1. Organizational Change
McGraw-Hill/Irwin
McShane/Von Glinow OB 5e
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Umpqua Bank’s OrganizationalChange
Umpqua Bank has become the largest regional community bank in the Pacific Northwest by applying effective organizational change practices

3. Lewin’s Force Field Analysis Model
Developed by Kurt Lewin
Driving forces
Push organizations toward change
External forces or leader’s vision
Restraining forces
Resistance to change -- employee behaviors that block the change process
Restraining
Forces
Driving
Forces

4. Force Field Analysis Model
Driving
Forces
Restraining
Desired
Conditions
Driving
Forces
Restraining
Driving
Forces
Restraining
Current
Conditions
Before Change
During Change
After Change

5. Not Hoppy About Change
Mina Ishiwatari(front) wanted to improve Hoppy drink’s brand image, but most staff didn’t want to change. “I tried to take a new marketing approach to change the image of Hoppy but no one would listen to me.” She improved Hoppy’s popularity with limited support or budget. Most employees who opposed Ishiwatari’s changes have since left the company.

6. Restraining Forces (Resistance to Change)
Many forms of resistance
e.g., complaints, absenteeism, passive noncompliance
View resistance as a resource
Symptoms of deeper problems in the change process
A form of constructive conflict -- may improve decisions in the change process
A form of voice – helps procedural justice

7. Why People Resist Change
Direct costs
Losing something of value due to change
Saving face
Accepting change acknowledges own imperfection, past wrongdoing
Fear of the unknown
Risk of personal loss
Concern about being unable to adjust

8. Why People Resist Change (con’t)
Breaking routines
Organizational unlearning is part of change process
But past practices/habits are valued by employees due to comfort, low cognitive effort
Incongruent organizational systems
Systems/structures reinforce status quo
Career, reward, power, communication systems
Incongruent team dynamics
Norms contrary to desired change

9. Creating an Urgency for Change
Inform employees about driving forces
Most difficult when organization is doing well
Customer-driven change
Adverse consequences for firm
Human element energizes employees
Sometimes need to create urgency to change without external drivers
Requires persuasive influence
Use positive vision rather than threats

10. Minimizing Resistance to Change
Communication
Highest priority and first strategy for change
Improves urgency to change
Reduces uncertainty (fear of unknown)
Problems -- time consuming and costly
Learning
Involvement
Stress Mgt
Coercion
Negotiation

11. Minimizing Resistance to Change
Communication
Provides new knowledge/skills
Includes coaching and other forms of learning
Helps break old routines and adopt new roles
Problems -- potentially time consuming and costly
Learning
Involvement
Stress Mgt
Negotiation
Coercion

12. Minimizing Resistance to Change
Communication
Employees participate in change process
Helps saving face and reducing fear of unknown
Includes task forces, future search events
Problems -- time-consuming, potential conflict
Learning
Involvement
Involvement
Stress Mgt
Negotiation
Coercion

13. Minimizing Resistance to Change
Communication
When communication, learning, and involvement are not enough to minimize stress
Potential benefits
More motivation to change
Less fear of unknown
Fewer direct costs
Problems -- time-consuming, expensive, doesn’t help everyone
Learning
Involvement
Stress Mgt
Negotiation
Coercion

14. Minimizing Resistance to Change
Communication
Learning
Influence by exchange -- reduces direct costs
May be necessary when people clearly lose something and won’t otherwise support change
Problems
Expensive
Gains compliance, not commitment
Involvement
Stress Mgt
Negotiation
Coercion

15. Minimizing Resistance to Change
Communication
Learning
Involvement
When all else fails
Assertive influence
Radical form of “unlearning”
Problems
Reduces trust
May create more subtle resistance
Encourage politics to protect job
Stress Mgt
Negotiation
Coercion

16. Refreezing the Desired Conditions
“When you are leading for growth, you know you are going to disrupt comfortable routines and ask for new behavior, new priorities, new skills… Even when we want to change, and do change, we tend to relax and the rubber band snaps us back into our comfort zones.”
Ray Davis, CEO, Umpqua Bank

17. Refreezing the Desired Conditions
Realigning organizational systems and team dynamics with the desired changes
Alter rewards to reinforce new behaviors
Change career paths
Revise information systems

18. Change Agents
Change agent -- anyone who possesses enough knowledge and power to guide and facilitate the change effort
Engage in transformational leadership
Develop the change vision
Communicate the vision
Act consistently with the vision
Build commitment to the vision

19. Strategic Vision & Change
Need a vision of the desired future state
Identifies critical success factors for change
Minimizes employee fear of the unknown
Clarifies role perceptions

20. Diffusion of Change Begin change as pilot projects
Effective diffusion considers MARS model
Motivation – pilot project is successful, reward diffusion of pilot project
Ability – Train employees to adopt pilot project
Role perceptions –Translate pilot project to new situations
Situational factors – Provide resources to implement pilot project elsewhere

21. Action Research Approach
Action orientation and research orientation
Action – to achieve the goal of change
Research – testing application of concepts
Action research principles
Open systems perspective
Highly participative process
Data-driven, problem-oriented process

22. Action Research Process
Form
client-
consultant
relations
Diagnose
need for
change
Introduce
intervention
Evaluate/
stabilize
change
Disengage
consultant’s
services

23. BBC Takes the Appreciative Journey
To become a more creative organization, the British Broadcasting Company sponsored an appreciative inquiry process of employee consultation, called Just Imagine. “It gave me a powerful mandate for change,” said BBC’s chief executive at the time.

24. Appreciative Inquiry Approach
Frames change around positive and possible future, rather than traditional problem focus.
Application of positive organizational behavior

25. Four-D Model of Appreciative Inquiry
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”

26. Large Group Interventions
Future search, open space, and other interventions that involve “the whole system”
Large group sessions
May last a few days
High involvement with minimal structure
Limitations of large group interventions
Limited opportunity to contribute
Risk that a few people will dominate
Focus on common ground may hide differences
Generates high expectations about ideal future

27. Parallel Learning Structure Approach
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

28. Parallel Learning Structures
Organization

29. 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

30. Organizations are About People
“Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory.”
Andrew Carnegie ( )
Source: Library of Congress

31. Discussion of Activity 15.3 Strategic Change Incidents
McGraw-Hill/Irwin
McShane/Von Glinow OB 5e
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

32. Scenario #1: “Greener Telco”
Scenario #1 refers to Bell Canada’s Zero Waste program, which successfully changed employee behaviorby altering the causes of thosebehaviors.
Pilot project in Toronto – 12 floor building of 1000 staff reduced waste from 1800 lb per day to just 75 lb per day within 3 years.
Courtesy of Bell Canada

33. Bell Canada’s Change Strategy
Relied on the MARS model to alter behavior:
Motivation -- employee involvement, respected steering committee (photo)
Ability -- taught paper reduction, , food disposal
Role perceptions – learned importance of reducing waste
Situation -- created barriers to wasteful behavior, eg. removed garbage bins
Courtesy of Bell Canada

34. 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.

35. 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

36. Organizational Change
McGraw-Hill/Irwin
McShane/Von Glinow OB 5e
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.