Yardstick International College Course: Change and Innovation Management Instructor: Lemi Tesfa Wakshum (Ph.D.) Assistant Professor 5/14/2021 Lemi Tesfa (Ph.D.) 1
Chapter Two Managing Change in an Organization 5/14/2021 Lemi Tesfa (Ph.D.) 2
Theories of Change There are three theories of change. 1. Traditional Models 2. Critical Perspectives 3. Strategic Management Models 5/14/2021 Lemi Tesfa (Ph.D.) 3
Theories of change Traditional view Much of the change management literature positions leadership as the key source of energy for change. From a pragmatic view of point this is a natural enough starting point but doing so does involve begging several questions. The process of change can be summarized as comprising two elements, namely leaders and followers. Leaders give signals that changes are needed, can be described, pathways to change can be sketched out and plans, resources and support for implementation provided. But without followers no change is possible because leaders cannot do everything. But not all followers will embrace change. Neither will all followers resist change. 5/14/2021 Lemi Tesfa (Ph.D.) 4
Theories of change Traditional view Borrowing an idea from innovation theory, we can identify a change vanguard and early adopters. They carry forward the change ideas and practices within the organization. Success in change management to some extent is based on identifying and supporting those people. But leaders must also provide resources, facilities, training, space and organizational cover. Often indeed people implement plans incorrectly, sometimes just because they do not understand. 5/14/2021 Lemi Tesfa (Ph.D.) 5
Theories of change Traditional view In these circumstances the change vanguard and early adopters must necessarily experiment, problem solve and so on in order to get things on the right track. But there will be detractors around. All of this happens at both the individual and the organizational level. At the individual level leaders must articulate change ideas with frame resonance, to use an idea from research on social movements in which leaders seek to direct attention not at descriptions of new values, nor indeed at new behaviours, but rather at acceptable ideas regarding the organization s desired direction of travel. 5/14/2021 Lemi Tesfa (Ph.D.) 6
Theories of change Traditional view Leaders must also provide for quick wins and demonstration projects ; showing that progress is being made and is therefore possible in the future. In turn, this argument suggests that the ideas which underpin any change initiative need to be influential throughout the organization. We know that adults learn best from direct experience, even allowing for what we certainly know about the varying learning styles across the human population. Ideas are considered in relation to problems we seek to 5/14/2021 Lemi Tesfa (Ph.D.) 7 resolve.
Theories of change Traditional view In practice this implies that one effective strategy for change implementation is as follows: 1 Identify people in teams who are respected members of those teams; 2 Convince them of the value of the intended changes; 3 Train them in the new methods and in change facilitation; 4 Encourage them to support other members of their own team 5/14/2021 through informal Lemi or Tesfa on-the-job (Ph.D.) training; 8
Theories of change Traditional view 5 Invest some of your training effort in the sharing of best practice across the teams; 6 Ensure that supervisors and others support and provide organizational cover for the efforts of those most respected co-workers ; and finally 7 Senior executives must secure the space for this to take place, for example in relation to performance management processes. 5/14/2021 Lemi Tesfa (Ph.D.) 9
Change implementation Approaches There are four approaches to theorizing about how major changes can be implemented. These are: 1 Clinical approaches. 2 Linear approaches. 3 Systems approaches. 4 Emergent change. 5/14/2021 Lemi Tesfa (Ph.D.) 10
The Clinical Approach Here the engagement of individuals and teams is seen as central to success or failure. Within this form of analysis themes such as resistance to change, team effectiveness and dynamics as effected by changing circumstances and the leadership dynamics of change are each important. The concept of a psychological contract between employer and employee and the attitudes of those involved in change are also central. 5/14/2021 Lemi Tesfa (Ph.D.) 11
The Clinical Approach Thus Burnes (2004) concludes that the planned approach to change is closely associated with the practice of organizational development (OD). He quotes what is perhaps the most widely known text in the area in his favour. French and Bell (1995) state that: Organization development is a unique organizational improvement strategy that emerged in the late 1950s and early 1960s... evolved into an integrated framework of theories and practices capable of solving or helping to solve most of the important problems confronting the human side of organizations. OD is about planned change, that is getting individuals, 5/14/2021 Lemi Tesfa (Ph.D.) 12 teams and organizations to function better.
The Clinical Approach It seeks to do so based on valid knowledge. This knowledge primarily relates to people and how they behave, perceive, feel and react to the organizational setting. Often the interventions are undertaken within a process known as action research. OD specialists, sometimes depicted as change agents, lead these interventions. Change agents are assumed to be committed to the purpose of enhancing organizational effectiveness, but this is 5/14/2021 Lemi Tesfa (Ph.D.) 13 not clear-cut.
Linear Approaches This might be labelled the managerial approach because models tend to describe change as a series of steps from vision to implementation. Views change as sequential. Often of value because they at least specify the tasks which managers need to undertake; these models are also commonly criticized as too simple. The experience of managing a change of any magnitude is generally more complex with many stops and starts and much side-tracking along the 5/14/2021 Lemi Tesfa (Ph.D.) 14 way.
Linear Approaches Stacey (1996) is clearly of this view, identifying three assumptions leading to that conclusion: 1 That managers can identify organizational adaptations ahead of environmental changes (note that this appears to be a rather purist view; why must it be ahead of those environmental changes?). 2 That change is a linear process. 3 That organizations are systems tending toward static equilibrium (i.e., a stable state within which the organization s position in its environment is stable ). 5/14/2021 Lemi Tesfa (Ph.D.) 15
Linear Approaches Linear models tend to understate the role of external stakeholders such as government, shareholders, fund managers and so on. Where such groups are considered, they tend to incorporate them within the organization s system. Note, however, that the focus in these latter studies remains targeted on the internal changes rather than the orientation or intentions of external stakeholders. 5/14/2021 Lemi Tesfa (Ph.D.) 16
Linear Approaches The linear paradigm(unitary view of sequential) reflects the influence of Lewin s well-known threestage model of change (Lewin, 1947), which encompasses the following: 1 Unfreezing, a stage within which those involved come to recognize that something must change. Unfreezing refers to the creation of a perceived discrepancy between the existing and ideal state of an organization that generates a desire for change and lowers people s resistance to change. 5/14/2021 Lemi Tesfa (Ph.D.) 17
Linear Approaches 2 Moving, during which stage new ideas are tested and new ways of working emerge. Moving refers to the various processes such as training, education, and restructuring that lead to the development of new behaviors, attitudes, and beliefs. 5/14/2021 Lemi Tesfa (Ph.D.) 18
Linear Approaches 3 Followed by refreezing, a stage within which new behaviours, skills and attitudes are stabilized and commitment to change is achieved. Refreezing refers to reestablishing a new state of equilibrium within the organization by stabilizing the new patterns through a variety of support mechanisms. 5/14/2021 Lemi Tesfa (Ph.D.) 19
Linear approaches Others proposed developmental model of change comprises four stages: 1 The conceptualizing process. 2 The motivation process. 3 The commitment process. 4 Implementation and evaluation (implementing new ideas and installing the means for performance monitoring and evaluation). 5/14/2021 Lemi Tesfa (Ph.D.) 20
Linear approaches In some senses the most influential model of change to adopt the linear approach is Kotter (1996). He identifies eight stages: 1 Establishing a sense of urgency. 2 Creating the guiding coalition. 3 Developing a vision and strategy. 4 Communicating the change vision. 5 Empowering employees for broad-based action. 6 Generating short-term wins. 7 Consolidating gains and producing more change. 8 Anchoring new changes in the culture. 5/14/2021 Lemi Tesfa (Ph.D.) 21
Systems theory Systems theory is claimed by its adherents to take the whole system into account as the basic unit of analysis, though rarely is this achieved. The sociotechnical systems theory school originally based at the Tavistock Institute of Human Relations in the UK was for many years the leading institutional base for research and thinking. Researchers such as Trist, Emery, Rice and others proposed to optimize jointly the social and technical subsystems in work settings. 5/14/2021 Lemi Tesfa (Ph.D.) 22
Systems theory In effect the claim was that there exists a range of technological possibilities and options in any given setting. Thus organizational choice exists. By going for a less than optimal technological design you might achieve, overall, a more effective design where the design chosen created more satisfying and meaningful work, thus avoiding other performance inhibiting behaviour like absenteeism. If you look at Emery and Trist (1963) you can see just how attractive this theoretical stance proved to be, but you can 5/14/2021 also see its limit. Lemi Tesfa (Ph.D.) 23
Systems theory Emery and Trist (1963) is a study of mechanized coal mining. By contrasting different levels of technology, the researchers were able to show that some technology options made organizing work teams into semi-autonomous work groups easier. The groups were also shown to be more likely to be associated with work seen by employees to be more meaningful, more satisfying and likely to be more effective in terms of indicators like absenteeism. 5/14/2021 Lemi Tesfa (Ph.D.) 24
Systems theory Systems dynamics provides the analytical means of modelling social systems and can allow the study of various design options when rethinking an organization. The focus is largely on how to choose rather than on how to change but clearly the process of choice is part of change, and the fuller evaluation of options helps us avoid unintended consequences. 5/14/2021 Lemi Tesfa (Ph.D.) 25
Emergent approaches to change The focus is not on a particular change programme no matter how extensive or strategic, but rather on the characteristics and processes associated with achieving breakthrough change to sustained competitive advantage. This model therefore overcomes one of the fundamental problems associated with the change literature, that of viewing any specific change in isolation from other changes going on in the organization at the same time. 5/14/2021 Lemi Tesfa (Ph.D.) 26
Emergent approaches to change These are presented in the model diagram as sequential steps, but we prefer to take them as issues to be resolved, to a large extent in parallel. 1 Build-up stage within which you need to appoint, nurture and encourage level 5 leaders. These are leaders who combine leadership qualities alongside a willingness to acknowledge personal limitations. It represents a counterpoint to the notion of the charismatic leader but not a rejection of the idea. Thus level 5 leaders may well have charisma. Ultimately the notion is that leaders need to inspire and connect with people. 5/14/2021 Lemi Tesfa (Ph.D.) 27
Emergent approaches to change Accepting your own limitations, bringing as it were human scale to leadership, may be thought to help with the latter need. Organizations need also to get the right people into place in terms of knowledge, experience, skills and motivation. Finally, in the build-up stage Collins emphasizes the need to face reality rather than not face facts because people feel threatened or uncomfortable when doing so. 5/14/2021 Lemi Tesfa (Ph.D.) 28
Emergent approaches to change 2 Breakthrough During which the organization needs to build a passion for its business, its products/services/sector/capabilities/technology and people. Moreover, the organization must learn to think and act in both a disciplined and decisive manner. For Collins speed is important but so is discipline. 5/14/2021 Lemi Tesfa (Ph.D.) 29
Emergent approaches to change The essence of the approach is to say that organizations need to plan to provide certain defining characteristics of successful operation and ways of deciding, working and performing. If these are diffused throughout the organization success will emerge. However, the most important point to note here is that the model does not require that we specify specific goals around the changes but rather that we identify a direction of development along with a long-term 5/14/2021 goal. Lemi Tesfa (Ph.D.) 30
Emergent approaches to change Incrementally you would plan such goals, not least as part of an annual budget process. So, this is not a planned change model. Rather it is a planned process of emergent change. The idea of emergent change and the linked idea of emergent strategy (Mintzberg, 1994) was developed to provide greater realism to discussions of strategy formulation and change. They do so either by relying on complexity theory or by requiring less to be specified in advance. We ought to note that logically open systems theory is at least a precursor to this line of thinking. 5/14/2021 Lemi Tesfa (Ph.D.) 31
Theories of Change: Critical perspectives Reading Assignment 5/14/2021 Lemi Tesfa (Ph.D.) 32
Theories of change: Strategic Management Models Reading Assignment 5/14/2021 Lemi Tesfa (Ph.D.) 33
Key Factors in Managing Change Success has many parents, but failure is an orphan. _ Scholars Change is the coping process of moving from the present state to a desired state that individuals, groups and organizations undertake in response to dynamic internal and external factors that change current realities. 5/14/2021 Lemi Tesfa (Ph.D.) 34
Programming Change The Drivers of Change Model clarifies what drives the need for change, especially transformational change. The model portrays a sequence to these triggers, with one trigger calling forth change in the next, and the next, and so on. A demand-and-response relationship exists between these various catalysts, although many of the forces are in fact iterative and can have reciprocal influence. 5/14/2021 Lemi Tesfa (Ph.D.) 35
Programming Change The Drivers of Change Model illustrates that changes in the larger external domains, such as shifts in the environment or marketplace, demand a response (change) in the more specific domains of business strategy and organizational design, which, in turn, require change in the human domains of culture and people s behaviors and ways of thinking. 5/14/2021 Lemi Tesfa (Ph.D.) 36
Programming Change The external domains are clearly more familiar to leaders environment, marketplace, business, and organization while the internal ones culture, behavior, and mindset are new to most, yet equally essential. 5/14/2021 Lemi Tesfa (Ph.D.) 37
SIGNIFICANCE OF CHANGE MANAGEMENT 1. Understanding environment (society, government, customers) It is important for organization to understand, assess and gauge the dynamics in its external environment in order to envisage and establish an appropriate relationship with various actors like government, customers and society. Therefore, managers by knowing the subject of change management can better be prepared to understand whatever is going on in the 5/14/2021 Lemi Tesfa (Ph.D.) 38
SIGNIFICANCE OF CHANGE MANAGEMENT 2. Objectives, strategy formulation & implementation (to develop competitive advantage) Second is consequent upon knowing the impact of change at extraneous level on its own internal dynamics, and the foremost is objective setting and seeking competitive advantage. 5/14/2021 Lemi Tesfa (Ph.D.) 39
SIGNIFICANCE OF CHANGE MANAGEMENT 3. Employees (trained, high performing work practices, reliable organization) The employees are the recipient of change plan. One such perpetual concern of senior managers is to make organization highly reliable, therefore employees ought to be trained and high performing one in today s hyper competitive world. 5/14/2021 Lemi Tesfa (Ph.D.) 40
SIGNIFICANCE OF CHANGE MANAGEMENT 4. Technology Issues Technology is considered the engine of growth in today s world. Perhaps the greatest challenge for contemporary organizations is the acquisition and integration of technology in its strategy, structure and process. As such the concern of top managers is how to avoid organization being obsolete and how to cope and absorb the impact of changing information and communication technologies which have decisively influencing production and consumption behavior. 5/14/2021 Lemi Tesfa (Ph.D.) 41
SIGNIFICANCE OF CHANGE MANAGEMENT 5. Globalization The management of international economic and political forces what is today known as internationalization and globalization is yet another important factor influencing decision making of organization. No organization or nation can stay independent and indifferent to whatever is happening at international (political) level. WTO (Does it benefit Ethiopia?) 5/14/2021 Lemi Tesfa (Ph.D.) 42
Making the Change Process Effective To manage change effectively involves the ability to create a new synthesis of people, resources, ideas, opportunities and demands. The manager needs skills rather like those of an orchestral conductor. Vision is essential and creativity paramount. Yet the capacity to create systematic plans to provide for the logistics of resources, support, training and people is central to any change programme. People must be influenced, departmental boundaries crossed or even swallowed up, new ideas accepted, new ways of working embraced, and new standards of performance and quality achieved. 5/14/2021 Lemi Tesfa (Ph.D.) 43
Making the Change Process Effective The politics of the organization are crucial. Support must be mobilized, coalitions built and supported, opposition identified and considered. People need help to cope with the stress, anxiety and uncertainties of change. Continuity and tradition must be overturned, in part, as the old is replaced by the new. Yet continuity and tradition provide people with stability, support and meaning and should not needlessly be destroyed. 5/14/2021 Lemi Tesfa (Ph.D.) 44
Making the Change Process Effective The effective management of organizational change demands attention to all these somewhat conflicting issues and challenges. So, in a period of change, synthesis is the key. In this section we shall deal with three skill areas: 1 Managing transitions. 2 Dealing with organizational cultures. 3 The politics of organizational change. 5/14/2021 Lemi Tesfa (Ph.D.) 45
Thank You! 5/14/2021 Lemi Tesfa (Ph.D.) 46