources Focus resources on accomplishing strategy Time People Money Careful study of required resources Ensure allocation of resources © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 17

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 18

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 19

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 20

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 21

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 22

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 23

Why Improvement Efforts Fail Source: Brynjolfsson, Erik, http://ebusiness.mit.edu/erik/ © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 24

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, and Training © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 25

Elements of Planning Change © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 26

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 27

Localization Barriers Languages Cultures, values Business practices Taste Competitors Proximity to local customer Risk Cost Pace Food Authority National and regional protectionism Laws, regulations, tariffs Communications weakness Labor unions Transportation Quality of labor New technology Organization © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 28

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 © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 29

Cross-Cultural Stereotypes © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 30

“Who Moved My Cheese?” Lessons Change happens Anticipate change Monitor change Adapt to change quickly Change Enjoy change Be ready to change quickly and enjoy it again © 2004 Managing the Information Technology Resource, Jerry N. Luftman Chapter 10 - Slide 31