Organizational

Change
 Change
management
▹ Change resistance
▹ Change process

Power dynamics in the organization

especially relationships between change
leaders and recipients. Power is
understood not necessarily coercive or
oppressive but synonymous with social
relations which can be positive or
negative.

2
Organization change

▹ Managing change is consistently ranked as one of the most difficult and critical
tasks that leaders face.
▹ Thousands of books have been published on the topic of organization change, yet
studies find that more than 70% of change initiatives fail. Why?
▹ If change is such an important aspect of organizational life, shouldn’t we be
getting better at it over time?
▹ What makes change so difficult?
Forces of change

4
 Social False
proof consensus
effect/curse of
knowledge

Classical
Self-serving
/operant/
bias/learned
vroom
helplessness

5
 Organization
ENVIRONMENT
INPUT

FORMAL SUB-SYSTEM
Management Strategy
Goals
Structure Operations
Technology

INFORMAL SUB-SYSTEM
Culture politics
Leadership

OUTPUT
 Poor fit Good fit

Organization Organization

Environment

Environment

7
 Three key assumptions
No single
Change is both correct formula
Organizations
a process and to manage
are systems
an outcome successful
change
Change Management

This chapter
Help you:

1 2 3
Develop your Identify opportunities Overcome resistance
team’s skills for for improvement to change
navigating change
Discussion forum

▹ How have differing responses like ‘yes’ or ‘no’ affected the success of the
organization’s change initiatives in the past?
▹ Let’s hear from one or two of you about the impact of people’s positive versus
negative reactions to change. Please raise your hand if you want to share some
thoughts about this.
▹ When you and your team have the skills and mindset for navigating change, you
can approach the challenge with drive and a sense of purpose. You turn
uncertainty into opportunity—which is crucial both for your career and for helping
your company gain strategic advantage.
Your role in Change

▹ How many times has organizational change affected you and your team in the
past year? In the past month?
▹ If you’re like most people, change is happening all around you, all the time.
▹ It takes different forms:
• An employee requests a sudden leave of absence—and you have to scramble to find
a replacement.
• Your team decides to test new ways to improve efficiency.
• Your company rolls out a new technology.
▹ It used to be that change was a temporary detour from business as usual. These
days, it’s rarely a single event with clear starting and stopping points.
What change means for you

▹ The simplest definition of change is “to make or become different.”

• You make things different by leading your group in improving processes or
implementing new initiatives.
• But to do these tasks well, you and your team members also need to become
different. You can’t operate with the same mindset or follow old routines and
expect different results.
▹ In both cases, you need to adopt new practices and behaviors—and let go of
any that no longer serve their purpose.
▹ It’s not always as easy as it sounds.
Planned change

▹ It seeks to improve the ability of the organization

to adapt to changes in its environment.
▹ It seeks to change employee behavior.

CHANGE AGENTS

13
What a difference a word makes: VUCA

VOLATILE UNCERTAINTY

VUCA

COMPLEXITY AMBIGUITY
14
15
 “
▹ Case study – “Wat a burger”

16
 “
▹ Should growth strategies be
implemented in VUCA world or not?

17
 “
Pause the
growth

Identify the pros and

cons for each of the
option.

18
Business
Model
Canvas ▹ A business model describes the rationale of how an
entrepreneurial venture creates, delivers, and
captures value. This helps the founders/owners of
an entrepreneurial venture understand its external
environment and internal setup. The application of
technology and innovation helps refine and improve
the business model. A good business model helps an
entrepreneurial venture survive and sustain itself.

Create a BMC for Wat-a-burger

19
BUST THE MYTH ABOUT CHANGE - To set the stage for positive outcomes

Navigate continual Build skills for making the most of continual

change change
Empower your team to Identify and carry out opportunities for
initiate change improvement

Lead a change initiative Plan for and manage successful change projects

Address resistance to Anticipate and address factors that can derail

change change.
The Risk of Not Changing

Organizational declines occurs when companies don’t anticipate, recognize, neutralize,

or adapt to the internal and external pressures that threaten their survival.
1. Blinded stage
2. Inaction stage
3. Faulty action stage
4. Crisis stage
5. Dissolution stage
How do you think NOKIA reacted to the change when faced competition from
Samsung and Apple?
Nokia’s comeback: by embracing the emotional side of strategy

1 2 3
Increase trust by Reduce emotional Nudge top managers
defining new attachment to the to pay attention to
conversational prevailing strategy data that conflicts
norms. by generating many with their gut
new options – not feelings.
just one alternative.
Managing people’s emotions is often referred
to as the ‘soft stuff’, while questions of
strategy are the ‘hard stuff’. But our deep dive
into Nokia’s experience shows that these two
aren’t as separate as many assume. In fact
paying more attention to the soft stuff may
help boards and top management teams
increase their ability to think strategically in
times of major disruption and stress.
Types and approaches of organizational change

▹ Organizations typically respond to the challenges of new technologies,

new competitors, new markets and demands for greater performance with
various programs, each designed to overcome obstacles and enhance
business performance.

Structural Cost
change cutting

Process Cultural
change change
25
Two different approaches to change

▹ While there are many types of change programs,

two very different goals typically drive a change
initiative :
▸ Near term economic improvement
▸ Improvement in organizational development

26
Theory E: An economic approach

▹ The explicit goal of Theory E change is to dramatically and rapidly increase

shareholder value, as measured by improved cash flow and share price.
▹ Popular notions of employee participation and the “learning organization"
take a back seat to this overarching goal.
▹ Financial crisis is usually the trigger for this approach to change. Driven to
increase shareholder value, Theory E proponents rely heavily on
mechanisms likely to increase short-term cash flow and share price:
performance bonuses, headcount reductions, asset sales, and strategic
reordering of business units.

20/70/10 rule, Pareto Law

27
Theory O: An organizational capabilities approach

▹ The most successful and enduring organizations are those with dynamic, learning-
oriented cultures and highly capable employees. The goal of Theory O change is to
develop an organizational culture that supports learning and a high- performance
employee base.

▹ Companies that follow this approach attempt to invigorate their cultures and
capabilities through individual and organizational learn- ing. And that requires high levels
of employee participation, flatter organizational structure, and strong bonds between the
organization and its people.

▹ Because employee commitment to change and improvement are vital for Theory O
change to work, implicit contracts with employees are considered too important to break-
quite the opposite from what happens in the Theory E organization.
28
Theory O

▹ An organization that banks on its culture and people to drive financial

success is potentially incompatible with concentrated power and direction from
the top. But leaders of Theory O change are less interested in driving the
success themselves than in encouraging participation within the ranks, and in
fostering employee behaviors and attitudes that will sustain such change.

Which is best – or most

appropriate? Why?

29
30
 Kruger’s Iceberg Model of Change

▹ Iceberg Model of Change Management explains further that there are four types of
people which are hiding under the water and are part of larger portion of iceberg.
▹ These four types of people are:
▹ Promoters: They are the people who are positive about the change they support and
promote change
▹ Potential Promoters: They are agreed with change and have a potential to support and
implement change but they are not clear in their thinking and some what reluctant about
change.
▹ Opponents: They are the people who are totally against the idea of change and they
reject it and are the main barrier of change.
▹ Hidden Opponents: They are the people who are against the change deep inside of their
heart and mind but they are not open about it.
 “
▹ Case study – Managing Change

32
Dimensions of Change Theory E Theory O Theories E and O
combined
Goals Maximize shareholder value Develop organizational Embrace the paradox
capabilities between economic value and
organizational capability
Leadership Manage change from the top Encourage participation from Set direction from the top
the bottom up and engage the people
below
Focus Emphasize structure and Build up corporate culture: Focus simultaneously on the
systems employees’ behavior and hard (structure and systems)
attitudes. and soft (corporate culture).
Process Plan and establish programs Experiment and evolve Plan for spontaneity

Reward system Motivate through financial Motivate through Use incentives to reinforce
incentives commitment – use of fair change but not to drive it
exchange
Use of consultants Consultants analyze Consultants support Consultants are expert
problems and shape management in shaping their resources who empower
solutions own solutions employees

33
 Organization Development – setting the context

Organization development is a systematic process for applying behavioral science

principles and practices in organizations to increase individual and organizational
effectiveness.
In order to build organizational capabilities to compete with international rivals:
Productivity, product quality, customer service, business ethics, and innovation
were some of the areas of focus.
Flexibility and adaptability were considered virtues when it came to coping with the
accelerating pace of change.
 Overview (Cont.)

OD programs are long-term planned, sustained efforts. Such efforts begin when a leader identifies an
undesirable situation and seeks to change it.

The two major goals of OD programs are (1) to improve the functioning of individuals, teams and the total
organization, and (2) to teach organizations members how to continuously improve their own
functioning.

Organization development deals with the gamut of “people problems” and “work systems problems” in
organizations; poor morale, low productivity, poor quality, interpersonal conflict, intergroup conflict,
unclear or inappropriate goals, inappropriate leadership styles, poor team performance, inappropriate
organization structure, poorly designed tasks, inadequate response to environmental demands, poor
customer relations, inadequate alignment among the organization’s strategy, structure, culture, and
processes, and the like.
Characteristics of Organization Development

▹ Organizational development brings about organizational change in a planned manner.

▹ It takes a collaborative approach to problem-solving by involving all stakeholders affected by the changes to
increase their participation.
▹ It increases the effectiveness of organizations by appealing to the humanistic values within the people who
make up the organization.
▹ It considers the organization as an open system that is in constant interaction with its environment, with
interdependencies and interrelationships between the various organizational elements.
▹ Organizational development generates data using primary and secondary research techniques. This data then
provide the basis for the planning of further action to be taken in the interest of the organization.
▹ It develops programs that emphasize on improvements in organizational efficiency.
 OD Action Research Model

▹ The action research model as applied in OD consists of

▸ (1) a preliminary diagnosis,
▸ (2) data gathering from the client group,
▸ (3) data feedback to the client group,
▸ (4) exploration of the data by the client group,
▸ (5) action planning by the client group,
▸ (6) action taking by the client group, and
▸ (7) evaluation and assessment of the results of the actions by the client
group—with an OD practitioner acting as a facilitator throughout the
process.
OD Action Research Model

▹ OD can be defined as a process of diagnosing, taking action, re-

diagnosing, and taking new action.
▹ This process assumes a distinct form in OD called action research.
▸ Action research is essentially a mixture of three ingredients: the
highly participative nature of OD,
▸ the consultant nature of OD,
▸ the consultant role of collaborator and co-learner,
▸ and the iterative process of diagnosis and action.
 Thinking about OD Interventions

Blake and Mouton have continued to refine the nature of interventions and
proposed a theory and typology for the entire consultation field.
The first is what the consultant does, that is, which of five basic types of
interventions the consultant uses—
Acceptant: (the consultant gives the client a sense of worth, value, acceptance, and
support);
Catalytic: (the consultant helps the client generate data and information to
restructure the client’s perceptions);
Confrontation: (the consultant points out value discrepancies in the client’s beliefs
and actions);
Prescription: (the consultant tells the client what to do to solve the problem)
Theories and Principles: (the consultant teaches the client relevant behavioral
science theory so the client can learn to diagnose and solve his or her own
problems).
Types of change

Transformational
Tactical Change
Change
Top-down

ORIGIN

Evolutionary Revolutionary
Change Change

Bottom-up

SCOPE
Incremental Radical
 Tactical change: designed Transformational change:
to address specific issue in the intended impact is
the organization, implies a significant. Leaders
shift that can be targeted regularly devote a great
and quickly implemented. deal of resources to
Rarely a organization wide managing transformational
change and implemented changes because such
when the leader is initiatives are often directly
confident tied to the leader’s strategic
goals.
INCREMENTAL &
OPERATIONAL STRATEGY & CULTURE

Evolutionary change: rely

on ideas from individuals Revolutionary change:
and subunits within the these changes emerge
organization. Leader’s role from within the organization
is to provide resources, and reaches across the
remove barriers and offer organization.
guidance.
RAPID &DISRUPTIVE
GRADUAL &
CONTINUOUS

41
 “
▹ Reading – “Change for change’s sake”

42
Change for change’s sake

Deadening
Formation
impact of
of silos
routine

Emergence
Knowing
of
when to
entrenched
change
interests

43
“Managers can’t do it all”

▹ In recent decades sweeping reengineering, digitization, and agile

initiatives—and lately the move to remote work—have dramatically
transformed the job of managers.
▹ Change has come along three dimensions: power, skills, and structure.
Managers now have to think about making their teams successful, rather
than being served by them; coach performance, not oversee tasks; and
lead in rapidly changing, more-fluid environments.
▹ These shifts have piled more responsibilities onto managers and required
them to demonstrate new capabilities.
Transition in the role of manager

Traditional role of
Management layers Climate of
managers no more
eliminated psychological safety
in place
Upgrading employee skills in light of
Doubled size of the team with most Definition of power, status and skills
constant changes which expects her
working on cross division projects led changed completely. Demand for
to demonstrate endless amount of
by others more people leaders.
empathy.

“People join companies and leave

No single office, and to know more
their managers”. Something has
about her people she has to join Expected to seek out diverse talent.
clearly broken: if managers remain
stand-ups. No longer feels in touch Not trained to handle the emotional
essential but their traditional role has
and yet has the same energy.
become obsolete, then its time for
responsibilities.
change.
Four defining business movements

Digitization: it democratized access to both

Process reengineering: focused on eliminating
information and people, but in doing so it
bureaucracy and boosting operational
undermined traditional sources of managerial
efficiencies.
power.

Four defining business

movements

Agile movement: it aimed to shorten timelines

and turbocharge innovation by using internal Embracing the possibilities of flexible work: it
marketplaces across whole organizations to dramatically altered how and where work was
match skills to work and to rapidly assemble done.
project teams on an as needed basis.
Impact of transition for “managerial role”

Power Skills Structure

In a power shift, managers have In a skills shift, they’re In a structural shift, they
to think about making teams expected to coach have to lead in more fluid
successful, not being served by performance, not oversee environments.
them. tasks.
Ten principles to guide developmental initiatives
within organizations (soft stuff of change)
▹ Encourage cooperation ▹ Promote personal growth:
▹ Organize for change physical attributes and
▹ Anticipate the future training & practice.
▹ Remain flexible ▹ Empower people
▹ Create distinctive spaces ▹ Reward high performers
▹ Diversify your workforce – ▹ Foster a leadership culture.
create an inclusive
environment
‘Hard Side’ of the Change Management

▹ Companies must pay as much attention to the hard side of change

management as they do to the soft aspects.
▹ Managing change is tough, but part of the problem is that there is little
agreement on what factors most influence transformation initiatives.
▹ Ask five executives to name the one factor critical for the success of these
programs, and you’ll probably get five different answers. So, what to do and
how to undertake the process of change?

50
Importance of hard factors of change management

▹ First, companies are able to measure them in direct or indirect ways.

▹ Second, companies can easily communicate their importance, both within
and outside organizations.
▹ Third, and perhaps most important, businesses are capable of influencing
those elements quickly.

Identify the three main “hard factors” of

change?

51
Hard factors of change management

Performance
integrity

Project Transformational Employee

duration commitment
initiative

Effort

52
Importance of DICE Factors

▹A short project led by a skilled, motivated, and cohesive team,

championed by top management and implemented in a department that
is receptive to the change and has to put in very little additional effort.
▹ A long, drawn-out project executed by an inexpert, unenthusiastic, and
disjointed team, without any top-level sponsors and targeted at a
function that dislikes the change and has to do a lot of extra work

DICE factors carefully to figure

out if their change programs will
fly—or die.
53
DICE Factors

▹ D. The duration of time until the change program is completed if it has a

short life span; if not short, the amount of time between reviews of
milestones.
▹ I. The project team’s performance integrity; that is, its ability to
complete the initiative on time. That depends on members’ skills and
traits relative to the project’s requirements.
▹ C. The commitment to change that top management (C1) and employees
affected by the change (C2) display.
▹ E. The effort over and above the usual work that the change initiative
demands of employees.

54
Duration

▹ The longer an initiative carries on, the more likely it is to ____________?

▹ It is assumed that the longer an initiative carries on, the more likely it is to
fail—the early impetus will peter out, windows of opportunity will close,
objectives will be forgotten, key supporters will leave or lose their
enthusiasm, and problems will accumulate.
▹ However, contrary to popular perception, our studies show that a long
project that is reviewed frequently is more likely to succeed than a short
project that isn’t reviewed frequently. Thus, the time between reviews is
more critical for success than aproject’s life span.

55
Duration

▹ How frequently do you think the change projects

should be reviewed?
▹ Whether reviews should be scheduled even more frequently depends on how
long executives feel the project can carry on without going o ff track. Complex
projects should be reviewed fortnightly; more familiar or straightforward
initiatives can be assessed every six to eight weeks.
▸ Scheduling milestones
▸ Review of such a milestone

56
Scheduling milestones

▹ What are the benefits of scheduling milestones?

Give an example.
▹ Scheduling milestones and assessing their impact are the best way by which
executives can review the execution of projects, identify gaps, and spot new risks.
▸ The most effective milestones are those that describe major actions or achievements rather than day-to-day
activities.
▸ They must enable senior executives and project sponsors to confirm that the project has made progress
since the last review took place.
▸ Good milestones encompass a number of tasks that teams must complete.

57
Review of milestones

▹ How do you think you should plan the reviews?

▸ It should be a formal occasion during which senior-management sponsorsand the project team evaluate the
latter’s performance on all the dimensions that have a bearing on success and failure.
▸ They should also determine whether achieving the milestone has had the desired effect on the company;
discuss the problems the team faced in reaching the milestone; and determine how that accomplishment will
affect the next phase of the project.

▹ Sponsors and team members must have the power to address weaknesses.
▹ When necessary, they should alter processes, agree to pushfor more or
different resources, or suggest a new direction.
▹ At these meetings, senior executives must pay special attention to the
dynamics within teams, changes in the organization’s perceptions about the
initiative, and communications from the top.
58
Integrity

▹ Which people should be part of a change project

in an organization?
▹ By performance integrity, we mean the extent to which companies can rely
on teams of managers, supervisors, and staff to execute change projects
successfully.
▹ Can you develop a flawless team for change management?
▹ Senior executives are often reluctant to allow star performers to join change
efforts because regular work can suffer. Is it right?

59
Integrity

▹ But since the success of change programs depends on the quality of teams,
companies must free up the best staff while making sure that day-to-day
operations don’t falter.
▹ Since project teams handle a wide range of activities, resources, pressures,
external stimuli, and unforeseen obstacles, they must be cohesive and well
led.

They must clarify members’ roles, commitments,

Senior executives ask people and accountability. They must choose the team
at the watercooler if a project leader and, most important, work out the team’s
team is doing well? composition.

60
Integrity

▹ How do you think we can go about selecting members for a change

management project?
▹ Reference
▹ Volunteerism
▹ Leadership skills
▸ Problem solving skills
▸ Result oriented
▸ Methodical with high tolerance of ambiguity
▸ Organizationally savvy
▸ Willing to accept the responsibility for decisions
▸ Highly motivated but not craving the limelight
61
Commitment

▹ Companies must boost the commitment of two different groups of people if

they want change projects to take root, who are they?
▸ They must get visible backing from the most influential executives (what
we call C1), who are not necessarily those with the top titles.
▸ Takeinto account the enthusiasm—or often, lack thereof—of the people
whomust deal with the new systems, processes, or ways of working (C2).

No amount of top-level
support is too much

62
Commitment – situation

▹ In 1999, when we were working with the CEO of a consumer products

company, he told us that he was doing much more than necessary to display
his support for a nettlesome project. When we talked to line managers, they
said that the CEO had extended very little backing for the project. They felt
that if he wanted the project to succeed, he would have to support it more
visibly!

A rule of thumb: When you feel that you are talking up a change
initiative at least three times more than you need to, your managers
will feel that you are backing the transformation.

63
Effort

▹ How do you think managers must divide the

work of change management initiatives on the
employees?
▹ When companies launch transformation efforts, they frequently don’t
realize, or know how to deal with the fact, that employees are already busy
with their day-to-day responsibilities.
▹ According to staffingtables, people in many businesses work 80-plus-hour
weeks. If, on top of existing responsibilities, line managers and staff
have to deal withchanges to their work or to the systems they use, they
will resist. – SO, WHAT IS THE SOLUTION??
64
Effort - strategies

▹ Project teams must calculate how much work employees will have to do beyond their
existing responsibilities to change over to new processes.
▹ Ideally, no one’s workload should increase more than 10%.
▹ To minimize the dangers, project managers should use a simple metric like the
percentage increase in effort the employees who must cope with the new ways feel
they must contribute.
▹ Also check if the additional effort they have demanded comes on top of heavy workloads
and if employees are likely to resist the project because it will demand more of their scarce
time.
▹ Companies can start by ridding these employees of discretionary or nonessential
responsibilities.
▹ Another way to relieve pressure is for the company to bring in temporary workers, like
retired managers, to carry out routine activities or to outsource current processes until the
changeover is complete.
65
66
Calculating DICE Scores

▹ Duration [D]

▹ Ask: Do formal project reviews occur regularly? If the project will take
more than two months to complete, what is the average time between
reviews?
▹ Score: If the time between project reviews is less than two months, you
should give the project 1 point. If the time is between two and four
months, you should award the project 2 points; between four and eight
months, 3 points; and if reviews are more than eight months apart, give
the project 4 points.
67
Calculating DICE Scores

▹ Integrity of Performance [I]

▹ Ask: Is the team leader capable? How strong are team members’ skills and
motivations? Do they have sufficient time to spend on the change initiative?
▹ Score: If the project team is led by a highly capable leader who is respected by
peers, if the members have the skills and motivation to complete the project in the
stipulated time frame, and if the company has assigned at least 50% of the team
members’ time to the project, you can give the project 1 point. If the team is
lacking on all those dimensions, you should award the project 4 points. If the
team’s capabilities are somewhere in between, assign the project 2 or 3 points.

68
Calculating DICE Scores

▹ Senior Management Commitment [C1]

▹ Ask: Do senior executives regularly communicate the reason for the change and
the importance of its success? Is the message convincing? Is the message
consistent, both across the top management team and over time? Has top
management devoted enough resources to the change program?
▹ Score: If senior management has, through actions and words, clearly
communicated the need for change, you must give the project 1 point. If senior
executives appear to be neutral, it gets 2 or 3 points. If managers perceive senior
executives to be reluctant to support the change, award the project 4 points.

69
Calculating DICE Scores

▹ Local-Level Commitment [C2]

▹ Ask: Do the employees most affected by the change understand the reason
for it and believe it’s worthwhile? Are they enthusiastic and supportive or
worried and obstructive?
▹ Score: If employees are eager to take on the change initiative, you can
give the project 1 point, and if they are just willing, 2 points. If they’re
reluctant or strongly reluctant, you should award the project 3 or 4 points.

70
Calculating DICE Scores

▹ Effort [E]
▹ Ask: What is the percentage of increased effort that employees must make to
implement the change effort? Does the incremental effort come on top of a heavy
workload? Have people strongly resisted the increased demands on them?
▹ Score: If the project requires less than 10% extra work by employees, you can give
it 1 point. If it’s 10% to 20% extra, it should get 2 points. If it’s 20% to 40%, it
must be 3 points. And if it’s more than 40% additional work, you should give the
project 4 points.

71
Calculating DICE Scores

▹ Executives can combine the four elements into a project score. When we conducted a
regression analysis of our database of change efforts, we found that the combination that
correlates most closely with actual outcomes doubles the weight given to team performance
(I) and senior management commitment (C1). That translates into the following formula:

▹ DICE Score = D + (2 x I) + (2 x C1) + C2 + E

▹ In the 1-to-4 scoring system, the formula generates overall scores that range from 7 to 28.
Companies can compare a project’s score with those of past projects and their outcomes to
assess if the project is slated for success or failure. Our data show a clear distribution of
scores:

72
Calculating DICE Scores

▹ Scores between 7 and 14: The project is very likely to succeed. We call
this the Win Zone.
▹ Scores higher than 14 but lower than 17: Risks to the project’s success are
rising, particularly as the score approaches 17. This is the Worry Zone.
▹ Scores over 17: The project is extremely risky. If a project scores over 17
and under 19 points, the risks to success are very high. Beyond 19, the
project is unlikely to succeed. That’s why we call this the Woe Zone.

73
74
Applying the DICE Framework – Prioritizing the need for change

Manage
portfolio of
projects

75
Types of change

Transformational
Tactical Change
Change
Top-down

ORIGIN

Evolutionary Revolutionary
Change Change

Bottom-up

SCOPE
Incremental Radical
Discussion on Reading 1 - Campaigning for Change

Large scale change initiatives often collapse under

the weight of their own complexity. To bring order to
the chaos, organize the effort into three coordinated
campaigns: political, marketing and military.
Campaigning for change

Political Marketing Military

campaign campaign campaign
Secure supply
Listen in
Forge alliances lines
Work with lead Choose
customers beachheads
Shift
organizational Develop a Creating a war
structures theme room
78
Defining organizational change
▹ Organizational change may be defined as the adoption of a new idea or a
behaviour by an organization.
▹ It is the way of altering an existing organization to increase organizational
effectiveness for achieving its objectives.
▹ Organizational change is primarily structural in character and it is designed to
bring about alterations in organizational structure, methods and processes.
▹ Successful organizational change must continually focus on making organizations
responsive to major developments like changing customer preferences,
regulatory norms, economic shocks and technological innovations.
What is change management?

▹ Change management is the systematic approach and application of

knowledge, tools and resources to deal with change.
▹ It involves defining and adopting corporate strategies, structures,
procedures and technologies to handle changes in external conditions and
the business environment.
▹ Effective change management goes beyond project management and
technical tasks undertaken to enact organizational changes and involves
leading the “people side” of major change within an organization.
▹ The primary goal is to successfully implement new processes, products and
business strategies while minimizing negative outcomes.
 Leading change

▹ Leadership is nothing if not about change.

▹ If there is no change, one could argue there is no leadership; we don’t talk
about leadership for the status quo, or maintenance leadership.
▹ Change and its related concepts and principles are inextricably intertwined
with leadership and its concepts.
▹ In a world that continues to change rapidly, effective leaders are masters
of the change process; they understand, embrace, and lead change.
▹ Ineffective leaders struggle with change and find that many of their
efforts at managing change fail.

81
Model of change

▹ Over the course of our lives, we become comfortable with a certain set of
behaviors.
▹ We have used them before, they seem to work well enough, and so they
become a part of our common routines.
▹ This is also true of organizations. This set of comfortable routines
becomes a box for us, a box that allows us to be productive and to move
forward efficiently without testing everything we do, but also a box that
constrains us and inhibits our thinking about and trying new things.
▹ We can call this set of routines our comfort zone or our baseline behavior
or our organizational culture

82
General model of change

BASELINE BEHAVIOR

How Our Comfort Zones are Perpetuated into

BaselineBehavior

The danger is that these “comfort zones” can reduce our flexibility—in which case it’s just a matter of time until the
market shifts and we’re leftbehind.

Unless these investments in our historical means to success build an enhanced ability to adapt to our
environment into our personal and organizational systems, they become strategic blockades rather than sources
of competitive advantage.
Challenges

▹ We all want to think well of ourselves.

▹ Our minds develop remarkable techniques for maintaining a positive self-image. If
what we did in the past worked and helped us succeed in some sense, then we
seek, naturally, to maintain that positive self- image.
▹ This desire to think well of ourselves connects to our view of the outside world. If,
after long periods of time receiving confirming data about our baseline behavior,
we get some disconfirming data, we are faced with a choice about what to do
about it.

Disconfirming data is a
challenge to ourselves

84
How Most People Deal with Disconfirming Data
WHAT WILL YOU DO
REDUCE YOUR
DISCOMFORTING DATA?

HURT
or PAIN DENY
DISTORT
DISCOUNT
IGNORE

CURRENT Dis-con-
COMFORT ZONE ENCOUNTER firming
BASELINE
NEW DATA data
BEHAVIOR

85
Disconfirming to experimentation

▹ If we accept the disconfirming data, that is, if we recognize the need to change our
behavior, then we have to do something about it.
▹ This will involve, by definition, some experimentation on our part. We will be
electing to try out things we haven’t done before. For most people, that’s getting
out of their comfort zone and trying something new.
▹ This is threatening, scary, and undertaken with trepidation. We try the experiment
and that, in turn, generates more feedback data. If the data disconfirm the validity
of the experiment (even if we didn’t do the experiment “correctly”), we are likely
to abandon the new approach, and our behavior will snap back to the former
baseline.
▹ Think about your personal efforts to change?
86
General Change Process

87
Role of outside help in managing change

▹ There are several places where outside help can greatly assist a person or an
organization in recognizing disconfirming data and acting productively on it.
▹ First, assembling and presenting the disconfirming data itself is something that
outsiders can often do better than an individual or employees working within a
firm.
▹ By virtue of living in our own comfort zones, it’s often hard to see how we might
be overlooking (discounting, distorting, or ignoring) bits of disconfirming data.
Our long-established behaviors, our habits, become invisible to us. If we tend to
be defensive (again, as a person or an organization), outside infusions of
information from consultants, physicians, and friends can help us to view the data
differently, with more seriousness and a greater sense of validity.

88
Role of outside help in managing change

▹A second place where outside help is of great assistance is in identifying

alternative courses of action. Because we have been operating in our comfort
zone, we don’t see clearly what other ways of doing things there might be. Getting
a consultant or a new executive from another industry can be very helpful in
developing a new view of what’s possible.
▹ A third place where external viewpoints are helpful is in interpreting the data
from the new experiment. If we are defensive, we may interpret the new data
negatively and even subconsciously manage the experiment so that it fails. This
happens in business, too. Outside monitors can help us be honest in our attempts at
new experiments and at evaluating the data from them until we get our own
bearings and are able to see things more objectively.

89
Role of outside help in managing change

90
Role of outside help in managing change

Leading the Change Process

• Clarifying Disconfirming Data
• Building a Change Team
• Designing and Managing Change Experiments
• Relentlessly reinforcing the results with the new vision.

91
Classic and Current models of change

▹ Do you think compliance can be a good model to

bring the desired change?

92
Michael Beer
change model
Cv=Dsq*Mf*Pc>Cc

93
Forms of Denial

Denying the message Denying the messenger

DENIAL

Denying my ability to do
Denying the relevance of
anything about the
the message
message
94
Responses to change – by changees

Disconfirming
data
Denial Anger

Bargaining Despair

Experimentation Hope
Integration

95
Typical change cycle

Complacency /Turbulence /Resistance /Small Wins /Consolidation /New Baseline

96
Processes for Planned Organization Change

• Lewin’s process model

– Organizations should approach change as a multi-stage process
▪ Unfreezing
o From the old state of being, there’s an awareness of a need to change
▪ Change
o Movement from the old way of doing things to a new way
▪ Refreezing
o Process of making new behaviors relatively permanent and resistant to
further change, results in the new state of being

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Lewin’s Process of Organization Structure

In Lewin’s three-step model, change is a systematic process of

transition from an old way of doing things to a new way. Inclusion of
an “unfreezing” stage indicates the importance of preparing for the
change. The “refreezing” stage reflects the importance of following
up on the change to make it permanent.

Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Thirteenth Edition. © 2020 Cengage. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Kotter’s eight step change management process

Establish a Generate
sense of short term Never let up
urgency wins

Create a Empower Incorporate

guiding broad based changes into
coalition action the culture

Communicate
Develop a
the vision for Finish
change vision
buy-in
The Four P’s

▹ “Four Ps” of change: Purpose (derived presumably from

some felt Pain), Picture, Plan, Part.
▹ This is, in essence, a manager’s view of Beer’s equation: if
people don’t see a purpose for the change, if they don’t see
where they’re trying to go, if they don’t see a plan for how to
get there, and if they don’t see a part that they can play in the
plan, they’re not likely to participate in the change effort—
and it will flounder or founder.

100
The MIT Model

▹ MIT have developed a powerful seven-step

model of managing change. They suggest that
change is a three-dimensional phenomenon:
▸ A developmental process of 4 phases
▸ Seven tools for effective change
▸ Importance of managing resistance to change

101
The MIT Model

The MIT Change Management Skill

Sets
Traditional Exploratory
phase phase

1. Persuasive communication
2. Participation
3. Use of expectations
4. Role modeling
Generative Internalization 5. Using extrinsic rewards
process phase
6. Making structural and
organizational changes
7. Coercing

102
Principles of Effective Leadership

▹ 1. Leadership by definition is about managing change.

▹ 2. Effective leaders understand and have masterful skills in managing the change process.
▹ 3. Changing is like dying a little death: part of us must be let go and a new part born.
▹ 4. Change begins with disconfirming data. We have a choice about how we respond to that data, whether to ignore it
or consider it.
▹ 5. Recognizing and managing various change effort roles—including change leader, change agent, change manager,
change model and changee—are helpful in mounting a successful change effort.
▹ 6. Disconfirming data often leads to a series of predictable reactions to the change process: denial, anger, bargaining,
despair, experimentation, hope, and integration into a new way of doing things. People can get stuck all along the way, and
often outside help is useful in moving through each phase.
▹ 7. People need strong and consistent reinforcement in the experimentation phase in order to settle on the new way of
doing things.
▹ 8. Outside agents are often very helpful in managing change because they can see things that have become invisible
habits to those in the change arena.
▹ 9. Level Three, or value level change, is the most enduring.

103
Questions for reflection

▹ 1. What kinds of disconfirming data have you encountered either personally or

in your work group over the last six months? What was your response to it?
▹ 2. What change roles are you playing in your work group? What data do you
see that maybe others don’t see, that invite you to become a change leader?
▹ 3. What has been helpful for you in the past when you have needed support
getting through the reactions to change process? How might you provide those
functions to others?
▹ 4. List the most significant changes you’ve made in your life. Think through the
process that you used to navigate each change. How well did you manage those
changes? What did you learn from them and what would you like to know how to
do better?
104
Case study: Air
India

105