1. Steven E. Phelan, November 2007

3. Friday Why change? Top down approaches to change Resistance to change Cases Saturday Bottom up approaches Merger plan simulation

4. Change is a risky activity Many organizational changes fail or do not realize their intended outcomes (50-70%). This raises the question of why change is so prevalent? Pressure to change comes from: External, environmental pressures Internal, organizational pressures

5. PressureExamplesDescription Fashion pressures Boeing Co. This is based on mimetic isomorphism – imitating companies that are legitimate and successful Mandated pressures Chevron Texaco This is based on coercive isomorphism – when change is demanded by outside sources. Geopolitical pressures 3M This is when global crises greatly impact an organization and change is necessary for survival.

6. PressureExamplesDescription Market decline pressures Harley Davidson When current markets that the organization operates in begin to decline there is pressure to find newer, more viable markets. Hypercompetition pressures Intel This affects the way organizations respond to their consumers and their competitors to cater for the increasingly rapid pace of business. Reputation and credibility pressures Walt Disney Company In light of recent corporate governance scandals in organizations, the pressure to maintain a good reputation and high level of credibility has increased.

7. PressureExamplesDescription Growth pressuresMicrosoft Existing systems and processes in a smaller organization may no longer be applicable when the size of the organization increases. Integration and collaboration pressures EDS Integration and creating economies of scale can lead to pressure for change in organizations. Identity pressuresForte Hotel A common organizational identity and the unified commitment of staff in different areas/departments of an organization can be difficult to manage and may encourage change.

8. PressureExamplesDescription New broom pressures UNLV New authority figures in an organization can herald a new era and often signal significant changes an organization in an organization. Power and political pressures Morgan Stanley Power relationships and politicking can change internal processes and decision making. This has significant flow on effects within the organization.

10. Focuses on strategic, intentional and usually large-scale change Entails following a variety of steps; the exact steps vary depending upon the model used Belief that achieving organizational change is possible through a coordinated and planned approach

11. Ten Steps Define the vision Mobilize Catalyze Steer Deliver Obtain participation Handle emotions Handle power Train and coach Actively communicate 12 Actions Get support of key power groups Get leaders to model change behavior Use symbols and language Define areas of stability Surface dissatisfaction Promote participation Reward behavior that supports change Disengage from the old Communicate image of future Use multiple leverage points Develop transition mgt arrangements Create feedback

12. 10 Commandments Analyze the need for change Create a shared vision Separate from the past Create a sense of urgency Support a strong leader role Line up political sponsorship Craft an implementation plan Develop enabling structures Communicate and involve people Reinforce and institutionalize change Eight-step model (Kotter) Establish the need for urgency Ensure there is a power change group to guide the change Develop a vision Communicate the vision Empower staff Ensure there are short term wins Consolidate gains Embed the change in the culture

13. Compare and contrast the various steps in these models. What is left out of different models? Create your own composite model. Is there a preferred sequence of steps? Why? Identify the key management skills associated with each step Which ones are you strongest on? Weakest on? In your experience: Which steps have been best handled? Worst handled? Why?

14. The goal of change management is to dupe slow-witted employees into thinking change is good for them by appealing to their sense of adventure and love of challenge This is like convincing a trout to leap out of a stream to experience the adventure of getting deboned

15. Active signs of resistance Being critical Finding fault Ridiculing Appealing to fear Using facts selectively Blaming or accusing Sabotaging Intimidating or threatening Manipulating Distorting facts Blocking Undermining. Starting rumors Arguing Passive signs of resistance Agreeing verbally but not following through (“malicious compliance”) Failing to implement change Procrastinating or dragging one’s feet Feigning ignorance Withholding information, suggestions, help, or support Standing by and allowing change to fail Which of the various ways of resisting change are the most common? Which are the most difficult to deal with?

16. Dislike of change People don’t resist change, they resist pain! Boredom can be pain, too. Discomfort with uncertainty Low tolerance for ambiguity Perceived negative effects of interests Authority, status, rewards, salary, social ties Attachment to the established culture/ways of doing things Perceived breach of psychological contract

17. Lack of conviction that change is needed Lack of clarity as to what is needed Belief that the specific change being proposed is inappropriate Belief that the timing is wrong Excessive change Cumulative effects of other changes in one’s life Perceived clash with ethics Reaction to the experience of previous changes Disagreement with the way the change is being managed

18. Security Money Authority Status/prestige Responsibility Better working conditions Self-satisfaction Better personal contacts Less time and effort

19. The classic steps: Education and communication Participation and involvement Facilitation and support Gray areas Negotiation and agreement Manipulation and cooptation Explicit and implicit coercion My IT change management story Does a successful change manager needs skills in all six areas? Where do you need development?

20. Resistance is a natural (even necessary) psychological stage in any change: Denial/Shock Resistance/Anger Exploration/Mourning Commitment /Acceptance Do we just ‘let nature take its course’ then? Can people get stuck in a stage?

21. Use the power of resistance to build support Showing respect towards resistors creates stronger relationships and thereby improves the prospects of success Fundamental touchstones Maintain clear focus Embrace resistance Respect those who resist (assume good faith) Relax Join with the resistance Look for points of commonality

22. Use power Manipulate those who oppose Apply force of reason Ignore resistance Play off relationships Make deals Kill the messenger Give in

23. Which approach to the management of resistance attracts you? Why?

24. Contingency approaches challenge the view that there is “one best way” The style of change will vary, depending upon the scale of the change and the receptivity of organizational members for engaging in the change. Kotter and Schlesinger recommend changing tactics according to the: Amount and kind of resistance anticipated The position and power of the change agent The personality of the person designing and implementing the change The time available and the consequences of failure

25. Views change as a continuous process which unfolds differently depending upon the time and the context It sees the outcome of change as occurring through a complex interplay of different interest groups, goals, and politics. Only some outcomes will be able to be achieved given the “messiness” of change This approach does not provide a list of “what to do” steps as in the change management approaches. Rather it alerts the change manager to the range of influences which they will confront and the way in which these will lead to only certain change outcomes being achieved

26. Stay alive Learn to greet absurdity with laughter Use your skills, emotions, labels, and positions don’t be used by them Don’t get trapped in other people’s games Start where the system is Understand how others see themselves (empathy) Never work uphill Work in the most promising arenas Don’t build hills as you go Build resources Don’t over organize Don’t argue if you can’t win Don’t drift – remain focused on your purpose

27. Light many fires Load experiments for success Innovation requires a good idea, initiative, and a few friends Find the people who are ready and able to work, introduce them to one another, and work with them Those who need to rebel or submit are not reliable partners Keep an optimistic bias Capture the moment timing is everything

28. Key propositions Proceed experimentally and flexibly Conceal true goals and intentions Build awareness and credibility to legitimize new viewpoints Tactical shifts, partial solutions Use serendipity to promote supporters, replace opponents, fund pet projects Broaden political support and overcome opposition Encourage others to trial new ideas and create pockets of commitment (but don’t be associated with failure). Why is this a processual view of change?

31. Stakeholders State Governor – Dr. Phelan State Regulator – Allen Union Organizer – Caroline Journalist –Sidney Largest Southern Customer – Eric B. East/West Bank – Eric P.

32. Denis Hightower

33. Peter Browning

35. Values Humanistic Openness, honesty, integrity Democratic Social justice, freedom of choice, involvement Developmental Authenticity, growth, self-realization

36. T-groups (Lewin, 1946) Training groups – a form of group therapy Socio-technical systems Tavistock Institute Focus on social teams and industrial democracy Surveys with Likert scales from 1946 Often used for diagnosis of organizational climate and post-intervention Participative Action research A Plan-Do-Check-Act cycle that involves those who are affected by the changes

37. Steps Problem identification Consultation/collaboration with OD consultant Data gathering and problem diagnosis Feedback Joint problem diagnosis (with group) Joint action planning (with group) Change actions Further data gathering

38. Critics of change management depict it as being “faddish” and the product of management consultancy firms There is a debate between proponents of OD and proponents of change management: OD is criticized for being less relevant to modern organizations which require strategic, often large scale change rather than slower, incremental change often associated with a traditional OD Change management is criticized for lacking a humanistic set of values and for having a focus on the concerns of management rather than on those of the organization as a whole

39. Focus on transformational change, culture, and learning organizations Argyris undiscussables, double loop learning, and triple loop learning Senge’s system dynamics for learning New interest in teams High performance work organizations Self managed teams TQM Visioning, diversity, large meetings Large-scale OD

40. Loss of community People pretend to care more about one another than they really do Loss of employer-employee social contract I must take care of myself Employability Is my employer giving me the skills to find another job if I have to? Trust Widening gap between have and have nots Difference between what managers say and do Lack of openness Culture Clash Need for negotiation and conflict resolution skills

41. Participation by large-scale intervention Shows a shift from problem solving to joint envisioning of the future Involves a four-step technique: Discovering current best practices Building on existing knowledge Designing changes Sustaining the organization’s future

42. Goal: Quality executive education Step 1: Describe your peak experience in quality education Step 2: Generate some ‘provocative propositions’ for the UNLV EMBA program based on step 1. Step 3: Describe times when the UNLV program approached peak experience Step 3: Develop a vision of what could be Step 4: What needs to change in skills, structure, processes and systems, management style, and staffing to enhance this vision

43. Task Develop a formal integration plan (with decisions on branch closures, systems conversion, product alignment, layoffs, and communication strategy) that will maximize shareholder value while keeping as much support as possible from the stakeholders at the two banks and external organizations. 10 minutes = 1 news cycle = 1 day