Change Management Specialist (CMS) - LearnUpondscormmedia.learnupon.com/4602/po3gxx76d5v8y1km78h0/res...Why Change? By the end of this session you will be able to: Understand why some

Change Management Specialist (CMS)

“An organization's ability to learn, and translate that

learning into action rapidly, is the ultimate

competitive advantage.”

Jack Welch

Management and Strategy Institute

By the end of this course

you will be able to:

Design and manage change programs,

persuade people to change and

respond to resistance to change

What is This Course About?


Why Change?

By the end of this session


Understand why some organizations fail

in change management


Why Change?

• The purpose of this course is to familiarize you with the

process of change management and help you

understand why some companies succeed in

implementing change while others fail.


Why Change?

• You will be introduced to a variety of theories on change

management and best practice guidelines derived using

comprehensive studies carried out by the scientific

community on change. You will learn what needs to be

done both behaviourally and structurally to make change

stick.


Why Change?

• This course helps you understand why some people are

afraid of change and resist it. You will be introduced to a

number of techniques that are shown to be effective to

overcome this resistance. You will also learn about

coaching, mentoring, motivating and various

management tools that can help you in the process.


Why Change?

• This session is about leadership and management,

especially change management. Main causes of

organization’s failure in terms of change management

are explored in this session. Different types of change

are also explained to help you predict how your own

organization might react to a changing environment.

• You will also learn about two established theories on

change management and explore their application.


Why Organizations Fail

• Recent history shows that we have become good at

creating companies around new concepts, ideas and

technologies. Founders of these companies often have a

vision for the use of the technology or methods they

pioneer and use that vision to develop the company.



Growth requires management

Success leads to more recruitment

Setting up factory and starting to sell

Acquiring offices

Founding a company

Mastering a new technology or method

An idea



• Once the company becomes more successful, it starts to

dominate the market. This in turn leads to more growth

which requires a more extensive organization.

• This is when the risk of failure starts to increase.



• The organization’s priority changes to manage this

growth and turns its focus inwards. Members of staff are

trained mainly on management and not on leadership

simply because there is a huge demand for managing

various aspects of the organization as it grows.

Employees learn how to solve problems, how to plan

and how to manage resources but there is no emphasis

on leading.


Organizational culture increasingly resistive to change

Focus changes to revenue generation than making great products

Emergence of competitive middle managers; “Elastic Band”

Increased bureaucracy

Management focuses on problem solving rather than leadership



• The strong focus on management leads to excess

bureaucracy. Since the organization is dominant in the

market, sales still continue and this lack of leadership

and focus on external events goes unnoticed.



• Meanwhile, a new breed of competitive managers

emerges within the company. They are totally focused on

increasing efficiency and monitoring products and

services in ever more imaginative ways and totally lose

track of external opportunities or threats.



• There is no urgency in changing anything, because

managers have always been encouraged and trained to

maintain the current system. The focus is no longer on

making great products or solving a customer’s needs;

instead, it is about maintaining market share and

increasing revenue per customer to make more money.



• This inward managerial attitude leads to a damaging

culture which is resistive to changes and lacks

leadership. It easily misses the obvious trends in the

market and sometimes even denies their existence.


Further cuts and change in senior management

Share price goes down

Announces various profit warnings; reduces number of staff

Too slow to change even when obvious

Ignores or actively denies new trends in the market



• Before long, a new competitor releases a vastly superior

product to the market by which time it is too late and too

difficult to turn the massive lingering corporate ship

around.



• What follows is what we have heard many times; growth

forecast warning, downsizing, political infighting, share

price crashes and increased volatility, redundancies, a

series of management changes, still losing market share

and becoming increasingly irrelevant in the industry. In

extreme cases the company may go bankrupt and leave

a legacy of “how not to do it”.


“How not to do it”

Possible bankruptcy

Becoming more irrelevant


The Solution

• The solution is to initiate change early and create a

culture of leadership. This is not about having one larger

than life leader that goes around convincing everyone of

a new vision. Large organizations are much too big for

this.


The Solution

• Instead, many people need to get involved in leading the

change and this must be embedded into the culture of an

organization so it can always anticipate and react to

market changes.


Is Change Inevitable?

• From a certain view, change is neither emergent nor

planned. As an organization goes through cycles of

growth it needs to respond to the changing environment.

The following chart demonstrates an organizational life

cycle and how various crises may develop as the

organization grows (Greiner 1972).



Age of Organization MATURE YOUNG

LARG

E

SM

ALL

Siz

e o

f

Org

aniz

ati

on

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Crisis of

Leadership

Crisis of

Autonomy

Crisis of

Control

Crisis of

Bureaucracy Next

Crisis?



• The above graph shows that as the organization grows,

it passes through 5 distinct phases. As each growth

period comes to an end, the organization goes through a

short-lived crisis. This trend forms the evolution and

revolution stages of a company as shown in the diagram.

The flat lines are the evolution and the zigzags are the

revolution. A typical life cycle pattern consists of the

following (Clark 1994):


Life Cycle

The Entrepreneurial Stage

The Collective Stage

The Formalization Stage

The Elaboration Phase


The Entrepreneurial Stage

• Focus is on manufacturing products or providing the

service.

• Key strategy is to survive.

• Success brings growth and the need to recruit.

• Employee need managing and organizational strategy

becomes more complex.


The Collective Stage

• The organization is more formally shaped into

departments.

• Professional managers are recruited who share the

same vision as leadership.

• Further growth requires more management control and

delegation.

• Responsibilities are well defined and there is a stronger

sense of autonomy as it increases efficiency.


The Formalization Stage

• Systems of communication and control become more

formal.

• Bureaucratization occurs.

• Systems of rewards and incentives, salary structures,

and organizational hierarchy are formalised.

• Low level mangers become more autonomous as the

organization grows.

• There is a differentiation between strategic management

and management required to implement policy.


The Elaboration Phase

• Strategic change expected.

• The organization may reach a plateau or may even show

the first stages of decline.

• Middle managers may need to learn new skills to

achieve change.

• This stage may include rapid turnover and replacement

of senior management.


Types of Change

• Companies don’t always go through change uniformly

and this can have a significant impact on the way they

handle change or anticipate it. The following are the

most popular patterns of change (Arnold et al. 1998).


Types of Change

Time

HIG

H

LO

W

Rate

of

Change


Smooth Incremental Change

• Change evolves slowly and follows a clear path.

• The changes are minor and people can cope with them.


Smooth Incremental Change

Time

HIG

H

LO

W

Rate

of

Change

Range of

Stability


Bumpy Incremental Change

• There is some degree of predictability in the external

environment but it is difficult to predict frequency,

duration or magnitude of change.


Bumpy Incremental Change

Time

HIG

H

LO

W

Rate

of

Change

Range of

Stability


Discontinuous Change

• Discontinuous change is a radical change and a significant shift away from the way currently things are done. This can be as a result of a crisis in the external environment, possibly affecting the whole industry and not just your organization. Alternatively, the crisis could be due to actions of a competitor.

• The key point is that the organization is under threat and needs to act fast, and change fast to accommodate.

• Because of the urgency, management is likely to provide instructions for change rather than consult for a way forward. The aim is short-term results and compliance. Once the crisis is over, management can proceed to gain long term commitment and anchor the change into organizational culture.


Discontinuous Change

Time

HIG

H

LO

W

Rate

of

Change

Range of

Stability


Punctuated Equilibrium

• This illustrates situations where periodically there is a

sudden burst of activity. It suggests that the organization

has carried on with the change within the range of

stability, though every now and then people had to move

out of their comfort zones to respond to various

demands in the market and the environment.


Punctuated Equilibrium

Time

HIG

H

LO

W

Rate

of

Change

Range of

Stability


Continuous Transformation

• As communication technology has significantly changed

the environment and has introduced dramatic changes, it

seems that the incremental punctuated model of change

will no longer be sufficient to keep pace. Instead, a

continuous transformation model is proposed where an

organization needs to proactively reinvent itself and

initiate change while responding to environmental

changes. It means that rate of change will frequently go

out of the range of stability as the organization aims to

stay on top.


Continuous Transformation

Time

HIG

H

LO

W

Rate

of

Change

Range of

Stability


Leadership versus Management

• Management is different from leading. Management is

the set of processes used to run a complicated mix of

people and technology smoothly. In contrast, leadership

is the set of processes that creates an organization or

leads it to change and adopt according to circumstances.



• When it comes to change management, the distinction is

critical. Transforming an organization depends a lot more

on leadership than it does on management.

Unfortunately, many want to manage change while in

practice they should focus on leading the organization

through change.

• Here is how management compares to leadership:



Management

• Organising

• Planning

• Budgeting

• Staffing

• Problem solving

• Controlling

• Resource management

• Providing policies and procedures

• Delegating

• Monitoring

Leadership

• Vision

• Strategy

• Producing change to achieve the vision

• Influence direction and thought process

• Create teams

• Create coalitions that understand the change

• Motivating and energizing

• Overcoming bureaucratic barriers


Two Theories of Change

• There are two archetypes of theories of change as

demonstrated by Michael Beer and Nitin Nohria (Price

2009). They are known as Theory E and Theory O.



Theory E • Change based

on economic value.

Theory O • Change based

on organizational capability.

HARD APPROACH SOFT APPROACH


Theory E: Change based on economic value.

– This is the kind of change that leads to headlines. It involves

substantial redundancies, heavy use of economic incentives,

downsizing, cost saving, selling parts of the business to save

costs and so on.

– It is also known as the “hard” approach to change.


Theory O: Change based on organizational

capability.

– Here, the goal is to develop a corporate culture through

organizational training and learning. It is a long term approach

and involves self-reflection, feedback, implementing more

changes and gradually developing a new corporate culture with

new ways of working.

– It is also known as the “soft” approach to change.


Theory E Theory O

Aims

Increase and

maximise

shareholder value

Improve

organisational

capability

Focus

Focus on cost

saving, efficiency

and systems

Focus on corporate

culture, attitudes and

employee mentality

Results Focus on short-term

immediate results

Focus on long terms

goals

Increase and maximize

shareholder value Improve organizational capability

Focus on cost saving,

efficiency and systems

Focus on corporate culture,

attitudes and employee mentality

Focus on short-term

immediate results without

which the organization may

not survive

Focus on long terms goals to

change course and end up with

persistent gains


Theory E Theory O

Leadership Top down change

management

Bottom up change

management

Process Plan specific

programs

Experiment and

evolve

Top down change management Bottom up change management

Plan specific programs Experiment and evolve


Theory E Theory O

Use of

Consultants

Consultants analyse

the organisational

problem and

provide and shape

solutions

Consultants provide

support to the

management and

employees come up

with their own

solutions

Rewards

Provide financial

incentives to

motivate

Use commitment and

increased

responsibility as

incentives motivate

Consultants are used to analyze

the organizational problem and

provide and shape solutions

Consultants provide support to the

management and employees to

come up with their own solutions

Provide financial incentives to

motivate

Use commitment and increased

responsibility as incentives

motivate



• Theory E and O are not always used in isolation; they

can be combined to achieve better results. The

combination allows the organization to quickly cut costs

and increase efficiency and therefore avoid immediate

financial disaster or serious cash flow problems.



• Meanwhile, the organization can embark on a corporate

cultural change to shift its focus to more profitable areas

and respond to the changing environment by

permanently modifying the way they work.


How Change Affects People

By the end of this session


Understand how people handle change

and why their reactions matter



• This session explores various ways in which people

respond to change. This helps you understand what

people are going through as a result of the change and

allows you to plan accordingly to provide support,

training, mentoring, coaching and resources.



• You will also learn about how ideas spread which further

helps you see how people react to these new ideas

which again can help you to plan ahead as you go

through different stages of change.


How We Respond to Change

• The following model known as the “The Personal

Transition Curve” was developed by John Fisher. It

captures how individuals deal with change. This is a

useful model for change managers and those who need

to be aware of the consequences of change so they can

provide support as the change unfolds.


Time

HIG

H

LO

W

Accepta

nce

Anxiety

What is going to happen?


Anxiety

Thought:

• What is going to happen?

Concept:

• Not knowing how to cope with future change.

• Becoming anxious because the events lie outside of an

individual’s control.


Time

HIG

H

LO

W

Accepta

nce

Finally, something is going to change.

Anxiety

Happiness


Happiness

Thought:

• Finally, something is going to change.

Concept:

• Anticipating change and positively looking forward to it,

hoping that things will progress forward.

• Confirmation of thoughts that something was indeed

wrong and needed change and hence welcoming the

change.

• This stage can lead to unrealistic expectations if not

managed well.


Time

HIG

H

LO

W

Accepta

nce

Can I handle this?

Anxiety

Happiness

Fear


Fear

Thought:

• Can I handle this?

Concept:

• There is a fear that something significant is going to

change and will have an effect on everything. How

would the individual handle this?


Time

HIG

H

LO

W

Accepta

nce

This is big and can disrupt my life.

Anxiety

Happiness

Fear

Threat


Threat

Thought:

• This is big and can disrupt my life.

Concept:

• The change is perceived as a threat to lifestyle habits or

a disruption to the normal state of affairs in the current

environment. The individual is afraid to end up with

limited choices in the future or how the change can

impact others’ perception of him.


Time

HIG

H

LO

W

Accepta

nce

Did I really behave that way?

Anxiety

Happiness

Fear

Threat

Guilt


Guilt

• Thought:

• Did I really behave that way?

• Concept:

• The individual compares his past actions and reactions

and explores alternative interpretations. The self-

awareness and discovery can lead to guilt, causing the

person understand the extent of what was wrong and

how it had impacted others.


Time

HIG

H

LO

W

Accepta

nce

This is hopeless.

Anxiety

Happiness

Fear

Threat

Guilt

Depression


Depression

• Thought:

• This is hopeless.

• Concept:

• The individual is de-motivated and confused. He cannot

see how he can fit into this new future. The individual

does not identify with the change and is somewhat lost.


Time

HIG

H

LO

W

Accepta

nce

This is not for me. I cannot be like this.

Anxiety

Happiness

Fear

Threat

Guilt

Disillusionment

Depression


Disillusionment

• Thought:

• This is not for me. I cannot be like this.

• Concept:

• The individual loses motivation and is in despair. His

values and beliefs are disrupted and are incompatible

with those of the organization or what the change

dictates. The individual is unmotivated and gradually

withdraws by providing minimum effort, constantly

criticising or complaining. The individual may also resign

to fully disengage from the change.


Time

HIG

H

LO

W

Accepta

nce

I cannot accept this. This is not right.

Anxiety

Happiness

Fear

Threat

Guilt

Depression

Hostility

Disillusionment


Hostility

• Thought:

• I cannot accept this. This is not right.

• Concept:

• The change has not been accepted and is in constant

friction with the individual’s current beliefs. The new

processes are either ignored or are actively undermined.


Time

HIG

H

LO

W

Accepta

nce

There is no Change.

Anxiety

Happiness

Fear

Threat

Guilt

Depression

Disillusionment

Hostility

Denial


Denial

• Thought:

• There is no Change.

• Concept:

• The change is not accepted and its presence denied.

The individual falls back to old processes and habits

ignoring the need for change or evidence that supports

ideas that are contrary to his beliefs.


Time

HIG

H

LO

W

Accepta

nce

I can see how I would fit into this future.

Anxiety

Happiness

Fear

Threat

Guilt

Depression

Disillusionment

Hostility

Denial

Gradual

Acceptance


Gradual Acceptance

• Thought:

• I can see how I would fit into this future.

• Concept:

• The individual can see how to handle the change and

how it can work for him. He is beginning to see a future

which is better as the result of the change.


Time

HIG

H

LO

W

Accepta

nce

This is great. The change is working.

Anxiety

Happiness

Fear

Threat

Guilt

Depression

Disillusionment

Hostility

Denial

Gradual

Acceptance

Moving

Forward


Moving Forward

• Thought:

• This is great. The change is working

• Concept:

• The individual can see how the change can directly

benefit him and how to exploit these changes to move

forward both individually and also as an organization.


Why Reaction to Change Matters

• The Personal Transition Curve is a great tool in

recognizing what is needed at each stage. As a

manager who is leading the change, you need to be

aware that most people may not clearly understand

which part of the curve they are in.



• It is your job to recognize this, communicate appropriate

information and provide support to help them through

these stages.



• As you may have noticed, many of the stages on the

transition curve are highly emotional. Management must

take steps to address these emotional upheavals as they

occur and control their impact in order to minimize the

spread of negativity throughout the organization.



• Another important concept is that different people transit

through the curve at different speeds. Hence, you will

end up with a team where each person thinks slightly

differently about the change and hence behaves

differently. This is why the management needs to

provide a tailored solution to accommodate various

needs and reassure the staff accordingly.


How Ideas Spread

• Another useful classification of how people react to

change and how ideas spread through culture is the

Diffusion of Innovations theory by Everett Rogers.

• Diffusion is a process where a change or an innovation

is communicated in a social network through various

channels over time.


How Ideas Spread

Earl

y

Majo

rity

Time

Innovato

rs

Earl

y

Adapto

rs Late

Majo

rity

Laggard

s

2.5%

13.5%

34% 34%

16%


Innovators

– Willing to take risks

– Slightly radical

– Crave change and innovation

– Cope well with uncertainty

– Well informed with multiple sources of information


Early adopters

– Gatekeepers of new ideas into a system

– The “opinion leaders”


Early majority

– Take more time to adopt

– Can be influenced by early adopters

– Seldom hold a position of “opinion leadership”


Late majority

– Sceptical to change

– Might adopt as a result of increased pressure from peers


Laggards

– Isolated from social network

– Will be the last to change

– Suspicious of change agents

– Show little or have no “opinion leadership”

• The adoption of innovation or change follows an “S

Curve” when plotted over time. Here is how it looks like:


Earl

y M

ajo

rity

Time

Innovato

rs

Earl

y A

dapto

rs

Late

Majo

rity

Laggard

s

% o

f

Popula

tion

100%

0%

50%

CH

ASM

@ 1

6%


How Ideas Spread

• A related area of work to diffusion of innovation is the

epidemics of memes. Malcolm Gladwell is his book, “The

Tipping Point” defines tipping point:

• “The tipping point is the magic moment when an idea,

trend, or social behaviour crosses a threshold, tips, and

spreads like wildfire.”

• The book discusses a variety of conditions that

contribute to this and is a great read for anyone

interested in engineering a tipping point for the idea of

change.


Adoption Stages

• Individuals go through 5 stages during the adoption

process:


Adoption Stages

Finalises Decision

Confirmation

Considers

Use

Seeks Info to

Understand Benefits

Implementation

Weight Concepts

Decides?

Decision

Interested

Actively Seeks Info

Persuasion

Exposed to

Innovation

Not Inspired

Knowledge

ADAPT

REJECT


Knowledge

– An individual is exposed to the innovation or new idea, but lacks

knowledge

– Is not inspired to find more information about it.


Persuasion

– Has become interested in the innovation

– Actively seeks information


Decision

– Weighs the concept of change and considers advantages and

disadvantages of using it

– Decides to adopt or reject


Implementation

– Considers implementing the change or innovation to various

degrees

– Seeks information for better understanding


Confirmation

– Finalizes decision to continue using the innovation and may end

up with total commitment to use it to its full potential


Continued

• Please continue to Lesson #2


Documents

Change Management Specialist (CMS) - LearnUpondscormmedia.learnupon.com/4602/po3gxx76d5v8y1km78h0/res...Why Change? By the end of this session you will be able to: Understand why some