Change Management Prof. Steve Phelan Lecture 10

Today Culture, values, and behavior  Why change programs don’t produce change  Psychological contracts  Culture change at Seagram LMZ Ch 24  Building systems that learn on a large scale (~1990)

Why change programs don’t produce change Fallacy of programmatic change  Formal organization structure and systems cannot lead a corporate renewal process  Successful transformations usually start at the periphery in a few plants far from corporate  Ad hoc arrangements to solve concrete business problems  Change roles, responsibilities, relationships -> Changes behavior which then changes attitudes Senior managers should:  Create a climate for change  Provide resources and leadership development  Spread the lessons of success and failure  Not insist on specific solutions

Changing the deal while keeping the people What is a psychological contract?  Examples Achieving transformation  Challenging the old contract – a reason to change  Preparation for change Signal that we really mean it Symbolic ending of old contract Loss reduction – losses are more painful than gains Transition structures  Creating a new mindset Evoking a new contract script – interesting!  Living the new contract

Psychological contracts ctd. Continuous change  Can an organization go through so many changes that they lose the capacity for employees to enter into voluntary commitments and good faith agreements? Concept of balanced contracts  Both employer and employee have performance terms to live up to and high investments in the relationship

Seagram Case Questions are given:  What should be done with recommendations for action raised by participants in training?  Are you going to punish the values violators?  How will we recognize and reward the values champions?  What should be done with new employees?  How do we sustain the momentum / institutionalize the values?

Large scale systems change The article effectively applies OD to large scale system change  Maximum mix teams  Organizational valentines  Preferred futuring  Celebrating diversity (MBTI) Do you buy the philosophy?  Does it work under any circumstances?  Would you ever use it?