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Managing ChangeManaging Change

Lecture 3Lecture 3Change Strategies and Change Strategies and

InterventionsInterventions

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Lecture OutlineLecture Outline

IntroductionIntroduction Issue related to changeIssue related to change Models for change Models for change Intervention strategiesIntervention strategies Organizational development (OD)Organizational development (OD) Business Process Re-engineering (BPR)Business Process Re-engineering (BPR) Turnaround strategyTurnaround strategy Action research model of changeAction research model of change

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INTRODUCTIONINTRODUCTION

• The process of change has an impact The process of change has an impact on the whole Organizationon the whole Organization

• The change process influences:The change process influences:

- What the organization does- What the organization does

- The way the organization does - The way the organization does thingsthings

- The way all the business units - The way all the business units communicate and share informationcommunicate and share information

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The change processThe change process

Old Organization

New Organization

Change Management

Human Resource Management

Corporate Development

ITQuality Management

Project Management

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• Hard problemsHard problems – technical or – technical or mechanistic which are usually mechanistic which are usually scientific or engineering in naturescientific or engineering in nature

• Soft problemsSoft problems – that which – that which involves people in which emotional involves people in which emotional responses predominateresponses predominate

• Most problems fall between the Most problems fall between the two abovetwo above

ISSUE RELATED TO CHANGE

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Hard Problems Hard Problems VS.VS. Soft Soft ProblemsProblems• Quantifiable Quantifiable

objectives, constraintsobjectives, constraints

• System orientationSystem orientation

• Limited number of Limited number of potential solutionspotential solutions

• Clear problem Clear problem definition.definition.

• Clear resource req.Clear resource req.

• Reasonable staticReasonable static

• Known time-scalesKnown time-scales

• Bounded problem with Bounded problem with min. ext. interactionsmin. ext. interactions

• Subjective & at best Subjective & at best semi quantifiable semi quantifiable objectives, constraintsobjectives, constraints

• People orientationPeople orientation• Wide range of Wide range of

potential solutionspotential solutions• Unclear problem Unclear problem

definition.definition.• Unclear resource req.Unclear resource req.• Dynamic environmentDynamic environment• Fuzzy time-scalesFuzzy time-scales• Unbounded problem Unbounded problem

with many complex with many complex ext. interactionsext. interactions

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MODELS FOR CHANGEMODELS FOR CHANGE• Many models have been generated Many models have been generated

since change have been recognized since change have been recognized as a mainstream management as a mainstream management issue.issue.

• Before proceeding with the more Before proceeding with the more popular change models, it is useful popular change models, it is useful to go through the works of earlier to go through the works of earlier change theorists.change theorists.

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Kurt Lewin’s 3 Phase ModelKurt Lewin’s 3 Phase Model

• UNFREEZINGUNFREEZING – understand the need – understand the need

• MOVEMENTMOVEMENT – the new plan or system – the new plan or system introducedintroduced

• REFREEZINGREFREEZING – New patterns or behavior & – New patterns or behavior & techniques become part of the ongoing techniques become part of the ongoing organizational processorganizational process

Source: Robbins, S.P. and Coulter, M. (2007). Management, 9th Edition. Prentice-Hall, USA.

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Goodstein & Burke’s 3 LevelsGoodstein & Burke’s 3 Levels

1)1) Changing the skills, values, Changing the skills, values, attitudes & behaviorattitudes & behavior

2)2) Changing organisational Changing organisational structures & systemsstructures & systems

3)3) Changing the organisational Changing the organisational climate or interpersonal skills eg. climate or interpersonal skills eg. The decision-making processThe decision-making process

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Rosabeth Moss Kanter Rosabeth Moss Kanter

In her book In her book ‘Change Masters’‘Change Masters’ – she – she looks at the conditions necessary looks at the conditions necessary to encourage innovation, such as:to encourage innovation, such as:

• Creating visionCreating vision

• Enrichment of skills & knowledgeEnrichment of skills & knowledge

• Seizing of opportunitiesSeizing of opportunities

• Skill to put to practice ideasSkill to put to practice ideas

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Tom PetersTom Peters

• The most influential management The most influential management guru of the 1990’sguru of the 1990’s

• His vision centered on the shift His vision centered on the shift from hierarchical bureaucratic from hierarchical bureaucratic management to team-centered, management to team-centered, flexible structuresflexible structures

• Advocated proactive change at Advocated proactive change at every level involving every every level involving every employeeemployee

• Refer to table on page 91-93Refer to table on page 91-93

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• Systems Intervention StrategySystems Intervention Strategy – – developed by Open Business Schooldeveloped by Open Business School

• Total Project Management modelTotal Project Management model – – developed by Glasgow Business Schooldeveloped by Glasgow Business School

• All intervention models , despite All intervention models , despite their diff. terminology , follow the their diff. terminology , follow the same basic 3 phase approach, same basic 3 phase approach, which are:which are:

INTERVENTION STRATEGIESINTERVENTION STRATEGIES

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• Definition phaseDefinition phase – – involves defining involves defining objectives, collecting data & examining the objectives, collecting data & examining the problem problem environmentenvironment

• Evaluation and design phaseEvaluation and design phase – – determining which research procedures to determining which research procedures to use, analyzing data to produce potential use, analyzing data to produce potential solutions, evaluating potential solutions solutions, evaluating potential solutions against performance objectives and against performance objectives and choosing the best solutionchoosing the best solution

• Implementation phaseImplementation phase – – implementing the solution and appraising implementing the solution and appraising & monitoring& monitoring

3 Phases of Intervention Strategy

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• Where are we now?Where are we now?

• Where do we want to be?Where do we want to be?

• How can we get there?How can we get there?

• How will we know when we get How will we know when we get there?there?

• What will it be like? andWhat will it be like? and

• Can we carry the process through?Can we carry the process through?

The questions asked when working through the systems intervention model:

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The range of analysis The range of analysis techniquestechniques

• Examination & manipulation of systems Examination & manipulation of systems diagramsdiagrams

• Physical or computer simulationsPhysical or computer simulations• Investment analysisInvestment analysis• Cost-benefit analysisCost-benefit analysis• Network analysisNetwork analysis• Cash flow analysisCash flow analysis• Strategy analysisStrategy analysis• Cultural analysisCultural analysis• Experimental techniques etcExperimental techniques etc

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3 ways of Implementation 3 ways of Implementation

• Pilot studiesPilot studies – chance to test – chance to test before implementationbefore implementation

• Parallel runningParallel running – simultaneous – simultaneous running of old and newrunning of old and new

• Big bangBig bang – Immediate takeover – Immediate takeover

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ORGANIZATIONAL ORGANIZATIONAL DEVELOPMENT (OD)DEVELOPMENT (OD)

• A distinct area within the field of A distinct area within the field of organizational science that focuses on the organizational science that focuses on the planned and controlled change of planned and controlled change of organizations in desired directions – best organizations in desired directions – best suited for soft issuessuited for soft issues

• A planned, systematic process of change that A planned, systematic process of change that uses behavioral science knowledge and uses behavioral science knowledge and techniques to improve an organization’s techniques to improve an organization’s health and effectiveness through its ability to health and effectiveness through its ability to adapt to the environment, improve internal adapt to the environment, improve internal relationships, and increase learning and relationships, and increase learning and problem‑solving capabilities (Daft, 2008)problem‑solving capabilities (Daft, 2008)

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Facts to remember about Facts to remember about ODOD

• Changes all aspects of an OrganizationChanges all aspects of an Organization• Based on a belief that change can be Based on a belief that change can be

plannedplanned• It is a slow processIt is a slow process• Requires assistance from outside the Requires assistance from outside the

OrganizationOrganization• It is process oriented rather than goal-It is process oriented rather than goal-

oriented oriented

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The 7 stages of the OD modelThe 7 stages of the OD model

1)1) Agree organizational purpose/missionAgree organizational purpose/mission

2)2) Assess the outer and inner contentsAssess the outer and inner contents

3)3) Gather dataGather data

4)4) Gain involvementGain involvement

5)5) Set targets and formulate proposalsSet targets and formulate proposals

6)6) Implement change and development Implement change and development activitiesactivities

7)7) Evaluate and reinforce changesEvaluate and reinforce changes

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Techniques used in ODTechniques used in OD

• Survey feedbackSurvey feedback

• Team-buildingTeam-building

• Sensitivity training and analysisSensitivity training and analysis

• Confrontational meetingsConfrontational meetings

Refer to page 104/5 for a case study Refer to page 104/5 for a case study on ODon OD

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Techniques used in ODTechniques used in OD (cont.)(cont.)

Source: Robbins, S.P. and Coulter, M. (2007). Management, 9th Edition. Prentice-Hall, USA.

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BUSINESS PROCESS RE-BUSINESS PROCESS RE-ENGINEERING (BPR)ENGINEERING (BPR)

• Defined as the process consisting of Defined as the process consisting of taking all the activities of a business taking all the activities of a business back to their basic elements and back to their basic elements and restructuring them to create a more restructuring them to create a more efficient and effective whole, often efficient and effective whole, often involving delayering or reduction in involving delayering or reduction in management layers and in productsmanagement layers and in products

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BPR’s impact on BPR’s impact on OrganizationsOrganizations• Cover a number of functionsCover a number of functions• Supports the Organization's business plan Supports the Organization's business plan

and contribute to corporate performance and contribute to corporate performance• The fundamental business remains the The fundamental business remains the

same but the structure, rules & same but the structure, rules & boundaries would be dramatically boundaries would be dramatically changedchanged

• The authority and responsibility of staff The authority and responsibility of staff may be dramatically changedmay be dramatically changed

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7 Principles for BPR7 Principles for BPR

1.1. Organized around outcomes, not tasks.Organized around outcomes, not tasks.2.2. Have those who use the output of the process Have those who use the output of the process

perform the process.perform the process.3.3. Subsume information-processing work into the real Subsume information-processing work into the real

works that produces the information.works that produces the information.4.4. Treat geographically dispersed resources as Treat geographically dispersed resources as

though they were centralised.though they were centralised.5.5. Link parallel activities instead of integrating their Link parallel activities instead of integrating their

results.results.6.6. Out the decision point where the work is Out the decision point where the work is

performed and build control into the process.performed and build control into the process.7.7. Capture the information once and at the source.Capture the information once and at the source.

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TURNAROUND STRATEGYTURNAROUND STRATEGY

• The most radical of the change The most radical of the change models that would effectively cure or models that would effectively cure or kill an Organization.kill an Organization.

• Would be appropriate for an Would be appropriate for an organization that is in serious trouble.organization that is in serious trouble.

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8 distinct steps of the 8 distinct steps of the Turnaround StrategyTurnaround Strategy

1)1) Gain management control – involve seniorsGain management control – involve seniors2)2) Establish and communicate credibility with Establish and communicate credibility with

stakeholdersstakeholders3)3) Assess existing managers and replace if Assess existing managers and replace if

necessarynecessary4)4) Evaluate the businessEvaluate the business5)5) Action planningAction planning6)6) Implement organisational change if it is Implement organisational change if it is

appropriateappropriate7)7) Motivate management and employeesMotivate management and employees8)8) Install and improve budgetary systemsInstall and improve budgetary systems

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ACTION RESEARCH MODEL ACTION RESEARCH MODEL (ARM) OF CHANGE (ARM) OF CHANGE

• Barbara Senior (1997) describes ARM as:Barbara Senior (1997) describes ARM as:

‘ ‘A combination of research and action – A combination of research and action – this means collecting data relevant to this means collecting data relevant to the situation of interest, feeding back the situation of interest, feeding back results to those who must take action, results to those who must take action, collaboratively discussing the data to collaboratively discussing the data to formulate an action plan and finally formulate an action plan and finally taking the necessary actions’taking the necessary actions’

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The stages of the ARMThe stages of the ARM

1)1) Diagnose current situation and Diagnose current situation and develop vision for changedevelop vision for change

2)2) Gain commitments to the visionGain commitments to the vision

3)3) Develop an action planDevelop an action plan

4)4) Implement the changeImplement the change

5)5) Assess and reinforce the changeAssess and reinforce the change

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Kotter’s 8 Change StepsKotter’s 8 Change Steps

1.1. Establish a sense of urgencyEstablish a sense of urgency

2.2. Form a powerful guiding coalitionForm a powerful guiding coalition

3.3. Create a visionCreate a vision

4.4. Communicate the visionCommunicate the vision

5.5. Empower others to act out the visionEmpower others to act out the vision

6.6. Create short-term winsCreate short-term wins

7.7. Consolidate and buildConsolidate and build

8.8. Institutionalize the new approachesInstitutionalize the new approaches

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ReferencesReferences

• Daft, R.L. (2008). The New Era of Daft, R.L. (2008). The New Era of Management, 2nd Edition. Management, 2nd Edition. Thomson South-Western, Ohio. Thomson South-Western, Ohio.

• Robbins, S.P. and Coulter, M. Robbins, S.P. and Coulter, M. (2007). Management, 9th Edition. (2007). Management, 9th Edition. Prentice-Hall, USA.Prentice-Hall, USA.