Steven E.

Phelan, November 2009

 Change is a risky activity

Many organizational changes fail or do not realize their intended outcomes (50-70%). This raises the question of why change is so prevalent?

Pressure to change comes from:

External, environmental pressures Internal, organizational pressures

Pressure Market decline pressures

Examples

Description When current markets that the organization operates in begin to decline there is pressure to find newer, more viable markets. This affects the way organizations respond to their consumers and their competitors to cater for the increasingly rapid pace of business. In light of recent corporate governance scandals in organizations, the pressure to maintain a good reputation and high level of credibility has increased.

Harley Davidson

Hypercompetition pressures Reputation and credibility pressures

Intel

Walt Disney Company

Pressure Fashion pressures Mandated pressures Geopolitical pressures

Examples Boeing Co.

Description This is based on mimetic isomorphism imitating companies that are legitimate and successful This is based on coercive isomorphism when change is demanded by outside sources. This is when global crises greatly impact an organization and change is necessary for survival.

Chevron Texaco

3M

Pressure

Examples

Description Existing systems and processes in a smaller organization may no longer be applicable when the size of the organization increases. Integration and creating economies of scale can lead to pressure for change in organizations. A common organizational identity and the unified commitment of staff in different areas/departments of an organization can be difficult to manage and may encourage change.

Growth pressures Integration and collaboration pressures

Microsoft

EDS

Identity pressures

Forte Hotel

Pressure New broom pressures Power and political pressures

Examples

Description New authority figures in an organization can herald a new era and often signal significant changes an organization in an organization. Power relationships and politicking can change internal processes and decision making. This has significant flow on effects within the organization.

UNLV

Morgan Stanley

 Take five minutes to personally answer these questions:

Have you (or someone you know) ever experienced organizational change? What was your view of the change? What did others think of the change? Who were the change champions? How did they behave?

 Perform the following activities in your group:

Share your stories with members of your group What are the common issues? What are the differences? Are there lessons embedded in these stories? What three conclusions do you draw from these stories about managing change?

 Controlling
Top-down view of management Fayols theory of management: planning, organizing, commanding, coordinating and controlling.

Shaping
Participative style of management Improving the capabilities of people within the organization

 Intended Change:
Change is a result of planned action

Partially Intended Change:

Change may need to be re-modified after it is initially implemented

Unintended Change:
Forces beyond the control of the change manager

Images of Managing

Controlling . . . Shaping . . . (activities) (capabilities) Intended Partially Intended Unintended DIRECTOR NAVIGATOR CARETAKER COACH INTERPRETER NURTURER

Images of Change Outcomes

Coach Director Relies upon building in Based on an image of the right set of values, management as control skills and drills that are and of change outcomes deemed to be the best as being achievable. ones that organizational Supported by the n-step members will be able to models and contingency draw on in order to achieve desired theory. organizational outcomes. Related to organizational development approaches.

Navigator Interpreter Control is still seen to be at The manager creates the heart of management meaning for other action, although a variety of organizational members, factors external to helping them to make sense managers mean that while of various organizational they may achieve some events and actions. intended change outcomes, Supported by the senseothers will occur over which making theory of they have little control. organizational change and Supported by the concept of enactment contextualist and processual theories of change.

Nurturer Caretaker Even small changes may The change managers have a large impact on ability to control is organizations and severely impeded by a managers are not able to variety of internal and control the outcome of external forces beyond these changes. However, the scope of the they may nurture their manager. The caretaker organizations, facilitating is seen as shepherding organizational qualities their organizations along that enable positive selfas best they can. organizing to occur. Supported by life-cycle, Related to chaos and population-ecology and Confucian/Taoist theories. institutional theories.

 To what extent are you more comfortable with one or other of the six images?
Why is this the case?

What are the strengths and limitations of the images that you have identified as most relevant to you? What skills do you think are associated with each image?
Are there areas of personal skill development that are needed for you to feel more comfortable in using other images?

Have you ever been in an organization that was dominated by particular images?
What barriers to alternative images existed in this organization? What strategies could overcome these barriers?

 Surfacing our assumptions about change

Images simplify & illuminate but also obscure

Assessing dominant images of change

To what degree are some images seen as natural and not open to negotiation in certain organizations

Using multiple images in change

Image-in-use might depend on the type of change Image-in-use might depend on the context Image-in-use might depend on the phase of change Multiple change images can also co-exist
Skilled change managers are able to swap images or even manage multiple images simultaneously

 Typical questions about change:

Was it managed well? What went right? What went wrong? Did we get the outcome we were after?

Do these questions assume a certain image of change? How does each image assess success?
Which images have non-traditional success measures? Judgments of success are conditional on who is doing the assessment and when the judgments are made Is this true?

 Take your groups stories from earlier in the day

Which images of change did you come across? How did these images affect the way the various actors approached change? Do the images used vary by the type, context, or phase of change? What broad conclusions can you form?

 Questions: Which of the six change images were held by:

Gunter? The hospitality literature? The consultant?

How did these assumptions influence prescriptions for dealing with the turnover problem What does it mean to say the problem was dissolved? Choose another change image and apply it to the turnover problem What new insights arise? Does considering different images of change help us (I hesitate to add solve the problem)?

 The goal of change management is to dupe slow-witted employees into thinking change is good for them by appealing to their sense of adventure and love of challenge This is like convincing a trout to leap out of a stream to experience the adventure of getting deboned

Active signs of resistance Passive signs of resistance Being critical Agreeing verbally but not Finding fault following through (malicious Ridiculing compliance) Failing to implement change Appealing to fear Procrastinating or dragging Using facts selectively ones feet Blaming or accusing Feigning ignorance Sabotaging Withholding information, Intimidating or suggestions, help, or support threatening Standing by and allowing change to fail Manipulating Distorting facts Which of the various ways of resisting Blocking change are the most common? Undermining. Which are the most difficult to deal with? Starting rumors Arguing

 Dislike of change
People dont resist change, they resist pain! Boredom can be pain, too.

Discomfort with uncertainty

Low tolerance for ambiguity

Perceived negative effects of interests

Authority, status, rewards, salary, social ties

Attachment to the established culture/ways of doing things Perceived breach of psychological contract

 Lack of conviction that change is needed Lack of clarity as to what is needed Belief that the specific change being proposed is inappropriate Belief that the timing is wrong Excessive change Cumulative effects of other changes in ones life Perceived clash with ethics Reaction to the experience of previous changes Disagreement with the way the change is being managed

Security Money Authority Status/prestige Responsibility Better working conditions Self-satisfaction Better personal contacts Less time and effort

 The classic steps:

Education and communication Participation and involvement Facilitation and support

Beyond the classic steps:

Negotiation and agreement Manipulation and cooptation Explicit and implicit coercion

The Paula Story Does a successful change manager needs skills in all six areas?
Where do you need development?

 Resistance is a natural (even necessary) psychological stage in any change:

Denial / Resistance / Exploration / Commitment / Shock Anger Mourning Acceptance

Do we just let nature take its course then? Can people get stuck in a stage?

 Use the power of resistance to build support

Showing respect towards resistors creates stronger relationships and thereby improves the prospects of success

Fundamental touchstones
Maintain clear focus Embrace resistance Respect those who resist (assume good faith) Relax Join with the resistance
Look for points of commonality

Use power Manipulate those who oppose Apply force of reason Ignore resistance Play off relationships Make deals Kill the messenger Give in

 Contingency approaches challenge the view that there is one best way
The style of change will vary, depending upon the scale of the change and the receptivity of organizational members for engaging in the change.

Kotter and Schlesinger recommend changing tactics according to the:

Amount and kind of resistance anticipated The position and power of the change agent The personality of the person designing and implementing the change The time available and the consequences of failure

 Which approach to the management of resistance attracts you? Why?

 Task
Develop a formal integration plan (with decisions on branch closures, systems conversion, product alignment, layoffs, and communication strategy) that will maximize shareholder value while keeping as much support as possible from the stakeholders at the two banks and external organizations. 10 minutes = 1 news cycle = 1 day

NORTHERN BANK CEO John

CIO Kevin VP-HR Bruce VP-Retail Banking Bita

SOUTHERN BANK CEO Lisa

CIO Josh VP-HR Psyche VP-Retail Banking Nikkole

 Other Roles
Change Manager: Mike Journalist: Scott Union Organizer: Bryan State Regulator: Courtney Admin Assistant: Chandra EastWest Bank: Rick

Donna Dubinsky