1. Chapter 14
Managing Change

2. 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.

3. 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

4. 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.

5. 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

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

7. 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.

8. 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

9. 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.

10. 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:

11. Change Approaches (Figure 14-4)

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

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.

18. 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.

19. 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.

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

21. 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

22. 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.

23. 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.

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

25. 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.”

26. 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.

27. 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

28. 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

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

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

31. 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.

32. 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.

33. 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

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

35. 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.

36. 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.

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

38. 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