Provide a brief summary of the organization (its history, culture, industry, product, and services). Explain why a change was needed. What is the gap between the present state and the desired future state?
1- its a critical thinking assignment . please do your effort the professor is so hard .
2 – 4 to 5 pages WITH OUT COVER PAGE AND REFERENCES
4- APA style 7th edition
5- I need introduction and conclusion
6- use book as reference and use at least 3 peer reviewed references . references should be more than 5 references as total
7- no more than 10% plagiarism
8- make sure to cover all reqirments .
Requirements: 5 pages
Organizational Change
Each organization has its own background perceptions, ethics, values, history, and ambitions. Therefore, a “one size fits all” change management process may not work in every organization. We must assess and adapt our process to fit the backgrounds and philosophies of each organization.
Given this understanding, we need to research and assess when, and if, an organization is ready for change, and then adopt a process to best facilitate the change process. Choose a Middle Eastern organization at which you are currently working or one in which you are familiar. (If neither is possible, conduct an internet search to identify a Middle Eastern organization which has gone through a transformation process within the last three years.) Then address the following:
Provide a brief summary of the organization (its history, culture, industry, product, and services).
Explain why a change was needed. What is the gap between the present state and the desired future state?
How strong is the need for change?
What is the source of this need? Is it external to the organization?
If the change does not occur, what will be the impact on the organization in the next few years?
Briefly explain if the change process was a success or failure.
Based on what you have learned thus far in the course, evaluate the company’s readiness for change. Were they ready, why or why not? Would you have done anything differently?
Your well-written paper should meet the following requirements:
Be 4-5 pages in length, which does not include the title and reference pages, which are never a part of the content minimum requirements.
Use Saudi Electronic University academic writing standards and APA style guidelines.
Support your submission with course material concepts, principles, and theories from the textbook and at least three scholarly, peer-reviewed journal articles.
It is strongly encouraged that you submit all assignments into the Turnitin Originality Check prior to submitting it to your instructor for grading. If you are unsure how to submit an assignment into the Originality Check tool, review the Turnitin Originality Check – Student Guide for step-by-step instructions.
Review the grading rubric to see how you will be graded for this assignment.
Organizational ChangeFourth Edition
This book is dedicated to Tupper Cawsey,our dear and wonderful friend, colleague, andextraordinary educator.He passed away, but his positive impact continues toreverberate in those he touched.Thank you, Tupper.Gene and Cynthia
Organizational ChangeAn Action-Oriented ToolkitFourth EditionGene DeszcaWilfrid Laurier UniversityCynthia IngolsSimmons UniversityTupper F. CawseyWilfrid Laurier UniversityLos AngelesLondonNew DelhiSingaporeWashington DC
Melbourne
FOR INFORMATION:SAGE Publications, Inc.2455 Teller RoadThousand Oaks, California 91320E-mail: [email protected] Publications India Pvt. Ltd.B 1/I 1 Mohan Cooperative Industrial AreaMathura Road, New Delhi 110 044IndiaSAGE Publications Ltd.1 Oliver’s Yard55 City RoadLondon EC1Y 1SPUnited KingdomSAGE Publications Asia-Pacific Pte. Ltd.18 Cross Street #10-10/11/12China Square CentralSingapore 048423Copyright © 2020 by SAGE Publications, Inc.All rights reserved. Except as permitted by U.S. copyright law, nopart of this work may be reproduced or distributed in any form orby any means, or stored in a database or retrieval system, withoutpermission in writing from the publisher.
All third party trademarks referenced or depicted herein areincluded solely for the purpose of illustration and are the propertyof their respective owners. Reference to these trademarks in noway indicates any relationship with, or endorsement by, thetrademark owner.Printed in the United States of AmericaLibrary of Congress Cataloging-in-Publication DataNames: Deszca, Gene, author. | Ingols, Cynthia, author. | Cawsey, T. F., author/Title: Organizational change : an action-oriented toolkit / Gene Deszca, WilfridLaurier University, Canada, Cynthia Ingols – Simmons College, USA, Tupper F.Cawsey – Wilfrid Laurier University, Canada.Other titles: Organisational changeDescription: Fourth Edition. | Thousand Oaks : SAGE Publications, [2019] |Revised edition of Organizational change, [2016] | Includes bibliographicalreferences and index.Identifiers: LCCN 2019013498 | ISBN 9781544351407 (paperback)Subjects: LCSH: Organizational change.Classification: LCC HD58.8 .C39 2019 | DDC 658.4/06—dc23LC record available at https://lccn.loc.gov/2019013498Acquisitions Editor: Maggie StanleyEditorial Assistant: Janeane CalderonProduction Editor: Gagan MahindraCopy Editor: Lynne CurryTypesetter: C&M Digitals (P) Ltd.Proofreader: Rae-Ann GoodwinIndexer: Mary MortensenCover Designer: Candice HarmanMarketing Manager: Sarah Panella
Brief Contents1. Preface2. Acknowledgments3. Chapter 1 • Changing Organizations in Our Complex World4. Chapter 2 • How to Lead Organizational Change:Frameworks5. Chapter 3 • What to Change in an Organization: Frameworks6. Chapter 4 • Building and Energizing the Need for Change7. Chapter 5 • Navigating Change through Formal Structuresand Systems8. Chapter 6 • Navigating Organizational Politics and Culture9. Chapter 7 • Managing Recipients of Change and InfluencingInternal Stakeholders10. Chapter 8 • Becoming a Master Change Agent11. Chapter 9 • Action Planning and Implementation12. Chapter 10 • Get and Use Data Throughout the ChangeProcess13. Chapter 11 • The Future of Organizations and the Future ofChange14. Notes15. Index16. About the Authors
Detailed ContentsPrefaceAcknowledgmentsChapter 1 • Changing Organizations in Our Complex WorldDefining Organizational ChangeThe Orientation of This BookEnvironmental Forces Driving Change TodayThe Implications of Worldwide Trends for ChangeManagementFour Types of Organizational ChangePlanned Changes Don’t Always Produce theIntended ResultsOrganizational Change RolesChange InitiatorsChange ImplementersChange FacilitatorsCommon Challenges for Managerial RolesChange RecipientsThe Requirements for Becoming a Successful ChangeLeaderSummaryKey TermsEnd-of-Chapter ExercisesChapter 2 • How to Lead Organizational Change:FrameworksDifferentiating How to Change from What to ChangeThe Processes of Organizational Change(1) Stage Theory of Change: LewinUnfreezeChangeRefreeze: or more appropriately Re-gell(2) Stage Model of Organizational Change: KotterKotter’s Eight-Stage Process(3) Giving Voice to Values: GentileGVV and Organizational Change(4) Emotional Transitions Through Change: DuckDuck’s Five-Stage Change Curve(5) Managing the Change Process: Beckhard and Harris
(6) The Change Path Model: Deszca and IngolsApplication of the Change Path ModelAwakening: Why Change?Mobilization: Activating the Gap AnalysisAcceleration: Getting from Here to ThereInstitutionalization: Using Data to Help Make theChange StickSummaryKey TermsEnd-of-Chapter Exercises➡ Case Study: “Not an Option to Even Consider:”Contending With the Pressures to Compromise byHeather Bodman and Cynthia IngolsChapter 3 • What to Change in an Organization: FrameworksOpen Systems Approach to Organizational Analysis(1) Nadler and Tushman’s Congruence ModelHistory and EnvironmentStrategyThe Transformation ProcessWorkThe Formal OrganizationThe Informal OrganizationPeopleOutputsAn Example Using Nadler and Tushman’sCongruence ModelEvaluating Nadler and Tushman’s CongruenceModel(2) Sterman’s Systems Dynamics Model(3) Quinn’s Competing Values Model(4) Greiner’s Model of Organizational Growth(5) Stacey’s Complexity TheorySummaryKey TermsEnd-of-Chapter Exercises➡ Case Study: Sarah’s Snacks by Paul MyersChapter 4 • Building and Energizing the Need for ChangeUnderstanding the Need for ChangeSeek Out and Make Sense of External Data
Seek Out and Make Sense of the Perspectives ofStakeholdersSeek Out and Make Sense of Internal DataSeek Out and Assess Your Personal Concerns andPerspectivesAssessing the Readiness for ChangeHeightening Awareness of the Need for ChangeFactors That Block People from Recognizing theNeed for ChangeDeveloping a Powerful Vision for ChangeThe Difference Between an Organizational Vision and aChange VisionExamples of Visions for ChangeIBM—Diversity 3.0Tata’s Nano: From Vision to Failed ProjectChange Vision for the “Survive to 5” ProgramChange Vision for “Reading Rainbow”Change Vision for a Large South African WinemakerChange Vision for the Procurement System in aMidsize Manufacturing FirmSummaryKey TermsA Checklist for Change: Creating the Readiness forChangeEnd-of-Chapter Exercises➡ Case Study: Leading Change: The PharmacyTeam by Jess CopplaChapter 5 • Navigating Change through Formal Structuresand SystemsMaking Sense of Formal Structures and SystemsImpact of Uncertainty and Complexity on FormalStructures and SystemsFormal Structures and Systems From an InformationPerspectiveAligning Systems and Structures With theEnvironmentStructural Changes to Handle Increased UncertaintyMaking Formal Structural ChoicesUsing Structures and Systems to Influence the Approvaland Implementation of Change
Using Formal Structures and Systems to AdvanceChangeUsing Systems and Structures to Obtain FormalApproval of a Change ProjectUsing Systems to Enhance the Prospects forApprovalWays to Approach the Approval ProcessAligning Strategically, Starting Small, and “Morphing”TacticsThe Interaction of Structures and Systems with ChangeDuring ImplementationUsing Structures and Systems to Facilitate theAcceptance of ChangeSummaryKey TermsChecklist: Change Initiative ApprovalEnd-of-Chapter Exercises➡ Case Study: Beck Consulting Corporation byCynthia Ingols and Lisa BremChapter 6 • Navigating Organizational Politics and CulturePower Dynamics in OrganizationsIndividual PowerDepartmental PowerOrganizational Culture and ChangeHow to Analyze a CultureTips for Change Agents to Assess a CultureTools to Assess the Need for ChangeIdentifying the Organizational Dynamics at PlaySummaryKey TermsChecklist: Stakeholder AnalysisEnd-of-Chapter Exercises➡ Case Study: Patrick’s Problem by Stacy Blake-BeardChapter 7 • Managing Recipients of Change and InfluencingInternal StakeholdersStakeholders Respond Variably to Change InitiativesNot Everyone Sees Change as NegativeResponding to Various Feelings in Stakeholders
Positive Feelings in Stakeholders: Channeling TheirEnergyAmbivalent Feelings in Stakeholders: They Can BeUsefulNegative Reactions to Change by Stakeholders:These Too Can Be UsefulMake the Change of the Psychological Contract Explicitand TransparentPredictable Stages in the Reaction to ChangeStakeholders’ Personalities Influence TheirReactions to ChangePrior Experience Impacts a Person’s andOrganization’s Perspective on ChangeCoworkers Influence Stakeholders’ ViewsFeelings About Change Leaders Make a DifferenceIntegrity is One Antidote to Skepticism and CynicismAvoiding Coercion but Pushing Hard: The Sweet Spot?Creating Consistent Signals from Systems andProcessesSteps to Minimize the Negative Effects of ChangeEngagementTimelinessTwo-Way CommunicationMake Continuous Improvement the NormEncourage People to Be Change Agents and Avoid theRecipient TrapSummaryKey TermsChecklist: How to Manage and Minimize Cynicism AboutChangeEnd-of-Chapter Exercises➡ Case Study: Travelink Solutions by Noah Deszcaand Gene DeszcaChapter 8 • Becoming a Master Change AgentFactors That Influence Change Agent SuccessThe Interplay of Personal Attributes, Situation,and VisionChange Leaders and Their EssentialCharacteristicsDeveloping into a Change Leader
Intention, Education, Self-Discipline, andExperienceWhat Does Reflection Mean?Developmental Stages of Change LeadersFour Types of Change LeadersInternal Consultants: Specialists in ChangeExternal Consultants: Specialized, Paid ChangeAgentsProvide Subject-Matter ExpertiseBring Fresh Perspectives from Ideas That HaveWorked ElsewhereProvide Independent, Trustworthy SupportLimitations of External ConsultantsChange TeamsChange from the Middle: Everyone Needs to Be aChange AgentRules of Thumb for Change AgentsSummaryKey TermsChecklist: Structuring Work in a Change TeamEnd-of-Chapter Exercises➡ Case Study: Master Change Agent:Katherine Gottlieb, Southcentral Foundation byErin E. SullivanChapter 9 • Action Planning and ImplementationWithout a “Do It” Orientation, Things Won’t HappenPrelude to Action: Selecting the Correct PathPlan the WorkEngage Others in Action PlanningEnsure Alignment in Your Action PlanningAction Planning Tools1. To-Do Lists2. Responsibility Charting3. Contingency Planning4. Flow Charting5. Design Thinking6. Surveys and Survey Feedback7. Project Planning and Critical Path Methods8. Tools to Assess Forces That Affect Outcomesand Stakeholders
9. Leverage Analysis10. Employee Training and Development11. Diverse Change ApproachesWorking the Plan Ethically and AdaptivelyDeveloping a Communication PlanTiming and Focus of CommunicationsKey Principles in Communicating for ChangeInfluence StrategiesTransition ManagementSummaryKey TermsEnd-of-Chapter Exercises➡ Case Study: Turning Around CoteConstruction Company by Cynthia Ingols, GeneDeszca, and Tupper F. CawseyChapter 10 • Get and Use Data Throughout the ChangeProcessSelecting and Deploying Measures1. Focus on Key Factors2. Use Measures That Lead to Challenging butAchievable Goals3. Use Measures and Controls That ArePerceived as Fair and Appropriate4. Avoid Sending Mixed Signals5. Ensure Accurate Data6. Match the Precision of the Measure With theAbility to MeasureMeasurement Systems and Change ManagementData Used as Guides During Design and EarlyStages of the Change ProjectData Used as Guides in the Middle of theChange ProjectData Used as Guides Toward the End of theChange ProjectOther Measurement ToolsStrategy MapsThe Balanced ScorecardRisk Exposure CalculatorThe DICE ModelSummary
Key TermsChecklist: Creating a Balanced ScorecardEnd-of-Chapter Exercises➡ Case Study: Omada Health: Making theCase for Digital Health by Erin E. Sullivan andJessica L. AlpertChapter 11 • The Future of Organizations and the Futureof ChangePutting the Change Path Model into PracticeFuture Organizations and Their ImpactBecoming an Organizational Change Agent:Specialists and GeneralistsParadoxes in Organizational ChangeOrienting Yourself to Organizational ChangeSummaryEnd-of-Chapter ExercisesNotesIndexAbout the Authors
Preface to the Fourth EditionDifficult to see. Always in motionis the future.11 Spoken by Yoda in the movie The Empire Strikes BackThe world has continued to churn in very challenging ways sincethe publishing of the third edition of this text. Uneven and shiftingglobal patterns of growth, stubbornly high unemployment levels inmany parts of the world, increasing income inequality, and serioustrade disputes that threaten to transform trade patterns areseverely stressing our highly interconnected global economy. Themassive credit crisis of a decade ago was followed byunprecedented worldwide government stimulus spending and lowinterest rates to promote growth, which, in turn, have resulted inescalating public debt, exacerbated in some nations through taxcuts. These combine to threaten the capacity of nationalgovernments to respond to future economic difficulties.In addition, wars, insurrections and civil insurrections in parts ofAfrica, the Ukraine, the Middle East, and Asia have sent massesof people searching for safety in new places. Simultaneously,deteriorating international relationships involving major powers,fears of global pandemics (Ebola and MERS), and the stayingpower of radical Islamist groups such as al-Qaeda and ISISaffiliates, Boko Haram and Jemaah Islamiyah have shaken allorganizations in affected regions—big or small, public or private.Escalating concerns related to global warming, speciesextinctions, and rising sea levels are stressing those whorecognize the problems in governments and organizations of allshapes and sizes, as they attempt to figure out how toconstructively address these emerging realities. Add to theseelements the accelerating pace of technological change and it’seasy to see why we, at times, feel overwhelmed by theturbulence, uncertainty, and negative prognosis that seem todefine the present.
But, all is not doom and gloom. Progress on human rights andgender equity, reductions in extreme poverty and hunger,declining rates of murder and violent crime, improving rates ofliteracy and life expectancy, and increasing access to informationand knowledge through affordable digital resources provideevidence that progress is being made on some fronts. Thegrowing public willingness to tackle very difficult environmentaland social issues now, not later, are combining with innovativetechnologies, creative for-profit and not-for-profit organizations,and forward-thinking politicians and leaders from all walks of life.Supportive public policies are combining with public and privateinitiatives to demonstrate that we can make serious progress onthese issues, if we collectively choose to act in constructive andthoughtful manners locally, regionally, and globally. These factorshave also made us, your authors, much more aware of theextreme influence of the external environment on the internalworkings of all organizations.As we point out in our book, the smallest of firms needs to adaptwhen new competitive realities and opportunities surface. Eventhe largest and most successful of firms have to learn how toadapt when disruptive technologies or rapid social, economic,political and environmental changes alter their realities. If they failto do so, they will falter and potentially fail.Our models have always included and often started with eventsexternal to organizations. We have always argued that changeleaders need to scan their environments and be aware of trendsand crises in those environments. The events of the past twoyears have reinforced even more our sense of this. Managersmust be sensitive to what happens around them, know how tomake sense of this, and then have the skills and abilities that willallow them to both react effectively to the internal and externalchallenges and remain constant in their visions and dreams ofhow to make their organizations and the world a better place tolive.A corollary of this is that organizations need a response capabilitythat is unprecedented because we’re playing on a global stage ofincreasing complexity and uncertainty. If you are a bank, you need
a capital ratio that would have been unprecedented a few yearsago, and you need to be working hard to understand the potentialimplications of blockchain technologies, regulatory changes, andchanging consumer preferences on the future of banking. If youare a major organization, you need to design flexibility andadaptability into your structures, policies, and plans. If you are apublic-sector organization, you need to be sensitive to howcapricious granting agencies or funders will be when revenues dryup. In today’s world, organizational resilience, adaptability, andagility gain new prominence.Further, we are challenged with a continuing reality that change isendemic. All managers need to be change managers. All goodmanagers are change leaders. The management job involvescreating, anticipating, encouraging, engaging others, andresponding positively to change. This has been a theme of thisbook that continues. Change management is for everyone.Change management emerges from the bottom and middle of theorganization as much as from the top. It will be those key leaderswho are embedded in the organization who will enable the neededadaptation of the organization to its environment. Managers of allstripes need to be key change leaders.In addition to the above, we have used feedback on the thirdedition to strengthen the pragmatic orientation that we haddeveloped. The major themes of action orientation, analysis tiedwith doing, the management of a nonlinear world, and the bridgingof the “knowing–doing” gap continue to be central themes. At thesame time, we have tried to shift to a more user friendly, actionperspective. To make the material more accessible to a diversityof readers, some theoretical material has been altered, some ofour models have been clarified and simplified, and some of ourlanguage and formatting has been modified.As we stated in the preface to the first edition, our motivation forthis book was to fill a gap we saw in the marketplace. Ourchallenge was to develop a book that not only gave prescriptiveadvice, “how-to-do-it lists,” but one that also provided up-to-datetheory without getting sidetracked by academic theoreticalcomplexities. We hope that we have captured the management
experience with change so that our manuscript assists all thosewho must deal with change, not just senior executives ororganization development specialists. Although there is much inthis book for the senior executive and organizational developmentspecialist, our intent was to create a book that would be valuableto a broad cross section of the workforce.Our personal beliefs form the basis for the book. Even asacademics, we have a bias for action. We believe that “doing ishealthy.” Taking action creates influence and demands responsesfrom others. While we believe in the need for excellent analysis,we know that action itself provides opportunities for feedback andlearning that can improve the action. Finally, we have a strongbelief in the worth of people. In particular, we believe that one ofthe greatest sources of improvement is the untapped potential tobe found in the people of all organizations.We recognize that this book is not an easy read. It is not meant tobe. It is meant as a serious text for those involved in change—thatis, all managers! We hope you find it a book that you will want tokeep and pull from your shelf in the years ahead, when you needto lead change and you want help thinking it through.Your authors,Gene, Cynthia, and TupperNote on Instructor Teaching SiteA password-protected instructor’s manual is available atstudy.sagepub.com/cawsey to help instructors plan and teachtheir courses. These resources have been designed to helpinstructors make the classes as practical and interesting aspossible for students.PowerPoint Slides capture key concepts and terms for eachchapter for use in lectures and review.A Test Bank includes multiple-choice, short-answer, and essayexam questions for each chapter.
Video Resources for each chapter help launch class discussion.Sample Syllabi, Assignments, and Chapter Exercises as optionalsupplements to course curriculum.Case Studies and teaching notes for each chapter facilitateapplication of concepts in real world situations.
AcknowledgmentsWe would like to acknowledge the many people who have helpedto make this edition of the book possible. Our colleagues andstudents and their reactions to the ideas and materials continue tobe a source of inspiration.Cynthia would like to thank her colleagues at the School ofBusiness, Simmons University, Boston, Massachusetts. Inparticular, she would like to thank Dr. Stacy Blake-Beard, DeloitteEllen Gabriel Chair of Women and Leadership, and Dr. PaulMyers, senior lecturer, who each contributed a case to this fourthedition of the book. In addition, Paul graciously read and gavefeedback on other cases and parts of the text, suggesting ways tobring clarity to sometimes muddled meanings. Alissa Scheibert, aSimmons library science student, conducted in-depth research fora number of chapters. Dr. Erin Sullivan, research director, andJessica L. Alpert, researcher, Center for Primary Care, HarvardMedical School, contributed two cases to this edition of the bookand I am very grateful for their contributions. Jess Coppla, aformer Healthcare MBA student leader and author of one of thecases, will someday be CEO of a healthcare organization. . . . I’mjust waiting to see which one. Colleagues Gary Gaumer, CathyRobbins, Bob Coulum, Todd Hermann, Mindy Nitkin, and MaryShapiro were wonderful cheerleaders throughout the many hoursof my sitting, writing, and revising in my office: thank you all!Managers, executives, and front-line employees that we haveknown have provided insights, case examples, and applicationswhile keeping us focused on what is useful and relevant. EllenZane, former CEO of Tufts Medical Center, Boston, is an inspiringchange leader; her turnaround story at the Tufts Medical Centerappeared in the second edition of this book and was publishedagain in the third edition; it continues to be on the Sage websitefor use by faculty. Cynthia has also been fortunate to work withand learn from Gretchen Fox, founder and former CEO, FOXRPM: the story of how she changed her small firm appeared in thesecond edition of the book and the case continues to be available
through Harvard Business Publishing (http://hbr.org/product/fox-relocation-management-corp/an/NA0096-PDF-ENG). NoahDeszca, a high school teacher, was the prime author of theTravelink Solutions case, an organization that underwentsignificant changes while he was working there. KatharineBambrick, a former student of Gene’s and the CEO of the OntarioTrillium Foundation and the former CEO of Food Banks Canada,is another of the inspiring leaders who opened their organizationsto us and allowed us to learn from their experiences, and share itwith you. The Food Banks case appeared in the third edition ofthis book and is one of the additional cases that are available onthis book’s website.Special thanks to Paige Tobie for all her hard work on theinstructors’ resources. She is a gem to work with.As with the previous editions, our partners Bertha Welzel andSteve Spitz tolerated our moods, our myopia to other things thatneeded doing, and the early mornings and late nights spent on themanuscript. They helped us work our way through ideas andsections that were problematic, and they kept us smiling andgrounded when frustration mounted.Our editors at Sage have been excellent. They moved the projectalong and made a difficult process fun (well, most of the time).Thank you, Maggie Stanley, our acquisitions editor, for keeping uson task and on time (or trying to keep us on time…). Weappreciate your style of gentle nudges. Thank you to JaneaneCalderon, our editorial assistant who was constantly on top of thevarious parts of the book and helped us push through to the end.Copyeditor Lynne Curry found stray commas and inconsistenciesthroughout the book: thank you for fixing the problems. GaganMahindra, Production Editor, kept us wonderfully focused on thedetails of production: thank you!Finally, we would like to recognize the reviewers who provided uswith valuable feedback on the third edition. Their constructive,positive feedback and their excellent suggestions were valued.We thought carefully about how to incorporate their suggestionsinto this fourth edition of the book. Thank you Mulugeta Agonafer
of Springfield College, Brenda C. Barnes of Allen College, C.Darren Brooks of Florida State University, Robert Dibie of IndianaUniversity Kokomo, Jonathan E. Downs of MidAmerica NazareneUniversity, Alexander C. Heckman of Franklin University, ScottElmes McIntyre of University of Houston – Clear Lake, FrankNovakowski of Davenport University, Pamela R. Van Dyke ofSouthern Methodist University, Jack Wilson of the United StatesNaval Academy, and Diana J. Wong-MingJi of Eastern MichiganUniversity.In short, our thanks to all who made this book possible.
Chapter One ChangingOrganizations in Our ComplexWorldChapter OverviewThe chapter defines organizational change as “plannedalteration of organizational components to improve theefficiency and effectiveness of organizations.”The orientation of this book is to assist change leaders—andpotential change managers—in becoming effective in theirchange activities.The social, demographic, technological, political, and economicforces pushing the need for change are outlined.Four types of organizational change are discussed: tuning,adapting, reorienting, and re-creating.Four change roles found in organizations are described:change initiators, change implementers, change facilitators, andchange recipients and stakeholders. The terms change leaderand change agent are used interchangeably and could meanany of the four roles.The difficulties in creating successful change are highlighted,and then some of the characteristics of successful changeleaders are described.Organizations fill our world. We place our children into day care,seek out support services for our elderly, and consumeinformation and recreational services supplied by otherorganizations. We work at for-profit or not-for-profit organizations.We rely on organizations to deliver the services we need: food,water, electricity, and sanitation and look to governmentalorganizations for a variety of services that we hope will keep ussafe, secure, well governed, and successful. We depend onhealth organizations when we are sick. We use religiousorganizations to help our spiritual lives. We assume that most ofour children’s education will be delivered by formal educationalorganizations. In other words, organizations are everywhere.Organizations are how we get things done. This is not just a
human phenomenon as it extends to plants and animals: look at abee colony, a reef, a lion pride, or an elephant herd and you’ll seeorganizations at work.And these organizations are changing—some of them decliningand failing, while others successfully adapt or evolve, to meet theshifting realities and demands of their environments. What exactlyis organizational change? What do we mean when we talk aboutit?
Defining Organizational ChangeWhen we think of organizational change, we think of majorchanges: mergers, acquisitions, buyouts, downsizing,restructuring, the launch of new products, and the outsourcing ofmajor organizational activities. We can also think of lesserchanges: departmental reorganizations, installations of newtechnology and incentive systems, shutting particularmanufacturing lines, or opening new branches in other parts of thecountry—fine-tuning changes to improve the efficiency andeffectiveness of our organizations.In this book, when we talk about organizational change, we referto planned alterations of organizational components to improvethe effectiveness or efficiency of the organization. Organizationalcomponents are the organizational mission, vision, values,culture, strategy, goals, structure, processes or systems,technology, and people in an organization. When organizationsenhance their effectiveness, they increase their ability to generatevalue for those they serve.The reasons for change are often ambiguous. Is the changeinternally or externally driven? In July 2018, Tim Hortons (aCanada-based coffee restaurant chain) announced that it wasaiming to open 1,500 new stores in China in the next decade.1This is in addition to expansion efforts involving the United States,the Philippines, Britain, Mexico, the Middle East, and Spain. TimHorton’s has a network of approximately 3,900 outlets in Canadaand another 900 elsewhere. It has also been busy revising itsmenu to shore up flattening same-store sales, adding Wi-Fiaccess, undertaking major store remodeling, and making changesto its sustainability and corporate social responsibility initiatives.What is driving these changes? The executives reported that theywere undertaking these actions in response to competitivepressures, customer needs, market opportunities, and the desireto align their efforts with their values. For Tim Hortons, the driversof change are coming from both the internal and externalenvironment. Dunkin’ Donuts, a much larger U.S.–based chainwith similarities to Tim Hortons’ business model and competitivepressures, seems to have been pursuing similar adaptive
responses.2 It is essential for managers to be sensitive to what ishappening inside and outside the organization and adapt to thosechanges in the environment.** Tim Hortons and Burger King announced their $12.5 billionmerger on August 26, 2014, forming the third largest quick-servicerestaurant in the world. They have maintained these two distinctbrands post-merger, but have taken advantage of synergies byleveraging their respective strengths and geographic reach.Note that, by our definition and focus, organizational change isintentional and planned. Someone in the organization has takenan initiative to alter a significant organizational component. Thismeans a shift in something relatively permanent. Usually,something formal or systemic has to be altered. For example, anew customer relations system may be introduced that capturescustomer satisfaction and reports it to managers; or a new divisionis created and people are allocated to that division in response toa new organizational vision.Simply doing more of the same is not an organizational change.For example, increasing existing sales efforts in response to acompetitor’s activities would not be classified as an organizationalchange. However, the restructuring of a sales force into twogroups (key account managers and general account managers) orthe modification of service offerings would be, even though thesechanges could well be in response to a competitor’s activitiesrather than a more proactive initiative.Some organizational components, such as structures andsystems, are concrete and thus easier to understand whencontemplating change. For example, assembly lines can bereordered or have new technologies applied. The change isdefinable and the end point clear when it is done. Similarly, thealteration of a reward system or job design is concrete and can bedocumented. The creation of new positions, subunits, ordepartments is equally obvious. Such organizational changes aretangible and thus may be easier to make happen, because theyare easier to understand.
When the change target is more deeply imbedded in theorganization and is intangible, the change challenge is magnified.For example, a shift in organizational culture is difficult toengineer. A change leader can plan a change from anauthoritarian to a more participative culture, but the initiativesrequired to bring about the change and the sequencing of thoseinitiatives are trickier to get a hold of than more concrete changeinitiatives. Simply announcing a new strategy or vision does notmean that anything significant will change since “you need to getthe vision off the walls and into the halls.”3 A more manageableway to think of such a culture change is to identify concretechanges that reinforce the desired culture. If management altersreward systems, shifts decision making downward, and createsparticipative management committees, then managementincreases the likelihood that it will create cultural change overtime. Sustained behavioral change occurs when people in theorganization understand, accept, and act. Through their actions,the new vision or strategy becomes real.4The target of change needs to be considered carefully. Often,managers choose concrete tangible changes because they areeasiest to plan for and can be seen. For example, it is relativelyeasy to focus on pay and give monetary incentives in an attemptto address employee morale. But the root cause of these issuesmight be managerial styles or processes—much more difficult torecognize and address. In addition, intervening throughcompensation may have unanticipated consequences andactually worsen the problem. An example of this can be found inthe story below.Change at a Social Service AgencyIn a mid-sized social service agency’s family services division,turnover rates climbed to more than 20%, causing serious issueswith service delivery and quality of service. The manager of thedivision argued that staff were leaving because of wages. Accordingto him, children’s aid societies’ wages were higher and staff left tojoin those organizations. Upon investigation, senior managementlearned of morale problems arising from the directive, non-inclusivemanagement style of the manager. Instead of altering pay rates,which would have caused significant budgetary and equity problems
throughout the organization, senior management replaced themanager and moved him to a project role. Within months, turnoverrates dropped to less than 10% and the manager decided to leavethe agency.5In this example, if the original analysis had been accepted,turnover rates might have declined since staff may have beenpersuaded to stay for higher wages. But the agency would havefaced financial challenges due to higher labor costs as well as afestering morale problem.
The Orientation of This BookThe focus, then, of this book is on organizational change as aplanned activity designed to improve the organization’seffectiveness. Changes that are random (occur simply due tochance) or unplanned are not the types of organizational changethat this book will explore, except, insofar, as they serve as thestimulus for planned change initiatives. Similarly, changes thatmay be planned but do not have a clear link to attempts toimprove organizational effectiveness are not considered. That is,changes made solely for personal reasons—for personal gain, forexample—fall outside the intended focus of this book.There is a story of two stonecutters. The first, whenasked what he was doing, responded, “I am shaping thisstone to fit in that wall.” The second, however, said, “I amhelping to build a cathedral.”The jobs of the two stonecutters might be the same, but theirperspectives are dramatically different. The personal outcomes ofsatisfaction and organizational commitment will likely be muchhigher for the visionary stonecutter than for the “just doing my job”stonecutter. Finally, the differences in satisfaction and commitmentmay well lead to different organizational results. After all, if you arebuilding a cathedral, you might be more motivated to stay late, totake extra care, to find ways to improve things, and to help otherswhen help is needed.In other words, the organizational member who has a broaderperspective on the value of his or her contributions and on thetask at hand is likely to be a more committed and capablecontributor. As a result, we take a perspective that encourageschange leaders to take a holistic perspective on the change and tobe widely inclusive in letting employees know what changes areneeded and are happening.
If employees have no sense of the intended vision and seethemselves as “just doing a job,” it is likely that any organizationalchange will be difficult to understand, be resisted, and causepersonal trauma. On the other hand, if employees “get” the visionof the organization and understand the direction and perspectiveof where the organization is going and why, they are more likely toembrace their future role—even if that future means they leavethe organization.6This book is aimed at those who want to be involved in changeand wish to take positive actions. We encourage readers toescape from passive, negative change recipient positions and tomove to active and healthy roles—those of change initiators,facilitators, and implementers. Readers may be in middlemanager roles or may be students hoping to enter managerialroles. Or, they may be leaders of change within an organization ora subunit. The book is also intended for the informal leaders inorganizations who are driving change, sometimes in spite of theirbosses. They might believe that their bosses “should” be drivingthe change but don’t see it happening, and so they see it as up tothem to make change happen regardless of the action or inactionof their managers.This book has an action, “how to do it” emphasis. Nothinghappens unless we, the people, make it happen. As someoneonce said, “The truth is—the cavalry isn’t coming!” There will beno cavalry charging over the hill to save us. It is up to us to makethe changes needed. At the same time, this “how-to” orientation ispaired with a focus on developing a deep understanding oforganizations. Without such an understanding, what needs to bechanged, and what the critical success factors are, change effortswill be much more difficult. This twin theme, of knowing both howto do it and what to do, underpins the structure of this book andour approach to change. To paraphrase Zig Ziglar, “It’s not whathappens to you that matters. It’s how you respond that makes adifference.”7Change capability is a core managerial competence. Without skillsin change management, individuals cannot operate effectively intoday’s fluctuating, shifting organizations.8 Senior management
may set the organizational direction, but, in this decentralizedorganizational world, it is up to managers and employees to shiftthe organization to accomplish the new goals and objectives. Todo this, change-management skills are paramount. In manyorganizations, those managers are looked to for insights,innovative ideas, and initiatives that will make a positive differencein their firms. Investigate firms such as Google, Cisco, Marriott, St.Jude Children’s Hospital, Deloitte, and others listed among the100 best to work for here and offshore, and you will find manyexamples of firms embracing these practices.9 They do so with arealistic appreciation for the fact that change management is oftenmore difficult than we anticipate. We believe, as do Pfeffer andSutton, that there is a Knowing–Doing gap.10 Knowing theconcepts and understanding the theory behind organizationalchange are not enough. This book is designed to providepracticing and prospective managers with the tools they will needto be effective change agents.
Environmental Forces Driving Change TodayMuch change starts with shifts in an organization’s environment.For example, government legislation dealing with employment lawpushes new equity concerns through hiring practices.Globalization means that marketing, research and development,production, and other parts of an organization (e.g., customerservice’s call centers) can be moved around the world and/oroutsourced. International alliances form and reform. These andrelated factors mean an organization’s competition is often globalin nature, rather than local. New technologies allow purchasing tolink to production within an integrated supply chain, changingforever supplier–customer relationships. Concerns over globalwarming, sustainability, and environmental practices give rise tonew laws, standards, and shifts in consumer preferences forproducts and firms that exhibit superior environmentalperformance. A competitor succeeds in attracting anorganization’s largest customer and upsets management’sassumptions about the marketplace. Each of these externalhappenings will drive and push the need for change. Thesefactors are summed up in the acronym PESTEL. PESTEL factorsinclude political, economic, social, technological,ecological/environmental, and legal factors that describe theenvironment of an organization.These are not simply private sector realities. Not-for-profits,hospitals, schools, and governments all experience theseenvironmental challenges as the world shrinks and the seemingpace of change accelerates and increases in complexity. Not-for-profits or NGOs (nongovernmental organizations) and variousgovernmental bodies respond to hunger in war-torn Somalia andSyria; public universities and hospitals respond to for-profitcompetitors. Governments around the world deal with issuesrelated to enhancing their economic competitiveness andattracting employers, hopefully in sustainable and sociallyresponsible ways. No one is immune.Sometimes organizations are caught by surprise by environmentalshifts, while other organizations have anticipated and planned for
new situations. For example, management may have systems totrack the perceived quality and value of its products versus itscompetition’s. Benchmarking data might show that its quality isbeginning to lag behind that of a key competitor. Theseenvironmental scanning and early warning systems allow foraction before customers are lost or provide paths to newcustomers and/or new services. Toyota had such systems inplace, but management appears to have responded inadequately.Did Toyota or GM Know About the Safety Defects?
Misreading the Environment andAssociated RisksOn April 5, 2010, the U.S. government’s transportation departmentstated it would seek $16.4 million from Toyota for not notifying thegovernment about potential accelerator pedal problems. “In takingthe step, federal authorities are sending the strongest signal yet thatthey believe the carmaker deliberately concealed safety informationfrom them.”11Did Toyota know about these deficiencies and respond by denyingthey existed and covering up? If so, this is an example of aninappropriate organizational response to environmental stimuli.The same question could be asked of General Motors concerningignition switch problems in the Cobalt and other brands. By GM’sadmission, they first became aware of this problem in 2001. It wasthe subject of a technical service bulletin in 2005, but there was norecall until 2014, in the aftermath of multiple deaths and injuries,mounting public scrutiny, and lawsuits. The global recall totaled 2.6million vehicles by May 2014: there have been humiliating U.S.congressional hearings, CEO Mary Barra has publicly apologized,and GM is sought immunity from the courts for lawsuits related toperiods before its 2009 bankruptcy. To say this had the potential toundermine confidence in GM and its brand would be a grossunderstatement and points to the danger of failing to act andimplement needed changes in a timely manner.12It’s beyond the scope of this book to provide an in-depth treatmentof all of the various trends and alterations in the environment.However, we will highlight below some of the important trends tosensitize readers to their environments. As is always the case,organizations find themselves influenced by fundamental forces:changing social, cultural, and demographic patterns; spectaculartechnological achievements that transform how we do business;concerns about the physical environment and social responsibilitythat are producing demands for changes in our products andbusiness practices; a global marketplace that sends us competingworldwide and brings competition to our doorsteps; political andlegal forces that have the potential to transform the competitivelandscape; continued political uncertainty in many countries that
has the potential to introduce chaos into world markets; theaftermath of the economic turmoil that rocked the world economyin 2008; and trade wars in 2018 that promoted further uncertainty.Responses to the External Environment Can Escalate RisksThe financial crisis of 2008 occurred because banks failed tocomprehend the risks they took with asset-backed securities andother derivatives. Incentive systems drove bankers to take onexcessive risks for excessive profits. They denied the evidencepresented to them, and when the bubble burst, the results werecatastrophic. For example, when warned by his chief risk officer, whoproposed shutting down the mortgage business in 2004, the head ofLehman Brothers threatened to fire him! This rush for profits drovemany banks. Chuck Prince, the head of Citigroup at the time, justbefore the credit markets seized up in August 2007, said, “As long asthe music is playing, you’ve got to get up and dance. We’re stilldancing.”13Clearly bankers misread both the ethical and business implications ofwhat was going on inside their firms. Either there was collectivemyopia at work with respect to mounting evidence of excessive riskfrom very credible sources,14 or the rewards and short-termperformance pressures were such that they chose not to attend tothe warning clouds.The Changing Demographic, Social, andCultural EnvironmentAge Matters.The social, cultural, and economic environment will bedramatically altered by demography. Demographic changes in theWestern world and parts of Asia mean that aging populations willgray the face of Europe, Canada, China, and Japan.15 Thefinancial warning bells are already being sounded. Even beforethe huge government deficits of 2009 and beyond that Westernnations have been digging themselves out from under, Standard &Poor’s predicted that the average net government debt-to-GDPratio for industrialized nations will increase from 33% in 2005 to
180% by 2050, due to rising pension and health care costs,16 ifchanges are not undertaken. In 2013 and 2016 they reportedmodest progress had been made on this debt challenge, but theproblems and related societal challenges have certainly not goneaway.17Although the United States will age less quickly, Europe andJapan will face a dependency crisis of senior citizens requiringmedical care and pension support. By 2050, the median age inthe United States is projected to be 41 versus approximately 50 inEurope. The United States will keep itself younger than Europethrough immigration and a birth rate that is close to replacementlevel,18 though even here growth assumptions have come underquestion as the rate of immigration has declined in the aftermathof the economic slowdown and questions around emigrationpolicies remain highly politicized. Even with this influx, if nothingchanges, it is estimated the U.S. governmental debt-to-GDP ratiowill grow to 472% of GDP by 2050, due mainly to pension andhealth care costs.19 Aging European countries will be around 300–400% of GDP, despite older populations, due to more cost-efficient approaches in these areas. On the high side, Japan ispredicted to reach 729%. The European Union’s population isprojected to peak in 2025 at around 470 million and then begin todecline, while the United States reaches 335 million in 2020 andcontinues to grow thereafter to 398 million in 2050. The decline inthe European Union would occur much earlier if it were not forimmigration.Throughout the world, fertility rates are falling and falling fast.20 In1974, only 24 countries had fertility rates below replacementlevels. By 2009, more than 70 countries had rates below 2.1. Insome countries, the swings are dramatic. The fertility rate in Irandropped from 7 in 1984 to 1.9 in 2009, a huge shift.
Source: U.N. Population Division.Some see a close tie between female education, fertility rates,and economic growth. When economies are poor, the fertility rateis high and there are many young dependents relying on workingadults and older siblings for sustenance. When fertility rates drop,there is a bulge of people, meaning the ratio of working adults todependents increases, leading to an increase in per capita wealth.Mexico and China are examples of this currently. When this bulgeages, dependent, nonworking seniors become a largerpercentage of the population, so these advantages tend todisappear over time, as incomes rise and fertility rates fall.21 Asdiscussed above, this has happened and is happening in Europeand Japan. India, Africa, and Mexico are examples of areas with asmaller proportion of dependents (the young and the old) relativeto their working populations, and this is something referred to asan economic dividend. However, it is only a dividend if thepopulation has the skills and abilities needed, and there areinfrastructure and policies in place to support employment—something many developing nations are finding verychallenging.22
These demographic shifts can take decades to work their waythrough, and the economic implications for organizations aresignificant. Imagine 400 to 500 million relatively wealthyAmericans and the impact that will have on global economicpower, assuming that pension and health care challenges areeffectively managed. Consumer spending in developing countriesis expected to grow to $44.8 trillion by 2030, eclipsing the $19.2trillion in North America and Europe.23 Also imagine the impact ofa graying Europe and Japan’s declining workforce. Someestimates put the fiscal problems in providing pensions and healthcare for senior citizens at 250% of national income in Germanyand France.24Pension costs can become a huge competitive disadvantage atthe company level too. At General Motors, there were 2.5 retireesfor every active worker in 2002. These so-called “legacy” costswere $900 per vehicle at that time due to pension and health careobligations. These costs rose to $1,800 by 200625 and retiredemployee–related costs were one of the key reasons that GMsought bankruptcy relief in 2009. Debt relief certainly alleviatedthe immediate pressure, but as the number of retired to active GMemployees continues to grow, this challenge is not going away.26Companies appear to be ill prepared to deal with this agingpopulation.27 Both private and public sector employers are wakingup to these pressures and attempting to bring about changes totheir pension programs that will be more sustainable, but thejourney will not be easy. Public pushback to reductions in pensionincome and other entitlement programs has been strong, andeven relatively modest proposals for shifts to policies such asincreasing the age of retirement by a year or two have facedwidespread resistance. This is resistance that scares politiciansbecause these are also people who are most likely to vote andwho are also feeling vulnerable as they find their savings areinsufficient to sustain their lifestyle.28An aging population also provides new market opportunities—would you have predicted that the average age of a motorcyclepurchaser would be over 49? That’s Harley-Davidson’s
experience.29 With aging populations, organizations can expectpressures to manage age prejudice more effectively. Subtlediscrimination based on age will not be accepted. Innovativesolutions will be welcomed by aging members of the workforceand an increasing necessity for employers. See the story below.Older Workers Can’t Be Ignored“The day is coming when employers are going to embrace the valueof older workers. They don’t have a choice,” writes Kerry Hannon.Demographic and fiscal realities are making the retention of oldermembers of the workforce escalate in importance and give rise to theinnovations in working relationships, from full time to flexible workrelationships and contract positions. Some employers are realizingthe benefits that these employees can bring with them and arerecognizing the importance of investing in them before theirknowledge walks out the door. Employers that fail to adjust theirapproach to older employees could find themselves seriously at riskas U.S. labor markets reflect the demographic realities.30KPMG has publicly recognized the benefits, noting that “olderworkers tend to be more dedicated to staying with the company, aplus for clients who like to build a relationship with a consultant theycan count on to be around for years.”31Diversity MattersOther demographic issues will provide opportunities andchallenges. In the United States, Latinos will play a role intransforming organizations. The numbers of Latinos jumped from35.3 million during the 1990s, to 55.4 million or 17.4% of thepopulation in 2014 (up from 13% in 2000), making them thelargest ethnic/racial group in the United States. They are alsomuch younger (29 versus the national average age of 37.2), and65.6% of its members have been born in the United States.Significantly, the largest growth often is in “hyper-growth” Latinodestinations such as Nevada and Georgia,32 some of which haveseen an increase of more than 300% in Latino populations since1980. The immigration component of this growth rate wasadversely affected by the U.S. economic downturn andimprovements in the Mexican economy, but it is predicted to
continue upward due to domestic population growth, difficultconditions in other parts of Latin America, and the impact that areturn to economic health in the United States will have onimmigration.One of the outcomes of hyper-growth in certain urban areas hasbeen an imbalance of Latino males and females. In the non-Latinopopulation, the ratio of males to females is 96:100. In the Latinopopulation, ratios as high as 118:100 are seen in the hyper-growthdestinations.33 While the specific implications for businesses areunclear, the general need for response and change is not. Notionsof cultural norms (including those around English literacy anddominant language used) and markets could be shattered by suchdemographic shifts.There have also been significant demographic shifts in Europeand parts of Asia, as people move from disadvantaged areas(economic, social, and political) in search of greater opportunities,security, and social justice. These trends are likely to continue,and as in the United States, they provide both challenges andopportunities. For countries like France and Austria, they help tomoderate the effects of an aging population by providing newentrants to the workforce and new customers for products andservices. However, they also represent integration challenges interms of needed services and there has been a backlash fromsome groups, who see them as both an economic and socialthreat. Resistance to immigration reform in the United States, thetightening of emigration rules in Canada, the rise of anti-immigration political parties in Western Europe, and the January2019 shut-down of the U.S. federal government over the disputedwall on the U.S.-Mexico border are evidence of this.Our assumptions about families and gender will continue to bechallenged in the workplace and marketplace of the future.Diversity, inclusiveness, and equity issues will challengeorganizations with unpredictable results. The heated debates thatoccurred in the United States in 2006 concerning legislationrelated to illegal or undocumented immigrants, temporary workers,and family unification continue to provoke passionate positionsand no resolution as of 2019. In Europe, debate around these
topics has given rise to some electoral success by what used tobe fringe parties in Sweden, France, and Italy (to name three),and isolated examples of violence.34 Some nations haveimplemented laws around certain religious practices (typicallyassociated with dress and visible symbols in schools andworkplaces) that are viewed by many as discriminatory.35 Mattersrelated to same-sex marriage, gender identity, and gender equitycontinue to be challenging for many organizations, as laws andbehavioral norms related to what is acceptable slowly evolve. Thefront-page coverage devoted to the drafting by the St. Louis Ramsof Michael Sam, the first openly gay professional football player,testifies to the attention and emotions these matters cangenerate.36 In too many parts of the world they represent life anddeath issues.The same is true for matters of gender violence, as seen in therise of the #MeToo movement in the United States and other partsof the world. Bad behavior is being exposed, attitudes arechanging, and governments and organizations are beginning toalter policies and procedures in meaningful ways. Reactions to thereported behaviors of Harvey Weinstein (film producer), RogerAiles (Fox News chairman), and many others attest to this.Christine Blasey Ford and Brett Kavanaugh’s 2018 SupremeCourt hearing concerning allegations of gender violence attractedover 20 million viewers37 and the strength of subsequentresponses suggest public concerns and demands for action ongender-related matters are increasing.In some nations, employment- and human rights-relatedlegislation have gone a long way toward advancing the interestsand acceptance of diversity, by providing guidance, rules ofconduct, and sanctions for those who fail to comply. However,issues related to gender, race, and diversity still need to beattended to by organizations. Participation and careeradvancement rates and salary level differences continue to attractthe attention of politicians, the public, and the courts. Further, theyconstrain the development of talent in organizations and haveadverse consequences on multiple levels—from the ability toattract and retain to performance and attitudinal outcomes thatcan, in turn, influence the culture and work climate of the firm.38
What happens when this boils over? In 2014 the intense newscoverage and disciplining of Donald Sterling, the owner of the LosAngeles Clippers NBA franchise, for racist comments made duringa private conversation, point to the extreme distress it causedmembers of the team and the reputational and brandconsequences his behavior had on the franchise and the leagueitself. Only the swift actions of NBA Commissioner Adam Silvercontained the damage, facilitated the sale of the franchise, andclearly signaled what was expected of owners.39Risks in this area are not just related to the actions of seniormanagement. Social media exposure extends the risks to alllevels of the firm, where postings from organizational memberscan and do go viral with adverse consequences (more will be saidabout this later). Employees in the United States have certainprotections when it comes to discussing working conditions withothers online. In the case of fast-food restaurants, this hasmanifested itself into a very public national campaign to increasethe minimum wage from $7.50 to $15.00 per hour. This campaignbegan on social media and is now giving rise to pay increases bysome firms and minimum wage increases at the state level.40Firms are finding they must respond very carefully, in partbecause of the public’s connection to a workforce where mattersof age, gender, race, ethnicity, and economic fairness are veryvisible.41 When employee postings go over the line on matters ofrace, gender, diversity, and equity, firms need to act and be seento be acting quickly and appropriately in order to controldamage.42Being viewed as proactive and progressive in these areas cancreate advantages for firms in terms of attraction, retention, andthe commitment levels of employees and customers. Firms suchas TD Bank communicate this commitment very publicly and havebeen recognized as one of the best employers by Diversity Inc.,Corporate Knights, and the Human Rights Campaign.43Multinational corporations, such as IBM, view workforce diversitymanagement as a strategic tool for sustaining and growing theenterprise.44 That doesn’t mean it is easy. Google has sought toincrease the diversity of its workforce for several years. In May
2014 it publicly recognized its current lack of diversity (30%women, 2% black, and 3% Hispanic), and committed itself toaggressively address this through significant external and internalinitiatives geared to attracting more individuals from these groupsto technical careers and Google.45 Smaller and medium-size firms(particularly tech start-ups) are increasingly recognizing theimportance of this, as they attempt to scale their operations.Race, gender, age, and diversity-related challenges multiply onceorganizations extend their footprints internationally. Differing rules,regulations, cultural norms, and values add to the changeleadership challenges that need to be managed, as people learnto work with one another in efficient, effective, and sociallyappropriate ways. Think of the workforce challenges that a NorthAmerican, Brazilian, or Indian firm needs to address whenestablishing its presence in a different part of the world. How willthey deal with norms and values in these areas that run contraryto their core values? This is not just an issue for largerorganizations. Increasingly, smaller firms find themselves facinginternational challenges as they seek to grow. These come inmany forms—from managing virtual, globally dispersed teams andsupply chains, to dealing with the complexities of joint ventures.While the challenges can seem daunting, an increasing number ofsmall and midsize companies are succeeding on the global stage.A study of 75 such firms highlights the strategies and tactics thathave produced positive results. Change leadership skills in thesefirms play a critical role in their survival and success.46The Physical Environment and SocialResponsibility MattersConcerns over global warming, the degradation of theenvironment, sustainability, and social responsibility haveescalated societal pressure for change at the intergovernmental,governmental, multinational and national corporate, andcommunity levels. Accountability for what is referred to as the“triple bottom line” is leading firms to issue audited statements thatreport on economic, social, and ecological performance with thegoal of sustainability in mind.47 The 2013 fire and building
collapse involving garment suppliers in Bangladesh (1,100workers killed) and the 2014 spread of the Ebola virus in WestAfrica intersected with questions about the role of multinationalcorporations in the health and safety of people in developingcountries.The 2010 pictures of BP’s oil well gushing millions of gallons intothe Gulf of Mexico combined with pictures of oil-coated pelicans,drought, extreme heat, storm-related flooding, and disappearingice masses reinforce the message that action is urgently needed.While the Paris Agreement on Climate Change was hailed as abreakthrough, the United States decision to withdraw from it hascast into doubt the future of coordinated global abatement efforts.However, the increasing frequency of extreme weather events(e.g., floods, storms, droughts, extreme heat events) and theirhuman impact will cause the pressure for action to intensify in theyears ahead. The question is more a matter of how quickly theintensifying pressure for action will reach a tipping point and willthat tipping point come in time? The growing number of crediblereports expressing serious concerns over the future of seasidemetropolises such as Miami due to sea level rises, the increasingfrequency of storms, and imminent threats to its water supply willhopefully hasten that tipping point and advance needed changesbefore it is too late.48There is also mounting evidence of the advantages that canaccrue to organizations that think about these issues proactivelyand align their strategies and actions with their commitment tosustainability and corporate social responsibility.49 Reportedbenefits range from increased employee commitment to positivecustomer reactions and improved financial performance. Thereputational damage firms incur when they are found to havefailed to behave responsibly can be severe (e.g., Volkswagen’sfalsification of diesel emissions tests).50New TechnologiesIn addition to responding to environmental and demographicchanges in the workplace and marketplace, organizations andtheir leaders must embrace the trite but true statements about the
impact of technological change. Underpinning technologicalchange is the sweeping impact that the digitization of informationis having. The quantity of data available to managers is mind-boggling. It is estimated that digital data will grow from 400 billiongigabytes of Web-enabled data in 2013 to 40 trillion gigabytes by2020.51 The explosion in the amount of data available will beaided by the impact of inexpensive nano-scale microelectronicsthat will allow us to add sensors and collection capacity to justabout anything. The use of data mining methodologies andartificial intelligence is becoming increasingly common inorganizations that seek to transform data into information.52 Thefollowing list of technological innovations points to the breadth ofchanges we can anticipate. This is not the stuff of science fiction.In most of these areas, applications are already present and costsare declining rapidly:Software that writes its own code, reducing human errorHealth care by cell phone, laptop, and appVertical farming to save space and increase yield53The Internet of Things, cloud technology, and crowd sourcingare providing access to massive data pools that can betranslated into useful information and action.The automation of knowledge workAdvanced robotics, from industrial applications to surgeryWearable computing, from basic data gathering to humanaugmentation and computer–brain interfacesAutonomous and near autonomous vehiclesNext-generation genomics, from agricultural applications tosubstance production (e.g., fuel) and disease treatmentapplicationsRenewable energy and energy storage breakthroughs thatwill change energy access and cost equations3-D printing for applications as varied as the production ofauto parts and human body partsAdvanced materials (e.g., nano technology) for a host ofapplications that will result in dramatic reductions in weightand improvements in strength, flexibility, and connectivityAdvanced oil and gas exploration and recoverytechnologies54
The use of blockchain technologies and cyber currencies islikely to change the way we undertake and securely recordtransactions on digital ledgers that can’t be tampered with.These can be used to record and track the ownership thoseassets over time, execute contracts, transfer ownership rightsand obligations, and make payments, to name a few of thepotential applications.Technology has woven our world together. The number ofinternational air passengers rose from 75 million in 1970 to anestimated 3.7 billion in 2016.55 The cost of a 3-minute phone callfrom the United States to England dropped from more than $8 in1976 to less than $0.06 in 2014 when VoIP (voice over Internetprotocol) is used for a call to a landline or cell phone. When boththe sender and receiver have the appropriate software (e.g.,Skype, WhatsApp) then the cost goes to 0. The number oftransborder calls in the United States was 200 million in 1980.56Estimates of the numbers today are in the tens of billions. VoIPhas disrupted traditional long-distance telephone marketsdramatically, and the proliferation of alternative communicationchannels, including SMS texting, BBM (Blackberry Messenger),Facebook, and their equivalents on other platforms havetransformed the communication landscape. The number of cellphones in use totaled 6.8 billion in 2013, meaning one for almostevery person alive.57 In 2017, there were an estimated 2.32 billionsmartphone users, meaning access to digital information andapps for everything from weather forecasts to online purchasingand the transfer of funds. Even those without access to a bank orsmartphone can transfer cash safely and securely on a regularcell phone in some developing parts of the world—Google “M-Pesa” for an example of this.58Our embrace of digital technology and connectedness hasopened the world to us and made it incredibly accessible, but ithas come with costs. Security concerns related to viruses andhacking have also escalated, and serious breaches are a commonoccurrence. The Ponemon Institute estimates that in the UnitedStates alone, 110 million adults had their personal informationexposed by hackers during a 12-month period in 2013. InSeptember 2018 Facebook reported that 50 million of its accounts
were directly affected by a hack.59 The cost to firms responding tothese threats and breaches are in the billions, and that doesn’tinclude the damage done to customer trust and loyalty. Costsrelated to online fraud and identity theft are in the billions (someput the estimates in excess of $100 billion) and growing rapidly.These issues will not go away any time soon.60 Issues related tothe loss of privacy, industrial espionage, and sabotage involvingboth firms and government agencies have also becomecommon.61 On a business-to-business level, supply chains woventogether through software allows them to operate effectively andefficiently, while at the same time opening them to risks.62With the Internet, students around the globe can access the samequality of information that the best researchers have if it is in thepublic domain (which is increasingly the case) and if theirgovernment hasn’t censored access to it. At the same time, thetechnology that has made the world smaller has also produced atechnological divide between haves and have-nots that has thepotential to produce social and political instability. Aspects of thegap are closing, as is seen in the growth of cell phones,smartphones, and Internet access in the developing world.Laptops and tablets are now available at well under $100, and thecost in India has dropped to below $50.63 Lack of access to cleanwater, sufficient food, and needed medication is less likely to betolerated in silence when media images tell people that othershave an abundance of such resources and lack the will to share.Events such as the Arab Spring, Occupy Wall Street, the 2014election of Narendra Modi as India’s prime minister, and the 2017Women’s March point to the power this technology has inmobilizing public interest and action. Technology transformsrelationships. Facebook, LinkedIn, Twitter, and their equivalentskeep us connected, 19% of U.S. newlyweds in 2017 werereported to have met online, and people have even been foundattempting to text in their sleep.64The New Change Tool on the BlockSocial media has fundamentally altered thinking about changemanagement. It has changed how information is framed, who frames
it, and how quickly it migrates from the few to the many. It canstimulate interest, understanding, involvement, and commitment toyour initiative, and it can also be used to create anxiety andconfusion, and used to mobilize opposition and resistance. It cancreate communities of shared interest, but it can also serve to isolatecommunities when they choose to only search out information thatconfirms their view of the situation. The one thing it can’t be is beingignored!Our purpose is not to catalogue all new and emergingtechnologies. Rather, our intent is to signal to change leaders theimportance of paying attention to technological trends and theimpact they have on organizations, now and in the future. As aresult of these forces, product development and life cycles areshortened, marketing channels are changing, and managers mustrespond in a time-paced fashion. Competitors can leapfrogorganizations and drop once-market-leaders into obsolescencethrough a technological breakthrough. The advantages of verticalintegration can vanish as technical insights in one segment of thebusiness drive down the costs, migrate the technology throughoutsourcing to other segments, or otherwise alter the value chainin ways that had not been anticipated.Is this overstating the importance of paying attention to howrapidly technological and social change can alter the competitivelandscape? BlackBerry went from creating and dominating thesmartphone business to less than 3% market share in five years.Dramatic downsizing and reinvention became the order of the dayas the BlackBerry executives searched for new paths andrenewed market relevance; it took them years to regain theircompetitive footing as a cybersecurity software and connectedcars firm.65 Now shift your thoughts to the automotive sector.What will the emergence of self-driving electric vehicles mean formanufacturers and their suppliers and distributors? What will theymean for city planners, urban transit, and the taxi driver?Prototypes are currently driving on the streets of Mountain View,California, and elsewhere. Expectations are that these sorts ofvehicles will be for sale by 2020.66 The watchword for changeleaders is: be aware of technological trends and be proactive inconsidering how to respond to organizationally relevant ones.
Political ChangesThe external political landscape of an organization is a reality thatchange leaders need to pay attention to and figure out how toengage. Even the largest of multinationals has minimal impact onshaping the worldwide geopolitical landscape and the focus ofgoverning bodies.67 However, if they are attentive and nimble,their interests will be better served.The collapse of the Soviet Empire gave rise to optimism in theWest that democracy and the market economy were the naturalorder of things, the only viable option for modern society.68 Withthe end of communism in Russia, there was the sense that therewas no serious competitor to free-market democracy and thebelief existed that the world would gradually move to competitivecapitalism with market discipline.Of course, this optimism was not realized. Nationalistic borderquarrels (India–Pakistan, for example) continue. Some Africancountries have become less committed to democracy (Zimbabweand Ethiopia). Nation-states have dissolved into microstates(Yugoslavia and Sudan) or had portions annexed as in the case ofCrimea. While American power may still be dominant worldwide,September 11, 2001 (9/11) demonstrated that even the dominantpower cannot guarantee safety. Non-nation-states and religiousgroups have become actors on the global stage. The Middle East,north and central parts of Africa, the Ukraine, Venezuela, andCentral Asia continue to be in turmoil, creating political andeconomic uncertainty.Changes in the economic performance of nations have alsoaltered the geo-political landscape. Growth in China and India,though it has slowed, continues to advance much more than twicethe rate of the developed world.69 They led the world out of the2007–2008 crash, and in some periods have been joined by otherAfrican and Asian nations that are experiencing more rapideconomic growth than the developed world. However, progress inthe developing world has slowed in the face of global concernsrelated to protectionism, trade wars, and constrained capital
flows70. Grinding poverty rates, though improving, are still thereality for hundreds of millions of people who live in these areas.71As organizations become global, they need to clarify their ownethical standards. Not only will they need to understand the rulesand regulations of each country, they will also have to determinewhat norms of conduct they will work to establish for theirorganizational members, and what constitutes acceptable andunacceptable behavior. Peter Eigen, chairman of TransparencyInternational, states, “Political elites and their cronies continue totake kickbacks at every opportunity. Hand-in-glove with corruptbusiness people, they are trapping whole nations in poverty andhampering sustainable development. Corruption is perceived tobe dangerously high in poor parts of the world, but also in manycountries whose firms invest in developing nations.”72 Leftunaddressed, political corruption can become embedded inorganizations. Transparency International finds bribery mostcommon in public works and construction and arms and defensecorporations as compared with agriculture.73 The accounting andgovernance scandals of 2001 to 2002 (Enron and WorldCom),followed by an almost uninterrupted series of major ethical lapsesin global financial services/banking, pharmaceutical, andgovernment sectors (to name just three), have created publicdemands for transparency, accountability, regulations with teeth,and heightened expectations that firms should be expected tobehave in socially responsible manners. Some companies,Hewlett-Packard, H&M, Tesco, Loblaw, and Apple, for example,have responded by requiring that they and the participants in theirsupply chain adhere to a set of specified ethical standards.Further, they are committed to working with their suppliers toensure they reach these standards.74The politics of globalization and the environment have createdopportunities and issues for organizations. The United States’Obama administration was committed to the introduction of newgreen energy initiatives, but the election of Donald Trump hasplaced U.S. progress in this area in doubt.The desire to reduce the world’s dependence on foreign oil andcoal has meant subsidy programs for new technologies and
opportunities for businesses in those fields. It has also led to anexplosion of energy recovery methods, such as fracking, whichbring with them their own ethical issues. Some organizations arerestructuring themselves to seize such opportunities. Forexample, Siemens has reorganized itself into three sectors—industry, energy, and health care—to focus on megatrends.75Senge and his colleagues argued that the new environmentalismwould be driven by innovation and would result in radical newtechnologies, products, processes, and business models.76 Therapid rates of market penetration for such technologies and thedecline in their costs are evidence that Senge was right.The politics of the world are not the everyday focus for allmanagers, but change leaders need to understand their influenceon market development and attractiveness, competitiveness, andthe resulting pressures on boards and executives. Firms doingbusiness in jurisdictions such as Russia, China, and Argentinaknow this all too well. Issues related to climate change, water andfood security, power, urbanization/smart cities, public transport,immigration, health care, education, trade, employment, and ouroverall health and safety will continue to influence politicaldiscussion and decision making at all levels—from the local to theinternational context. A sudden transformation of the politicallandscape can trash the best-laid strategic plan. The growth ofpopulist and anti-global sentiments in Europe and the UnitedStates has demonstrated how political surprises (e.g., the Brexitvote in the UK and the election of Donald Trump) can quicklydisrupt existing relationships (e.g., alliances, markets, supplychains) and create high levels of uncertainty as to what liesahead. It’s been argued that the rise of these movements isattributable to the declining size of the middle class in manycountries, the massing of wealth by elites, and the declining sensein parts of the population that a positive future is available, givencurrent conditions and trends.77Successful change leaders will have a keen sense of theopportunities and dangers involved in global, national, and localpolitical shifts. If they are behaving in a manner consistent withcorporate social responsibility, they will also have a keen sense ofthe opportunities and dangers related to the issues themselves.
The EconomyIn 2007, the world economy crashed into financial crisis andappeared headed for a 1930s depression. Trillions of dollars ofasset-backed paper became valueless, seemingly overnight.Investors and pension funds lost 20% of their value. Global stockmarkets shrank by $30 trillion, or half their value.78 The Americanhousing market, which provided an illusory asset base, collapsedand led to the credit crisis. Firms that were chastised for havingtoo much cash on hand and were seen as missing opportunitiessuddenly became the survivors when credit vanished. At theindividual firm level, the economic crisis led to layoffs andbankruptcies. Firms saw their order books shrink and businessdisappear. Entire industries, such as the automotive industry, wereoverwhelmed and certain large automotive manufacturers mighthave vanished if not for government bailouts. An example of theimpact on one small firm is shown in the story below.The Impact of the 2007–2009 Recession on a Small BusinessSerge Gaudet operates a wholesale and retail drapery and windowblind business in the small Canadian town of Sturgeon Falls, Ontario.The world economic crisis suddenly became real when banks wouldno longer extend him credit. In his words, “I had signed orders,contracts in hand, and my bank refused my line of credit so that Icould buy the inventory. How was I to finance this deal? I had thecontract and it was with a government hospital. Surely, this wascreditworthy? What else could I do?”Mr. Gaudet managed through the crisis by negotiating newer,tougher terms with his bank. But the lack of credit was not his onlyproblem. “Normally, I bid on requests for proposals and win areasonable percentage of them,” he reported. “Suddenly, there wasnothing to bid on. Nothing. Every institution that was going to buyblinds was waiting—waiting for government aid that was very slow incoming. It was touch-and-go whether I could last until new contractscame in.”Mr. Gaudet’s story is typical of the situation faced by many smallbusinesses as they struggled through the economic crisis of 2007–2009. Many did not survive. Those that did were able to do so
because they had low overhead and debt.79 As of 2019, Mr Gaudetcontinues to successfully operate his business.Governments responded to the economic crisis with Keynesianabandon. G20 countries ran huge deficits as governments tried tostimulate their economies out of recession. America’s federaldeficit hit 83% of GDP in 2009, and the overall debt to GDP wentfrom 62% in 2007 to 99% in 2012.80 In December 2010,economists were talking about a slow recovery in America and analmost nonexistent one in Europe, and they were right.81Economists also predicted that China would have an 8.6% GDPgrowth and 11.1% investment growth, with significant growth alsopredicted for India, the BRICS nations and other parts of thedeveloping world (in particular, Africa). While growth in theseeconomies has not been as robust as expected during the 2010s,most (with the exception of Russia) performed relatively well untilaround 2016 when significant economic headwinds emerged.These headwinds have varied in nature from country to country(e.g., declining foreign direct investment, serious and crediblecorruption allegations leading to political uncertainty, growingprotectionism). However, most economists believe there has beena shift in the economic order of the world toward the developingworld and that is not about to reverse. Initiatives such as China’sOne Belt and One Road initiative and its involvement in Africandevelopment reinforce this.82As slower rates of growth in the developed world became thenorm, frustration was building within those countries amongstthose who were feeling marginalized and left behind economically.Their economic concerns were coupled with growing fears aboutimmigration, unfair trade, societal norms, and their place insociety. While Donald Trump’s “Make America Great Again”campaign provides a window on the U.S. context, Brexit in theUK, and the rise of nationalistic governments elsewhere, forexample, Austria, Italy, and Turkey, suggest that this is not anisolated phenomenon. Though Keynesian solutions were quicklyapplied to triage the 2008 crisis, budgetary discipline at thenational level in many countries has been missing in action in the2018 period. Budgetary deficits are ballooning in a number ofcountries at a time when most economists would suggest we
should be saving for a rainy day, creating escalating risk for afinancial crash.83 For example, the Congressional Budget Officepredicts the U.S. deficit to rise to $1 trillion by 2020 and 148% ofGDP by 2047.84 This suggests the economic fallout that willaccompany the next downturn will be exacerbated due to our levelof indebtedness.The lessons from the economic crisis and subsequentdevelopments are centered on risk management and capacitybuilding. In a world where everything is interconnected,organizations need to be able to respond quickly. In order to doso, organizations need the capacity to weather numerouschallenges. Ideally, organizations will incorporate the mechanismsto anticipate these challenges and adapt their management andleadership practices to hold the underlying social fabric of the firm.In many situations, these anticipatory mechanisms will not beavailable and organizations will need to rely on their ability toadapt and change as the environment shifts.See Toolkit Exercise 1.2 to practice thinking about environmentalforces facing your organization and their implications.
The Implications of WorldwideTrends for Change ManagementThe economic globalization of the world, the demographic andsocial shifts around the globe, technological changes,environmental and ecological pressures, and the upheaval andpolitical and economic uncertainties around the world form thereality of organizational environments. Predicting specific short-run changes is a fool’s errand. Nevertheless, change leadersneed to have a keen sense of just how these seemingly externalevents impact internal organizational dynamics. “How will externalchanges drive strategy and internal adjustments andinvestments?” has become a critical question that change leadersneed to address. For example, the rise of the sharing economyhas disrupted traditional business structures of the hotel and taxibusiness. Airbnb and Uber have both capitalized on globalizationtrends and technological innovations to improve access toinformation relevant to travelers, increase social trust, and throughthese mechanisms change the way that people travel.85In 2002, Barkema, Baum, and Mannix predicted that certainmacro environmental changes would change organizational formsand competitive dynamics and, in turn, lead to new managementchallenges.86 They captured three macro changes facing ustoday: digitization of information; integration of nation states andthe opening of international markets; and the geographicdispersion of the value chain. These are leading to theglobalization of markets. This globalization, in turn, will drivesignificant shifts in organizational forms and worldwidecompetitive dynamics. Table 1.1 summarizes Barkema andcolleagues’ article. Column 1 outlines those three macro changes,column 2 the new organizational forms and competitive dynamicsarising from them, and column 3, the new managementchallenges that arise from these.Table 1.1 New Organizational Forms andManagement Challenges Based on
Environmental ChangeTable 1.1 New Organizational Forms and ManagementChallenges Based on Environmental ChangeMacro Changesand ImpactsNewOrganizationalForms andCompetitiveDynamicsNew ManagementChallengesDigitizationleading tofasterinformationtransmission,lower-costinformationstorage andtransmissionIntegration ofnationstates, andopening ofmarketsGeographicdispersion ofthe valuechainAll leading toglobalizationof marketsGlobal smalland medium-sizedenterprisesGlobalconstellationsoforganizations(i.e.,networks)Large,focusedglobal firmsAll leading tospread ofautonomous,dislocatedteams;digitallyenabledstructures;intense globalrivalry; andrunning fasterwhileseeming tostand stillGreaterdiversityGreatersynchronizationrequirementsGreater time-pacingrequirementsFaster decisionmaking,learning, andinnovationMore frequentenvironmentaldiscontinuitiesFaster industrylife cyclesFasternewness andobsolescenceof knowledgeRisk ofcompetencytraps where oldcompetenciesno longerproducedesired effects
Macro Changesand ImpactsNewOrganizationalForms andCompetitiveDynamicsNew ManagementChallengesGreaternewness andobsolescenceoforganizationsSource: Adapted from Barkema, H. G., Baum, J. A. C., & Mannix, E. A.(2002). Management challenges in a new time. Academy of ManagementJournal, 45(5), 916–930.The early decades of the 21st century suggest acceleratedchange in comparison to the latter part of the 20th century.Diversity, synchronization and time-pacing requirements, decisionmaking, the frequency of environmental discontinuities, quickindustry life cycles and in consequence product and serviceobsolescence, and competency traps all suggest greatercomplexity and a more rapid organizational pace for today andtomorrow. As such, middle managers will play increasinglysignificant roles in making change effective in their organizationsin both evolutionary and revolutionary scenarios. Barkema et al.argue that much change today deals with mid-level change—change that is more than incremental but not truly revolutionary.However, increasing rates of disruption in retail, finance/banking,technology, manufacturing, mining, media, insurance and othersectors is challenging this assumption and giving rise to the beliefthat if we don’t disrupt ourselves, our competitors will.87
Four Types of Organizational ChangeOrganizational changes come in different shapes and sizes:mergers, acquisitions, buyouts, downsizing, restructuring,outsourcing the human resource function or computer services,departmental reorganizations, installations of new incentivesystems, shutting particular manufacturing lines or opening newbranches in other parts of the world, and the list goes on. All ofthese describe specific organizational changes. The literature onorganizational change classifies such changes into two types,episodic or discontinuous change and continuous change. That is,change can be dramatic and sudden—the introduction of a newtechnology that makes a business obsolete or new governmentregulations that immediately shift the competitive landscape. Or,change can be much more gradual, such as the alteration of corecompetencies of an organization through training and adding keyindividuals.Under dramatic or episodic change, organizations are seen ashaving significant inertia. Change is infrequent and discontinuous.Reengineering programs are examples of this type of change andcan be viewed as planned examples of injecting significantchange into an organization. On the other hand, under continuouschange, organizations are seen as more emergent and self-organizing, where change is constant, evolving, and cumulative.88Japanese automobile manufacturers have led the way in this areawith kaizen programs focused on encouraging continuous change.In the technology sectors, collaborative approaches, facilitated bysocial networks that extend beyond corporate boundaries andeven crowd sourcing, are giving rise to continuous change modelsfor organizational adaptation, growth, and renewal.89A second dimension of change is whether it occurs in a proactive,planned, and programmatic fashion or reactively in response toexternal events. Programmatic or planned change occurs whenmanagers anticipate events and shift their organizations as aresult. For example, Intel, a multinational semiconductor chipmaker headquartered in California, anticipates and encourages acycle of computer chip obsolescence.90 As a result, the
organization has been designed to handle this obsolescence.Alternately, shifts in an organization’s external world lead to areaction on the part of the organization. For example, theemergence of low-cost airlines has led to traditional carriersemploying reactive strategies, such as cutting routes, costs, andservice levels in an attempt to adapt.91Nadler and Tushman combine these two dimensions in a usefulmodel illustrating different types of change (see Table 1.2). Theydefine four categories of change: tuning, adapting, redirecting orreorienting, and overhauling or re-creating.Tuning is defined as small, relatively minor changes made on anongoing basis in a deliberate attempt to improve the efficiency oreffectiveness of the organization. Responsibility for acting onthese sorts of changes typically rests with middle management.Most improvement change initiatives that grow out of existingquality-improvement programs would fall into this category.Adapting is viewed as relatively minor changes made in responseto external stimuli—a reaction to things observed in theenvironment, such as competitors’ moves or customer shifts.Relatively minor changes to customer servicing caused by reportsof customer dissatisfaction or defection to a competitor provide anexample of this sort of change, and once again, responsibility forsuch changes tends to reside within the role of middle managers.Table 1.2 Types of Organizational ChangeTable 1.2 Types of Organizational ChangeIncremental/ContinuousDiscontinuous/Radical
Incremental/ContinuousDiscontinuous/RadicalAnticipatoryTuningIncremental changemade in anticipation offuture eventsNeed is for internalalignmentFocuses on individualcomponents orsubsystemsMiddle-managementroleImplementation is themajor taskFor example, a qualityimprovement initiativefrom an employeeimprovementcommitteeRedirecting orReorientingStrategic proactivechanges based onpredicted majorchanges in theenvironmentNeed is for positioningthe wholeorganization to a newrealityFocuses on allorganizationalcomponentsSenior managementcreates sense ofurgency andmotivates the changeFor example, a majorchange in product orservice offering inresponse toopportunitiesidentified
Incremental/ContinuousDiscontinuous/RadicalReactiveAdaptingIncremental changesmade in response toenvironmental changesNeed is for internalalignmentFocuses on individualcomponents orsubsystemsMiddle-managementroleImplementation is themajor taskFor example, modestchanges to customerservices in response tocustomer complaintsOverhauling or Re-creatingResponse to asignificantperformance crisisNeed to reevaluatethe wholeorganization,including its corevaluesFocuses on allorganizationalcomponents toachieve rapid,system-wide changeSenior managementcreates vision andmotivates optimismFor example, a majorrealignment ofstrategy, involvingplant closures andchanges to productand service offerings,to stem financiallosses and return thefirm to profitabilitySource: Adapted from Nadler, D. A., & Tushman, M. (1989, August).Organizational frame bending: Principles for managing reorientation.Academy of Management Executive, 3(3), 196.Redirecting or reorienting involves major, strategic changeresulting from planned programs. These frame-bending shifts are
designed to provide new perspectives and directions in asignificant way. For example, a shift in a firm to develop acustomer service organization and culture would fall in thiscategory. Finally, overhauling or re-creation is the dramatic shiftthat occurs in reaction to major external events. Often there is acrisis situation that forces the change—thus, the emergence oflow-cost carriers forced traditional airlines to re-create what theydo. Likewise, the credit crisis bankrupted General Motors andforced a complete overhaul and downsizing of the company.The impact of the change increases as we move from minoralterations and fine-tuning to changes that require us to reorientand re-create the organization. Not surprisingly, reorienting andre-creating an organization is much more time-consuming andchallenging to lead effectively. These activities also have a greaterimpact on individuals who must reorient themselves. Regardlessof difficulty, the financial crisis and recession of 2008–2009 forcedcompanies to react. While there are no data that we know of toconfirm this, anticipatory organizational change does not seem tobe sufficient to prepare organizations for the dramatic shift in theglobal business environment presented by 2008–2009. Whileplanning can help organizations think about risk and opportunities,it was their awareness and adaptive capacity that allowed firms torespond and survive the crisis. The escalating interest inheightening adaptive capacities within organizations reflects theimportance of this.92An examination of the history of British Airways provides a classicexample of a single organization facing both incremental anddiscontinuous change while both anticipating issues and beingforced to react.93British Airways: Strategic and Incremental ChangeTodd Jick’s case study describes the crisis of 1981. British Airways’(BA’s) successful response in the 1980s was revolutionary in nature.During that period, BA revolutionized its culture and its view of thecustomer with outstanding results. In the 1990s, BA entered a periodof slow decline as the systems and structures at BA becameincreasingly incongruent with the new deregulated environment andthe successful competitors that were spawned by that environment.
Major upheavals in international travel pushed BA into a reactivemode following 9/11, and the results of management’s attempts todevelop new strategies were unclear for a considerable period. Astrike in the summer of 2003 created more uncertainty for the firm.94The dramatic rise in oil costs during 2007 and 2008 forced BA to cutcosts and implement a merger with Iberia. These strategic moves tocut costs were matched by more incremental internal actions to limitthe wages of cabin staff to match those of its competitors. Thesechanges led to limited strike action in 2010 and a negotiatedresolution in 2011, which was facilitated by the arrival of new chiefnegotiators on both sides—Keith Williams, BA’s new president, andLen McCluskey, the union’s new general secretary. Fleet renewal(their first Airbus A380 was put into service in 2013), along withongoing changes to systems, processes, and procedures wereundertaken in and around that time.95Roll the clock forward to 2018 and new and recurring strategic andoperational challenges have emerged that BA must manage. Theseinclude issues related to Brexit, aggressive competitors, labourchallenges, data security, and other IT related issues (e.g., the ITfailure that grounded 75,000 people for days in May 2017).96 Thesemark the continuance of their change journey, marked by bothstrategic and incremental change initiatives.Nadler and Tushman raise this question: “Will incremental changebe sufficient or will radical change be necessary in the long run?”Suffice it to say that this question has not been answered.However, the Japanese provided a profound lesson in the value ofincremental, daily changes. Interestingly enough, it was a lessonthe Japanese industrialists learned from North Americanmanagement scholars such as Duran and Deming. If oneobserves employee involvement and continuous improvementprocesses effectively employed,97 one also sees organizationalteam members that are energized, goal directed, cohesive, andincreasingly competent because of the new things they arelearning. Such teams expect that tomorrow will be a little differentfrom today. Further, when more significant changes have to beembraced, these teams are likely to be far less resistant andfearful of them because of their earlier experiences with facilitatingchange within group structures. Organizational change is part ofdaily life for them.
Many think of incremental/continuous change anddiscontinuous/radical change as states rather than aperspective or a spectrum of change size. From an organization’spoint of view, a departmental reorganization might seemincremental. However, from the department’s perspective, it mayseem discontinuous and radical. As Morgan puts it,A mythology is developing in which incremental andquantum change are presented as opposites. Nothingcould be further from the truth. . . . True, there is a bigdifference between incremental and quantum changewhen we talk of results (but) incremental and quantumchange are intertwined. As we set our sights on those500% improvements, remember they’re usually deliveredthrough 5, 10, and 15% initiatives.98The perception of the magnitude of the change lies in the eye ofthe beholder. Incremental changes at the organizational level mayappear disruptive and revolutionary at a department level.However, as noted earlier, those who are accustomed to facingand managing incremental change on a regular basis will likelyview more revolutionary changes in less threatening terms. Thosewho have not faced and managed change will be more likely toview even incremental changes as threatening.Organizational members need to learn to accept and value theperspectives of both the adaptor (those skilled in incrementalchange) and the innovator (those skilled in radical change).99 As achange agent, personal insight regarding your abilities andpreferences for more modest or more radical change is critical.The secret to successful organizational growth and developmentover time lies in the capacity of organizational members toembrace both approaches to change at the appropriate times andto understand that they are, in fact, intertwined.100
Planned Changes Don’t Always Produce theIntended ResultsTo this point, it is clear that change—from simple fine-tuning toradical reconstruction—is a necessary prerequisite toorganizational survival. However, successful change is extremelydifficult to execute as the scope and complexity increases. Manytypes of change initiatives have failed: reengineering, total qualitymanagement, activity-based costing, joint optimization, strategicplanning, and network structures.101 If change leaders were tofully consider the failure rates when designing interventions oracquisitions, fear would trump action. As one manager put it, “Theopportunity has turned out to be 10 times what I thought it wouldbe. The challenges have turned out to be 20 times what I thoughtthey were!”102Fortunately or unfortunately, inaction and avoidance are nosolution. Maintaining the status quo typically does not sustaincompetitive advantage, particularly in troubled organizations.Delays and half-hearted efforts that begin only after the problemshave become critical increase costs and decrease the likelihood ofa successful transformation. As Hamel and Prahalad put it, “Nocompany can escape the need to re-skill its people, reshape itsproduct portfolio, redesign its process, and redirect resources.”103Organizations that consistently demonstrate their capacity toinnovate, manage change, and adapt over the years are the oneswith staying power.104Hamel and Prahalad believe that restructuring and reengineering,on their own, do little to increase the capabilities of the firm. Thesetwo Rs increase profitability and can enhance competitiveness but“in many companies . . . re-engineering (and restructuring) . . . aremore about catching up than getting out in front.”105 Hamel andPrahalad argue that companies need to regenerate their strategyand reinvent their industry by building their capacity to compete.These transformations and realignments that result are sustainedmarathons, not quick fixes. Skilled change leaders provide acoherent vision of the change and do all that they can to help
people adapt and embrace the changes with realisticexpectations. When change recipients understand that things willoften get worse before they get better, but also believe that thebenefits are well worth the effort, change initiatives are more likelyto be sustained.106 For example, as costs rise in China, theenvironment is shifting manufacturing elsewhere, including arebirth of manufacturing in the United States. This trend demandsa continuing evolution of strategy as well as reshaping of supplychains to alter ingrained overseas production practices that haveevolved over the past 15 years—changes that manufacturing andsupply chain managers may have difficulty adjusting to.107Radical solutions both terrify and fascinate managers. Oftenmanagers are comfortable with relatively small technological fixesas the source of products, services, efficiency, and effectiveness.However, they tend to fear interventions that seem to reduce theircontrol over situations, people, and outcomes. Whenorganizations embrace technology but not people, they pay asteep price. They reduce the likelihood that the change willproduce the desired results and they fail to take advantage of thecollective capacity of organizational members to improveoperations, products, and services. To say the least, this practiceis extremely wasteful of human capacity and energy, causing themto atrophy over time. Investment in infrastructure alone isinsufficient,108 and as a result, increasing attention is beingdirected toward matters such as employee engagement,commitment and organizational agility (the ability to rapidly andsuccessful adapt to changing conditions).109
Organizational Change RolesWithout a sense of vision, purpose, and engagement, itis easy to become a passive recipient of change. As apassive recipient, you see yourself as subject to thewhims of others, as relatively helpless, perhaps even asa victim. As a passive recipient, your self-esteem andself-efficacy may feel as if they are under attack.110 Yourperception of power and influence will diminish and youwill feel acted on. Years ago, Jack Gordon talked aboutaligning employees. That is, once top management hasdecided on the strategic direction, employees need to bealigned with that direction. We cannot help but think thatif you are the recipient of change, “being aligned” justwon’t feel very good.111Who are the participants in organizational change? Manyemployees will step up and make the change work. They will bethe change implementers, the ones making happen what others,the change initiators, have pushed or encouraged. Changeinitiators, or champions, also frame the vision for the changeand/or provide resources and support for the initiative. Or,employees can be on the receiving end of change, changerecipients. Some employees will play a role in facilitating change—change facilitators won’t be the ones responsible forimplementing the change, but they will assist initiators andimplementers in the change through their contacts andconsultative assistance.Of course, one person might play multiple roles. That is, a personmight have a good idea and talk it up in the organization (changeinitiator); take action to make the change occur (changeimplementer); talk to others to help them manage the change(change facilitator); and, ultimately, be affected by the change too(change recipient). In this book, we use the terms change leaderand change agent interchangeably. Change initiators, change
implementers, and change facilitators are different roles thanplayed by the change leader or agent. At any given moment, theperson leading the change may be initiating, implementing, orfacilitating. Table 1.3 outlines the roles that people play inorganizational change.
Change InitiatorsChange initiators get things moving, take action, and stimulate thesystem. They are the ones seeking to initiate change to makethings better. They identify the need for change, develop thevision of a better future, take on the change tasks, and championthe initiative. Change initiators may face considerable risk in theorganization. To use a physical metaphor, action createsmovement, movement creates friction, and friction creates heat!And creating heat may help or hurt one’s career. Change initiatorsneed to take calculated actions and be prepared to undertake thework needed to create and support the powerful arguments andcoalitions to effect change in organizations from the top or themiddle of the organization.Change initiators will find useful aids for change in this book. We,as authors, cannot supply the passion and powerful vision neededby initiators, but we can point out the requirements of successfulchange: planning, persuasion, passion, and perseverance. Andwe can provide frameworks for analysis that will enhance thelikelihood of successful change.Change initiators need to be dogged in their desire anddetermination. Those who succeed will earn reputations forrealistic, grounded optimism, for a good sense of timing, and fornot giving up. If nothing else, the opposition may tire in the face oftheir persistence. Better yet are those who have the uncannyability to creatively combine with others into a coalition that turnsresisters into allies and foot draggers into foot soldiers andadvocates for change.
Change ImplementersMany would-be and existing managers find themselves as changeimplementers. Others, including their bosses, may initiate thechange, but it is left to the implementers to make it work. This roleis critical. Pfeffer argues that effectiveness doesn’t come frommaking the critical decision but rather from managing theconsequences of decisions and creating the desired results.112 Ashe says, “If change were going to be easy, it would already havehappened.” The change implementer’s role is important andneeded in organizations. Without it, there is no bridge to thedesired end state—no sustained integrated approach.113Table 1.3 Managerial Roles and OrganizationalChangeTable 1.3 Managerial Roles and Organizational ChangeRolesRole DescriptionChangeleader oragentThe person who leads the change. He or shemay play any or all of the initiator,implementer, or facilitator roles. Often, but notalways, this person is the formal changeleader. However, informal change leaders willemerge and lead change as well. (Note: Inthis book, change leader and change agentare used interchangeably.)ChangeinitiatorThe person who identifies the need andvision for change and champions the changeand advocates for it in the organization.ChangeimplementerThe person who has responsibility for makingcertain the change happens, charting thepath forward, nurturing support, andalleviating resistance.
RolesRole DescriptionChangefacilitatorThe person who assists initiators,implementers, and recipients with thechange-management process. Identifiesprocess and content change issues andhelps resolve these, fosters support,alleviates resistance, and provides otherparticipants with guidance and council.ChangerecipientThe person who is affected by the change.Often the person has to change his or herbehavior to ensure the change is effective.Change implementers will find much in this book to assist them.They will find guidance in creating and increasing the need for thechanges that change initiators are demanding. They will find toolsfor organizational diagnosis and for identifying and working withkey stakeholders. And they will find concepts and techniques tofacilitate the internal alignment of systems, processes, andpeople; improve their action plans and implementation skills; andhelp them sustain themselves during the transition.At the same time, we encourage and challenge changeimplementers to stay engaged, to stay active, and to initiatechange themselves. Oshry identifies the dilemma of “middlepowerlessness,” where the middle manager feels trappedbetween tops and bottoms and becomes ineffective as a result.114Many middle managers transform their organizations byrecognizing strategic initiatives and mobilizing the power of the“middles” to move the organization in the direction needed.
Change FacilitatorsToday’s complex organizational changes can fail because partieslock into positions or because perspectives get lost inpersonalities and egos. In such cases, an outside view canfacilitate change. Change facilitators understand changeprocesses and assist the organization to work through changeissues. As such, they sometimes formally serve as consultants tochange leaders and teams. However, many of those who act aschange facilitators do so informally, often on the strength of theirexisting relationships with others involved with the change. Theyhave high levels of self-awareness and emotional maturity and areskilled in the behavioral arts—using their interpersonal skills towork with teams or groups.In this book, change facilitators will discover frameworks that willhelp them to understand change processes. With theseframeworks, they will be able to translate concrete organizationalevents into understandable situations and so ease change. Andtheir knowledge and interpersonal skills will provide changeperspectives that will allow managers to unfreeze their positions.
Common Challenges for Managerial RolesTable 1.4 highlights common sources of difficulty that changeinitiators, implementers, and facilitators face when attempting toimplement planned changes. While there are external factors thatcan frustrate progress in unanticipated and undesirable directions,this table focuses on ways in which change leaders act as theirown worst enemies, self-sabotaging their own initiatives. Theystem from predispositions, perceptions, and a lack of self-awareness. The good news is that they also represent areas thata person can do something about if he or she becomes self-awareand chooses to take the blinders off.Table 1.4 Common Managerial Difficulties inDealing With Organizational ChangeTable 1.4 Common Managerial Difficulties in Dealing WithOrganizational Change1. Managers are action oriented and assume otherrational people will see the inherent wisdom in the proposedchange and will learn the needed new behaviors. Or,managers assume that they will be able to replacerecalcitrant employees.2. Managers assume they have the power and influenceto enact the desired changes, and they underestimate thepower and influence of other stakeholders.3. Managers look at the transition period activities as acost, not an investment that increases the prospects forsuccess and reduces failure risks.4. Managers are unable to accurately estimate theresources and commitment needed to facilitate theintegration of the human dimension with other aspects ofthe change (e.g., systems, structures, technologies).5. Managers are unaware that their own behavior, andthat of other key managers, may be sending out conflicting
messages to employees and eventually customers.6. Managers find managing human processes unsettling(even threatening) because of the potential emotionalityand the difficulties they present with respect to predictionand quantification.7. Managers simply lack the capacity (attitudes, skills, andabilities) to manage complex changes that involve people.When those managing the change get defensive, the mindsof others tend to close rather than open.8. Managers’ critical judgment is impaired due to factorsrelated to overconfidence115 and/or groupthink.
Change RecipientsChange recipients are those who find themselves on the receivingend of change. Their responses will vary from active resistance,passivity, to active support, depending upon their perceptions ofthe change, its rationale, and its impact. When people feel actedupon and with little or no voice or control in the process,dissatisfaction, frustration, alienation, absenteeism, and turnoverare common responses to demands for change.116 This bookprovides guidance that will help recipients to better understandwhat is happening to them and their organizations. Further, it willidentify strategies and approaches that will help change recipientsto take an active role and increase the amount of control theyhave over organizational events.Regardless of your role in the organization—change recipient,change implementer, change initiator, or change facilitator—thisbook contains useful tools. Change recipients will understandwhat is happening to them and will learn how to respondpositively. Change implementers will develop their capacity to usetools that increase their effectiveness, and change initiators willlearn to take more effective actions to lever their changeprograms. Change facilitators will find themselves with newinsights into easing organizational change.See Toolkit Exercise 1.3 to think about change roles you’veplayed in the past.Gary Hamel of Harvard talks about “leading the revolution”—anyone can play the change game. Anyone can seekopportunities, ask questions, challenge orthodoxies, and generatenew ideas and directions! And in doing so, individuals fromvirtually anywhere in an organization (or even outside of it) canbecome change leaders.117 The leadership that started Facebookand Google came from dorm rooms. The local heroes nominatedby CNN viewers and profiled on their network come from all walksof life.118 Change leaders foment action. They take independentaction based on their analysis of what is best for the long-terminterests of their organizations or even society, and they recognize
the many faces of change and the crucial next steps necessary tomeet their long-term change goals. Finally, they recognize whoneeds to play what roles in order to advance needed change. Assuch, at different points in time they fulfill the roles of changeinitiator, implementer, and facilitator, depending upon the needs ofthe situation, their skills and abilities, and their beliefs about whatis required at a point in time to advance the change.
The Requirements for Becoming aSuccessful Change LeaderSuccessful change leaders balance keen insight with a drivingpassion for action. They have that sensitivity to the external worlddescribed above and will be skilled anticipators of that world. Theyhave a rich understanding of organizational systems—theirsystem in particular and the degree to which continuous orstrategic changes are appropriate. They understand themselves,their influence, and image in their organizational context. Theyhave special personal characteristics— a tolerance for ambiguity,emotional maturity, self-confidence, comfort with power, a keensense of risk assessment, a need for action and results, andpersistence grounded in reasoned optimism and tenacity. Finally,while they are curious and have a strong desire to learn, they alsohave a deep and abiding distrust of organizational fads andrecognize the negative impact of fad surfing in organizations.119Change leaders who see the world in simple, linear terms willhave more difficulty creating effective change.120Change leaders understand the rich tapestry that forms theorganizational culture. They understand the stakeholder networksthat pattern organizational life. They recognize the impact andpervasiveness of organizational control systems (organizationalstructures, reward systems, measurement systems). They knowand can reach key organizational members—both those withlegitimate power and position and those with less recognizableinfluence. And they understand which tasks are key at this point intime given this environment and this organizational strategy.121Successful change leaders know their personal skills, style, andabilities and how those play throughout the organization. Theircredibility is the bedrock on which change actions are taken.Because change recipients will often be cynical and will examinehow worthy the leaders are of their trust, change leaders must beaware of their personal blind spots and ensure these arecompensated for whenever needed.
Change leaders also embrace the paradoxes of change:122They are involved in both driving change andenabling change.Change leaders understand the need to persist and drive changethrough their organization. Without such determination,organizational inertia will slow change and other organizations willrace ahead. At the same time, change leaders recognize thatgetting out of the way might be the most helpful managementaction to be taken. When those around a manager are following apassion, the best thing might be to help in whatever way possibleor to provide resources to make things happen.They recognize that resistance to change isboth a problem and an opportunity.Change resistance happens in planned change. Overcoming suchresistance is frequently necessary to make progress. However,change leaders recognize that there are often good reasons forresistance—the person resisting is not just being difficult oroppositional; he or she often knows things or has perspectivesthat cast doubt on the wisdom of a particular change initiative.Change leaders need to recognize this and work actively toovercome this paradox.Good change leaders focus on outcomes butare careful about process.Far too often, change programs get bogged down because afocus on results leads change implementers to ignore goodprocess. At the same time, too much attention to process candiffuse direction and lead to endless rituals of involvement andconsultation. Good change leaders learn how to manage thisbalance.
Change leaders recognize the tension betweengetting on with it and changing directions.The environment is always changing. Leaders can always modifytheir objectives and respond to the environment. But, if this isdone repeatedly, they never settle on a design and direction, andas a result, will fail to get things done. Keeping the focus on thelong-term direction while making adjustments can make sense.The trick is to understand and balance this tension.Change leaders understand the need tobalance patience and impatience.Impatience may prove very helpful in overcoming inertia and fear,generating focus, energizing a change, and mobilizing for action.However, patience can also prove a valuable tool in reducingtension and establishing focus and direction, by providing time forpeople to learn, understand, and adjust to what is being proposed.Finally, today’s change leader knows that in today’s globalcompetition, what matters is not the absolute rate of learning, butrather the rate of learning compared to the competition. And ifyour organization doesn’t keep pace, it loses the competitive race.SummaryThis chapter defines organizational change as a planned alteration oforganizational components to improve the effectiveness or efficiencyof the organization. The forces that drive change today are classifiedunder PESTEL: political, economic, social, technological,ecological/environmental, and legal. Four types of organizationalchange—tuning, reorienting, adapting, and re-creating—are outlined.Finally, the nature of change leaders is discussed and some of theparadoxes facing them are examined.This chapter outlines the change roles that exist in organizations:change initiator, change implementer, change facilitator, and changerecipient. Change leaders or agents could be any of the four roles,initiator, implementer, facilitator, or recipient.
Finally, the chapter outlines a summary checklist and criticalquestions that change leaders need to consider when thinkingthrough matters related to how to change and what to change. SeeToolkit Exercise 1.1 for critical thinking questions for this chapter.Key TermsOrganizational change—for the purposes of this book,organizational change is defined as a planned alteration oforganizational components to improve the effectiveness of theorganization. By organizational components, we mean theorganizational mission and vision, strategy, goals, structure, processor system, technology, and people in an organization. Whenorganizations enhance their effectiveness, they increase their abilityto generate value for those they are designed to serve.Change management—is based in a broad set of underlyingdisciplines (from the social sciences to information technology),tends to be strategy driven, with attention directed to whateverfactors are assessed as necessary to the successful design andimplementation of change.PESTEL factors—the political, economic, social, technological, andecological/environmental, and legal factors that describe theenvironment or context in which the organization functions.Macro changes—large-scale environmental changes that areaffecting organizations and what they do.Tuning—defined as small, relatively minor changes made on anongoing basis in a deliberate attempt to improve the efficiency oreffectiveness of the organization.Adapting—viewed as relatively minor changes made in response toexternal stimuli—a reaction to things observed in the environmentsuch as competitors’ moves or customer shifts.Redirecting or reorienting—major, strategic change resulting fromplanned programs. These frame-bending shifts are designed toprovide new perspectives and directions in a significant way.Overhauling or re-creation—the dramatic shift that occurs inreaction to major external events. Often there is a crisis situation thatforces the change.
Incremental/continuous changes—organizational changes that arerelatively small in scope and incremental in nature. They may stemfrom the fine-tuning of existing practices or represent an incrementaladaptation to environmental changes. Depending on the perspectiveof the change recipient, incremental change can be perceived asdiscontinuous/radical change.Discontinuous/radical changes—changes that are broad in scopeand impact and that may involve strategic repositioning. They usuallyoccur in anticipation of or reaction to major environmental changesand are discontinuous in that they involved changes that are notincremental in nature and are disruptive to the status quo.Change implementer—the person responsible for making certainthe change happens, charting the path forward, nurturing support,and alleviating resistance.Change initiator—the person who identifies the need and vision forchange and champions the change.Change recipient—the person who is affected by the change. Oftenthe person who has to change his or her behavior to ensure thechange is effective.Change facilitator—the person who assists initiators, implementers,and recipients with the change-management process. Identifiesprocess and content change issues and helps resolve these, fosterssupport, alleviates resistance, and provides other participants withguidance and council.Change leader or change agent—these two terms are usedinterchangeably in the text to describe those engaged in changeinitiator, implementer, or facilitator roles. All those involved inproviding leadership and direction for the change fall within theirbroad coverage.
End-of-Chapter Exercises
Toolkit Exercise 1.1
Critical Thinking QuestionsThe URLs for the videos listed can be found in two places. The first spotis next to the exercise and the second spot is on the website atstudy.sagepub.com/cawsey4e.1. Did You Know 2019 — 6:13 minuteshttps://www.youtube.com/watch?v=bTM06NZOyDQ&t=3sThis video helps us visualize the rate of technical change in theenvironment.Choose one fact and discuss how it may impact changeinitiatives for an organization you’re familiar with.Which fact listed do you think will have the most long-term implications for organizations in the future?Find a video that outlines ecological and environmentalchanges and consider their implications for you andorganizations you’re familiar withBrainstorm other political, economic, social,technological, environmental/ecological, and legal factorsthat you think may be true in 5 years, 15 years, and 25years and consider their implications for individuals,organizations and society.2. IBM Study: Making Change Work—2:57 minuteshttps://www.youtube.com/watch?v=2ol9zYw4Chg&t=8sThe video discusses an IBM study that only 60% of changeprojects succeed. It discusses factors that seem to increasethe chances for success.List reasons (both in the video as well as those notmentioned) that explain why change projects often fail.Can you think of similar instances of change projectfailure from your own experience?What are the main takeaways about how to increase thesuccess of a change initiative?3. Individually or in groups, pick a product or service and then go to theWeb and explore what technological and/or geopolitical changes areoccurring that could seriously disrupt existing organizations in thatsector. Then pick an organization that would be affected and identifythe changes you’d undertake to help it adapt and thrive.For example, if you owned a taxi firm in New York City, how would youprepare for the potential arrival of self-driving cars?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 1.2
Analyzing Your EnvironmentSelect an organization you are familiar with. What are the keyenvironmental issues affecting this organization? List the factors undereach subheading and their implications for the organization.FactorsProactive ImplicationsReactive ImplicationsPoliticalEconomicSocialTechnologicalEcological/EnvironmentalLegalPlease see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 1.3
Change Roles in Your OrganizationThink about organizations that you are familiar with—organizations forwhich you have worked, schools you’ve attended, and organizationsyou’ve volunteered for such as a baseball league or a church.Think about changes, large or small, that have taken place in thoseorganizations. Take a moment to describe a situation when you filled eachof the change roles (Return to Table 1.4 on page 28 for definitions of eachrole). How did the role feel? What did you accomplish in the role?When did you play the role of a change initiator?When did you play the role of a change implementer?When did you play the role of a change facilitator?When did you play the role of a change recipient?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Chapter Two How to LeadOrganizational Change:FrameworksChapter OverviewIn this chapter we discuss frameworks that illustrate theprocess of how to create organizational change; in Chapter 3we examine what aspects of an organization might need to bechanged. Change leaders must understand and do both.We present six models that provide dissimilar andcomplementary insights into the process of planned, purposefulchange:1. The first model is a basic step model, that is, the leadertakes an organization through step 1 before step 2; this isLewin’s three-stage model.2. Kotter’s eight stages of organizational change provide ahighly structured, finish-one-stage-before-the-next-stageapproach to change.3. The third model is Gentile’s Giving Voice to Valuesmethodology, which supports individuals taking effectiveethical action when a situation so demands.4. The fourth model is Duck’s five-stage model that focuseson people and the range of their emotional responses tochange.5. Fifth, there is a modified version of Beckhard and Harris’schange-management model that concentrates on processissues.6. We end this chapter with the Change Path, our four-stagemodel that concentrates on process issues and is used asa guiding framework throughout the book. The four stagesof this model are Awakening, Mobilization, Acceleration,and Institutionalization.Just as an athlete needs different types of trainingand equipment to play and succeed at differentsports (think of the difference between a professionalbaseball player and a downhill skiing professional),so too does the change leader need differentframeworks to apply to specific situations.These models will help change leaders articulate their approachto leading organizational change and provide guideposts for
instituting that change.Sweeping demographic changes, technological advances,geopolitical shifts, and demands to be sensitive to our physicalenvironment are combining with concerns for security andorganizational governance to generate significant pressure fororganizational change. Awareness of the political, economic,sociological, technological, ecological/environmental and legalaspects of any organization’s external environment forewarnsmanagers for the need to pay attention to multiple factors.Furthermore, it alerts managers to attend to their organizations’environmental contexts and to decide whether they need to takesome action as a result.McDonald’s has been one of many organizations that scanned itsenvironment and made changes to its products as a result ofshifts in its environment. The recession of 2008–2009 put pricingpressure on the restaurant business. McDonald’s responded witha continuous stream of new products. Since 2004, it hasintroduced the snack wrap, several salads, specialty coffees, and,most recently, the Angus burger, a 1/3-lb. burger.1 These productinnovations have led to increases in store sales and improvedprofits. Recently, McDonald’s has embraced the “greenmovement” with major initiatives in the areas of sustainability andcorporate social responsibility, and public reporting of theirprogress. They also piloted the placement of charge points forelectronic vehicles in one store in 2009, and this initiative has nowbeen extended to a few other locations.2 One trend that haschallenged McDonald’s creativity is the “eat local” movement,where consumers are encouraged to eat locally grown foods. Inthe international market, McDonald’s has created a variety ofpartnerships to create a more localized experience for itsconsumers. McDonald’s now offers Red Bean Pie in Hong Kong,a Parmigiano Reggiano burger in Italy, and Caldo Verde soup inPortugal.3 In the United States, McDonald’s has tried to use amessage about locally grown foods in its advertising. At first it wasslow to commit to using verifiable metrics to support theseclaims,4 but it has improved in this area over the years. To makethese product decisions, McDonald’s managers had to evaluate
environmental shifts and assess their relevance to theorganization’s strategy and the probability of its continuedeffectiveness.5In the early 2000s scientific evidence linked childhood obesity inthe United States with kids eating fast-food meals that wereloaded with calories, sodium, sugar, and saturated fats.McDonald’s Happy Meals was one such example. By 2018, inpartnership with the Alliance for a Healthier Generation,McDonalds had set goals to improve the nutrition and limit thecalories in its Happy Meals in the United States. Simultaneously,the fast-food giant analyzed how it could enact its corporatemission: “to be our customers’ favorite place and way to eat anddrink.” In January, 2019, McDonald’s announced that they, too,would add bacon to their menu: customers could buy cheesybacon fries (cheese and bacon were added to their iconic frenchfries), a Big Mac Bacon burger, and a Quarter Pounder Baconburger. Bacon, they noted, earned 17,000 mentions a day on U.S.online platforms and the company wanted to get on board with thetrend. McDonald’s executives examined the bacon trend anddecided that product changes were necessary.If one takes the McDonald’s example and generalizes it to allmanagers, then changes in the external environment providepowerful clues about how an organization’s products and servicesneed to change—quickly. In 2019, the rapidity of changes in themarketplace makes acquiring and diagnosing data and thenacting on the data immediately a demanding skill set fororganizational leaders.Each person has ideas about how organizations work. For some,this model is explicit—that is, it can be written down anddiscussed with others. However, many managers’ views oforganizational functioning are complex, implicit, and based ontheir personal experiences. Deep knowledge and intuition, so-called tacit knowledge, about the functioning of an organization isinvaluable. However, tacit knowledge is personal, often difficult tocommunicate, and almost impossible to discuss and challengerationally. As a result, this book takes an explicit approach andprovides ways to articulate unspoken models of how organizations
work and to use several models to think systematically about howto change an organization.
Differentiating How to Change fromWhat to ChangeThe complexity of change can be simplified somewhat byrecognizing that there are two distinct aspects of organizationalchange that must be addressed. Managers must decide both How(process) to lead organizational change and What (content) tochange in an organization. The example below highlights thedifference between the how and what of change. Imagine that youare the general manager of a major hotel chain and you receivedthe following customer letter of complaint:A Letter of ComplaintDear Sir:As a customer of yours, I wanted to provide you with our experiencesat ATMI, your London, England, hotel.* I have reflected on myexperience and decided to provide you with feedback—particularlygiven your promise on your website—the Hospitality PromiseProgram.My wife and I arrived around 10 p.m. after a flight from NorthAmerica and the usual tiring immigration procedures, baggagecheck, and finding our way to your hotel. The initial greeting wascourteous and appropriate. We were checked in; the desk personasked if we wished a room upgrade. After I clarified that this wouldcost money, I declined that proposal.We then went to our room on the 3rd floor, I believe, and discoveredit was a disaster, totally not made up. I phoned the switchboard andwas put through to reception immediately. There were profuseapologies and we were told that someone would be up immediatelywith another key.Within 5 minutes, someone met us with a key to a room on the 5thfloor, a quick, fast response. However, when we got to the new room,it was not made up!Again I phoned the switchboard. The operator said, “This shouldn’thave happened. I will put you through to the night manager.” I said
that was not necessary, I just wanted a room. However, the operatorinsisted and I was put through to the night manager. Again, therewere profuse apologies and the manager said, “This shouldn’t havehappened, I will fix this and get right back to you.” I indicated that Ijust wanted a room—I didn’t want the organization fixed, just a room.The manager repeated, “I will get right back to you.”We waited 5, 10, 15 minutes. Inexplicably, the manager did not returnthe call even though he said he would.Finally, around 20 minutes later, I phoned switchboard again. I saidwe were waiting for a room and that the night manager had promisedto call me back. The operator said, “This is probably my fault as Iwas doing work for the assistant manager.” I did not and do notunderstand this part of the conversation but again, I was told thatthey would call right back. Again, I repeated, “I just need a room.”I waited another 5 minutes—it was now 11 p.m. and we were quitetired—there was no return phone call.My wife and I went down to reception, waited, and after a brief timewere motioned forward by the person who registered us initially. Iexplained that we needed a room. He said, “You were taken care of.You got a room.” I stated that “No, I did not have a room, I just hadtwo rooms that were not made up and we needed a clean one for thenight.”Again, there were profuse apologies. The reception person then said,“Excuse me, just for a moment, so I can fix this.” I said, “Really, I justwould like a room.” The person at the reception desk went aroundthe corner and began to berate someone working there. This went onfor several minutes. He then returned to his station, called meforward again, apologized again, and located a third room for us. Aswell, he gave us coupons for a complimentary breakfast.This third room was made up. It was “more tired” than the previousrooms, but it was clean and we were delighted to find a spot to sleep.In the middle of the night, as is the norm in many places, the invoicewas delivered to our room. To our surprise, a £72 charge was addedto the price of the room for a “room change.”Of course, early the next morning, I queued up to discuss thischarge. The same reception person was still on duty. He motionedme forward and then immediately left to open up all the computerstations in the reception area. He had a tendency to not make eye
contact. This may have been a cultural phenomenon or it may havebeen his dismay at having to deal with me again. I cannot say.I showed him the invoice. He said, “Oh, there will be no charge forthat room.” I said that I was concerned as the invoice did show thecharge. He said, “It is taken care of.” I said, “Regardless, I would likesomething to prove that there would not be another charge to mycredit card.” After one further exchange and insistence on my part,he removed the charge from my invoice.My wife and I had a pleasant breakfast and appreciated it beingcomplimentary.We thought that you would want to know of our experience.Customer service is a critical part of the hospitality industry and I amcertain that ATMI would wish feedback on experiences such asthese.I am interested in such things and look forward to your reply.Yours truly,* The hotel name is disguised.The list of things done poorly and the organizational issues thatexist at this hotel are extensive. Identifying this list of what needsattention is relatively easy. The desk clerk has twice assignedrooms that were unmade. This indicates that the system used torecord and track information on the condition of the rooms iseither nonexistent or not working properly. One wonders ifsomeone is responsible for monitoring the housekeepers’performance. There are managerial issues—a manager promisesto get back to a customer and doesn’t. There are organizationalculture issues—the excuses by the switchboard operator andyelling by the reception person. There are further system issuesas indicated by the £72 charge for a room change. There aresome service training issues—the responses by the receptionistwere variable. He was quick to send up a second room key butleft the customer standing while he turned on computers. He wasreluctant to reverse the extra room charge. There is some hint thatthere might be other cultural issues that are pertinent.However, it is not clear how the general manager should proceedwith needed changes. First off, how accurate is the letter? Can the
general manager accept it, or does he have to investigate?Assuming the letter reflects the experiences of more than oneunhappy customer, then the general manager still faces the “how”question. If the computer system for tracking room availabilitydoes not exist, then it is relatively straight forward to buy andinstall one. However, if the system exists but is not being used,how does the general manager get the staff to use the systemeffectively? Closer supervision and training might work, but whocan do that and who will pay for it? Even more difficult are theorganizational and cultural issues. The norm among employeesappears to be to make excuses and to “berate” others whenthings go wrong. A manager can tell employees that thesebehaviors are inappropriate, but how does one persuadeemployees not to respond abusively? And how will the generalmanager know if and when the changes are implemented? Isthere a system in place to track customer and employeesatisfaction? Are these several systems worth the cost theyimpose on the organization?Clearly, managers must know what needs to change. However,how to go about making change requires careful thought andplanning. The models below may help you to think about theprocess of change and how to make it happen.
The Processes of OrganizationalChangeMany leaders know what they need to achieve, but they just don’tknow how to get there. An examination of competitors’ initiativesand accomplishments, customers’ behavior, and other data fromenvironmental scans will provide cues as to what is needed, butmoving one’s organization to successfully address these factorsand related opportunities is difficult.Why is it so difficult to accomplish organizational change?There is a web of tightly woven factors that make organizationalchange difficult. However, one common cause might lie inpractices that were effective in the past and that are no longerappropriate; this can be called the “failure of success.”Organizations learned what worked and what didn’t. Theydeveloped systems that exploited that knowledge and establishedrules, policies, procedures, and decision frameworks thatcapitalized on previous successes. Further, they developedpatterned responses (habits), assumptions, attributions, andexpectations that influenced the ways employees thought abouthow the world worked.6 These beliefs and ingrained responsesformed a strong resistant force, which encouraged people andtheir organizations to maintain old patterns regardless of feedbackthat they were no longer appropriate. In many respects, this iswhere the questions of what to change and how to changeintersect.Charles Handy describes some of these dilemmas by examiningthe pattern of success over time.7 As he so aptly said, too often“by the time you know where you ought to go, it’s too late” (p. 50).He describes a sigmoid curve that outlines where one shouldbegin changing and where it becomes obvious that one needs tochange (see Figure 2.1). This curve depicts the outcomes of asystem as a curve that increases during early-stage developmentand growth phases, flattens at maturity, and shifts into decline
over time. Consider the path tracked by successful technologicalinnovations. Once an innovation demonstrates its value to keyearly adopters, then sales take off. As others see the benefits ofthe innovation, they adopt it as well. Patents and proprietaryknowledge provide some protection, but over time competitorslaunch similar products, profit margins become squeezed, andsales growth slows due to increased competition and the level ofmarket saturation. This leads to a flattening of the curve, referredto as the maturity phase. Decline follows as the market becomesincreasingly saturated and competitive, and this declineaccelerates with the arrival of a new, disruptive innovation thatattracts customers away from the existing product or service.Think of what happened to the VCR players when DVD playersarrived on the scene. Consider how prices fell for DVD players inthe face of competition. Now, video streaming has eclipsed themarket for DVDs. DVDs are becoming obsolete as morecompanies offer streaming services.The time to introduce change is at point B when the system isgrowing. The dilemma is that in the short run, the costs are likelyto be greater than the benefits. It is only when the new changesare adopted and the system is working well that the outcomes’curve turns upward again. One dilemma is that the costs ofchange are real and include adding people and shifting productionlines, while the benefits of change are uncertain. Managersbelieve the changes will improve productivity and profits, but thatmay not occur. By holding off investing in change, an organizationmay improve its profits in the short run. However, if environmentalconditions continue to change and the organization fails to adjustin a timely fashion, executives can quickly find themselves laggingbehind their competitors, scrambling to adapt, and running tocatch up. If management waited too long to adapt, then anorganization may find it impossible to do so. The escalating rate ofchange, combined with the frequency and magnitude ofdisruptions being experienced by firms point to the dangers ofbeing laggards!By the time the system reaches point A, the need for change isobvious, but it may also be too late for the organization to survivewithout experiencing significant trauma. Positive planned change
needs to be commenced sooner in the process—before thingsdeteriorate to a crisis or disaster stage. Unfortunately, changetypically comes with costs that appear to lessen the positiveoutcomes in the short run. As many know, convincing anyone thatthey should incur costs, make investments, and initiate changesnow for long-run benefits is a difficult selling task, particularly ifthings are going well. This is depicted as the shaded spacebetween the solid and dotted lines beginning at point B in Figure2.1. The costs of change appear certain and are tangible. But thebenefits are uncertain and often vaguely defined. The time afterpoint B is a time of two competing views of the future, and peoplewill have difficulty abandoning the first curve (the one they are on)until they are convinced of the benefits of the new curve. Inconcrete terms, creating change at point B means convincingothers about the wisdom of spending time and money now for anuncertain future return.In the following pages we present six models for thinking aboutand changing organizations. These models are both discrete andcomplementary. Below is an overview of what you will find in thesemodels.Lewin’s model is simple, making it useful for communicatingthe overall change process to participants.Kotter’s provides a detailed map of the change process interms of what each step needs to achieve (i.e., the keysuccess factors of a change initiative), which is useful forplanning and implementing.Gentile provides individual-level guidance for pushing backand responding skillfully and effectively to people andsituations that contradict a person’s values; this approachmay or may not make systemic change, but it often allows anindividual to change an unethical situation.Duck offers guidance for people and the emotional issuesassociated with organizational change.Beckhard and Harris provide an action-oriented overview thatindicates the sets of activities that should be completed withinthe steps Kotter identified (roughly).The Change Path Model maps sets of activities within asystems-level view (following Lewin) that also reflects
organizational-level factors (e.g., operations, control, andmeasures).Figure 2.1 The Sigmoid CurveSource: Adapted from Handy, C. (1994). The age of paradox(p. 50). Boston, MA: Harvard Business School Press.The models have more similarities than differences.Each is a process model (i.e., they all depict how changeshould happen).Two are descriptive (Lewin and Duck), three are prescriptive(Kotter, Gentile, and Beckhard and Harris), and our ChangePath Model combines both.One is system-level (Lewin); three are organizational-level(Kotter, Beckhard and Harris, and our Change Path Model);and two are individual-level (Gentile and Duck).The models describe many of the same processes, butdescribe them at varying levels of granularity and withdifferent lenses (e.g., emotions with Duck, managerial taskswith Kotter).Organizational change most often requires changing at threelevels: individual, team or unit, and the organization. Learning and
applying more than one model will give the change agent a largeset of tools to work with.
(1) Stage Theory of Change: LewinOur first model is a basic step model. Sixty years ago, Kurt Lewin8wrote about the problem of how to bring about change. Hedescribed a three-stage model of change:Unfreeze → Change → RefreezeLewin stated that we need to understand the situation and systemas a whole as well as the component parts that make up thesystem. Before change can occur, an unfreezing process musthappen within that system. Unfreezing focuses on the need todislodge the beliefs and assumptions of those who need toengage in systemic alterations to the status quo. The unfreezingprocess might occur because of some crisis. For example, newcompetitive products that are attacking the major profit centers ofa private enterprise might be a sufficient shock to the organizationto “unfreeze” patterns. In this example, the balance in the systemmust be disrupted or broken in order to permit conditions forchange to develop. Some top managers even talk about “creatinga crisis” in order to develop the sense of urgency around the needfor change.9When this unfreezing occurs, the people who are embedded inthe systems become susceptible to change. Systems andstructures, beliefs, and habits become fluid and thus can shiftmore easily. Once the change has been completed, thesesystems, structures, beliefs, and habits can refreeze in their newform.To illustrate Lewin’s model, refer back to the Letter of Complaintand examine the comments below.
UnfreezeWill this letter of complaint be sufficient to “unfreeze” the generalmanager and move him to action? If this is a single letter, it ishighly unlikely that change will occur. If complaints are commonfor this hotel, this might be seen as just one more letter in a pile—background noise in running the hotel. The letter suggests thatthis might be an airport hotel in London, England. The location ofthe hotel might be such that customer service shortfalls might notmake a difference to occupancy rates, whereas minimizing costswould be crucial to the hotel’s profitability. In all the abovescenarios, no unfreezing would take place.However, this letter may represent an initiative that capturesmanagerial attention and promotes action. The general managermight be facing declining occupancy and view this letter as asignal of where problems lie. A comparison with other hotels onmeasures of profitability and customer satisfaction mightdemonstrate a dramatic need for change that the letterforeshadowed. In this situation, the general manager’s views onthe existing system are more likely to be unfrozen, and he wouldbe ready for change.Note that the unfreezing must take place at many levels. Thegeneral manager might be ready for change, but the employees atthe reception desk might think things are just fine. Theirperceptions need unfreezing as well! The integration andinterdependence of systems and people require us to think aboutthe unfreezing of the organizational system as a whole.
ChangeAssume that the general manager accepts the need to improvethe system that indicates that rooms are ready for occupancy. Hemust decide what else needs to change to bring about the neededimprovements. He could begin by hiring a quality-control personwho is charged with inspecting and certifying all rooms beforethey are entered into the system as “ready to use.” Somecomputer programming may be needed to flag rooms when theyare ready, and the quality-control person must be responsible formanaging that flag subsystem. The quality-control person willhave to be recruited, hired, and trained if management cannotpromote an appropriate internal person. Once the room-qualitysystem has been designed and procedures are in place, allreceptionists will have to be trained. This change could be aparticipatory process with the involvement of staff; or, the generalmanager could have it designed and order its implementation.Either way, the change process would be complex, involving anumber of people and systems.During this phase, there would be considerable uncertainty. Thenew system could be ready before the quality-control person ishired and trained. Or, the reverse could be true: the person maybe hired and trained, but the room-quality system is not ready.Employees might see opportunities to improve what is beingproposed and make suggestions regarding those improvements.Regardless of the specifics, the organization will be in flux as thegeneral manager analyzes the organization’s problems anddecides how he will implement changes: in other words, themanager will need to decide who will do what, when, where, why,and how.
Refreeze: or More Appropriately Re-gellOnce the changes are designed and implemented, employees willneed to adapt to those changes and develop new patterns andhabits. The new flag system will alter how those at reception andin housekeeping do their work. They may informally ask thequality-control person to check certain rooms first as these are inhigher demand. The general manager will follow up to see howthe system is working and what people are doing. New reportingpatterns need to be established, and the quality-control personmight begin passing on valuable information to hotel maintenanceand housekeeping regarding the condition of particular rooms. Atthis point, the system settles into a new set of balances andrelative stability. With this stability comes refreezing, as the newprocesses, procedures, and behaviors become the new “normal”practices of the organization.What do we mean by this notion of relative stability andpredictability that comes with refreezing? It stems from theobservation that organizational systems, composed of tasks,formal systems, informal ways of behaving, and individuals,develop over time an interdependent state of balance calledhomeostasis. Perturbations or shifts in one part of the system areresisted, or swings away from balance are countered and balanceis regained. As suggested earlier, managers may introducechange initiatives only to have those initiatives fail because ofexisting systems, processes, or relationships that work against thechange. Planned changes in structures and roles may be seen asdecreasing the power and influence of certain individuals orgroups, and these groups may react in complex ways to resistchange. For permanent change, new structures and roles areneeded and new points of balance or homeostasis developed.The image of a spider’s web can help to depict the phenomenon.That is, view the organization as a complex web of systems,relationships, structures, assumptions, habits, and processes thatare interconnected and interdependent over time. Altering onestrand of the web is not likely to alter the patterns significantly. To
do that requires a breaking of many interconnected items—the“unfreezing” in Lewin’s terms.This simple model has stood the test of time. Change agents findit useful both because of its simplicity and because it reminds usthat you can’t expect change unless the system is unfrozen first!We may need other, more complex models of the organization tothink through what must be unfrozen and changed, but Lewinforces us to recognize the rigidity that comes with stability andinterconnectedness within existing systems, relationships, andbeliefs.However, several concerns prevent us from wholeheartedlyembracing this model. First, the model oversimplifies the processof change and suggests that change is linear. The reality is thatchange tends to be complex, interactive, and emergent. Second,the creation of the need for change deserves more attention. It isnot merely a matter of moving individuals away from theirassumptions about the current state. Rather, they need to have avision of a future desirable state. Finally, the model implies thatrefreezing is acceptable as a frame of mind. This seemsproblematic because it implies that change is a discrete event,rather than a continuous process. In today’s rapidly changingworld, organizations find that pressures to adapt mean they arenever “refrozen”—and if they are, they are in trouble.Organizations that freeze too firmly may fail to thaw in time, whennew markets and customers appear. They may refuse toincorporate feedback in making useful changes. Continuousimprovement programs may appear faddish, but they reflect arealistic view of what is needed in a dynamic environmentbecause they enhance an organization’s adaptive capacity. Thus,there is concern with the image created by the word refreeze, asthis is likely too static a condition for long-term organizationalhealth. In discussions with managers, we find the phrase “re-gelling” to have appeal as a state between total fluidity of a liquidand the excess rigidity of a solid. Since Lewin articulated hisframework of organizational change in the early 1950s, it is likelythat he, too, would have modified his framework for change.
(2) Stage Model of OrganizationalChange: KotterThis second model describes a highly structured step-by-stepprocess that overcomes the problem of simplification of Lewin’smodel. In 1996, Harvard Business School Professor John Kotterpublished Leading Change.10 His eight-stage process argues thatan organization must successfully go through each phase insequence. For example, failing to establish a sense of urgencythroughout an organization (step 1), may explain a leader’sinability to communicate effectively a vision for change (step 4).Kotter’s framework helps managers know what they should do,when they should take specific actions, and when and how theyare ready to move to the next stage.
Kotter’s Eight-Stage Process1. Establish a sense of urgency: In older, well-establishedorganizations a sense of complacency may have set in.Leaders need to illustrate the threats to the system and moveenough organizational members from a sense ofinvulnerability to vulnerability.2. Create a guiding coalition: Select a significant number ofpeople (10 to 50) who have titles and lead divisions anddepartments, have the respect of their colleagues, andrelevant knowledge. This group should be aligned and knowthat change is needed.3. Develop a vision and strategy: People need an overarchingdream of an inspiring future. From this vision comes theimplementation plans and steps.4. Communicate the change vision: Capture the hearts andminds of most employees by communicating through multiplechannels and multiple times the vision for change.5. Empower employees for broad-based action: Largenumbers of employees need to embrace the vision and thenorganizational structures, human resources systems, and amyriad of other internal organizational mechanisms need tosupport, rather than block, the change.6. Generate short-term wins: Large-scale organizationalchange may take three to five years and yet employees needto see evidence of successful change within 18 months (p.11). Highlight short-term gains to keep employees motivated.7. Consolidate gains and produce more change: Since ittakes years for organizational change to become a part of anorganization’s DNA, many leaders stop too soon. Keeppressing forward until the change seeps into the deepestrecesses of an organization.8. Anchor new approaches in the culture: Make sure that thechange is embedded in the organization’s cultural norms andvalues.The heightened need for agility in the face of escalating rates ofchange, the challenge of closing the gap between the currentmode of operation and the desired future state, and collateral
challenges related to managing the transition have caused Kotterto offer additional advice in this area. Goods, services and thevalue promise still need to be delivered upon as the changes arepursued. To “accelerate” the process (Kotter’s words), herecommends a new strategy designed to augment his originaleight steps.Kotter sees these accelerators as concurrent and always at work,energized by a volunteer army and nested in a flexible and agilenetwork. His eight accelerators are (1) create a sense of urgencyaround a single, big opportunity; (2) build and maintain a guidingcoalition; (3) formulate a strategic vision and develop changeinitiatives designed to capitalize on the big opportunity; (4)communicate the vision and the strategy to create buy-in andattract a growing volunteer army; (5) accelerate movement towardthe vision and the opportunity by ensuring the network removesbarriers; (6) celebrate visible, significant short-term wins; (7) neverlet up—keep learning from experience and don’t declare victorytoo soon; and (8) institutionalize strategic changes in the culture.11
(3) Giving Voice to Values: GentileThe third model focuses on the ethical implications oforganizational change. Pick up any newspaper or magazine andone finds stories about personal, corporate, or governmentalmalfeasance; accounts of injustice; and reports of individualviolence against peers and society’s vulnerable members. Anunderlying issue in most of these situations is an organizationalclimate that does not effectively manage individual and groupbehavior. Take the multiple scandals at Wells Fargo. In April,2018, the bank agreed to pay $1 billion to settle U.S. federalgovernment probes into its mistreatment of consumers. Thesettlement covered problems in Wells Fargo’s auto-lending andmortgage divisions. In 2017, the bank had revealed that itsemployees had forced customers who took out car loans to buyunwanted insurance. Other employees imposed inappropriatecharges for locking in interest rates on new home loans. InOctober, 2016, CEO John Stumpf resigned abruptly, as pressuremounted from the public and lawmakers.With numerous examples of corruption and fraud, educator andresearch scholar Mary Gentile decided to develop Giving Voice toValues, a program, at first for business students, to supportpeople’s development of confidence and skills that would allowthem to speak and act their values—effectively—when faced witha situation that runs counter to their principles. Gentile’s GivingVoice to Values (GVV) curriculum12 takes people through alearning process that prepares them to expect values conflicts andprovides the tools to intervene when they perceive wrongdoing.(See https://www.darden.virginia.edu/ibis/initiatives/giving-voice-to-values/ for cases and other teaching tools for the GVVcurriculum).The GVV curriculum focuses on the practical application of skillsneeded to push back and respond skillfully and effectively topeople and situations that contradict a person’s values. The GVVcurriculum consists of three parts that represent the processindividuals need to work through to advocate for the need to
change: the clarification and articulation of one’s values; post-decision-making analysis and implementation plan; and thepractice of speaking one’s values and receiving feedback.1. Clarification and articulation of one’s values: The GVVcurriculum invites participants to consider the notion that there is auniversality of values and some researchers, such as MartinSeligman and Rushworth Kidder, have found a commonality ofcore values across cultures and religions. Kidder, who conducteda cross-cultural survey, identified a “list of five widely sharedvalues: honesty, respect, responsibility, fairness, and compassion”(p. 30). The first step requires participants to articulate their valuesand the impact of acting on those values. This exerciseencourages participants to take their often implicit principles andmake them explicit and public, an important first step in bringingabout change.2. Post-decision-making analysis and implementation plan:The GVV curriculum requires participants to examine case studiesof protagonists who have been clear about their values and haveeffectively voiced their principles in difficult situations (all GVVcases are available through the website). The protagonists ofGVV cases have concluded what is right, and the cases walkreaders through their thinking and actions—to a point: thenreaders are invited to figure out what the protagonist might do tovoice her values effectively. For example, in the “Not Even anOption” case, readers meet Ajith, a pharmaceutical representativein a developing country. Ajith is clear that paying bribes is not anoption for him (read his story at the end of this chapter). And, yet,it seems that he and his company will not succeed unless hesuccumbs to societal norms and pays bribes to governmentofficials to review and accept his company’s registrations for thedrugs. Participants analyze Ajith’s situation and ask, given Ajith’sunwillingness to pay bribes, what should he do and say, and towhom? These situations start from the point where the protagonistknows his values and what is right for him to do. GVV is, then, acurriculum about taking actions post decision making.The analytical work can be further subdivided into three parts.First, participants engage in a stakeholder analysis. This is not the
traditional “stakeholder analysis” that encourages a utilitarianweighing and making of trade-offs, but rather is an effort tounderstand how to effectively influence key people. Second,people need to anticipate how stakeholders might respond to theprotagonist’s questioning of the stakeholders’ actions. Gentilecalls this the “reasons and rationalization” that a protagonist mightexpect from others. And, third, Gentile asks, what levers can aprotagonist use to persuade stakeholders to join the protagonist’svision?3. The practice of speaking one’s values and receivingfeedback: One of the central tenets of GVV is the importance of“pre-scripting.” As noted above, the GVV cases often invitereaders to decide to whom the protagonist should talk and whatshe should say. Gentile believes that participants’ practice inspeaking their values after they have analyzed a situation “is botha cognitive exercise as well as a behavioral and emotional one”(p. 173). Participants write out a script, speak the script in front ofanother participant, and receive feedback from a third participant—an observer who acts as a peer coach to the participant who isarticulating the script. Delivering a script challenges participants toarticulate often vaguely formed ideas, which deepens their sensethat they will take action in difficult, future situations.
GVV and Organizational ChangeAn assumption of this GVV training is that prepared individuals willspeak up and in their speaking up people will change the courseof events in units, organizations, or even societies. The GVVcases provide numerous examples of people shifting the directionof their organizations. In the Helen Drinan case, for example,Drinan pushes back and speaks up when it seems that a CEO ofa hospital system will be let off the hook even though severalwomen have accused the CEO of sexual harassment.13 Thepublicity surrounding this case led the attorney general ofMassachusetts to note the problems with governance of thehospital system; eventually the Catholic Diocese of Boston waspushed to sell its hospitals. The point is this: When people thinktactically and strategically about how to most effectively createchange around a values conflict, the person or group can besuccessful. Sometimes this process involves speaking up and atother times the process involves gathering data, asking questions,building a coalition, and/or making alliances with key people. Thepoint of the GVV curriculum is to prepare people to expectconflicts in values and then to take effective action for individualand organizational change.
(4) Emotional Transitions ThroughChange: DuckThe fourth model captures the people and their emotionalresponses to the change process. In The Change Monster: TheHuman Forces That Fuel or Foil Corporate Transformation andChange,14 consultant Jeanie Daniel Duck argues thatorganizational change evolves in a fairly predictable andmanageable series of phases that she calls the “Change Curve.”This Change Curve is a “simplification and an approximation” ofcomplex, ambiguous, and volatile human emotions thataccompany all types of organizational change, from externallydriven mergers and acquisitions to internally planned andmanaged new programs.
Duck’s Five-Stage Change Curve1. Stagnation occurs when people have their heads in the sandand have an insufficient sense of threat from the externalworld. This can only end with a forceful demand for changefrom the external environment, such as a merger oracquisition, or from internal pressures for change from astrong internal leader. It is the leader’s role to push people tosee the truth of their situation and to wake them up.2. Preparation begins with a dramatic announcement of changefrom an internal person, such as the CEO, or from an externalforce, such as an announcement of a takeover. Immediately,some people feel anxious or jittery; others may be hopefulthat needed change is coming; while still others will retreat tocynicism and will not take the announcement seriously. Whenthis rush of emotion occurs, productivity often goes down.This phase requires a tremendous amount of planningand operational work by the leaders. In addition,organizational leaders must be aligned for the plannedchange to succeed.3. Implementation is when the journey begins. It includesdesigning new organizational structures, job descriptions, andlots of other detailed plans. However, operational changesare not enough: Implementation also requires changingpeople’s mindsets and work practices—in other words,people’s emotional maps and habits.4. Determination kicks in when people realize that the changeis real and they will need “to live their work lives differently”(p. 30). Duck argues that “people long for an excuse to quitthe hard path of transformation,” requiring leaders torecognize this emotional trap and to pursue the new visionwith high energy and enthusiasm.5. Fruition is the time when the hard work pays off and theorganization seems new. “The employees feel confident inthemselves; they’re optimistic and energized, and they’re ableto get their work done with less hassle, in less time, and withbetter results” (p. 34). Leaders need to make sure that thisbasking in the satisfaction of the change does not lead tonapping and future stagnation.
In 1969, Elizabeth Kübler-Ross observed and wrote in On Deathand Dying about the five predictable emotional stages interminally ill patients: denial, anger, bargaining, depression, andfinally acceptance. She later said that these observable stagesapply to children whose parents are going through divorce and topeople who experience traumatic losses, such as parents whosechild dies. Although Duck does not reference Kübler-Ross, Duckfocuses on predictable human emotional responses toorganizational change. In reality, people embrace changedifferently and at dissimilar speeds; Duck argues, however, thatindividuals go through similar emotional responses to change. It isthe savvy leader who monitors his own emotional response tochange, anticipates and articulates underlying negative andpositive emotional responses to change in others, and then pullsthe group through the negative to excitement and satisfaction withthe new order.
(5) Managing the Change Process:Beckhard and HarrisThe fifth model of change, outlined by Beckhard and Harris,15 hasa strong focus on process. Building on the work of Kurt Lewin,Beckhard and Harris propose a process model that begins with anassessment of why change is needed. Here the forces for andagainst change are analyzed and understood. A thoroughunderstanding of the organization and its stakeholders will assistin this analysis.Following the recognition of the need for change, leaders arefaced with the task of defining and describing a desired futurestate in contrast to an organization’s present reality. This processis called a gap analysis. This second step in the change processinvolves both determining the need for change and creating apowerful change vision A desired future state allows leaders toidentify the gap between the present and the future and how theypropose to close the gap. This is one of the most important stepsin the Beckhard and Harris Model and one that change leadersneed to attend to.The discussion of how to get from the present to a desired futurestate represents the action or implementation state. The final stepin the change process is to manage the transition. Beckhard andHarris provide a useful elaboration of how the process of changeoccurs. What is not so clear is how to bring the various stages ofthe model to life, in order to see change through to a successfuloutcome. The Change Path Model addresses this matter.
(6) The Change Path Model: Deszcaand IngolsExtracting from the preceding models, years of consulting work,and decades of teaching and talking with managers andexecutives about change, the Change Path Model combinesprocess and prescription: There is more detail and direction thanLewin and less instruction than Kotter. We recommend thatmanagers also use Gentile’s model to act effectively, especially ifthere is a conflict in values. Duck reminds us about the all toooften neglected side of change: the emotional impact of change.Finally, Beckhard and Harris16 remind us of the power of a well-executed analysis of the gap between the current mode ofoperation and the desired state. (Figure 2.2 sets out the changePath Model.)Step 1: The first process is Awakening, which begins with aCritical Organizational Analysis (like Beckhard and Harris).Leaders need to scan continuously both their external andinternal environments and understand the forces for andagainst any particular organizational shift. The most powerfuldrivers for change tend to originate outside organizations.These forces range from new legislation, new productslaunched by competitors, new population trends, to newtechnologies; in fact, it is usually an interlocking web ofexternal factors that make environmental shifts so challengingfor organizations to respond to effectively. Leaders also needto understand deeply what is going on inside their ownorganizations. For example, are people with criticalcompetencies leaving the organization? If yes, why is theturnover rate disturbingly high?Managers need data from all significant parts of theirorganization and stakeholders to understand the dynamicsinternal to their institutions. Once external and internal data iscompiled, leaders need to examine their organizations’situation and talk about how the new challenges from theexternal and internal environments impact their institutions.
Chapter 3 addresses how to diagnose an organization’sproblems and Chapter 4 focuses on identifying and clarifyingthe need for change, assessing the organization’s readinessfor change, and developing the vision for the change.Step 2: The second step in the process is Mobilization,which includes several significant actions. The determinationof what specifically needs to change and the vision forchange are further developed and solidified by additionalanalyses and by engaging others in discussions concerningwhat needs to change and nurturing their participation in thechange process. Many assume that the need for change iseasily recognizable, obvious, and evident from theenvironment. Sometimes this occurs, but often it is not thecase. For example, if bankruptcy risks are rising or if profitshave declined, some people in the organization may believethings must change, but others may not, thinking that what isneeded is to simply stay the course until conditions improve.However, once change leaders are convinced of the need forchange, it is their job to convince others from the top of theorganization to the frontline staff.Change leaders also need to recognize that there is often alag between what they know, as the results of theirassessments, and what is known by others in different partsof the organization. This lag in information requires changeleaders to engage others through multiple communicationchannels, so that they become convinced of the importanceof changing now and not continuing to operate as they havein the past.The development of the analysis of the present state and thedefinition of a desired future state leads to the solidification ofthe gap analysis—an image of the differences between wherean organization presently is and where it needs and wants togo. A manager, for example, might have data that employeemorale is low. To take appropriate action to improveemployee morale, managers need to understand the rootcauses of the problem. Is it the pay system? Is it theperformance appraisal system? Is the problem found acrossthe organization, or is it confined to certain divisions? Theanswers to these and other questions may suggest differentcourses of action. In Chapter 3, several frameworks are
described for readers to develop a sophisticated checklist fororganizational diagnosis. The gap analysis allows changeleaders to clearly address the questions of why change isneeded and what needs to change. Being able to clearly andsuccinctly communicate this, along with the vision for thechange, is critical to building shared understanding andsupport for the change in the organization. Think of this asthe value of a clear, succinct, and compelling “elevator pitch”of what you have in mind and why it is worth undertaking.The analyses of (a) formal structures, systems, andprocesses; (b) the power and cultural dynamics of theorganization; (c) the various stakeholders; (d) the recipientsof the change; and (e) the change agents themselves, all helpto complete an understanding of the situation and the gapsthat need attention. In addition to identifying the gaps thatmust be addressed, these analyses also help change leadersto understand how the existing situation can be leveraged inorder to increase the prospects for success. For example,change leaders need to consider how existing systems andprocesses can be used to advance the change and howinfluence can be exercised and support built for theundertaking. Further, they need to assess how their own skillsand abilities are best deployed to advance the changes.Step 3: Acceleration involves action planning andimplementation. It takes the insights gained in earlierchapters and translates them into the development andactivation of a detailed plan for action, in order to bring thechange to life. Appropriate tools are deployed to manage theplan, build momentum, and manage the transition. People aresystematically reached out to, engaged and empowered toadvance the change. Needed new knowledge, skills, abilities,and ways of thinking are developed in others to support thechange. Finally, small wins and the achievement ofmilestones along the way need to be celebrated.While the stages of the change process, includingacceleration, are depicted as linear and straightforward, thereality is usually quite different. Managing change whileoperating the organization is like changing the tire on amoving car. Conditions can change in unanticipated ways andchange leaders need to be able to learn and adapt their
understanding of the situation and what is needed as they go.The way the change is communicated, the specifics of thechange, and its implementation may also need to be adaptedfor different parts of the organization to help them betterunderstand and implement the change within their specificcontexts (e.g., production vs. marketing). Transitionmanagement plays an important part in doing just that.Figure 2.2 The Change Path Model
Step 4: Institutionalization involves the successfulconclusion of the transition to the desired new state. This isaided by the sophisticated monitoring of progress along theway, including the assessment of when the changes havebeen incorporated into the fabric of the organization.Measurement can play a very useful role in this area.Understanding the impact of the particular organizationalchanges we are trying to achieve depends on our ability tomeasure such change and this sets the stage for futurechange initiatives. Measurement and data also play veryimportant roles in earlier phases of the change process.
Application of the Change PathModelLet’s return to the hotel guest’s letter presented earlier in thischapter and use it as an opportunity to apply the Change Pathprocess model to an organization that appears to need to change.
Awakening: Why Change?The general manager might have very good reasons forinterpreting the letter as a signal not to change. The hotel alreadymight be in the midst of a computer systems modification and beoverwhelmed with this change. Or, the general manager mayhave a tracking system that indicates that most hotel guests arevery satisfied and that this is an unusual occurrence. Or, thegeneral manager may be under pressure to reduce costs andviews change as leading to increased costs. Or, the generalmanager might see himself as exiting the organization and doesnot want to put the time and energy into changing systems.On the other hand, the general manager may have the oppositereaction. The letter could trigger the manager to note inefficientprocesses that cause higher costs (i.e., it is more costly to clean aroom twice or have to return to a room to deliver missing towels).If this letter were sent to Trip Advisor, Yelp, or other travel-relatedwebsites, then the hotel could experience the loss of customersand a damaged reputation, particularly if there were otherunhappy customers who expressed dissatisfaction with the hotel.Even if the general manager accepts the need for change, theemployees might not. At this point in time, they know nothingabout the letter. They may feel that their performance is good andno change is needed. They might have a department managerwho doesn’t follow up on directives and, thus, they could believethat no action is necessary. Or, they might be new to their jobsand be poorly trained in customer service.The challenge for the change leader is to articulate “why change”and their initial vision for the change to key stakeholders in waysthat they will understand and move them to positive actions.
Mobilization: Activating the Gap AnalysisThe present state of the hotel operations has several dimensionsthat could be addressed. The following gaps might exist:A gap in information between room readiness and theinformation that the desk clerk hasA gap between what the hotel’s managers say they will doand what they actually doA gap between the appropriate bill and the bill given to thecustomerA gap between the desired interpersonal relationshipsbetween employees and customers and that which existsA gap between the desired handling of hotel guests and thatwhich occursEach of these gaps could require different action plans forchange. Careful analysis will demonstrate that there areunderlying issues that need to be dealt with. For example, if theorganization’s culture has evolved to one that is not focused oncustomer care and relationships, the individual gaps might bedifficult to correct without a systematic approach. This gapanalysis, then, needs to be used by change leaders to furtherdevelop and frame the vision for change. This vision plays acritical role in helping others understand the gap in concrete termsby contrasting the present state with the desired future state.Taking an organization through the process of change requiresgoing through predictable stages of change. Some organizationalchange experts, such as Kotter (1996)17 and Duck (2001),18argue that a leader must successfully take the organizationthrough each stage before moving to the next stage. While ourexperiences suggest that context matters and we challenge a rigidprescription of stages of change, we do believe that there is apredictable beginning, middle, and end process of change, andthese set the stage for future pressures for change. Things don’tstand still.
Acceleration: Getting from Here to ThereIn this phase, specific actions are undertaken to advance theimplementation of the desired changes. Several planning toolscan be used (see Chapter 9). If the general manager in the hotelcase decided that the issue to be tackled is computer systems,then the implementation plan and actions might include thefollowing steps:Discuss the need for change, the gap analysis, and the visionfor change with involved staff to develop a consensusconcerning the need for action.Form a users’ task force to develop the desired outcomesand usability framework for a new computer system.Contact internal information systems specialists for adviceand assistance on improving the hotel’s information system.Identify the costs of systems changes and decide whichbudget to draw on and/or how to fund the needed systems’changes.Work with the purchasing department to submit a “request forproposal,” promoting systems’ suppliers to bid on theproposed system.Contact human resources to begin staffing and training plans.Implement the plans.This list of sample tasks lays out the actions needed toaccomplish the change. In Chapter 9, we identify tools that help inplanning. For example, there are tools to assign responsibilitiesfor different aspects of projects and others for contingency plans.Other tools illustrate how to manage during the transition.Organizations usually don’t stop what they are doing becausethey are changing! In the hotel, for example, rooms will need to bemade up, allocated, and assigned while the information system isbeing modified. In particular, receptionists will need to ensure aseamless transition from the old to the new system. In manysystem changes, parallel systems are run until the bugs in thenew system are found and corrected. Hotel receptionists need tobe trained on the new system. How and when that will be done in
this implementation phase is part of the managerial challengeduring the transition state.
Institutionalization: Using Data to Help Makethe Change StickThe final aspect of the model deals with the measurement ofchange and the metrics used in that measurement. How will thegeneral manager know that the changes implemented areworking? Managers can measure inputs easily, such as thenumber of hotel receptionists who are trained on the new system.But management will also need to track the number of timesrooms are misallocated. This is a more difficult problem becausethe staff could be motivated to prevent accurate reporting fromsuch a system if the results could put the staff in a negative light.Chapter 10 talks about measurement and control methods thatcan assist change managers in navigating the path forward.Models improve change managers’ abilities to plan and implementorganizational change and to predict outcomes. The Change PathModel provides a practical framework that lays out a linearprocess for change. This model, like others, risks having changemanagers oversimplify their challenges. Cause–effect analysis iscomplex because organizations are nonlinear, complex entitiesand the constantly shifting external environment impacts anorganization’s customers and resources. An overreliance onsuperficial thinking can lead to errors in judgment and unpleasantsurprises. Organizations are more surprising and messier thanpeople often assume.Coordination and control of change may appear fairlystraightforward. However, the reality is that organizations oftenundertake multiple change projects simultaneously. For example,a factory may be shifted toward a continuous improvementprocess while other parts of the organization are beingrestructured. Different managers are working on separate changeprojects to make things better. Under such complexity, control isdifficult and likely involves multiple layers of authority andsystems. Difficult yes, but coordination and integration of effortstoward shared goals can be accomplished when approachedcarefully, thoughtfully, and empathetically. See Toolkit Exercise
2.2 to examine a change initiative through the Change Pathprocess and differentiate between the how and what of change.SummaryThis chapter differentiates what to change from how to change anduses several models to explicitly consider how to change. Successfulchange management requires attention to both process and content.The Change Path Model serves as the organizing framework for thechapter sequence is laid out using the model. See Toolkit Exercise2.1 for critical thinking questions for this chapter.Key TermsHow to change—relates to the process one uses to bring aboutchangeWhat to change—relates to the assessment of what it is that needsto change—in other words, the content of the changeSigmoid curve—describes the normal life cycle of somethingincluding an initial phase, a growth phase, deceleration, and decline
Lewin’s Model of Change: Unfreeze →Change → RefreezeUnfreezing—the process that awakens a system to the need forchange—in other words, the realization that the existing equilibriumor the status quo is no longer tenableChange—the period in the process in which participants in thesystem recognize and enact new approaches and responses thatthey believe will be more effective in the futureRefreeze (or re-gel)—the change is assimilated and the systemreenters a period of relative equilibrium
Kotter’s Eight-Stage Change ProcessEstablish a sense of urgency—upend complacency in order tocommunicate the need for changeCreate a guiding coalition—a team of a significant number ofpeople (10 to 50) who have titles, lead divisions and departments,and have the respect of their colleagues and relevant knowledge tolead the changeDevelop a vision and strategy—an overarching dream of aninspiring future and how to get thereCommunicate, communicate, communicate—capture the hearts andminds of most employees by communicating through multiplechannels and multiple times the vision for changeEmpower employees—helping employees embrace the vision andsupport necessary structural mechanismsGenerate short-term wins—highlight short-term gains to keepemployees motivatedConsolidate gains and produce more change—continue pressingforward until the change seeps into the deepest recesses of anorganizationAnchor new approaches—embed the changes in the organization’scultural norms and values
Gentile’s Giving Voice to ValuesClarification and articulation of one’s values—articulation of one’sown values and the impact of acting on those values, making implicitprinciples explicitPost-decision-making analysis and implementation plan—understanding how to voice opinions in difficult situationsThe practice of speaking one’s values and receiving feedback—pre-scripting situations in order to practice voicing values
Duck’s Five Phases of People’s ReactionModelChange Curve—a simplification of the complex, often volatile,human emotion that accompanies changeStagnation—occurs when people have an insufficient sense ofthreat or challenge from the external worldPreparation—requires a tremendous amount of planning andoperational work and alignment of leadersImplementation—includes designing new organizational structures,job descriptions, and lots of other detailed plans as well as changingpeople’s mindsets and work practicesDetermination—motivation to continue the long path totransformationFruition—is the time when the hard work pays off and theorganization seems new
Beckhard and Harris’s Change-Management ProcessFocus on process—is key to this model with a step-by-stepprescription for changeGap analysis—describing a desired future state in contrast to anorganization’s present realityManage transition—the final step in the process key to a successfulchange initiative
The Change Path—Cawsey-Deszca-IngolsAwakening—the stage of the process in which the need for changeis determined and the nature of the change or vision is characterizedin terms others can understandMobilization—the identification of the distance between the desiredfuture state and the present state at which the system operatesAcceleration—the stage of the process in which plans aredeveloped for bridging the gap between the current mode ofoperation and the desired future state and the means by which thetransition will be managed. A key part of this stage includes actionplanning and implementation.Institutionalization—the process of making the change inherent inorganizational processes. Also, a consideration of how to measurechange and what measures will be used to help identify where theorganization is and the level of success achieved.End-of-Chapter Exercises
Toolkit Exercise 2.1
Critical Thinking QuestionsThe URLs for the videos listed below can be found in two places.The first spot is next to the exercise and the second spot is on thewebsite at study.sagepub.com/cawsey4e.A visit to the following website will provide the reader with numerousvideos, cases and other materials related to the Giving Voice to Valuescurriculum.https://www.darden.virginia.edu/ibis/initiatives/giving-voice-to-values/1. Giving Voice to Values:Please read at the end of this chapter: “Not an Option to EvenConsider: Contending with Pressures to Compromise,” andconsider the following questions:Who are the important stakeholders that Ajith needs towork with?What are the main arguments that Ajith will need tocounter? In other words, what are the reasons andrationalizations that Ajith should expect to encounter withthe different stakeholders?What levers can Ajith pull to increase the chances thatLaurent’s drugs will be registered? In other words, whatpower and/or influence does Ajith have to get what hewants?Gentile talks about the importance of Giving Voice toValues to frame and address ethical issues and change.Meet in small groups and discuss an issue organizationshave to deal with that has conflict of values imbedded init. Would positive change be advanced if we were toadopt the methodology recommended by Gentile?2. Kotter’s Eight-Step Organizational Change Model: Sydney Boone,Ayushmaan Baweja, and Steven Thomsen—12:57 minuteshttps://www.youtube.com/watch?v=LxtF4OXzhyIThis video delves more deeply into Kotter’s process model ofchange.What are the key lessons you learned from the video?How do they help you think about the process of leadingchange?Compare this approach with the Change Path Model.What are their similarities and differences, and how wouldyou work with both models if you were leading change?
Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 2.2
Analyzing a Change Process through theChange Path ModelPart IInterview a manager at any level who has been involved in change withhis or her organization. Ask the person to describe the change, what he orshe was trying to accomplish, and what happened. Use the followingquestions as guides for the interview.How was the desired change identified? What were the reasons forthe change?Describe the gap between the organization’s current performanceand the desired future state.What was the vision for the change? How was that visioncommunicated throughout the organization?How were the formal structures, systems, and processes involved inthe change?How were the recipients of change and other key stakeholdersengaged in order to get them on board with the change?What tools and trainings were used as the change wasimplemented, and how did the leadership make the change stick?What challenges surfaced that weren’t accounted for in the originalchange plan?What were the results of the change process? Did the results reflectthe original vision? How was measurement used to facilitate changeat different stages of the process?Part IIAfter the interview, describe the process of the change by answering thefollowing questions that are related to how they managed the process:How did the manager work to make things happen?Who was involved?How did they persuade others?What resources did they use?Also describe what was being changed? Why were these thingsimportant? How did these changes help the organization?As you reflect back on the interview, which do you feel was moreimportant to the impact of the change: how things were changed,that is, process, or what was changed?
Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
“Not an Option to Even Consider:”Contending With the Pressures toCompromise (A)†† This case was prepared by Heather Bodman under the supervision ofProfessor Cynthia Ingols of Simmons University School of Business. Thiscase was inspired by interviews and observations of actual experiencesbut names and other situational details have been changed forconfidentiality and teaching purposes.By Heather Bodman, Researcher, and Cynthia Ingols, Professor ofPracticeSchool of Business, Simmons University, Boston, MAAjith sighed as he hung up the phone. Once again, the health ministryhad failed to move his registration application forward so that hiscompany, Laurent Pharmaceuticals, could begin selling prescriptionmedications in the Southeast Asian state of Kamaria. Though this newdelay wasn’t entirely unexpected, Ajith, a seasoned pharmaceuticalexecutive, was still disappointed. Ajith’s primary goal ever since arriving inKamaria a year earlier to serve as director of operations and chiefresident representative overseeing Laurent’s in-country businesses, hadbeen to obtain these registrations. Laurent’s existing businesses includedpersonal care products and over-the-counter medications. Laurent hopedto enter the pharmaceutical and vaccine markets but without theregistrations, Ajith knew that the firm could not enter the market,restricting the firm’s ability to grow the small but promising Kamarianbusiness.His disappointment was not only due to the delays themselves, but also tothe reasons for them. The products that Laurent Pharmaceuticalsintended to introduce specifically addressed growing major healthconcerns in the country. Ajith suspected that if his application could getpast the first gatekeeper and into the hands of the health ministry’s reviewcommittees, he could make a compelling case for introducing Laurent’sproducts into Kamaria and dramatically improving the health of itscitizens. Yet other companies appeared to be getting priority over Laurent.“What was quite amazing to us at the time was that companies who camewith files six months later or three months later, were getting registrationsextremely quickly,” Ajith recalled. How were his competitors achievingthese results? “They were basically bribing the gatekeeper and their filesquickly ended up in the review committees, and they then probably met
up with the review committee people and starting doing the same,” Ajithrealized. “They were getting quite a few registrations, so what we finallysaw was that all sorts of registrations were coming through for ourcompetitors and none for us.”Every day, the pressures on Ajith increased. Both his commitment touphold the official policy of the company, which stated that compromisewas unacceptable, and his strong sense of personal integrity—a source ofprofessional and personal pride for Ajith—were being tested. Externally,the competitive pressures were mounting as other companies’ mangerscompromised and obtained registrations. Internally, Ajith’s Laurentmanagers were becoming impatient with the obstacles to progress andwere beginning to think that policy or no policy, compromise was the onlyway forward. Ajith disagreed, but he knew that he needed to articulate abetter way.To make matters worse, further difficulties had arisen in the over-the-counter market that Ajith also oversaw in Kamaria. LaurentPharmaceuticals produced a widely used over-the-counter painkillerunder the brand name Theradil. At first, this product was quite successfulin Kamaria, achieving over 50% market share by 2008. But Ajith hadrecently begun to notice that Theradil’s market share was eroding. Cheap,locally produced imitation products of inferior quality had begun to pop upin the pain relief market, decreasing Laurent’s market share considerably.In investigating further, Ajith discovered that the factories producing thefake Theradil were run by former generals of the Kamarian army, who hadbeen awarded these factories as rewards for their years of service and asspoils of war. Any attempt to shut them down could further impact LaurentPharmaceuticals’ ability to operate in Kamaria, and could potentially posepersonal dangers for Ajith, due to the powerful nature of the individualswho ran these operations.Ajith remained calm in the face of these challenges, reflecting that “thesewere standard issues that go with the terrain of operations in this part ofthe world, and especially the developing nations.” Still, he acknowledged,“the situation after one year of operations in Kamaria was grim.” Howcould he obtain registrations for the pharmaceutical products withoutcompromising his integrity? And what strategies could he use to combatthe growing problem of imitation Theradil without impacting Laurent’sability to do business in Kamaria?
Historical contextKamaria is a small, single-party state located in Southeast Asia. A formerEuropean colony, Kamaria suffered through decades of brutal civil war inthe 20th century and finally achieved independence in 1987. Though itremained a closed market through the end of 1998, Kamaria began toopen its markets to the outside world the following year, establishing asmall private sector dominated by small- and medium-sized businessesand encouraging foreign-owned enterprises to set up local operations. By2008, Kamaria was recognized as a fast-growing and export-drivenemerging economy. The government of Kamaria was seeking to use theirnew status on the world stage to negotiate favorable trade agreementswith the UK, the United States, and other developed nations to ensure thecontinued success of their exports. As in other developing countries,however, corruption was a problem that impaired Kamaria’s ability toattract significant foreign direct investment, in spite of the attractiveness ofits rapidly growing markets and manufacturing sector. Another issuefacing Kamaria in trade agreements was the general lack of control theyexerted over intellectual property, which was a concern to Westerncompanies across a diverse set of industries, from entertainment andelectronics to consumer goods and pharmaceuticals.Laurent Pharmaceuticals was originally founded in the late 18th centuryas the first compounding pharmacies were beginning to appearthroughout Europe. During the 19th century, Jean-Philippe Laurentinherited the firm and under his leadership, the company expanded intoindustrial manufacturing of chemical agents and early forms ofpharmaceutical products. Though business suffered during the turbulentfirst half of the 20th century, Laurent recovered and became one of thefirst manufacturers of antibiotics, developing into one of the leadingmanufacturers of antibiotics and vaccines in the world by the 1970s.Today, they have evolved into a multinational, research-drivenpharmaceutical and chemical company with operations in over 40countries, including the United States, the UK, the EU, Australia, anddozens of emerging and developing nations. Producing and sellingprescription medications for a variety of indications, as well as over thecounter medications and personal care products, LaurentPharmaceuticals is now one of the largest pharmaceutical companies inthe world, earning $42 billion in revenues worldwide in 2008.
Growing a businessIn 1988 Ajith began his career in marketing, working for a largemultinational firm in his home region of South Asia. After moving toLaurent Pharmaceuticals in 2000, he accepted several internationalposts, which took him to the Middle East and East Africa. Working inthese challenging markets honed his talent for management of in-countryoperations in developing countries, attracting the attention of Laurent’sregional management is Southeast Asia. In 2008, Ajith was recruited toserve as director of operations for Laurent’s business in Kamaria.Initially, Ajith managed Laurent’s operations in Kamaria from Singapore,introducing over-the-counter medications and personal care products. In ashort period of time, Laurent achieved a 50% market share in the lucrativepain relief market in Kamaria on the strength of its huge Theradil brand,an over-the-counter analgesic, creating a small but profitable(approximately $60,000 USD annually) operation. The next step ingrowing Laurent’s Kamarian business was to enter the pharmaceuticalmarket. To facilitate this new venture, Ajith was tasked with starting up alocal office in Kamaria:Basically, when I went down to Kamaria, my first task, besidessetting up the office, was to try and meet with the ministry ofhealth officials and prepare all the registration files for all thevaccines that we needed to register and all the antibiotics weneeded to register and accelerate the registration process.By about mid-2006, we had set up operations and we hadstarted building a small team. We had probably about 15 to 20medical delegates on board now, who were mostly qualifieddoctors—medical doctors—who were on the team as medicaldelegates. The pay that they were getting in governmenthospitals was pretty low, and I think that they saw this as anattractive option for them.At the time, doctors in the state-run hospitals in Kamaria could expect tomake approximately $30 USD per month. Ajith noted, “I think they wereall finding it quite difficult to exist with that income.” Doctors who becamemedical delegates to international pharmaceutical companies like Laurentcould expect to start at $70–$100 USD per month, and could potentiallyearn as much as $200 a month if they were successful. “They had tomake a call at that time,” Ajith said, “and make a decision as to what theywanted to do.” Doctors could not work for the hospitals and the
pharmaceutical companies at the same time, “but they had the option ofmoving out anytime they wanted back into being doctors, and some ofthem saw this as a short-term measure to collect some cash.”By the time Laurent Pharmaceuticals entered the Kamarian market, therewere already approximately 30 competitors operating in Kamaria,including companies based in the United States, Europe, South Korea,and India, along with many local firms. “The Korean and Indiancompanies all had similar portfolios in terms of products to what we had.There were also Kamarian competitors, but very much in the lower-endproduct categories, like over-the- counter medicines, not in the high endvaccine and antibiotics businesses.” Though competition was healthy, themarket was booming.In part, this rapidly growing market was fueled by growing healthconcerns in Kamaria, as Ajith explains:There were two major health issues in Kamaria at the time. Thefirst one was Hepatitis B. Hepatitis B in Kamaria has almost a10% carrier rate, which means 1 in 10 Kamarians are prone toHepatitis B. And the second big issue that was rising rapidly inKamaria was resistance to antibiotics. Antibiotic resistance hadnow reached close to 18%, which meant that lots of frontlineantibiotics were no longer effective amongst close to 20% ofKamaria’s population. So most of the drugs that we were tryingto register were high end vaccines for Hepatitis B and also thebetter antibiotics that we had in our portfolio, because Laurenthas always been a world leader in both vaccines and inantibiotics and continues that leadership today. So, we knew theneed was there, we knew the consumer problem was there, andwe also knew that our products were significantly superior indelivering the remedial action compared to the drugs that wewere getting registered.Pharmacists, Ajith noted, were a key population that Laurent needed toreach in order to make any progress against antibiotic resistance. “I don’tthink too many Kamarian pharmacists know what it is to deliver aprescription and not under-deliver a prescription, and also educateconsumers of the need for giving the full antibiotic dose as opposed tounder-dosing themselves.”It would not be possible for Ajith to undertake such a marketing campaignhimself until he was able to convince the Kamarian government to issueregistrations for Laurent Pharmaceuticals products:
We were quite perturbed because it had taken close to one yearthat we’d been there, and we were struggling to get anywherewith registrations. It was becoming more and more clear that ifwe needed registrations that we had to be ready to compromise,and that the Korean companies were compromising, and theIndian companies were compromising, and some of the otherEuropean companies were compromising.Compromising was not an acceptable solution for Ajith, however:It was extremely clear to me that that was not an option for us toeven consider. That was a very clear integrated policy in thecompany and we practiced that in almost every market where weoperated. However, I must mention that if left up to some of themanagers, they would also compromise. Now for example, at thetime I was running Kamaria for Laurent, the guy who wasrunning [a major competitor] was compromising. So having anintegrity principle is one thing, but deciding whether to practice itor not, depending on the pressure you are getting from thecompany, is another thing. I can tell you that I was getting quite alot of pressure from my regional head and from the globaloperations people because they were seeing very little forprogress in growing the Kamaria business.At the same time, problems were brewing in the previously robust over-the-counter business that Laurent Pharmaceuticals was operating inKamaria.We realized that sales of our brand of pain reliever, Theradil,were beginning to crash down rapidly. We had probably about50% of the market in Kamaria for pain relievers, and we weresuddenly seeing a massive decline from a 50–55% share downto about a 30% share, and when we began to investigate thisfurther, we found that there were close to 12 brands of fakeimitation Theradil in our market.Testing of samples of the fake Theradil products revealed that consumerswho purchased these brands were being seriously underdosed—at best,the imitation pain relievers contained 72% of the minimum standard doseof the active ingredient, with the most inferior substitutes containing just36% of the standard dose.
To address the imitation Theradil problem, Ajith hired a law firm toinvestigate these issues and made a disquieting discovery.Almost all the 11 fake Theradils that were available in differentparts of Kamaria were manufactured by factories formerly ownedby the Kamarian government which were run by the then-generals of the Kamarian army. These generals had been givena pharmaceutical factory each, as compensation or recognitionof their great contribution to the success of the Kamarian war atthe time. In different parts of Kamaria, each of these guys hadtheir little companies and it doesn’t cost much to get a printerand develop your own artwork ripping off the competition.With their government connections, Ajith knew that it would be difficult toput pressure on these factory owners to shut down their operations,particularly since, as Ajith observes, they made no attempt to hide whatthey were doing.Most of these companies were putting their factory addresses atthe bottom of the pack. The detectives didn’t have to do toomuch detection to figure out what was happening, because thiswas a reasonably flagrant violation. Anyway, they probably knewthat they were sort of above the law at the time and could getaway with it, so they probably didn’t worry too much about that.By the time Ajith uncovered the extent of the Theradil problem, eightsubmissions of registration paperwork to the ministry of health for Laurentantibiotics and vaccines had now been missed. “We were now having asales decline in our base business, and not having the opportunity togrow the potential business, and that was very much the situation wewere in,” Ajith recalled.
Developing relationshipsIn the course of launching the office in Kamaria in 2008, Ajith hadrecruited a dedicated local management team. This team oversaw thestaff of doctors and supervised all other aspects of day-to-day operationsof Laurent in Kamaria. Ajith’s commitment to accountability andtransparency in his organization were inspirational to his staff. Determinedto fit in with his staff, Ajith began learning the Kamarian language, andonly stopped conducting meetings in Kamarian when his staff expressedtheir desire to practice their English with him instead. He also plied histeam for their expertise on a wide range of issues involving local customsand traditions, gaining insight into the tightly-knit culture of Kamaria. Thisexpertise helped shape the vision Ajith was forming of what Laurent couldoffer the Kamarian consumer once the pharmaceutical registrations wereapproved.At the same time, Ajith had been working closely with the Frenchembassy in Kamaria as Laurent’s operations were ramping up. In recentdiscussions with embassy officials, Ajith observed that the upcoming tradenegotiations were a frequent topic of speculation, with strong opinions onall sides of the debate. Some embassy officials felt that the government ofKamaria was simply too corrupt to be considered a good free tradepartner. Others saw great potential in Kamaria, and supported Europe’sparticipation in free trade agreements with Kamaria, but worried about theweak protections in Kamaria for intellectual properly. Still othersadvocated for totally open trade, arguing that once Kamaria entered theglobal market, market forces would require the government to behavedifferently or risk losing their lucrative export position.
Taking actionAjith sat at his desk and pondered his options. He did not want tocompromise, but unless he took some action, he knew that hismanagement would give up on Kamaria and he would have to leave. Infact, some members of his legal team went so far as to suggest that itwould be in his best interest to leave Kamaria, due to concerns about thereaction from the powerful factory owners about the investigations into theproduction of imitation Theradil. But Ajith was not willing to give up quiteso easily. He knew that Laurent’s products, particularly the vaccines andantibiotics, could make a real, long-term difference in addressing thegrowing health concerns for the people of Kamaria, and this motivatedhim to pursue a creative solution. Surely there was a path forward that didnot involve either compromising or turning a blind eye to illegalcompetition, and Ajith felt that he was up to the challenge.What resources could he use to motivate the Kamarian government toreview his submissions and issue registrations? Who were thestakeholders that Ajith needed to involve? What levers could he use toaddress the growing problem with fake Theradil? And how could headdress these issues without compromising his values and the values ofhis company?
Chapter Three What to Change in anOrganization: FrameworksChapter OverviewChange leaders need to understand both the process of makingorganizational modifications (the how to change as outlined inChapter 2) and the ability to diagnose organizational problemsand take actions to change an organization.Determining what needs changing requires clear organizationalframeworks. Change leaders need to comprehend thecomplexity and interrelatedness of organizational components:how analysis needs to occur at different organizational levels,and how organizations and their environments will shift overtime, requiring further analysis and action.This chapter outlines several frameworks that one can use toanalyze organizational dynamics:1. Nadler and Tushman’s Congruence Model balances thecomplexity needed for organizational analysis, and thesimplicity needed for action planning and communication,and provides the overarching structure for this book;2. Sterman’s Systems Dynamics Model views the nonlinearand interactive nature of organizations;3. Quinn’s Competing Values Model provides a frameworkthat bridges individual and organizational levels ofanalysis;4. Greiner’s Phases of Organizational Growth Modelhighlights organizational changes that will—inevitably—occur over time in organizations, from their infancy tomaturity; this model is particularly useful for entrepreneurswho sometimes need to be reminded that change needsto occur, even in their small start-up organizations; and5. Stacey’s Complexity Theory is introduced to highlight theinteractive, time-dependent nature of organizations andtheir evolutionary processes.Each framework aids a change agent in diagnosing a particularkind of organizational issue and suggests remedies for whatails an institution.
In Chapter 2, we considered the process of change (the ChangePath). In this chapter, we deal with what aspects of anorganization to change. Differentiating the process from thecontent is sometimes confusing, but the rather unusual examplebelow will highlight the difference.Bloodletting is a procedure that was performed to helpalleviate the ills of mankind. . . . In the early 19th century,adults with good health from the country districts ofEngland were bled as regularly as they went to market;this was considered to be preventive medicine.1The practice of bloodletting was based on a set of assumptionsabout how the body worked—bloodletting would diminish thequantity of blood in the system and thus lessen the redness, heat,and swelling that was occurring. As a result, people seemed to getbetter after this treatment—but only in the short term. The realitywas that they were weakened by the loss of blood. As we knowtoday, the so-called science of bloodletting was based on aninaccurate understanding of the body. It is likely that bloodlettingprofessionals worked to improve their competencies anddeveloped reputations based on their skills in bloodletting. Theyworked hard at the how aspects of their craft. Advances inmedicine prove that they did not really understand theconsequences of what they were doing.Bruch and Gerber differentiate the what and the how in aleadership question—“What would be the right action to take?”—and a management question—“How do we do it right?”2 Theyanalyzed a strategic change program at Lufthansa that took placefrom 2001 to 2004. This program generated more than €1 billionin continuing cash flow. The how questions focused on gainingacceptance of the change: focusing the organization, findingpeople to make it happen, and generating momentum; and thewhat questions were analytical, asking what change was right,what should be the focus, and what can be executed given theculture and situation. Bruch and Gerber concluded that a focus on
implementation was not sufficient. A clear grasp of the criticalneeds, the change purpose or vision, was also essential.3The two foundational models of this book are the Change PathModel (Chapter 2) and the Nadler and Tushman’s CongruenceModel (Chapter 3). The latter helps in the analysis of what is goingon in an organization and what components of an organizationneed to be changed. That is, it is the “what to change” model. Inany organizational change, both process (how to) and content(what) are important. Thus, we embed the Nadler and Tushmanmodel in the four-stage Change Path Model. Nadler and Tushmanhelp us to understand what gaps exist between where theorganization is and where we want the organization to be. Like allmodels, the Nadler and Tushman’s Congruence Model capturesorganizational reality from one perspective; consequently, Chapter3 describes four additional organizational models designed toassist change leaders in their thinking about organizations and thereality that they represent.For strengths, the Nadler and Tushman’s Congruence Modelgives us a comprehensive picture of an organization, itscomponent parts, and how they fit together. That is, it asks us toexamine organizational tasks (the work of the organization),people, informal organization (often thought of as the culture), andthe formal organization (structures and systems) in the context ofan organization’s external environment, resources, history, andother inputs. Organizations are dynamic and highly interactivewith their constantly changing environments. Change one aspectof an organization and other things are affected. Change thecompensation system, for example, and we expect employeemotivation and efforts to change as well—which they might ormight not do.Our second model in this chapter, Sterman’s Systems DynamicsModel, helps us to understand underlying dynamics in complexsystems and to see potential unanticipated consequences beforethey happen. Sterman asks managers to discard their linear,rational, causative view of organizations and to expand theirperspectives to complex, interactive, multi-goal viewpoints. Notethat this perspective is at the individual level. If we focus only at
that individual level, we will miss major environmental factorsand/or organizational-level matters.Our third model of this chapter, Quinn’s Competing Values Model,reminds us to think of the individual and organizational levels. Thismodel captures much of the dual reality. It categorizesorganizations into four cultural types with matching roles and skillsneeded to effectively operate in each of the organizationalcultures.So, we know that we need to have a process to change (theChange Path helps). We need to know what to change (Nadlerand Tushman help). We need to understand how systems areinteractive and dynamic (Sterman helps). And we need to thinkabout levels of analysis: individual and organizational (Quinnhelps). But, we also know that both the internal and externalenvironment changes over time, too.In order to help us think about time, our fourth model, Greiner’sPhases of Organizational Growth Model, helps. Greiner posits aseries of predictable stages that occur in the life of anorganization. While the empirical evidence to support this model isweak, many managers find this prescriptive stage model helpful inthinking about organizations and how they change over time andgrow.Finally, our fifth model recognizes just how complex organizationalsystems are. Stacey’s Complexity Theory provides a set ofpropositions about organizations that helps us to capture theimplications of intricacies and convolutions.Keeping a clear line of sight on what needs to change is not a“one shot” activity, conducted only at the commencement of aninitiative. This is particularly true for initiatives that are not simpleand straight forward. Analyses are, by their nature, premised onassessments of factors that can and do shift over time.Sometimes, those shifts are slow to evolve while at other times,such as the financial meltdown in 2008 or the imposition of tariffsin 2018, they are swift and profound.
Analyses, including the questioning of the underlying assumptionsthat ground them, need to be updated throughout the course of achange initiative. By tracking changing conditions, adjustmentscan be made along the way. When Target entered Canada,evidence suggests it assumed that replicating what it did in theUnited States would lead to success. That assessment was faulty.Twenty-three months after entering Canada, they exited, taking a$5.4 billion loss. One of the main causes of this was tied toTarget’s failure to adapt its supply chain to the Canadian context—something that was arguably preventable.4Further, the analyses attached to a change initiative need to drilldown into the different parts of an organization in order to assesswhat specifically needs to change in each area to support theoverall change program. One size does not fit all.In summary, to be a successful change leader we need tounderstand both how to change (i.e., a focus on process) andwhat to change (i.e., an analysis of organizational problems). Weneed to know that organizations are dynamic, they can be viewedat different levels of analysis (from individual to group toorganizational), they change over time, and they are complex.Each model described in this chapter builds our conceptual toolkitto better lead change.
Open Systems Approach toOrganizational AnalysisOrganizations interact with their environments in complex anddynamic ways. This open systems perspective is based on thefollowing assumptions:5 Open systems exchange information,materials, and energy with their environments. As such, a systeminteracts with, and is not isolated from, its environment.A system is the product of its interrelated and interdependentparts and represents a complex set of interrelationshipsrather than a chain of linear cause–effect relationships.A system seeks equilibrium: when it is in equilibrium, it willonly change if some energy is applied.Individuals within a system may have views of the system’sfunction and purpose that differ greatly from the views held byothers.Things that occur within and/or to open systems (e.g., issues,events, forces) should not be viewed in isolation, but rathershould be seen as interconnected, interdependentcomponents of a complex system.The adoption of an open systems perspective allows managers toidentify areas of misalignment and risk between the externalenvironment and the organization’s strategy and structure. Opensystems analysis helps practitioners to develop a rich appreciationfor the current condition of an organization and plausiblealternatives and actions that could improve it. For example, whenpeople, products, or services within systems have operatedwithout considering their environment for extended periods oftime, they risk becoming seriously incongruent with the externalenvironment.6 Or, if an environment changes rapidly, the resultscan prove disruptive and, in some cases, disastrous for anorganization. Consider how the innovations and actions at Appleand Google disrupted the smartphone market in ways that leftBlackberry and Nokia scrambling to revive and reinventthemselves as relevant technology providers. Innovation by onecompany led to significant disruption and change for otherorganizations. Disruptions can shake organizations to their
foundations, and they also have the potential to sow the seeds forrenewal (hence the term creative destruction, coined by JosephSchumpeter7).In summary, organizations should not be analyzed as if they existin a bubble, isolated from their environments. But rather,organizations should be analyzed as to how effectively andefficiently they garner resources from the external environmentand transform these resources into outputs that the externalenvironment welcomes. Nadler and Tushman’s CongruenceModel does just that.
(1) Nadler and Tushman’sCongruence ModelIn this book, the Nadler and Tushman model is used as aframework to assist in structuring change leaders’ organizationalanalysis. The model has a reasonably complete set oforganizational variables and presents them in a way thatencourages straightforward thinking. It specifically linksenvironmental input factors to the organization’s components andoutputs. As well, it provides a useful classification of internalorganizational components and shows the interaction amongthem. Nadler and Tushman’s model is one example of an opensystems model.Nadler and Tushman8 provide a conceptual scheme thatdescribes an organization and its relationship to its externalenvironment. The Congruence Model is based on the principlethat an organization’s performance is derived from fourfundamental elements: tasks (or the work of the organization),people, formal organization (structure and systems), and informalorganization (part of which is the “culture”). The more congruencethere is among these four components, and the more aligned theyare with the external environmental realities and the strategy ofthe organization, then the better the organization’s performancewill be in the external marketplace—whether it is the quality ofservices for at-risk youths offered by a local school board, or anew electric vehicle an automobile firm hopes will achieve marketacceptance.9 An adaptation of their model is depicted in Figure3.1. This model is used as a framework for this book. Inputs aretransformed to outputs, and the feedback links make the modeldynamic and the components highly interdependent.
History and EnvironmentFrom its start-up phase, leaders of an organization make choicesconcerning where they want to locate themselves, what they wantto do, and which resources they want to buy, access, or otherwisedevelop and deploy. These historical decisions set the stage forfuture actions and outcomes, and which human, technological,and capital resources they subsequently seek from theenvironment. The history of an organization provides insights intohow it evolved its mission, culture, strategy, and approach to howit organizes and manages itself. 3M’s early experience, forexample, as a near bankrupt mining company set the stage for asustained culture that highly values flexibility and innovation askeys to its resilience and success.In addition to history and resources, external environmentalfactors play a huge role in influencing what organizations chooseto do. These include political, economic, social, technological,ecological, and legal factors (PESTEL factors). For example, if acompetitor launches a more attractive product/service, if newenvironmental regulations are enacted that create risk oropportunity for your products/services, or if an attractive newforeign market is emerging due to changing economic anddemographic conditions, organizations will need to consider suchenvironmental factors and trends as they decide upon theirstrategic approach. All organizational leaders must deal with anorganization’s history and recognize the impact and constraints,as they deal with the current external environment and seek toalign their resources with the strategy to produce the desiredresults. In thinking about what to change, all inputs may besources of opportunity and constraint.For change leaders, an ability to analyze the organization’sexternal environment and see implications for action in theorganization is a central change skill.
StrategyAn analysis of the organization’s competencies, strengths, andweaknesses, in light of the environmental threats andopportunities, leads to the strategy that organizational leadersdecide to pursue. Strategic choices lead to the allocation ofresources. Sometimes the strategy is consciously decided. Atother times, it is a reflection of past actions and marketapproaches that the organization has drifted into. When there is agap between what leaders say their strategy is and what they do(i.e., the actual strategy in use), one needs to pay close attentionto the strategy in use. In Chapter 4, we discuss strategy in depth.Figure 3.1 Nadler and Tushman’s OrganizationalCongruence ModelSource: From Nadler, D. A., & Tushman, M. L. (1989).Organizational frame bending: Principles for managingreorientation. Academy of Management Executive, III(3), 194–204.For change leaders, the change strategy is a critical focus of theiranalysis. What are the purposes and objectives of the plannedchange in the context of the organizational strategy? Is it of thefine-tuning variety, to better align resources with the strategy,remove an obstacle, and more effectively deliver the desired
results, or does the change involve something much moresubstantial, including changes to the strategy itself?
The Transformation ProcessThe next elements of the model are what Nadler and Tushmandefine as the transformation process. This is where theorganization’s components are combined to produce the outputs.They include the work to be done, the formal structures, systemsand process, the informal organization, and the people.
WorkThe work is the basic tasks to be accomplished by an organizationand its subunits in order to carry out the organization’s strategy.Some of these tasks are key success factors that the organizationmust execute in order to successfully implement its strategy. Anorganization’s work may be described in a very discrete way,listing, for example, the duties of a particular position, or, at thepolar extreme, the basic functions such as marketing. Tasks maybe nested in teams, requiring coordination and integration; beseparated and independent from one another or configured insome other way. The tasks may be designed to require a widerange of sophisticated skills and abilities or require a narrow set ofbasic skills. The work may require sophisticated judgment anddecision making or require people to follow standardizedprocedures. Existing task designs reflect past decisionsconcerning what needs to be done and how best to do things.These designs often reflect cultural beliefs in the organization andare, to a degree, a matter of choice. Chapter 5 deals with how thework is formally structured and organized.In change situations, change leaders should think through thenecessary shifts in key tasks in order to carry out the changeinitiative. This will assist in developing a specific gap analysis andchange plan.
The Formal OrganizationThe formal organization includes the “organizational architecture,a term that describes the variety of ways in which the enterpriseformally structures, coordinates, and manages the work of itspeople in pursuit of strategic objectives.”10 Once tasks areidentified and defined, they are grouped to form reportingrelationships, the formal organizational chart of roles,responsibilities, departments, divisions, and so on. The purpose ofa structure is to enable efficient and effective task performance.The formal systems of an organization are the mechanisms thathelp the organization accomplish its work and direct the efforts ofits employees. These include an organization’s human resourcemanagement systems (recruitment and selection, reward andcompensation, performance management, training anddevelopment); information systems; measurement and controlsystems (e.g., budget, balanced scorecard); production systems;and so forth. Chapter 5 deals with designed systems andstructures.Change leaders need to understand how the formal systems andstructures influence people’s behaviors and how structures can beused to facilitate change. Often formal systems, such asbudgeting systems, need to be used to gather data for change.
The Informal OrganizationThe informal relationships among people and groups in theorganization, the informal way things get done, and the normsaccepted by organizational members reflect the way the culturemanifests itself in the organization. While managers define thework necessary to accomplish the strategy and then structurethose tasks in formal ways, many things occur that are unplanned,unanticipated, and/or evolve over time. For example, friendlyrelationships between individuals often ease communications;groups form and provide support or opposition for theaccomplishment of tasks; and individuals and teams adaptprocedures to make things easier or more productive.* Theinformal system will include an organization’s culture, the norms orunderstandings about “how we do things around here,” values(e.g., about the importance of customer service), beliefs (forexample, about why the organization is successful), andmanagerial style (a “tough boss” style, for example). It will alsoreflect the informal leadership and influence patterns that emergein different parts of the organization.* For an interesting perspective on the relational aspect of aninformal system, see either M. Hutt, et al., “Defining the SocialNetwork of a Strategic Alliance,” Sloan Management Review 41,no. 2 (2000): 51–62, or D. Krackhardt and J. R. Hanson, “InformalNetworks: The Company Behind the Chart,” Harvard BusinessReview 74, no. 4 (1993): 104–111.Culture is a product of both the organization’s history and itscurrent organizational leadership. It acts as a control system in thesense that it defines acceptable and unacceptable behaviors,attitudes, and values and will vary in strength and impact,depending upon how deeply held and clearly understood theculture is. Other elements of the informal organization that areimportant to analyze when considering how to create changeinclude power relationships, political influence, and decision-making processes. Chapter 6 deals with informal systems, power,and culture.
Change leaders need to make explicit the oftentimes implicitnorms and behaviors of individuals and groups. Identifying thecurrently useful and dysfunctional norms and dynamics is a criticalchange agent activity.
PeopleThe people in an organization perform tasks using both theorganization’s designed systems and structures, and the informalcultural processes that have evolved. It is important that theattitude, knowledge, and skills of each person match theindividual’s role, and that their responsibilities and duties matchthe organization’s needs. Understanding the individuals in theorganization and how they will respond to the proposed changewill be significant in managing the change process. The role ofstakeholders and change recipients is discussed in Chapters 4, 6,and 7.Within every organization, certain key individuals are critical to itssuccess. Often, we think of the formal leaders as those who aremost important in terms of accomplishing the mission, but othersmay be crucial. These people might have special technical skillsor might be informal leaders of a key group of employees. Peoplesuch as these, acting as change leaders, are described in Chapter8.Change leaders need to understand the impact of proposedchanges on the organization’s employees. Further, they need toidentify key leaders in the organization who can facilitate theneeded changes.
OutputsThe outputs of an organization are the services and products itprovides to generate profitability or, especially in the case of publicsector and nonprofit organizations, to meet mission-related goals.Additional outputs are also important: the satisfaction oforganizational members, the growth and development of thecompetencies of the organization and its members, and customersatisfaction (to name just three). These outputs need to bedefined and measured as attentively as profitability, return oninvestment (ROI), or numbers of clients served.The above model reflects how one would look at the organizationas a whole. However, this same approach can be adapted to lookat internal parts of an organization that supply inputs or servicesfor another part of the enterprise. The level of success of theorganization in producing desired outputs becomes part of thefeedback loop and a new input to the organization. In a well-functioning organization, feedback will provide input whencontemplating modifying the strategy or internal alignments.Chapter 10 focuses on the measurement of change.Change leaders need to recognize that “what gets measured iswhat gets done.” They need to select key measures that will trackthe change process.In their work, Nadler and Tushman make three critical statements.First, the system is dynamic. This means that a diagnosis of howthe organization should operate will change over time if externalor internal conditions change or if different concerns andobjectives emerge. Second, the “fit” or congruence betweencomponents is significant in diagnosing why the organizationperforms well or poorly. And third, the better the fit is amongorganizational components and their alignment with theenvironment, the more effective the organization is. Theorganizational change challenge is to align the system’scomponents to respond to changing external and internalconditions.
The System is DynamicWhen an organization’s environment shifts, so must its diagnosis,in order to identify the changes needed to effectively realign itspeople, formal systems and processes, tasks, and culture to thatenvironment and produce the desired outcomes. For example,when inflation was running at 1,100% per year in Brazil,11 theinfluence of financial executives soared because financialmanagement played a pivotal role in sustaining firms. Wheninflation slowed and stabilized in the range of 10% to 20%, powershifted away from finance and toward sales, marketing, andproduction. If the external environment alters significantly, theinternal organization needs to change also. While this may seemlike a statement of the obvious, it often goes unobserved inpractice. Managers develop patterns of thinking aboutorganizational performance that served them well in the past, butover time these patterned approaches may impair their ability tosee when conditions have changed, and a different approach isneeded. Since the external environment is dynamic, the internalsystems also need constant tuning, or even, at times,transformation.The “Fit” Between and Among OrganizationalComponents Is CriticalNadler and Tushman argue that there are many different ways tothink about the components of an organization. However, theychoose to focus their model on four major components: “1) thetask, 2) the individuals, 3) the formal organizational arrangements,and 4) the informal organization.”12A change agent needs to understand these four components of anorganization and how they fit together and influence one another.Congruence is a measure of how well components fit together.For example, executives in an organization who restructure andignore the knowledge and skills of people who will fill the newlycreated jobs do so at some risk. Restructured organizations withnewly defined jobs either require the retraining of employees, orthe hiring of new employees with the requisite skills. Or, if
managers create structures and jobs to fit the competencies ofkey people and then those people leave, there may be asignificant loss of fit between the structural components and thenew key people.Organizations With Good Fit Are More EffectiveThan Those With Poor FitNadler and Tushman argue that effective organizations haveexcellent “fit” or “congruence” between components. Further, theyargue that the strategy needs to flow from an accurateassessment of the environment and respond to, or takeadvantage of, changes occurring in that environment. Similarly,the strategy needs to fit the organization’s capabilities andcompetencies, or the organization needs to develop capabilitiesand competencies that are aligned with the strategy. If all of theseare not aligned reasonably well with the strategy, the organizationwill be less effective than it could have been. Inside theorganization, the four components (tasks, people, designedstructure and systems, and culture) must fit each other. Forexample, if an organization hires motivated, highly skilledindividuals and assigns them routine tasks without challenge ordecision-making opportunities, those individuals will likely bebored. There will be a lack of fit and productivity will suffer. Or, ifthe strategy demands the adoption of new technology andemployees are not provided with the necessary training, fit islacking. Within categories, elements might not fit. For example, anorganization might decide to “empower” its employees to improveperformance. If it fails to adjust the supervisory approach andreward system to reinforce the desired behaviors, or if the cultureof the organization is one of mistrust, this lack of fit could easilylead to a failure of the empowerment strategy.Overall, lack of fit leads to a less effective organization. Good fitmeans that components are aligned with the strategy and thestrategy is effectively aligned with what is going on in theenvironment.For many managers, the notion of fit is easiest to understand asthey follow the flow from strategy to key tasks to organizing those
tasks into formal structures and processes to accomplish thedesired objectives. This is a rational approach to managementand appeals to one’s logic. At the same time, the reality oforganizations often means that what appears to management aslogical and necessary is not logical to employees. Manageriallogic may be viewed by employees as against their interests orunnecessary. Peters recognizes the importance of the so-callednonrational aspects of organizations.13 He argues that managersshould tap into the power of teams to accomplish results and thatindividuals can be challenged to organize themselves toaccomplish tasks. Thus, while fit is easiest to picture in logicalterms, change agents need to consider it in terms of the informalsystem and the key individuals in the change process who willinfluence its success.In a typical scenario, changes in the environment may requireleaders to rethink the organization’s strategy. This, in turn, resultsin changes in key tasks and how managers structure theorganization to do those tasks. In developing a new strategy andin redesigning an organization’s systems and structures,managers need to become aware of and understand the influenceof key individuals and groups.Why Should Those Advocating for Change Care?Nadler and Tushman’s Congruence Model helps practitioners inthree ways. First, it provides a template to assist in anorganizational analysis. Second, it gives one a way of thinkingabout the nature of the change process—environmental factorstend to drive interest in the organization’s strategy, which, in turn,propels the transformational processes. These, then, influence theresults. Third, the congruence framework emphasizes that, fororganizations to be effective, a good fit among all elements in theprocess is required from environment to strategy through to thetransformation process. Fit is also necessary within thetransformation process; this is a constant challenge forincremental change initiatives such as continuous improvementprograms. An emphasis on the internal fit between organizationalcomponents often focuses on efficiency. An emphasis on theexternal fit between the organization and its environment is an
effectiveness focus. See Toolkit Exercise 3.2 to practiceexamining a situation through Nadler and Tushman’s model.
An Example Using Nadler and Tushman’sCongruence ModelOver the past several years, Dell Computers has transformeditself. Dell made its name by selling low-cost computers directly tocustomers. The company was renowned for an efficient supplychain that allowed it to receive payment for its computers before itincurred the cost of building them. The Dell story outlines thecompany’s attempt to reorient itself.Dell Computers Reorients Itself14For years, Dell focused on being the low-cost, efficient producer ofcomputers. As one report put it, “Dell long stuck with its old playbookof cranking out PCs as efficiently as possible.”15 Dell had focused onmaking the computer a commodity and sold online using genericparts. Dell focused on optimizing the business it already had whilethe market shifted. Its competitors, Hewlett-Packard, IBM, Apple, andothers, marketed newer, sleeker laptops with better Internetcapabilities using retail stores for distribution.In 2007, company founder Michael Dell returned as CEO after threeyears of relative distance from operations. He replaced his seniormanagement team, added new products and services, and focusedon what customers wanted. However, the marketplace was changingradically as smartphones and similar products became the hot, newfocus.The troubles for Dell had begun when the market shifted. Growth inthe corporate market lessened while the consumer sector flourished.As well, developing markets overseas became critical—markets thatwere less willing to buy over the Internet and use direct delivery.Additional processing power became less critical, and consumersdemanded special features and more attractive machines. Dell sawthe clear need to alter what it was doing. A diagnosis of what wouldwork led to an overhaul of its products and the company.After taking over, Michael Dell responded to the marketplace. He setup mechanisms to get customers’ input. He shifted Dell’s distributionstrategy to sell in retail outlets, too. This required a shift in mindsetfor Dell managers as they had to establish new distribution systemsand manage their relationships with retailers. New machine designs
were created and new hardware, including smartphones, wereoffered. Dell began selling mini-notebooks to appeal to overseasmarkets. And the company responded to changes in the corporatesector by providing systems solutions, not just computers.To implement his strategy, Michael Dell installed a new seniormanagement team. One of his first moves was to hire RonGarriques, the executive who introduced Motorola’s Razr phone, ashead of Dell’s consumer business. Garriques shut down work on theMantra, a standard line of Dell products. As well, he stopped theintroduction of Dell specialty stores and developed relationships withretailers. Product design became a new, central focus.Michael Dell also brought in Brian Gladden from GE. Gladdenbelieved that Dell needed to be restructured, that its systems andprocesses were not sophisticated enough for a company of its size.One major move was to shift how Dell focused on external marketsby organizing around market segments, such as consumers,corporations, small- and mid-sized businesses, and governmentsand educational buyers.Culture change was necessary to shift Dell to a more responsive,flexible company. Group leaders had clear financial targets but weregiven significant discretion in determining how to achieve thesetargets.New products were developed and Dell began selling what in 2010was the world’s thinnest notebook. Design and style wereemphasized, along with “tech appeal.” Smartphones were alsointroduced, but Dell announced it was exiting this product category inDecember 2012 as they continued to search for a strategy that wouldwork in this very competitive sector.While Dell Inc. remained one of the leading companies in thetechnology industry, key financial ratios from 2006 and 2010 illustrateits problems: profit margins fell from 6.5% in 2006 to 2.7% in 2010. In2006 Dell reported revenue growth at 13.6%; in 2010 the companyreported a 13.4% decline in revenue.16 Ever-the-optimist CEOMichael Dell said the business climate was improving and “repeatedhis expectations for a ‘powerful’ hardware refresh cycle beginningnext year (2010).”17 Somewhere in the 2011–2013 period, MichaelDell decided to take his eponymous company (#51 on Fortune 500list in 2014) private. He had concluded that further changes wereneeded and that being a publicly listed firm was getting in the way ofaccomplishing the longer-term objectives. By November 2013, hecelebrated his public to private deal with 350 employees in Silicon
Valley. As one of the world’s richest men, Dell mixed in “his 16%ownership, valued at more than $3 billion, and another $750 millionin cash, with $19.4 billion from Silver Lake Partners (a private equityfirm) for a 75% stake in Dell Inc.”18Dell has not faded from the scene. In 2013 it was the world’s largestshipper of monitors and in 2015 Dell was the third largest PCvendor.19 At the same time, it continued to actively diversify itsrevenue streams through its servers, networking, software, andservices. Its activities in cloud computing are notable. In 2016 Dellannounced the acquisition of EMC Corp. (an enterprise and cloudstorage firm) for an estimated $64 billion in cash and shares.20 Thisallowed Dell to become a much more significant competitor in thisgrowing market. In July 2018, Dell undertook some financialreengineering and announced that it intended to once again becomea publicly traded company.21 This was likely done to provide hisprivate equity partners with path to exit and to provide Dell withgreater access to capital and public exposure.Time will tell if the transformations undertaken within Dell Inc. willlead to sustained success.During its rapid growth years in the 1990s, Dell providedunrivalled service to its markets. Corporations wanted reliableequipment with good prices and excellent service. Dell providedthis with online ordering and fast delivery. Its manufacturing,inventory management, and distribution systems were designed todeliver built-to-order PCs at a low cost. Speed of productionbecame critical in order to minimize the delay between customerorder and shipment to that customer. Relationships in the marketwere with customers, not retailers. While major clients(governments, etc.) had clout, as long as Dell delivered qualityproducts and provided good technical service, the clients weresatisfied. The key tasks, to use Nadler and Tushman’sterminology, were production and distribution.During this growth phase, Dell’s organization was aligned well withits market. Internally, the production orientation fit those marketneeds. Systems were designed for efficiency and simplicity. Therewas no need for retail management. Inventories were minimizedas Dell built to order, leveraging its effective supply chain.Finances were simple because customers paid as they ordered
and before Dell incurred the costs of production. Dell’smanagement team excelled at getting efficiencies from thissystem, and the results showed for many years.As the market shifted, the Dell organization became increasinglyout of sync with the marketplace. Dell’s strategy was no longer agood fit as the marketplace shifted away from corporate demandto consumers, from machine power to design, from hardware tosoftware and the Internet, from America to other nations. Theclean, straightforward organization that Dell had built could notmeet the more complex market expectations.Note how Michael Dell responded. All components of thecompany changed. First, the strategy shifted. Design wasemphasized. Retailers became key parts of the distributionnetwork. Product variety increased. With that strategic shift, thekey success factors or critical tasks changed. Design becamemore important. Management of retail distribution became crucialand introduced an entirely new set of skills at Dell. As the productrange increased, skills in the introduction and timing of newproducts became more important. To manage this, the companywas reorganized into four divisions, each focused on one majorcustomer segment. Financial systems would need to beoverhauled to manage this complexity. New formal and informalnetworks were established as the company’s focus changed. Keyexecutives were replaced by others with the skill sets demandedby this new strategy. In short, a new state of congruency wassought so that the internal operations fit the new strategy better.When these strategies were found to be producing results tooslowly in the eyes of investors and analysts, Dell decided to ceasebeing a publicly traded firm and go private in 2013. They did thisin order to have more freedom to execute their longer-termstrategies away from the public glare. It downsized andreorganized and continued to actively pursue product and servicediversification and growth though product and service innovations.The acquisition of EMC in 2016 was particularly noteworthy. It fitwell with Dell’s strategy to greatly enhance their capacities ingrowing areas of cloud data storage, cloud computing, and relatedenterprise services.
Dell’s shifts in market focus (products, services, markets,channels), acquisitions, legal structure (public vs private), andinternal realignments over time provide an excellent example ofhow the Nadler and Tushman model’s notion of congruency canbe used to help us understand and analyze organizations, theresultant outcomes produced, and what needs to change in orderto achieve the desired outcomes. At the time of the writing of thisbook, it is too early to tell if Dell’s most recent initiatives will yielddesired results.Nadler and Tushman’s model enables a change agent to thinksystematically about the organization. It serves as a checklist toensure practitioners consider the critical components that must bematched with the strategy and environmental demands. Since thesystem is dynamic, the environment, the people, the competition,and other factors change over time, and part of that change is dueto how the components interact with each other. Second, the fitbetween organizational components is critical. Dell’s products,organization, systems, and culture had become misaligned withthe emerging environment in and around the 2010–2013 period.Finally, organizations with good fit are more effective than thosewith poor fit because they will be able to more efficiently andeffectively transform inputs into outputs. The moves that MichaelDell made improved the fit and led to a modest turnaround insales and margins in the short term, but subsequent competitivechallenges caused him to recognize that much more is needed—hence the move to take the company private so that neededchanges could be made away from the glare of stock marketpressures for short-term results.Like any living entity, an organization survives by acting andreacting effectively to its external environment. Unless it adjustswith appropriate changes to its approach and, when needed, itsstrategy, it reduces its capacity to thrive. When one part of theorganization is changed, then other parts also need to adapt tomaintain the congruence that leads to effectiveness. Whether Delland his team have made enough savvy changes for the long termwill be demonstrated by the company’s future performance.Critical to this will be Dell’s ability to innovate and change in theface of shifts in its environment.
Evaluating Nadler and Tushman’s CongruenceModelAre the assumptions made by Nadler and Tushman’s CongruenceModel reasonable ones? For example, should strategy alwaysdictate the organization’s structure and systems? While that is oneof the traditional views of how to achieve organizationaleffectiveness, it is not unusual to see the reverse where changesin the structures and systems drive alterations to strategy. Forexample, FedEx used its systems and expertise that it built todeliver packages to its own customers to provide logisticalservices to other companies. Amazon got into the cloud storagebusiness by taking advantage of its capability to run large serverfarms. Thus, the implied direction of the Nadler and Tushmanmodel is appropriate, but any analysis must recognize howdynamic and interactive organizational factors are. For manychange agents, particularly those in middle management, thestrategy of their organizations will be a given and their role will beto adapt their parts of the transformation process to better achievethose strategic directions. In doing so, they may also seek toinfluence what goes on in other parts of the organization becauseof how things in one part of the organization impact on theachievement of their objectives. This task is made easier whenthe objectives are shared.Alternatively, change agents may attempt to influence the strategydirectly (e.g., participation in a strategic task force) and/orindirectly (initiate activities that lead to the development of newinternal capacities, learning, awareness, and interest that makenew strategies viable).Has the importance of fit been overstated? Probably not. Forexample, in an investigation into the mixed results achieved bytotal quality management (TQM) initiatives, Grant, Shani, andKrishnan found that “TQM practices cannot be combined withstrategic initiatives, such as corporate restructuring, that arebased on conventional management theories. The failure of oneor both programs is inevitable.”22 Thus, they found that the
strategy, the structure, and new TQM processes need to fit witheach other. Another example of issues of fit emerged followingSeptember 11, 2001, when the U.S. government created theDepartment of Homeland Security, which combined 22government entities. However, reports subsequently emerged thatsuggested the secretary of the department had few levers neededto do his job: the formal structure had been created, but not thesystems and processes that were necessary to give him leverageto be successful.23 In both of these examples, a lack of alignmentundermined the efforts to effectively change these organizations.The need for change may not always be identified by looking at anorganization’s environment. Problems surface in a variety of ways.There might be problems in the organization’s outcomes oroutputs, indicating that some aspect of performance needs to beaddressed. Further, there is the question of the magnitude of thechange. The organization may decide to change its strategy, itsculture, or some other core element. Generally, the morefundamental the change, the more other elements of theorganization will need to be modified to support the desiredchange. For example, a change to one aspect of an organizationmay create a domino effect, requiring other changes to structure,systems, culture, and people.Mary Barra, GM, and the Need for RealignmentMary Barra, GM’s CEO who was appointed in 2014, is living with thischallenge. While alignment had improved significantly sinceemerging from bankruptcy in 2009, as evidenced by positive productreviews and improvements in sales and profitability, GM’s leadersfound themselves dealing with legacy cultural issues. For example,ignition switch design defects that resulted in 124 deaths had notbeen addressed for a decade. Internal investigations andcongressional hearings reported that there was an organizationalculture that promoted silence on such issues.Barra acted on the dysfunctional aspects of GM’s culture. She fired15 executives found to have been involved with the situation, spokeabout it with greater candor than ever before, and instituted acorporate-wide change initiative called “Speak up for Safety.”24 Shehas affirmed that more recalls are likely as they search through theirfiles: She stated that an “aggressive stance on product recalls is the
new norm at GM” and that it is unacceptable for employees to staysilent on safety issues. She also focused GM’s attention oninnovation, particularly in the area of electric and self-drivingvehicles, and on diversity in its workforce. It was ranked #1 out of200 global firms in its efforts to achieve gender equity in 2018. Barrastates, “You need the right people, the right culture and the rightstrategy. To be truly great, your team must have diversity of thoughtand be willing to collaborate constructively. Your company cultureshould empower and inspire people to relentlessly pursue thecompany vision – always with integrity.”25Finally, does better fit always increase the likelihood ofeffectiveness? This depends upon the measure of effectiveness.In the short run, fit focused on efficiency might mean increasedprofits as the organization reduces costs and becomes efficient.However, an innovation measure might show that fit focusedprimarily on efficiency has led to declining creativity. Efficiency isimportant but so is the development of appropriate adaptivecapacities in an organization. It can be argued that in the long run,tight congruence in a stable environment leads to ingrainedpatterns inside the organization. Individuals and organizationsdevelop formal systems and structures, as they should, but thesecan lead to ritualized routines and habits. Such patterns can bechange resistant and can be hugely ineffective when theenvironment changes. Dell Computers suffered from this prior toMichael Dell’s reintroduction in 2007. If the pace of change anorganization must deal with is rapid, then an overemphasis ongetting congruence “just right” can lead to delays that put thehealth of the firm at risk. In a rapidly changing environment,approximations are appropriate: don’t make it perfect; get itacceptable and move on. Nevertheless, for most analyticalpurposes, the assumption that an increasing fit is a good objectiveis appropriate.As with other congruence or alignment-oriented models, theNadler and Tushman model must deal with the criticism that “toomuch emphasis on congruence potentially (could have) anadverse or dampening effort on organizational change.”26 The keylies in balancing the need for flexibility and adaptability with theneed for alignment. This balance point shifts as environmentalconditions and organizational needs change. To emphasize the
dynamic nature of organizations, we next examine Sterman’sSystems Dynamics Model.
(2) Sterman’s Systems DynamicsModel27As discussed, Nadler and Tushman’s Congruence Modelacknowledges the dynamic nature of systems as the authorsfocus on the importance of alignment. In contrast, Sterman’smodel, below, focuses on the interplay of dynamic forces of theenvironment, managerial decisions, and actions of others.Sterman believes that managers should handle increasedcomplexity by increasing the number of variables that theyconsider. The dynamic nature of the variables and the interactionsamong the variables over time may lead to counterintuitive results.Sterman argues that managers often take a linear view of theworld—a rational, causative model where managers identify a gapbetween what is and what is desired, make a decision, and takeaction, expecting rational results. If sales are low, managementmight increase advertising, thinking that sales will flow. However,because of how the variables interact with one another, this linearview can be inaccurate and limiting. What management may getare counterintuitive results that are often change resistant. IfCompany A, for example, increases its advertising, thenCompanies B, C, and D may increase their advertising as well.The result may be increased costs and static revenues. Managersmay fail to anticipate the side effects of their decisions, and howtheir actions lead to competitive responses.The dynamics described above at the organizational level canalso play out at the national and international levels. The tradewar between the United States and China that began in 2018caused some analysts to urge caution out of concern that it could,paradoxically, make China a stronger competitor. Theirassessment was that tariff pressures could give rise tounanticipated innovations and competitive responses in China’sindustries that could, in turn, end up hurting firms in the West.28Consider the following example. Managers change the incentivestructure for employees, anticipating that this will lead to higherproductivity. However, employees might see increased productivity
as leading to layoffs (if we produce more, they will need fewer ofus), and thus resist increasing outputs. Or, employees will begin tofocus on quantity and neglect crucial quality concerns. This, inturn, creates negative customer reactions that cause managementto create new control systems around quality. Such controlsystems take additional paperwork and effort that increase costsand potentially defeat the original objective of increasingproductivity.Another point Sterman makes is that many problems result fromtime lags and delays, inventories and buffer stocks in the system,and attribution errors. Thus, another possible outcome, in ourabove example, is that employees may increase their efforts togenerate new sales as the result of the changed rewards.However, there could be a significant lag before sales increase.Some sales cycles take months and even years before producingresults. Thus, management’s initial observation might be that thechange in the reward system did not work. Small changes indemand may get exaggerated because of inventory buffers thatautomatically adjust. And finally, humanity’s need to attributecause might mean that managers assume causal links that don’texist.Sterman’s model heightens the awareness of the complexityinvolved with change and the challenges involved in developingalignments that will produce desirable results in the short and longterm and not result in unpleasant surprises. As such, Sterman’smodel builds on the work of Argyris and Schön,30 identifying theimportance of organizational analysis through double-loop andtriple-loop learning. Single loop is essentially adaptive learningwithin the organization’s operation. Internal data are assessedand modifications are made, but the original objectives are notquestioned. Double-loop learning goes beyond makingincremental modifications and challenges the assumptions,standards, policies, values, and mode of operation that gave riseto the standards and objectives. Triple-loop learning extends thisanalysis and exploration of possibilities further and questions theunderlying rationale for the organization and why it exists. Triple-loop learning is also consistent with the work of Senge31 on how
organizations should be designed and managed in order toenhance organizational learning, innovation, and change.In Figure 3.2, decisions lead to side effects as well as intendedeffects. These interact with the environment and the goals ofothers to create a more complex set of outcomes than wereanticipated.At McDonald’s at the beginning of the 21st century, managementdecided to increase the number of corporate-owned stores anddecrease costs. In the short term, this led to improved results:higher sales and improved profits. However, it also led to adecreased focus on store cleanliness as stores reduced staff. Withmore stores, overall revenues increased. With less time and effortfocused on cleanliness, operating costs decreased and, in turn,increased profits. However, over time, customers became awareof the lack of cleanliness and stopped going to McDonald’s. Theseunintentional side effects created more pressure for short-termprofits due to a decline in sales. The cycle would repeat untilmanagement became aware of this self-defeating cycle.32Figure 3.2 Sterman’s System Dynamics Model29Source: Reprinted from Sterman, J. (2001, Summer).Systems dynamic modeling. California Management Review,
43(4). Copyright ©2001, by The Regents of the University ofCalifornia.When a firm lowers its prices to increase market share andprofitability, management may do so without thinking through theimplications of its decisions. Its actions may lead to competitorresponses that lower prices further and sweeten sales terms andconditions (e.g., no interest or payments for 12 months orimproved warranties) in an effort to respond to its competitors andwin back market share. Thus, the planned advantages comingfrom the price cuts may end up adding a few new sales, shrinkmargins, condition customers to see the product in primarily priceterms, and lock the organization into a price-based competitivecycle that is difficult to escape.33Sterman cautions managers to avoid the trap of thinking in astatic, simplistic way. Increasingly, successful managers areresorting to systems thinking and more complex, nonlinearmodeling to improve their diagnostic skills. The Economist argues,“Better understanding is the key” to improved productivity.34 Thepromise of “big data” is that it will allow us to engage in muchmore sophisticated modeling of what is going on and why, so thatmore accurate assessments and effective courses of action canbe undertaken. However, being awash in increasing mounds ofdata won’t help unless we learn how to model it in ways that moreaccurately reflect the complexity of what is going on, including thelag effects our actions in one area can have on other areas.In doing a diagnosis, managers need to recognize theirassumptions and values that underlie their implicit understandingof organizational dynamics and the nature of the environment andthe market place. Picture marketing people in a meeting withoperations or R&D people and you can imagine the value clashes.Marketing people are often externally oriented while operationspeople are concerned with internal dynamics. A model by Quinnhelps to frame these issues and points to the value of a diversityof perspectives when approaching organizational andenvironmental analysis.
(3) Quinn’s Competing Values ModelHow managers think about organizations will largely determinewhat they think needs changing. The level of analysis that amanager examines can range from the individual to team todepartment to organization. A psychologist, for example, analyzesindividuals and small groups and suggests changes at that level.In contrast, an economist uses econometric models to analyze onthe organizational or societal level. Quinn provides a model thatbridges the individual, team, department, and organizational levelsand encourages change agents to think about the interactionbetween the systems at these levels.35Quinn’s Competing Values Model outlines four frames relevant toorganizations. Each frame is based on a set of values andassumptions about the organization and how it works. Quinnargues that two dimensions underlie and help define these fourframes: an internal-external dimension and a control-flexibilitydimension. That is, underlying the perceptions of organizationsare assumptions about the importance of the inside versus theoutside of the organization and the need for control versus theneed for adaptability. Plotting these two dimensions forms fourquadrants, each of which provides a different “frame” or view ofthe organization. The Competing Values Model is portrayed inFigure 3.3.As a manager, do you think about the organization in internalterms and how it operates? Or, do you think of the organization’senvironment and the fit between that environment and theorganization? Do you focus your attention on how the organizationadapts and changes? Or, is your emphasis more on ensuring thatthe direction is under control and that people do what is needed?Quinn argues that these dimensions form the four valueorientations: Open Systems View, Rational Economic View,Internal Process View, and Human Resources View. Further, hestates that while all orientations are needed in an organization,each person will tend to operate from one quadrant more than theothers. As well, because the values underlying each quadrant are
in conflict, individuals will have difficulty having a “natural”perspective from more than one quadrant. Individuals will tend toadopt one set of internally consistent values and find their views inconflict with or competing with those individuals with perspectivesfrom other quadrants.One of the strengths of Quinn’s model is that it links individual andorganizational levels of analysis. That is, managers can examinean organization’s processes and determine whether they arefocused on external adaptation, internal adaptation, and so forth.At the same time, Quinn suggests managerial roles and skills thatare needed for each quadrant. To increase the focus on aquadrant, one needs to have managers develop the competenciesneeded and design systems to reinforce those skill behaviors. Ofspecific interest to change leaders are those skills that help withchange processes. (See Chapter 8 on change leaders for more onthis.)Figure 3.3 Competing Values Model and ChangeSource: Quinn, R. E., Bright, D., Faerman, S. R., Thompson,M. P., & McGrath, M. R. (2003). Becoming a master manager.New York: John Wiley & Sons.
Quinn labels the internal/flexibility quadrant the Human ResourcesView of organizations. Similarly, the external/flexibility quadrant isthe Open Systems View, the external/control quadrant is theRational Economic View, and the internal/control quadrant is theInternal Processes View. Each of these quadrants can beassociated with a particular way of thinking about organizationswith roles that managers need to play and skill sets managers canlearn that enable them to play the roles.36Every organization needs to attend to all four quadrants to knowwhat is going on internally while also understanding its externalenvironment. It needs to control its operations and yet be flexibleand adaptable. At the same time, too much emphasis on onedimension may be dysfunctional. That is, organizations andleaders need to be flexible, but too much flexibility can bringchaos. Conversely, too much control can bring rigidity andparalysis. In the end, organizations need to balance these in waysthat are congruent with their external environmental realities.Each quadrant provides a value orientation needed inorganizations and suggests managerial roles and skills that willsupport those value orientations. For example, Quinn argues thatinnovator and broker roles are needed in the Open Systemsquadrant. The innovator roles demand an understanding ofchange, an ability to think creatively to produce change, and thedevelopment of risk-taking. The broker role involves thedevelopment and maintenance of a power and influence base, theability to negotiate solutions to issues, and the skills of persuasionand coalition building. Care must be taken not to be trapped intoadopting one view and ignoring alternate perspectives. Too muchfocus on internal stability led IBM to miss the PC revolution formany years. Too much focus on the external world led many dot-coms to spin out of control in the technology boom of the early2000s, and many bitcoin inspired block chain initiatives to do thesame in the 2018 period.37Quinn’s model can be used in several ways: to characterize anorganization’s dominant culture, to describe its dominant tasks, toportray the focus of its reward systems, or to describe a neededshift in task emphasis or in the types of people that it must recruit.
To refer again to the Dell example, the company was striving tobecome more consumer oriented while maintaining its productionefficiencies. Because these two value orientations are not joinedeasily, change leaders will know that the concurrent developmentof these two initiatives will require careful management.Quinn’s model provides both a framework that bridges individualand organizational levels of analysis and a framework tounderstand competing value paradigms in organizations. Whilethese perspectives are useful, they suggest a relatively staticsituation, not a dynamic one that Sterman argues for. In particular,Quinn’s framework does not encourage managers to considerpossible changes that occur in organizations over time. Greiner’smodel, described below, provides a framework for predicting thestages of change that occur within organizations over time as theygrow from entrepreneurial ventures to multidivisional, multinationalentities.
(4) Greiner’s Model of OrganizationalGrowthAs discussed in Chapter 1, the magnitude of organizationalchanges can vary markedly—from small, evolutionary changes tolarge, revolutionary ones.† Evolutionary shifts are, by definition,less traumatic for organizational members and less disruptive tothe organization. Since they typically involve small, incrementalshifts in existing systems and behaviors, they are easier to planand execute. However, they may not be what the organizationneeds in order to maintain health and vitality. For incremental,evolutionary change, the challenge might be convincing people ofthe need and tweaking systems and processes to reinforce thedesired outcomes. For disruptive, revolutionary change, the issuemay well be keeping the organization operating while makingsignificant alterations to how the organization views the world, itsstrategy, and how it goes about transforming inputs into outputsthat its customers desire.† The determination of the size of the change is, of course,somewhat dependent upon organizational level and perspective.An incremental change, according to a CEO, may well be viewedas transformational by the department head that is directlyaffected by the change.Greiner believes that organizations pass through periods ofrelative stability and incremental change, punctuated periodicallyby the need for radical transformations of practices.38 During theperiods of relative stability, organizations tend to be in equilibrium,and evolutionary approaches to change are adopted in order toincrementally improve practices. Then a crisis occurs, such as therapid growth of the enterprise or the introduction of a disruptivetechnology by a competitor, and the crisis demands revolutionarychange. In the “crisis of leadership” stage, the founding leader ofan entrepreneurial adventure may be pushed aside for the hiringof professional managers. Greiner describes these alternatingperiods of evolutionary and revolutionary change as natural as an
organization grows over time.‡ Figure 3.4 outlines Greiner’smodel.‡ Eisenhardt believes that organizations can force incrementalchange by “time pacing”—setting up targets and deadlines thatrequire regular periodic change. See S. Brown and K. Eisenhardt,“The Art of Continuous Change: Linking Stacey’s ComplexityTheory and Time-Paced Evolution in Relentlessly ShiftingOrganizations,” Administrative Science Quarterly 42, no. 1 (1997):1–34, or K. Eisenhardt and B. N. Tabrizi, “Accelerating AdaptiveProcesses: Product Innovation in the Global Computer Industry,”Administrative Science Quarterly 40, no. 1 (1995): 84–110.In Greiner’s view, over time, managers will change their views onhow to operate a business incrementally. These become lesseffective as conditions change and the business becomesincreasingly less well aligned or congruent with its internal andexternal realities. (In Nadler and Tushman’s terms, theorganizational strategy and/or the transformational components—task, formal organization, informal organization, and people—become increasingly out of sync with the environment.) Once thepressure builds sufficiently, it produces the need for more radicaltransformations of the organization. Pressures build until abreaking point is reached and change is forced. Will theorganization adapt to the radical changes needed or will itsdecline become inevitable?39 This relatively rapid anddiscontinuous change over most or all domains of organizationalactivity is referred to by Greiner as the revolutionary changeperiod.40As shown in Figure 3.4, Greiner outlines a model of typical stagesof growth in an organization. He suggests that these patterns areprogressive and logical as the organization grows. Greiner isprescriptive in that he claims the organization must pass throughthese crises in order to grow and develop. The transitions may becaused by a variety of issues: the death of the founder; the needfor a functional organization to develop specialties; the emergenceof disruptive market forces and/or technologies; the need todecentralize into divisions to keep closer to the customer; and,
finally, the need to become more flexible to enable theorganization to use the potential of all employees.This framework is appealing because of its straightforwardness,logic, and simplicity. However, the model is suggestivelyprescriptive. Not all organizations follow Greiner’s patterns. Intoday’s world, a small entrepreneurial venture may become aglobal competitor of reasonable size by using the Internet andcollaborating with partners around the world. In other words,organizations need not develop as Greiner claims. The modeldoes not seem open to the possibility of the broker organization,one that makes money by connecting organizations to each other.Nevertheless, the framework is valuable in highlighting many ofthe crises faced by organizations and in relating those crises tothe growth stages of the organization. The model reinforces thenotion of the competing values that managers must keep in anappropriate state of dynamic tension. For example, as managersmove from the crisis of autonomy to growth through delegation,there should be a shift in values and perspectives, from control toflexibility in Quinn’s terms.Figure 3.4 Greiner’s Five Phases of Organizational Growth
Source: Reprinted with permission from Greiner, L. (1972,July-August). Evolution and revolution as organizations grow.Harvard Business Review.In the Dell example, the company shifted from a control andfunctional specialty stage to one where the company wasorganized into relatively autonomous divisions focused oncustomer segments. While Greiner’s model suggests that certaintensions predominate during different growth phases, suchtensions might not vanish. As such, Dell may continue to strugglewith balancing the previously successful efficiency focus that itsmanagers held with its need for flexibility and adaptiveness.While Greiner’s model is prescriptive, it captures many of theissues faced by organizations both in responding to growth and indealing with the human side of organizational change. Too often,managers are trapped by their own perspectives. They fail torecognize that regardless of who has what title or authority, others
will see things differently and have different criteria to judgepotential outcomes. An important key in identifying what to changeis to embrace multiple perspectives, recognizing that each comeswith its own biases and orientation on what needs to be done. Bydeveloping an integrated, comprehensive assessment processand being conscious of one’s own biases and preferences, thechange leader is likely to achieve a holistic understanding of whatchange will produce the necessary realignment for organizationalsuccess.
(5) Stacey’s Complexity TheoryMany models of organizational change rely on a gap analysis asthe description of what needs to change,41 just as this book does.While this has the advantage of simplicity, change agents need tomove beyond this to recognize the importance of interdependenceand interrelationships.42 This chapter began by describingorganizations as open systems, and frameworks have beenpresented for analysis that can account for the dynamic,multilevel, time-dependent nature of organizations. As well,change leaders have been encouraged to recognize that differentsituations require different levels of analysis, and the appropriateanalytic tools are dependent on that level. The importance ofmoving away from seeing change in primarily simple, rational,cause-and-effect terms should not be underestimated. Changeleaders must learn how to cope with complexity and chaos asrealities.Another branch of organizational theorists argues thatorganizations are complex, paradoxical entities that may not beamenable to managerial control. In this theory, called Stacey’sComplexity Theory, Stacey43 identifies the following as theunderlying propositions (adapted below):Organizations are webs of nonlinear feedback loops that areconnected with other individuals and organizations by websof nonlinear feedback loops.These feedback systems can operate in stable and unstablestates of equilibrium to the point at which chaos ensues.Organizations are inherently paradoxical. On one hand, theyare pulled toward stability by forces for integration andcontrol, security, certainty, and environmental adaptation. Onthe other hand, they are pulled toward instability by forces fordivision, innovation, and even isolation from the environment.If organizations give in to the forces for stability, they becomeossified and change impaired. If they succumb to the forcesfor instability, they will disintegrate. Success is whenorganizations exist between frozen stability and chaos.
Short-run dynamics (or noise) are characterized by irregularcycles and discontinuous trends, but the long-term trends areidentifiable.A successful organization faces an unknowable specificfuture because things can and do happen that were notpredicted and that affect what is achieved and how it isachieved.Agents within an organization can’t control, through theiractions, analytic processes and controls, the long-term future.They can only act in relation to the short term.Long-term development is a spontaneous, self-organizingprocess that may give rise to new strategic directions.Spontaneous self-organization is the product of politicalinteraction combined with learning in groups, and managershave to pursue reasoning through the use of analogy.It is through this process that managers create and come toknow the environments and long-term futures of theirorganizations.Some complexity theorists would argue that the managed changeperspective that underpins this book is fundamentally flawed.They would do so because it focuses on management ofcomplexity and renewal through environmental analysis andprogrammatic initiatives that advance internal and externalalignment, and through them the accomplishment of the goals ofthe change. Those who adopt a complexity perspective wouldview the change leader’s job as one of creating conditions andground rules that will allow for innovation and efficiency to emergethrough the encouragement of the interactions and relationshipsof others.Advocates believe this approach can unleash energy andenthusiasm and allow naturally occurring patterns to emerge thatwould otherwise remain unseen (i.e., they self-organize intoalignment). Vision and strategy are still valued by complexitytheorists because they can supply participants with a sense of thehoped-for direction. However, they are not viewed as useful whenthey attempt to specify the ultimate goal.
A close review of the complexity ideas, though, shows that thisperspective is not far from the one advocated by this book. Thisbook adopts an open systems perspective and argues that theenvironment is characterized by uncertainty and complexity andthat organizations are more likely to be successful over time ifthey develop adaptive capacities. This means that openness tonew ideas and flexibility need to be valued and that organizationsneed to learn how to embrace the ideas, energy, and enthusiasmthat can be generated from change initiatives that come fromwithin the organization. The book recognizes the value that teams(including self-managed teams) can contribute to successfulchange, from needs assessment to the development of initialideas and shared vision through to strategy development andimplementation. Further, it acknowledges that too muchstandardization and reduction of variance could drive outinnovation. Finally, it notes that greater uncertainty and ambiguitygives rise to greater uncertainty over how things will ultimatelyunfold, thereby highlighting the importance of vision and strategyas directional beacons for change initiatives as opposed to setdirectives or rules.An important idea that comes from Stacey’s Complexity Theory isthat small changes at key points early on can have hugedownstream effects. But can one predict with any certainty wherethose changes and leverage points will be or what downstreamresults will emerge as the result of actions we take today? Oftenthe answer is no. Motorola likely had no clear idea where wirelesstechnology would take the world when it began work on cellularphone technology in the 1960s. Likewise, Monsanto probably hadlittle sense of the magnitude of the marketplace resistance thatwould build for genetically modified seeds when its research anddevelopment program was initiated in the 1980s.We may not be able to predict precisely what will transpire overthe long term, but we can make complex and uncertain futuresmore understandable and predictable if we do our homework in anopen systems manner, look at data in nonlinear as well as linearterms, engage different voices and perspectives in the discussion,and rigorously consider different scenarios and differentapproaches to envisioning what the future might look like.
When organizations do this, they are likely to get a sense of whatis possible from a visionary, directional, and technologicalperspective. Further, through the engagement and involvement ofmany, change leaders are in a strong position to initiate changewith a shared sense of purpose. They are also more likely to haveidentified critical actions and events that must occur and wheresome of the potentially important leverage and resistance pointsexist. As a result, they are more aware of how things may unfoldand are in a stronger position to take corrective or alternativeaction as a result of their ongoing monitoring and management ofthe process.44 As well, change agents will recognize theimportance of contingency planning as unpredictable, unplannedevents occur.It may not be possible to predict absolute outcomes. However, it ispossible to generally predict where an organization is likely to endup if it adopts a particular strategy and course of action. Theidentification of the direction and the initial steps allow anorganization to begin the journey. Effective monitoring andmanagement processes allow leaders to make adjustments asthey move forward. The ability to do this with complex changecomes about as the result of hard work, commitment, a suitablemindset (e.g., openness and flexibility), relevant skills andcompetencies, appropriate participation and involvementapproaches, access to sufficient resources, and control andsignaling processes. In the end, the authors of this book subscribeto the belief that “Luck is the intersection of opportunity andpreparation.”45SummaryIn this chapter, change agents learned about five differentorganizational models that will help them to develop a well-groundedsense of what needs to change in an organization. This book usesNadler and Tushman’s model as its main framework. The modelfocuses on achieving congruence among the organization’senvironment, strategy, and internal organizational components toachieve desired outcomes. In addition, it helps managers categorizethe complex organizational data that they must deal with. It examinesthe tasks, people, structures, and culture of organizations. Finally, itfits neatly into a process approach to organizational change, helping
to merge what needs to be changed with the process of how changemight occur.While the book relies on both Nadler and Tushman’s framework andthe Change Path Model, change leaders must be particularlysensitive to the dynamic nature of organizations, to the need formultiple levels of analysis, and to the shifts that organizations makeover time. Sterman’s, Quinn’s, and Greiner’s models take a systems’perspective and are presented to reinforce subtle differences infocus. As well, we discuss Stacey’s Complexity Theory. This theorychallenges a simple goal-oriented approach that many changemanagers might take and encourages an emergent view oforganizations.Change leaders must recognize the assumptions and biasesunderlying their analysis and whether the assumptions they makelimit their perspectives on needed change. Their diagnosis shouldrecognize the stage of development of the organization and whetherit is facing evolutionary, incremental change, or, at the other end ofthe change continuum, revolutionary, strategic change. Bydeveloping an in-depth and sophisticated understanding oforganizations, change leaders will appreciate what has to be done toenhance an organization’s effectiveness. See Toolkit Exercise 3.1for critical thinking questions for this chapter.Key TermsOpen systems perspective—considers the organization as a set ofcomplex, interdependent parts that interacts with the externalenvironment to obtain resources and to transform the resources intooutputs.
Models of OrganizationsNadler and Tushman’s Congruence Model—views organizationsas composed of internal components (tasks, designed structures andsystems, culture, and people). The model states higher effectivenessoccurs when the organization is congruent with its strategy andenvironment. This model forms the framework for this text.Sterman’s Systems Dynamics Model—describes organizations asinteractive, dynamic, and nonlinear as opposed to the linear, staticview that many individuals hold of organizations.Quinn’s Competing Values Model—describes organizations asbased on opposing values: flexibility versus control and externalversus internal. These two dimensions lead to four competing viewsof organizations: the Human Resources View, the Open SystemsView, the Rational Economic View, and the Internal Process View.Greiner’s Model of Organizational Growth—hypothesizes thatorganizations move through five states of growth followed by fivestages of crisis.Stacey’s Complexity Theory—argues that organizations are websof nonlinear feedback loops that connect individuals andorganizations that can lead to self-organization and alignment amongparts.
End-of-Chapter Exercises
Toolkit Exercise 3.1
Critical Thinking QuestionsThe URLs for the videos listed below can be found in two places. The firstspot is next to the exercise and the second spot is on the website atstudy.sagepub.com/cawsey4e.1. How Organizations Change: Henrik Marten—7:07 minuteshttps://www.bing.com/videos/search?q=how+organizations+change%3a+henrik+marten&docid=608043414918531403&mid=3133A011A1B9CC647A6A3133A011A1B9CC647A6A&view=detail&FORM=VIREPresentation by H. Marten on how learning is necessary fororganizational change.Explain Marten’s key takeaways about how anorganization can best learn.Discuss any change experience you’ve had and how itmay compare to Marten’s description of organizationallearning.2. Eddie Obeng: Smart Failure for a Fast-Changing World—12:33minuteshttps://www.youtube.com/watch?v=EjSuaeVfE9IObeng talks about our ever-changing world, how our learninghas changed and the importance of smart failures.Describe how you perceive failure.Describe how others you’ve worked with in the past havedealt with failure in themselves as well as people aroundthem.Discuss how you might begin changing an organization totreat failure as learning, as Obeng describes in the video.Please see study.sagepub.com/cawsey4e for access to the videos anddownloadable template of this exercise.
Toolkit Exercise 3.2
Analyzing Your Organization Using Nadlerand Tushman’s Congruence ModelUse the congruence model to describe your organization or anyorganization you are familiar with.1. Describe the key input factors that influence the organization:a. The external environment (the PESTEL factors includepolitical, economic, social, technological, ecological and legalfactors).b. The organization’s history (including its culture) and theresources it has access to.2. What is the strategy of the organization? Is it in line with theorganization’s environmental inputs and its history (including itsculture) and resources?3. Are the components of the transformation processes well alignedwith the input factors and the strategy? These elements include thefollowing:a. The workb. The formal organizationc. The peopled. The informal organization (part of which is the culture thatmanifests itself in different parts of the organization)e. How they interact with one another in ways that influence theoutputs produced by the organization4. What outputs are being achieved? Are these the desired outputs?5. When you evaluate your organization’s outputs at the individual,group, and organizational levels, what issues should theorganization address?6. Are there any aspects of how your organization works that you havedifficulty understanding? If so, identify the resources you would needto access to help with this analysis.7. Use your answers to fill in the visual model.
Exercise 3.2Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Sarah’s SnacksBy Paul Myers, PhDSchool of Business, Simmons University, Boston, MASarah Woodley, CEO and Founder of Sarah’s Snacks, sat at her deskpreparing to meet with her executive team. It had been eighteen monthssince the company adapted a consultant’s recommendation to change thecompany from a functional organization to a process-based one. Despiteexpectations that performance would improve, little had changed. Theextended length of time it took to introduce new products cost thecompany market share as competitors more quickly came out with flavorsthat better matched emerging consumer trends. Production delays due tosupply shortages led to stockouts at some of the largest supermarketcustomers. The organizational changes were intended to resolve theseproblems as well as create efficiencies that would reduce overall costs.Woodley needed her team to determine why the company was not yetseeing those results and to help her decide whether they needed to makeadditional changes.
Company BackgroundSarah’s Snacks was a producer of organic popcorn, pretzels, tortilla chips,and other snack foods. Woodley launched the company in 1995 by sellinghand-packed bags of varieties of popcorn kernels grown in her nativeIndiana at local farmer’s markets. From its modest beginnings, thecompany had become one of the top ten independent producers oforganic snacks in the United States. Years of steady revenue growth asthe company expanded its product line and entered new geographicmarkets confirmed that the strategy of offering a broad line of organicproducts with distinctive flavors aligned with what customers were lookingfor.Over time, however, new entrants into their product categories cut intosales and made price a more important factor to consumers. At the sametime, because of growing demand for organic ingredients, the cost ofsupplies was rising. This resulted in profit margins being squeezed. Tohelp investigate what might be done to reverse this trend and otherperformance issues, Woodley hired a consultant to advise her. Afteranalyzing the situation, his recommendation was that the companyredesign how it operates to make better use of information technology tointegrate its business processes. He provided a plan for the initial stepsthe company should take to implement the solution.
Formal OrganizationSarah’s Snacks operated as a functional organization, which meantactivities were divided between departments where employees withsimilar skills worked together. Those functional areas includedpurchasing, product development, operations, marketing and sales,accounting, and information technology (see diagram below). Eachdepartment was led by a director who typically had two or three directreports responsible for managing others. Roles and duties were clearlyspelled out in detailed job descriptions. Departments set goalsindependently of each other, and employees were evaluated andrewarded based on their individual performance. Promotions weretypically within department, and employees seldom moved betweenfunctional areas. The company had no formal training process. While thecompany had a single information technology infrastructure, manydepartments used their own applications to record transactions andmanage data.
WorkProduction workers operated the largely automated production lines andwere responsible for assessing quality. Horizontal coordination acrossfunctions, including information flows, occurred on a limited basis. Forinstance, after the product development team came up with new snacks,their involvement ended after they passed the specifications on to themanufacturing group to determine how to produce them. Except for theproduct development group, most work was done independently andwithout much collaboration.
Informal OrganizationThe culture at Sarah’s Snacks was integrally linked with Woodley’s corebelief in the importance to health and wellness of eating organic products.Even at the top levels of the company, success was defined as meetingcustomers’ desires for snacks they could feel good about eating. Thismission drove everything the company set out to do and represented aset of values that motivated employees seeking to serve a higherpurpose. One employee noted that “most of us are here as much out ofthe sense that we’re doing good as for a paycheck.” Most employeesregarded their co-workers as a family, and Woodley reinforced this sensein how she interacted with them. To the extent anyone thought aboutcustomers, it was as snack consumers with whom they would neverdirectly interact. The predominant management style was characterizedby benevolence and a high degree of trust; the executive team tended tosmooth over conflict in search of reaching consensus on decisions.
PeopleIn most functional areas, Sarah’s Snacks hired people based on theirknowledge and skills rather than their psycho-social profile on suchfactors as adaptability or learning orientation. Some of its non-productionstaff joined the company soon after college graduation and had workedfor no other employer. Sixty percent of employees were women, includinga majority of the executive team. More than half of the employees hadworked at the company for over ten years, and a few had been therealmost since the start.
Organizational ChangeIn line with the consultant’s advice, the first order of business in changingthe organization focused on how work was done. Woodley assigned herexecutive team the task of identifying key business processes. Theseincluded order fulfillment, which encompassed everything from takingorders from customers to receiving payment; product development,including analyzing market needs, moving from concept to prototype,market testing, and manufacturing and equipment design; procurement,which incorporated activities related to acquiring supplies, such asinputting purchase orders, receiving goods, and accounts payable.The next step identified how the processes could be redesigned andintegrated across functions using information technology. This began withconsidering the perspective of the customer, then eliminating non-valueadding steps, and finally devising new ways of organizing the work acrossfunctional lines. Doing so created new process flows of informationsupported by an integrated set of databases and portals that were part ofan off-the-shelf system purchased by the company. The consultant hadadvised that to meet an aggressive implementation schedule, decisions atthis important phase would need to be made quickly. Senior managerswithin the functional groups shared responsibility for process redesign.Often there was disagreement about the best solution; after longdiscussions, they generally took the approach that garnered the mostsupport.The company took an incremental but accelerated approach toimplementation by starting with the procurement process; other processesfollowed soon after. The changes focused exclusively on how work wasdone; no other organizational changes were made. They affected allemployees at the company, although some more than others andmanufacturing workers least of all. The new processes requiredemployees to learn new ways of doing things, including how to use thenew information technology system intended to replace existingapplications. They also meant many employees needed to work withothers in different departments for the first time. In addition, a key elementof moving to a process-based organization was adopting a new, broader,internally focused view of who a customer was. Employees now had tothink about whom the recipient of their work was and focus on the qualityand timeliness of what they were sending.
ResultsImplementing the new process designs proved more difficult thanexpected. The company had undertaken rolling out additional processesbefore the preceding ones had been completed. Many employeescontinued to rely on the old processes rather than adopting the new waysof doing things, which they regarded as both confusing and ineffective.They also continued to use existing applications that had not yet beenretired, often failing to enter data in the new system. Most of theseomissions were not discovered and rectified until weeks later. Employeesfound the new system difficult to learn, and it was much easier to dothings the way they always had.As the key processes were being implemented, administration of thepractices that were not affected continued unchanged. Annual reviews ofnon-production employees relied on existing performance plans sincemanagers were too busy with the process redesigns to revise them. Oneconsequence of the process changes was that a number of managementpositions were eliminated. Those who were laid off received two weeks’notice and the promise of positive recommendations to their potential newemployers. At the same time, recruitment and hiring of new employeescontinued unabated in order to replace essential ones who had left thecompany rather than deal with the effects of the process changes.Based on the consultant’s guidance, Woodley had anticipated costsavings of 10%-15% from reducing errors and rework, experiencing fewerstockouts, and eliminating most legacy software applications. She alsoexpected a reduction of up to 30% in the time from conceiving a newproduct to producing and selling it. After a year and a half of effort, noneof these outcomes had been achieved. Woodley wondered what hadgone wrong and whether there was anything she could do about it.
Assignment Questions1. How well did Sarah’s Snacks fit Nadler and Tushman’s congruencemodel before it began its organizational change?2. Why have the changes at Sarah’s Snacks not produced theexpected results?3. What do you recommend Woodley do? Which of yourrecommendations can be implemented in the short term, and whichare longer term solutions?4. How does the Change Path Model help you analyze what shouldhave happened at 18 months and what should happen now?Sarah’s Snacks Organization Chart
Chapter Four Building and Energizing the Need forChangeChapter OverviewThis chapter asks the question, “Why change?”It develops a framework for understanding the need for change based on making sense of external andinternal organizational data, and the change leaders’ personal concerns and perspectives.The chapter describes what makes organizations ready for change and provides a questionnaire to ratean organization’s readiness.It outlines how change leaders can create awareness for change.Finally, the chapter outlines the importance of the change vision and how change leaders can create ameaningful vision that energizes and focuses action.In Chapter 2, we discussed the concept of unfreezing as a precondition to change. How can anorganization and its people move to something new if their current mindset and response repertoireare not open to alternative paths and actions?You are in a large auditorium filled with people when suddenly you smell smoke and someone yells, “Fire!”You leap to your feet, exit the building, and call 911.This situation above is straightforward. A crisis makes the need for change clear and dramatic. Itdemands an immediate response and the required action is understood—even more so if theinstitution has taken fire-safety planning seriously. Most people know the key actions: Where to exit?How to avoid panic? Who should be notified? Who should do the notifying?However, in many situations, the need for change is vague and appropriate action is unclear. Forexample, even in an emergency, if there have been no “fires” for a considerable period but therehave been false alarms, people may have become complacent, warning systems might be ignoredor even have been deactivated due to improper maintenance, and emergency action plansforgotten. A parallel to this might explain the lack of action prior to the mortgage meltdown in theUnited States in 2007 and the contagion it caused in global financial markets. Some economists andfinancial experts had raised alarms as early as 20031 (including the FBI in 20042) over flawedfinancial practices and regulations. However, their warnings about the need to regulate mortgagelenders were ignored. The prevailing perspective within the Bush administration was that regulationsneeded to be minimized because they got in the way of free markets and the generation of personalwealth. Before the meltdown, the need for change was evident to only a few people. In addition,powerful financial institutions and their executives had huge incentives to ignore such warnings andsilence those in their own firms who were raising alarms. Self-interest, blind spots, and/or misguidedviews of the greater good can sometimes blind people to strengths, weaknesses, opportunities, andrisks. It is a primary reason for the rise in the importance of risk management and the requirementsaround risk reporting that publicly traded firms must comply with.3Past experiences may cause people to become not only complacent but also cynical aboutwarnings. If false alarms have been regular occurrences, people will come to ignore them. Ifemployees are told that there is a crisis when similar alerts in the past have proven to be falsealarms, they will tend to discount the warning. If people are busy and they don’t want to besidetracked, they won’t prepare for events that they think aren’t going to happen. Remember thepress reports concerning the H1N1 flu pandemic in the summer and fall of 2009 and how theychanged by the winter of 2010? In the fall, there was a sense of panic, with people lining upovernight to get inoculated. By February, journalists were writing that the World Health Organization(WHO) had overstated the threat, as they had with Bird Flu. As such reports multiply and becomethe fodder for water cooler and Internet conversations, will the public take WHO warnings asseriously next time?4 Concerns related to creating complacency may help to explain the careful waythat WHO framed the warnings related to the outbreaks of Ebola in West Africa and the SARS-likevirus in Saudi Arabia in 2013–2014.5
When leaders are perceived to cry “wolf” too often, who will take them seriously when the threatcomes to fruition? However, when risks manifest themselves into reality, the blaming always beginswith whether or not warning signs were ignored. Such were the responses following both the SandyHook School Shooting, in Newtown, Connecticut, in December 2012, and the bombing at the BostonMarathon in April 2013. This, in turn, may lead us to treat symptoms rather than underlying causes,as we look for quick solutions and misinterpret correlations for causality. Even trained professionalscan miss obvious cues, as in the story below.A few years ago, my father was in intensive care, hooked to a heart monitor. Shortly after I arrived to visit him,the emergency alarm went off, but no one responded. I ran for help but was told not to worry—the alarm goesoff all the time—just hit the reset button. The health care professionals had clearly adjusted their behavior todiscount false alarms, but needless to say, I was left feeling anything but secure concerning the quality of thesystem designed to monitor the need for change in my dad’s treatment. What if it hadn’t been a false alarm?(G. Deszca)Change agents need to demonstrate that the need for change is real and important. Only then willpeople unfreeze from past patterns. This is easier said than done. From 2008 through to the winterand spring of 2009, General Motors (GM) struggled to convince the United Auto Workers Union(UAW) that they needed significant financial concessions to survive. The UAW initially took theposition that GM had signed a deal and should live up to it. However, the collapse of consumers’demand for automobiles in the summer of 2008 led to fears of bankruptcy. Political pressure fromthe U.S. and Canadian governments on both GM and their employee unions in the United States(the UAW) and Canada (the CAW or Canadian Auto Workers) escalated in the wake of bailoutrequests. As a result of this pressure, the UAW abandoned its position that “We have done ourshare.” Concessions followed during the next nine months, covering everything from staffing levels,pay rates, health care benefits to pensions.6 The CAW followed suit, shortly thereafter. When itcomes to raising alarms concerning the need for change, it is sometimes tough to know when andhow to get through to people. With GM, it took going to the edge of the precipice and beyond. Theyhad to go bankrupt!Many change-management programs fail because there is sustained confusion and disagreementover (a) why there is the need for change and (b) what needs changing. Ask organizationalmembers—from production workers to VPs—why their organization is not performing as well as itcould and opinions abound and differ. Even well-informed opinions are often fragmentary andcontradictory. Individuals’ perspectives on the need for change depend on their roles and levels inthe organization, their environments, perceptions, performance measures and incentives, and thetraining and experience they have received. The reactions of peers, supervisors, and subordinatesas well as an individual’s own personality all influence how each person looks at the world. Whenthere has been no well-thought-out effort to develop a shared awareness concerning the need forchange, then piecemeal, disparate, and conflicting assessments of the situation are likely to pervadethe organization.7Look at the responses of different constituencies to the big issues of our day. Take air quality. Theadverse effects of poor air quality on public health are well documented. However, if you review theongoing debate concerning the urgency of the problem and how we should go about addressing it,you will see various stakeholders with different vested interests and perspectives, and how theymarshal evidence to advance their points of view and protect their positions. As a result, meaningfulproblem solving is delayed or sidetracked. Appropriate analyses, actions, and interventions aredelayed, with predictable consequences, unless a disaster, very visible near disaster, or a seismicshift in public opinion occurs that galvanizes attention and precipitates action.People often see change as something that others need to embrace and take the lead with. Onehears, “Why don’t they understand?” “Why can’t they see what is happening?” or “They must bedoing this intentionally.” But stupidity, blindness, and maliciousness are typically not the primaryreasons for inappropriate or insufficient organizational change. Differences in perspective affectwhat is seen and experienced. As the attributions of causation shift, so too do the beliefs about whoor what is the cause of the problems and what should be done.8 A common phenomenon calledresponsibility diffusion often occurs around changes. Responsibility diffusion happens when multiplepeople are involved and everyone stands by, assuming someone else will act.9
In terms of the change-management process, the focus of this chapter is on the “Awakening” boxcontained in Figure 4.1. To address this, change leaders need to determine the need for change andthe degree of choice available to them and/or the organization about whether to change. Further,they need to develop the change vision and they need to engage others in these conversations sothat a shared understanding develops. Without these in hand, they are in no position to engageothers in conversations about the path forward.Figure 4.1 The Change Path ModelThis chapter asks change leaders, be they vice presidents, line operators, or volunteers at their localfood bank, to seek out multiple perspectives as they examine the need for change. There is typicallyno shortage of things that could be done with available resources. What, then, gets the attention andcommitment of time and money? What is the compelling reason for disrupting the status quo? Arethere choices about changing and, if so, what are they? In many cases, it is not clear that change isneeded. In these cases, the first step is for leaders to make a compelling case for why energy andresources need to be committed to a particular vision. Addressing these concerns advances theunfreezing process, focuses attention, and galvanizes support for further action.But recognizing the need and mobilizing interest are not sufficient—a change leader also needs tocommunicate a clear sense of the desired result of the change. Change leaders do this bydeveloping a compelling vision of the change. It conveys to others what life will look like after it isimplemented. The vision for change seldom arrives fully formed and more often than not emergesthrough the engagement of others. This approach to creating momentum is the focus of the latterhalf of this chapter.
Understanding the Need for ChangeThe change process won’t energize people until they begin to understand the need for change.People may have a general sense that things are amiss or that opportunities are being missed, butthey will not mobilize their energies until the need is framed, understood, and believed. Anorganization may have amassed data on customers, production processes, suppliers, competitors,organization financials, and other factors, but nothing will happen until someone takes theinformation and communicates a compelling argument concerning the need for change. Advancingthe change agenda is aided by being able to address the following questions:Developing an Assessment for the Need for Change1. What do you see as the need for change and the important dimensions and issues that underpinit? What external and internal data either confirms or contradicts your assessment for the need forchange? How much confidence do you have in the data and why should others have confidence it? Inwhat ways is the appraisal for the need for change grounded in a solid organizational and environmentalassessment?2. How have you investigated the perspectives of internal and external stakeholders? Who has astake in the matter of change and do you understand their perspectives on the need for change?People’s perspectives of organizational life are often determined by their role and their level in theorganization. How many people have you talked with in marketing, operations, HR, and so forth? Howmany middle and upper middle managers have you talked with? What external stakeholders, such ascustomers and vendors, have you talked with or surveyed?3. How can the different perspectives be integrated in ways that offer the possibility for acollaborative solution? How can you avoid a divisive “we/they” dispute?4. How have you communicated the message concerning the need for change? Have you done soin ways that have the potential to move the organization to a higher state of readiness for andwillingness to change? Or have your deliberations left change recipients feeling pressured into doingsomething they don’t agree with, don’t understand, or fear will come back to haunt them?The challenges at this stage for change leaders are to develop the information they need to assessthe situation, develop their views on the need for change, understand how others see that need, andcreate awareness and legitimacy around the need for change when a shared awareness is lacking.To make headway on these questions and challenges, change leaders need to seek out and makesense of external data, the perspectives of stakeholders, internal data, and their own personalconcerns and perspectives. (Figure 4.2 outlines these factors.)
Seek Out and Make Sense of External DataChange leaders should scan the organization’s external environment to gain knowledge about andassess the need for change. Getting outside one’s personal perceptual box helps to avoid blindspots that are created by “closed-loop learning.”*10 Change agents may make incrementalimprovements and succeed in improving short-term results. However, change leaders may not bedoing what is needed to assess the risks and opportunities and to adapt to the environment over thelong term.11 Executives tend to spend too little time reflecting on the external environment and itsimplications for their organizations.12* Closed-loop learning is learning that focuses on current practices and perspectives rather thandeveloping a deeper understanding of the complex interactions underpinning the situation, includingthe impact of the external environment.Figure 4.2 Developing Your Understanding of the Need for ChangeAn organization that is experiencing an externally driven crisis will feel the sense of urgency aroundthe need for change. In this case, the change initiator’s task will be easier.13 This crisis can be usedto mobilize the system and galvanize people’s attention and actions. Without this, many within theorganization may not perceive a need for change even though the warning clouds or theunaddressed opportunities may be keeping the change leader awake at night.The value of seeing organizations as open systems cannot be underestimated. This analyticapproach and the learning it promotes play an important role in the development of awareness,improved vision, and flexibility and adaptability in the organization.14 Often the question for thechange leader becomes “Which external data do I attend to?” A change agent can drown ininformation without a disciplined approach for the collection, accumulation, and integration of data.Consider how complex the innocuous-sounding task of benchmarking can become.15 The absenceof a disciplined approach to data gathering may mean that time is wasted, that potentially importantdata go uncollected or are forgotten, or the data are never translated into useful information for theorganization.Some sources for data will be concrete (trade papers, published research, and news reports), whileothers will be less tangible (comments collected informally from suppliers, customers, or vendors attrade shows). Data collection can take a variety of forms: setting aside time for reading, participatingin trade shows and professional conferences, visiting vendors’ facilities, and/or attending executiveeducation programs. Just as important, the change leader should consider engaging others inprocesses related to framing the questions, identifying and collecting data, and systematicallyinterpreting the results in a timely fashion. This makes the task more manageable, increases thelegitimacy of the data and the findings, builds awareness and understanding of the need for change,and creates a greater sense of ownership of the process.Working without awareness of the external environment is the equivalent of driving blind. And yet ithappens all the time. For a variety of reasons, ranging from a heavy workload or a sense ofemergency, to complacency or arrogance, organizational leaders can be lulled into relying on pastsuccesses and strategies rather than investigating and questioning. In so doing, they risk failing todevelop an organization’s capacity to adapt to a changing environment.16
Seek Out and Make Sense of the Perspectives of StakeholdersChange leaders need to be aware of the perspectives of key internal and external stakeholdersand work to understand their perspectives and reasons for supporting or resisting change. This willinform and enrich a change agent’s assessment of the need for change and the dynamics of thesituation, and allow them to frame their approaches in ways that have a greater chance ofgenerating needed support. Without such work, it is impossible to accurately assess perceptions ofthe situation and frame responses to questions that will resonate with those stakeholders—questions such as why change and what’s in it for me?17Externally, these stakeholders may include suppliers, bankers, governmental officials, customers,and alliance and network partners. Internally, the stakeholders will include those individuals who aredirectly and indirectly affected by the change. If the change involved a reorganization of productionprocesses, the internal stakeholders would include a long-list of managers: production supervisors;union officials; human resource personnel with recruitment and training responsibilities; finance folkswith budget and control tasks; sales and marketing managers with customer service implicationsand IT implications; and engineering managers.The point of view of the person championing the need for change will likely differ from theperspectives of other stakeholders. What is interesting and important to those stakeholders will vary,and this will affect what data and people they pay attention to and what they do with the information.If the change leader hopes to enlist their support or at least minimize their resistance, the leaderneeds to capture and consider their perspectives and the underlying rationale.18 Particularstakeholders may still remain ambivalent or opposed to the change, but not seeking them out andlistening is likely to make things worse. Why create resistance if you don’t have to?All of this highlights the importance of doing preparatory analysis and having a purposefuldiscussion with affected stakeholders and those who understand their perspectives and canpotentially influence them. It will increase the change leader’s awareness and sensitivity to thecontext, inform and strengthen the analysis, and indicate blind spots and alternative explanationsand paths.Change Vision at an Insurance FirmWhen a North American insurance firm acquired one of its competitors, the senior manager in charge ofintegrating the acquisition was determined to have every employee understand the need for change, the newvision, and its implications. On the day the deal was announced, she made a live presentation (along with theCEO and other key officials) to employees at the head office of the acquisition and streamed the meeting liveto all of the acquisition’s branch offices and facilities, as well as into the parent organization. She honored theacquisition’s senior management team, who were present, communicated the reasons for the acquisition andits implications for change, took questions, and encouraged employees to contact her with questions orconcerns. She set up a special website and phone line to answer questions in a timely and direct manner andfollowed this with visits to all the offices, key customers, and suppliers over the next two months. She held twotown-hall meetings with employees over the next year to communicate the status of integration activities andreduce anxiety.An integration team from the acquiring firm was deployed to the acquired firm the day the deal wasannounced. After introducing themselves and their mandate, the integration team presented specific initiativeswith staff to align key systems and processes and develop strategic and tactical plans. Leaders from theintegration team visited key groups at all levels in the acquired organization to discuss the need for change, todiscuss their current position in the marketplace, and to review how the roles and responsibilities werecurrently organized. Integration team members communicated what they knew, listened hard, and made firmcommitments to get back with answers by specific dates. The integration team honored those commitments,including the communication of the new organization’s strategic and tactical plans and clarification of eachperson’s employment status, within 90 days of the acquisition. Like the senior manager responsible for theintegration of the acquisition, the integration team communicated candidly, listened, and adjusted toassessments of the need for change and the strategic path forward, based upon what they learned. Theteam’s approach tapped into the emotional needs of “acquired” employees, reducing their anxieties, instillinghope for the future, and illustrating that their views and concerns were heard. Employee surveys, lowabsentee and turnover rates, and performance data confirmed this.19
The change agents for the insurance firm did their homework when developing and communicatingthe need for change. They openly engaged stakeholders in dialogue, listened and responded withcare and consideration, and then proceeded to the next stage in the change process. Too manyexecutives underestimate the need for communication and the importance of it being two-way.There can never be too much top-level communication and support, but unfortunately, there is oftenfar too little listening. A rule of thumb for managers is to talk up a change initiative at least threetimes more than you think is needed and listen at least four times as much as you think youshould!20 One change leader states that messages need to be communicated 17 times before theyget heard!21
Seek Out and Make Sense of Internal DataIt is no surprise that change leaders need to pay careful attention to internal organizational datawhen developing their assessment of the need for a particular initiative. Change agents whocommand internal respect and credibility understand the fundamentals of what is going on within afirm. Change leaders need to know what can be inferred from internal information and measures,how these are currently being interpreted by organizational members, and how they may be leadingthe firm down the wrong path. Some of this will be in the form of so-called hard data—the sort thatcan be found in the formal information system and it is often numeric in nature (e.g., customerretention and satisfaction, service profitability, cycle time, and employee absenteeism). Othervaluable information will be soft data, the intuitive information gathered from walking around thebuilding and work areas and having discussions with critical stakeholders. For example, doemployees generally pick up litter such as candy wrappers, or is that task left exclusively to thejanitorial staff? The former often indicates widespread pride and feelings of ownership in anorganization.
Seek Out and Assess Your Personal Concerns and Perspectives“Know thyself” is a critical dictum for change leaders. Change agents need a good understanding oftheir strengths and weaknesses, attitudes, values, beliefs, and motivations. They need to know howthey take in information and how they interpret and make decisions. They need to recognize theirpreferences, prejudices, and blind spots. As change agents expand their self-awareness, they arefreer to ask questions and seek help when they need it.22“I think it’s a combination of how self-aware people are and how honest they are. I think if someoneis self-aware, then they can always continue to grow. If they’re not self-aware, I think it’s harder forthem to evolve or adapt beyond who they already are.”Tony Hsieh, CEO, Zappos.com, Inc.23During the Cuban Missile Crisis, October 1962, Collins and Porras report that President Kennedywas incredibly comfortable with expressing what he did not know and asking many questions beforepassing judgments.24 This led to informed decision making that may have saved the world fromWorld War III. Many change leaders have difficulty publicly owning the fact that they do not have allthe answers and demonstrating a real interest in listening and learning. They likely have noticed thatsomeone who communicates more confidence in their judgment tends to be responded to morepositively than a person who is more cautious—particularly if the audience is predisposed to thatpoint of view. However, behavioral economists have found that this can lead to serious errors ofjudgment. For example, those individuals in the media who are most self-assured in their judgmentare significantly less accurate than those who are more nuanced in their assessments. We may lovetheir bravado and certainty, which helps explain their frequent appearances on TV, but beware ofputting too much trust in their conclusions!25 In 2002–2003 Vice President Dick Cheney’s confidencein Saddam Hussein and Iraq’s possession of weapons of mass destruction was absolute, and yet,U.S. forces found very few.Reputations for skill, judgment, and success develop over time, and this development is aided by agreater willingness to look, listen, and learn before committing to a course of action. As DanielKahneman and his colleagues have noted, dangerous biases creep into important decision makingand these need to be guarded against. Taking steps that keep you open to learning and testing yourassumptions can help you avoid decision traps and greatly benefit the quality of the final choice.26These actions reinforce the value of looking before you leap. People will build trust in your judgment,knowing that you’ve done your homework and considered the situation seriously, and show othersthat a little humility in one’s judgment never hurts.27New Leadership at MicrosoftWith the selection of Satya Nadella as its CEO in February 2014, Microsoft signaled a departure from theloudness of Steve Ballmer and a return to someone more like Bill Gates in his skill set and approach tomanagement. Nadella is very competent technically and managerially and has demonstrated this over theyears at Microsoft as he has successfully led change initiatives, most recently at the Cloud and Enterprisegroup. People report that he has done so by asking questions, listening, and engaging and energizingparticipants in ways that allow them to get out of their comfort zone and succeed. Those who have workedwith him say he is honest, inclusive, authentic, and caring—generating success by thoughtfully nurturing theinvolvement and commitment of those around him.28Whenever we, the authors, work with groups of university students, or managers and executiveswho are attempting organizational change, we caution them not to assume that their perspectivesare held by all. They often fail to understand the impact of their own biases, perspectives, and needsand how they differ from those of others involved in a change initiative. They believe that theyunderstand the situation and know what must change; this attitude can create significant barriers toaccomplishing the change objectives. The strength of their concerns combined with their lack of self-awareness creates blind spots and causes them to block out dissenting perspectives. When change
leaders talk to stakeholders, they may receive polite responses and assume that this implies acommitment to action. Statements such as “That’s an interesting assessment” are taken as supportrather than as neutral comments. Change leaders’ inability to read subtle cues or misinterpretlegitimate concerns as resistance, rather than thoughtful feedback, leads them astray.In an extreme attempt to protect himself and his followers from his personal shortcomings and cult-like reputation, Nehru, one of the founding fathers of modern, independent India, used an alias whenhe wrote the following about himself in a prominent publication in 1937. The backdrop was thestruggle for independence from Britain, which was achieved 11 years later.What lies behind that mask of his, what desires, what will to power, what insatiate longings? Men like(Nehru) with all their capacity for great work, are unsafe in democracy . . . every psychologist knowsthat the mind is ultimately a slave to the heart and logic can always be made to fit in with the desiresand irrepressible urges of a person. . . . (Nehru’s) conceit is already formidable. It must be checked.We want no Caesars.29—Nehru writing in the press about himself, using an aliasNehru’s deep commitment to India’s independence did not blind him to how his own ego and theburgeoning hero worship that he was experiencing might impair the goal of a democratic India thatwould need an electorate that exercised thoughtful discourse and informed decision making. Assuch, he publicly noted the trend toward hero worship and its intoxicating impact on himself and hisfollowers.This section asks change leaders to consider their readiness for leading a change initiative and theroles that they will play in the process. It asks change agents to assess their skills, abilities, andpredispositions to assess and guide the change. In Chapter 8, change agents will again be asked tolook in a mirror and assess their predispositions toward various change agent roles. See ToolkitExercise 4.2 to understand and diagnose a need for change.
Assessing the Readiness for ChangeUnderstanding the need for change and creating a vision for change are closely linked. Diagnosingwhere an organization is in the present moment is a prerequisite for figuring out its future direction.Beckhard and Harris30 argue that addressing the question “Why change?” is a necessaryprecondition to being able to define the desired future state or the vision. If the question of “Whychange?” is never meaningfully addressed, no one should expect the emergence of any sense of ashared vision. The answer to “Why?” is a prerequisite to the “What?” and the “How?” of change.While dissatisfaction with the status quo by senior managers is certainly very helpful in advancingchange, it is unlikely to be a sufficient condition. Spector31 argues that the creation of dissatisfactionamong others is needed. This dissatisfaction can be developed by sharing competitive information,benchmarking the organization’s performance against others, challenging inappropriate behaviorsthrough highlighting their impact, developing a vision for the future that creates frustration with thepresent state, and simply mandating dissatisfaction if one has the clout. Being dissatisfied with thestatus quo helps to ready the organization for change. That readiness depends on previousorganizational experiences, managerial support, the organization’s openness to change, itsexposure to disquieting information about the status quo, and the systems promoting or blockingchange in the organization.Change initiators may understand the need for change, but other key stakeholders may not beprepared to recognize that need or believe it is strong enough to warrant action. Newspaperaccounts of the failure to react in time are all too common (e.g., Chrysler in the auto industry,32Target (Canada) and Kmart in retailing,33 Yahoo and BlackBerry in the digital world34). Though alitany of reasons is offered in the press, two common themes emerge: (1) Management failed toattend to the warning clouds or the opportunities that were clearly visible, often well in advance; and(2) when management took actions, they did too little too late. Past patterns of success can lead toactive inertia (doing more of the same), flawed environmental scanning and assessments, and otherfactors that will be discussed later in the chapter that sabotage organizational members’ capacity tosuccessfully adapt.35Organizational readiness for change is determined by the previous change experiences of itsmembers; the flexibility and adaptability of the organizational culture; the openness, commitment,and involvement of leadership in preparing the organization for change; and member confidence inthe leadership. It is also influenced by the organizational structure, the information members haveaccess to, reward and measurement systems, resource availability, and the organization’s flexibilityand alignment with the proposed change.36 This theme goes back to Chapter 3’s discussion ofNadler and Tushman’s Congruence Model and the importance of alignment. Readiness is advancedwhen organizational members can see how the existing misalignment is getting in the way ofproducing better outcomes and believe that the needed realignment can be achieved. Anorganization’s readiness for change will influence its ability to both attend to environmental signalsfor change and listen to internal voices saying that change is needed.37Previous experiences affect individual readiness for change. If organizational members haveexperienced more gain than pain from past change initiatives, they will be more predisposed to trysomething new. However, there is also the risk that they may resist changes that divert them frominitiatives that have worked in the past.If previous change experiences have been predominantly negative and unproductive, employeestend to become disillusioned and cynical (“we tried and it didn’t work” attitude).38 However, underthe right conditions, this situation may produce increased resolve concerning the need for change.(Reactions to past change experiences will be discussed further in Chapter 7.)Writers regularly report that the development and maintenance of top management’s support iscrucial to change success.39 If senior managers are visibly supporting the initiative, are respected,and define and tie their success to the change initiative, then the organization is likely to bereceptive to change. However, it is not unusual to find differences of opinion concerning change atthe senior management level, so a lack of initial support is a reality that many change leaders must
navigate. The beginning of any change journey can feel quite lonely, because though you and a fewothers have become convinced of the need for change, others may have quite different opinionsabout the need or not yet have given the matter much thought. This includes senior management.Perhaps more troubling situations than the lack of visible support occur when senior managementassures change agents of support but fails to provide it at crucial moments because it isn’t one oftheir priorities or they choose to engage in passive forms of resistance.Organizations that have well-developed external scanning mechanisms are likely to be aware ofenvironmental changes. Cultures and systems that encourage the collection and objectiveinterpretation of relevant environmental, competitive, and benchmark data tend to be more open tochange and provide members of the organization with the information they need to provoke theirthinking concerning the need for change.40 If the culture supports environmental scanning andencourages a focus on identifying and resolving problems rather than “turf protection,” organizationswill be more open to change.Readying an Organization for ChangeArmenakis and his colleagues41 identified factors for readying an organization for change.Their list includes the following:1. The need for change is identified in terms of the gap between the current state and the desired state.2. People believe that the proposed change is the right change to make.3. The confidence of organizational members has been bolstered so that they believe they can accomplishthe change.4. The change has the support of key individuals the organizational members look to.5. The “what’s in it for me/us” question has been addressed.Holt was concerned about an organization’s readiness for change and developed a scale based onfour beliefs among employees: They could implement a change, the change is appropriate for theorganization, leaders are committed, and the proposed change is needed.42 Judge and Douglaswere also interested in calibrating an organization’s readiness for change and utilized a rigorousapproach to identify eight dimensions related to readiness:1. Trustworthy leadership—the ability of senior leaders to earn the trust of others and credibly show othershow to meet their collective goals2. Trusting followers—the ability of nonexecutives to constructively dissent or willingly follow the new path3. Capable champions—the ability of the organization to attract and retain capable champions4. Involved middle management—the ability of middle managers to effectively link senior managers withthe rest of the organization5. Innovative culture—the ability of the organization to establish norms of innovation and encourageinnovative activity6. Accountable culture—the ability of the organization to carefully steward resources and successfully meetpredetermined deadlines7. Effective communications—the ability of the organization to effectively communicate vertically,horizontally, and with customers8. Systems thinking—the ability of the organization to focus on root causes and recognizeinterdependencies within and outside the organization’s boundaries.43Table 4.1 contains a readiness-for-change questionnaire. It reflects the questions and issues raisedin this section and provides another method for helping change leaders assess an organization’sreadiness for change.44 By considering what is promoting and inhibiting change readiness, changeagents can take action to enhance readiness—a change task in and of itself. For example, ifrewards for innovation and change are seen to be lacking, or if employees believe they lack theneeded skills, steps can be taken to address such matters. When considering rewards, rememberthese include intrinsic as well as extrinsic rewards. The impact of rewards on judgment and behaviorneeds to be considered carefully, because it can be complicated. For example, excessive rewardsfor success or excess punishment for failure are more likely to produce unethical behavior.45Alternatively, intrinsic rewards and moderate levels of equitable extrinsic rewards that are nested inteams can heighten information sharing, motivation, and commitment.46 More will be said about this
in later chapters. Change readiness must be consciously developed, aligned with supportivesystems and structures, and then put to use as a source of competitive advantage. Developingchange readiness is an important matter in both public and private organizations.47Table 4.1 Rate the Organization’s Readiness for ChangeTable 4.1 Rate the Organization’s Readiness for ChangeReadiness DimensionsReadinessScorePrevious Change Experiences1. Has the organization had generally positive experiences with change?Score 0 to+22. Has the organization had recent failure experiences with change?Score 0 to-23. What is the mood of the organization: upbeat and positive?Score 0 to+24. What is the mood of the organization: negative and cynical?Score 0 to-35. Does the organization appear to be resting on its laurels?Score 0 to-3Executive Support6. Are senior managers directly involved in sponsoring the change?Score 0 to+27. Is there a clear picture of the future?Score 0 to+38. Is executive success dependent on the change occurring?Score 0 to+29. Are some senior managers likely to demonstrate a lack of support?Score 0 to-3Credible Leadership and Change Champions10. Are senior leaders in the organization trusted?Score 0 to+311. Are senior leaders able to credibly show others how to achieve theircollective goals?Score 0 to+112. Is the organization able to attract and retain capable and respected changechampions?Score 0 to+213. Are middle managers able to effectively link senior managers with the restof the organization?Score 0 to+114. Are senior leaders likely to view the proposed change as generallyappropriate for the organization?Score 0 to+2
Readiness DimensionsReadinessScore15. Will the proposed change be viewed as needed by the senior leaders?Score 0 to+2Openness to Change16. Does the organization have scanning mechanisms to monitor the internaland external environment?Score 0 to+217. Is there a culture of scanning and paying attention to those scans?Score 0 to+218. Does the organization have the ability to focus on root causes andrecognize interdependencies both inside and outside the organization’sboundaries?Score 0 to+219. Does “turf” protection exist in the organization that could affect the change?Score 0 to-320. Are middle and/or senior managers hidebound or locked into the use of paststrategies, approaches, and solutions?Score 0 to-421. Are employees able to constructively voice their concerns or support?Score 0 to+222. Is conflict dealt with openly, with a focus on resolution?Score 0 to+223. Is conflict suppressed and smoothed over?Score 0 to-224. Does the organization have a culture that is innovative and encouragesinnovative activities?Score 0 to+225. Does the organization have communications channels that work effectivelyin all directions?Score 0 to+226. Will the proposed change be viewed as generally appropriate for theorganization by those not in senior leadership roles?Score 0 to+227. Will the proposed change be viewed as needed by those not in seniorleadership roles?Score 0 to+228. Do those who will be affected believe they have the energy needed toundertake the change?Score 0 to+229. Do those who will be affected believe there will be access to sufficientresources to support the change?Score 0 to+2Rewards for Change
Readiness DimensionsReadinessScore30. Does the reward system value innovation and change?Score 0 to+231. Does the reward system focus exclusively on short-term results?Score 0 to-232. Are people censured for attempting change and failing?Score 0 to-3Measures for Change and Accountability33. Are there good measures available for assessing the need for change andtracking progress?Score 0 to+134. Does the organization attend to the data that it collects?Score 0 to+135. Does the organization measure and evaluate customer satisfaction?Score 0 to+136. Is the organization able to carefully steward resources and successfullymeet predetermined deadlines?Score 0 to+1The scores can range from -25 to +50.If the organization scores below 10, it is not likely ready for change and change will be verydifficult.The higher the score, the more ready the organization is for change.If the score is below 10, the organization is not likely ready for change at the present.To increase readiness, change agents can use the responses to the questions to helpthem identify areas that need strengthening and then undertake actions to strengthen thereadiness for change.Change is never “simple,” but when organizational factors supportive of change are in place,the task of the change agent is manageable.The purpose of this tool is to raise awareness concerning readiness for change.Change agents can modify it to better reflect the realities of their organization andindustry.Source: Adapted from Stewart, T. (1994, February). “Rate your readiness to change” scale. Fortune, 106–110;Holt, D. (2002). Readiness for change: The development of a scale. Organization Development Abstracts,Academy of Management Proceedings, and Judge, W., & Douglas, T. (2009).Organizational change capacity: Thesystematic development of a scale. Journal of Organizational Change Management, 22(6), 635–649.
Heightening Awareness of the Need for ChangeWhen an organization is open to change, thinking individuals will still want to critically assess theevidence concerning the need for change. The change leader may experience blanket resistanceand defensiveness, or may experience more localized opposition. Individuals may recognize theneed for change in some departments and functions but be resistant to recognizing the need forchange as it gets closer to home. If they see only the unraveling of what they’ve worked toaccomplish and/or unpleasant alternatives ahead for them, they will be very reluctant to embracechange proposals. Even when the need for change is broadly recognized, action does notnecessarily follow.From Bad to Worse: Garbage Services in Naples, ItalyNaples, Italy, has lived with a garbage problem for years. Poor management, organized crime, and ineffectivepolitical leadership allowed the matter to fester and escalate. In 2008, worldwide coverage of the problemdrew attention and political promises for action, as 55,000 tons of uncollected garbage filled city streets, and110,000 to 120,000 tons awaited treatment in municipal storage sites. Though the streets are now cleaner,resolution has been slow and suspect. Untold tons of irresponsibly (some would argue criminally) handledwaste continue to reside in illegal landfills that dot the countryside, or they have been shipped elsewhere forquestionable “disposal.” The results have fouled the environment, endangered health, seriously harmedNaples’ economy, and required deployment of the army in 2008 and 2011 to deal with uncollected garbage.48In November 2013, the legacy created by decades of mismanagement and corruption erupted very publiclyyet again—this time in the form of burning trash heaps on the outskirts of Naples that were producing toxicfumes and threatening water quality and food safety in the region.49In the story above, the need for change seems obvious. However, the politicians of the city andother levels of government were reluctant to take the difficult steps needed to deal with theproblems. Clearly, Naples and her citizens were not yet prepared to undertake the type of changeneeded.Once change leaders understand the need for change, they can take different approaches toheighten the awareness of the need throughout the organization. Change leaders can do thefollowing:1. Make the organization aware that it is in or near a crisis.2. Identify a transformational vision based on higher-order values.3. Find a transformational leader to champion the change.4. Take the time to identify shared goals and work out ways to achieve them.5. Use information and data to raise awareness of the need for change.1. The first method is a form of shock treatment and involves making the organization aware that itis in or near a crisis. Many of the dramatic turnaround stories that are reported are successfulbecause the actions of people were galvanized and focused by the necessity for action. In the faceof crisis, people find it difficult to deny the need to change and to change now. When the crisis isreal, the issue will be one of showing others a way out that they will follow if they have confidence inits viability, given that the alternatives are far from attractive.50At times, managers will be tempted to create a sense of urgency to change and mobilize staffaround a change initiative that may—or may not— be fully justified. Creating a sense of crisis whenone does not really exist must be approached with care.51 If mishandled, it may be viewed asmanipulative and result in heightened cynicism and reduced commitment. The change leader’spersonal credibility and trustworthiness are then at stake. The reputation developed in and aroundchange initiatives casts a long shadow, for better or worse. The currencies that change agents useare credibility and trustworthiness. These take a long time to develop and can be quicklysquandered.52 An extension of the crisis approach is the “burn or sink your boats.” In this case, thechange leader takes the process one step further and cuts off any avenue of retreat. That is, there isno going back. This approach is based on the belief that this will lead to increased commitment tothe selected course of action. While it may aid in focusing attention, this approach can increaserisks: (a) individuals may resent being forced into a situation against their will; or (b) it may producecompliant and even energized behavior in the short term due to the absence of alternatives, but it
can give rise to undesirable long-term consequences if the actions come to be viewed asinappropriate or unfair. Consequences can include elevated levels of mistrust, reduced commitment,and poor performance.53Creating Urgency at New York City’s Metropolitan Transit Authority (MTA)In October 2012, Hurricane Sandy left huge challenges for NYC’s MTA. MTA used the sense of urgency tomotivate staff to think in creative ways to get the most essential job done. The priority was to get the cityconnected and moving after the storm. Despite there being no emergency handbook for this kind of situation,the MTA was able to get partial service up within days and full lines running within a week.54In the wake of Hurricane Sandy, the transit system was underwater in many areas, infrastructurehad been destroyed, and virtually nothing was running. The crisis faced by Joseph Leader, thesubway’s chief maintenance officer, and all the other executives and staff, was both real anddevastating. They knew tough decisions were needed around the alignment and coordination ofresources and that a huge amount of work would be required to get the city’s transit systemoperational. A competent and highly motivated staff, combined with the powerful shared goal ofgetting the trains moving, allowed them to mobilize, sort out what needed to be done, and act—evenin the absence of protocols.Urgency is straightforward when there is an event such as Sandy. However, it can prove moredifficult when it evolves more slowly, such as deteriorating market conditions, or in the case of not-for-profits such as government agencies, deteriorating service standards or relevance to the public.With the right use of data and influence approaches, people can be woken up. Creating a sense ofsocial and political urgency through advocacy approaches has proven powerful in the public arena,as seen in the pressure for change in the U.S. Department of Veterans Affairs.55 Likewise,approaches that disrupt existing perspectives, challenge past learning, and hasten the adoption ofnew perspectives through creating a sense of urgency have been shown to help new productdevelopment teams get out of ruts and become more effective, though they do have to guardagainst information and knowledge loss in the process.562. A second approach to enhancing people’s awareness of the need for change is by identifying atransformational vision based on higher-order values, such as the delivery of superb service andresponsiveness to customers’ needs. Transformational visions tap into the need for individuals to gobeyond themselves, to make a contribution, to do something worthwhile and meaningful, and toserve a cause greater than themselves. These appeals can provide powerful mechanisms tounfreeze an organization and create conditions for change. In addition, transformational visions pullpeople toward an idealized future and a positive approach to needed change.Cynics in an organization may reject these visionary appeals for several reasons. They may seethem as superficial, naive, ill-advised, off-target, or designed simply to serve the interests of thosemaking the pronouncements. If organizational members have previously heard visionarypronouncements, only to see them ignored or discarded, they may believe the most recent iterationis simply the current “flavor of the week” approach to change.Change agents need to be committed to following through on the actions that underlie the visionaryappeals. If they are not, then they should stop rather than contribute to the build-up of organizationalcynicism and alienation that accompanies unmet expectations. Nevertheless, the power of trulytransformational visions should not be underestimated. How else do we understand the response tothe visionary perspectives provided by change leaders such as Mahatma Ghandi and NelsonMandela?3. A third approach to enhancing the need for change is through transformational leadership.Leadership in general and transformational leadership, in particular, continue to command attentionin the change literature—not surprising, given its stature in Western culture and mythology.57 FromGeorge Washington to Adolf Hitler, from Nelson Mandela to Saddam Hussein, we elevate heroesand condemn villains.The same is true for the corporate world. Steve Jobs’s resuscitation of Apple, Anne Mulcahy’stransformation of Xerox, Thomas Tighe’s work at Direct Relief International, Oprah Winfrey’s growth
of a media empire, Richard Branson’s entrepreneurial initiatives at Virgin, and Elon Musk’sdevelopment of PayPal, SpaceX, and the Tesla automobile are examples of the work of successfultransformational leaders. The appeal of charismatic and transformational individuals is powerful. Inaddition to effectively framing the change vision as noted above, they have the capacity to createstrong, positive personal connectedness and a willingness to change in followers that oftenoverrides the followers’ personal concerns. However, corporate scandals (e.g., Bernie Ebbers ofWorldCom, Bernie Madoff of Madoff Investment Securities, Angelo Mozilo of Countrywide Financial,and John Stumpf of Wells Fargo) remind people of the risks of idolizing transformational exemplars.Even GE’s Jack Welch’s image took a beating with published reports of his divorce battles and thesize and nature of his retirement package.58 Caution is needed if you are relying on charisma toinduce followers to change an organization. Charismatic appeals can prove powerful and helpful,but there are good reasons for people to be suspicious of charismatic appeals because historydemonstrates that personal magnetism is not always directed toward desirable outcomes.It is important to note that many leaders are very effective change agents without being particularlycharismatic. Some of those who have proven to be most influential in nurturing long-termorganizational success have been much quieter in their approach.59 Such a list would include MegWhitman, CEO of HP; Satya Nadella, CEO of Microsoft; Warren Buffett of Berkshire Hathaway;Michael Latimer, president and CEO of OMERS, a large Canadian pension fund; Ursula Burns, CEOof Xerox; and Ellen Kullman, CEO of DuPont.4. A fourth way of stimulating awareness of a need for change is by taking the time to identifyshared goals and working out ways to achieve them. Finding common areas of agreement is a veryuseful way to avoid resistance to change. Instead of focusing on what might be lost, examine therisks of not taking action. What will be gained by taking action can create momentum for change.This is often achieved by having people seriously consider their long-term interests (rather than theirimmediate positions) and the higher-order goals that they would like to pursue. Shared interest inand commitment to higher-order goals can provide a powerful stimulus for commitment andmobilization.5. Fifth, information and data can be used to raise awareness of the need for change. In manyrespects, this is the inverse of the command-and-control approach to change, because it seeks tobuild awareness and support through information rather than edict. Reluctance to change may be aresult of lack of information, or confusion about conflicting sources of information. This can beovercome with a well-organized communications campaign that provides employees with neededinformation, such as best practices in a specific area; benchmark data about the practices andapproaches of others; visits to other organizations to see and hear about their practices; orcompetitive data on the specific topic.60 Research on effective organizations can provide acompare-and-contrast picture to an organization’s current mode of operation and that process canstimulate discussion and facilitate change.Misguided Approach to ChangeIn October, 2018, Sears filed for bankruptcy. Founded in St. Louis in 1928, Sears had been a retailing giant,with thousands of stores across the USA. Hard-hit by the e-commerce revolution in retailing, Sear’s billionaireCEO Eddie Lampert decided to reengineer the company’s finances rather than do the hard-work oforganizational change. Since 2005 Lampert spent $6 billion to buy back Sears’ own shares in an effort tosupport its stock price. William Lazonick, a retired University of Massachusetts’ Economics Professor and anexpert in share repurchasing, argues that if Lampert had used the $6 billion to reduce its debt burden and/orprovide capital to modernize stores, then Sears just might have stayed out of bankruptcy court.Once again, the change agent’s credibility is crucial. If employees are suspicious of the motives ofthe change agent, the accuracy of the information, or there has been a history of difficultrelationships, then the information will be examined with serious reservations. When employeescome to accept the information and related analyses, the ground is fertile for the development of ashared sense of the need and the vision for change.
Factors That Block People from Recognizing the Need for ChangeGiving voice to the need for change can create awareness in employees. However, future directionsare not always obvious and an organization’s history and culture can be strong impediments to newpathways. It took Hewlett-Packard a number of years of poor performance, problematic acquisitions,and related stumbles under different CEOs (most notably Carly Fiorina) until they recognized thatcobbling in poorly fitting acquisitions to boost market share, and focusing primarily upon efficiencyand cost reduction by playing with structures and product/service portfolios, would not reverse thefortunes of their business. Meg Whitman, the retired CEO of eBay, stepped into this very difficultsituation and led the revitalization of storied HP by valuing its roots, leading the conversation aroundthe need for change, working to create a sense of urgency and hope, and taking actions to removesome of the obstacles in the way.Reversing the Death Spiral at Hewlett-PackardHewlett-Packard had demonstrated commitment over the years to the belief that long-term success wasgrounded in the “‘HP Way”—a cultural perspective that celebrated technical expertise, flexibility, andinnovation; placed high value on their collegial, teamwork-based environment; saw employees as their mostimportant resource; and had a strong customer orientation and commitment to act with integrity at all times.However, in 1999, following a period of lackluster performance, HP hired Carly Fiorina as their CEO. Fiorina’stop-down leadership style put results as the number one priority and arguably devalued employees. Herautocratic and aggressive style left her workforce demoralized. The ill-conceived merger with Compaq and anumber of other major actions, such as the restructuring of the enterprise into a more hierarchical one,generated sustained, deepening disappointment on the performance front.It could be argued that Fiorina suffered from tunnel vision concerning how to act on the need for change andmanage the path forward. This blocked her from realizing how to value what was there, respondconstructively to the challenges they faced, and modify her management style to facilitate needed changes.The results of her actions demoralized members of the firm, generated significant turnover, and adverselyaffected the entire organization.Following Fiorina’s dismissal in 2005 and subsequent flawed efforts to get things back on track, the boardappointed Meg Whitman as CEO in 2011. At that point, many believed HP was operating on borrowed time. Anumber of the members of the senior management team were reported to have been very unhappy with herappointment. Whitman was an outsider, and some of them had been jockeying for the top job.Whitman knew that hard choices were needed. These included making major changes to her seniormanagement team to get rid of infighting and promote much-needed cooperation and constructiveengagement. Major job cuts (34,000) had to be made to address cash flow and market realities. However, shealso clearly signaled a return to the organization’s roots, by restoring funding and executive support for whatwas then a gutted and demoralized R&D function, symbolizing their commitment to innovation. She made theneed for change salient to organizational members and highlighted a sense of urgency. The enterprise wasrestructured to better align it with the emergent strategy, and she reinforced the importance of having a clearcustomer focus. Further, she created a vision for the future that offered employees reasons for hope andregenerated shared commitment through the focus on teamwork, collaboration, excellence in execution, andshared celebrations of success. Changes of this magnitude do not happen overnight. HP’s impressive returnto cultural and financial health by 2014 (stock price up 300% since 2011; being recognized as one of the 100top employers in Canada in 2014) show that they were well on their way.61 There were drops in revenue,profit and unit performance in 2015 and 2016, but these had rebounded nicely by 2017. Its share price wasapproximately 2.2 times its 2016 low by January 2019.62All too often, strategists will introduce a new direction and seek to change the organizational culturewithout attending to the question of the impact of cultural artifacts on the desired change.63 Culturalartifacts are the stories, rituals, and symbols that influence employees’ attitudes and beliefs; theyare important because they help to define and give life to the culture. If change agents continue totie themselves to those artifacts, they may reinforce the old culture they wish to change. However,being dismissive of the past can also be problematic because it may signal that things done in thepast are no longer valued. The challenge is: how do you value the past and its positive attributeswithout trapping yourself in the past? In 1994, Bethune and Brenneman faced this challenge whenthey tackled the turnaround of Continental Airlines, taking the firm from near bankruptcy and theworst customer service ratings in the industry to success on all fronts over the next decade.64 Oneof the major reasons that they were successful in implementing a turnaround was their introductionof new cultural artifacts that highlighted customer service as a key corporate value.
Cultural Change at Continental AirlinesA new reward system was put into place at Continental that focused on improved service. Performance-reward systems, in and of themselves, are not necessarily cultural artifacts, but this new reward systemcontrasted with past practices. It was tied directly to corporate performance, and the financial rewards werepaid in a separate check to employees to draw attention to the relationship between performance andrewards. This reward system not only reinforced a new value at Continental, but it also became a symbol toemployees of the importance of high levels of performance in the new Continental, as opposed to theacceptance of poor performance, as had been the case in the old Continental. In addition, stories were toldthroughout Continental about how the new CEO told jokes to employees, answered questions honestly, andwas an all-around good guy to work for. These and numerous additional artifacts replaced old ones that hadreinforced bureaucracy and the acceptability of poor performance and that had led to unbelievably lowemployee morale.65 They succeeded in sustaining positive changes in customer service and fleetperformance over the years, and their financial performance reflected their success in this very competitiveindustry. In 2009, Fortune magazine named Continental the world’s most admired airline, and the WorldAirline Awards recognized it as the best North American airline.66 In 2010 United Airlines acquiredContinental.Both the Continental and HP examples show that the existing culture can impair organizationalmembers’ capacity to either recognize the urgency of the need for change, or believe that there isthe organizational will to constructively respond. Even if organizational members recognize theneed, culture can impede their ability to take appropriate actions until things occur that weaken theexisting beliefs and open the way to new thinking about the organization, the current situation, andits leadership. When this occurred at Continental and HP, the door was opened to meaningfulchange. Actions that created reasons for hope and reinforced the development and strengthening ofnew cultural beliefs ensured that the organization would continue its journey in a positive directionand wouldn’t regress to old patterns.Culture can get in the way of recognizing the need for change in poorly performing firms. However, itcan represent an even more difficult barrier in successful firms. Consider Unilever, which had greatbrands and a long history in emerging markets and yet was falling behind competitors in those samemarkets. They knew they needed to change something but were mentally locked into the businesspractices that had become sources of disadvantage.67 In 2004, they finally recognized the sourcesof the problem and by 2006 were reaping the benefits in terms of renewed growth and profitability.Unilever’s performance was adversely affected by the 2008 recession, along with all their majorcompetitors, but their renewed competitive capacities facilitated their recovery by 2010 and led toall-time share price highs in 2014.68 Sull argues that organizations trapped in their past successesoften exhibit lots of activity (this was true for Unilever), but the outcome is “active inertia,” becausethey remain essentially unchanged.69 Even when organizations recognize that they need to change,they fail to take appropriate actions. He believes this occurs becauseStrategic frames, those mental models of how the world works become blinders to thechanges that have occurred in the environment;Processes harden into routines and habits, becoming ends in themselves rather than means toan end;Relationships with employees, customers, suppliers, distributors, and shareholders becomeshackles that limit the degrees of freedom available to respond to the changed environment;andValues, those deeply held beliefs that determine corporate culture, harden into dogma, andquestioning them is seen as heresy.During periods of financial difficulty, senior management may become polarized in their positions,isolate themselves from data they need, and incorrectly assess the need for change. Seniormanagement may prevent critical information from surfacing as they self-censor, avoid conflict,and/or are unwilling to solicit independent assessments as they attempt to preserve cohesion andcommitment to a course of action.70 These are conditions that lead to groupthink† and can result indisastrous decisions that flow from the flawed analysis.71 Change agents need to be vigilant andtake actions to ensure that groupthink does not cloud a team’s capacity to assess the need forchange. If change agents are dealing with a cohesive team exhibiting the characteristics ofgroupthink, the agent needs to take action with care, considering how to make the group aware offactors that may be clouding its judgment. Change agents who attempt to alert such teams to these
realities are often dealt with harshly, since “shooting the messenger” is a speedy way for teams toprotect themselves from difficult data. Strategies for avoiding groupthink include the following:† Groupthink is “a mode of thinking that people engage in when they are deeply involved in acohesive in-group, when the members’ striving for unanimity overrides their motivation to realisticallyappraise alternative courses of action.” Retrieved December 2010 fromhttp://wps.prenhall.com/wps/media/objects/213/218150/glossary.html.Have the leader play an impartial role, soliciting information and input before expressing anopinion.Actively seek dissenting views. Have group members play the role of devil’s advocate,challenging the majority’s opinion.Actively pursue the discussion and analysis of the costs, benefits, and risks of diversealternatives.Establish a methodical decision-making process at the beginning.Ensure an open climate for discussion and decision making, and solicit input from informedoutsiders and experts.Allow time for reflection and do not mistake silence for consent.72Additional factors that obstruct managerial judgment over the need for change and the inability todevelop constructive visions for future action have been highlighted in both the business andacademic press. Ram Charan and Jerry Useem summarized such factors in their 2002 Fortunemagazine article on the role executives play in organizational failures:They have been softened by past success.They see no problems or at least none that warrant serious change. This can be both internaland external blindness.They fear the CEO and his or her biases more than competitors.They overdose on risk and play too close to the edge. This is often tied to systems that rewardexcessive risk taking.Their acquisition lust clouds their judgment.They listen to Wall Street more than to employees and others who have valuable insights theyshould attend to.They employ the “strategy du jour”—the quick-fix flavor of the day.They possess a dangerous corporate culture—one that invites high-risk actions.They find themselves locked in a new economy death spiral—one that is sustained andaccelerating.They have a dysfunctional board that fails in its duties around governance.73Developing a well-grounded awareness of the need for change is a critical first step for changeleaders when helping organizations overcome inertia, rein in high-risk propensities, address internaland external blind spots, disrupt patterns of groupthink, and view their environment in ways thatopen organizational members to change.So far, this chapter has outlined the variety of perspectives that will exist regarding the need forchange. It emphasizes that the perspective of the change leader may not be held by others and thatoften change leaders need to develop or strengthen the need for change before trying to makespecific changes. One of the ways to enhance the perceived need for change and begin to createfocused momentum for action is to develop a clear and compelling new vision.
Developing a Powerful Vision for ChangeA vision is an idealized view of the future. A manager may, for example, have a three-year vision forher career, which, once the next desired-for management level is reached, will require a new vision.The new vision clarifies the actions that the manager will need to take in the future to reach herfollowing career goal. For example, the manager may need to earn an MBA degree to have theskills that are needed for the subsequent level of management responsibilities. Visions, then,foreshadow the type and direction of actions. Just as visions can set direction and action forindividuals, visions are also needed for teams, departments, and organizations. When organizationsare undergoing massive change, a new vision can provide a powerful pull on employees toparticipate positively in the change process and the actions that will come.74 As Simons says,“Vision without task is a dream world and task without vision is drudgery.”75Change leaders use visions to create and advance the mental pictures people have of the future.Developing a new vision is a key part of defining a future state: the change leader needs toarticulate the gap between where an organization is today and where it wishes—ideally— to go inthe future.Understanding the foundational components of organizational vision is important. In an idealworld, it is closely connected to the mission of the organization and informs the core philosophy andvalues of the institution. It addresses such questions as “What does this organization stand for?”From this should flow the strategies, goals, and objectives of the organization.76 When changeleaders have fully developed a change process, the strategies, goals, and objectives flow from thevision and will address three essential questions for an enterprise:What business are we in?Who are our target customers and what is our value proposition to them?How will we deliver on our value proposition?Change agents often create “sub-visions” in different department units to generate emotional energyand directional clarity for a large-scale organizational change. These allow the overall new vision tobe adapted to reflect how it manifests itself within specific areas of the organization. If FedEx’soverriding commitment to its customers for its express service is “absolutely, positively overnight,”then a change leader’s vision concerning a logistics support initiative might deal with enhancingaccuracy in package tracking to reduce error rates to below .00001%.Beach states,Vision is an agenda of goals … vision is a dream about how the ideal future might be … itgives rise to and dictates the shape of plans … vision infuses the plan with energy becauseit gives it direction and defines objectives. Even the most unassuming vision constitutes achallenge to become something stronger, better, different.77In short, a vision can mobilize and motivate people78 and have a positive impact on performanceand attitudes.79Change leaders need to know how to develop a vision. Jick outlines three methods for creating avision: (a) leader-developed, (b) leader-senior team-developed, and (c) bottom-up visioning.80 Asthe name suggests, a leader-developed vision is done largely in isolation from others. Once it hasbeen created, it is announced and shared with others in the organization. Leader-senior team-developed vision casts a broader net. Members of the senior team are involved in the process ofvision formation. Once completed, it is then shared with others. Bottom-up visioning, or anemployee-centric approach, is time-consuming, difficult, and valuable in facilitating the alignment oforganizational members’ vision with the overall vision for change. If an executive leader canarticulate a compelling vision that captures a broad spectrum of organizational members’ hearts,then a leader-developed vision is likely appropriate. If, on the other hand, employees are diverse
and have mixed feelings about upcoming changes, then the change agent’s job will be difficult and abottom-up approach may be helpful. If employees both “get it” (i.e., the vision) and “want to get it,”subsequent support for change will prove much easier to develop, leverage, and implement.81 Thisis particularly important when cultural changes are involved.82 What does it take to develop aneffective change vision? According to Jick, good change visions are clear, concise, easilyunderstood.83 They areMemorableExciting and inspiringChallengingExcellence centeredStable but flexibleImplementable and tangibleThe process of creating a vision statement encourages change agents to dream big. Paradoxically,when visions become too grand and abstract, they can cease to have much impact. Alternatively,they may provide guidance that energizes and mobilizes individuals to undertake initiatives thatunintentionally work at cross purposes to other initiatives that have been embarked upon or thatmay even have the potential to put the organization at risk.84Food Banks CanadaFood Banks Canada is the national body that plays a leadership role with its 450 affiliated nonprofit foodbanks across the country and 10 provincial associations. Its corporate vision is to relieve hunger in Canadaevery day by raising food and funds to share with food banks nationally, delivering program and services toCanadian food banks, and influencing public policy to create longer term solutions. To help them convey thismessage they adopted the slogan “a Canada where no one goes hungry.” This slogan provides guidance thatunderpins the vision for specific change initiatives that do the following: promote increased food donationsfrom national and regional organizations (e.g., supermarkets, food producers); advance coordination andcooperation among local food banks and the provincial bodies; enhance press and community awareness offood bank initiatives and hunger issues; build support in the corporate community; and influence relevantgovernmental organizations and departments on matters related to hunger and food security. These initiativesgrew out of restructuring and revitalization initiatives by the food bank community around 2006. At that timethe new CEO and other staff members were recruited, the board and its governance processes wererestructured, branding activities for the national organization were undertaken, and the approaches toadvocacy and outreach were revitalized. As the result of these initiatives, Food Banks Canada has improvedits reputation with government, national private sector organizations (e.g., grocery chains and foodmanufacturers), and affiliated local food banks as a credible and respected national voice on hunger issues,and an effective deliverer of related services. Donations (food, money, and related services such as trucking)are significantly stronger now. Awareness levels related to domestic hunger have also increased. The releaseof their data-rich annual publication, Hunger Counts, now generates significant media attention andcommentary by the sorts of individuals who can make a difference.85Lipton provides a pragmatic view of what makes for an effective vision statement. He argues that itneeds to convey three key messages: (a) the mission or purpose of the organization, (b) thestrategy for achieving the mission, and (c) the elements of the organizational culture that seemnecessary to achieving the mission and supporting the strategy.86 He believes a vision will be morelikely to fail when the following occurs:Actions of senior managers are incongruent with the vision. They fail to “walk the talk.”It ignores the needs of those who will be putting it into practice.Unrealistic expectations develop around it that can’t possibly be met.It is little more than limited strategies, lacking in a broader sense of what is possible.It lacks grounding in the reality of the present that can be reconciled.It is either too abstract or too concrete. It needs to stimulate and inspire, but there also needs tobe the sense that it is achievable.It is not forged through an appropriately messy, iterative, creative process requiring acombination of “synthesis and imagination.”It lacks sufficient participation and involvement of others to build a consensus concerning itsappropriateness.Its implementation lacks “a sense of urgency … and measurable milestones.”87
Lipton’s list provides change leaders with a set of factors to consider when developing andoperationalizing their vision for change. Are their actions aligned with the vision? Have theyconsidered the needs of those who will be putting it into practice? If not, Lipton would argue that youare lowering the motivational and directional value the change vision can provide. Conversely, ifthese elements are present, the power of the change vision is enhanced.Visions need to paint pictures that challenge the imagination and enrich the soul. Too many visionstatements are insipid and dull. Too often they represent generic pap—right-sounding words butones devoid of real meaning, designed for plaques and outside consumption and not rooted in theheart of the organization. By trying to say everything or appeal to everyone, they say nothing andappeal to no one.88 Table 4.2 contains the Handy-Dandy Vision Crafter, a cynical view of how someorganizational vision statements are developed. While many statements may end up containingwords similar to those in the model, the Handy-Dandy Vision Crafter ignores the hard work and thedifficult creative process and activities that organizations go through to develop a vision statementthat they are truly committed to. In many ways, the process of developing a new vision is asimportant as the vision itself. However, too many vision statements read as if the Vision Crafter hadbeen used to create them.Table 4.2 The Cynics’ Handy-Dandy Vision CrafterTable 4.2 The Cynics’ Handy-Dandy Vision CrafterJust fill in the blanks with the words that best suit your needs!We strive to be the:_____________________________________________________________________________(Premier, Leading, Preeminent, World-class, Dominant, Best of class …)Organization in our industry. We provide the best in: _____________________________________(Committed, Caring, Innovative, Expert, Environmentally friendly, Reliable, Cost-effective, FocusedDiversified, High-quality, On-time, Ethical, High-value-added …)(Products, Services, Business Solutions, Customer-oriented Solutions …)To:______________________________________________________________________________(Serve Our Global Marketplace; Create Customer, Employee, and Shareholder Value; Fulfill Our Cto Our Stakeholders; Exceed Our Customers’ Needs; Delight Our Customers …)Through _______________________________________________________________________employees(Committed, Caring, Continuously Developed, Knowledgeable, Customer-focused …)In the Rapidly Changing and Dynamic:________________________________________________________(Industry, Society, World)Sometimes a quick statement, a slogan, can serve as a vision proxy. Consider the followingstatements:Every life deserves world-class care: Cleveland ClinicThink differently: Apple ComputersSaving people money so they can live better: WalmartInspire the world, create the future: SamsungTo organize the world’s information and make it universally accessible and useful: GoogleThe greatest tragedy is indifference: Red CrossGrace, space, pace: Jaguar
Play on: LegoUntil every child is well: Boston Children’s HospitalThese slogans are tied to statements of mission and vision, and they provide messages that areclear to employees and customers alike. They are meant to reflect underlying values that theorganization holds dear and can help provide continuity with the change vision. Consider, forexample, the one adopted by the Cleveland Clinic: Every life deserves world-class care. If you wereto take the words at their face value and were an associate there, change initiatives that facilitateaccess for the poor at the Cleveland Clinic are more likely to be viewed as positive change initiativesthan ones focused solely on improving profitability, because they have the potential to be consistentwith what the organization is all about.The slogan “Quality is job #1” was used by Ford to symbolize its determination to improve quality inthe 1980s. In the aftermath of quality and safety concerns that buffeted Ford, the automakersuccessfully used these words, with an accompanying concerted program of action, to refocusemployee and public perceptions of the importance of quality to Ford and, ultimately, the excellenceof its products. This major initiative spanned several years and was ultimately successful in takingroot in the minds of employees and the public. However, the Ford Explorer/Firestone controversy in200089 concerning vehicle stability in emergency situations reopened public questions of Ford’scommitment to quality and safety and put extreme internal and external pressure on Ford andBridgestone, Firestone’s parent organization, to restore the public trust. The lesson to draw fromFord’s experience is that an image built on a vision that took years to develop can be shatteredquickly. Ford appears to have learned from the experience and their recent slogan, “Drive Further,”is intended to address customer concerns around quality by committing to deliver products that areup to the challenge.GM is relearning this lesson now, due to its decade-long failure to address an ignition switchproblem that has resulted in a number of deaths, lawsuits, and the recall of approximately 18 millioncars in North America in 2014. CEO Mary Barra has worked hard to get out in front of this horriblesituation, be transparent with the internal and external investigations, take concerted action toaddress the issue, and restore public confidence that inaction, such as this, will not recur under herwatch at the GM.90Johnson & Johnson’s response to the 1982 Tylenol deaths and tampering of bottles scare91 andProcter & Gamble’s92 response to inappropriate competitive intelligence activities related to haircare products provide two examples of how clear vision can help organizations develop initiativesthat respond effectively to potentially damaging events. In the case of Tylenol, this best-selling brandwas pulled from store shelves until the company was confident it had effectively addressed the riskof product tampering, at the cost of tens of millions of dollars. In the Procter & Gamble situation,when the CEO found out, he fired those involved, informed P&G’s competitor that it had been spiedupon, took appropriate action with respect to knowledge that P&G had inappropriately gained, andnegotiated a multimillion-dollar civil damage payment to the aggrieved competitor. The actions ofthese two firms demonstrated their commitment to their respective visions of how they shouldoperate and reinforced public and employee confidence in the firms and what they stood for.‡‡ Johnson & Johnson’s credo can be found at http://www.jnj.com/connect/about-jnj/jnj-credo/.Procter & Gamble’s mission, vision, and values can be found athttp://www.pg.com/en_US/downloads/media/PVP_brochure.pdf.Compare Procter & Gamble’s and Johnson & Johnson’s responses with Toyota’s initial reactions tosafety concerns in 2009 and 2010. The Toyota vision in 2010 was to become the most successfuland respected car company in each market around the world by offering customers the bestpurchasing and ownership experience. However, one wonders if the desire to become the largestand most successful auto firm got in the way of the vision for respect that would be linked to qualityand the willingness to put the needs of customers ahead of the company’s own. The response tosafety concerns was initially slow and defensive, and Toyota paid a very heavy price in lost salesand damaged reputation and brand.93 It was ranked the seventh most admired company in theworld by Fortune in 2010, dropped to 33 for 2011 and 2012, and is slowly regaining ground, landing29th on the list in 2013.94
As noted earlier, companies can be trapped by the existing vision of their organization.95 Goss,Pascale, and Athos argue that (a) narrow definitions of what the company is about, (b) failure tochallenge the accepted boundaries and assumptions of the company, and (c) an inability tounderstand the context leads to inadequate or mediocre visions. They show the problems that canoccur when a vision is achieved—now what? Once the vision is achieved, motivation is lost. It is abit like a team whose vision was to “make it to the Super Bowl”—it is at a distinct disadvantagewhen playing against a team whose vision is to “win the Super Bowl.”Once the vision is clear, the issue becomes one of enactment by employees. Storytelling is atechnique employed by change leaders to communicate a vision and mobilize awareness andinterest. Because people identify with and remember stories, change agents can use stories inseveral ways: to create contextual awareness of how an organization got to its problematiccondition; to demystify data; to clarify a change initiative and why a particular course of actionmakes sense; to relieve or increase tension and awareness; and finally, to instill confidence.96 Themultiple uses of stories make storytelling a critical skill for change leaders. Some have referred tothis as ways to increase the “stickiness” of the message and enhance its meaningfulness. Toincrease the stickiness, Cranston and Keller recommend framing the stories five different ways. Bythis they mean not stopping the message for change after the traditional data-based approach thateither demonstrates shortfalls (here is how we’re falling behind and need to improve) oropportunities. In addition to this, they recommend also framing the stories in terms of the impact ofthe vision on society, the customer, the work team, and the individuals. Which messages are youmore likely to remember—stories about positive impacts on you, your work team, your customers,and society, or ones that speak solely to 5% improvements to margins and 10% increase in saleslevels?97Wheatley argues that one must “get the vision off the walls and into the halls.”98 She claims thatpeople are often trapped by a mechanical view of vision, one that is limited to only a directionalcomponent of vision. She argues that vision should be viewed as a field that touches everyemployee differently and is filled with eddies and flux and shifting patterns. This view emphasizesthe need to understand how each individual “sees” or “feels” the vision. As Beach says, “Eachmember of the organization has his or her own vision.”99 Somehow, these individual visions need tobe combined into an overall sense of purpose for the organization. The active engagement andinvolvement of employees in the development, communication, and enactment of the vision forchange is a strategy that has been effectively used to advance the creation of a shared sense ofpurpose.100 Twenty-six centuries ago, Lao Tzu observed that “the best change is what the peoplethink they did themselves.”
The Difference Between an Organizational Vision and aChange VisionWhile the rules for crafting a vision remain the same, the focus of the vision shifts depending uponthe level and position of the change leader. Different parts of the organization will focus the vision fortheir areas in ways that reflect the aspirations for their part of the enterprise. They should be alignedwith the overarching vision but differentiated in ways that generate meaning and energy for thoseinvolved with that part of the organization. Whereas the corporate vision is about the long-termfuture, the change vision is shorter term in its perspective, and more specific as to the targets forchange, the tangible outcomes to be achieved, and the anticipated impact. In other words, it isfocused on the specific changes to be implemented. By definition, they are designed to contribute tothe vision of the organization but are focused in their scope, and often require the cooperation ofothers to bring them to fruition.101This is easy to understand if subunits, such as divisions, are involved with different products and/orservices and/or different markets. However, it also holds for other functions within the organization,such as manufacturing, marketing, or accounting services. For example, a staff support functionsuch as HR will have a change focus that is largely internal to the organization, because that iswhere most of its customers and services lie. However, a vision for change focused on improvingHR’s ability to successfully recruit and retain external talent would involve an external focus plus theneeded alignment of internal systems and processes to produce the desired results for theorganization. If you are an organization needing to scale your operations rapidly, change initiativesthat facilitate the recruitment, development, and retention of talented employees takes on addedurgency—something firms such as Infosys and Tata Consulting, know all too well.102 In 2014,Infosys reported they were planning to add 3,500 employees to two of their Indian developmentcenters and were striving to keep their attrition rate at 12% or lower. To promote their image as adesirable employer, they had, among many internal and external initiatives, undertaken specificoutreach initiatives to educational institutions and had distributed 10,000 electronic notebooks tostudents studying in government schools in regions near the two development centers.103Change leaders’ goals are advanced when they develop compelling messages that appeal to theparticular groups of people critical to the change initiative. However, in practice, there will betensions between the changes proposed and what other parts of the organization are attempting toaccomplish. For example, the sales force may be focused on how quickly it is able to respond tocustomers with the products they require, while manufacturing may be rewarded for how efficiently itis able to operate rather than how quickly it is able to respond to customers’ orders. These tensionsneed to be recognized and managed so that the needed changes do not flounder, and variousapproaches for handling this will be addressed in subsequent chapters.When change leaders develop their vision for change, they are challenged with the question ofwhere to set the boundaries. A narrower, tighter focus will make it easier to meet the test of Jick’scharacteristics of an effective vision for a specific target audience, but it may also reduce theprospects for building alliances and a broad base of support across an organization. As the need forchange extends to strategic challenges and the culture of a firm, this issue of building a broadconstituency for the change becomes increasingly important. Two questions must be answered:First, where, if anywhere, do common interests among stakeholders lie? Second, can the vision forchange be framed in terms of the common interest without diverting its purpose where it no longerdelivers a vision that will excite, inspire, and challenge?This was a challenge that Dr. Martin Luther King met superbly. In 1963, King stood on the steps ofthe Lincoln Memorial and delivered his famous “I Have a Dream” speech on the 100th anniversaryof the publishing of the Emancipation Proclamation by President Lincoln. This was a critical point inthe Civil Rights Movement, and Dr. King succeeded in seizing that moment by enunciating acompelling vision that embraced a large coalition. Attention to the coalition is apparent in his words:The marvellous new militancy which has engulfed the Negro community must not lead usto distrust all white people, for many of our white brothers, as evidenced by their presence
here today, have come to realize that their destiny is tied up with our destiny and theirfreedom is inextricably bound to our freedom. We cannot walk alone.Dr. King then went on to set out a vision in language all would understand: “I have a dream that oneday this nation will rise up and live out the true meaning of its creed: We hold these truths to be self-evident: that all men are created equal.”104A broadly stated vision will potentially appeal to a broader range of people and engage a morediverse group in a change process. For example, the National Campaign to Prevent TeenPregnancy appealed to a broad range of groups, from Catholics who opposed abortion to PlannedParenthood who accepted abortion.105 Regardless of their specific positions, all groups wanted toprevent teen pregnancy. However, each of these groups had different ideas about the strategies forprevention. The risk of a broad vision is that its appeal to particular groups may either be watereddown, or the coalitions attracted to it may subsequently fall apart when the vision gets translated intoaction.Coalitions that develop around a common vision can be surprising. Who would have thought thatTed Olson, a prominent conservative lawyer, and David Boies, a prominent liberal lawyer, who hadfaced off in the courts over the hanging chads in the 2000 U.S. presidential election, would becomeco-councils in the successful litigation to defeat the Defense of Marriage Act and California’sProposition 8, that culminated in a decision in their favor in the Supreme Court of the United States?106 Likewise, the ability for environmentalists and conservative Republicans to forge a commoncause around the reduction of fossil fuel consumption is not something many expected, but it nowexists. Though their perceptions of the underlying rationale for the need for change are different,they identified a common vision for change:Reducing Fuel Consumption as a Common VisionEnvironmentalists and groups of conservative Republicans are stepping up a campaign to promotealternative-fuel vehicles and wean the USA from dependence on foreign oil. While conservatives are stillskeptical about links between autos and global warming, they have concluded that cutting gasolineconsumption is a matter of national security.Right-leaning military hawks—including former CIA Director R. James Woolsey—have joined with otherconservative Republicans and environmental advocates such as the Natural Resources Defence Council tolobby Congress to spend $12 billion to cut oil use in half by 2025. Their vision is to end America’sdependence on foreign oil, build a sustainable energy system, and, in the process, create millions of jobs. Thealliance highlights how popular sentiment is turning against the no-worries gas-guzzling culture and howalternative technologies such as gas–electric hybrids are finding increasingly widespread support in theUnited States.“I think there are a number of things converging,” said Gary L. Bauer, a former Republican presidentialcandidate and former head of the Family Research Council who has signed on to a strange-bedfellowcoalition of conservatives and environmentalists called Set America Free. “I just think reasonable people aremore inclined right now to start thinking about ways our country’s future isn’t dependent on … oil from aregion where there are a lot of very bad actors.”107
Examples of Visions for ChangeIn the past, visions have generally been viewed as aspirational organization-level statements.However, change programs can benefit from a clear sense of direction and purpose that visionstatements provide. The most powerful visions tap into people’s need to be part of somethingtransformative and meaningful. Mundane but important change programs involving restructuring orprofit-focused issues need clear, concise targets.Here are some examples of organizational change visions:
IBM—Diversity 3.0IBM has a long history of commitment to diversity and has consistently taken the lead on diversitypolicies long before it was required by law. It began in the mid-20th century, grounded in EqualOpportunity Legislation and compliance (Diversity 1.0). We moved forward to Diversity 2.0 in the1990s with a focus on eliminating barriers, and understanding regional constituencies anddifferences between the constituencies. As our demographics changed, we adapted our workplaceto be more flexible and began our focus on work-life integration. In addition, over the past 5 years,we’ve introduced IBM’s Values, which links to our diversity work.This strong foundation brings us to where we are today—Diversity 3.0. This is the point where wecan take best advantage of our differences—for innovation. Our diversity is a competitive advantageand consciously building diverse teams helps us drive the best results for our clients.108
Tata’s Nano: From Vision to Failed ProjectRatan Tata’s 2003 Vision to his engineering team, led by 32-year-old star engineer Girish Wagh,was this:Create a $2,000 “people’s car.” It has to be safe, affordable, all weather transportation for afamily. It should adhere to regulatory requirements, and achieve performance targets suchas fuel efficiency and acceleration.The result of this vision was Nano, a compact “city car,” that was to appeal to motorcycle andscooter riders. The rear-engine hatchback was launched in 2008 in India for one lakh rupees, orapproximately US$2,500. It got 50 miles to the gallon and sat up to five people. Unfortunately, therewere delays in manufacturing and early instances of the Nano catching fire (Tata maintained that itwas foreign electrical equipment that was placed on top of their exhaust system that caused thefires). In March 2012, Mr. Tata stated that the original vision for the Nano had been achieved, andthat the vision had now shifted to further upgrading and refinement of the product.109 In 2018, CyrusMistry, chair of the Tata Group, called the Tata Nano a failed project and production ended in May.110
Change Vision for the “Survive to 5” ProgramSave the Children, World Vision, UNICEF and other not-for-profits, have taken up the challengeposed by the World Health Organization, to reduce child mortality by two-thirds, by 2015. Mortalityrates had been reduced by 41% between 1990 and 2011, but the refugee crises that have beencreated by wars and environmental disasters were complicating efforts, giving rise to a call for theUnited Nations for a redoubling of efforts.111 Vision: We believe all children should live to celebratetheir fifth birthday.The Survive to 5 campaign supports Millennium Development Goal 4—to reduce child mortality bytwo thirds by 2015 and save the lives of over 5 million children under 5 who are dying of preventableand treatable diseases.112In order to help reduce preventable deaths, Survive to 5 will work in countries where basichealth care is inaccessible to large numbers of children. Working with government andprivate sector health care systems, we will develop policy environments that are conduciveto community-based care and train a cadre of local health care workers to increase healthcare coverage and ensure linkages and referrals to facilities for more complicated cases.Research shows that simple interventions—including vaccines, oral rehydration therapy,antibiotics for pneumonia and sepsis and medicine to treat malaria—could save some two-thirds of the children who currently do not survive. Clean practices at birth and improvedimmediate newborn care, such as breastfeeding and special care for low birth weightbabies would also contribute to saving young lives.113
Change Vision for “Reading Rainbow”In 2014, LeVar Burton used the crowdsourcing website “Kickstarter” for a campaign to raise $5million. The short-term change vision was to work together to bring back the “Reading Rainbow”show to PBS, and provide free access to it in 7,500 classrooms.This change vision was linked to a broader vision of leveraging the existing free Reading Rainbowapp and make its existing and future content available for free, to each and every web- connectedchild, by developing a web-enabled Reading Rainbow for the home, create a classroom version withthe tools teachers need, and subsidize the cost so it is available to schools for free.114
Change Vision for a Large South African Winemaker§§ Courtesy of Mr. Mpsheboshego Ngwato Malesela, Engineer, MBA, and the firm’s operationalexcellence manager.Every brandcrafters, every day, will search for opportunities for improvement and workcooperately with one another to bring these improvements to life in real time—not thedistant future. These actions will allow us to work more effectively together, make our workmore pleasant and meaningful, allow us to produce better wine, heighten our pride in whatwe do, and collectively celebrate becoming the best-in-class producer in term of quality andcost by 2023. We will know we are making progress by listening to our brandcrafters,working with them to improve their satisfaction and commitment, tracking the number andthe quality of the improvement initiatives we undertake, celebrating our efforts to improveand ultimately, our achievement of best-in-class quality and cost by 2023.When reading the above statement, it is important to know that this specific change programfocuses on the actual production of the wine and does not involve the farmers who grow the grapes,nor the downstream marketing, sales and distribution staff. It was initiated by senior production staff,in response to senior management’s recognition of its eroding position in terms of cost and quality.The vision for change statement was developed with high levels of employee involvement.Brandcrafters is the term used to describe all those directly involved in the production and bottling ofwine. Agreed-to metrics are in place to track progress on all the fronts mentioned in the vision forchange.
Change Vision for the Procurement System in a Midsize ManufacturingFirm**** Courtesy of Mr. Andro Ventor, B.Eng (Mechanical), MBA, and Senior Design Engineer with themidsize manufacturing firm supplying the construction industry.We believe that providing reliable and cost-effective procurement services is critical to thefuture survival and success of our organization. We will develop and deploy a computer-based process that will provide accurate and repeatable information to procurement so thatthose involved will be able to eliminate purchasing errors, make more knowledgeablepurchase decisions, and through these actions reduce costs and increase the profitabilityand effectiveness of the organisation. This change will completely eliminate rework on thebill of materials and will enhance the effectiveness and efficiency of the procurementprocess, quoting and planning phases. We will know we have succeeded in bringing thischange to life by the measures we use to track progress, including error rates, costs, timesavings, and user satisfaction.This change initiative was undertaken by the firm’s senior design engineer, who saw the need toimprove the efficiency and effectiveness of the procurement system. His firm manufactured productsfor the construction industry. The vision for change statement evolved from the input of those in theorganization who generate and use the bills of material. IT staff assisted in the development of thenew process, though much of the coding was done by the design engineer who had worked todevelop an intimate knowledge of both the existing and desired process. The estimated time to fullyexecute the change, including training, was six months. Before and after measures were used totrack progress.Visions for change are the starting point for a chain: vision → objectives → goals → activities.†† Tomake the change vision tangible, change agents need to specify measurable goals for their changeefforts. The research on goal setting has been quite clear on the benefits of SMART (specific,measurable, attainable, relevant, and time-bound) goals.115 The provision of direction withmeasurable results for feedback galvanizes many people to pursue desired aims. This is easy tosay, but defining the right measurable goals is not straightforward. Perhaps a critical task is topersuade a key stakeholder to view the change positively. How does one assess when suchattitudes are beginning to change and capture the progress? Identifying interim goals, indicators ofprogress, and key milestones that demonstrate progress toward the end goals of the change visionare challenges that will be dealt with in subsequent chapters. See Toolkit Exercise 4.3 to practicewriting a vision statement, then move on to Toolkit Exercise 4.4 to combine your understanding forthe need for change and your newly crafted vision statement.†† We use the following definitions. Mission means the overall purpose of the organization. Visionmeans the ultimate or ideal goal pursued. Thus, for a social service agency, the mission might be tolook after the homeless and improve their health outcomes. The vision could be to eradicatehomelessness and related health issues in the community by 2020. The change vision relatedspecifically to accommodations might then be to provide access to safe, affordable housing for 60%of the homeless in the community within the next three years.SummaryIn summary, change occurs when there is an understanding of the need for change, the vision of where theorganization should go, and a commitment to action. Change leaders need to address the question “Whychange?” and develop both a sound rationale for the change and a compelling vision of a possible future.Unfreezing organizational members is advanced when these have been effectively executed.The rationale for change emerges from a sound understanding of the situation: the external and internal datathat point to a need for change, an understanding of the perspectives of critical stakeholders in theorganization, internal data in the organization that affects any change, and the personal needs and abilities ofthe change leaders themselves. Critical in this is an understanding of the organization’s readiness for change
and the awareness of the need for change throughout the organization. Finally, the chapter discusses thecreation of powerful visions and how to develop a specific change vision.In addition to creating appealing visions of the future and demonstrating a compelling need for change,change agents need to understand the particular contexts of the major individuals in the change events.These stakeholders, or key players, will have an impact on the change situation, so their motives andinterests need to be analyzed. Likewise, the impacts of formal structures, systems, and processes on thechange need to be assessed and understood. The next two chapters explore these topics. See ToolkitExercise 4.1 for critical thinking questions for this chapter.Key TermsNeed for change—the pressure for change in the situation. This need can be viewed as a “real” need, thatdemonstrated by data and facts, and a “perceived” need, that seen by participants in the change.Developing a perspective on the need for change is aided by (a) seeking out external data, (b) seeking out theperspective, (c) seeking out data internal to the organization, and (d) reflecting upon personal concerns andperspectives of the change leader.Perspectives of key internal and external stakeholders—the unique point of view of important participantsin the change process. Understanding this perspective is critical to recognizing why this stakeholder supportsor resists change.
Readiness for ChangeOrganizational readiness for change—the degree to which the organization as a whole perceives the needfor change and accepts it.Individual readiness for change—the degree to which the individual perceives the need for change andaccepts it.Readying an organization for change—can be done through the use of a variety of strategies, including (a)creating a crisis, (b) developing a vision that creates dissatisfaction with the status quo in the organization, (c)finding a champion-of-change leader who will build awareness of the need for change and articulate the visionfor change, (d) focusing on common or superordinate goals, and (e) creating dissatisfaction with the statusquo through education, information, and exposure to superior practices and processes of both competitorsand non-competitors. Different strategies have different strengths and weaknesses associated with them.Eight dimensions related to readiness—trustworthy leadership, trusting followers, capable champions,involved middle management, innovative culture, accountable culture, effective communications, and systemsthinking.Strategic frames—the mental models or sets of assumptions held by change participants about how theworld works. These can block the recognition for the need for change.
VisionVision for change—the idealized view of the short-term future after a specific change has been enacted.Change visions are more specific than organizational visions and have some element of a time constraint.Organizational vision—the idealized view of the future. The vision needs to be (a) clear, concise, easilyunderstood; (b) memorable; (c) exciting and inspiring; (d) challenging; (e) excellence centered; (f) stable butflexible; and (g) implementable and tangible.Leader-developed vision—developed directly by the change leader.Leader–Senior-team-developed vision—developed by the senior management group in conjunction withthe change leader.Bottom-up visioning—engages a broader spectrum of organizational members in the vision framingprocess. The change vision is developed through the active participation of those responsible forimplementing the change, including those on the front line.
A Checklist for Change: Creating the Readiness for Change1. What is the “objective” need for change? That is, what are the consequences to the organization ofchanging or not changing? Are people aware of these risks?2. Are organizational members aware of the need for change? Do they feel the need for change, or do theydeny its need? How can they be informed?3. Remember that individuals are motivated toward change only when they perceive the benefits asoutweighing the costs. How can you, as a change leader, help employees see the benefits asoutweighing the costs?4. If individuals believe the benefits outweigh the costs, do they also believe the probability of success isgreat enough to warrant the risk-taking, including the investment of time and energy that the change willrequire?5. What change alternatives are people predisposed to? What are the costs, benefits, and risks that makethem attractive? How should these alternatives be addressed by the change leader?
End-of-Chapter Exercises
Toolkit Exercise 4.1
Critical Thinking QuestionsThe URL for the video listed below can be found in two places. The first spot is next to the exercise and thesecond spot is on the website at study.sagepub.com/cawsey4e.Consider the questions that follow.1. David Logan: Tribal Leadership—16:36 minuteshttps://www.ted.com/talks/david_logan_on_tribal_leadershipThis video focuses on five kinds of tribes that people naturally form and how they influence behavior.Describe Logan’s theory on tribes.Compare Logan’s ideas with tribes you’ve been a part of in the past.Reflect on how Logan’s idea of Tribal Leadership may affect how to approach change.2. There are lots of great examples of leaders communicating their vision for change, such as Martin LutherKing, Nelson Mandela, Malala Yousafzai, Steve Jobs, Howard Schultz, Indra Nooyi, and Melinda Gates.Go to the Web and find a powerful vision for change speech that resonates with you. What is it aboutthe one you selected that resonates with you?Does it share the characteristics of an effective vision statement outlined in the text?Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Toolkit Exercise 4.2Developing the Background to Understand the Need for ChangeAs suggested earlier in this book, a careful diagnosis is essential for successful organizational change. Much ofthis diagnosis is needed to understand the need for change that the organization faces and then to engage andpersuade organizational members concerning the need for change.1. Consider an example of an organizational change that you are familiar with or are considering undertaking.What data could help you understand the need for change?2. Have you:a. Understood and made sense of external data? What else would you like to know?b. Understood and made sense of the perspectives of other stakeholders? What else would you like toknow?c. Understood and assessed your personal concerns and perspectives and how they may be affectingyour perspective on the situation?d. Understood and made sense of internal data? What else would you like to know?3. What does your analysis suggest to you about the need for change?Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Toolkit Exercise 4.3
Writing a Vision for Change Statement116Think of an organization you are familiar with that is in need of change. If you were the change leader, what wouldbe your vision statement for change?1. Write your vision statement for the change you are striving for.2. Evaluate your vision. Is it:Clear, concise, and easily understood?Memorable?Exciting and inspiring?Challenging?Excellence centered?Stable and yet flexible?Implementable and tangible?3. Does the vision promote change and a sense of direction?4. Does the vision provide the basis from which you can develop the implementation strategy and plan?5. Does the vision provide focus and direction to those who must make ongoing decisions?6. Does the vision embrace the critical performance factors that organizational members should be concernedabout?7. Does the vision engage and energize as well as clarify? What is the emotional impact of the vision?8. Does the vision promote commitment? Are individuals likely to be opposed to the vision, passive (let ithappen), moderately supportive (help it happen), or actively supportive (make it happen)?9. Now assess your vision on a scale of 1 to 5 (5 being the highest) relative to the factors set out below.a. Actions of senior managers are congruent with the vision. They walk the talk.1 2 3 4 5b. It pays attention to the needs of those who will be putting it into practice.1 2 3 4 5c. Realistic expectations develop around it that are challenging but can be met.1 2 3 4 5d. It communicates a broader sense of what is possible.1 2 3 4 5e. It is grounded in the reality of the present and can be reconciled with it.1 2 3 4 5f. It is neither too abstract nor too concrete. It has the potential to stimulate and inspire, but it alsocommunicates the sense that it is achievable.1 2 3 4 5g. It has been forged through an appropriately messy, iterative, creative process requiring a combination of“synthesis and imagination.”1 2 3 4 5h. It has sufficient participation and involvement of others to build a consensus concerning itsappropriateness.1 2 3 4 5i. Its implementation contains “a sense of urgency … and measurable milestones.”1 2 3 4 510. Given your assessment of the above items, what would you recommend be done in order to strengthen thevalue of the change vision?Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Toolkit Exercise 4.4
Putting the Need for Change and the Vision for Change TogetherFor any change to be successful, the need for change must be real and must be perceived as real. If theorganization does not accept the need for change, the chances of anything substantive happening are negligible.Thus, developing the need for change is vital. Understanding the gap between what is and what is desired isimportant in order to accurately describe the need for change.Think of the situation you were considering in Exercise 4.2.1. What is the gap between the present state and the desired future state?2. How strong is the need for change?3. What is the source of this need? Is it external to the organization?4. Is there tangible evidence of the need for change in that there is concrete evidence of the need or a crisissituation that demonstrates the need for change?5. If the change does not occur, what will be the impact on the organization in the next two to six years?6. What is the objective, long-range need to change?People can be motivated by higher-order purposes, things that relate to fundamental values. Changevisions can be crucial in capturing support for change and in explaining the nature of change to others.Creating such a change vision is tricky. If one aims too high, it taps into higher values but often fails tolink with the specific change project or program. If one aims too low, the vision fails to tap into valuesthat motivate us above and beyond the ordinary. Such a change vision looks like and feels like anobjective.7. Return to the change vision you developed in Exercise 4.2. Does it capture a sense of higher-order purposeor values that underpin the change and communicate what the project is about?8. Explain how the vision links the need for change.Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Leading Change: The Pharmacy TeamBy Jess Coppla, Healthcare MBA, 2018Simmons University, Boston, MA
IntroductionKim could not believe how Joe had just talked at an elderly customer. Joe had been rude and abrupt with someonewho was clearly confused about his medications. As an employee of Poplar’s Drug Store chain, Joe, a pharmacytechnician, had been trained in how to approach and interact with customers, but he was not exhibiting thebehavior taught in those classes. In her first shift since she had rejoined the pharmacy team at Poplar’s Chelsealocation, Kim noted other problems among team members: poor communication, high stress levels, inability tobalance operational tasks with taking care of customers, a lack of teamwork, and so on. The pharmacist who wason duty, clearly flustered by the backlog of work, was so busy filling prescriptions that he was unaware of Joe’sinteraction with the customer. After turning to walk away from the counter, another technician bumped directly intoJoe, dropping her basket of prescription labels and bottles of medication all over the floor. Obviously upset by whathad just transpired, Joe announced to no one in particular that he was taking a bathroom break and stormed out ofthe pharmacy. No one beside Kim even seemed to notice.Kim had worked on the Chelsea pharmacy team, the group responsible for prescriptions and over-the-countermedications, for four of the last five years: in fact, she had worked there since her sophomore year in high school.During that time, she knew that the pharmacy team had consistently received low marks in customer service. Thisdismayed her greatly, because she felt like everyone on the team shared the same goal: helping customers behealthy.The team members assisting the pharmacist(s) were called “pharmacy technicians.” The normal size of the teamat the Chelsea store was four plus the lead pharmacy technician. The senior pharmacist on duty was ultimatelyresponsible for the performance of the team, but day-to-day leadership was delegated to the senior technician.Since her return from the nearby Elmwood store, Kim had ideas about how to make things better at Chelsea. Alittle over a year ago, Kim had transferred to Poplar’s nearby Elmwood location where she was promoted, trained,and learned how to become an effective senior technician. Now Kim was back at Chelsea as the senior technicianand she was hoping to make changes in how team members approached their work.Kim envisioned a pharmacy where customers left feeling happy and employees loved coming to work, where acohesive team delivered a great experience that was reflected in their monthly scorecards. Within hours of herreturn, however, she observed that nothing had changed in Chelsea since her departure. In fact, if Joe’s recentencounter with the elderly customer was any indication, things had gotten worse.Kim asked herself, how and where should I begin to make changes? What structural changes do I need to make?Or, should I begin with the team’s culture, and if so, how? How do I work with the senior pharmacist and staffpharmacists to inspire a shared vision? What about the managers and staff that serviced the other parts of theChelsea Poplar Drug Store who were responsible for all the other types of products and services the store offeredits clients (e.g., over-the-counter drugs, perfume, skin and hair care products, greeting cards, food products,electronic products, etc.)? Did they need to become involved in her change initiative or should she just focus onher team? What changes do we need to make with how we service and treat our customers, Kim asked herself.How will I be received by my team, given that I’ve just returned? As the second in command after the pharmaciston duty, she knew she needed to talk to Joe and address the situation. A pang of anxiety came over her. For thefirst time since she embarked on her mission over a year ago, Kim felt nervous. It was at that moment she thoughtto herself, “What have I gotten myself into?”
BackgroundPoplar’s Drug Store had grown its footprint significantly since Kim was hired. Once a small, regional player inIllinois, Poplar’s ownership turned its attention to becoming a nationally recognized pharmacy ten years ago. Ofparticular note were the two very large-scale acquisitions over the past five years, adding more than 1,000locations and expanding its presence to several more states. Due to acquisitions, Poplar’s sales levels hadincreased dramatically, though profitability had lagged because of integrating, logistics, and rebranding initiativeswith the acquisitions. Though there were some 1,000 sq. ft. outlets that were strictly pharmacies, many of thestores were 12,000 to 15,000 sq. ft. in size and Chelsea was one of these. In addition to medically relatedofferings, the larger stores provided customers with a wide range of beauty care products; household items, suchas paper products and cleaning supplies, and food items, including milk, a limited range of meats, fresh fruits, andvegetables.As it became more of a household name, however, Poplar struggled to hold on to the local vibe and reputation forgood customer service it once held. In an effort to standardize business across the fleet of pharmacies, Poplar’smanagement introduced a series of trainings all employees were required to take as well as a monthly scorecardwith key performance metrics (KPM) by which each store’s performance would be measured. Metrics fell into twocategories: one focused on customer satisfaction and the other on financial health. Customer satisfaction scoreswere generated from feedback surveys customers completed by filling out an e-survey or by calling a numberprovided on the bottom of their receipt. Customers completing a survey were given a coupon for a 10% discounton regular priced products. (See Appendix A for an example scorecard.)
Problems at the Chelsea storeWithin the very busy, chaotic Chelsea pharmacy, days could get very stressful for Kim and her teammates. Everyshift had its own unique challenges and time constraints, but many problems were predictable, too: customersneeding prescriptions or over-the-counter, non-prescription medical products that were not in stock; staff notshowing up to work; or, so many tasks and responsibilities that staff simply did not have the bandwidth to take careof all the orders and daily tasks within standard operating hours. There were often piles of prescriptions leftunfinished from the day before, resulting in long lines of frustrated customers. Despite their dissatisfaction with theChelsea store, Poplar’s was the only conveniently located pharmacy in the community. Kim felt that morecustomers surely would have left if there were other options. She wondered if improving customer service hadbeen overlooked in the past since the store continued to meet its sales expectations. Considered a “needsimprovement” store mainly for its poor performance in customer service, Chelsea’s KPM scores had beenconsistently running in the high 60s when Kim decided to take steps to address the problems. (See exampleChelsea scorecard in Appendix B.)
Kim’s career aspirationsAlthough she was 21 years old at the time, juggling a full-time job as a pharmacy technician at Poplar whilecompleting her full, final year of college, Kim yearned to be a leader and to make a difference. She was a fixer, andshe wanted to inspire change at her pharmacy for the sake of the patients and the staff alike. Correcting long-standing performance issues and the underlying behaviors that caused them would not be easy, yet Kim felt it wasright to try. To do so, she devised a multi-phase career plan that involved leaving the Chelsea store for a shortperiod. Kim was not in a position of power and felt she needed to move into a respected role in order to makechanges. Approximately a year ago, she shared her proposed plan with both her senior pharmacist, Will, and withthe chain’s regional manager. She told them she wanted to become a lead pharmacy technician so that she couldplay a leadership role and help bring about positive changes. This role functioned as a supervisor within thepharmacy, an intermediary between the pharmacy technicians and the pharmacists and the store manager. Thestore’s current senior technician had notified them that she would be taking a long-term maternity leave in sixmonths.Will, the senior pharmacist, the store manager, and the regional manager all agreed that Kim was ready to take onmore responsibilities. However, they worried that she lacked the experience needed to lead the Chelsea team outof its current state and felt it would be better for her to learn the role by first transferring to another store that wasalready doing well. That way, she could assist in overseeing a functional team that had no history with her as afriend or co-worker. Kim liked the idea of having a safe place to learn the role and was eager to demonstrate thatshe was up for the challenge. The regional manager identified a store in Elmwood, a community 30 miles awaywhere she could take on the developmental role of assistant senior pharmacy technician. He did so with thesupport of the store managers at both pharmacies and the new store’s senior technician.
Learning how to lead changeWhile working in the Poplar Drug Store in Elmwood, Kim realized that the recipe for success is hard to bake into astandardized scorecard that thousands of stores spread out across the country are expected to follow. The one-size-fits-all approach drove business, but not necessarily culture. The threshold score to “meet expectations” was77 points out of a possible 100, with up to 50 points earned through customer ratings and the other 50 from sales.In some stores, this created conflict among Poplar’s employees who felt at times they did not have ample time tohelp each customer as quantity of interactions seemed to be valued just as much, if not more, than the quality ofthem. With the current scorecard structure, stores could somewhat mask issues with customer service if the salesvolume was there, which had been the case in Chelsea. Though sales levels accounted for only 50% of a store’sscore, it was Kim’s impression that financial performance played a significantly greater role in determining howstores were assessed, including managerial bonuses. Why else would Chelsea’s lower scores have been toleratedfor so long by upper level management at Poplar’s?The Elmwood store was a high performer before and during Kim’s time there, scoring in the low 90s and earningthe designation of “outstanding performer.” At first Kim found this ironic since Elmwood was a busier pharmacywith a less tenured staff than Chelsea. She quickly learned that there were key differences between the twopharmacy teams, accounting for their scorecard disparity. Part of what made Elmwood so successful was thateveryone on the team knew how to do every task. This alleviated pressure on individuals and created a teamenvironment where the staff knew they could rely on one another to get things done. Additional team-buildingactivities, such as weekly competitions to see who could get the best customer comment or sign up the mostcustomers for flu shots, created a fun atmosphere in Elmwood. The senior pharmacist and the senior pharmacytechnician encouraged Kim to have weekly check-ins with each of her technicians as well as take part in teammeetings, hiring interviews, and the quarterly performance review process. Kim knew she’d need to bring thesepractices to Chelsea. Her experience in Elmwood confirmed what she already knew. Scorecards and trainings donot teach passion, empathy, positivity, or trust—leaders do.The leaders in the Elmwood store, both in the pharmacy and the general merchandise section, shared Kim’s visionabout how great Poplar could be for its customers. They emulated the passion they wished to see in their teamsand led by example. They worked in harmony, offering associates from either section to help the other. Everyemployee in the store was trained to assist any customer, and coached on the importance of teamwork and greatcustomer service. This was all done in addition to the standard training all Poplar employees were required tocomplete, and the Elmwood team lived out these principles every day. Elmwood even had an unofficial,motivational slogan that Kim found rather clever: “Who puts the U in PopYOUlar?” When an employee wasrecognized by a customer for a job well done or reached a goal or milestone, their picture was displayed on abulletin board dubbed The PopYOUlar Wall of Fame. The caption on the board read, “Great job, and thank you!Poplar wouldn’t be PopYOUlar without you!” Kim loved this approach and recognized how happy it made the teamat Elmwood. She spoke with the senior pharmacist and store manager to learn more about it. They believed thatpassion must start at the top—if the team doesn’t observe genuine enthusiasm in their leader, the shared goalsbecome less important to them and they will pursue their jobs with less fervor. They encouraged Kim to be self-aware and think about how she could show her passion in her work to inspire others.Over the course of six months, Kim learned the ins-and-outs of the lead pharmacy technician’s position, becomingexceptionally proficient in the tasks required for the role. Kim’s leadership skills had grown greatly through thisexperience, training, and the mentorship she had received at Elmwood. She earned a spot on the Wall of Fame forher efforts. Kim felt she was ready to return to Chelsea as lead pharmacy technician and her regional managerand Chelsea’s senior pharmacist agreed. Her return to Chelsea was accompanied by challenging performancegoals. She was given six months to help Chelsea boost its monthly scores from “needs improvement” to “meetsexpectations.” Kim knew that was a tall order, but she was excited by the challenge. It was both the best thing forher career within Poplar (she had agreed to continue with Poplar following college graduation in three months),and her beloved Chelsea community.
Now What?Kim could see Joe walking toward the pharmacy while she was finishing up a transaction with a regular customer.She thanked Mr. Braxton for coming in, took a deep breath, and met Joe at the door.“Hey Joe, I saw what happened a few minutes ago. Can you tell me a little more about it?” she asked.“That guy hates this place. He said it was his third time coming in to pick up his prescriptions, which we told himwe’d have ready yesterday afternoon. Then he had questions about his medication that I couldn’t answer, and wasupset when I told him the pharmacist could help him after he was done with his calls. I had to get back to myinventory tasks because unless I order the medications we don’t have, we’ll get another bad score in ‘Item inStock.’ He was yelling at me. I tried to stay calm, but it’s hard to excuse yourself when someone won’t leave. I hadto get away from him.”“That sounds frustrating for both of you,” Kim said. She then asked a question to which she felt she already knewthe answer. “Who else on the team helps with the inventory?”“That’s a good one, Kim. No one else here is trained in inventory. There’s no time for me to teach someone, andthere’s no one else that wants to learn. It’s all on me and without help, it’s really hard to get things done.”Kim could hear the exasperation in Joe’s voice. She offered, “Why don’t I help you with the inventory tasks today,Joe?”“Really?” Joe’s frown eased a bit. “You know Kim, everyone around here is shocked you’d leave as great a storeas Elmwood to come back here. I don’t think we’ll ever be as good as them.”Kim smiled at Joe, although she wondered to herself if he was right. She completed the inventory work beforeleaving for the night. As she walked out, she considered the magnitude of the work ahead. The clock was tickingon her master plan. She asked herself, “Now what?”
Appendix A
Example of Monthly Scorecard at Poplar DrugPoplar KPM Rating – ExampleKPMTargetCustomer Satisfaction(Scale 1–5)Greeted Immediately5Friendly and Attentive5Professional5Received Clear Instructions5Offered Help5Item in Stock5Cleanliness5Timeliness5Would Recommend to Others5Total Satisfaction With Visit5Financial Health(Scale 1–25)Over-the-Counter Sales25Prescription Sales25Overall Monthly Score100RatingOutstanding PerformerRating Scales<77Needs Improvement77–83Meets Expectations84–90Exceeds Expectations>90Outstanding Performer
Appendix B
Recent Scorecard at the Chelsea StorePoplar KPM Rating – July 2016KPMCurrent ScoreTargetCustomer Satisfaction(Scale 1–5)Greeted Immediately25Friendly and Attentive35Professional35KPMCurrent ScoreTargetReceived Clear Instructions45Offered Help25Item in Stock15Cleanliness25Timeliness25Would Recommend to Others25Total Satisfaction With Visit35Financial Health(Scale 1–25)Over-the-Counter Sales2225Prescription Sales2025Overall Monthly Score66100RatingNeeds ImprovementRating Scales<77Needs Improvement77–83Meets Expectations84–90Exceeds Expectations>90Outstanding Performer
Chapter Five Navigating ChangeThrough Formal Structures andSystemsChapter OverviewThis chapter discusses the basics of how organizationsstructure themselves.It outlines how change leaders can diagnose the strengths andweaknesses of existing systems and structures.It examines how the formal structure and systems can foster,impair, and facilitate the acceptance of change initiatives.It lays out ways to manage systems and structures to gainapproval for change initiatives. Formal, coalition-building, andrenegade approaches are discussed.Finally, it reviews the ways to develop more adaptive systemsand structures to increase the likelihood of continuousimprovement.Any discussion of organizational change needs to pay carefulattention to the role of formal systems and structures. Theyinfluence what gets done, how it gets done, the outcomes that areachieved, and the experiences of the people who come intocontact with the organization. While leaders define theirorganizational systems and structures, the systems and structures—paradoxically—also shape the behavior of organizationalleaders and members. Formal systems and structures playimportant coordination, communication, and control roles, andthey influence how decisions are made about change and who isauthorized to make changes. Sometimes, systems and structuresneed to change.An organization’s formal structure is defined by how tasks areformally divided, grouped, and coordinated.1 Formal structuresare designed to support the strategic direction of the firm byenhancing order, efficiency, effectiveness, and accountability.They serve as guides and controls on decision-making authority,
coordinate and integrate operations, provide direction to internalgovernance, and attempt to promote desired behaviors andorganizational outcomes.2 The organizational chart is the commondocument of organizational design.Formal systems include planned routines and processes such asstrategic planning, accounting and control systems, performancemanagement, pay and reward systems, and the informationsystem. Collectively, these set out how things are supposed to bedone, the rules and procedures to be followed, how information iscollected and disseminated, how individuals are to becompensated, and all the other formalized systems and processesthat are used for coordination, integration, and control purposes.They provide the formal infrastructure that operationalizes theorganizational structure.Organizations vary in their need for complexity in their structuresand systems, but all require some degree of formalization to besustainable. These are modified over time as conditions changeand they need to bring themselves into alignment with externalconditions and the organization’s strategy. The corner grocerneeds simple systems for accounting, staffing, and managingsuppliers, pricing, and inventory. Walmart, on the other hand,requires highly sophisticated systems and structures to efficientlyand profitably handle $500 billion in net sales, processed by 2.3million associates in 11,700 stores that operate in 28 countries.3Walmart’s sales channels include e-commerce websites in 11countries, contributing $11.5 billion in online sales in 2017, anincrease of 44% over 2016.4One reason that Walmart dominates the consumer retail market isits logistics systems that coordinate all aspects of inventorymanagement, from ordering through to shipping, warehousing,shelving, and final disposition. Its knowledge-managementsystem, Retail Link, provides Walmart and its suppliers with datathat allow them to identify emerging opportunities for theirproducts. Their systems are continuously improved in order tobetter drive business results, and they are demonstrating theirability to effectively extend their technical reach to the world ofonline retailing. It is systems like this that allow Walmart to satisfy
multiple stakeholders and maintain its competitive position in theindustry.5This chapter describes the purposes that formal systems andstructures play in advancing change. It also provides guidance inidentifying the gap between the existing structures and systems,and what is needed to bring about alignment after the change.Figure 5.1 outlines where this chapter fits in the change-management process. This chapter is the first of four that detailshow change leaders can advance a sophisticated gap analysisand deploy it in pursuit of change. This chapter deals with formalsystems and structures, and the chapters that follow will cover theinformal aspects of organizations, change stakeholders andrecipients, and change leaders themselves.Change leaders need to develop a deep understanding of howexisting structures and systems are currently influencingoutcomes and how they are likely to facilitate or impede theproposed changes. Once that understanding is developed,change leaders need to put that system and structural awarenessto use to promote and enact change. To advance this agenda, thechapter is divided into four sections:1. Making sense of organizational structures and systems2. Diagnosing the strengths and weaknesses of existingsystems and structures3. Understanding how structures and systems influence theapproval process of a change initiative and how they thenfacilitate or hinder the acceptance of change4. Designing adaptive structures and systems to enhance futurechange initiativesFigure 5.1 The Change-Management Process
Making Sense of Formal Structuresand SystemsThe structural frame,6 to use the language of Bolman and Deal,outlines an internal blueprint for how managers assign tasks,roles, and authority to produce products or services for theexternal marketplace. Wrapped around this structure are all theformal systems and processes that are designed to bring thestructure to life and make it possible for the organization to deliveron its strategy and value proposition.To make sense of structures, it is useful for change leaders tounderstand and be able to work with core concepts in this area.These are some of the more common elements:71. Differentiation: The degree to which tasks are subdivided intoseparate jobs or tasks. This concept deals with who does whatand asks about the degree to which jobs are specialized anddistinctive from one another on both the horizontal and verticalorganizational axes. The differentiation of tasks is an early step inthe life of an entrepreneurial adventure as it grows from one totwo and then three people, with further differentiation of tasks asthe number of employees increases. As organizations grow andadd more people, tasks are divided and subdivided. Largeorganizations, as a consequence, are often characterized byhighly specialized jobs, leading to silos of similar and separatetasks and job categories.2. Integration: The coordination of the various tasks or jobs into adepartment or group. This is the extent to which activities arecombined into processes and systems, pulling together all thedisparate pieces of tasks and jobs into a coherent whole. Smallorganizations are typically structured in a simple andstraightforward manner, organized by functions such asproduction, accounting/finance, sales and marketing, and humanresources. As they grow and become more complex, executiveslook for more efficient and effective ways to group tasks and
activities. Departments or divisions may be organizedgeographically or by product category, customer segment, orsome other hybrid approach such as networks that seem to offerthe best way to organize activities at that point in time. Sometimesthey may even be spun off as separate, stand-alone entities. Inlarge organizations, such as Boeing, there are integrative roleswith people and teams who specialize in coordinating andcommunicating in order to bring together the disparate parts of theenterprise.3. Chain of command: The reporting architecture in a hierarchicalorganization. This concept defines how individuals and/or unitswithin an organization report to one another up and down theorganizational ladder. It reflects the formal power structure andwhere decision responsibilities lie within the hierarchy.4. Span of control: The number of individuals who report to amanager. This notion questions the optimal ratio of workers tomanagers in an organization. Since there is no one correct way toanswer this question, part of the art of organizational design is tofigure this out, given the culture, strategy, and what needs to bedone. An organization that gives managers too little span ofcontrol runs the risk of creating a costly and top-heavyadministrative structure and encourages its managers tomicromanage too few employees. On the other hand, managerswho have too many employees reporting to them run the risk ofinadequate supervision, feedback, and employee development.5. Centralization vs. decentralization: How and where decisionmaking is distributed in an organizational structure. The morecentralized the approach, the more the decision making gravitatesto the top of the organization. Conversely, the more decentralizedit is, the more the decision making is delegated to lower levels ofemployees. In general, organizations flatten their hierarchieswhen they adopt a more decentralized approach and vice versa.6. Formal vs. informal: The degree to which organizational chartsexist, are codified, and are followed. This is the extent to whichstructures and processes of the organization are set down inwriting and expected to be followed.8
To practice understanding change on existing structures andsystems see Toolkit Exercise 5.2.
Impact of Uncertainty andComplexity on Formal Structuresand SystemsAnother way of thinking about structural alignment is to begin byreflecting on the environment they operate in. Beginning with thework of Thompson in the 1960s,9 researchers have explored theimpact of uncertainty and complexity on why organizationsstructure their systems and processes as they do and the impactthese configurations have on their capacity to successfully adaptto the environment over time.10 When examining the structuraldimensions, organizations have often been classified into twotypes: (1) those that are more formal, more differentiated, morecentralized, and more standardized; and (2) those that are lessformal, less differentiated, more decentralized, and lessstandardized. The terms that are applied to this organizationaltypology are mechanistic and organic. Table 5.1 outlines thecharacteristics of mechanistic and organic organizational forms asopposite ends of a continuum.11Table 5.1 Mechanistic and OrganicOrganizational FormsTable 5.1 Mechanistic and Organic Organizational FormsMore Mechanistic → More OrganicTasks are broken downinto separate parts andrigidly defined andassignedFlexible tasks that are adjustedand redefined throughteamwork and participation
More Mechanistic → More OrganicHigh degree offormalization, stricthierarchy of authority andcontrol, many rulesRelatively little formalization,less reliance on a hierarchy ofauthority and control, fewrules, greater participation anddecentralizationNarrow span of controlwith reliance onhierarchies of people inspecialized rolesWide span of controlKnowledge and control oftasks are centralized at thetop of the organization,limited decision making atlower levelsKnowledge and control oftasks are decentralized andlocated throughout theorganization; highlydecentralized decision makingCommunication is verticalCommunication is horizontaland free flowing, with manyintegrating rolesSimple, straightforwardplanning processesSophisticated environmentalscanning, planning, andforecasting, including the useof scenarios and contingencythinkingSource: Adapted from Daft, R. I. (2007). Organization theory and design(9th ed., p. 152). Mason, OH: South-Western.Mechanistic organizations rely on formal hierarchies withcentralized decision making and a clear division of labor. Rulesand procedures are clearly defined and employees are expectedto follow them. Work is specialized and routine. Mechanisticorganizations tend to be concentrated in industries where the riskof getting it wrong is high. For example, nuclear power suppliers
or pharmacy industries will be extremely mechanistic in order tomanage the high risk and detailed logistics of their business.Organic organizations are more flexible. They have fewer rulesand procedures, and there is less reliance on the hierarchy ofauthority for centralized decision making. The structure is flexibleand not as well defined. Jobs are less specialized.Communication is more informal, and lateral communications aremore accepted. Many start-up companies and companies increative fields will be more organic, allowing increasedcommunication and flexibility in day-to-day tasks. While it mayappear that one structural form is more appealing than the other,both can be effective depending upon their fit with theenvironment. When efficiency is critical to success and ambiguityand uncertainty are low to moderate, a more mechanistic structurewill fit best. However, when an organization’s ability to respond toits environment with flexibility and adaptiveness is critical to itssuccess, a more organic structure will make more sense.12
Formal Structures and SystemsFrom an Information PerspectiveA third way of thinking about the impact of systems and structureson how and why firms operate as they do is to look at how theyformally manage information. One of the primary purposes offormal structures and systems is to place the right information inthe hands of appropriate individuals in a timely fashion so thatthey can do what is needed. Information technology has beeninstrumental in allowing organizations to develop structures andsystems that are more robust, dynamic, and flexible. Conversely,Atul Gawada reports that doctors hate their computers, reflectingthe paradox some feel between the need for consistency andreliability and the need for individual autonomy and professionaljudgement in matters of analyses and how best to move forward13(New Yorker article).Supply chains, distributed manufacturing, flattened hierarchieswith empowered workgroups, and networked organizations allowe their growth to improvements in this area. It has letorganizations such as Dell to move from mass production modelsto mass customization, with little productivity loss.14 However,those who have successfully made the transition have done so bygiving very careful attention to the end state and the optimal routefor getting there.15 By extension, technology has also allowed usto think differently about structures and systems when planningand managing organizational change. For example,telecommunication advances mean virtual teams distributedaround the globe can be created, meet “face to face,” access andshare information in real time, and move projects forward in waysthat were not possible 10 years ago.Jay Galbraith defines this as the information-processing view oforganizations.16 If the organization is to perform effectively, thereneeds to be a fit between the organization’s information-processing requirements and its capacity to process informationthrough its structural design choices. The better the fit between
these, the more effective the organization will be. As uncertaintyincreases, the amount of information that must be processedbetween decision makers during the transformation processincreases. The organization must either increase its capacity tohandle that information or restructure itself to reduce the need forinformation handling. Figure 5.2 outlines Galbraith’s work.As uncertainty increases, the traditional vertical informationstrategies for uncertainty reduction will prove increasingly lesseffective, and the organization will require methods that eitherreduce the need for information processing or increase thecapacity of the organization to process information.17Organizations can reduce their information-processing challengesby adding slack resources to act as buffers (e.g., extra people andinventory) and/or by creating self-contained tasks (e.g., divisionsorganized around product categories, geography, or customers).For example, extra inventory means that increased variation indemand for a product will be handled by drawing down orincreasing inventory levels. Similarly, separating an organizationinto divisions operating as profit centers means that the divisionsmay not need to coordinate their activities as much. This reducesthe information-processing requirements.Figure 5.2 An Information-Processing View of OrganizationalStructure
Source: Adapted from Galbraith, J. R. (1977). Organizationdesign. Reading, MA: Addison-Wesley; and Daft, R. L.(2003). Organization theory and design (8th ed.). Cincinnati,OH: South-Western.Initially, organizations may attempt to increase their information-processing capacity by using the hierarchy (i.e., verticalcommunication). That is, if you are uncertain what to do, ask yourboss. If the situation becomes repetitive, create a decision rule toguide the decision. If the subordinate knows more about thesituation than the boss, they can agree on a set of criteria thatallows the subordinate to act independently and handle theuncertainty. These represent what Galbraith calls verticalinformation strategies. A further vertical information strategy iswhen organizations increase their capacity to process informationby investing in vertical information systems (e.g., computer-generated performance reports, decision support systems).Organizations also can improve their information-processingability by increasing their horizontal communication capacity (e.g.,
e-mail systems, intranets, electronic bulletin boards, texting, andvarious forms of social media). They can increase the capacity toprocess information horizontally by creating lateral relationshipsthat vary in complexity from something as simple as direct,informal contact, to more formal networks and complex, formalstructures such as a matrix that are intended to facilitate thehierarchical and horizontal flow of information.The role of the information systems is to distribute neededinformation and get it to the individuals who most need it in atimely manner for decision making. Interdepartmental andinterdivisional boundaries and jurisdictional disputes can impedethe flow of information. The investigation of the 9/11 tragedypointed to examples of this.18 Information was present in variousdepartments and agencies at the federal and state levels thatwould have assisted in alerting officials to the danger, butcommunication impediments kept it from being shared andintegrated in a timely fashion. Removing impediments is easiersaid than done in large, complex organizations. Issues such asprivacy, data and system security, decision rights (who issupposed to do what with the information), and protection ofintellectual property must be sorted out. Questions related towhere information resides, in what forms, and who should haveaccess to it need to be tackled before it can be pulled together.Galbraith identified seven types of lateral relations that will helpovercome boundaries that impair information flow. These arelisted below:1. direct contact between affected individuals (e.g., a productdesigner and a manufacturing engineer)2. use of individuals in liaison roles to bridge groups3. multidepartment task forces4. formal teams5. integrating roles such as a product manager with cross-departmental authority6. managerial linking roles (similar to the integrating roles butwith more formal decision authority)7. structures with dual-authority relationships, such as are foundin a matrix organization
If the organization is to perform effectively, this model points to theimportance of congruence between the firm’s strategy, itsinformation-processing requirements (e.g., market andcompetitive information, operational information), and theinformation-processing capacity that the firm’s design choicespromote.Change leaders need to be aware of the impact of vertical andhorizontal information strategies on information flows andorganizational performance when assessing what needs tochange. Further, sensitivity to these issues needs to extend to theactual management of the change process. This is because evenwell-managed change will increase uncertainty in the short term,and major changes will significantly increase it for longer periodsof time. This will give rise to information-processing needs thatchange leaders will need to develop and manage.Research reported by McKinsey and Company point to the valueof making greater use of social media technologies and payingmore attention to networks to advance change initiatives.19 Whenchange leaders don’t pay sufficient attention to the information-processing needs related to change, the lack of fit may impair theeffectiveness of the change initiative. Multiple actions in this areaare often needed to support a change initiative — extra resourcesto increase the capacity to process information, a focus onunderstanding the goals and purposes, and a significant increasein lateral relations.
Aligning Systems and Structures With theEnvironmentThe structural variables and models outlined above providechange leaders with an introduction to the multiple perspectivesthey can use when assessing structures and the formal systemsthat are developed to bring them to life. This can prove helpfulwhen evaluating the internal consistency of structures andsystems and their alignment with an organization’s strategy,vision, culture, and environment. When cost strategies in atraditional manufacturing context are critical, a more mechanisticapproach is often appropriate. When innovation is key, organicapproaches provide a better fit with an organization’s strategy.20In their quest to improve their performance, there is a tendency formanagers to increasingly seek out efficiency improvements. At thesame time there is a tendency to avoid potentially valuableinnovations that may be more disruptive in the short term.21Keeping these in appropriate balance is challenging for changeagents as the organization matures.For change leaders, the importance of this material lies in the factthat organizations need to align their formal structures andsystems with their strategy and their environments. In 2008, ITT,an engineering firm serving the energy, transportation, andindustrial markets, took a hard look at the alignment of its formalstructures. This led ITT to drop its organization-wide performancerating system when management realized it was having anadverse impact on employees in different parts of the company’sglobal operations and was not accomplishing its purpose. Forexample, a “3” or average on its 5-point rating scale ofperformance was viewed negatively by its Chinese employees,who saw it as a loss of face. This resulted in increaseddissatisfaction and turnover. ITT realigned its formal performancerating system globally to reflect cultural differences and removedthis global rating scale. In China, turnover was halved followingthe change.22 ITT is not alone in abandoning its existing approachto performance assessment. Microsoft, Dell, IBM, and many other
firms have done the same, having concluded that their existingapproaches were harmful to advancing the outcomes they hopedto achieve.23In Nadler and Tushman’s terminology, there needs to becongruence between the outside world, the strategy, and how theinside world is formally organized. By understanding the nature ofthe external environment and the organization’s strategy, history,and resources, a change leader gains insight into the types ofstructures and systems that have the most to offer. Byunderstanding the formal organizational arrangements, the leadergains insights on where and how decisions are made and howthese can be leveraged to advance change.Change leaders also need to be aware that even in a fairlymechanistic organization, different departments and divisions mayface very different information-processing needs and will thereforeneed to be structured and managed differently. For example, afirm’s R&D department’s environment may be more dynamic anduncertain than that faced by the production department. As aresult, R&D may need a more organic structure, whereas theproduction department will benefit from a more mechanistic onethat leverages well-developed, standardized processes. Likewise,those involved with the launch of a new product or expansion intoa new market will have to deal with higher levels of uncertaintyand complexity than those responsible for mature markets, whereconcerns for structures and systems that enhance efficiency arelikely the norm.
Structural Changes to Handle IncreasedUncertaintyFrom a structural perspective, the quest for enhancedorganizational efficiency and effectiveness starts by looking atwhat needs to change in the organization and deciding how bestto analyze and allocate the work. These differentiationapproaches include aspects such as division of labor anddepartmentalization. If this has already been done, the challengeusually shifts to a discussion of how to integrate the componentsso that they can accomplish the intended results. The vertical andhorizontal information linkage strategies identified by Galbraith inFigure 5.2 are examples of such integrating approaches. Sortingout the decision rights (who is authorized to make what sorts ofdecisions) and insuring the flow of appropriate information tothose responsible for such decisions is critical to successfulalignment.24Boeing’s redesigned approach to the development andmanufacturing of its aircraft provides an excellent example of theapplication of structural changes in a very complex business. Theaircraft manufacturer realized that it had to change its approach tocompete with Airbus, and it did so in its approach to thedevelopment of the 787.Boeing Restructures ItselfBefore the 787, Boeing did all the engineering design work itself. Themain reason to change, says Mike Bair, head of the 787development team, was that the company realized it had to trawl theworld and find the best suppliers in order to compete with its mainrival in the market for commercial aircraft, the increasingly successfulAirbus.Airbus, a joint European venture involving French, German, British,and Spanish partners, started from scratch. Almost by accident itstumbled on an organizational architecture that, along with generoussubsidies, helped it overtake the giant of the business in less thantwo decades.
Boeing’s reorganized commercial plane development operations nowlook more like the approach used by Airbus. It scoured the globe fornew partners and found some in Europe, some in Japan, and somenot far from its home base in the United States. Whereas with the777 aircraft the company worked with 500–700 suppliers, for the 787it selected just under 100 “partners.”The difference is not just in the numbers, but in the relationship.Their supplier partners now share greater responsibility for thesuccess of the project. For over six months in 2005, teams of peoplefrom the various 787 partners met at Boeing’s base in Everett, northof Seattle, to work together on the configuration of the plane—something that until then Boeing had always done by itself. Partnersthen went back to their own bases, responsible for all aspects of theirpiece of the puzzle. The partners built their own production facilitiesfor their bits of the aircraft. As Bair said, “It puts a high premium onthe choice of partners in the first place.”It also put a high premium on the management of that network ofpartners. Boeing held a partners’ “council meeting” every six weeksand set up a network to facilitate global collaboration that made itpossible for designers from all over the world to work on the sameup-to-the-minute database.To further advance communication, collaboration and integration, thecompany put great faith in videoconferencing and set up high-bandwidth facilities that were in constant use. People came into theiroffices in the middle of the night to have virtual meetings withcolleagues in different time zones. Technically, the 787 is anAmerican plane; but in reality it is a global one.25The 787 was designed to be a breakthrough product, with featuresthat would dramatically improve its performance on all fronts—fromfuel consumption to customer comfort. However, breakthroughs withsophisticated new technologies and materials do not come easy. Theproject was 3½ years late in making it into the hands of its initialcustomers and development cost ballooned 120% over the originalestimate. When the first few planes entered service, performance inareas such as weight and fuel efficiency was found to be wanting.Battery-related fires required the grounding of the plane until theywere successfully sorted, creating additional challenges andreputational risk.However, Boeing was finally on its way to success with the 787 bythe end of 2013. In that year, it had carried over 10 millionpassengers, flown 100 million miles in service, and Boeing had back
orders for more than 800 planes.26 By 2018, total plane orders hadreached 1,398, of which 742 had been delivered. The growing painsassociated with its supply partners is a distant memory and analystsreport that the 787 performance is consistently exceedingperformance guarantees which delights its owners.27Then came the crashes of two 737 MAX’s (Oct., 2018 and March,2019).This example provides a graphic illustration of how Boeing usedstructural approaches to respond to increasing complexity andambiguity in its environment. In the aircraft maker’s case, thisincluded a revolutionary design. It also included innovations inwhere and how aircraft design and manufacturing would beundertaken, the role of suppliers, the treatment of intellectualproperty, and how the process would be managed. Boeingrecognized that its past approach was making it uncompetitive. Itworked to break down silos and bring its suppliers into the designprocess as part of a dynamic network. This necessitated a culturalshift toward treating its selected suppliers as trusted partners inthe design and manufacturing processes, and it has required theuse of information-processing strategies to link it all together.Boeing’s structural and systemic transformations around the 787were extremely challenging. It logged record advanced orders, butits innovations on the product design and manufacturing frontsresulted in huge cost overruns and more than a 3½-year delay inthe delivery of the first planes (outcomes that have been commonto Airbus, Bombardier, and other plane manufacturers when theyundertook major product innovations). There were seriousdifficulties getting its global supply chain outsourcing model towork as expected, and a 2-month strike at Boeing exacerbatedmatters.28 It entered commercial service in August 2011, but firesrelated to battery electrical issues grounded the plane for a periodin 2013. However, the order backlog has remained strong,pointing to carrier confidence in the 787 and related products thatemerge from this platform.Boeing has demonstrated a willingness to tackle fundamentalquestions of how to deal with the structural challenges ofdifferentiation and integration to enhance its performance. Wetzel
and Buch29 argue that organizations tend to be more comfortablewith increasing both differentiation and integrating mechanismsthan with other approaches and tend to overuse these strategies.For example, a need for a specialized response (e.g., theformation of a technical customer support team) leads to a morestructurally differentiated organization. This, in turn, leads to aneed to integrate more, so that the newly formed technicalcustomer support team is not orphaned in the organization. Analternate strategy would be to decrease the need to differentiate,easing information-processing needs in Galbraith’s terms. Thiscould be done by outsourcing the technical customer supportfunction, by undertaking design changes that reduce the need forsuch customers support, or other such strategies.Wetzel and Buch believe that it is useful to consider the benefitsof a reduction in the amount of structural differentiation in theorganization, through such mechanisms as flattened structures,multi-skilled workers, automated processes, and self-managedteams. By reducing their reliance on differentiating structures,organizations can reduce their need for integrating mechanisms.From an information-processing perspective, this falls into thecategory of strategies to ease information-processing linkage (seeFigure 5.2).One of the ways Boeing attempted to reduce the need for internaldifferentiation and integrating mechanisms at the enterprise levelwas through significantly increasing the level of outsourcing of thedesign and manufacturing of major components (e.g., wings,engines, and fuselage) to trusted supply-chain partners locatedaround the globe, while at the same time reducing the totalnumber of individual suppliers it managed. This was undertaken toincrease its flexibility and adaptiveness, reduce cost, and improvequality; however, it was not well managed in the beginning andcreated major headaches and delays for Boeing.30 It took themtime to learn how to adapt to this new structure at the enterpriselevel and to handle the increased levels of uncertainty created bya project like the 787 Dreamliner.Just as Boeing adapted to overcome significant challenges to turnthe Dreamliner into a high-performance aircraft, Boeing
management must show that it can pull the company throughanother even more serious crisis that threatens its very survival.On March 10, 2019, Ethiopian Airlines Flight 302, a Boeing 737MAX airplane, crashed into the sea, killing all of its passengersand crew. This crash immediately set off alarm bells: on October29, 2018, Lion Air Flight 610, another Boeing 737 MAX airplane,had crashed off the coastline of Indonesia, killing all on board.Data suggested significant similarities between the two crashes asthe 737 MAXes flew erratically in the first minutes of the flight; thepilots asked to return to their respective airports; and the planescrashed soon thereafter. While the investigations are ongoing,there were enough parallels for the U.S. Federal AviationAuthority (FAA) to ground the plane quickly. Soon all Boeing 737MAX jets were grounded worldwide.By early April Boeing had swiftly taken a series of steps tomanage the situation and to protect itself, as its stock took a 12%shellacking on Wall Street. Boeing CEO Dennis Muilenburgaddressed the world through an online video on the company’swebsite, noting that the preliminary report from Ethiopiasuggested that there was a software glitch: an “erroneousactivation of the Maneuvering Characteristics AugmentationSystem (MCAS), activated in response to erroneous angle ofattack information.” Muilenburg declared that its top engineerswere working with its customers and the FAA to update thesoftware so that the 737 MAX could safely return to the skies. Thesoftware update, said Muilenburg, would be accompanied byupdated training and educational materials for pilots around theworld (there had been stories that pilots in low-cost airlines, suchas Lion Air, had not received adequate training on the 737 MAXand that the instructions for how to deal with the MCAS problemshad been written only in English).How Boeing’s leaders deal with this crisis will influence whether ornot the company survives these devastating two crashes. Whileleaders must now fix the software problem as quickly as possible,the larger issue is to figure out how their structures, systems, andprocesses allowed this problem to go undetected in thedevelopmental and testing stages. What role did their structural
arrangements have in allowing the design flaw to go undetected?What were the people issues that might have contributed to thesoftware glitch? These are but two of the hundreds of questionsthat Boeing’s leaders must ask and answer. With somereasonable idea of how the software problems were allowed toenter the 737 MAXes, then the hard work of making organizationalchanges will need to take place at Boeing.
Making Formal Structural ChoicesAn organization’s design impacts the behavior of its members. Inuniversities, faculty in the schools of management, government,and education may all teach courses on leadership, but thesefaculties may never speak with one another or teach oneanother’s students. And yet these differentiated faculties mayteach the same concepts and use the same textbooks. Similarly,in many large universities, each school or faculty often has its ownspecialized library and librarians, a costly arrangement. In fact,these diverse libraries might house the same journals and booksin different physical locations across a campus or subscribe to thesame electronic data sets that provide access to online journals.Faced with significant budget cuts, the Harvard College Librarytook steps in 2009 to streamline services and foster collaborationwith the sharing of research librarians across library facilities.Rather than only looking at cuts to fixed costs and personnel, thelibrary administration chose to “encourage structural efficiency asa means of wringing savings from their ledgers.”31Every formal structure and system design has strengths andweaknesses associated with it. Bolman and Deal32 argue that allorganizational designs present structural dilemmas, or insolvablepredicaments, that managers must deal with and reconcile. Thesefundamental design issues confront managers with enduringstructural dilemmas: “tough trade-offs with no easy answers.”33Bolman and Deal define, for example, the differentiation versusintegration conundrum as follows:The tension between allocating work and coordinatingsundry efforts creates a classic dilemma…. The morecomplex a role structure (lots of people doing manydifferent things), the harder it is to sustain a focused,tightly coupled enterprise…. As complexity grows,organizations need more sophisticated—and more costly—coordination strategies. Rules, policies, andcommands have to be augmented.34
Bolman and Deal identify other structural dilemmas. Another, forexample, is the gaps versus overlaps dilemma. If tasks are notclearly assigned, then they can easily fall through theorganizational cracks. If, on the other hand, managers overlapassignments, then they may create “conflict, wasted effort, andunintended redundancies.”35 The point is for change agents tounderstand these structural dilemmas, know the costs ofmismanagement of these structural issues, and analyze if andhow a gap has become an organizational liability that needs tochange. Once a preferred structural option has been selected,weaknesses related to it can be alleviated and internal alignmentimproved through the design or modification of the formal policies,processes, structures, and systems.Change leaders need to understand their organizations’ strategy,how the formal structures, systems and processes are alignedwith it, and the impact of those arrangements on outcomes.Wischnevsky and Damanpour found that sustained poorperformance is likely to produce strategic change, and this, inturn, is likely to drive structural change.36 This is true at theorganizational level, and it is equally true down to the team level.Change leaders may be faced with this question: “How can theformal structures and systems be modified to enhance thecapacity of the organization to deliver on its strategy?” If a changein strategy is needed, how do the formal structures and systemsneed to be realigned to contribute to the strategic changeagenda? Since formal relationships often include external partiesand organizations (e.g., suppliers, alliance partners), it isimportant to include them in one’s analyses. The Boeing casehighlighted this.At the team or departmental level, change leaders have the optionof creating several types of reporting structures, depending uponthe need under different conditions. For example, when newperspectives and ideas are sought, brainstorming sessions can beused to promote a free flow of ideas among all members of thegroup, with no hierarchical impediments. All ideas are equallywelcomed. While brainstorming structures are good at generatingideas and engaging broadscale participation, moving to the
implementation stage typically requires the concentration ofauthority and decision making into fewer hands. This could takethe form of a team or task force charged with making suchdecisions, or it could be delegated to a specific individual—moreoften than not, the manager responsible for the activity.Mechanistic organizations may need to create structures orprocesses that allow them to either temporarily or permanentlysuspend hierarchical practices to advance innovation. The goal isto create spaces in which frank and open dialogue is encouraged,and learning and organizational improvements can be advanced.Continuous improvement teams within call centers, event-debriefing processes used by Special Forces units in the military,and innovation task forces within governments are examples ofattempts to encourage reflection and innovation in mechanisticstructures. Decisions that lie beyond the authority andresponsibilities of those who generate the analyses can then bereviewed by the appropriate senior individuals. Approvedinitiatives can then be further developed and/or implemented on abroader scale where warranted. This is essentially what occurs atLifeSpring Hospitals.An Efficient Hierarchy with Well-Developed, Standardized Systemsand ProcessesMaternity-related deaths total 2 million babies a year in India, butLifeSpring is bringing hope. It is doing so through high quality, nofrills pre- and postnatal counselling and delivery at 30–50% of themarket price. This is a 50–50 joint venture between the AcumenFund, a U.S.-based not-for-profit venture philanthropy fund, and HLLLifecare, a government of India–owned corporation that is the largestmanufacturer of condoms in the world. Acumen’s investment in thisjoint venture is $2 million.LifeSpring is designed for scalability. By 2018 eleven small maternityhospitals (20–25 beds) and eight extension centers were operating,and LifeSpring has plans to raise funds for many more. The AcumenFund reports that the hospitals are ISO certified. LifeSpring reportsthey delivered 20,000 babies in the 2015–2017 period and havetreated several hundred thousand women with maternity-relatedissues since inception37.
The experience of the poor with public hospitals in India has notinspired confidence. Care can be of questionable quality, difficult toaccess, and sometimes requires bribes. In contrast, LifeSpringhospitals are bright and inviting, and mothers-to-be (plus those whoaccompany them) have their own private space. Doctors and nursesare in ready attendance, and services include staffed operatingrooms in the event that a cesarean section is required. Over 90standardized procedures have been developed to ensure consistenthigh-quality care for all and replicability as new hospitals are added.Careful staff selection and training reinforces these quality practicesand high standards of care. There is an extensive ongoingcommitment to the professional development of medical staffinternally and with external bodies. Staff is involved in continuousimprovement initiatives to ensure that standards of care and relatedstandardized processes continue to improve. There are also strongcommitments to transparency and the building of strong customerrelationships through community outreach.38 In other words, theirstructure, systems, and processes are all focused on delivering highquality, low cost maternal health through dedicated smaller maternityhospitals that all operate in a similar manner.How does LifeSpring deliver such consistent, high-quality serviceto the poor, at 30–50% of the normal cost? The keys lie in clearlyfocused values, vision, value proposition and strategy, andstructures, systems, and processes that are well aligned with theservice delivery model. Its scalable, no frills model is supported byhigh-quality equipment and facilities, the smaller size of itsfocused hospitals, and a committed, well-trained staff that pursuescontinuous improvement on an ongoing and systematic basis.Scalability comes from replicating its hospital model (as resourcesbecome available) though the application of its structures,systems, and processes.Change leaders must understand these important points aboutformal structures:There is no one best way to organize.Structural decisions should follow strategic decisions becausethe structure will then be there to support the strategy.All structures present leaders with dilemmas that they mustmanage. Today’s trade-off may seem too costly in the future
and will suggest a reorganization to fit tomorrow’s externalenvironment.Once structural choices are made, formal systems, andprocesses need to be aligned so that weaknesses areaddressed and the internal alignment with the strategy issupported.Organizational structures shape and impact people’sbehavior. A task force, for example, that formally bringspeople together to analyze and report on a particular issueforces its members to cross organizational boundaries and tolearn about and collaborate with people beyond their silo.
Using Structures and Systems toInfluence the Approval andImplementation of Change
Using Formal Structures and Systems toAdvance ChangeFormal structures and systems must be leveraged, and at timeschallenged, to advance change. For example, industry-widestandard practices have long inhibited change in the airlineindustry. At United, American, Air Canada, British Airways, andother traditionally organized air carriers, air routes were organizedin what is called a “hub-and-spoke” design. That is, passengerswere collected at many points and delivered to a central hub,where they changed planes and were sent out on a differentspoke to their final destination. Different types of planes werepurchased to service different routes, cabins were dividedbetween business and economy class, and services were verysimilar across airlines. For many years, this strategy deliveredcost savings to the airlines and served them well. Unionagreements escalated labor costs over this period as employeessought to share in the success.However, discount airlines, such as Southwest Air, WestJet, andRyanair, came along and opted for a different strategic approach.They adopted a single type of plane to ease maintenancechallenges, offered a single no-frills service level in the cabin, andstructured other aspects of their operations to lower labor andcapital costs per passenger mile. Most important, theyrestructured their air routes to provide point-to-point service, usedless expensive airports (where appropriate), and had moreefficient schedules that advanced load factors and processes thatreduced the time required before the plane was back in the air.The changes they made to the way they structured their activities,as compared with more traditional airlines, were anchored incultural and strategic differences, and new structures, systems,and processes designed to support the new value proposition.Because of these changes, they were able to fly passengersdirectly to their destinations at a lower price and, in the case ofSouthwest, WestJet, and Ryanair, become very profitable in theprocess. The traditional airlines’ structures and systems that weredesigned to facilitate efficient and effective service delivery
became a problem and contributed to the financial challenges thatthey are continuing to try to overcome by doing things such aslaunching their own discount services.Poor financial airline performance in the past has led to growingdemands for major improvements from banks, shareholders,pension funds, and other stakeholders. Structural and systemrealignment to lower labor costs and other cost drivers becamekey targets of change. Those who sought to resist the changes,such as the airline labor unions, attempted to leverage existingstructures and systems to advance their interests. The followingexample provides a fascinating but different look at the role thatexisting structures can play in organizational change.Competitive Efficiency at United AirlinesOne of the ways that the board at United Airlines (UAL) responded tothe competitive realities and the disastrous financial results was touse formal processes to replace a number of key executives39 andcharge senior management with responsibility for turning thingsaround in 2002. Staffing arrangements, work rules, and labor costswere among the many areas that attracted the attention of seniormanagement tasked with effecting change. Management analyzedand then used existing systems and structures (including formaljudicial components) to advance and legitimize changes to theircollective agreements and, by extension, changes to staffing levels,the organization of work, and related terms and conditions of work.In response, employee groups enlisted formal (as well as informal)systems and structures to protect their interests—actions that airlineexecutives saw as resisting needed changes. UAL’s use of existingstructures and systems to effect change was viewed by employeegroups as adversarial, generating serious resentment in what wasobviously a very difficult context. Despite the dissatisfaction ofemployees and their representatives with the imposed changes, theywere enacted because the formal structures and rules that governedthe situation allowed management to do so.Similar hard-nosed change tactics were employed at Air Canadain 2003 when it entered bankruptcy protection40 and BritishAirways in 2010 as it responded to huge financial losses.41 Theseexamples show the use of existing structures and systems to
advance change through the exercise of formal power andauthority from the top of the organization and/or through theimposition of action by outside agents such as banks, courts, orregulators.Approaches that leverage formal structures and systems toadvance change do not have to result in a war with one’semployees. Rather, their application can be undertaken in amanner that facilitates understanding, builds support (or lessensresistance), and legitimizes change among those who haveserious reservations. In 2002, Agilent, an electronic test andmeasurement business, had to downsize, laying off 8,000employees.42 However, management was seen by its employeesas having acted responsibly and humanely. Openness andhonesty characterized how the financial and strategic issues wereapproached and how the appropriate systems and structures wereapplied by the executives. Employees believed all reasonableoptions were explored and that layoffs were undertaken as a lastresort. Those exiting Agilent reported that they were treated withrespect and dignity, while those remaining were left with hope forthe future of the firm and confidence in the leadership. To gothrough this level of downsizing and still be ranked #31 onFortune’s 100 Best Companies to Work For in the following periodis no small accomplishment!Agilent continues to be an innovative leader in scientificmeasurement and a desirable employer. Various awards fromaround the globe point to its innovativeness, positive employmentpractices, and corporate citizenship, including being named 2017company of the year by Instrument Business Outlook.43 In 2015, itspun off its electronic measurement business, under the nameKeysight Technologies. By 2017, Keysight had revenues of $3.32billion, a net profit of $102 million, employed over 10,000 people,and, according to analysts, a positive financial future. In 2017Agilent employed 13,500 people, generated sales of $4.5 billion,and had a net profit of $841 million.44
Using Systems and Structures to ObtainFormal Approval of a Change ProjectChange is made easier when the change leader understandswhen and how to access and use existing systems to advance aninitiative. In larger organizations, formal approval processes formajor initiatives are often well defined. For example, inuniversities, significant academic decisions usually require theapprovals of department councils, faculty councils, and universitysenates in the form of formal motions and votes. The changeagent’s task is to engage in tactics and initiatives that will increasethe likelihood of a positive vote for the proposed change throughthese various formal bodies.Any significant change initiative will cost money. To maximize thechances of receiving resources for a change initiative, changeleaders will need to understand the budget process and how togarner support for the proposed change through departments andindividuals who approve the budget. Timing is important. Thelikelihood of approval, in the short term, is less if the organizationis in the middle of the budget cycle and available funds havealready been allocated. Efforts to build interest and support shouldbegin well in advance of when significant funds are needed,building to coincide with key decision dates.Earlier in this book, two dimensions of change were considered:the size of the change and the proactive–reactive initiationdimension. Change projects that are incremental will normallyrequire fewer resources and lower levels of organizationalapproval. As the change increases in magnitude and strategicimportance, change leaders will need to pay attention to formalapproval processes, eliciting the support of senior individuals priorto enacting the change. However, exceptions to this generalpattern are often found in areas with safety and regulatorycompliance implications. In these situations, significant changedecisions (e.g., mandated changes to work practices) may bedelegated to appropriate frontline staff due to the risk of notresponding quickly. Once the urgency abates, decisions may bereviewed by senior managers and other paths adopted. Reactive
strategic changes tend to attract everyone’s attention because ofthe risk, visibility, and criticality of such changes to the future ofthe organization.45When senior decision makers believe the change initiative hassignificant strategic and/or financial implications and risks, thechange will typically require the formal approval of theorganization’s senior executive team or its board of directors. Asavvy change leader knows the approval levels and hurdlesassociated with different types of changes—that is, at what leveldoes an issue become a board matter, a senior executivedecision, or an issue that can be dealt with at a local level? Whatwill they be looking for in the way of analysis and support?No two organizations will be the same. Organizations in whichthere are significant negative consequences of failure (e.g., anuclear power plant or a pharmaceutical manufacturer) will usuallyrequire more senior levels of approval for what may appear to bea relatively modest undertaking in a mission-critical area.Likewise, the hurdle levels are likely to be rigorous inorganizations with senior managers and/or cultures that have alow tolerance for ambiguity and risk.
Using Systems to Enhance the Prospects forApprovalChange leaders have a variety of factors they need to considerconcerning how to leverage the use of existing systems toincrease the likelihood of approval.First, change leaders need to ask themselves if formal approval isrequired or if the change decision already rests within their spanof control. If no approval is required, they may choose to makepeople aware of their intent and engage them in discussions toincrease downstream acceptance. However, why initiate activitiesthat trigger unnecessary formal approval systems and processeswhen they are not required? Figure 5.3 outlines the variousconsiderations regarding positioning the approval of a changeproposal.In all cases:a. When there is a decision maker, identify his or her attitude tothe change and attempt to work with that person.b. Demonstrate how the change project relates to the strategyand vision of the organization and the other person’s agenda.c. Use good process to legitimize the change proposal, such asdemonstrating that you’ve engaged in appropriate analyses,exercised due diligence, and consulted with appropriateindividuals.If formal approval is required, change leaders need todemonstrate that the initiative is aligned with the vision andstrategy of the organization, advances the organization’s agenda,and has benefits that exceed the costs. It will also help if you canshow how the change will advance executives’ personal agenda ifit differs from the above. If the needed changes modify the vision,strategy, or key elements that make up the organization, thechange leader will need to demonstrate how such changes willenhance organizational health and have downstream benefits thatexceed the costs and risks associated with these significant
organizational changes. Included in such a calculation should bethe costs and risks of doing nothing.Another tactic that can assist in obtaining approval through formalsystems is to introduce the ideas and rationale behind the changeinitiatives early, invite dialogue, and seek input. Even though theproposal is not fully developed at this stage, it may be beneficial tofamiliarize decision makers with key aspects being explored andthe underlying logic. This can be particularly important if there arecompeting ideas under consideration that, if acted upon, wouldreduce the attractiveness of your change initiative. Awarenessprecedes understanding which, in turn, precedes trial andacceptance, and the above approach can often help movedecision makers along this path. Once others agree with aproposal it becomes harder to change their minds and convincethem to change direction.If changes are more extreme and if there is sufficient time, leaderscan frame and introduce the change in ways that increasemanagement’s familiarity and comfort with the proposal. They cando this incrementally, using vehicles such as staged agreementson the purpose and scope of the change (e.g., defining the scopeof Stage 1, followed by defining the scope of Stage 2 once Stage1 has been completed, etc.), preliminary studies, task forcereviews, consultants’ reports, and pilot projects prior to therequest for formal approval of the larger initiative. This, in turn,reduces perceived risks, enhances a sense of the benefits, andessentially conditions the organization to embrace (or at least notresist) more fundamental changes to the aligned systems.Figure 5.3 Positioning the Change for Formal Approval
If time is of the essence due to a crisis or emerging threats, thechange leader can act with urgency and use the danger to focusattention, facilitate approval of the initiative, and generatemotivation to proceed. Formal approval processes typically haveexpedited processes available for dealing with imminent threatsand emergencies. One sees this, for example, when there aredangers to health and safety.When formal approval is required, a change leader will need toknow whose agreement is needed. However, if broaderacceptance is important before gaining formal approval, thenthose involved in approval discussions will need to be expandedaccordingly. Approval and acceptance are generally enhancedwhen people are involved in the discussion and feel that theyhave been heard. They are also enhanced when there is theperception that the analysis and discussion around the alignmentsystems (e.g., vision, strategy, goals, balance scorecards, andstrategy maps) have been discussed thoroughly.46 Acceptance issometimes increased among the uncommitted and more resistantwhen they believe that there has been a rigorous review processin place for the assessment of a change. That is, the proceduresare thorough and complete. Further, when there is active
involvement of those individuals or their representatives in theplanning and approval processes, their understanding andacceptance of the change tend to rise. Some may see this as aco-option strategy.Formal approval systems, therefore, can increase the perceptionthat a change has been assessed appropriately and is worthy ofsupport. However, those who are opposed to a proposal mayusurp the process and intentionally erect procedural and approvalbarriers to an initiative. The oppositions’ motives in doing this maybe unsullied (the desire for due diligence, due process, andcareful review), and they may be firmly convinced that the changeis not in the organization’s best interests. Or, their motives may beto obstruct out of self-interest. Change leaders will need tocarefully assess the motives of the opposition before deciding onhow best to respond.
Ways to Approach the Approval ProcessMastering the Formal Approval ProcessHowell and Higgins47 identified three different ways ofapproaching the formal approval process. The first involves thestraightforward rational approach. Proposals are typicallydeveloped and brought forward for consideration, and they arereviewed for inclusion on the agenda. Once the proposal ispresented and discussed, it is approved, rejected, or sent back forfurther study or rework. The likelihood of gaining approval isincreased when change leaders experience the following:Have a well-placed sponsorKnow their audience members and their preferencesUnderstand the power and influence dynamics and theimplications of the project for the organization and for thoseinvolved in the approval process and in positions of powerDo their homework with respect to their detailed knowledge ofthe change project, its scope and objectives, its costs andbenefits, and risk areasInformally obtain needed approval and support in advanceHave the change project presented persuasively by anappropriate individualHave a good sense of timing concerning when best to bring itforward48The systems associated with obtaining formal approval forplanned changes vary greatly. In organic or entrepreneurialorganizations, the process may be loose and idiosyncratic. Asorganizations mature, even very entrepreneurial firms tend tosystematize and formalize the approval processes in order toincrease control.The decision making associated with formal approval processestakes many forms from formal voting by an executive committeeto “go/no-go” decisions controlled by an executive. While theexact approval process will be unique to the firm, the level ofrigorousness and formality used to assess proposed changes
usually varies with the magnitude and cost of the change, thelevels of perceived risk, the preferences of those involved with thedecision, and the culture and power dynamics at work in theorganization.When the proposed change lies in an area in which much isknown, decision makers tend to focus on concrete information(e.g., benchmark data, industry patterns, and performance data).They then use this data to help make a decision.49 When thechanges reside in areas that are inherently ambiguous, attentionturns to an assessment of the quality of the analysis and thereputation of the advocate for the proposal. In essence, thedecision makers need to decide whether or not they trust thejudgment of the change leader and the skills and abilities of thechange team.50As organizations mature, they often adopt a staged approvalprocess for changes that are viewed as strategically significant,expensive, wide-reaching in their impact, and potentiallydisruptive. A staged approach establishes decision approval stepsthat do not prematurely dismiss ideas worthy of further explorationwhile controlling the ever increasing commitment of time andresources if the change were to progress to the next stage.51 Thegoal is to provide focus through vision and strategic alignment,allow proposed initiatives to be explored and assessed in arational manner, avoid unpleasant surprises, manage risk, andkeep an eye on the portfolio of change initiatives to ensure theorganization does not become overwhelmed with initiatives.As one proceeds through the approval stages, the assessmentprocess becomes increasingly rigorous and the hurdles that mustbe met before proceeding to the next stage rise. When theprocess is working well, it should stimulate innovative thinking andinitiatives, enhance the quality of assessment, reduce the cycletime from ideation to implementation, and reduce the likelihood ofdysfunctional political behavior.The formal approval process does more than ensure that thedecision making concerning change is thorough and reasoned. Ifthe process used to make the decision is viewed as legitimate by
others in the organization, this will lend legitimacy to whatchanges are pursued and enhance acceptance. Sometimes anincremental or staged approval process is used with a majorinitiative. Staged approaches begin with concept or initial planassessment, followed by a field experiment or pilot test, possibly alarger field test, and a final review prior to a large-scale adoption.With a staged approach, there are go/no-go decision points andopportunities to fine tune the change, at each stage along theway. When this approach is adopted, the outcomes achievedalong the way, the credibility of the findings and the reaction ofopinion leaders will play an important part in building support forapproval and downstream acceptance by others.In addition to addressing the traditional hierarchical approach,Howell and Higgins identified two other ways to use systemawareness to advance change: strategies based on creepingcommitment and coalition building; and strategies involvingsimply forging ahead without formal approval.Encouraging “Creeping Commitment” andCoalition BuildingAs an alternative to directly pursuing formal approval for a changeinitiative, change leaders can employ a strategy of creepingcommitment (the foot-in-the-door approach52) and coalitionbuilding. Initiatives such as customer and employee surveys,benchmark data, pilot programs, and other incremental system-based approaches can be used to acclimate organizationalmembers to the change ideas. Such initiatives can be usedsystematically to clarify the need for change, refine the initiative,address concerns, reduce resistance, show linkages to theiragendas, and increase comfort levels. As well, they can createopportunities for direct involvement that will build interest andsupport for the change within key groups. This, in turn, shouldreduce pushback and increase the prospects for support if andwhen formal approval is sought. This strategy also capturescommitment by reducing energy that may be spent on otheroptions or directions.
Coalitions can be extremely valuable for building support prior tothe formal approval process. Change leaders need to understandkey players and behave authentically with them to developinfluential coalitions that will support the changes.53 Often, intechnological changes, if key user groups want to adopt newsoftware, management will be more willing to accept theinnovation. In other situations, developing the coalition providesthe political clout to move the decision in a favorable direction.The intent of this approach is to create the momentum needed toreach a tipping point54 that significantly enhances the likelihood ofapproval. When formal approval is required, the support from keycoalition members and stakeholders should make the processmore manageable. If the change has been accepted by a coalitionof key stakeholders, it may make the approval process all butautomatic.Developing coalitions for change often makes a great deal ofsense when seeking formal approval. However, coalition buildingis not without its risks. This approach takes time and addscomplexity (more fingers are in the pie) that may impede theapproval process. It can also become quite political and divisive,with coalitions developing in opposition to the change that willneed to be managed. Change leaders should avoid gettingtrapped in tactics that seriously harm relationships, diminish theirintegrity, and/or compromise long-term objectives.Bypassing the Formal Approval Process: JustDo It!The need to seek formal approval can sometimes be bypassedentirely. Peter Grant, a banker who changed the demographiccomposition of employees at his bank over a 30-year period,never sought formal permission. He understood the systems in hisorganization and used this awareness to quietly advance achange agenda over 30 years. Through this approach, hedramatically altered the nature of his organization. He wouldappear to have followed the classic change dictum, “Don’t ask,just do it.”
Peter Grant’s “Just Do It” ApproachPeter Grant was a black manager, one of the few in the firm when hejoined. Over his career, he pursued his personal goal of bringingmore women and minorities into the firm. Each time he had theopportunity, he hired a qualified minority. And he encouraged othersto do the same. Over his career, he was instrumental in having 3,500talented minority and female members join the organization.55 Whenthe scope of the change is manageable, defensible, and arguablywithin their scope of authority, change leaders should seriouslyconsider proceeding on their own without seeking formal approval.Key people, such as supervisors, should be kept sufficiently in theloop so that they are not unpleasantly surprised or left with the beliefthat someone acted in an underhanded fashion.When the “just do it” strategy is effectively applied, the dynamicscan be powerful. Those who might otherwise be predisposed tooppose the change may not notice it or be lulled intoacquiescence as the change proceeds in a lower-key fashionduring the initial phases (e.g., data gathering, preliminaryexperimentation). This approach allows for change refinement, thegeneration of supportive data, and the building of momentum forchange that is difficult to stop.Howell and Higgins refer to this as the renegade process.56 Itgrows out of the premise that it is often easier to gain forgivenessthan permission to do something in organizations. This tactic canprove helpful in the early stages of product innovation, but Frostand Egri57 argue that securing permission is an importantcontributor to success when social innovations are involved.When using a renegade approach, one must be careful not tocreate enemies unnecessarily or engage in tactics that createlong-term damage to your reputation and credibility or thereputation of the firm.The renegade method does not mean the chaotic introduction ofdisturbances merely to shake things up. Most organizations arealready experiencing enough turbulence. Nor does it mean actingin organizationally naïve ways. Rather, this approach begins witha careful assessment of organizational and environmental factors,including the needs and preferences of key individuals who have
the potential to harm or assist the change and the change leader.Finally, it asks change leaders to recognize the power andinfluence that they have to get things done through launching theinitiative on their own and, when the situation is appropriate, to“just do it!” This attitude and propensity toward making thesedecisions also sets the precedence for similar decisions in thefuture.
Aligning Strategically, StartingSmall, and “Morphing” TacticsGaining approval for change becomes less daunting when you areable to show how the change aligns with the organization’smission, vision, and strategy. When a change plan is beingdeveloped, questions of its relationship to these dimensions andits alignment with other existing systems need to be addressed.If the case can be made that the change initiative adds value overother alternatives and fits within the context of the mission, vision,strategy, and significant downstream systems (e.g., informationand reward systems, organizational structure), the likelihood ofacceptance and adoption of the change is enhanced. If theresources required for the change seem relatively minor relative tothe benefits, approval is also more likely. For example, consider aproposed change in the level of customer service offered by callcenter personnel that has high potential to increase customersatisfaction and significantly reduce the need for callbacks.The likelihood of approval and acceptance is higher if the onlyrequired actions are an additional half day of training, thedevelopment of needed support materials, the modification of acouple of decision support screens, the presence of supervisorysupport, and the modification of performance metrics to reinforcethe desired change. In effect, the change leader will havedemonstrated that there is little to fear because the change isincremental, is not particularly disruptive in nature, is consistentwith the vision and the strategy, and contains benefits thatoutweigh the costs.Change leaders often find it is useful to frame changes in waysthat reduce the sense of incongruence with existing structures andsystems. In general, this approach makes it easier to gainapproval because it reduces the sense of disruption and risk thatthe change will entail. For example, if the end state of a changewere to move from mass marketing to relationship-focused, one-to-one marketing, this would be a huge change. The perceived
risk can be reduced by breaking the change down into a numberof smaller, manageable stages that begin with exploratoryresearch and evaluation, followed by a pilot project, assessmentof learning and system alignment challenges, extension to acustomer group that was particularly well suited to the approach,and so forth. By starting small and minimizing the incongruencewith existing systems, the change leader can move in asystematic fashion in the desired direction, learning, andmodifying systems and structures in ways that look incremental inthe short term but have significant long-term effects.As momentum and the critical mass of support build for arevolutionary change that is positioned as incremental, the changemay take on a life of its own. When those smaller changeelements are added together over time, the cumulative changeswill look far more significant in retrospect than they did at anypoint along the way. The term “morphing” captures the sense ofthis approach to change because it depicts a slow and steadytransformation of the organization over time.58 Abrahamson refersto this as the “change without pain” approach, though not allrecipients would share this sentiment.59 The earlier example ofPeter Grant, who was instrumental in the hiring of 3,500 womenand visible minorities at his bank, falls into this category. Thelesson is that approval can often be advanced by avoiding thedepiction of the change as a marked departure of heroicproportions. An evolving series of ten 5% changes inorganizational performance over the course of five years producesa total change of 50% in organizational performance, and thatdoes not include the compounding effects!See Toolkit Exercise 5.3 to reflect on an approval process you’refamiliar with.
The Interaction of Structures andSystems With Change DuringImplementationStructures and systems not only have an impact on a changeleader’s ability to gain acceptance for a change project, they canalso have a significant impact on the success of theimplementation process. When major changes are undertaken,there will be existing systems and structures that change agentshave to work with in order to gain approval and proceed. Inaddition, subsequent alterations to those structures and systemswill often be required in order to bring them into alignment with theproposed path forward.Microsoft’s TurnaroundWhen Nadella became the CEO of Microsoft in 2014 andcommenced his change initiatives, he and others working on itstransformation had to navigate the existing formal structures andsystems, in order to create and then deploy the desired structuresand systems. Coalitions needed to be built and permission toundertake planned changes needed to be sought within the thenexisting structures and systems. Nadella’s task was made somewhateasier by the fact that Microsoft’s board, market analysts, and a largenumber of existing employees recognized the need for majorrevitalization.Nadella’s knowledge of the organization combined with his stellarreputation allowed him to engage the organization and move quickly.Actions involved major changes in strategy. These included thefollowing: exiting the smartphone market, ending the war with Apple,Android and Sales Force; entering the Internet of Things and cloudservices market; major investments and acquisitions (e.g., LinkedIn),to speed market success into targeted segments; and possibly mostimportantly, cultural changes to make it a more inquisitive, inclusive,innovative, empowered, and adaptive learning environment.Changes undertaken also involved product revitalization, therealignment of Microsoft’s structures and systems around the newstrategy, and the largest layoff in Microsoft’s history (18,000).Microsoft’s employees’ 82% approval rating of Nadella on Glassdoor
following these layoffs point to fairly high levels of internal support heenjoyed.60How have things worked out? The changes are proving to be aresounding success. Some things have not met expectations, butmany others have clearly made their mark. Microsoft was ranked #2on Forbes’ list of best global companies to work for in 2018, shareprice in 2018 was triple what it had been in 2014, and sales were up13.3% over the previous year.61Nadella recognized the necessity of aligning systems andstructures with the vision and strategy. He used changes in theseareas, in concert with other initiatives, to advance Microsoft’s newmission (empower every person and every organization on theplanet to achieve more), and the vision for change needed atMicrosoft to support that mission. Further, he and others avoidedgetting bogged down in finger pointing and other defensive tacticswhen things didn’t pan out initially. Such actions can derailprogress in even what appears to be a relatively straightforwardproblem.Diagnosis of the nature and impact of structures and systems onperformance during implementation puts change leaders in astrong position to identify when and where these may presentchallenges that will need to be managed and where they can beused to facilitate change. The Microsoft and Peter Grant changeexamples involved approaches that refined and exploited systems(in the best sense of the word) in support of the desired changes.In summary, change agents need to understand the approvalprocesses for their particular projects. They need to know the keyplayers and how formal the process is. Does it require a vote? Willthe go-ahead be authorized at a management or executivemeeting? Alternatively, can the change agent act to develop acoalition first, or just act using available resources and power?Further, will there be needs for changes to existing structures andsystems to support the underlying change initiative? If so, whatare those changes and how should they be executed? In the nextsection, we will explore the role of systems in change approval,acceptance, and implementation.
Using Structures and Systems toFacilitate the Acceptance of ChangeChange agents may be tempted to breathe a sigh of relief andrelax once a change project is approved. However, gaining formalapproval is not the same as gaining generalized acceptance of thechange. Too often, the anticipated chorus of excitement fails tomaterialize and, in its stead, change agents experiencebegrudging cooperation, or covert or overt resistance. Theassumption that approval will automatically lead to acceptance isa dangerous one.Customer Relationship ManagementComplex implementations, failure to yield desired results, andescalating maintenance costs have all marred the reputation ofcustomer relationship management (CRM) programs; 50% of CRMimplementations generally fail and almost 42% of CRM softwarelicenses bought end up unused. In 2013, a survey of 352 U.S.-basedexecutives found that failure rates of CRM had risen to 63%. Whilesome fault lies with the vendors, sometimes it is, unfortunately, thebusiness that gets itself in a rut. An analysis of failureimplementations found a lack of clear ownership for the initiative 53%of the time followed by a lack of management bandwidth (43%), alack of executive support (38%), and the lack of a sense that it wasan IT priority (38%).62Despite their best intentions, change leaders have less-than-stellar success in bringing approved change to fruition. Whenmajor changes are undertaken, approximately 60–70% fallsignificantly short of their objectives. Since half of the “failures”report achieving some of their objectives, the total failure categorylies in the 30–35% range.63 A poorly thought through changeinitiative and bad luck can explain some of the lack of success.However, lack of awareness for and acceptance of the changewithin the organization, lingering doubts and half-heartedcommitments at senior levels, confusion as to who is supposed to
do what, issues of skill and ability, and lack of time or resourcesoften play significant roles in the lack of success.Structural and systemic factors in an organization can be used toease the legitimization and acceptance of a change initiative andprovide access to needed resources. They facilitate theassignment of authority and responsibility, provide needed trainingand bandwidth, publicly affirm commitment and neededresourcing at the senior and middle levels, and ensure that theoutput of the changes is put to use and not ignored, because theyhave not been part of past practices. However, they can alsoderail progress when not properly deployed. The inappropriatedelegation of sponsorship, structures that fail to provide sufficientaccess to needed resources, and the misapplication of systemsare three of the most commonly cited mistakes made by topmanagement in change initiatives.64Paul Tsaparis, formerly of Hewlett-Packard, did not make themistake of underestimating the role that systems and structurescan play when undertaking a huge change challenge.Systems and Structures at HP (Canada)In May 2002, Paul Tsaparis, 42, president and CEO of Hewlett-Packard (Canada) Ltd., began managing the massive integration ofHewlett-Packard and Compaq in Canada. The new 6,800-personorganization had annual revenues in excess of $3 billion (Canadian).As is often the case with organizational integration, staff reductionswere involved.Tsaparis approached the integration challenge by getting out andputting a human face on the challenges and changes. He activelycommunicated the vision and corporate strategy and let people knowwhat was happening to their employment situation as soon aspossible. He reassured other key stakeholders (customers,suppliers) that they would not be lost in the shuffle. Tsaparis followedup by deploying organizational structures, systems, and processesthat would support HP’s strategy, reinforcing the integration changeinitiative, and increasing the likelihood of longer-term organizationalsuccess. Change teams were created to facilitate the implementationof the needed organizational changes and these teams, in turn,required structures, systems, and processes that would support themin the pursuit of their objectives.
Tsaparis remained the president of HP Canada until 2010, when hewas promoted to VP of Technology Support for the Americas. Hetook early retirement in June 2012 and has subsequently served onthe board of directors in several organizations, including the Board ofYork University, where he was appointed chair in 2018. 65Tsaparis faced significant cultural, structural, and systemic changechallenges. Each organization, HP and Compaq, had its own wayof doing things. And many of those systems and structures wouldhave explicit as well as implicit implications—ways of doing thingsthat might not even be written down but were firmly embedded inthe habits of organizational members. As a result, the consciousdevelopment of structures and systems that would support HP’sstrategy represented an important step in the building of aninfrastructure that would support change and promoteacceptance. Conflicting and misaligned structures and systemsneeded to be identified and addressed so that the resulting web ofstructures and systems were aligned. Staying true to HP’s corevalues and principles provided critical guidance for the massivechange initiative. Tsaparis acted on the belief that the more theseare aligned with your own core values, the more likely you, asleader, are to succeed.Change agents need to understand the effects of structures andsystems from the perspective of the person who is on thereceiving end of the change—the actual person who will be askedto behave differently. If people do not accept the change, they areunlikely to modify their behavior in the desired direction, no matterhow excellent the change project is.Interestingly, gaining compliance does not necessarily meanattitudes have changed, assuming that attitude change is needed.Attitude change does not always come first. It may well evolveafter the change in behavior has been achieved. Changes tosystems and structures can be used to promote the desiredbehavior in individuals through having them live with the newarrangements. For example, when new software goes live and theold software is disabled, individuals have no choice but to workwith the new system. When thoughtfully undertaken (i.e., carefulanalysis and a thoughtful implementation plan), this approach canresult in changes in behavior, followed by changes in attitudes in
the desired direction over time as people experience their newcontext.66The role of physical space in change deserves highlightingbecause it sometimes goes underappreciated. Thoughtfullyaltering the physical space in which people work can changecommunication and working patterns in ways that promoteunderstanding and facilitate attitudinal changes.67 Architects andinterior designers have long promoted the value of giving thiscareful consideration.68 However, one does not always have towait until there is a major redesign of the physical space. Think ofsomething as simple as sitting patterns in a classroom. Oncepeople find a chair at the beginning of the semester, they tend toreturn to that space. If the faculty member changes those seatingpatterns by randomly assigning people to teams that need to sittogether, communication patterns will be altered and newrelationships formed. The potential value of more modest changesto work space deserves careful attention.Clarity of purpose and direction, combined with formal processesthat facilitate employee involvement and reward desired behavior,can all be used to advance the engagement and involvement ofemployees in change-related initiatives. However, be careful ofapproaches that are viewed as heavy handed. A top-downdirective that orders change without any consultation may lead toless information sharing, reduced risk-taking, less acceptance ofchange, and greater employee turnover.69 The thoughtful use offormal systems and processes can facilitate others’ understandingof what is being undertaken (and why) and the sense oflegitimacy. Unless the employees buy into the legitimate authorityof executives and the legitimacy of the change, they may notaccept it and instead may engage in actions that slow, disrupt, orsabotage progress.Much of the change leaders’ difficulty in thinking through theimpact of structure on employees’ acceptance flows from theirassumptions: they see the need for change and the rationaleunderlying it and believe the change is immensely logical. Fromthat position, it is much too easy to assume that others will seeand accept the logic of the change agent! But the logic falls flat for
organizational members facing a formal reward system that worksagainst the change or an organizational structure that emphasizescharacteristics contrary to the desired change (e.g., a focus oncost controls rather than customer retention).The passage of time, in conjunction with the use of formalsystems, can also influence the acceptance of change. When achange initiative has been the subject of formal discussion andreview for an appropriate interval, this gestation period may allowthe idea to become more familiar and acceptable. Initiatives thatare shocking at first may appear less threatening after a period ofreflection. Alternatively, if approval has been granted and thereseems to be little activity or visible progress, acceptability andsupport may diminish.In summary, systems and structures, properly leveraged anddeployed, can play an important role in the speed and rate ofacceptance of change. People don’t resist all change. Lots ofthings have the potential to be seen as worth doing, and peopletend to respond positively to change initiatives that theyunderstand and believe are worth the effort and risk. The way thatsystems and processes are deployed will influence the perceptionof the change.70Developing Adaptive Systems and StructuresThe ability of organizations to adapt to change is aided by theirability to learn. Nevis suggests that organizations can be viewedas learning systems that acquire knowledge, disseminate itthrough the organization, and use that knowledge to accomplishtheir missions.71 Learning is facilitated when organizationalmembers do the following:1. Systematically and deliberately scan their externalenvironment and learn from it2. Demonstrate the desire to question existing approaches andalways improve3. Have a concern for measurement of performance and sharedperceptions of the gap between the current and desired levelsof performance
4. Develop an experimental mindset where they try new things5. Create an organizational climate of openness, accessibility,honesty, and active discussion and debate6. Engage in continuous education at all organizational levels7. Use a variety of methods, appreciate diversity, and take apluralistic view of competencies8. Have multiple individuals who act as advocates for new ideasand methods and who are also willing to exercise their criticaljudgment in the review of ideas9. Have an involved, engaged leadership10. Recognize the interdependence of units and have a systemsperspectiveMany of these learning actions are influenced by organizationalstructures and systems. The presence of formal early-warningsystems and opportunity-finding systems advance the scanningcapacity of the organization. The presence of a formal strategyand environmental review process, complete with performancemetrics, will increase the likelihood that firms will systematicallyreview where they are and where they want to go. Systems thatreward innovation and information sharing will increase theprospects for openness and exploration. Systems that fund andreinforce development will open people to continuous education.Likewise, appropriately designed systems and processes can beused to advance diversity and the exploration of new ideas.Finally, systems can be used to increase the prospect thatinterdependencies are recognized and that a systems perspectiveis brought to problem solving.Organizations that are flexible and adaptive have an easier timeadjusting to incremental and upending changes than dobureaucratic ones.72 As the complexity and turbulence oforganizational environments increase, more flexible and adaptivesystems and structures will be required.73 Essentially,organizations need to become more “change ready.”74In a study of strategic planning in an internationalnongovernmental development organization, the need foradaptive capacity manifested itself in an interesting way. Ratherthan opt for an unambiguous course of action, this organization
tended to develop multiple strategies that were both ambiguousand ambitious. What looked like strategic drift to outsidersprovided managers with flexibility in how they responded tochanging conditions. Appropriate ambiguous strategies were usedas metaphors to promote consensus and legitimacy with keystakeholder groups and allow for learning and the adjustment ofchange plans as they proceeded forward.75To cope with turbulence and complexity, organizations are beingdesigned in unconventional ways. These include the increasinguse of formal and informal networks to link individuals in theorganizations with external individuals and organizations topromote shared initiatives. For example, supply chain networksare increasingly being used to leverage supplier talents in dealingwith design and engineering challenges, finding ways to enhancequality, and identifying opportunities for cost reduction. Designer,supplier, producer, and distributor capabilities of differentorganizations are being brought together in networks to increaseflexibility, adaptability, and innovative results. Thus, a productmight be designed in Italy, built in Korea from Brazilian materials,and distributed in the United States by a Scandinavian firm. ThinkIKEA for this type of network.76 The network partners are heldtogether by market mechanisms such as contracts, just-in-timelogistics, shared market intelligence and production systems,shared purposes, and customers’ demands rather than byorganizational charts and traditional controls.77The need for greater flexibility and adaptiveness is movingorganizations away from command and control structures, andgiving rise to the increased use of collaborative structures andprocesses to promote trust, communications, information sharing,and shared ownership of the undertaking. At a micro level, thismay come in the form of self-managed work teams, cross-functional teams and task forces, and other approaches thatfacilitate intra-organizational communication and cooperation. Atthe organizational level, it may take the form of flattenedstructures, systems processes, and technologies that promotecollaboration (both within and outside the organization), andleadership styles and cultural norms that foster greatercollaboration, transparency, and shared sense of purpose.78
When people are geographically dispersed and collaboration isneeded, virtual teams are increasingly being deployed, along withenabling technologies to allow them to build needed trust andeffectively work together. In some organizations, the physicaldesign of office space is being reimagined, in order to bringpeople from different functions together and promotecollaboration, rather than isolate them from one another.79 Oneexample of a company employing a flatter more democraticstructure is Zappos.com. While a democratic system or“holacracy” made up of self-organizing teams has certainlygarnered attention, there are doubts as to whether it will become atried-and-true management structure.80Collaborative relationships and their associated networks aretaking new and interesting forms that extend far beyond traditionalorganizational boundaries. Open-sourced design anddevelopment, shared content creation initiatives such as thatassociated with Wikipedia, customer co-creation, online advisorygroups, and other forms of cooperative input and informationsharing are creating fascinating opportunities for individuals andorganizations of all sizes that did not exist in the past.81In matters of organizational change, the formal use of socialtechnologies and the degree to which they are used to advancethe change have been found to contribute to successfulimplementation.82 This is not surprising when one thinks of thepower of social technologies for communicating information andaligning the interests and efforts of dispersed individuals.Research has found that greater organizational learning andknowledge creation are associated with more organicorganizational structures rather than more mechanistic ones.83Collaborative networks have been found to be powerfulcontributors to how people respond to change, but more will besaid of this later.84One of the roles of the change agent is to help organizations learnfrom the past and evolve systems and structures that are likely tohelp them succeed in the future. Focusing on how organizationsacquire knowledge and spread it throughout the organization canbe a valuable diagnostic tool in this regard. By facilitating the
development of adaptive systems and processes (keeping in mindthe competitive realities and the need for congruence with theenvironment), change agents will succeed in enhancing thecapacity of the organization to adjust to change in the future.SummaryFormal systems and structures influence how change initiativesevolve and succeed. Change leaders need to understand them, howthey operate, and how they influence the change process. Inaddition, change leaders need to know how to manage the approvalprocess for initiatives so that they can work with, through, and/oraround them in order to increase the prospects of the change beingadopted. Formal systems and structures can be used to advanceacceptance and implementation of the change in the organization.And finally, formal systems and structures increasingly need to beflexible and adaptive, to promote learning, and set the stage forneeded changes. See Toolkit Exercise 5.1 for critical thinkingquestions for this chapter.Key TermsFormal organizational structure and systems—how theorganization formally organizes itself to accomplish its mission.Formal structures refer to how the organization’s tasks are formallydivided, grouped, and coordinated. The structure would include theorganizational hierarchy, the structure of any manufacturingoperation, and any formal procedures such as the performanceappraisal system, as well as other structures. The formal systemsare the documented processes of coordination and integration withinthe organization. Examples include the information, compensation,financial accounting, and human resource systems.Formal approval process—the formal procedure that changeagents must follow for organizational approval of a change project.Mechanistic organizations—exhibit machinelike qualities. They relyon formal hierarchies with centralized decision making and a cleardivision of labor. Rules and procedures are clearly defined, andemployees are expected to follow them. Work is specialized androutine.Organic organizations—exhibit organism-like qualities as they aremore flexible. They have fewer rules and procedures, and there is
less reliance on the hierarchy of authority for centralized decisionmaking. The structure is flexible and not as well defined. Jobs areless specialized. Communication is more informal and lateralcommunications more accepted.The information-processing view of organizations—considersorganizations as information-processing mechanisms. This viewargues that the better the fit between the information-processingcapabilities of the organization and its environment, the moreeffective the organization.Environmental uncertainty—measures the degree of variability ofthe environment. Duncan suggests two dimensions of uncertainty:degree of complexity of the environment and degree of dynamism.The formal approval process—the traditional approach in which aperson or persons develop a proposal and bring it forward forassessment and formal approval by the appropriate organizationalmembers.Acceptance of change—the degree to which change participantsaccept or “buy into” the change that has been implemented.Creeping commitment—the gradual increase in commitment bychange participants toward the change project. Such an increase isoften obtained by involving participants in decision making.Coalition building—the forming of partnerships to increasepressures for or against change.The renegade approach—when change is initiated without havingfirst obtained formal approval. This is often done in conjunction withcreeping commitment and coalition-building tactics. The intent of theapproach is that the change is advanced to the point that it cannoteasily be reversed by those with formal authority.Adaptive systems and structures—those that are relatively readyfor change compared to others.
Checklist: Change Initiative Approval1. What does a review of documents related to relevant formalstructures and systems reveal about the formal approvalprocess and who has formal authority for approving the changeinitiative?2. What are the key points in the process that a change leaderneeds to pay attention to: timing of meetings, getting on theagenda, cycle time, types of decisions made, and wheredecisions are made?a. How are the relevant systems and structuresinterconnected? How do they influence one another?3. Develop a process map that tracks the change idea from startto finish.a. What role (and person) has formal authority and decision-making responsibility for this initiative?b. What are the decision parameters that are normallyapplied, and are there zones of discretion available todecision makers?c. What are the power and influence patterns aroundparticular systems and structures? Who has direct andindirect influence on how the systems and structures areapplied?d. How should the change leader manage these formalsystems and structures to reduce resistance? And howcan they be managed to advance the change initiative?
End-of-Chapter Exercises
Toolkit Exercise 5.1
Critical Thinking QuestionsThe URLs for the videos listed below can be found in two places. The firstspot is next to the exercise and the second spot is on the website atstudy.sagepub.com/cawsey4e.Consider the questions that follow.1. How Do Food Banks Help? —1:30 minuteshttps://www.youtube.com/watch?v=IdJnLj-ksVkConsider this video from Food Banks Canada.Comment on how a video such as this inspires could beused to inspire a vision for change. If you were avolunteer, what sort of specific vision for change wouldyou want to work toward implementing?How did the video use data to engage listeners?2. Dr. John Kotter: Accelerate! The Evolution of the 21st CenturyOrganization—6:07 minutes. https://www.youtube.com/watch?v=Pc7EVXnF2aIIn this video, Kotter provides a prescription for howorganizations need to structure themselves to be able toevolve successfully today.What do you think of his prescription?Think of an organization you are familiar with (it could bepublic, private, a not-for-profit, or a branch ofgovernment). What are the change implications for it if itwere to adopt this approach?What do you think this organization should do to enhanceits flexibility and readiness for change?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 5.2
Impact of Existing Structures and Systemson ChangeThink of a change you are familiar with.1. How did the organization use structures and systems to deal withthe uncertainty and complexity in the environment?Was this an appropriate response?How could the existing structures and systems have beenapproached and used differently to advance the desiredchange?How did existing structures and systems affect the ability of thechange leader to bring about the desired change?a. What systems/structures were involved?b. How did these systems/structures influence whathappened?Was this related to how they were formally designedor was this related to how they actually came to beused in practice?c. Who influenced how the systems/structures were used,and how did this affect the outcomes that ensued?2. What role could incremental strategies that were nested withexisting systems and structures have played? Would they havereally moved the process forward or simply avoided the realchanges that needed to be addressed?3. What role could more revolutionary strategies have played? Wouldthey produce issues related to their alignment with existing systemsand structures?How would you manage the challenges created by this?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 5.3
Gaining Approval for the Change ProjectConsider a change project in an organization with which you are familiar.1. What is the approval process for minor change initiatives?For major change initiatives?Can you describe the processes involved?a. If a project requires capital approval, are there existingcapital budgeting processes?b. If the project needs dedicated staff allocated to it or if itwill lead to additions to staff, what are the processes foradding people permanently, and selecting and developingstaff?c. Does the project alter the way work is organized andperformed?d. What are the systems and processes used for definingjobs and assessing performance?e. Can the project be approved by an individual? Who isthat person? What approval power do they have?2. Are there ways that the perceived risks of the change could havebeen reduced by the way the change leader staged the project andmanaged the approval process?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Beck Consulting CorporationBy Cynthia Ingols, Professor of Practice, and Lisa Brem, ResearcherSchool of Business, Simmons University, Boston, MAAs she drove, Beck reflected on all that had transpired in her career sinceshe earned her MBA in 2002. She had started her business, BeckConsulting Corporation (BCC) a year after graduation. Over the next 11years, her consulting business, which ranged from moving offices to entirecompanies to new locations, had grown from a one-person consultancy toa successful private company employing 40 people. Beck had reason tofeel that she had “made it.” But she also felt that she could not simply sitback and savor her success. Her business continued to haveopportunities for growth. As Beck explained,The real joy for me comes from founding and growing abusiness. We are a growing company, and we need sparks ofexcitement that come from change, from going to the next level.Opening new offices, going national or international, expandingthe services we offer, going public—all these things would giveus as a company more reasons to be proud. People here areinvested in the future. We can’t get to the future by standing still.While the business was prospering, its growth posed urgent problems.For the first time, Beck felt she needed to add another layer ofmanagement to her organization. In addition, Beck wasn’t sure that thecompensation and incentive plans currently in place were appropriate forthis new layer and she wondered if they needed to develop moreformalized work systems and processes. However, she also worried thatmore hierarchy and formalization would ruin the carefully constructedculture of independent thinkers at her company.Beck had built her business by maintaining close contact with bothemployees and clients. Her vivacious personality, intelligence, and “can-do” attitude set the tone for her company. Beck’s personal touch was oneof the major motivators for her staff and one of the selling points for thecompany’s services. The central question in Beck’s mind was how to growthe business without losing the hands-on style that had made thecompany successful.
An Easy Way to Start a ConsultingCompanyFor Marilyn Beck running a relocation company was a perfect fit. She hadmoved several times in the United States and internationally with her latehusband. In 1998, she settled in the Boston area. She earned her MBApart time while holding down a job and raising two children. Throughoutthe 1990s she held administrative management positions at a variety ofBoston law firms. As it happened, a common denominator of all her jobswas moving the office. As Beck recalled,All the firms I worked for made major moves, and I ended upmanaging them. I became something of an expert at it. Ipreferred the project management aspect of moving rather thanthe day-to-day maintenance tasks.In August 2002, at the end of her third year of her part-time MBAprogram, Beck was ready for a change.She had become increasingly impatient with the rigid hierarchies she sawin the legal firms where she worked. She felt it took too long to makedecisions and that steep hierarchies promoted a lack of accountability.Beck explained:One reason I really don’t like hierarchies is their lack ofimmediate decision making. One example that had seriousrepercussions was when I worked at a law firm and we had abad snow storm. I wanted to send people home early, but myboss had to go to his boss and on up the chain. By the time I gotout of there, I ended up with a seven-hour drive home.The other part of it for me, is that I don’t automatically respectsomeone with a title; I’m more interested in a meritocracy. Thelaw firms couldn’t give underlings decision making authoritybecause they weren’t lawyers. Conversely, I remember a time Iwas lugging huge water bottles to the cooler and the big,strapping, male lawyers walked right by me—not one stopped tohelp. Being a partner took precedence over being a person.Those kinds of separations don’t make for a cohesive team. Iwanted to create a place where I didn’t have to live by thoserules.
She felt she could be successful if she put all her experience withcorporate relocation to work in a consulting business. Beck, however, wasnot sure how to get started.In 2003, she had the answer. An office manager from a large Boston lawfirm called Beck to see if she’d be interested in organizing their upcomingmove. The call came as a result of a networking group that Beck hadstarted while she was working for a law firm in Washington D.C. Beckexplained the connections that led to her first consulting job:I was working for the D.C. satellite office of a large Boston lawfirm. There was one other Boston firm that also had a satelliteoffice, so I started a lunch group that brought together managersfrom both companies. I felt as though we dealt with similarissues and could benefit from sharing experiences. I got to knowthe office manager of the other firm pretty well. A couple of yearslater, after I’d moved back to Boston, the office manager from theBoston firm happened to be talking to the DC office manager.The Boston office manager was looking for someone to managethe firm’s move, and my DC friend immediately recommendedme.I interviewed for the job along with about eight other people. Thehiring manager told me later that even though he’d interviewedpeople with a lot more experience, he said my interpersonalskills were so strong that they decided to offer the job to me.The company offered Beck either a full-time one-year contract to move its950-member workforce, or to serve as an independent contractor. AsBeck recalled,There I was—wondering how to start consulting and this jobdropped in my lap. I decided to go in as an independentcontractor. I remember thinking—what easier way to start aconsulting company? Of course, I didn’t think then of what beinga consultant meant. Later, I realized that, in addition to deliveringservices, I would have to send out invoices, set up abookkeeping system, and find more clients.Beck set up shop in her home and worked independently on smallprojects until 2007 when she accepted a large job at a large, internationaluniversity that eventually developed into a two-year commitment. Shehired several temporary employees to help coordinate the move, butquickly realized that she would need permanent help. Beck hired Susan
Smith, a facility management specialist from a large telecommunicationscompany. Smith had a degree in interior design and experience withbusiness furnishings that complemented Beck’s business degree andrelocation skills. Although Beck was happy to gain an employee withSmith’s background, hiring a full-time employee was unsettling. As Beckexplained,Hiring Susan, my first permanent employee, was the first bigmilestone for the business. It was the hardest thing I have everhad to do. I was suddenly responsible for someone else—for herfamily—for her livelihood. It was a combination of worrying aboutnot having enough work for her and having to pay her even if thework wasn’t coming in. We sort of got around that. Wenegotiated an hourly wage, figuring that if I didn’t need 40 hoursper week consistently, I wouldn’t have to pay for it. But in reality,Susan ended up working 50 hours a week from the start and thathas never really changed. She is still here—and is vice presidentof the company.
A Loose Collection of ConsultantsIn the fall of 2007, when a large regional bank hired Beck to move itsMassachusetts headquarters, Beck hired two more employees. FromSeptember 2007 through May 2008, Beck Consulting moved 1,500people for the bank. From that time on, Beck continued to augment thebank’s project management staff, managing various aspects of employeerelocation on a permanent basis.By 2009, the company had seven hourly employees. The base ofoperations was still Beck’s home, although most of the work was done on-site at client facilities. Beck’s second employee described this start-upphase:I started working for Marilyn in 2007. At the time, BeckConsulting wasn’t so much a company as a loose collection ofconsultants. She had one employee—Susan Smith. Mostly,though, Marilyn hired consultants to get the jobs done.Eventually, she hired me as the second employee.It was interesting working out of someone’s house. I feelfortunate to have started that way because I was able to workdirectly with Marilyn. I got to really understand what sheexpected and how she worked with clients. At the time she wasa project manager running projects instead of the moreadministrative role she plays now as president of the company. Ienjoyed those early days. I felt we were all learning at the sametime.The energy of starting something new and operating on a shoestring wasexciting, but Beck felt the need to become established in a Bostonlocation closer to her client base. “People were trying to do business onthe streets with their cell phones,” she recalled. “It was time we moveddowntown.”By December 2010, Beck Consulting had doubled in size, with enoughwork to keep ten full time employees busy. The company moved to 2,200square feet of space. Six months later, it increased its office size byanother 2,200 square feet. Beck explained the financial risk the companytook that year:Instead of paying $6,000 a year on rent, we were now payingmore than 10 times that amount. It was daunting. But the up side
was that our business was expanding as well. By the end of2011, we had over 20 employees. We had doubled in size in twoyears.
Relocation Consultants—A Niche within theFacility Management IndustryBefore 1980, the term “move consultants” was not in Corporate America’svocabulary. Most—if not all—moves were performed by employees. Officemanagers in small to medium-sized firms and facility management teamsin large firms typically had the dubious honor of managing and executinga move. In the 1980s, however, as the tidal wave of downsizing sweptaway corporations, executives found that there was no one left with theexpertise and the time to plan a large move. The facility managementoutsourcing industry gave birth to a small subset of firms that chose tospecialize in the high-stress world of corporate relocations.Another trend in facilities management, called “workforce churn,” alsofueled the growth of relocation consultants. Churn was the term used todescribe the continual movement of employees as a result of expansion,downsizing, redeployment, or a project-oriented workforce. The reasonsfor the high level of churn rates were increases in industry consolidations,corporate mergers, and the rapid expansion of high-tech firms that usedfluid teams to perform projects.In addition to offering an experienced, cost-efficient team to managemoves, relocation consultants also took the heat of a stressful move off anemployee or department. Since two-thirds of employees in charge of amove are either fired or quit soon after the move, hiring a move consultantsaved companies the cost of hiring and training new personnel. Beckpointed out that consultants were, for the most part, protected from officepolitics and made space assignments objectively.
The Beck WayThroughout the 2005-2010 period, Beck experienced growth in numberand scope of assignments. She continued to hire project managers inresponse to the increasing demands of clients. In 2010, Beck promotedSusan, her first employee and right arm, to the position of vice president.This marked a departure from Beck’s “loose collection of consultants” andthe installation of a rudimentary hierarchy. The bulk of the staff, the projectmanagers, remained on the same level.The company prided itself on its lack of formal titles and status symbols.As Beck explained,I didn’t personally do well in hierarchical organizations. I didn’tlike it, and I chose not to subject other people to it. That’s not tosay we don’t have any hierarchy or that we have a totally flatorganization. Of course, we do have some hierarchy—we havehierarchy of experience. We have some people who have beenin this business for 25 years and some who have been in it forone. The one with 25 years of experience is much more likely tobe managing a project than the person with little experience. Butwe don’t use titles, except for Susan and myself. It’s notsomething that’s needed internally.Despite the lack of titles, it was always clear to the client who tocontact if there was a problem. In the beginning they alwaystalked to me; then after I made Susan vice president, she talkedto her clients and I kept mine. There was perhaps more internalthan external confusion.Although most of the staff at Beck Consulting were female, Beck assertedthat she didn’t set out to build an all-female company. The fact was theoverwhelming majority of applicants happened to be female. Beckbelieved the reason for this was that the work lent itself to a traditionally“female” approach to tasks and problem solving. As she explained,The way we work is very hands-on. Of course, not all relocationcompanies work this way. One of our competitors is almostentirely male, and they don’t offer the same level of hands-onattention to detail that we do. It’s really a different businessmodel.
We are widely known for our incredible ability to coordinate andmanage all the details of a move. One of our employees said tome the other day that a lot of what we do is handholding andgiving pats on the back. And that really is important. People aretraumatized by moves. Even if they are moving to a differentfloor in the same building, there is something very unsettlingabout it. We help communicate with people and listen to theirconcerns. At the same time, we handle a zillion details, fromselecting voice/data networks to making sure there are coathangers in every closet.Employees at Beck Consulting expressed a strong sense of sharedvalues and prided themselves on their customer-service orientation. AsProject Manager Makayla Jones explained,At Beck, we have a style of working that is tightly focused oncustomer service. We want the customer to be happy and wewant to do a good job. Everyone here is willing to get down anddirty and do whatever it takes to get the job done—whether it’sdesigning office space or crawling around on the floor looking foroutlets.
Workflow at Beck ConsultingClient projects at Beck Consulting generally fell into two categories: one-time moves and ongoing facility management. Beck employees wereprimarily coordinators for one-time moves. They did not actually pick upand move boxes; rather, they set schedules and coordinated the movingcompany’s activities with the activities of other sub-contractors such assecurity, electricians, and environmental systems. One-time movesinvolved anything from a small group relocating to another floor, to 2,500employees moving to a new building over the course of a single weekend.Beck teams were formed for each job and were disbanded when a jobwas done.The ongoing facility work usually entailed at least two people working fulltime, or nearly full time, on-site at a client’s facility. Ongoing work includedspace planning; inventorying, refurbishment, or procurement of furniture;coordinating new construction and building maintenance; and moving andinstalling technology. Employees at Beck either worked for several clientsand projects at once or were stationed full time on-site as part of theclient’s facility management team.Beck and Smith conducted most of the company’s marketing, which tookthe form of networking, nurturing client relationships, following leads, andthe occasional write-up in the local press media. Approximately 30% ofnew jobs came from repeat customers, and most new clients came toBeck Consulting through word-of-mouth. Once a new client was identified,Beck or Smith wrote proposals and conducted negotiations.Smith maintained a two-month workflow projection based on current jobsand what she and Beck judged to be “in the pipeline.” Jobs were assignedto project managers based on their availability and expertise. Employeepreferences were taken into account whenever possible. Generally, jobswere given to teams of two or three people. Although one person usuallyfunctioned as the primary client contact and maintained a budget andschedule for the project, that person did not have authority over others inthe team and did not act as team leader. When the job was completed,members of the team moved on to form new teams around a new project.In large or complex moves, the teams were bigger and Beck or Smithappointed a team leader to manage the overall move. Beck explained thefluid nature of the project manager roles:People are given projects based mainly on availability. Theycould be managing a large project this month and put on anotherproject that someone else is running next month. So, a person is
not always in charge, nor is he or she always in the position ofunderling. This structure really makes a difference to how peoplesee their roles.As Project Manager Makayla Jones explained,We don’t have politics at Beck. People don’t have to vie forposition. There’s no real hierarchy. People aren’t trying to get tothe next level, because there is no next level. So, there isn’t asense of competition—just a feeling that we want to do a goodjob on our projects. We enjoy each other’s successes and helpout from job to job. There is a lot of camaraderie.Since most clients wanted to minimize the downtime associated withrelocation, the actual moving was done over a short and convenientperiod of time—usually at night or over a weekend. The team in charge ofthe move often needed more people to get the job completed onschedule. In particularly large or complex moves, the entire Beckcompany could be mobilized. As Project Manager Jones explained,We think of ourselves as a team—one that needs to worktogether. Everyone is very good about that. Because even ifyou’re on a two-person team, you may have a large move andyou’ll need extra help. I’ve never seen an instance whensomeone’s needed help and no one has come forward. Sure,there are lots of times when you don’t know what people areworking on, but there are also the times when everyone—evenMarilyn—will pitch in and help with a move.
Human ResourcesNew employees came to Beck Consulting almost exclusively throughword-of-mouth. Even in times of low unemployment job markets, thecompany had never needed to post a help-wanted ad. The companyreceived several unsolicited resumes almost every week. Beck and Smithconducted interviews on an ongoing basis. Most of the resumes camefrom people with art, architecture, interior design, space planning, orfacility management backgrounds. Many had experience as projectmanagers for large companies. Beck felt that despite the word-of-mouthmethod of hiring, she was diverse in her hiring practices.Project Manager Steven Brown recalled why he was attracted to BeckConsulting:I wanted to work for a small company. I like to keep a balancebetween my work and personal life and be able, for the mostpart, to maintain a 40-hour work week. I talked to some peoplewho work for big companies and they had war stories about howmany hours they put in. One of the benefits of working at BeckConsulting is that Marilyn and Susan recognize that people havea life outside the office and empower us to manage our ownworkload and hours.In the early years of the company, all employees interviewed andapproved each new hire. Since the company was so small, Beck wantedto ensure that personalities meshed and that every employee understoodand fit into the culture. Project Manager Brown, who was stationed fulltime at a client site, described a typical Beck Consulting employee:We are generally people who can fit in with other people. I likefitting in—I like understanding my client’s needs, understandingtheir organization, and becoming part of it. I keep a reasonabledistance while actively taking part in the job and acting in myclient’s interest. We’re chameleons. We can pick up the color ofour surrounding environment. It helps to get the job done whenyou are able to think the way your client thinks.As the company grew, it was no longer feasible for all employees to beinvolved in hiring decisions. Instead, new hires met with an ad hoccommittee of veteran employees. Project manager Makayla Jonesdescribed the hiring process and what she looked for in an applicant:
Nervous people don’t do well here. This is a high stress job. Weare usually the last people brought in—after the architect, thebuilders, and so on. We are also the last people standing thereafter the move is completed, and we end up taking responsibilityfor decisions we didn’t make. It’s also our job to stay on a bitafter the move to make sure everyone is settled. Sometime thistakes a lot of diplomacy. Lots of people hate their job or hatetheir company, and the way they express that is to say, “I hatemy chair.” People will try to gain control over whatever they can.So, we change the chair, the employees are happy, and theproject is a success.Employees here also need to be comfortable with the lack offormal organizational structure. People come from all kinds ofbackgrounds. Some, who’ve come from large organizations witha lot of structure, have a hard time adjusting to the flexibility wehave at Beck. We have to work odd hours. We don’t havedefined roles. And we don’t get a lot of formal feedback.Other than annual reviews conducted by either Beck or Smith, employeeswere given feedback and direction on a situational basis. Projectmanagers had considerable autonomy over their projects. Jonesexplained the review process:There is a form Marilyn uses for employee reviews, but she justuses it as a guide. I haven’t seen her actually fill it out. We arenot managed very closely at all. Basically, Marilyn and Susanlook at whether we bring our projects in on budget and on time.At the beginning of a job, they give us a not-to-exceed pricebased on a scope of work, and then it is up to us to manage thejob. We occasionally get feedback from clients through letters ortelephone calls. Most times we will ask the client if we can usethem as a reference. We get a lot of our jobs through word-of-mouth, so it’s important to have a good ongoing relationship withour clients.Steven Brown described his feelings about the way employees weremanaged:One thing I like more than anything else about this job is that, asfar as the client is concerned, I am Beck Consulting. We manageourselves and we represent our own company. I think it’s greatthat I’m a reflection of our company. I’ve never fully had thatfeeling before in any other job. It’s very satisfying. I have a
feeling of ownership without the liability that true ownershipwould bring.However, Brown also saw drawbacks to the lack of formal structure:I have three people on my team. We are stationed full time atone of our large corporate clients. I am considered the seniorperson of that team: there is also another project manager andwhat I’d call a junior person on the team. To the client I amconsidered the team leader, but at Beck we’re all considered tobe on the same level. That’s where I think there is somethinglacking in the organization, particularly for junior people whoshould be receiving regular feedback on their performance froma supervisor. There is some lack of clarity on our parts: ourinternal roles don’t always correspond with our external roles.Most people here seem comfortable with this ambiguity, so Ihave not made an issue of it.As one would expect in a service business, payroll and related expensescomprised the largest percentage of expenses. All the project managersat Beck Consulting had the choice of being paid on an hourly or salariedbasis. Hourly wages and salaries were negotiated individually, with theapplicant naming a preferred rate, which Beck compared to otheremployees in the company with similar experience. Occasionally, Beckresearched architectural and design firm employees’ pay rates. However,Beck was more concerned with maintaining internal wage parity thancomparing with other firms. Most employees chose to be paid hourly. AsBeck explained,In the early days of the company, people were paid hourlybecause I wasn’t sure we could guarantee full time employment.It was fine with employees—they didn’t need the guarantee of a40-hour salary. Now, paying hourly wages serves as a motivatorfor people. It’s similar to being on a sales force. The employeeshave some control over how much they make because, in mostsituations, they can set their schedules. We certainly don’t wantpeople working significantly more than 40 hours per week on aregular basis. People know, however, that if they do need to putin that kind of time, they will be paid for it. In certain cases,individuals who are paid hourly make out better on an annualbasis than those same individuals would have on salary, so Iencourage some people to opt for hourly pay. A few of the
people who started out as salaried have eventually asked to gohourly, I have never seen anyone go the other way.
Growing PainsIn 2012–2013 many of Beck Consulting’s clients experienced growth andmergers, leading the company to double in size from 20 to 40 employees.Up until this point, the company had enjoyed steady, manageableexpansion. Project Manager Makayla Jones explained the impact of thisgrowth spurt:There was a rough period when we were growing rapidly. Wehad some growing pains. We went to 40 employees before wehad the infrastructure to support them. People were getting hiredso quickly. They felt they were thrown into the lion’s den withoutany training. We didn’t have time to train, and we weren’t able tocommunicate with each other. On one project a newly hiredperson did not understand that she needed to report to a projectmanager for a specific project: the newly hired person did notunderstand that yesterday’s boss could be tomorrow’s colleagueand yesterday’s colleague could be tomorrow’s boss. It’s hardworking in an organization with 38 people when you don’t knowwho some of the new people are.Quickly, Beck realized that the company needed to change the way ittrained new employees:It became clear that we could no longer train people just byosmosis. We had to institute a more formal training program,which is basically a mentoring system. New people, regardlessof how much work experience they have, are partnered withsomeone more senior on projects until such time as they can goout on their own.Jones agreed that the worst of the transition times seemed past:As things slowed down a little, we started making time formeetings, and Marilyn and Susan have made an effort to getpeople to know each other. They tried to shift around the teamsto allow people to work with others they hadn’t gotten to knowyet. Marilyn started picking names out of a hat and having thosepeople go to lunch with each other. Through all of this rapidgrowth, Marilyn and Susan have tried to keep up the familyatmosphere. For example, they are very tolerant of people’s
personal lives. Marilyn and Susan try to understand what isgoing on with everyone and how their personal lives may or maynot interfere with their work.Another way Beck communicated with her growing workforce was a two-hour bi-weekly staff luncheon. All employees attended the meetings—even those stationed off-site. At the meetings, people had a chance toapprise others of particular issues they may have on a project. Thecompany also invited vendors or other experts to give presentations as away to keep staff up to date on industry issues and new products. Thecompany always paid for lunch, and each meeting concluded with a cakeand celebration of staff birthdays.Growth at Beck Consulting was not only measured in the increasednumber of client projects and employees. The company was alsoexpanding its capabilities. New employees brought with them a range ofskills that Beck Consulting added to its capacities. For example, thecompany acquired a small interior design firm that had expertise incomputer-aided design. Beck Consulting also developed expertise in artcollection management. In addition, the company was handling biggerand more complex moving projects that required larger teams of peopleand a more formal hierarchy to execute. Makayla Jones described theteam put in place to conduct the Federal Courthouse move:The project was different in that it was more massive thananything I had experienced before. It was the first time wedesignated an actual team leader, feeling that one person wouldbe most efficient. I was the project leader, and had all the directclient contact. I directed three project managers who worked withthe individual courts. I had to keep the project managersfocused, maintain the schedules and budgets, and keep a viewof the big picture. It was difficult at first. We had never worked inthat kind of a structured team. It caused some tension becausepreviously we’d been equals. But we talked it out and came to anunderstanding that our roles had to be different for this project. Inthe end we learned that sometimes we need that kind ofstructure to get the job done.For Beck, growth also meant she was forced to step away from projectmanagement and the day-to-day oversight of her company. Sherefocused her role on marketing and public relations. As the companygrew, Smith shouldered more and more of the daily responsibility ofrunning the company and supervising employees.
Marilyn and I play different roles. Marilyn has become apersonality—winning awards and being written about in thenewspaper. She is now externally focused and involved in themarketing of the company. I am more hands-on, keeping tabs onstaffing and the status of projects. Since Marilyn is so much inthe public eye and out-of-the office so frequently, I’m not alwayssure if I should handle Marilyn’s clients, if there is an urgentsituation.As Smith and Beck’s roles evolved, some employees expressed a senseof ambiguity concerning reporting relationships and authority. As StevenBrown described,It’s a little hard to say exactly what the reporting structure is here.Clearly Marilyn is the president of the company. I think about heras the overall strategic “picture” person. Susan, I think of moreas the general manager/operations director. But I don’t feel Ihave to go to only one of them about a specific problem. Theyare more like twin managers.
The FutureAs Beck sat at her desk, she felt satisfied that she had built a reputablecompany, had a great team of people who were happy to work for her,and had a client base that would continue to expand. She knew that somekey questions had to be answered in order to meet the future proactively.In what direction should she take the company? What will be the impactof growing from 50 to 100 people? This was very likely to occur in thenext year, given the anticipated rate of growth, based in part on theprojects they were currently being considered for. How much longer couldshe pay people on an hourly basis? She was sure that soon she wouldhave to move to a conventional salary model. How would that impact herincentive structure? Beck also felt that she needed to create another layerof management. But should she? What impact would such changes haveon teams and leadership of teams?As Beck became more focused externally, how should she change herrole and what should that new role be? Are isolated tensions andambiguities indicative of systemic problems that could be exacerbated asthe company grows? How should Beck Consulting maintain—or change—its structure, culture, and ability to respond quickly and effectively toclients’ needs through this period of rapid growth?
Study Questions1. Draw the current organizational structure of Beck ConsultingCorporation (BCC). Have designations for 38 people. How is thisorganizational chart similar to or different from other organizationalcharts that you have seen? Next, draw a new organizational chartfor BCC with a new layer of management. How many people wouldyou elevate to this new layer of management? Explain yourreasoning for the number that you would elevate to the newmanagement roles and note to whom these new managers willreport. How do you imagine that this new layer of managers willimpact the organizational dynamics within Beck Consulting?2. What are the advantages and disadvantages of paying professionalpeople on an hourly basis? How should Beck maintain or changeher salary model and why? What impact do you imagine aconventional salary model will have on Beck employees? If Beckchanges the compensation system from hourly to salary, should shechange other aspects of her compensation system?3. How would you describe the organizational culture at BeckConsulting? How might the purposed new layer of managers impactthe organizational culture at BCC? What, if anything, should Beck doif and when she adds a new layer of management?4. Assume that Beck Consulting chooses to take advantage of currentbusiness opportunities and will need to grow to 100 members in thenext 9 months in order to respond to the challenges. What changeswould you recommend Beck undertake to ensure the continuedsuccess of her firm?
Chapter Six Navigating OrganizationalPolitics and CultureChapter OverviewChange leaders recognize the importance of observing and analyzingthe informal components of an organization—power and culture—which are key forces at play within an organization, impacting allstakeholders in the change situation.Identifying the power dynamics in an organization is critical to asuccessful change process. Different sources of power are described,allowing change agents to assess the potential of their power andinfluence and gain leverage in their organizations, if needed.Force field analysis and stakeholder analysis are two tools toadvance your understanding of the informal organizational systemand how to change it.Know yourself as a change leader and stakeholder in the process.Change leaders’ understanding of both the present and desired futurestate of organizations depends on an analysis of multiple dynamicswithin organizations. Chapter 5 looked at the formal structures andsystems, noting how they impact change initiatives. Chapters 7 and 8will examine the impact of key individuals in the organization on thechange process. This chapter provides the background on the lesstangible but no less real aspects of organizations: political dynamicsand culture (see Figure 6.1).It is important to note that in evaluating stakeholders in yourorganization, you, too, are a stakeholder. To get a full picture of theinformal organization, it is important to use these political and culturalconcepts to evaluate yourself as a part of the system. Be sure to askyourself how your personality impacts you as a stakeholder andchange agent. Evaluate your motivations and understand how you dealwith power and how you view your organization’s culture.Figure 6.1 The Change Path Model
If corporate mergers are the ultimate in change-managementchallenges, then the arrival of a new CEO may also challengeembedded power dynamics and cultural patterns. In December 2000,CEO Jim McNerney arrived at 3M’s 28-building, 430-acre, suburbanMaplewood, Minnesota campus. Interestingly, McNerney was the firstoutsider to lead 3M in all of its 98-year history. 3M’s CEOs usually risefrom within, after being steeped in the corporation’s culture andphilosophy. However, 3M employees found that the new CEO was ableto work with those around him.
Yahoo-Tumblr Merger: Power and Cultural DifferencesIt was 2007. High-school dropout David Karp founded Tumblr, a bloggingservice where users own their own pages. It quickly grew due to severalfactors: young individuals found their voices on the social networking site;like-minded people developed into strong communities; creatives launchedInternet memes; and bloggers were offered and accepted numerous bookdeals. By spring, 2013, when the aging Web pioneer Yahoo bought Tumblrfor $1.1 billion in cash, Tumblr had over 108 million blogs and reached 44million people in the United States and 134 million worldwide. For MarissaMayer, CEO of Yahoo, buying the social media site was her approach tochanging the aging giant Yahoo and bringing in a much-needed youngdemographic to the company.Skeptics of the purchase immediately talked about potential problems.Many analysts wondered how Yahoo would be transformed when it wasnot clear how Tumblr would ever become profitable. Karp had disliked anddistrusted advertising and he and other Tumblr executives had not figuredout how to monetize its bloggers. In 2012 he had burned through $25million in cash, and by 2013 investors were not rushing in with additionalmoney at an acceptable valuation. Karp, in other words, needed a saviorand in May, 2013, CEO Mayer looked like a potential rescuer for Karp andTumblr’s investors. At the announcement of the purchase for $1.1 billion,Mayer promised not to “screw it up” for Tumblr’s users.The young demographic that Yahoo wanted, however, brought with them aparticular culture: an acceptance of sexually explicit content on Tumblr.Advertisers, on the other hand, would not have their ads run on pages thatfeatured pornography. Yahoo needed to figure out a policy that would keepyoung users on Tumblr while not offending advertisers and Yahoocustomers. They never did figure out this cultural clash.At first California-based Mayer and Yahoo executives had a hands-offapproach to Tumblr and its 175 employees in New York City. By 2015,however, Mayer set a very aggressive target of $100 million in revenue forTumblr; but, she set this goal with little input from its executives. A yearlater when the revenue target had not been hit, Mayer abruptly mergedTumblr’s ad sales team with Yahoo’s under an executive who had littleexperience or rapport with Tumblr employees. Quickly, Tumblr employeesheaded for the exit doors. The next year Mayer again reorganized the adsales teams into two separate groups with chaos and anger following inthe wake of the separation. More employees headed for the door.By spring, 2016, Yahoo and Mayer hinted that the $1.1 billion Tumblracquisition was a waste of money. At that time Yahoo reduced its overallworkforce by 15%, closed offices around the world, and began its searchfor a private equity or corporate buyer, such as Verizon. Finally, in June,2017, Verizon announced that it had bought Yahoo and, with it, Tumblr.
A tangle of issues—as many as five to seven—undid this merger. No onefigured out how to make money at Tumblr. While Mayer’s hands-off policywith a continent between the two companies seemed appropriate at first, italso meant that employees kept their own assumptions and ways of theseeing the world rather than finding useful common ground in a sharedculture. When Mayer did step in, people said that it was too little, too late,and too aggressive, particularly around the supersized revenue goal.Mayer’s appointed leaders did not connect with Tumblr’s employees whobolted when they did not like Yahoo’s actions. There was conflict betweenYahoo’s leaders and Tumblr’s employees who reported being confused atthe mixed signals which came from Sunnyvale, California.In short, Mayer and her team never did the hard work of bringing togethertwo diverse workplaces and workforces into a common culture. Nor didthey deal effectively with issues of power and influence.1Mcnerney Enters 3MJim McNerney’s style has let employees to feel that they, not McNerney,are driving the changes. He was able to introduce data-driven changewithout forcing his ideas from General Electric onto the organization.McNerney was able to rely on existing 3M management rather thanimporting other GE executives. “I think the story here is rejuvenation of atalented group of people rather than replacement of a mediocre group ofpeople,” he says. As part of his change plan, he avoids giving orders andreinforces the 3M culture whenever he can. “This is a fundamentally strongcompany. The inventiveness of the people here is in contrast with anyother place I’ve seen. Everybody wakes up in the morning trying to figureout how to grow. They really do.” This diplomacy generally played well withthe 3M faithful. “He’s delivered a very consistent message,” says AltheaRupert, outgoing chair of Technical Forum, an internal society for all 3Mtechnical people. “There’s a sense of speed and a sense of urgency.”2In the 3M case, McNerney shows a clear understanding of the players,their perspectives, and their needs, and this made the implementationmuch easier to accomplish. Perhaps McNerney had no choice. But hedid act in ways that involved people, focused their attention andinterest, and brought them along rather than attempting to impose anoutside set of views.While the stories of the Yahoo-Tumblr merger and the installation of anew leader within a fully functional 3M are quite different, theydemonstrate the impact of power dynamics and the influence of anorganization’s culture. How change leaders deal with power and
behavioral organizational norms and the difficult-to-define, amorphousorganizational culture will affect the speed and nature of the change.When assessing possible responses to change initiatives, leadersneed to recognize the impact that individual and organizational historycan have. Employees may have had significant experience withchange that leads them to be wary. They may have also worked withthe existing approaches and have their own perspectives on whatchange is needed, so ambivalence and concern are natural—particularly in individuals who have demonstrated commitment to theorganization and the quality of the outcomes achieved.3 Some changeprojects are downsizings in disguise and yet change leaders somehowexpect employees to welcome such initiatives with open arms. Surely,such optimism is naïve!
Power Dynamics in OrganizationsMention the words “organizational politics,” and many people roll theireyes, throw up their hands, and say, “I don’t want to have anything todo with politics!” The assumption is that organizational politics isinherently dirty, mean-spirited, destructive, and that organizations andtheir members would be better off without “politics.”Bolman and Deal make a persuasive argument that organizational“politics is the realistic process of making decisions and allocatingresources in a context of scarcity and divergent issues. This view putspolitics at the heart of decision making.”4 Negotiating, according toBolman and Deal, is the key process in organizational politics. Themarketing department, for example, wants to redesign theorganization’s website, while the technology folks push back saying,“Not now! We have our hands full as we install the XYZ platform!” Inshort, organizational politics is the push-and-pull between and amongindividuals and departments and who gets what resources. There isnothing inherently good or bad about power. Rather, it is the applicationand purposeful use of power and its consequences that will determinewhether it is “good” or “bad.”In fact, the power to do things in organizations is critical to achievingchange. Power is a crucial resource used by change agents toinfluence the actions and reactions of others. The knowledgeablechange agent asks multiple power-related questions, such as, Whatpower do I have and what are the sources of my power? What am Iauthorized to do by virtue of my title and position? What signatoryauthority and what dollar limits of expenditure does my position have?For example, can I hire someone based on my signature alone, or do Ineed to obtain approval for the hiring from HR? These questions helpchange agents to diagnose their formal authority and power.
Individual PowerWhile organizations confer specific authority and power on particularpositions, change agents also need to be perceived as influential.Change agents need to articulate positive beliefs about power—and tobe aware of others’ perception of their power. There are both internalpsychological and external, reality-based roadblocks to exercisingpower. Clearly, power can be real—one can influence people withknowledge, persuade them by strength of personality and integrity, oruse rewards and punishments to direct people’s behaviors. But theperception of power is just as important, if not more important, than theactual resources that a manager holds. If others do not believe that aperson is influential, then the facts will have little impact until thoseperceptions are changed. The rookie manager has the same formalpower as the experienced one. However, the perception of their powerand influence are generally very different. Often the perception that anindividual has power to act is all employees need. When individualshave the trust of their CEOs, for instance, they want to maintain thattrust and are therefore not likely to use inappropriate influence tacticson their boss.5What gives people power in organizations? Individuals have powerbecause of the position they hold, who they are (character andreputation), and who and what they know. When position, reputation,and expertise combine in one individual, that individual is likely to bepowerful. These individual sources of power are classified in Table6.1.6
Departmental PowerIn addition to personal influence, departments within an organizationmay have different levels of power. This power is dependent on thecentrality of the work the department does, the availability of people toaccomplish important organizational tasks, and the ability of thedepartment to handle the organization’s environment. These can becategorized as follows:Table 6.1 Types of Individual PowerTable 6.1 Types of Individual PowerPositionalPowerThis is the legitimate authority of the title andposition; it includes control and access toresources and the ability to formally makedecisions and allocate resources.The formal authority to make decisions is amajor source of power.∗NetworkPowerPower in this area comes from the quality ofthe informal and formal network of connectionsthat permits a person to access and pass onvaluable information.People with large networks of colleaguesacross organizational levels and boundarieshave access to more information and are oftenperceived to be more influential.KnowledgePowerExpertise and knowledge is particularlyimportant in some organizations; it isparticularly important in such organizations aspharmaceutical and consulting firms.Expert power is the possession of a body ofknowledge essential to the organization;credentials provide independent certification ofexpertise and increase one’s ability toinfluence.Information power is clout gained through theflow of facts and data: by creating, framing,
redirecting, or distorting information and bycontrolling who receives the information.Knowledge power also relates to a person’sdepth of understanding of how things work inthe organization in order to get things done.This relates to both the formal (e.g., how theformal approval process works) and theinformal processes (e.g., how power andinfluence really manifest themselves in theorganization) that influence how theorganization operates.PersonalityPowerThe ability to inspire trust and enthusiasm fromothers provides many leaders with significantindividual power. Sometimes leaders havecharisma, a special charm that pulls people tothem.Reputation, which comes from people’sexperiences with the person, includes reportsof success (or failure), and influences personalpower.Treatment of these power related concepts can be found in: Whetten, D.A., &K.S. Cameron, Developing Management Skills, 8th ed. New Jersey: Prentice-Hall, 2010.∗ Another way of looking at this type of power is in terms of “yea-saying” or “nay-saying” power. Yea-saying means that a person canmake it happen. For example, he or she could decide who would behired. Nay-saying power means that a person could prevent somethingfrom happening. Thus, nay-saying power would mean that someonecould prevent a particular person from being hired but could not decidewho would be hired.Ability to cope with environmental uncertainty: Departments gainpower if they are seen to make the environment appear certain.Thus, marketing and sales departments gain power by bringing infuture orders, diminishing the impact of competitors’ actions, andproviding greater certainty about the organization’s future vitality inthe marketplace. During times of economic turbulence, financedepartments gain power through their ability to help the firmnavigate its way. Likewise, other departments and functions either
enhance or diminish their power based upon their ability to absorbuncertainty and make the world more predictable and manageablefor the organization.Low substitutability: Whenever a function is essential and no oneelse can do it, the department has power. Think, for example, ofthe power of human resources departments when no one else canauthorize hiring of new personnel or the power of technologydepartments that often gets to decide what kind of hard- andsoftware a firm will buy and use.Centrality: Power flows to those departments whose activities arecentral to the survival and strategy of the organization or whenother departments depend on the department for the completion ofwork. In most large white-collar organizations, systems peoplehave power because of our dependence on the computer and theinformation derived from it. Close the management informationsystems and you shut down the organization. Highly regarded andwell-developed information systems anchor the success of firmssuch as Federal Express, Walmart, and Statistics Canada.Hardy added to our understanding of the sources of power with herclassification.7 She described three dimensions of power:1. Resource power—the access to valued resources in anorganization. These include rewards, sanctions, coercion,authority, credibility, expertise, information, political affiliations, andgroup power. Resource power is very similar to the individualpower listed above.2. Process power—the control over formal decision-making arenasand agendas. Examples of process power would be the power toinclude or exclude an item on a discussion agenda. Nominatingcommittees have significant process power as they determine whogets to sit on committees that make decisions.3. Meaning power—the ability to define the meaning of things. Thus,the meaning of symbols and rituals and the use of languageprovide meaning power. For example, a shift from reservedparking and large corner offices for executives to first-comeparking and common office space can symbolize a significantmove away from the reliance on hierarchical power.Hardy’s introduction of process and meaning power adds significantlyto the understanding of how one might influence a change situation.Anyone who has tried to get an item added to a busy agenda willunderstand the frustration of not having process power.
While many sources of power exist, the type of power used bymanagers can have different effects. Some types of influence are usedmore frequently than others. One research study found that managersused different influence tactics depending on whether they wereattempting to influence superiors or subordinates. Table 6.2 outlinesthe usage of these power tactics. It shows that managers claim theyuse rational methods in persuading others. The use of overt power,either by referring something to a higher authority or by applyingsanctions, is not a popular tactic.Change agents, like all managers, need to think of themselves as“politicians.”8 Defining oneself as an organizational “politician” willsuggest the need to negotiate, develop coalitions, build and usealliances, deal with the personality of the decision maker, and usecontacts and relationships to obtain vital information. Savvy changeleaders do not underestimate the need for power and influence in theirdetermination to make something happen.See Toolkit Exercise 6.2 to assess different kinds of power.Table 6.2 Usage Frequency of Different PowerTacticsTable 6.2 Usage Frequency of Different Power TacticsWhen ManagersInfluence SuperiorsWhen ManagersInfluence SubordinatesMostPopularTactic↕LeastPopularTacticUse and give reasonsDevelop coalitionsAct friendlyNegotiateBe assertiveRefer to a higherauthorityUse and give reasonsBe assertiveAct friendlyDevelop coalitionsBargainRefer to higher authorityApply sanctionsSource: Kipnis, D., Schmidt, S. M., Swaffin-Smith, C., & Wilkinson, I. (1984,Winter). Patterns of managerial influence: Shotgun managers, tacticians andbystanders. Organizational Dynamics, 12(3), 56–67.
Organizational Culture and ChangeOrganizational culture: What does it mean?The concept of organizational culture is fairly new. While psychologiststalked about group “norms” and social climates in organizations asearly as 1939,9 the concept of “culture” only began to attractorganizational behavior researchers in the 1980s and 1990s.10 Now,the idea is widely used among academics and practitioners alike: A2014 search on Amazon books by the words “organization culture”yielded a listing of over 47,000 plus books.11 The widespread use ofthe term has not, unfortunately, created a standard definition. However,Ed Schein’s definition, which has been published in five editions of hisbook Organization Culture and Leadership (1992, 1996, 2004, 2010,and 2016), dominates the field and is quite useful in thinking about thephenomenon. Schein defined culture as follows:1. a pattern of shared basic assumptions2. that was learned by a group3. as it solved its problems of external adaptation and internalintegration4. that has worked well enough to be considered valid and,5. therefore, is taught to new members6. as the correct way to perceive, think, and feel in relation to thoseproblems [numbers were added by the authors].Note the complexity of this definition with its six sub-parts. Schein isconcerned with a group and its learning; with how an organizationadjusts to the external environment’s ever-evolving demands and howinternal players respond coherently and in alignment to thosechallenges; the fact that these ways of behaving are taught to newmembers “in a socialization process that is itself a reflection of (the)culture”; and that the culture promotes a particular way of thinking andfeeling about problems.
How to Analyze a CultureTo assess a culture, Schein identified three levels for analysis. The firstlevel is the visible aspect—or artifacts—of the organization. Theseinclude everything from how employees dress and the design of anorganization’s buildings to its structures and processes. While artifactsare easy to see, their meaning can be difficult to decipher and anobserver needs to be careful to ascribe meaning to a single artifact orobservation. The second level is an organization’s “espoused beliefsand values”; this second level includes an organization’s articulatedmission, values, and strategy. Most change agents begin to change anorganization by starting at this level of culture. The third level is the“basic underlying assumptions” that have become so ingrained and somuch a part of a group’s thinking and perspective on the world thatthey are not questioned. Since these assumptions remain largelyunarticulated, they are also non-debatable, making them extremelydifficult to change. For example, a university faculty may see itself ascaring passionately about the quality of the classroom experience, andprotect its beliefs by actions that serve to silence anyone who raisesquestions in this area.Many founders of organizations explicitly set out to establish a culturethat is compatible with their beliefs about how organizations operatebest and the values that should be embedded in the organization. Forexample, Gretchen Fox, founder and former CEO of FOX RelocationManagement Corp., Boston, had worked in excessively hierarchicallaw firms before she started her relocation firm. At law firms she hadobserved large, physically fit men who were senior partners in the firmand whereby held high-level positions in the organization’s hierarchy.These men would ignore low-level women staff as they lifted andcarried heavy boxes and bottles of water. For Fox, the human thing forthe men to do would have been to help with the heavy lifting. Foxdecided then and there that when she built her business, she wouldestablish a flat, non-hierarchical firm. This belief was embedded in thelayout of offices (Fox’s office was a regular-sized office in a row ofoffices, leaving the light-filled sunny corner spaces for employees); inthe minimal use of titles; in a collective, decision-making process forhiring new employees; and in a rational approach to work that did notinvolve status in the hierarchy.As FOX Relocation grew, some of the observable artifacts—such astitles—needed to change to accommodate folks in the external world’s
understanding of who did what inside the firm. The question becamethis: What else, if anything, needed to change inside the firm to adaptto its growth and to the external environment while maintaining theintegrity of its culture?
Tips for Change Agents to Assess a CultureA change agent, then, needs to assess a culture at three levels. Suchan analysis may lead to innovative ways to change a culture.1. Observe the artifacts: How do people dress? How are officesarranged? What is the space differential for offices between top-levelexecutives and other people who work in the organization? How areparking lots and spaces assigned, and who pays and does not pay fora space? How do members of the organization interact and relate toone another? Where and how are meals eaten? Is there an executivedining room and separate food for executives?2. Read documents and talk to people to gain an understanding of anorganization’s espoused beliefs and values: What does theorganization say about itself on its website and social media platforms?What are the articulated mission, values, and strategy statements?What does it brag about in its press releases? Ask five to ten people:What does this organization value and believe in? What, if any, of itsdocuments have changed in the past five years? How have theychanged, and are these changes in alignment with changes in theartifacts of the organization?3. Observe and ask people about underlying assumptions: Since theseare often unarticulated and their origins developed years before, it maybe difficult for people to express the organization’s fundamentalsuppositions. Observers need to look for clues on fundamental issues:What is the basic orientation to time in terms of past, present, andfuture? What time units are most relevant for the conduct of theorganization’s business? For example, colleges and universities orientaround the quarter or semesters, units of time that are not relevant tomost businesses but would be to bookstores that serve universitiesand landlords who rent to students. A second example would be thenature of human beings: “Are humans basically good, neutral, or evil,and is human nature perfectible or fixed?” (p. 429).12 It is important toconsider these fundamental issues, and then search for and develophypotheses about what needs to change to improve the outcomesexperienced and how to go about it.Clashing Workplace Cultures*
Training & Careers, Inc. (TCI), a small nonprofit agency, focused on jobtraining and placement for low-income residents included programs inculinary arts, janitorial work, and hotel and hospitality training. Due tofinancial issues, TCI merged with Careers, Inc. (CI), a national nonprofitthat had a similar mission and programs. TCI, headquartered in Boston,had a relaxed and autonomous work culture. Careers, Inc. (CI),headquartered in New York City, had a regimented and tightly supervisedworkforce. As the organizations began to merge their operations, theyneglected to address the differences in their workforce cultures. TCI wasmade up of white-collar staff, 25% of whom held a master’s degree insocial work. TCI was able to attract this talent by offering flexible workschedules, three weeks of paid vacation, and letting the staff out earlymost Fridays. CI’s workforce, on the other hand, attracted largely blue-collar workers who led the janitorial training programs. This workforce hadstrict time reporting guidelines and few vacation incentives, as theircompensation was commensurate with their high school or associate’slevel education.As the organizations attempted to merge, TCI experienced significantpushback from its employees as CI eliminated early-release Fridays andproposed cutting vacations. TCI moved away from staff autonomy byadopting CI’s time clock system, which required employees to punch inand out each day. Because the leaders of the two organizations did notsufficiently understand the cultural differences and take these into accountduring the merger, TCI experienced a 43% turnover of frontline stafffollowing the merger. Remaining staff were disgruntled and openly soughtother job opportunities outside the organization.* The names and locations of the organizations are disguised.This vignette suggests three levels of organizational culture. The timeclock system, requiring employees to punch in and out each day, is anartifact that was present in one of the organizations, but not the other.The espoused beliefs and values were discernable in the comparablemissions and programs of the two organizations and pointed topotential friction points. Further, the underlying assumptions of who tohire and how to manage them suggests differences at the third level ofculture. At Careers Inc., executives believed that staff needed to betightly controlled and supervised to make sure that they did a day’swork. By contrast, the underlying assumption of TCI was that staffaccepted lower pay in return for more autonomy and time off perks.When this assumption was challenged, the results were disastrous.To create one organization and one culture, the executives at CIrequired all of its employees to use the time clock, punching in and outdaily. In making this requirement, CI executives sent a signal about
their core beliefs about the nature of human beings and how theyshould be managed.
Tools to Assess the Need for ChangeIndividuals choose to consider and adopt a proposed organizationalchange—or choose not to. Sometimes they do this willingly and othertimes they choose reluctantly, either feeling forced or mixed about theirdecisions. This perspective is valuable when thinking about increasingthe success of organizational change, for it is at the individual level thatpeople decide to change. Their choices depend on their views of thesituation and how it impacts their lives.In the recent past, many change programs have been focused on costcutting, including the downsizing of the number of employees in anorganization. People are bright. They understand what is happening.And if a program will cost them their jobs, why would you expect themto be enthusiastic and positive? Such resistance demonstrates thepoint that individuals will choose to cooperate or not depending on theirpersonal circumstances and their assessment of how the change willimpact them personally. Individuals will adopt or accept change onlywhen they think that their perceived personal benefits are greater thanthe perceived costs of change. This can be summarized as follows:Change Occurs WhenPerceived Benefits of Change > Perceived Cost of ChangeThis simple formula highlights several things. First, change agentshave to deal with both the reality of change and its perceptions. Again,perception counts as much as reality. Second, in many situations, thecosts of changing are more evident than the benefits of change. Inmost change situations, first the costs are incurred and then thebenefits follow. The perceived benefits of change depend on whetherpeople think the benefits are likely—that is, the probability of thechange being successful in ways that count for them. As well, thebenefits of change depend on the state of happiness or dissatisfactionwith the status quo. Interestingly, people also tend to focus on theconsequences of the change rather than the consequences ofremaining the same. The more dissatisfied people are, the more theyas individuals will be willing to change. The change equation can bemodified to capture this as follows:
Change occurs whenDissatisfaction × Benefits × Success > CostWhereDissatisfaction = Perception of dissatisfaction with the status quoBenefits = Perception of the benefits of changeSuccess = Perception of the probability of successCost = Perceived cost of changeThus, change agents need to build the case for change by increasingthe dissatisfaction with the status quo by providing data thatdemonstrate that other options are better, demonstrating that theoverall benefits are worth the effort of the change, and showing that thechange effort is likely to succeed. When discussing these factors withothers, it’s useful to extend the assessment beyond the rational, “head-related” factors such as cost savings, market share, improvedprofitability, and competitive advantage. The assessment shouldextend to “heart-related” matters, such as the human impact of thechange on employees, work teams, the department/division, customersand the community. Doing your homework, engaging others inconversations about the change, and early successes are importantparts of the change agent’s toolkit in the early stages of a changeinitiative.It is important to differentiate between the costs and benefits to theorganization and the costs and benefits to individuals. Too often,change leaders focus on the organizational benefits and miss theimpact at the individual level. The earlier example highlighted this. If anindividual sees that the change will increase profits and result in jobloss, why would a manager expect support? It takes very securepeople who feel they have alternatives and are being equitably treatedto be positive under these circumstances even if they believe thechange is needed for the organization.Table 6.3 captures this. It contrasts the impact on individuals with theimpact on the organization to predict the resulting support for a changeinitiative. The purpose of Table 6.3 is to encourage change leaders toavoid the trap of assuming that positive organizational outcomes willautomatically be supported by individuals.
In addition to considering the direct impact of a change on a person,individuals will also think about and be influenced by the effects of thechange on their coworkers and teammates. The strength ofinterpersonal bonds, including the shared values, goals, and normswithin an organization, can have a significant impact on attitudes andactions. The traditions of how work is divided, how people anddepartments interact or do not, and simply the way of doing businesscreate a culture within an organization. The desire to maintain theorganization’s traditions, even if there is a mutual understanding for aneed to move on, can hinder the acceptance of changes. Thischallenge is greater if there are shifts in roles and responsibilities andtherefore a shift in power. A change leader needs to understand andrespect individuals’ and organizational history and the individualmembers’ perceptions of that history to effectively negotiate thechange process and appropriately engage stakeholders.Table 6.3 Organizational and IndividualConsequences and the Support for ChangeTable 6.3 Organizational and Individual Consequences and theSupport for ChangePerceived Impactof the Change onthe OrganizationPerceived Impact ofthe Change on theIndividualDirection of Supportof the ChangePositiveconsequencesfor theorganizationPositive outcome forthe individual (e.g.,less work, betterwork)Strong support forchangePositiveconsequencesfor theorganizationNegative outcome forthe individual (e.g.,more work, worsework)Indeterminatesupport for changebut very possiblyresistanceNeutralconsequencesfor theorganizationPositive outcome forthe individual (e.g.,less work, betterwork)Positive support forchange
Perceived Impactof the Change onthe OrganizationPerceived Impact ofthe Change on theIndividualDirection of Supportof the ChangeNeutralconsequencesfor theorganizationNegative outcome forthe individual (e.g.,more work, worsework)Resistance tochangeNegativeconsequencesfor theorganizationPositive outcome forthe individual (e.g.,less work, betterwork)Indeterminatesupport for changeNegativeconsequencesfor theorganizationNegative outcome forthe individual (e.g.,more work, worsework)Resistance tochangeChange agents need to think of the impact on individuals—particularlypeople critical to the change. When doing so, consider also the peoplewho will actually have to change and how they will view the changeequation and assess the benefits, costs, and risks. A general managermay decide that new systems are needed, but it is the individual whowill be operating the systems who will have to learn how to work withthem and change his or her behavior.To consider the perceived impact of change see Toolkit Exercise 6.3.
Identifying the Organizational Dynamics at PlayEach of the organizational models introduced in Chapters 2 and 3assumed that organizations consist of people, systems, and structuresthat interact according to different forces at play. In organizationalchange, the key is to understand the forces and how they respond toshifts in pressure. In system terms, the technical term is homeostasis,meaning a system has a tendency toward a relatively stableequilibrium among its interdependent factors. Organizations are asthey are because the forces involved are in balance. If one force ischanged, it could affect many things and may well be resisted.Alternatively, it may give rise to unanticipated support for the change.Two tools are particularly useful in helping change leaders tounderstand such forces and why the organization changes or doesn’t.1. Force field analysis—a process of identifying and analyzing thedriving and restraining forces impacting an organization’sobjectives2. Stakeholder analysis—a process of identifying the keyindividuals or groups in the organization who can influence or whoare impacted by the proposed change and then of working withthose individuals or groups to make them more positive to notionsof changeOnce these tools have been deployed, it is important to integrate them.Stakeholders will show up in the force field analysis as forces that needto be considered, and an in-depth assessment of them in thestakeholder analysis will put the change agent in a stronger position tomanage those forces in ways that will advance the change.
Force Field Analysis13The force field analysis identifies the forces for and against change. Insituations that are stable or in equilibrium, the forces for change(driving forces) and the forces opposing change (restraining forces) arebalanced. To create change, the balance must be upset by adding newpressures for change; increasing the strength of some or all of thepressures for change; reducing or eliminating the pressures againstchange; or converting a restraining force into a driving force. Figure 6.2depicts a force field analysis chart.Figure 6.2 Force Field AnalysisPressures for change come in many shapes and include both internaland external sources. External factors often are the initial triggers thatgive rise to internal pressures. External driving forces could includebenchmark data and various market forces that are putting pressure onsenior management to improve their performance in the private sector.Politicians concerned about increased costs or declining service levelscould generate driving forces in the public sector. Alternatively, externalfactors may involve opportunities for future growth or access to specialincentives (e.g., tax relief) designed to promote certain activities.Internal pressures, such as the vision of a champion, work groupattitudes and norms, and internal systems (e.g., the reward system)that are aligned with the change have the potential to act as drivingforces.Restraining forces for change might come from lack of access tosufficient resources, missing skills and abilities, power dynamics,cultural norms, and/or formal organizational systems that are
incongruent with the change. They can also come from outside of theorganization in the form of customer and supplier concerns, industrystandards, rules, and regulations. For example, if innovation is part ofthe desired change, control systems that focus on efficiency andminimize experimentation or variance from standards to reduce costswill act as a restraining force. Changes that are seen as threats toindividuals will lead to resistance. Habits or patterns of behavior thatcould impede the change might be difficult to alter, even whenindividuals are supportive. The longer those habits have been in place,the more difficulty individuals will have in extricating themselves fromthose patterns. Work group norms, informal leadership patterns, andworkplace culture may act as either driving or restraining forces,depending on the situation.To do a force field analysis,1. Identify the forces acting in the situation and estimate theirstrength. Both the immediate and the long-term forces need to beconsidered. The immediate forces are the ones that are actingnow and have an immediate impact (e.g., quarterly sales targets).The long-term forces are those that may have less immediateeffect but whose impact may linger longer, such as customersatisfaction or employee morale.2. Understand how the forces might be altered to produce a morehospitable climate for the change and develop strategies that willmaximize your leverage on the driving and restraining forces withthe minimum effort. Conserving your energy and resources isimportant because change management is a marathon, not a 100-yard dash.3. Look beyond the immediate impact and identify ways to increasesupport and reduce resistance. Consider unanticipatedconsequences that may result from what is implemented. Forexample, you may be able to reduce resistance by throwingfinancial rewards at individuals, but in doing so you mayinadvertently promote unethical behavior, reduce organizationalcommitment, and destroy your compensation system.In the 3M example mentioned earlier, the appointment of McNerneycreated a new force in the organization. The Six Sigma system heintroduced from GE was data driven and thus appealed to the values of3M employees. At the same time, he reduced defensiveness as a forceby praising the 3M culture and showed how the employees couldachieve more by focusing on the data and explicit goals. All of these
things added to forces for change and reduced or eliminated forcesagainst change. As positive outcomes began to ensue from theseinitiatives, the process provided sustaining reinforcement.Strebel suggests looking at force field analysis graphically. That is,consider the forces for and against change separately—not necessarilyopposing each other directly but operating orthogonally (at rightangles).14 Figure 6.3 shows this.Strebel’s view of the change arena allows us to plot where forces forand against change are in balance. The change arena helps us toidentify four areas with which many change agents are familiar: areasof constant or continuous change, areas of high resistance, areas of“breakpoint” change, and areas of “sporadic” or “flip-flop” change. Withbreakpoint change, pressures are significant and the resistance willbe strong. Under these circumstances, resistance will prevent changeuntil the driving forces strengthen to the point that the system snaps toa new configuration. For example, World War II was seen by manyAmericans to be someone else’s battle until the attack on Pearl Harbordramatically altered the status quo. When breakpoint change occurs, itwill be radical and create significant upheaval because of the strengthof the changes involved. The situations faced by General Motors andthe UAW in 2006 and 2009 are classic breakpoint situations. Themarket pressures on General Motors were very strong. The UAW facedequally strong resistance forces from both active and retired members,who wished to protect their health benefits and their pension plans.15 In2006, this led to significant concessions from the UAW, but these werea pale imitation of those obtained in 2009 after GM exercisedbreakpoint change through declaring bankruptcy and seeking courtprotection while it restructured.In flip-flop changes, forces are weak and change events are not veryimportant, and the situation could change only to reverse itself easily.Flip-flop changes tend to occur when participants have shiftingpreferences or are ambivalent concerning matters that are of onlymodest importance to them.Figure 6.3 Forces for and Against Change
Source: Strebel, P. (1994, Winter). Choosing the right changepath. California Management Review, 29–51.Force field analysis requires careful thinking about the dynamics of thesituation and organization, including how people, structures, andsystems affect and are affected by what is happening. How will thesefactors assist or prevent change?Toolkit Exercise 6.4 asks you to do a force field analysis in order todevelop your skills in this area.Such analysis does lead individuals to think in relatively linear ways—forces are either for or against change. Their influence is linear anddirect. However, a different, more nonlinear perspective is oftenneeded. A tool called stakeholder analysis is valuable in gaininginsights into a nonlinear interactive view of organizations.Stakeholder AnalysisStakeholder analysis is the identification of those who can affect thechange or who are affected by the change. Included in this is theanalysis of the positions, the motives, and the power of all keystakeholders. Stakeholder management is the explicit influencing ofcritical participants in the change process. It is the identification of the
“entanglements” in the organization, the formal and informalconnections between people, structures, and systems.The purpose of stakeholder analysis is to develop a clearunderstanding of the key individuals who can influence the outcome ofa change and thus be in a better position to appreciate their positionsand recognize how best to manage them and the context. A usefulstarting point is to think carefully about who will be affected and whohas to change their behavior in order for the change to be successful.An obvious but often overlooked point is exactly that—someone orsome people will be affected and some will have to change theirbehavior!∗ Once the key person or persons are identified, changeleaders must focus on who influences those people and who has theresources and/or power to make the change happen or to prevent itfrom happening.∗ We are reminded of the old definition of insanity: Doing the samething over and over, but expecting a different result!In doing a stakeholder analysis, the first step is to identify those peoplewho need to be concentrated on. A change leader can identify thosepeople by asking the following questions:Who has the authority to say “yes” or “no” to the change?Which areas or departments or people will be impacted by thechange? How will they likely react, and who leads and hasinfluence in those areas and departments? Note that thestakeholders relevant to a change do not always reside in theorganization and can include customers, suppliers, communities,and government bodies.Who has to change their behavior or act differently for the changeto be successful? This is a key question—the change ultimatelyrests on having these people doing things differently.Who has the potential to particularly ease the path to change, andwho has the potential to be particularly disruptive?Savage developed a model that plots stakeholders on two dimensions:their potential for threat and their potential for cooperation.16 If astakeholder has high potential for both threat and cooperation, Savagesuggests that a collaborative approach should be developed. In thisway, the stakeholder is brought onside and his or her support obtained.If the stakeholder is supportive, that is, has high potential forcooperation and low potential for threat, Savage argues for a strategy
of involvement where the change agent maximizes support from thestakeholder. A stakeholder who is non-supportive, that is, has limitedpotential for cooperation but high potential for threat, should bedefended against. Finally, a marginal stakeholder, one with limitedpotential for either cooperation or threat, should be monitored toensure the assessment is correct.Once these vested interests are mapped, the change leader canexamine the effects of organizational systems and structures. Only withthis deep understanding can change be managed well.Change agents need to know who the key participants are, theirmotivations, and the relationships between them. Creating a visualpicture of the key participants and their interrelationships can be helpfulto understanding the dynamics of the situation. A stakeholder maplays out the positions of people pictorially and allows the change agentto quickly see the interdependencies. In drawing stakeholder maps,some add complexity: Members of the same groups can be encircled;different thickness of lines can be used to signify the strength of therelationship; different colors can be used to signify different things(e.g., level of support or resistance); or arrows can be used to point toinfluence patterns, with their thickness often used to characterize thestrength of the relationship. The only constraint on the construction of astakeholder map is one’s ability to translate data into a meaningfulvisual depiction of the key stakeholders and their interrelationships. Asnoted earlier, it is critical to not leave out stakeholders that are externalto the organization. External stakeholders create and are a part ofimportant dynamics, and understanding their connection to theorganization as well as their power and influence will help the changeagent in plotting the complete landscape.Some of the factors that are useful to depict aretheir wants and needs,their likely responses to the change,how they are linked,their sources and level of power and influence,the actual influence patterns,how they currently benefit from the status quo,how they may benefit from the change, andhow they may be worse off from the change.Figure 6.4 shows a hypothetical stakeholder map.
Cross and Prusak classify organizational members as:Central connectors—people who link with one another. Forexample, Stakeholder #4 links Stakeholders #2, #3, and #6.Boundary spanners—people who connect the formal and/orinformal networks to other parts of the organization. In the map,the change agent and Stakeholder #4 are both serving asboundary spanners.Information brokers—people who link various subgroups. InFigure 6.4, the change agent has the potential to play that role.Peripheral specialists—people who have specialized expertise inthe network.17 Once the stakeholder map is developed, changeagents can visually see groupings and influence patterns, levels ofsupport and resistance, and the strength of existing groupings andrelationships. They can use this map to assess their assumptionsconcerning the stakeholders by soliciting input and feedback fromothers. Action plans can be reviewed relative to the map and tosee if the strategies and tactics are likely to produce stakeholderresponses that will contribute to the desired results. These are justa few of the ways these maps can be applied.Once the stakeholder map is developed, change agents can visuallysee groupings and influence patterns, levels of support and resistance,and the strength of existing groupings and relationships. They can usethis map to assess their assumptions concerning the stakeholders bysoliciting additional input and feedback. Action plans can be reviewedrelative to the map, to see if the strategies and approaches are likely toproduce stakeholder responses that will contribute to the desiredresults. These are just a few of the ways that the map can be applied.Figure 6.4 Hypothetical Stakeholder Map
Understanding the positions of key players or stakeholders is essentialif a change agent is to alter the forces that resist change andstrengthen those that promote change. One can think about movingeach stakeholder on a change continuum from an awareness of theissues to interest to a desire for action to taking action or supportingaction on the change. One also wants to guard against unnecessarilydriving them to actively resist the change.Awareness → Interest → Desire for action → Take actionClassifying stakeholders according to this continuum is useful becauseit can guide what change tools you should use. For example, in theinitial stages of a change process, the issue may be one of creatingawareness of the need for change. Here, one-on-one communicationto organization-wide publicity counts. Articles in an internalorganizational newspaper can educate people. Forums or opensessions discussing the issues can play a role. Addresses by seniorexecutives can both inform and generate interest in a topic. Benchmarkdata can convince skeptics that change is necessary, and a specialbudgetary allocation or a pilot project can pave the way for people totry out a change program. Which tactics are most appropriate to use atdifferent points in time will depend on the situation; the people affected;the change agent’s skills, abilities, reputation, and relationships; as wellas on the organization’s culture and previous experiences with change.
As a general rule, change leaders should shift from low-intensity formsof communication to high-intensity forms as individuals shift fromawareness to interest and action. Impersonal but educationalmessages might inform, but persuasion often takes direct one-on-oneaction.For example, in one organization, the CEO wanted independent salesagents to adopt a new and relatively expensive software program.Persuasion efforts about the costs and benefits had limited success.Finally, the change agent identified two things: First, the keyinfluencers were the managers of the sales agents and second, thesemanagers could be classed as supportive, neutral, or negative. Thechange agent had the CEO phone each manager directly, emphasizethe strategic importance of the adoption of the software, query themabout concerns they might have, and then directly ask them for theirsupport. Clearly, this was a very powerful and persuasive technique,using all of the power and prestige of the CEO along with hisconsiderable interpersonal skills.18Stakeholders will vary not only in their readiness to change but also intheir attitudes toward or predisposition to change. Some individualstend to be inherently keener about change and fall into the categoriesof innovators or early adopters. Others will wait until the first resultsof the change are in—they follow the initial two groups of adopters andform the early majority. The late majority wait longer before adopting.They want more definitive data concerning the change and thereactions of others before they are prepared to commit. Finally, somewill, by their nature, resist change until late in the process and can beclassified as laggards or late adopters and non-adopters. Table 6.4lists people’s predisposition to change.Table 6.4 Individual Predispositions to ChangeTable 6.4 Individual Predispositions to ChangeInnovators orearly adoptersIndividuals who seek change and want varietyEarly majorityIndividuals who are receptive to change but arenot first adoptersLate majorityIndividuals who follow others once the changehas been introduced and tried
Laggards orlate adoptersIndividuals who are reluctant to change and doso only after many others have adoptedNon-adoptersIndividuals who will not change or adapt undermost circumstancesIn most organizations, we tend to know the innovators. They areconstantly trying something new, including new products and services.Risk and novelty seem to provide the adrenalin they need to getthrough the day! Change comes easily and is sought. In contrast, wealso know those who tend to be uncomfortable with new things. Theseindividuals have a strong preference for order and routine. Change isto be avoided and when it must happen, it happens only after mostothers have shown the way and the status quo is no longer viable.Change agents need to identify and work first with innovators and earlyadopters. There is no sense trying to shift someone whose personalityresists change until others have adopted. It may be useful to keepcertain stakeholders informed of your activities even though they aretypically later adopters so as to avoid unnecessary backlash. However,the simple act of keeping people informed is not the same as workingclosely with innovators and early adopters to advance the initiative.Early in any change program, change agents must anticipate that theywill lack support. Few people will know about the change, let alonesupport it. The process of adoption will often be gradual until a criticalmass of support exists. This will be explored in greater detail inChapter 9 when the topic of the tipping point is introduced.While the willingness to change can be viewed, in part, as a personalityvariable, it is also dependent upon the degree to which someoneunderstands the change and his or her commitment toward thechange. Floyd and Wooldridge differentiated between understandingand commitment.19 In their view, someone could have high or lowunderstanding of the change and have high, low, or negativecommitment to the change.∗ This provides a matrix of possibilities thathelps us to think about stakeholders and their positions. Changeagents need to consider those who actively oppose the change as wellas those who are positive in their commitments. Being neutral orskeptical due to ambivalent feelings about the change is not the sameas being an informed opponent of the change. See Table 6.5.∗ Another way of looking at commitment is to categorize people as“make it happen,” “help it happen,” “let it happen,” or “keep it from
happening.”Floyd and Wooldridge stress that change agents need to understandpeople’s perspectives of the initiative and that there is no one “right”position. Often we assume that it is best to have people who bothunderstand the change and are committed to it. This is the “strongconsensus” cell in Table 6.5. Floyd and Wooldridge argue that atdifferent times, blind devotion, informed skepticism, or a weakconsensus is desirable. That is, at times we may need people to beblind devotees—if the change is a strategic secret, people need toaccept the change and be committed to act and not ask questionsbecause the change leaders are not in a position to answer them. Onthe other hand, when beginning a project and testing out ideas foraction, change leaders may well want informed skeptics—people whounderstand the situation well and who are not too committed. Thesepeople may well give valuable advice regarding change tactics andstrategies as well as contribute to the actual design of the change.Table 6.5 Stakeholder’s Understanding andCommitmentTable 6.5 Stakeholder’s Understanding and CommitmentHighUnderstanding ofthe ChangeLowUnderstanding ofthe ChangeHigh, positivecommitment to thechangeStrong consensusBlind devotionLow, positivecommitment to thechangeInformed skepticsWeak consensusNegative commitmentto the changeInformedopponentsFanaticalopponentsTable 6.6 Analysis of Stakeholder’s Readiness toTake ActionTable 6.6 Analysis of Stakeholder’s Readiness to Take Action
Stakeholder’sNamePredispositionto Change(innovator,early adopter,early majority,late majority,laggard)AwareInterestedDesiringChangeTakingActionCurrentCommitmentProfile(resistant,ambivalent,neutral,supportive orcommitted)JonesSmithDouglasTable 6.6 provides a grid that allows each stakeholder’s position anddegree of resistance and awareness to be plotted. This form provides asystematic analysis of stakeholders. In the second column, eachstakeholder’s predisposition toward change can be noted. Is theperson typically an innovator or an early adopter, or does thatindividual wait and see how others are reacting? If the person waits, ishe or she normally a part of the early majority of adopters or the latemajority group, or does he or she tend to lag further (i.e., the laggardsand non-adopters)?The second column can also be used to assess the stakeholder’scurrent commitment profile. Is this person currently resistant,ambivalent, neutral, somewhat predisposed, or supportive of thechange, or is he or she already committed to the initiative? The changeagent can then consider power and influence patterns and developstrategies and tactics that will move the individual stakeholders alongthe adoption continuum (aware, interested, desiring the change, andtaking action). The movement of the stakeholders can be plotted in the
appropriate columns, with attention given to learning (e.g., what wasthe impact of the action undertaken?) and the refining of strategies andtactics in the future. In the end, the objective is to move keystakeholders along the adoption continuum, or at minimum, preventthem from becoming significant obstacles to the success of the changeinitiative.SummaryChange agents need to understand the power and informal dynamics intheir organizations, including culture. They must recognize that resistanceto change is likely and is not necessarily a bad thing—there is potential touse resistance in a positive way. It is important to know the forcesimpacting the organization and the individuals within them, as well as theinternal and external stakeholders that will impact and will be impacted bythe change process.Two powerful tools to help us think through the organizational situation areforce field analysis and stakeholder analysis. Force field analysis helpschange agents to plot the major structural, systemic, and human forces atwork in the situation and to anticipate ways to alter these forces.Stakeholder analysis helps us to understand the interactions between keyindividuals and the relationships and power dynamics that form the web ofinteractions between individuals. See Toolkit Exercise 6.1 for criticalthinking questions for this chapter.Key TermsInformal organization—represented by relationships and processes thatemerge spontaneously from the interaction of people within the formalsystems and structures that define the organizational context. They includeinformal leadership, communication, and influence patterns; norms andinformal roles; and, at a macro level, the culture of the organization thatemerges and influences behavior.Power—the capacity to influence others to accept one’s ideas or plans.The chapter set out a number of sources from which power can bederived.Power tactics—strategies and tactics deployed to influence others toaccept one’s ideas or plans.The change equation—says that change occurs when the perception ofdissatisfaction with the status quo times the perceived benefits of thechange times the perceived probability of success is greater than theperceived cost of the change.
Force field analysis—a process tool that identifies and analyzes theenergies in an organization and then alters those forces to accomplishchange. The force field is made up of driving and restraining forces.Stakeholder analysis—the identification and assessment of those whocan affect the change or who are affected by the change. Included in this isthe analysis of the positions, motives, and power of all key stakeholders. Itis the identification of the relationships in the organization, the formal andinformal connections between people, structures, and systems.Stakeholder management is the explicit influencing of critical participants inthe change process. As such, it is common to see stakeholders alsoreflected in the force field analysis.Continuous change—occurs continuously because the forces for changeare strong and the resistance forces are weak.Breakpoint change—change that occurs in a context defined by strongforces for change and strong sources of resistance. When things occurthat heighten the change forces and/or weaken the resistance forces, thesystem is snapped into a new configuration.Flip-flop change (or sporadic change)—change that occurs within acontext of weak change forces and resistance forces. Within this context,the change is not viewed as particularly important and as a result, changemay occur, only to be easily reversed.Stakeholder map—a visual representation of the key stakeholders, theirinterrelationships, influence patterns, wants, needs, issues, andpredispositions toward the change.Central connectors—people who link with one another.Boundary spanners—people who connect the formal and/or informalnetworks to other parts of the organization.Information brokers—people who link various subgroups.Peripheral specialists—people who have specialized expertise in thenetwork.Change continuum—describes the four stages stakeholders mayprogress through during a change project. The stages are awareness,interest, desire for action, and taking action.Awareness—the first stage in the change continuum and describesstakeholders who are only just aware of the change initiative.Interest—the second stage in the change continuum and describesstakeholders move from general awareness to active interest in theinitiative.
Desire for action—the third stage in the change continuum and describesstakeholders move from an interest to a desire to take action. It isimportant in this stage to make action steps clear for stakeholders.Taking action—the final stage in the change continuum and describesstakeholders who are fully committed to the change and taking action forthe change.Readiness to change—a person’s predisposition toward change ingeneral. Is the individual generally an innovator, an early adopter, amember of the early majority, a member of the late majority, or a laggard?Innovators or early adopters—individuals who seek change and wantvariety. They have a natural predisposition to change.Early majority—individuals who are receptive to change, but are not thefirst adopters.Late majority—individuals who follow others once the change has beenintroduced and triedLaggards or late adopters—individuals who are reluctant to change anddo so only after many others have adopted. They have a very lowpredisposition to change.Non-adopters—individuals who will not change or adapt under mostcircumstances. These individuals will actively resist change efforts.Commitment profile—a person’s orientation toward the specific change inquestion. Is the individual resistant, ambivalent, neutral, supportive, orcommitted to the change?Resistance to change—the desire to not pursue the change. Resistancecan stem from a variety of sources, including differences in information,perceptions, needs, and beliefs. In addition, existing informal and formalsystems and processes have the potential to act as impediments tochange.
Checklist: Stakeholder Analysis1. Who are the key stakeholders in this decision or change effort?2. Who is the formal decision maker with the formal authority toauthorize or deny the change project? Who is that person (orpersons)? What are his/her attitudes to the project?3. What is the commitment profile of stakeholders? Are they against thechange, neutral (let it happen), supportive (help it happen), orcommitted champions of the change (make it happen)? Do acommitment analysis for each stakeholder.4. Who are the initiators, early adopters, early majority, late majority, orlaggards when it comes to change?5. Why do stakeholders respond as they do? Does the reward systemdrive them to support or oppose your proposal? What consequencesdoes your change have on each stakeholder? Do the stakeholdersperceive these as positive, neutral, or negative?6. What would change the stakeholders’ views? Can the reward systembe altered? Would information or education help?7. Who influences the stakeholders? Can you influence the influencers?How might this help?8. What coalitions might be formed among stakeholders? Whatalliances might you form? What alliances might form to prevent thechange you wish?9. By altering your position, can you keep the essentials of your changeand yet satisfy some of the needs of those opposing change?10. Can you appeal to higher-order values and/or goals that will makeothers view their opposition to the change as petty or selfish?
End-of-Chapter Exercises
Toolkit Exercise 6.1
Critical Thinking QuestionsThe URLs for the videos listed below can be found in two places. The firstspot is next to the exercise and the second spot is on the website atstudy.sagepub.com/cawsey4e.1. GM Edgar Schein on Corporate Culture—3:18 minuteshttps://www.youtube.com/watch?v=6ZB3jJlGWukHow has Schein’s thinking on culture evolved over time?Schein says that change leaders need to learn how to create“cultural islands.” What does he mean and why are culturalislands useful?What do you think of Schein’s advice on how to better prepareyourself for dealing with different subcultures, such as theprofessional subcultures of doctors and nurses?2. Simon Sinek: If You Don’t Understand People, You Don’t UnderstandBusiness—30:40 minuteshttps://www.youtube.com/watch?v=8grVwcPZnuwAccording to Sinek, how is trust built?How does understanding people help us better understandbusiness?What is Sinek’s case for authenticity?Please see study.sagepub.com/cawsey4e for a downloadable template of thisexercise.
Toolkit Exercise 6.2
Assessing PowerPersonal:1. What sources of power do you have?Your personal style and comfort zone will affect your choice oftactics. What power tactics have you used in the past?2. Consider a particular context in which you regularly find yourself (e.g.,work, school, church, community group). What could you do to increasethe power you have available to you in that context?What types of power are involved?3. As it is important to know exactly the sources and limits to your power, it isalso very important to understand the key players, structures, andsystems in your situation. How do these influence the types and amount ofpower available to you?What could you do to change this?Organizational:1. Pick an organization you are quite familiar with. What were theperceptions around power in the organization?In particular, what factors led to the assumption of power?Which departments carried more weight and influence? Whatbehaviors were associated with having power?2. Think of a change situation in the organization. What types of power wereat play?Who had position, knowledge, and personality power? Whatindividuals and departments handled uncertainty, were central, andwere not very substitutable?3. In Hardy’s terms, who controlled resources?Who had process power—that is, set the agendas, managed thenomination or appointment process to key committees, and so on?Who had meaning power—that is the power to define and influencepeople’s perception of what things meant and how important theywere.4. Who had yea-saying power? On what issues?Who had nay-saying power?Please see study.sagepub.com/cawsey4e for a downloadable template of thisexercise.
Toolkit Exercise 6.3
Understanding the Forces for and AgainstChange: The Force Field AnalysisConsider an organizational change situation you are familiar with. Use thefollowing questions to guide you through the process of drawing a force fieldanalysis.1. What are the forces for change? Include external forces as well as aconsideration of key individuals or groups. How strong and committed arethese forces? (Who will let it happen; who will help it happen; who willmake it happen?)2. How could these forces be augmented or increased? What forces couldbe added to those that exist?3. What are the forces that oppose change? Include structural forces suchas reward systems or formal processes in the organization. Consider aswell the effect of informal processes and groups or the culture of theorganization.4. How could these forces be weakened or removed? What things mightcreate major resentment in these forces?5. Can you identify any points of leverage that you could employ to advancethe change? For example, might you deploy to the department ororganization key well-respected individuals who support the change? Ormight you or someone else provide low-cost guarantees related to seriousconcerns?Please see study.sagepub.com/cawsey4e for a downloadable template of thisexercise.
Patrick’s ProblemBy Stacy Blake-Beard, Ph.D.Deloitte Ellen Gabriel Chair of Women and LeadershipSchool of Business, Simmons University, Boston, MAPatrick Jackson sat at the table, trying very hard to keep his mouth fromdropping open. He and the other nine executive directors on John Pointer’sleadership council were completing their annual talent reviews, discussingvarious individuals on their teams who would be good candidates for promotionto director. Of course, the logistics of this advancement opportunity would behandled through the Learning and Development Department. But Patrick waswell aware that the conversations that he and his fellow executive directorswere having in John Pointer’s “closed room” meeting were going to be veryinfluential in who was tapped and who wasn’t. John, vice president ofmarketing, and his team sitting around the table, represented a powerfulsegment of the leadership at Millenial. 20The informal banter belied the seriousness of the discussion they were having.There were several candidates that were being considered for the two spotsavailable. As names were raised, each executive director shared hisexperiences with that particular associate director. Some of the candidatesgenerated enthusiasm. For example, Alan Witherspoon was especially wellregarded. Steve Winter, Alan’s executive director and another senior leader onJohn’s team, had worked closely with Alan. Others had observed and heardenough about Alan that they felt comfortable speaking on his behalf. Theyspoke strongly in support of Alan, with Steve joking that they had attended thesame school so of course he was a strong player. Alan’s achievements wereenumerated and the praise was being laid on thick and heavy. . . a little toomuch from Patrick’s perspective.Patrick worked in a cross-functional team with Alan. His own experiences withAlan had not been as positive. He saw Alan’s performance as primarily self-serving. He also noticed that Alan was rather absent from the team, especiallywhen they were in crunch time. Alan didn’t seem particularly open to feedbackeither. When Patrick sent out congratulations to the team to acknowledge theirstrong work in finishing the project, he also offered an opportunity for each teammember to meet for a post-mortem discussion. While the project had endedsuccessfully, there were many learning opportunities along the way that Patrickwanted to discuss with his team members—learning that could be used to maketheir next project go more smoothly. Additionally, Patrick wanted to enhance hisown learning, so he was interested in a discussion that drew from their insights.Alan had opted not to take up this invitation, curtly declining.Patrick was waiting to hear how Alicia Conrad, another associate director, wasgoing to be discussed by his colleagues. He breathed a slight sigh of relief
when James Valencio, a fellow executive director, started the discussion withpositive comments. He said that she was motivated, that she could be countedon to exceed her clients’ expectations, and that she was quite strategic in herapproach to problem solving. But James quickly qualified that statement. Yes,she could be counted on to exceed her clients’ expectations. But did she needadditional support from her coworkers to perform at that level? James also hadsome questions about Alicia’s readiness to be promoted. “You know, shedoesn’t have that much experience. I think we should give her a year or twomore to get better prepared for the director role.” Patrick felt himself tense up—these concerns were issues that had consistently been raised… but only inregards to their female candidates. Women, and some men, in the organizationhad noticed this troubling trend. Although the Learning and DevelopmentDepartment was monitoring the promotion cycle, the ultimate decisions restedwith the leadership team. And… old habits die hard.One of the initiatives that Learning and Development sponsored was the MaleAlly Program. The Male Ally Program had been initiated to address the dearthof women in senior leadership positions. Alicia was his partner in this program.Because of their interactions, Patrick knew firsthand how Alicia was showing upand impacting the business. He wondered if Alicia’s collaborative style waswhat James saw as “needing support.” There was still an old-fashioned,outdated definition of leadership in Millenial; “leaders” were expected to ride inon a white horse and save the day. But Patrick was well aware that leadershipwas exemplified with many different behaviors. A primary aspect of a leader isthat he—or she or they—achieved identified goals. Indeed, Alicia and her teamhad successfully managed a large portfolio of clients, winning high satisfactionscores and scoring repeat business despite the challenging nature of some ofthe clients. She had done everything from meeting goals, supporting a team, tosatisfying customers. Was it still not enough?Clearly Alicia was successful in her role, and Patrick felt certain that she wasready for this promotion now, not in a year or two. But as James continued toshare his concerns about Alicia, doubts about her were spreading across theroom. Patrick wondered if he should speak up. But he was running out of time—they had spent so much time talking about Alan that they couldn’t give the sameattention to Alicia. And anyway, what happened in that room would stay in thatroom. They agreed to one more quick meeting in a few days before sharingtheir candidates for promotion with Talent Management.As Patrick left the room, he wondered again about the Male Ally Program—about his involvement and the organization’s commitment. Was Millenial reallycommitted to this “initiative?” All of the men around the table were signed up forthe program; some of them even had partners who were also being consideredfor this director role. Interestingly, Patrick was the only Male Ally to speak onbehalf of his partner. This lack of advocacy was not surprising; many of thewomen in Millenial shared their concerns that the program had been throwntogether and launched as a tool to quiet their loud voices. With enough time,those voices would be quelled—isn’t this what had happened in the past?Patrick believed that the program was an important initiative that held greatpromise for advancing women and increasing their presence in the senior
ranks. “If anyone is going to take a stand, not just for Alicia but for the programas well, I believe I am going to have to be the one,” thought Patrick. But heunderstood that taking a stand could result in some challenges for him. Hiscolleagues were not going to be pleased if he spoke up more strongly onAlicia’s behalf. So, he wanted to think carefully about the meeting next week.
Discussion Questions1. What are the reasons that Patrick might choose not to advocate for Alicia?2. How should he go about advocating for Alicia?3. What does Patrick risk if he speaks out on her behalf?4. What will happen if he opts to say nothing?5. What tensions has the launch of the Male Ally Program raised in Millenial?
Chapter Seven Managing Recipients ofChange and Influencing InternalStakeholdersChapter OverviewPeople respond to change in many ways. Some embrace it. Others areambivalent. Some view change negatively. Reactions depend on thenature of the change, the situation, the individuals involved, and how it isapproached. Change leaders need to understand why people react tochange as they do, gathering data to understand individuals’ situationsand their responses.Change leaders need to rethink their assumptions about resistance tochange. Employees often have good reasons for resisting the changeleaders’ proposals, and these reasons need to be understood andlearned from.Change leaders can rethink the language that they use, seeingemployees as “stakeholders and participants in the process.” This newlanguage implies a different stance toward power and the legitimacy ofemployees to voice their opinions during the change process.Change leaders need to be aware of the established psychologicalcontract between the organization and its employees and to recognizethat changes to the psychological contract need to be handled carefully.People usually respond emotionally to change directives, and leadersneed to prepare themselves for the emotional upheaval, even though theneed for change is often driven by rational factors.A present-day challenge is to make change the norm and encouragepeople to become change leaders or change implementers themselves.This capacity can be thought of as organizational agility and resilience.It was 2003 and the women of Liberia changed their status and role fromrecipients of change to stakeholders in the national political process oftheir country. Charles Taylor, president of Liberia since 1997, controlledabout one third of the country, and the Liberians United for Reconciliationand Democracy (LURD) and other rebel factions controlled the rest of thecountry. All groups were accused of a range of atrocities, from creatingchild soldiers and the raping of women and young girls to painful maimingof enemies. No one was safe, and many were starving and homeless. Inthese desperate circumstances, the women of Liberia united. Christianand Muslim women, rather than seeing their differences and continuingtheir exclusive affiliation with their own religious and ethnic rebels,recognized that a change in political party from Taylor’s National Patriotic
Front of Liberia (NPFL) to LURD would not change their lives sinceviolence was the permanent and lasting legacy of all the fighting factions.The women’s political slogan became PEACE. They dressed in white andsat in the fields in the sun, the rain. At first, they were ignored. Then theirpersistent presence was finally noted and President Taylor recognized thewomen as individuals who could no longer be dismissed. However, he didtoo little, too late. By the fall of 2003, Taylor was forced to resign and gointo exile in Nigeria. (It should be noted that there were multiple forces,including but not limited to the Economic Community of West AfricanStates [ECOWAS], the United Nations, and the United States of America’sgovernment, that demanded Taylor’s exile.) In 2005, Ellen Johnson-Sirleafwas elected president of Liberia with the support of the women’s peacemovement, Women of Liberia Mass Action for Peace. She took office inJanuary 2006, and was reelected in 2011. She was awarded the NobelPeace Prize in 2011, jointly with Leymah Gbowee of Liberia and TawakkolKarman of Yeman, for their nonviolent initiatives to advance women’srights to safe and full participation in the peace process. India honored herin 2013 by awarding her the Indira Gandhi Peace Prize, and in 2014Forbes listed her as the 70th most powerful woman in the world.1This remarkable story is told eloquently in Pray the Devil Back to Hell.2From the perspective of change leaders, it is important to note that theseLiberian women upended their status as recipients of change and violenceand established themselves as powerful stakeholders in the nationalpolitical process. While most organizational change situations are notabout physical violence, change leaders need to acknowledge that changecan require people to modify their personal or professional identities, skillsets, and other deeply held beliefs and expectations. It is to legitimizethese struggles of internal stakeholders that we use this language.The reality of people’s lives is that they are often on the receiving end ofchange, often called “the recipients of change.” This chapter suggestshow recipients of change may react and how change agents canincorporate this understanding to improve both their change plans and theoutcomes for others. The chapter deals with the reality of those who findthemselves on the receiving end of change. It will consider the range ofdifferent reactions to change: support or enthusiasm, mixed feelings orambivalence, and opposition or resistance to change.While positive responses toward change are fairly common, dependingupon the nature of the change and how it is introduced, this chapterfocuses on people who are mixed or negative toward change. The chapterhelps managers understand the phases people as recipients of change gothrough. As well, the chapter considers the factors that influence how
people respond to change: their personalities, their coworkers or teams,their leaders or managers, and their past experiences with change. Itrecognizes that both the content (the what) of change and the process (thehow) of change matter. Change leaders need to ensure that what they dois based on sound analysis and that the process of change (the how),allows for and encourages the involvement and input of others in both theassessment and implementation phases. Finally, this chapter looks at howchange leaders can reduce the negative effects of change initiatives onrecipients. Figure 7.1 summarizes the change model and highlights thekey issues in dealing with recipients of change and influencing internalstakeholders.
Stakeholders Respond Variably toChange Initiatives
Not Everyone Sees Change as NegativeMany managers assume that resistance is inevitable in change situations.It is time to dispel this myth. Employees do not always react negativelyand in many situations will react quite positively. Will they raise questionsand experience a sense of uncertainty or ambivalence when change isintroduced? Of course they will. They are thinking individuals, trying tomake sense out of the change and its impact. This questioning often isperceived as resistance but is not necessarily change resistance.Questions and concerns can give rise to tense times for the change agent,but don’t be afraid to engage others constructively about their perceptionsand concerns. Nurturing support for the change is highly likely if theyconclude: the benefits to them and their coworkers clearly outweigh thecosts; have high personal, team and organizational relevance; and areconsistent with their attitudes and values.3 True resistance arises onlyafter people have resolved their mixed feelings in ways that cause them tofirmly conclude that the initiative should be opposed, either passively oractively. As was noted in Chapter 6, negative reactions to change increasein frequency and intensity when people believe that the potential costs andconsequences to them and the things they value outweigh the benefits.A second myth that needs dispelling is the belief that age and resistanceto change go hand in hand. A person’s predisposition to change was foundto be a stronger influence than age when it came to resistance toinformation technology (IT) changes being undertaken.4 Another researchstudy found age to be negatively related to resistance. In other words,resistance decreased as age increased.5 To understand people’s reactionto change, look well beyond their chronological age. The causes likely lieelsewhere.Some researchers have suggested that “resistance to change” is a termthat has lost its usefulness because it oversimplifies the matter andbecomes a self-fulfilling prophecy. We agree. That is, if change leadersassume resistance will occur, it becomes more likely. Change leadersshould focus on trying to understand why people react to the change asthey do and how those reactions are likely to evolve over time.6 Whenchanges are introduced, people will have their own immediate reactionsand often find themselves pulled in different directions. Family, friends,relatives, coworkers, and subordinates may hold divergent viewsconcerning the proposed change, and organizational leaders andmanagers may deliver ambiguous or conflicting messages concerning itsrationale and implications. If things become polarized around the change,people who have come to a decision may view those who are of a different
opinion with suspicion and disapproval. All of these pressures can leadstakeholders to feel ambivalent about the change.Figure 7.1 The Change Path ModelThese mixed feelings can be magnified by concerns about the impact ofthe change on (a) their relationships with others; (b) their ability to do whatis being asked of them; (c) the fit with their needs and values; and (d) theirjob security and future career prospects. These concerns are furtherintensified when people lack confidence that the change will produce theintended results. When employees see themselves as relativelypowerless, a variety of less constructive coping responses, includingavoidance, alienation, passivity, absenteeism, turnover, and sabotage mayresult.7
Feelings of powerlessness can lead to sedentary activation (a termcoined by Cory Booker). He described sedentary activation as whathappens when you sit and yell at the TV or social media feeds but don’ttake concrete action.8 Feelings of powerlessness are not good for yourhealth!The perceptions of costs and benefits of change depend on what peopleare concerned about, what they have experienced in the past, and whatthey think they know. Sometimes relatively small changes will producestrong responses in one group due to the perceived consequences. Inanother group, more significant changes might produce mild reactionsbecause of perceptions that the impact on them will not be significant orthey are simply more comfortable with change.9 Consider the reactions ofemployees of Desjardins Group to the selection and subsequent actions oftheir new CEO in 2008.Monique Leroux and Change at DesjardinsIf cultural change in for-profit, publicly traded organizations is difficult, considerthe challenges inherent in doing so in a 100-plus-year-old financial servicescooperative, made up of over 500 independent, affiliated member brancheswith strong rural roots, governed by over 6,000 elected officers in Quebec,Canada. Monique Leroux is a chartered accountant who was one of the firstfemale partners at Ernst & Young and the senior Quebec VP for the RoyalBank of Canada before joining Desjardins in 2001. She became its CFO in2004 and successfully ran for election as its CEO in 2008, being selected overseveral other candidates by the 256 voting members who represented theaffiliated branches.Her election surprised many. Desjardins was viewed as an “old boys club,” andher earlier career experiences meant that she was still an outsider to many.However, her ability to articulate the challenges, constructively engageemployees and members in conversations about what was needed, and hermanagerial and leadership skills resonated. A majority of those voting believedshe represented the best leadership option, given her skills and hercommitment to Desjardins, its members, and its heritage. Leroux took officejust prior to the financial crisis of 2008. She successfully helped theorganization navigate the crisis and then undertake the significant changesneeded to effectively compete in the financial services industry—onedominated by large, sophisticated, and successful firms in Canada.Desjardins had a strong, customer-oriented culture and had been successful atattracting and retaining membership in its core rural communities, but the worldof financial services was changing rapidly. Its Quebec membership was grayingand the population was becoming more urban. Furthermore, the Quebececonomy was not performing well and suffered from relatively high levels ofunemployment. Leroux recognized that significant adaptations of their businessmodel were needed if they were to continue to successfully serve theirmembers, grow, and not become an anachronism. The organization operated
in a fairly fragmented manner due to the independence of its member affiliates,and the lack of integration needed to be addressed if customers were to beserved effectively and efficiently. This, in turn, required systems and processesto better integrate services, manage costs, and evolve their online presenceand portfolio of services. Leroux based her campaign to be CEO on the needto develop the organization and its services in order to compete effectively,while staying true to their core values as a cooperative. She believed it wasimportant to extend Desjardins’ reach outside of Quebec, but they would firsthave to deal with needed changes to their internal structure, system,processes, and service offerings.Soon after her appointment as CEO, the autonomous and close-knit culture ofthe Desjardins’ network of independent branches and associated divisionscame face-to-face with Leroux’s approach to change. It was one grounded inthe active engagement of members and employees in consultative processes,often through the use of teams. Consultation was followed by decision making,and between 2008 and 2012 this led to a flattening of the hierarchy, thesuccessful restructuring and realignment of services and processes, and areduction in the number of VPs from 250 to 112 and the number of senior VPsfrom 40 to 12. It also led to 1,000 job cuts. These waves of consultation andengagement also gave rise to initiatives related to new lines of business, staffand managerial development, diversification of the managerial and executivegroup, the establishment of separate groups outside the cooperative structure(e.g., business units targeting commercial markets) but owned by thecooperative, and a more performance-driven and customer-oriented approachto service delivery. To support these initiatives, Leroux actively built hermanagement team so that it contained the diversity of perspectives, skills, andvalues needed to respond effectively to the challenges. The combination ofrestructuring and issues of individual fit or alignment with the new organizationled to turnover in the executive and managerial ranks.Leroux was well aware of the fact that employees and members had validconcerns for what these changes might do to their cooperative culture. Shebelieved in the value of the cooperative movement, was committed to it, andwas very respectful of Desjardins’ roots—as indicated by her approach tochange which was characterized by the active engagement and involvement ofothers, rich communication of ideas and perspectives, and listening. However,once decisions were made and it was time to move to action, she activelypromoted and reinforced the expected changes. Leroux is reported to havesaid, “I will not go for bitterness or backstabbing, and fights, and territorialmanagement. You guys are responsible to make it happen and work as ateam” (pg. 7, Harvard Business School case).Leroux adopted an approach that allowed organizational members to see theneed for change themselves and to actively participate in its development andimplementation. Some had difficulty adjusting to the changes and the pace.Dissatisfaction, lower morale, and turnover were reported by managers insome divisions, particularly with those who had experienced title reductions ora disruption of work relationships they valued.The changes pursued under Leroux’s leadership were challenging for therecipients of change, but they have proven very successful. By 2012,
Desjardins had moved into new markets and lines of business (e.g., payrollservices, commercial and investment services, insurance), increased thenumber of employees from 17,000 to 45,000, increased their total assets from$152 billion to $190 billion, and increased their cash distributions or dividendsto their 5.8 million members from $215 million in 2008 to $401 million to 5.6million members by 2012. In terms of bank safety, they were rated number 3 inNorth America by Global Finance and were assessed as the 13th strongestbank in the world in 2013. They were rated highest in investor satisfaction forthree years in a row when evaluated against other discount brokerage firms byJ. D. Power, and were named one of Canada’s 10 best companies to work forby the Financial Post.By 2014, they were underway with the expansion of their services outside ofQuebec, as seen in their acquisition of the largest network of insurance brokersin Western Canada in 2010, the acquisition of Vancouver-based QtradeFinancial Group in 2013, and their 2013 opening of an office in Canada’sfinancial heartland in downtown Toronto, Ontario.10 They were also activelyengaged in conversations with other financial services cooperatives in Canadaand internationally, to explore ways they might be able to leverage oneanother’s strengths and capacities.11Leroux was elected to a second term in 2012, and under her leadershipDesjardins has continued to experience steady progress on all fronts, includingbeing recognized as a best place to work for 5+ years in a row.12 She hasbeen an active and influential advocate and mentor, nurturing diversity and theadvancement of female leaders and others. In addition to having beenDesjardins’ CEO and chair of its board, she has been a member of a number ofother cooperative boards and advisory groups nationally and internationally, aswell as several educational and not-for-profit advisory bodies.Lemeux is a member of the Order of Canada and the recipient of many othernational and international honors that recognize her expertise, contributions,and commitment to the betterment of society. She stepped down at the end ofher term in 2016 but has not slowed. Leroux was president of the InternationalCo-operative Alliance (2016-2017) and she is currently chair of the board ofInvestment Quebec and vice chair of Fiera Holdings, to name just two of theorganizations that continue to benefit from her energy, intelligence, insight andleadership capacities. She was inducted into the Canadian Business Hall ofFame in 2018.13How employees perceive change will depend upon their assessment ofthe situation. If they see themselves and the organization benefiting fromthe change, they are more likely to embrace the change. If they seethemselves as involved and participating in the initiative, they are morelikely to be supportive.14 If the outcomes are viewed as likely to benegative for the organization and the individuals, they will be unsupportiveof the change. If their views are mixed, they will experience ambivalenceto the change.15
The successes achieved at Desjardins under Leroux’s leadership weredue, in part, to her engagement of people in the renewal of theorganization’s services, systems, processes, and structures. Leroux wastransparent when she brought the challenges to the employees, andworked hard to create a shared understanding of the need for change andto think through what change could look like. She used change tools suchas stakeholder engagement, environmental and organizational analyses,participative teams, active communication through diverse channels, goalsetting, and change teams to bring needed changes to life and to helpreinforce commitment to a renewed culture that was congruent withDesjardins’ cooperative roots. Along the way, she succeeded in convertingmany skeptics and resistors into becoming partners in the changeprocess.The range of possible perceptions and responses is complex, as peopleassess the change against their interests, attitudes, and values. WhatMonique Leroux and her team were able to accomplish can be attributedto their engagement of both recipients of change and new recruits inhelping to define the problem, design solutions, and implement them. Thiswas aided by their use of hard data that all could understand;institutionalizing the change through projects, systems, and processes;and sustaining the change by creating a structure to promote collaborationand accountability. It was critical that the company’s internal systems andprocesses catch up, and the proof of their success lies in theorganization’s improved financial performance and the growth of itscapabilities and capacity to deliver.However, even in the face of improved performance on multiple fronts, notall ambivalence concerning the changes disappeared, and pockets ofresistance remained at Desjardins. A number of employees reported in2011 that they were still concerned that the pace of change had been toofast and that too high a price had been paid in the form of the deteriorationin employee morale and elevated levels of turnover in some areas.Recipients’ understanding and responses to the change will evolve overtime as the change unfolds. As a result, the approaches used by changeleaders will need to vary over the course of the change process. Whereasfactual information delivered in a speech or a consultant’s report may beuseful when dealing with beliefs concerning the need for change anddeveloping initial awareness, informal discussions and social support maybe much more useful when ambivalence is stemming from conflictingemotions.16 If downsizing or relocation is required, it will take more thanthe rational presentation of data or delivery of equitable relocationpackages or early retirement provisions to alleviate distress. Often,
executives have had months to consider the changes, and employeesneed time to adjust.If resistance occurs, it may stem from those in middle and/or more seniorroles, since they often have the most to lose, which happened atDesjardins. They may be seeking to maintain power and influence, sustaintheir capacity to perform, or avoid what they perceive to be a worsening oftheir position.17 Change leaders need to be aware of this as they managethe situation. Finally, attribution errors may cause change leaders to fixateon individual resistance rather than probe more deeply for causal factors.For example, behavior that is being categorized as individual resistancemay be due to misaligned structures and systems rather than individualopposition.18 As well, many managers are predisposed to expectresistance in subordinates. Care needs to be taken that a self-fulfillingprophecy is not created.Authentically engaging the hearts, as well as the heads and hands ofthose critical to the success of the change, is a key ongoing challengechange leaders need to be very attentive to.
Responding to Various Feelings inStakeholders
Positive Feelings in Stakeholders: Channeling TheirEnergyIn Chapter 6 approaches were discussed that help change agentsanticipate the reactions of different stakeholders. Let’s turn now to howbest to respond to their feelings. As noted earlier, many individualswelcome change. A change initiative can represent a chance for personalgrowth or promotion. Some people enjoy variety and seek opportunities tocreate. Others want the challenge of new situations. Still others imagine achange is needed to improve the situation.When people are feeling positive, engaged, informed, and hopeful, theseemotions can be harnessed in support of the change.19 It is important,however, to anticipate the risks that may accompany the positive feelingsin some stakeholders while others remain uncertain. Blind acceptance bysome employees may lead to a lack of reflection in both them and others.Strong positive support of organizational initiatives from respectedindividuals may cause others to censor their doubts and give rise to therisk of groupthink. This potential tyranny of the minority or majority maylead to a stereotyping of those ambivalent to or opposing the change as“the enemy.” This can lead to infighting rather than thoughtful analysis andthe productive pursuit of organizational benefits.Change leaders need tochannel the energy in positive ways, not letting the enthusiasm forchange overwhelm legitimate concerns;“name” the problem of mixed feelings and the need to understand thedifferent reactions to change;appoint highly respected, positively oriented stakeholders to chairsignificant committees or other change initiative structures, andensure they have the skills and resources required to fill these roles inways that don’t stifle needed discussions and debate. Transparency,openness to learning, and the willingness to translate learning intopractice will advance recipients’ openness to change; andmanage the pace and remember that going too slow can dampensupport for change with enthusiasts, while going too fast will createanxiety in those who are doubtful and fatigued.
Ambivalent Feelings in Stakeholders: They Can BeUseful20It comes as no surprise that employees are likely to have mixed feelingsabout change, as it often gives rise to perceptions of increased complexity,uncertainty, higher risk, and the disruption of agreed-to workresponsibilities and relationships. People’s beliefs about a change and itspotential impact can be both positive and negative and can vary inintensity. To illustrate this, consider the example of an industrial paintmanufacturer that changed how it handled its major customers by movingkey technical service representatives from the head office to thecustomers’ plants. The change provided staff with desired opportunities forincreased responsibility, autonomy, and pay, but it required their relocationto a new workplace and the disruption of their cohesive work group.Naturally, their feelings were mixed. Some were excited and othersanxious about their new responsibilities. Some were sad about leavingclose friends behind.21 This also created change in role definition, as thenew duties required service representatives to play a much more activeclient-management role. These were activities that customer servicerepresentatives had viewed as belonging to sales personnel.When ambivalence is prevalent, change leaders should create conditionsthat will increase the likelihood that people will voice concerns. They needto create an environment that welcomes feedback. Piderit states thatpeople are more likely to speak up when the ambivalence stems fromconflicting beliefs. When conflicting emotions are involved, though, shenotes that individuals often have more difficulty giving voice to negativeemotional responses. She hypothesizes that “they would be more likely towrestle with their ambivalence alone or to avoid the subject entirely.22”Ambivalence generates discomfort for people, causing them to seekresolution of the feeling. Once this resolution occurs and people come tofeel more certain about their position, subsequent changes to attitudesbecome more difficult.A person’s sense of certainty grows when there is a consensus of opinionabout the matter among those whose opinions they value, when there is arepetition of messages that support that consensus view, when the path totake actions in support of the consensus view are easily accessed and webegin to invoke our attitudes and actions in defense of that consensus.People protect their attitudes by employing a variety of strategies:turn to habits and approaches that have served them well in thepast;23
engage in selective perception (actively seeking out confirminginformation and avoiding disconfirming data);24recall selectively (being more likely to remember attitude-consistentrather than inconsistent data);25 anddeny in the form of counterarguments geared to support andstrengthen one’s position.More extreme defensive responses can include sarcasm, anger,aggression, and withdrawal. Since attitudes become much moredifficult to change once they solidify, there is all the more reason toinvest the time needed at the front end of the change in order toeffectively process people’s reactions to change.Rather than interpreting mixed feelings as resistance, change leaders arebetter served byfocusing on helping people make sense of the proposed changes;listening for information that may be helpful in achieving the change;reconciling constructively people’s ambivalence; andsorting out what actions are now needed.Injecting elements of uncertainty can prove helpful to change agentswhen dealing with ambivalence and also resistance. It assists inencouraging additional reflection on the matter. When change agentsare seen as open to the perspectives of others by modeling suchbehavior, they will tend to find they are more successful in helpingrecipients come to an informed judgement and resolve theirambivalence (and even resistance) in ways congruent with thechange initiative. Further, change agents may find that by modelingthis behavior they increase their capacity to develop insights thatinform the change and contribute to its success.26It is almost always in the best interest of change agents to actively engagepeople in meaningful discussions early in the change process and help toalign their interpretations with the process.27 Employees’ input can proveinvaluable in identifying potential problems and risk points.28 Theirengagement and involvement can allow concerns to be addressed.29Meaningful engagement can increase the likelihood of the formation ofsupportive attitudes toward the change and perceptions of fairness as theyattempt to make sense of what they are being asked to do.30 Desjardins’organizational change was effective due to the adoption of approachessuch as these, by highly skilled and respected change champions.Balogun and Johnson note that once the blueprint for more complexchange is set out, it is brought to life through the interpretations andresponses of employees. As a result, these authors argue that “managingchange is less about directing and controlling and more about facilitating
recipients’ sense-making processes to achieve an alignment ofinterpretation.31” As this evolves, so too does the change thatsubsequently unfolds. All this points to the importance of employeeperceptions of organizational support for what lies ahead. When they feelthis is present, perceptions of uncertainty are reduced because they havea greater sense that they know what is going on and that support will beavailable, if and when they need it. As a result, adaptability increases, andjob satisfaction and performance rise relative to what is seen when suchsupport is lacking. In essence, recipients have a clearer sense that theyknow what is going on; someone has their “back”; there is open,supportive communication to sort through matters as they arise; and thatthere are reasons for hope concerning what lies ahead.32
Negative Reactions to Change by Stakeholders:These Too Can Be UsefulChange leaders undertake an initiative because they believe the benefitsoutweigh the costs. However, anticipate that stakeholders may have arange of different perspectives, from feeling imposed upon andunprepared, to perceiving the change is ill advised and/or poorly designedand likely to fail, to feeling anger and rage. Table 7.1 outlines the causes ofnegative reactions to change.Concerns and negative reactions toward change develop for a variety ofreasons. Perception of negative consequences of the change may be areality. The change may be fundamentally incongruent with things thepeople deeply value about their jobs (e.g., autonomy, significance,feedback, identity, and variety)33 or the workplace (e.g., pay, job security).The loss of a job is likely the most extreme form of this. When significantjob losses are involved, such as when the major employer in a towndecides its plant needs to be closed for the good of the corporation, thecosts are all too real for the recipients. In situations such as the above, it isdifficult, if not impossible, for people to see positive consequences ensuingfrom the change. The closing of the Fishery Products International plantprovides an example of employment loss.34Table 7.1 Causes of Negative Reactions to ChangeTable 7.1 Causes of Negative Reactions to Change1. Negative consequences appear to outweigh the benefits.2. The communication process is flawed, leading to confusion anddoubt.3. There is concern that the change has been ill conceived,insufficiently tested, or may have adverse consequences that arenot anticipated.4. The recipients lack experience with change and its implications orhave habituated approaches that they rely upon and remaincommitted to (group and/or structural inertia).5. The recipients have had prior negative experience with a similarchange.6. The recipients have had prior negative experience with thoseadvocating the change.
7. The negative reactions of peers, subordinates, and/or supervisorswhom you trust and respect and with whom you will have to work inthe future influence your views.8. The change process is seen to be lacking procedural justiceand/or distributive justice and breaching the recipient’s sense oftheir employment contract (threat to established powerrelationships).9. The recipients fear that they don’t have the necessary skills andcompetencies to perform well after the change has beenimplemented (threat to expertise).Job Loss at Fishery Products InternationalThe 2008 closing of the Fishery Products International (FPI) processing plant inHarbour Breton, Newfoundland, is “devastating,” says Earle McCurdy,president of the Fish, Food and Allied Workers Union. “This closing has put350 people out of work in a community of 2,100. You don’t have to be a Ph.D.to determine the size of the impact,” he says. “And it’s not only Harbour Breton;it’s the entire peninsula.”FPI officials blame the closing on an independent report that claims “the planthas major structural problems and is no longer safe for occupancy.” However,FPI spokesman Russ Carrigan released a statement saying, “The entry ofChina into the market for headed and gutted cod has driven the commodityprice up dramatically—well beyond the point of our commercial viability.35” Inthis example, recipients would have difficulty accepting the corporateperspective on the need for change.In examples such as FPI, recipients would have difficulty accepting thecorporate perspective on the need for change for a number of reasons:Communication processes may be flawed, and people may be leftfeeling ill informed or misled.36 Support for management is less likelywhen people feel they lack the information they need to make aninformed judgment or lack the supervisory support needed tosuccessfully follow through on the proposed course of action. Theprospects for support diminish further and faster when employees feelthat information has been intentionally and arbitrarily withheld ormanipulated. In our FPI example, there appears to be confusion overthe reasons for the closure. Is it the structural problems, the entry ofChinese competition to the marketplace, or both?People may have serious doubts about the impact and effectivenessof the change. They may be concerned that the change initiative hasnot been sufficiently studied and tested, or they may believe that the
change will have adverse consequences that have not been thoughtthrough.37 For example, a move by a head office to consolidatewarehouse operations and trim inventory levels may be seen as asure fire way to increase efficiency, but it could cause seriousconcerns in sales and marketing about the firm’s ability to effectivelyservice its customers.People may lack experience with change and be unsure about itsimplications or their capacity to adjust. When conditions in anorganization have been stable for long periods, even modest changescan seem threatening. During extended periods of stability, peopletend to develop well-engrained habits, and the patterned behavior canresult in negative reactions to change. Habituated approachesrepresent strategies that we believe have served us well in the pastand that we are often not even conscious of.38 The Desjardinsexample earlier in the chapter demonstrated this, as the culture of theindependent branches prior to 2008 had resulted in issues of servicefragmentation and inefficiency and insufficient awareness that thiswas a pressing issue that needed to be dealt with.People may have had negative experiences with change initiatives orapproaches that seem similar to the one being advocated. To use anold adage, once burned, twice shy. If stakeholders have learned thatchange initiatives lead to layoffs or that the initiatives begin with greatfanfare but are never completed, people will be more negative. Theyhave learned that they should be skeptical about change and itsconsequences.39They may have had a negative experience with those advocating thechange. They may mistrust the judgment of those promoting thechange, their ability to deliver on promises, their access to resources,their implementation skills, or their integrity.People may be influenced by the negative reactions of peers,subordinates, or supervisors whom they trust and respect and/orwhom they have to work with in the future. These opinion leaders canhave a significant impact.Last but not least, there may be justice-related concerns. People maysee the process as lacking in procedural justice (i.e., was the processfair; did people have an opportunity to question change leaders, voiceopinions, and suggest options?). For example, an absence ofparticipation and involvement may leave employees feeling ignoredand relatively powerless.40 In addition to concerns about proceduralfairness and the trustworthiness of leaders,41 they may also believethat distributive justice was lacking (i.e., the final decision wasfundamentally unfair).42 Matters related to this will be discussed in thesection in this chapter dealing with the psychological contract the
recipients feel they have, involving their working relationship with anorganization.When things do not unfold as planned, resistance is often flagged as thecause. Rather than assess the situation carefully and objectively,managers responsible for change are quick to lay the blame at the feet ofthose thought to be acting as obstacles.43 The dynamics of this likelyincreases resistance as each blames the other and tensions rise. Whenmanagers and employees point fingers at each other as the cause ofchange difficulties, the focus is not on advancing the agenda for change.The key question is not who is to blame, but rather what is happening, whyis it happening, and what does this tell us about what we should do now?Kotter notes that impediments to change are much more likely to comefrom problems related to the misalignment of structures and systems thanfrom individuals engaged in resistance.44 For example, if existing systemscontinue to reward competitive behavior, why would you expect employeesto behave in a cooperative manner?45 Likewise, if critical information orresources are not available, how can individuals implement the changeprogram? Change leaders need to be aware of the tendency to focus onindividuals and not the roles that the existing structures, systems, andprocesses may be playing in impeding progress and influencing people’sreaction to the initiative.For successful change management and implementation, there needs tobe engagement and open conversation, especially in the face ofresistance. Such communications can create a shared understanding ofdifferent perspectives, and have the potential to be a valuable resourcewhen approached constructively, by identifying new ways of thinking aboutthe situation and possible paths forward.46 Alignment also needs to existbetween what is communicated and the systems and structures of theorganization. When the change leader asks you to do “A,” but othersystems and structures tell you that “B” is what you should do, one shouldexpect ambivalence and/or resistance until issues of alignment areaddressed. If resistance is based on different definitions of the issues, thenleaders need to return to the framing and analysis of the underlyingproblems and attempt to resolve the differences. If the resistance is basedon differing views of the consequences, the reasons need to beunderstood and change plans modified if appropriate.
Make the Change of the PsychologicalContract Explicit and TransparentPeople don’t resist change. They resist being changed – PeterSengeThe organizational context plays a major role in determining reactions ofpeople to change. People want some sense of agency or control andinformed consent over what happens to them in their work lives. Thepsychological contract that people have with the organization can be acritical contextual variable in this regard.47 The psychological contractrepresents the sum of the implicit and explicit agreements we believe wehave with our organization. It defines our perceptions of the terms of ouremployment relationship and includes our expectations for ourselves andfor the organization, including organizational norms, rights, rewards, andobligations. As such, they both influence and are influenced by the cultureof the organization.48 Much of the psychological contract is implicit.Because of this, change initiators may be unaware of it when they alterexisting arrangements. In effect, leaders often don’t recognize the impactsuch changes may have on the psychological contract. They fail to realizethat employees may have a very different view than they do of whatconstitutes “their deal,” their employment contract, including what theyhave a right to expect and what is fair and equitable. The perceptions ofsudden and arbitrary changes to the psychological contract of employeescan lead to trouble.While most people recognize that their psychological contracts will have toadapt to changing conditions, they don’t react well to surprises andunilateral actions that fail to consider their input or that of theirrepresentatives. Changes that threaten our sense of security and controlwill produce a loss of trust, fear, resentment, and/or anger.49 People needto devote time and effort to absorbing the change and its implications.Even unilateral changes that will have a positive impact on employeesmay be resisted because of factors such as suspicion over the “realagenda” and concerns about a reduced sense of control or the capacity toperform.When dealing with psychological contracts, remember that they do notexist in a vacuum. Changes to one person’s contract can have an impacton the psychological contracts of others, including the managers involved
and the change leaders themselves. Effectively managing theinterpersonal as well as personal dynamics when dealing with changes topsychological contracts represent important work that change leadersneed to address.50Ideas related to supervisory support, communications, and issues offairness that have been discussed earlier will assist change leaders indealing with the impact of the change on the psychological contract.Dmitriy Nesterkin argues that negative emotions and resistance tochanges in the contract are reduced “by implementing and sustainingsocially supportive and interpersonally just organizational environment, ledby an emotionally intelligent management staff (p. 573).51 This includesfollowing through and delivering on both the transactional commitmentsrelated to the change, as well as the relational elements of the contract.52The Washington Suburban Sanitary CommissionIn 2002, Washington Suburban Sanitary Commissions (WSSC) new generalmanager, John Griffin, was brought in to implement change given the threat ofprivatization that the organization faced. As an outsider hired into this role, heengaged in open and honest communication immediately, asking questionsand being transparent with all stakeholders. Griffin led the organizationalchange with structural reorganization. As a manager working closely withGriffin, Steve Gerwin told his employees, “Don’t worry, when the changecomes, there will be a job for you and even a better one than you have now.But if you think the job you used to have is going to be there, you’re wrong.”53Gerwin explicitly communicated that there was going to be a significantchange in the psychological contract. “If you want to come to work andread the newspaper, talk to your friends and fill up space and get your paycheck, that job is gone. But if you want a challenge and something to do,there may be an opportunity there.” He used language the people couldunderstand and remember: They could not have their old jobs after thereorganization, but they could have a challenging job.54
Predictable Stages in the Reaction to ChangeChange is inevitable—growth is optional—from a bumper stickerReactions to changes that are viewed by recipients as very disruptive canbe thought of as occurring in three phases: before the change, during thechange, and at the end of the change. The stages in the reaction tochange typically begin in advance of the actual change initiative asindividuals worry about what will happen and what their personalconsequences will be. The reaction can continue until long after thechange initiative has been completed as people work through the feelingscreated by the change. When experiencing traumatic changes andtransitions, people tend to go through a predictable sequence of stagessimilar to those outlined by Elizabeth Kübler-Ross in her work ongrieving.55 The model suggests that emotionally healthy people will workthrough issues until they accept the change. From a change agent’sperspective, this is sometimes referred to as helping others work throughthe “valley of despair.” Table 7.2 integrates her insights with those ofFink,56 Jick,57 and Perlman and Takacs.58Before the change: People who are anticipating significant change mayexperience pre-change anxiety. At this stage, people think something is inthe wind, but they don’t know exactly what it is or how it will show itself.Uncertainty escalates and people often find themselves agonizing over theimpact it could have on them as well as its impact on others. For many, theanticipation phase can be debilitating. In their desire to reduce uncertaintyand anxiety, many will search for signs of what might be on the horizon.Rumors may abound. Others will deny the signs and signals of change,finding it too threatening to think about. During this phase, theorganizational rumor mill often moves into high gear and increases anxietylevels. The confusion and uncertainty created often continue long after thechange has been announced and may be coupled with fear, anger,alienation, defensiveness, and a variety of other responses that havestrong attitudinal and performance implications. Ambivalent feelingsdescribed earlier are often generated at this point and are evident incomments and actions. As noted earlier in this chapter, people are morelikely to speak up when the mixed emotions stem from conflicting beliefs.When conflicting emotions are involved, though, individuals often havemore difficulty giving voice to negative emotional responses.59
Once change is announced and implementation is underway: Even thoughpeople know that change is coming, many still experience shock when itactually arrives. Individuals at this stage may feel overwhelmed by eventsto the point of immobilization. Some people will engage in defensiveretreat, holding onto the past and experiencing anger over the changes.Insecurity and a sense of loss and unfairness are common reactions.People will often try to avoid dealing with the real issues and try to reducetheir risk by lowering their exposure and relying on habituated responsesthat have worked in the past. The sense of betrayal will be strongest forthose who placed their greatest trust in the firm and who feel theirpsychological contract with the organization has been violated. Their trustin the leadership will typically decline. Some individuals may agreeoutwardly, announcing their willingness to cooperate (“We’re behind youall the way!”), only to act in a noncompliant manner when they are out ofsight of those advocating the change. This behavior can sometimesextend to sabotage. Some people will engage in bargaining behavior,negotiating to make the change go away or to minimize its negative impacton them. Depression and guilt, stress and fatigue, and reduced risk takingand motivation have been regularly reported to follow such unsuccessfulattempts to reverse the tide. Alienation can result.At the end: Finally, people begin to accept the change and acknowledgewhat they have lost. They begin to let go of the past and start to behave inmore constructive ways. At this point, they can again take risks—not thoseassociated with getting even, but rather those associated with liberationfrom the past and moving on. As risks are rewarded with success,confidence builds in the change. During the adaptation and change stage,people become more comfortable with or accepting of the change,internalize it, and move on.People need to work their way through their reactions to the changephases in a systematic fashion to avoid becoming stalled. To facilitate this,managers need to be in a position to help them do so, and more will besaid about later in this chapter in the two-way communication section. Thesame is true for the change process itself, which needs to happen in theappropriate order, according to Kotter. As the subtitle of his article LeadingChange: Why Transformation Efforts Fail says, “Leaders who successfullytransform businesses do eight things right (and they do them in the rightorder).” This order is as follows: establishing a sense of urgency, forming achange team, creating a vision for change, communicating the vision ofchange, empowering others to act, planning for and creating short-termwins, consolidating wins to reinvigorate the process, and institutionalizingthe change. Skipping steps, Kotter says, only creates an illusion of speedand never produces a satisfying result.60 Both what you do and how youdo it are important.
Table 7.2 Stages of Reactions to ChangeTable 7.2 Stages of Reactions to ChangeBefore the ChangeDuring the ChangeAfter the ChangeAnticipation andanxiety phaseShock, denial, andretreat phaseAcceptance phaseIssues: Coping withuncertainty andrumors about whatmay or may nothappenIssues: Coping withthe changeannouncement andassociated fallout;coping withuncertainty andrumors; reacting tothe new “reality”Issues: Putting residualtraumatic effects ofchange behind you,acknowledging thechange, achievingclosure, and moving onto new beginnings—adaptation and change1. Pre-changeanxiety—Worryingabout what mighthappen, confusion,and perhapssignificant denial ofwhat change isneeded or likely2. Shock—Perceived threat,immobilization, norisk-taking3. Defensiveretreat—Anger,rejection anddenial, compliance;sense of loss, risk-taking unsafe4. Bargaining5. Depression andguilt, alienation6. Acknowledgment—Resignation, mourning,letting go, energy forrisk-taking begins tobuild7. Adaptation andchange—Comfort withchange, greateropenness and readiness,growing potential for risk-takingAnother often mentioned method for overcoming resistance to change isthe ADKAR model. Its elements highlighted the importance of: creatingawareness of the need for change; developing desire to participate in andsupport the change; developing knowledge of how to change and a clearsense of the vision for the change; developing people’s ability toimplement the change and put it to use; and reinforcement to ensure thechange stays in place.61 Concerns have been identified with both of theabove approaches, including comments that they are too linear, simplisticand business process improvement focused and not attentive enough tothe emotional dimensions of change management. However, they provide
the change agent with useful food for thought concerning how to thinkabout and respond to ambivalence and resistance, if they set in.See Toolkit Exercise 7.2 to think about the phases of change.Even when people recognize the need for difficult decisions, they mayhave difficulty emotionally accepting and adapting to the consequences ofchange decisions.62 This emotional distress can be true regardless of theconsequences. For example, even those who are retained afterorganizational downsizing will experience emotional upset. The survivorsyndrome is a term that refers to the reaction of those who survive apoorly handled, traumatic change such as a downsizing.63 Survivorsyndrome effects include lower levels of job satisfaction, motivation, andorganizational loyalty; greater stress; greater ambiguity; vulnerability aboutone’s future position; a sense of entrapment in a negative situation; andguilt about being retained while others have been let go.64 To avoid someof the traps related to the survivor syndrome, individuals remaining withthe organization need to understand the reasons for the decisions, feelpeople have been fairly dealt with, and that there are solid reasons forhope in the future of the organization and its positive implications for them.The actions and words of the change agents and the way the initiative isrolled out can help recipients constructively adjust to the new realities.More will be said of this later.As Jick and Peiperl point out, the sequence described in Table 7.2provides a prescriptive, optimistic, and simplistic view of how individualsadjust to disruptive change.65 Some will move through the stages quickly,others will move more slowly, some will get stuck, and some will movemore quickly than they should, taking unresolved issues with them. As anexample, consider the actions of a senior executive we know who lost hisjob as the result of a merger. During the eight months it took him to find anew position, he focused on maintaining a very positive attitude. Friendsmarveled at his resilience, though some questioned whether he was livingin denial. Upon joining a new firm as a vice president, he becameincreasingly critical and bitter about his new employer. His hostility hadlittle to do with the organization he had joined or his new position. It wasunresolved anger and other baggage related to his earlier dismissal. Hisinability to recognize and deal with this ultimately cost him the newposition.66 When individuals get “stuck” in the early and middle stages,extricating themselves can prove very difficult.Individual reactions to organizational change will be related to perceptionsof the potential outcomes, and most changes will not be as severe anddisruptive as those envisioned above. In the next section, the chapter
explores three specific factors that have an influence on how people adaptto change:personality and experience with the rate of changethe reactions of coworkers and teammatesexperience with and trust in leadersSee Toolkit Exercise 7.3 to consider your personal reactions to a changesituation.
Stakeholders’ Personalities Influence Their Reactionsto ChangeSome individuals (innovators, early adopters, or members of the earlymajority) are generally more predisposed to change (see our discussion inChapter 6). Others tend to review carefully the experience of others andcommit later in the process (the late majority and late adopters). Finally,there are those who resist adopting change until the bitter end.67 Thesepredispositions to change are influenced by individual factors such assusceptibility to the social influence of others, tolerance for risk andambiguity, self-image (e.g., innovator versus cautious adopter), and (ofcourse!) the nature of the actual change and its perceived impact on themand the things they value.68 See Toolkit Exercise 7.4 to think about yournatural predisposition to change.As the above suggests, individuals’ perceptions of the change experienceand the risk of change will be influenced by their personalities.69 Peoplewho have a low tolerance for turbulence and ambiguity tend to be mostcomfortable in stable environments.70 As the rate of change accelerates,they will experience increased stress as they attempt to cope and adjust.At low to moderate levels, though, this increased stress may also lead toincreased job satisfaction if people experience success with change.However, when change comes to be seen as increasingly disruptive orradical, the resulting stress and strain will tend to produce increasinglyelevated levels of anxiety and fear, defensiveness, fatigue, and ultimatelyhopelessness, alienation, and resignation. Levels of absenteeism andturnover, errors and accidents, and depressed levels of work satisfactionare commonly observed to escalate as such stressors rise.71People who have a high tolerance for turbulence and uncertainty will findstable and unchanging environments unsatisfying after a period of time.When they find novelty and challenge lacking, concerns grow that theircareers have stalled,72 and they experience increasing levels of boredom,frustration, absenteeism, and turnover.73 As the rate of change increasesto moderate levels, so will their levels of satisfaction and interest,particularly if they become directly engaged with the change initiative. Asthe rate of change and the accompanying levels of turbulence anduncertainty intensifies to levels that are outside their comfort zones, effectssimilar to those seen in low-tolerance individuals are observed, althoughthe effects occur later at higher rates of change (see Figure 7.2).Take a few moments to revisit the question of how you react to changeand reflect on your experience. What is your predisposition to accept
change? You can also use this to help understand your stakeholders (seeToolkit Exercise 7.5).
Prior Experience Impacts a Person’s andOrganization’s Perspective on ChangePrevious experience with change will affect a person’s view and behavior.Long periods of stability and minimal change will lead to people seeingchange as more unsettling and risky than those with somewhat morefrequent encounters with change.74 Even those who are thinking “thankgoodness, we’re finally doing something!” may at first experience elevatedlevels of perceived risk and stress from exposure to even moderate levelsof change.A sustained period of continued success with a particular strategy cancause individuals and organizations to become trapped by those strategiesand tactics that have served them well. The tendency to rely oncompetencies and strategies that have worked in the past is referred to asa competency or a complacency trap.75 Faced with the need forchange, they rely on those approaches that have served them well in thepast, even though conditions have changed and the old strategies are nolonger well aligned with their environment. Breaking out of these traps isnot easy. Related to this is confirmation bias—our tendency to embraceinformation that supports our beliefs and reject contradictory informationand a related tendency to think we know much more than we do aboutthose things we have strong beliefs about. The more imbedded these are,the more work change agents have on their hands to help individuals(including themselves) break free of these traps so that they are more ableto see, understand and adapt.76If organizations and their employees have adapted successfully to ongoingexperiences with moderate levels of change, then those employees arelikely to be more open and flexible. The organization’s change “muscles”are toned. Those who have regular, ongoing exposure to moderateamounts of positive change (e.g., through continuous improvement) tendto find change to be less unsettling and hence less risky because theybecome accustomed to believing that tomorrow will likely be different fromtoday and that this is not something to be avoided.77 However, whenorganizations and employees live in an environment with sustainedperiods of major upheavals and uncertainty, the sense of personal riskescalates and remains high. Under these conditions, employees maybecome exhausted and feel increasingly vulnerable to the next wave ofchange. They become jaded and alienated if earlier promises and hopesfor improvement have gone unmet. Those who have not exited the firmmay resign themselves to adopting a strategy of keeping their heads downto avoid personal risk. Under these extreme conditions, the perceived risk
attached to a particular change initiative may actually diminish. Like thosein danger of being swept overboard in a storm, individuals may beprepared to grasp onto any plausible change initiative that looks like itcould serve as a lifeline, unless their alienation is such that they haveeffectively given up.Figure 7.2 depicts a hypothetical connection between past rates of changeexperienced by people in an organization and the degree of perceived riskwith an anticipated change. It illustrates the adaptability and resilience thatindividuals exhibit as a result of their experience with the previous ratesand types of change within an organization. For example, if people haveexperienced long periods of minimal change, they will likely perceivehigher risks with the proposed change. The perceived risk of the proposedchange declines if there has been a moderate rate of change within theorganization and a general normalization and level of comfort associatedwith past changes. As the normal rate of change increases in intensityand/or becomes drawn out, the perception of risk associated with the newchange begins to rise again. When the rate and level of intensity of changereach a certain point, those involved will be ready to grasp at anything withthe potential of offering a way out (see drop-off line in Figure 7.2). Thispattern can be seen when participants recognize that the organization is ina crisis state, and they become unfrozen and ready to change. In a crisissituation, one can expect initial defensiveness followed by openness tochange if a viable path forward can be offered.78As has been discussed, both personality and past experiences withchange affect how people view proposed changes. Table 7.3 outlines thehypothesized interactions between an individual’s need for change,tolerance for ambiguity, and the frequency and magnitude of the changeexperience. Change agents who recognize why people are reacting tochange as they are and who understand how to help them adapt possessa valuable skill set.
Coworkers Influence Stakeholders’ ViewsOur views of change are also influenced by the comments and actions ofthose around us—particularly those whose opinions and relationships wevalue (see Table 7.4). Trusted mentors, managers, and friends can beparticularly influential. If those we trust are positively predisposed toward achange initiative, we may be influenced in that direction. Similarly, if theyare experiencing serious concerns about the change or are opposed to it,they will influence us to consider factors that may move us in the oppositedirection.79Figure 7.2 Degree of Perceived Risk Associated With a ParticularChangeConsider, for example, the reactions of the immediate supervisor who is onthe firing line when it comes to implementing change. Have they beeninvolved in developing the change and/or do they feel fully informed aboutthe need for and nature of the change, and its implications? Do they feelthat they have been listened to? Research shows thatsupervisors/managers have a significant influence on how the change isperceived and reacted to by their direct reports. It comes as no surprise tofind that managers who are more committed to the change are more likelyto generate more positive responses to the change in those who report tothem.80 Yet all too often, frontline managers report that they found outabout the change at the same time as their direct reports. They seethemselves as being expected to explain and voice support for the changebut feel ill-informed about it and excluded from the process until the veryend. Ignoring them is a mistake to be avoided. Engaging them as valuedcontributors to the change process increases the likelihood that they willcommunicate support for the change with those they influence, andconstructively participate in its implementation.81
Coworkers and work groups play a critical role in how people sort out theirown reactions to change, because these individuals live in a similarorganizational world and their relationships are bound together by norms,roles, and shared obligations and experiences. When coworkers areambivalent on the desirability of a particular change, one can expect tosee skepticism in others as they sort out their own feelings about thematter. The importance of coworkers’ reactions increases as the strengthof relational ties rises. The more coworkers see themselves as part of acohesive team, the greater will be their influence.82 Even groups that seemto be in conflict will often become cohesive and turn on the “outsider” whois seen to be threatening group members. Change leaders who ignorecohesion, norms, and varying levels of ambivalence do so at their ownperil.Table 7.3 The Interaction of Personality With theExperience of ChangeTable 7.3 The Interaction of Personality With the Experience of ChangeIndividualDifferenceChange ExperienceLowNo changeexperiencefor anextendedperiod, abelief that thisjob will lastindefinitelySomeSomechangeexperiencethatdemonstratesboth thedifficultiesandsurvivabilityof changeFrequentFrequentchangeexperience,nothingstatic,majorupheavalsanduncertaintyChaoticChaoticenvironmentcharacterizedby temporarysystems, fluidenvironments,and constantchange
IndividualDifferenceChange ExperienceIndividualswho havehighertoleranceforambiguity,novelty,andchangeRestlessness,boredom,attempts tocreatechange or todisruptroutinesGrapplingwith changeissues;feelings ofinvigorationand newmeaning inthe job,expectationofimprovementStressshowing,copingstrategiesbeingdeveloped,energy stillpresent butfatiguestarting,voicing ofconcerns;the desireto exitincreasesStresseffects, fear,and fatigue asthey attemptto cope;voicing ofconcernsexists, but thelikelihood ofresignation,alienationrises; and/ora willingnessto grasp ontoa plausiblecourse ofaction as away to reducethe chaos
IndividualDifferenceChange ExperienceIndividualswho havea lowertoleranceforambiguity,novelty,andchangeAcceptanceof thesituation, buy-in to thesteady state,nopreparation oranticipation ofchangeStress effectspresent,concernsvoiced, but awillingness toadjust tomoderateamount ofchangepresentSignificantcopingdifficulties;stresseffects,includingfear,fatigue,andalienationoftenpresent;increasedwillingnessto grasp onto aplausiblecourse ofaction toreduce thechaosSeverecopingdifficultiesand resultantstress andstrain,alienation,resignationand/or exit athigh levelsand/orelevatedwillingness tograsp atplausiblecourses ofaction toreduce thechaosTable 7.4 Impact of Trusted Peers on RecipientsTable 7.4 Impact of Trusted Peers on RecipientsOpinionsof ThoseTrusted byRecipientsRecipients’InitialAttitude totheChangePossible Implications on the Attitude of theRecipientsPositivetoward thechangePositivetoward thechangeVery motivated to support and predisposedto get involvedNegativetoward thechangeOpposed to the change but potentiallyopen to other perspectives because of newinformation and peer pressure
Opinionsof ThoseTrusted byRecipientsRecipients’InitialAttitude totheChangePossible Implications on the Attitude of theRecipientsNegativetoward thechangePositivetoward thechangeSupport of the change may become moretempered due to information and theperspectives offered by trusted peers. Willoften experience pressure to reconsidertheir support or perhaps be silenced bypeer pressureNegativetoward thechangeOpposed to the change and reinforced inthose views by trusted peers and the peergroup
Feelings About Change Leaders Make a DifferenceHow employees view and react to change is influenced by theirperceptions of the change leaders. If people believe their perspectives andinterests are recognized and they trust these leaders, then they are likelyto respond positively to the suggestions for change.When change leaders talk about significant change, they often focus onthe rationale, including the costs and benefits of changing. They may paysome attention to the costs of not changing, but usually little focus is givento the benefits of the status quo. Followers, on the other hand, assessingchange at a personal level, will often reflect on the benefits of not changingand discount the costs of staying with the status quo. The followers mayprefer the devil they know to the unknown one. They can estimate, andoften inflate, the costs of changing but may feel far less certain about thebenefits. As a result, change leaders and followers’ estimates of thebenefits and costs can differ dramatically.If change leaders recognize and deal with the issues factually,constructively, and sensitively, they will help people interpret the context ina more predictable manner and concerns can be brought to the surfaceand addressed.83 An approach that has been advocated by Cranston andKeller is to communicate the reasons for the change to recipients in fivedifferent ways. The first (1)1 is the traditional business case approach thatwe are very familiar with (e.g., we’re losing market share, this is anopportunity to increase sales and profitability, lower costs will strengthenthe bottom line). However, they also recommend discussing why thechange is important to (2) society, (3) customers, (4) the working team,and (5) the individuals doing the work. In addition, they believe supervisorysupport, in conjunction with soliciting recipients’ ideas and engaging themin target setting, will enhance engagement and commitment. They alsorecommend the use of small, unexpected rewards to recognize progressand motivate along the way.84From a procedural justice and a personal efficacy point of view, peoplewant their voices to be heard, even if it doesn’t result in a change in thedecision. In 1998, when the president of Continental Airways toldemployees that he was closing their airport’s operations, his candor,combined with his positive reputation as a leader, resulted in anacceptance of the change.Candor at Continental Airways
I met with the employees and their families—about 600 people in all. Alongwith explaining the details of the closing and relocation plans (the company haddoubled the financial aspects of the relocation package over what was requiredby the contract), I also shared with them my vision for Continental and how farwe had come. I then opened the floor to questions and answers.For about five minutes, employees expressed appreciation that I hadpersonally come to give them the news and had developed a financial packageto meet their needs. But then the pilots walked in—in full uniform—with theirfamilies. They surrounded the room and refused to sit down. A pilot came tothe microphone to express how incompetent he felt management was and howContinental was once again making the wrong decision. The rest of the pilotsapplauded.Do you know what happened? The rest of the employees, led by a baggagehandler who was also being relocated, stood up and defended me, one afteranother, for 20 minutes. They told the pilots that they should feel lucky thatContinental finally had a senior management team that treated them withenough respect to deliver the bad news—as well as the good relocationpackage—in person. I left to a standing ovation.85How change leaders handle the perceptions and the alterations to thepsychological contract will matter to employees. The president ofContinental was more successful in managing the shift in psychologicalcontract with the ground employees than with the pilots. Perceptions of hispromises may have been influenced by the employees’ views that theywere being treated reasonably under the circumstances—procedural anddistributive justice was upheld.86 The fact that he was personally presentto deliver the news also mattered. People react positively to courage,empathy, honesty, and sound logic and these are better conveyed inperson than when they are relegated to talking points or a report. Whenpeople feel steamrollered by the pressure exerted on them rather thanreasonably engaged, resistance may go underground and resurface at alater date in the form of resentment for the change leader.87
Integrity is One Antidote to Skepticismand CynicismSome people believe change leaders when they promise a bright future orstate that there is no alternative except what is offered. However, othersare more skeptical—often for good reasons. Followers may believe thatthe promises are suspect, particularly if the leader is relatively unknown oruntested. If followers have received promises before and found themwanting, then people will be skeptical. Followers sometimes report thatchange leaders have said the right things but acted in ways that advancedtheir own self-interest, ignoring what was good for most employees andthe organization. That was the concern about Thorsten Heins (CEO,BlackBerry) that was voiced quietly at first when people read about hiscompensation arrangements in required public disclosures. It was voicedmuch more loudly when he departed BlackBerry with a $22 millionseverance after less than two years of rapidly deteriorating performanceand the unsuccessful sale of the firm.88 Similar concerns were initiallyraised about his replacement, John Chen, but those doubts have nowbeen replaced with hope. Chen has guided Blackberry through a long anddifficult journey. A well-earned reputation for sound judgement, candor, aclear eye on the longer term and integrity have provided internal andexternal stakeholders with light at the end of the tunnel.89Skepticism can shift to cynicism (a real loss of faith) and heightenedpessimism when people whose opinions we value share a similar negativebelief.90 The consequences of such cynicism include reduced satisfaction,reduced organizational commitment, and less motivation to work hard. Itresults in an increase in accidents and errors, a lessened desire and will toengage in future change initiatives, and decreased leader credibility. AsReichers, Wanous, and Austin say, “People do not deliberately becomecynical, pessimistic and blaming. Rather these attitudes result fromexperience, and are sustained because they serve useful purposes.Cynicism persists because it is selectively validated by the organization’smixed record of successful change, and by other people in theorganization who hold and express similar views.”91The perceived trustworthiness and integrity of the change leader playimportant roles in the judgments made by the recipients. When changeleaders are viewed as credible and trustworthy, their vision of the futurereduces the sense of uncertainty and risk and increases the sense of hopein recipients as they put their faith in the leader’s judgment. People oftenturn to credible leaders and colleagues to help them absorb uncertainty
and make sense of confusion.92 Leaders’ efforts to actively involverecipients in the change initiative further reduce the chances of cynicismdeveloping.93Periods of transition represent a time when the ethical and reputationalrisks for leaders are particularly high. The “best course of action” is farfrom clear. Offering hope and direction without misleading or overstatingthe case is the narrow path that change leaders must navigate. As oneCEO noted, the difference between a visionary leader and a huckster isthe thin edge that is integrity.94
Avoiding Coercion but Pushing Hard: TheSweet Spot?Change leaders may find that they have to resort to the use of coercion.Kramer argues that under certain circumstances, intimidating leadersapply their political intelligence to creatively push followers to higher levelsof performance than would otherwise have been achieved.95 Importantly,Kramer specifically notes that while such individuals are tough anddemanding, they are not simply bullies. Their initial coercion is to unfreezethe situation and achieve initial shifts in position. However, leaders whorely primarily on the application of fear and force to gain commitment tochange are taking significant risks.96 While it may be true that “if you havethem by their throats, their hearts and minds will follow,”97 any release ofthe throat risks resistance and revolt. Effective change must be aboutmore than the leader’s power.Monique Leroux at Desjardins challenged the employees, but she did sowith a mix of encouragement, active engagement, occasional ultimatumsaround unacceptable behavior, staff changes and dismissals whennecessary, and modeling the desired change through her own behavior.She used metrics and other information to make the business challengesvisible to everyone in ways they could understand and relate back to theirwork and the company they were committed to. The use of suchinformation was not only to help senior management understand thebusiness, the underlying problems, the paths forward, and progress alongthe way; the metrics and related information and stories had apsychological effect with the broader organization as well, increasingemployee awareness of what they were working toward and why it wasimportant.At times, employees respond to leaders out of fear of what will happen ifthey don’t comply. While fear can motivate, leaders who rely primarily onfear or coercion are following a risky path—both ethically andpragmatically (i.e., will the support be there when the stick or threat is nolonger present?).98 In his book From Good to Great, Collins refers to this“doom loop” as the enemy of effective leadership.99Leaders, frustrated by a lack of progress, are attracted to the use ofpunishment and fear, because these tools are available, are immediate intheir short-term effects, and carry the illusion of control through obedienceand compliant behavior.100 However, we do not recommend the use ofsuch strategies in most situations. Years ago, Deming noted that the move
to total quality could not be achieved through fear and evidence in theintervening years continues to demonstrate the lack of effectiveness offear.101 While fear may produce compliance in the short run, they haveproven to be ineffective over the intermediate to longer term.102 Further,such techniques can create undesirable side effects (e.g., frustration,withdrawal in the form of absenteeism and turnover, aggression, andsabotage). A much more desirable and less risky course of action isthrough the positive engagement of people through initiatives that enhancethe recipients’ capabilities to deal effectively with the change.103 At thesame time, managers can use their power to make expectations andstandards explicit in order to challenge employees.
Creating Consistent Signals fromSystems and ProcessesWhile the leader’s words and deeds are important, so too are other partsof the organizational context. A leader’s credibility will be either enhancedor diminished by the extent to which organizational systems andprocesses send a consistent message or are themselves the focus ofchanges that will bring them into alignment with the change vision. This isenhanced further when social media and informal channels are alsoconsistent in the messages they are carrying. However, this should not beinterpreted as a call to wall people off from conflicting or contrarymessages that are sent in good faith as people question what is occurringand why.Change agents may be tempted to try to create a communication “echochamber” in order to get everyone on the same page, but it is highlyrecommended that this temptation be avoided. Rather, use these channelsas an opportunity to deal openly and candidly with concerns, so that thevalue of critical thinking and the honest voicing of concerns are reinforcedand confidence is built in the honesty and integrity of what is beingcommunicated by the change agent and organization. This open approachmay take more time and energy in the short term but will pay dividends inreducing unsubstantiated rumors and helping to move changes forward inthe intermediate to longer terms.104Credibility and trust are diminished when the leader’s words say one thing(e.g., quality is critical) but the systems and processes signal somethingelse (e.g., ship now, fix later). In Built to Last, Collins and Porras found thatfirms with staying power possess resilient cultures that have the capacityto adjust and realign their systems and processes in response to changingconditions. This resilience was made functional by the underlying value setand supportive systems and processes that were installed by leaders.105As such, they provided continuity for organizational members while at thesame time contributing to the adaptability and change of existing systemsand processes. This reflects an interesting and important paradox for thechange leader. The successful management of change is enhanced bygiving voice to factors that develop the sense of continuity, the connectionbetween the past and the future, as well as by giving voice to the need forand nature of the change.106
Steps to Minimize the Negative Effects ofChangeThose who have been involved in significant changes know that howpeople view the change will have a profound impact on the ultimatesuccess or failure of a change initiative.107 Success is aided when changerecipients become willing implementers. Therefore, the effects of changeon recipients need to be approached with care during the initial planningphases and throughout the change process, including the post-changeperiod.
EngagementTrust is increased and rumors are reduced when leaders share story afterstory about the problems that are driving the need for change, what isknown and not known, process, action plans, and timelines.108 Whencoupled with the personal involvement of engaged leaders and executivesand a meaningful degree of employee involvement in decisions that affectthem (at minimum, the ability to ask questions, voice concerns, andreceive answers that reduce uncertainty), individual adaptation andacceptance are advanced.109 People want to know where things aregoing, why, and what the implications are on the organization, their partsof the operation, and on them personally. When change leaders don’tknow the answers to questions that are raised, people should be given atimetable detailing when they can expect to hear and the commitments tofollow up should be honored.
TimelinessEmployees often want to vent their concerns and frustrations, and, attimes, grieve what has been lost. If this is to be handled constructively,they need to hear in a timely fashion and be given time to constructivelyprocess what they have heard. No one benefits when recipients first hearabout a particular change on the evening news or in the local coffee shop.When this happens, the information needs to be quickly and credibly dealtwith through internal communication channels. The more that criticalmessages can be communicated in a timely, face-to-face manner (backedup by appropriate documents and systems/processes, as needed, tohandle complexity and retention), the better. Otherwise, the rumor mill willshift into overdrive as people attempt to make sense of new and potentiallyconflicting information.110 Once the message is in their hands, they mayneed time and assistance to make sense of what they have heard andconstructively react, both on their own and with their peers. Otherwise,they may well come to believe that they have not been fairly dealt with bythe change leaders or organization.
Two-Way CommunicationChange communication needs to be two-way, as change leaders need tobe open to learning as much from exchanges as followers. A variety ofcommunication channels are available to change leaders, and multiplechannels are best. Redundancy is clearly preferable to gaps.Communicating through executive-staff briefings, teams, task forces,recipient representatives, advisory groups, video, newsletters, hotlines,social media and the creative use of the intranet (including bulletin boards,blogs, social media and e-mail to monitor concerns and expedite thedelivery of answers) all have a role in helping people learn about andadapt to change. When coupled with transparency, authenticity, andminimal levels of executive defensiveness, these communicationapproaches advance recipient engagement and adaptation to change.Exposure to employees’ feedback and reactions allows change leaders toadapt strategies and approaches in an informed and sensitive manner. Forexample, tracking themes from e-mails, postings on bulletin boards, socialmedia, and surveys results can provide insights into how followers areinterpreting and responding to the change. The importance of suchfeedback proves the adage that leaders who think they know it all have afool as their advisor. To quote the movie director Blake Edwards, “Everytime I think I know ‘where it’s at,’ it’s usually somewhere else.”Bringselius provides interesting food for thought concerning what is drivingemployee objections to the organizational changes, the importance ofmanagers testing their assumptions, and developing a deeperunderstanding of those employee reactions. This allows managers to altertheir responses to different causes in ways that (a) test the legitimacy ofconcerns, (b) have a positive impact on the recipients’ sense of how theyare being treated, (c) allow new information to be factored into theunfolding of the change process, and (d) help employees work their waythrough the concerns they have.111 The ability to have new informationfactored into the unfolding of the change process can createimprovisational space that frees individuals (in the short term) from theirtraditional roles; allows them to explore; provides them with a greatersense of self-efficacy and agency (the strength of a person’s belief thatthey have the ability to complete tasks, accomplish goals, and have somedegree of influence over what happens to them); and makes possible therefinement of what is being pursued and how it is being pursued.112Jick and Peiperl have identified a number of strategies that can assist boththe recipients and their managers in coping with different stages of thechange (see Table 7.5).
Change recipients can develop support networks to facilitate letting go andmoving on if they know and understand the stages of change. Changeleaders need to develop an understanding of the dynamics around changeand recognize the need to work through the change-management processin a systematic and supportive fashion. Often, followers’ understanding ofthe need for change lags behind that of change leaders. By definition,those leading change have diagnosed the need for change, mourned theloss of the old, understood and embraced the new vision, and moved toaction. Those impacted by the change need to work through the sameprocess—but are lagging behind their leaders and lack their directinvolvement. As change leaders, we need to give them time to adapt andcatch up! See Toolkit Exercise 7.6 to analyze a time when you were achange recipient and the quality and actions of change leadership duringthat period.Table 7.5 Strategies for Coping With ChangeTable 7.5 Strategies for Coping With ChangeRecipientsChange LeadersAccepting Feelings asNaturalSelf-permission to feeland mournTaking time to workthrough feelingsTolerating ambiguityRethinking ResistanceAs natural as self-protectionAs a positive step towardchangeAs energy to work withAs information critical to thechange processManaging StressMaintaining physical well-beingSeeking information aboutthe changeLimiting extraneousstressorsTaking regular breaksSeeking supportGiving First AidAccepting emotionsListeningProviding safetyMarking endingsProviding resources andsupport
RecipientsChange LeadersExercising ResponsibilityIdentifying options andgainsLearning from lossesParticipating in thechangeInventorying strengthsLearning new skillsDiversifying emotionalinvestingCreating Capability for ChangeMaking organizational supportof risks clearProviding a continuing safetynetEmphasizing continuities,gains of changeHelping employees explorerisks, optionsSuspending judgmentInvolving people in decisionmakingTeamworkProviding opportunities forindividual growthSource: Adapted from Jick, T., & Peiperl, M. A. (2003). Managing change, casesand concepts (2nd ed.). New York: McGraw-Hill.
Make Continuous Improvement the NormOne way that organizations can reduce the perceived threat of change isto adopt managerial approaches that challenge everyone to regularlyquestion the status quo and seek to improve existing practices as part oftheir ongoing activities. If organizational members routinely question andinitiate continuous improvement projects, then shifts in the environmentwill not be seen as threatening events. Leaders generate an atmospherein which change is experienced as a naturally occurring condition bycreating an organizational climate in which incremental changes aresought out and embraced. The fact that tomorrow is unlikely to be exactlythe same as today becomes the expected norm as opposed to anunexpected shock.113One benefit of continuous improvement approaches such as Six Sigma isthe legitimization of ongoing changes in ways that provide continuity withthe past. Rather than searching for the silver bullet that will produce thecure for current organizational ills, these approaches seek to advance lessheroic, ongoing initiatives that will enhance organizational health inincremental ways.114 In so doing, these approaches make revolutionarychanges less likely and threatening because the real and perceivedmagnitude of the change is reduced.If the organizational culture promotes an ongoing and constructiveembrace of change, perceptions of the threat related to change are boundto be reduced. Abrahamson refers to this as dynamic stability. Firms likePepsi and Apple appear to be exemplars of the approach.115 Theexperience tells organizational members that changes are normal andtend to work out for the best.When the news is bad (maybe more importantly than when the news isgood), an approach of ongoing employee engagement with change canlead to lower levels of uncertainty, quicker response times (people knowwhat they are facing), improved outcomes (e.g., less undesirableemployee turnover), and higher levels of satisfaction than likely wouldotherwise have occurred. If people (or their representatives) haveparticipated in the analysis, planning, and/or implementation efforts, thistends to further reduce the fear and uncertainty.116Creating organizational agility and resiliency enables organizations to bemore prepared for change. Agility allows an organization to be more opento change while resiliency strengthens the core—common purpose,shared beliefs, and identity—to thoughtfully and strategically guide achange process. This requires the establishment of a knowledge-sharing
system, commitment from top leadership, and cross-training of employees.In addition, there needs to be a commitment to organization-widereevaluation and the use of all successes and failures as learningopportunities.117 Today’s and future organizations need to be designed toinstitutionalize change. This can be done through the promotion oforganizational modularity, quick anticipation and response to externalforces, construction of conflict-management processes, and building oforganizational coherence around values and culture rather thanstructure.118A final approach to reducing the perceived threat of change is to useapproaches that do not cause people to believe they have to bet the farm.One can do this through encouraging the use of experimentation and pilotprograms and through ensuring that the perceived rewards andpunishments associated with success and failure are not excessive. Again,experience has demonstrated that a series of smaller, interrelated changesby dedicated change agents over time can produce substantial, evenrevolutionary changes in the organization—sometimes without theorganization even knowing they were underway.119
Encourage People to Be Change Agentsand Avoid the Recipient TrapIt is clear from this chapter that being a change recipient is not asenergizing or exciting as being a change agent! Change agents are activeand involved. Change recipients find themselves on the receiving end andmay experience a lack of power and control. One way to reduce thenegative effects of change is to take risks, get more involved, and becomea change agent.When people attempt to influence the events swirling about them, theyare, in effect, acting as their own change agents. Since they are often insubordinate roles and dependent, to varying degrees, on the actions ofothers, recipients can manage the influence process by: recognizing whomthey are dependent on;120 engaging in appropriate stakeholder analysis;and taking actions that use the advantages of what they’ve learned. Bydemonstrating initiative, presenting ideas, taking actions, and attempting tomake a difference, change recipients can shift their role and potentiallycan gain power in both real and perceived terms. It will enhance both theirself-efficacy and agency and they will be viewed differently in theorganization.As you will have recognized by now, these notions of agency and activeinvolvement in change by organizational members, from awarenesscreation to ideation and implementation, are themes upon which this bookis built. The search for autonomy, mastery and purpose in one’s life isadvanced when one becomes an agent of change.121SummaryThis chapter has dealt with how people react and why they respond positively,negatively, or with ambivalence to change initiatives. It suggests that changeleaders use feelings of ambivalence as opportunities to learn and to influencestakeholders in constructive and informed ways. Change agents need tounderstand ambivalence and resistance to change and use the awareness ofthese emotions to develop a solid appreciation for the change environment.The chapter outlines the prescriptive model of change phases that people gothrough when disruptive changes are involved. Knowing the model mayprovide useful insights as to how to act. The chapter deals with the factors thataffect how people view change: their personalities, their experiences withchange, their coworkers, the organization, and the change leaders themselves.Finally, the chapter ends by considering what change agents and leaders can
do to manage the process and minimize the negative impact of change. SeeToolkit Exercise 7.1 for critical thinking questions for this chapter.Key TermsRecipients of change—find themselves on the receiving end of a changeinitiative and have little power to alter the direction or content of a changeinitiative.Resistance to change—includes actions that are intended to slow or preventchange from happening. Resistance arises when an individual comes tobelieve that the costs outweigh the benefits and that opposition is warranted.Actions can vary from the expression of concern and “go slow” responsesthrough to more active forms of resistance, including coalition building, formalprotests, and even sabotage. Too often managers expect resistance and itbecomes a self-fulfilling prophecy.Ambivalence to change—the mixed emotions that a change initiative cantrigger. Ambivalence arises from uncertainty and occurs when we are asked toact in ways that are inconsistent with our existing attitudes. These mixedemotions generate discomfort that we seek to resolve. There is evidence thatsuggests we have an easier time giving voice to mixed feelings involvingconflicting beliefs than we do when negative emotional responses are involved.Once the individual has resolved his or her ambivalence, subsequent changesto those attitudes become much more difficult until a new sense ofambivalence arises.The psychological contract—represents the sum of the implicit and explicitagreements we believe we have with key individuals and the organizationconcerning our employment relationship. These ground our expectationsconcerning ourselves and the organization, concerning terms and conditions,norms, rights, rewards, and obligations.The stages in the reaction to change—typically must progress through whencoping with a more traumatic change are the anticipation and anxiety phase,the shock, denial, and retreat phase, and the acceptance phase.The ADKAR model—this model highlights the importance of: creatingawareness of the need for change; developing desire to participate in andsupport the change; developing knowledge of how to change and a clearsense of the vision for the change; developing people’s ability to implementthe change and put it to use; and reinforcement to ensure the change stays inplace.Survivor syndrome—refers to the reaction of those who survive a poorlyhandled, traumatic change such as a downsizing.Predisposition to change—relates to our general inclination toward change.Are we typically innovators, early adopters, members of the early majority ofadopters, members of the late majority, or in the group of individuals who arevery late adopters or non-adopters?
Tolerance for turbulence and ambiguity—involves our comfort level withthese conditions. Individuals who have higher tolerance levels generally will bemore comfortable and open to change, while those who have lower tolerancelevels will prefer more stable and predictable environments.Competency or a complacency trap—the tendency to rely on competenciesand strategies that have worked in the past.Confirmation Bias—our tendency to embrace information that supports ourbeliefs and reject contradictory information, and a related tendency to think weknow more than we do about things we have strong beliefs about.Skepticism—relates to doubts and concerns we may have concerning thecapacity of the change to deliver the promised results. These may be rooted inthe change itself, the adoption process, concerns about the change leadership,or unease about the organization’s and other key stakeholders’ responses tothe change.Cynicism—occurs when we fundamentally lose faith in the change, theadoption process, the key individuals involved, or the organization.Self-Efficacy and Agency—the strength of a person’s belief that they havethe ability to complete tasks, accomplish goals, and have some degree ofinfluence over what happens to them.
Checklist: How to Manage and MinimizeCynicism About Change1221. Keep people involved in making decisions that affect them.2. Emphasize and reward supervisors who foster two-way communicationand good working relationships and show consideration and respect foremployees.3. Keep people informed about ongoing change—when, why, and how—andinclude honest appraisals of risks, costs, benefits, and consequences.4. Keep surprises to a minimum through regular communication aboutchanges, anticipating questions and concerns.5. Enhance credibility bya. Using credible spokespersons who are liked and trusted.b. Using positive messages that appeal to logic and consistency.c. Using multiple channels and repetition.6. Acknowledge mistakes, accept responsibility, apologize, and makeamends.7. Publicize successful changes and progress.8. Use two-way communication in order to see change from the employees’perspectives and use this awareness to help with planning and futurecommunications related to change.9. Provide opportunities for employees to express feelings and receivevalidation and reassurance. Ensure you address the concerns raised.10. Ensure existing structures, systems, and processes are not sendingconflicting messages, obstructing the change, and creating cynicism inthe process. If they are, recognize their impact, discuss them openly, andtake steps to address the issue and either bring them into alignment withthe change or minimize their negative impact.123
End-of-Chapter Exercises
Toolkit Exercise 7.1
Critical Thinking QuestionsThe URLs for the videos listed below can be found in two places. The first spot isnext to the exercise and the second spot is on the website atstudy.sagepub.com/cawsey4e.1. The Power of Vision: Dreaming of PeaceView Pray the Devil Back to Hell (Information about documentaryavailable at http://www.praythedevilbacktohell.com/).This is the story of how Liberian women who were recipients of a harshpolitical regime and leader became leaders of change within theircountry.Why did the women dress in white and sit in the marketplace fordays on end? What did they hope to accomplish? Why were theysuccessful in reaching their goal of petitioning the dictator, CharlesTaylor?How did the Liberian women, who were not a formal part of thenegotiating teams in Ghana, impact the negotiation processes?Who were the important allies of the Liberian women during thenegotiations?Would you agree that the Liberian women went from beingrecipients of change to being leaders of change? Which of theirstrategies and tactics do you think other powerless groups can useto become powerful and lead change?2. The “X” Model of Employee Engagement: Maximum Satisfaction MeetsMaximum Contribution—7:43 minuteshttps://www.youtube.com/watch?v=gZ3wxgog4ncConsider the following:How can you engage employees in each area to increase theirengagement to the organization and an organizational changeeffort?Which group are your greatest allies within the change, and howcan you use them?Think about jobs in the past and describe your engagement usingthis model.Please see study.sagepub.com/cawsey4e for the above case and adownloadable template of this exercise.
Toolkit Exercise 7.2
Working Through Emotional Responses toChange1. Consider a significant and disruptive change situation that you know about (ortalk to a friend or relative about such a change situation). Identify the differentphases of change.2. Can you identify strategies that people used or could have used to help themwork their way through the different phases?3. Can you identify strategies that change leaders used or could have used tohelp people work their way through the different phases?Arerecipientsaware ofhow theyarereacting?Yes/NoStrategiesrecipients can useto work through anemotionalresponse to achange initiativeStrategies changeleaders can use to helprecipients work throughan emotional responseto a change initiativePre-changeanxietyShockDefensive retreatBargainingDepression,guilt, andalienationAcknowledgmentAdaptation andchangeDoes the model hold? Why or why not?What other consequences of change can you identify?Please see study.sagepub.com/cawsey4e for a downloadable template of thisexercise.
Toolkit Exercise 7.3
Personal Reactions to Change1. Think through your organizational experiences at school and at work when youhave been a recipient of change. How have you typically responded to thesechanges? What were the factors that led to those responses?To help you think about these questions, ask yourself the followingconcerning three to four such changes:a. What was the change, and how was it introduced?b. What was the impact on you?c. What was your initial reaction? Enthusiasm? “Wait and see”attitude? Ambivalence, due to conflicting reactions? Cynicism?d. Did your attitudes change over time? Why or why not?2. Was there a pattern to your response?a. Under what circumstances did you support the change? When did youresist? What can you generalize from these experiences?b. If you experienced ambivalence, how did you resolve it and whathappened to your attitudes toward the change once the ambivalentfeelings were resolved?3. Overall, have your earlier experiences with change been largely positive,largely negative, or mixed?Have these experiences colored your expectations and feelings towardchange in the future?Please see study.sagepub.com/cawsey4e for a downloadable template of thisexercise.
Toolkit Exercise 7.4
Your Normal Reaction to Innovation and ChangeWhen you find yourself dealing with matters of innovation and change, how do youtypically react?1. Do you find that you fall into the category of innovator or early adopter, readilyconsidering and often adopting new approaches, well in advance of mostpeople?2. Or do you generally fall into the category of the early majority? If the initialresponses and experiences of the early adopters are generally positive, youare willing to take the risk and adopt the new approach.3. Or are you generally in the category of the late majority? You wait until theinnovation or new approach has been tried and tested by many people beforeyou commit to adopt.4. Or are you a person who typically does not adopt the innovation or newapproach until the vast majority of people have done so? In other words, areyou a late adopter or even a non-adopter until forced to do so?5. What is your tolerance for change? What level of turbulence and ambiguity ina work situation do you find most stimulating and satisfying?6. How do you react when the rate of change is quite low and is likely to remainthere?7. How do you react when the rate of change is at a moderate level? Whatconstitutes a moderate level for you? Are your tolerance levels lower or higherthan those of others you know?8. What price do you find you pay personally when the rate of turbulence andambiguity exceeds what you are comfortable with? When it is either too low ortoo high?9. Have you had to cope with prolonged periods of serious upheaval or periodsof extreme turbulence? Have these experiences affected your acceptance ofchange?Please see study.sagepub.com/cawsey4e for a downloadable template of thisexercise.
Toolkit Exercise 7.5
Disruption of the Psychological ContractThink about a change initiative that you are aware of. What happened or will likelyhappen to the psychological contracts of recipients?1. What is the existing psychological contract? (If in the past, what was thecontract?)2. What were the explicit and implicit pieces?3. In what ways did the change disrupt the existing psychological contract? Towhat extent was this perception real? (If in the past, in what ways did thechange actually disrupt the psychological contract?)4. Given the individuals and the context, what reactions to these disruptions tothe psychological contract do you anticipate? (If in the past, what were thereactions?)5. Are there steps that could be taken to reduce the negative effects stemmingfrom the disruption? (If in the past, could anything have been done?)6. How should a new psychological contract be developed with affectedindividuals? (If this is in the past, how could this have been done?)7. If you are the recipient of change, what steps could you take to better manageyour way through the development of a new contract? (If this is in the past,what could you have done?)Please see study.sagepub.com/cawsey4e for a downloadable template of thisexercise.
Toolkit Exercise 7.6
Leadership and Change RecipientsThink more specifically about an example of change leadership that you know.1. What was the nature of that leadership?2. Was the leader trusted?3. Did he or she deserve the trust given?4. What kind of power did the leader use?5. How were the messages about the change conveyed? Were they believablemessages?6. Did organizational systems and processes support, or at minimum, not impairthe change leader’s messages?7. Was there a sense of continuity between the past and the anticipated future?How was that sense of continuity developed and communicated? What wasthe impact?8. What can you learn about the impact of the leader on people and stakeholdersas a result of your responses to the above questions?9. What can you learn about the impact of organizational systems and processeson the people and stakeholders?10. Talk to others about their experiences. Can you generalize? In what way?What cannot be generalized?Please see study.sagepub.com/cawsey4e for a downloadable template of thisexercise.
Travelink Solutions*By Noah Deszca, TeacherDurham Board of EducationGene Deszca, Professor EmeritusLazaridis School of Business and Economics, Wilfrid Laurier University, Waterloo,Ontario, CASixteen months had passed since Will had joined Travelink Solutions’ Call Center. Ithad been both a fulfilling and frustrating employment experience. Now he wasfacing a decision concerning what to do next. Should he remain and try to make adifference or should he follow through on his plans to leave? Rather than let theexperience simply fade, he had documented events, hoping it might be helpful tohim and maybe even to the firm. He had submitted his resignation on Monday, buthis call center manager had asked him to reconsider and Will was scheduled tomeet with her on Friday.On Wednesday of that week, Will met with Robert, his close friend and a marketingmanager at Travelink. Robert had been with Travelink for three years. Will told himabout his looming decision and he shared what he had documented. Robert’s firstjob had been in the call center and he remained keenly interested in its operation,due to its impact on customer relations. He winced as he read. The writing capturedwhat had been happening and left him pondering not only what Will should do, butwhat he ought to do with the concerns it raised. It was a topic he’d been thinkingabout for months but had yet to move on. Change was urgently needed if “the shipwas to be righted” and it would not be easy. He turned to Will and shook his head.“Fascinating—let me read this once again.”
Will’s backgroundWill was enthusiastic when he started at Travelink Solutions Canada: a servicecompany that provided travel assistance to global travellers on a 24/7 basis. Its coreproduct had been emergency roadside automobile assistance, but over the yearsTravelink had expanded into other areas of travel help, such as medical coverage,legal assistance, and emergency travel arrangements. The company did this forboth its own individual customers and for other firms that offered related servicesbut who had outsourced the product design and/or post sale customer servicefunction to Travelink.Will had completed his final university course requirements while working full timeas a baker on the midnight shift at a Tim Horton’s franchise, a fast food outlet. Aftereight months of beginning his workday at 11 pm, he looked forward to more normalworking hours. He knew that there would be occasional night and weekend shifts atthe Call Center, but Will had been told that it would be no more than one week orweekend per month. That would be fine, reasoned Will. He was confident that thechallenge of this new job would prove more satisfying than slinging dough at 4 a.m.The application process had been an intensive experience. At the age of 23, Willhad never applied for a position that demanded a lengthy series of interviews,references that were verified, and tests designed to document his computer literacyand interpersonal and problem-solving skills. He felt very positive about havingmade it through their rigorous selection system. It suggested to him that this firmmust be serious about the quality of the people it hired.
Call Centers: How They OperatedA number of call centers were located in Will’s home region. The presence of threeuniversities, a college, and the ethnic diversity of the area provided call centers withaccess to a literate and multilingual labor pool. Further, office rental costs and laborrates were moderate by provincial standards and there was an excellenttelecommunications infrastructure. As a result, several of Will’s friends had workedor were working for other call centers. Their experiences, however, had generallybeen negative—particularly for those working in outbound call centers, whereemployees made unrequested solicitations for everything from rug cleaning servicesto cell phones and charitable donations. Friends who had worked in this type ofbusiness told him that there were attractive sales-related performance bonuses butthat the base pay of around $15 per hour was what most had to rely upon to pay therent. In addition, his friends reported that there seemed to be few employmentbenefits (e.g., dental plans) available in these firms and that a number of thepositions were essentially permanent part-time positions, in order to fit the need forlabor in the late afternoon and early evening periods and reduce benefit obligationsfurther. They were almost unanimous in their descriptions of their outward boundcall center jobs as quite stressful, characterized by hang-ups, call recipient abuse,and performance pressure.Travelink, however, was an inbound call center that responded to customerrequests for help with services they had already purchased. Furthermore, thepeople Will knew who had worked for the firm spoke very positively about the workatmosphere. Robert, for example, had started on the phones but had beenpromoted three times over a two-year period, most recently to a marketingmanagement position. Robert was the person who had urged Will to apply. At thattime, he had commented on the supportiveness of coworkers and his boss, thedecent pay, and the satisfaction derived from helping a customer sort through adifficult situation.Will’s new position came with comprehensive health benefits, paid holidays thatexceeded legislated standards, and special rates for things such as local gymmemberships, theme park passes, and concerts—discounts that the humanresources department had negotiated for Travelink employees. It seemed to Willthat his new employer had thought about how to make the firm an appealingcompany to work for. “Wow! A living wage, combined with such benefits—what apleasant change.” (See Exhibit 1 for compensation and benefit details.)
Building a BusinessTravelink was founded in 1987, in Jackson, Mississippi, to provide roadsideassistance to car owners. It had grown from a tiny office space of fifteen employeesto a billion-dollar, global service firm with offices based in Europe, Asia, andAustralia. In 2002, a Canadian office of 20 employees was established in Will’shome town. Sixteen years later, Travelink Solutions Canada had grown. Twohundred of its employees and its Canadian call center were located in two stories ofa ten-story office building. Travelink’s offerings had been extended over the years toinclude insurance policies that provided emergency support for national andinternational travelers facing a variety of perils, including medical emergencies, thetheft of personal property, automobile breakdowns, accidents, legal assistance,travel interruptions, and emergency travel related concierge services. Policies weremodular in nature and were designed for the traveler who wanted to avoidunpleasant surprises.Travelink’s Canadian call center was located on the lower of the two floors itoccupied and involved approximately 150 of the 200 employees located in thebuilding. A reception area on the upper story led into office space for underwritingand marketing employees, the human resources and training department, IT,accounting, supervisory personnel, and senior administration (see Exhibit 2 for apartial organization chart of the Canadian Division). Call center activities weresupported by a website that provided customers with valuable travel-relatedinformation, advice,and links to other relevant websites.
New Employee Orientation and TrainingTraining for Will commenced December 1st and lasted one month. On his first day,Will joined eleven other new employees, all of whom were university arts graduates.Some (Will included) had been referred to the company through friends that workedfor the firm. As a recruitment incentive, a bonus of $500 dollars was offered to anyemployee who referred a potential employee who was hired and successfullycompleted the training. Travelink Solutions tried to coordinate its hiring so that agroup of 6 to 12 began training at the same time.Will’s trainers, Luther and Marie, seemed approachable and knowledgeable. Theyworked diligently to accommodate any questions that were asked about workprocedures, customer service, company policies, or the call center industry. Willfound himself quickly integrated into a comfortable training environment wheredialogue occurred openly and people seemed to be genuinely helpful. The trainingprogram was quite structured and occurred in a classroom environment. The firsttwo weeks focused on industry and firm specific information that would be relevantto those who would be addressing customer questions and concerns. It includedinformation related to specific products and services, what associates could expectfrom the customer and their employer, and what was expected of them. The secondtwo weeks included additional content related to products, corporate policies, andworkflow procedures, as well as call center simulations and role plays. These latteractivities were designed to develop employee competence with the firm’s customerservice strategies and effective work practices.At one of the first training sessions, Marie explained that the Travelink Solutions CallCenter offered uniquely satisfying service opportunities. As Marie said, “You are notmerely the voice on the end of the line. You are the help line. You are someone’slifeline during an experience that will vary from the simply inconvenient to situationsthat are frustrating and, at times, frightening. If a customer is involved in a seriousaccident in Mexico, has a medical emergency they need to deal with, or getsmugged or arrested in a foreign land, you are one of the first persons they turn to forhelp.”Luther told Will’s training group that the average cost of recruiting and training anew call center employee was approximately $8,000. Will learned that TravelinkSolutions employed approximately 200 people in the Canadian office, 75% of whomwere directly involved with the phones in the call center. Direct sales of Travelink’sservices were done through brokers, agencies, and the internet. Travelink Solutionshad a team of underwriters and marketers who crafted and promoted automobile,medical, and travel-related service policies throughout Canada, via its distributionsystems. This group was also heavily involved in the design and delivery of similarservices for other firms (e.g., banks and insurance companies), under their clients’brand names. This accounted for approximately 75% of Travelink’s gross billings,profitability, and call center volumes. Trainees were told that Travelink wasconsidered a leader in customer service quality. Industry benchmark data ratedthem in the top 10% in customer satisfaction and quality and it was reported thatthey had almost never lost a corporate account once the business was won.Business volumes and profitability had been growing by more than 20% per yearsince 2002.
At the end of the month-long training period, each new employee was required towrite a three-hour comprehensive exam, dealing with the information that they hadbeen exposed to. If a grade of 90% was not achieved, then an employee wasrequired to retake the test before being permitted to field calls. Although he wasnervous, Will believed that his training sessions had been effective in transferringthe needed knowledge, and he passed the exam with flying colors. Out of histraining group of 12, two people needed to retake the exam before receiving a deskwithin the call center one week later.
The Work BeganWhen he graduated to the phones and live customers, Will was initiallyapprehensive. He often consulted online and paper manuals to ensure that he wasproviding callers with the proper information and advice. For the first few weeks,Luther and Marie were available on the floor to answer trainee questions that arose.Beyond the presence of the trainers, team leaders encouraged new employees todiscuss any questions or concerns with experienced associates. Will was directedto Yolanda, a senior associate who said that she would be happy to help. She hadbeen working at Travelink Solutions for over three years and the supervisorsallowed Yolanda to log off her phone whenever new associates approached her withquestions. Overall, it seemed to Will that the call center was a smooth and efficientoperation. The friendly and helpful environment gave him confidence that he wouldbe able to effectively assist callers. Initial supervisory checks and feedback duringhis first month on the phones further honed his competence and reinforced hisconfidence.Marie’s comments during the training session concerning the importance of theservices that call center employees provided to customers proved true. Offeringassistance to distressed travelers was quite satisfying. Will deepened his familiaritywith policy details and advisory support materials to ensure that he was providingcallers with the correct information, useful advice, and effective service. Of course,there were occasional complaints and angry callers who vented their unhappinesswith the quality of service (e.g., tow truck operators who were slow to respond orrude) or the answers they received concerning whether or not they were eligible forthe requested coverage. Will quickly learned that it was not helpful to dwell on suchcalls. Instead, through the guidance of the trainers and Yolanda, he developedtechniques that calmed customers and helped to defuse difficult situations. By andlarge, Will received positive feedback from the callers and this increased infrequency over his first three months on the phones.Will’s experience within the call center was not an anomaly. Comments from fellowtrainees echoed his reactions. He noticed that there was far less turnover andabsenteeism than what friends at other call centers had led him to believe were thenorms in the places they worked. Employees at Travelink voluntarily participated inand seemed to enjoy company events such as potluck lunches. Friends employedat other call centers told him that this was not the case within their firms. Oneperson reported that her firm had made participation mandatory at its corporatesocial events, leading her to post a message stating that management had decidedthe floggings would continue until morale improved.
The changesAfter about five months of employment, Will began to notice changes in hisworkplace. For example, senior managers were voicing concerns related to theneed for greater efficiency and new business at the monthly company meetings andteam leaders seemed more stressed than they had been earlier. Robert, themarketing manager and Will’s friend, explained to him that Travelink had ramped upits staff levels within the call center in anticipation of obtaining new business thathad not materialized. As a result, management was under pressure from the headoffice to improve its financial performance. Robert commented, “I’ve been working60-hour weeks for the past several weeks, exploring new opportunities, and draftingproposals related to potential contract bids, and there are rumours that seniormanagement is considering layoffs.”Will was shocked by Robert’s candid comments. Sure, the phones had been lessbusy lately, but this was also May, a month in which clients were no longer facedwith the winter elements that breed traffic accidents and mechanical breakdown.May was also a month in which vacation travel was typically down, resulting infewer travel-related emergencies. Was this not a time when the phones weresupposed to be quieter, allowing staff to follow up on the claims that had arisenearlier?Within the next four weeks, four of the people who had trained with Will left the firm.In their places were empty cubicles. Every time an employee was laid off or quit, thehuman resources department would send an email to all employees, notifying themof the person’s departure. For example, one day Will came into work to find thatLinda, a friendly woman who sat in the cubicle next to him, was no longer there.Within two hours, he received a company message that read, “We regret to informyou that, as of today, Linda Jameson is leaving Travelink Solutions. Please join usin wishing Linda all of the best in her future endeavours.” Within an hour, Willreceived a second email that read, “Please be advised that the door security codeshave been changed to 25678. Thank you for your cooperation.”Over the following weeks the number of empty cubicles grew. He was surprised thatthe departures were almost never discussed on the floor. It was as if the employeeswho had once filled the space had never been there in the first place. The loss ofpeople also seemed to be associated with declining morale. People’s willingness tohelp one another decreased, as did the overall friendliness of the workplace. Willbegan to save his money to ensure that he would have something to carry himthrough in the event that he too “went missing.”
A New AssignmentBut Will did not go missing. One afternoon in June, he was surprised to find that hisemployment situation was about to change for the better. He was invited by histeam leader and the director of information technology to participate in the“Datasmart” project, as the individual who would be in charge of drafting and editingthe standardized company correspondence forms that would be used by employeesin Canada. He would be entering these documents into a new corporate databasethat was under development. He was excited about the opportunity to advancewithin the company and use some of the writing skills he’d developed at university.As part of his new assignment, Will was offered a pay increase that would kick inafter his next performance review which he anticipated would be held within a fewweeks. He was given a quiet workspace away from the call center where he couldconcentrate on his writing and editing tasks.The company correspondence project was part of a larger organizationalundertaking that involved the revamping of their information systems. In order topave the way for a new work flow management system called Datasmart, allcompany information, standardized documents, reports, and work flows were to becharted, reviewed, and revised to reduce error rates and enhance operationalefficiency and effectiveness. While working on the project, Will was to report to theDatasmart project manager and was involved in weekly meetings with the IT staffwho were overseeing the implementation.Shortly after moving into his new role, Will was sent on his first business trip toattend a training seminar at the parent company’s U.S. headquarters. However,supervisory guidance in Canada was quite limited. His new supervisor was alwaysvery busy with more pressing tasks and had minimal time to discuss questions thatWill had regarding the content of specific documents or due dates. “Sorry, but I can’tmeet with you this week. I’m drowning in work. Can we reschedule? Just use yourjudgment—you seem to be making good progress,” was the usual response hereceived from his supervisor.All members of the 10-person Datasmart project team seemed to be very busy withthe components that they were individually responsible for. Will could not help butfeel somewhat out on a limb as he revised company forms and documents thatwere to be housed in the Datasmart system. People were beginning to use some ofhis revisions, but had he understood the implications of the wording and made theright changes? He was concerned that one day, he would be terminated as theresult of something he had written that opened the firm to unanticipated liabilities orcreated serious difficulties with one of the firms for whom Travelink suppliedservices. The processes related to approving document changes had been fairlyinformal over the years, with the individuals processing the claims handling theseelements largely on their own.A number of other events over the next three months caused Will additionalconcerns about his future prospects at Travelink. Will knew that the firm hadinvested a lot of time and money developing Datasmart. However, the launch datefor this software solution had come and gone on two separate occasions. Each timethat Datasmart appeared ready to go live with some of its modules, an email wouldcome out advising that the launch would be postponed to a later time. The emails
that Will received, as a member of the project team, suggested that both the U.S.and Canadian offices were having implementation problems. Eventually, no newemails concerning the release date were sent out.By mid-September, Will was noticing that there was a new topic on the embargo list.No one in management was discussing the new software. In June, all employeeshad received two hours of training on the basic purpose and planned functions ofthe new software, and staff had been told that detailed training related to the use ofthe software would follow. In the beginning there had been some excitementgenerated concerning the benefits that the new system would bring and special T-shirts had been distributed to celebrate its anticipated benefits. Will wondered ifothers were wondering what had happened to Datasmart but were afraid to ask.Robert told him that it looked like the project was going to be halted and that theAmericans were planning to bring in consultants to sort out the underlying problems.Will was not surprised by the rumors, but he took pride in the fact that a number ofhis rewritten documents were being put to use on a daily basis.
Frustrations DeepenWill had still not received his performance review and promised raise by the middleof September. The Travelink Solutions employee handbook stated that each callcenter associate would receive an appraisal review after six months of continuousemployment. Once a successful review was completed, an employee would beentitled to a pay increase. He had checked with the remaining members of histraining group and none had been approached yet, regarding their six-monthreviews, despite the fact that they were now into their tenth month of employment.The initial feelings of frustration that Will experienced concerning this were slowlyturning into anger. After all, he believed that he had performed very well. He hadtaken the initiative to learn about the office structure, the policy and procedureintricacies underlying different types of services, and different service techniquesthat went well beyond the competence required of a phone operator. When asked tojoin the Datasmart team, he had willingly volunteered and worked hard tounderstand and improve standardized documentation templates and corporatecorrespondence and had done so under minimal guidance. Yet, ten months hadpassed and there had been no formal review and no increase in pay, despite hisattempts to remind his supervisors that such a review was overdue. There had beenconsistent supervisory comments that he was doing a terrific job and that theperformance review would be looked after soon. However, managers were verybusy and nothing was ever scheduled.By October, Will’s correspondence and documents project was three quarters of theway to completion, but the phones in the call center were busy again—very busy!Robert had told him in mid-August that they had won a major new contract. Whilemanagement was pleased to have obtained the new business, Robert wasapprehensive. As a marketing manager, he was delighted that his hard work hadcontributed toward obtaining this new account. As a former employee in the callcenter, however, Robert was frightened that the additional call volume would greatlyexceed the current resources available. Robert told Will that he had argued to havenew employees hired and trained in advance of the start dates for the new contractsbut senior management said no. Robert said “the word from upstairs was that theywould scale their capacity to handle an increased volume of calls closer to when thenew revenue began to flow. Even crazier, a number of senior managers seem tobelieve that fewer new employees would be required once the call center wasorganized to better respond to volume patterns and leverage existing technology. Idon’t see how this approach can work.”Robert’s concerns became a nightmare for the employees within the call centerover the next few months. The phones started ringing and there were simply notenough hands to pick them up (see Exhibit 3 for call center volumes). In addition tothe spikes in call volume generated from the new contracts, Travelink was nowentering its busier season. Just a few months ago, the phones had been relativelyquiet—to the extent that employees found time in between calls to provide extraservice steps for their clients, such as arranging billing for insured expenses orexpediting alternative hotel and flight arrangements. Now, there was no timebetween calls. From his new workspace, Will overheard managers discussing that itwas not uncommon for clients to be placed on hold for up to five minutes whilewaiting for an available agent. Travelink provided a contractual guarantee that
clients would only be on hold for a maximum of three minutes, and Robert told Willthat account managers were finding themselves having to explain to their contractrepresentatives why individual customers were forced to hold for extended periodsof time.One day in early November, Will was asked to move back to the phones. Theincrease in call volume necessitated his reassignment to his old position, withouteven a formal “thank you” for the work he had been doing. With the lack of availabletrained employees to service the increasing volume of incoming calls, the customerservice managers were scrambling to ensure that the hold time was eased as muchas possible. The following Monday morning, Will entered the call center and noticedthat Luther, the trainer, was sitting beside him in the cubicle Linda used to occupy.Marie was sitting directly behind him. As he looked around the office, Will realizedthat other staff members were also in the call center, answering calls. When askedwhy he was there, Luther simply shook his head and said, “I worked here andearned my way to a training position. Now, I’m back where I started.” Marieoverheard the conversation and simply threw her arms up in frustration when Willnodded to her. All available hands were now busy answering calls rather thanproviding their usual support services.Will noted that there were now almost no company events being organized by thehuman resources department. Social events and birthday celebrations were cutfrom the schedule due to work pressures and the monthly management-staff noonhour corporate update meetings were postponed. When an event did occur, addedpressure was placed on employees to partake. It seemed to Will that managersdesperately wanted to believe that employees were still enjoying their work andfeeling good about the firm.By mid-February, customers’ hold times had increased from five minutes to, attimes, thirty minutes or more. On one occasion, Will talked to a man who had beenon hold for over an hour waiting for someone to arrange for a tow truck. Teamleaders sent out emails that reminded agents to apologize to customers who wererequired to wait for periods of ten minutes or longer. “Please apologize profusely,”the messages read. At this point, Will was so frustrated that he would often forget toapologize. After all, it was not his fault that the company he worked for had notmade the proper arrangements to service their clients. Why should he apologizewhen he and his coworkers were suffering too? Will found himself making less useof some of the techniques that contributed to customer service excellence, such asempathy, friendliness, and attention to detail.The lack of appropriate planning and implementation related to heightened callvolumes was having a visible, negative impact on the performance of all call centerassociates. For example, anytime that an agent logged off the phone to document acall, they were required to go on “not ready” status. This status was employed inorder to write the required case notes into the Travelink database. According to theemployee manual, agents were allowed to go on “not ready” for an hour each day,in addition to scheduled break times. With so many calls flowing into the call center,however, acceptable “not ready” time had disappeared. Team leaders were able tosee agents who were not taking calls and they began sending out emails that read,“Please log in. Several calls are waiting.” Out of frustration, Will began counting thenumber of emails he had received that were titled “Please log in.” Within one week,the tallied amount was 32.
Eventually, team leaders stopped using emails to ask agents to log in and beganphoning their direct extensions every time they were not prepared to take a call. Onone occasion, Will received a call from his team leader asking him to log in while hewas documenting a call that he had received from an elderly couple that had beenin a serious automobile accident in Mexico. From that point on, he attempted to typehis notes for one case while he was on the phone with the next client. Hequestioned the efficacy of the new shortcuts that he was employing, but there wasnothing that could be done. Every time that Will or any of the other operators tried tolog off of their phones to document a call, they were messaged to log back in.Scrambling to keep one’s head above water had become the new normal. To makematters worse, the claims department, which was in charge of reviewing thedocumented cases, was growing increasingly frustrated with the customer serviceagents over the increasing number of mistakes. The workload related to correctingerrors in claims that had been opened by operators had essentially quadrupled.Travelink began to actively recruit new phone agents in January, with the first onesarriving in the call center on February 1st. Melanie, a new agent, moved into theempty desk in front of Will. She was friendly and a hard worker, but she noted thatshe was feeling overwhelmed and ill prepared. She explained that some of the newemployees were being hired on a contractual basis and that her contract was for aperiod of three months. Will could not understand the rationale behind hiring newemployees for short-term contracts. The volume and complexity of the work was notgoing to go away. Furthermore, the fact that the new hires had only received twoweeks of training made them unaware of several elements, including workflows andbasic policy terms and conditions that were essential to the proper decision makingand documentation. Will believed that the impact in errors, added costs (e.g.,authorizing services the customer was not entitled to), and service failures wouldbecome all too apparent. By this point, employee turnover and absenteeism hadrisen markedly (see Exhibit 4).Robert was equally distressed by the fallout that was occurring due to growing callvolumes and a lack of properly trained customer service agents. Some of thecompanies that had placed their customer service contracts with Travelink Solutionscall center were now threatening to pull their contracts because Travelink was nothonoring its service delivery promises. The operations department noted that 10%of all calls were now being lost due to the lengthy response time. In other words,10% of all customers were not getting through to a representative, even though thismight be a time of great need.
Considering His AlternativesOne evening in early April, Will sat down to consider his future with TravelinkSolutions. He was thankful for the training and job experience that he had received—competencies that would undoubtedly be useful in many other positions—but hewas unsure how much more turmoil he could endure. He had saved enough moneyto, at the very least, pull himself through until a better opportunity came along. Onething seemed certain: Travelink Solutions no longer fit well with his goals.Will submitted his resignation on Monday of the second week of April, to take effecton April 30, sixteen months after he had commenced employment. On the day afterhe submitted his resignation, Will received an email, apologizing for his longoverdue performance appraisal interview. In the email, his manager applauded hisperformance, rated his potential as excellent in all categories, and asked what itwould take to get him to reconsider and stay. The manager requested that theymeet Friday. As Will thought about the offer, the words that came to mind werethese: Too little, too late.Will, however, bit his tongue: Before confirming his decision to quit, should he meetand hear what his manager had to say? If he did meet, should he discuss hisconcerns about how the call center was operating, including possibly sharing hiswritten comments and thoughts concerning possible solutions? As he sat discussinghis options with Robert, his friend was pondering similar questions.
Questions to ConsiderWhat is your assessment of the situation at Travelink at the end of the case?What are the underlying problems in the organization?If you found yourself in Will or Robert’s situation, what would you do? Why?If Will and Robert both decide to stay and try to advance needed changes,what changes would you recommend they focus on and how would yourecommend they go about it? Would you, for example, share Will’sdocumentation of the problems within the company? Why or why not?Have you ever been in a situation where you were a recipient of change andthings went poorly? How did it affect you and others in the organization?Exhibit 1 Travelink Solutions Compensation Package for Full-Time CustomerService RepresentativesExhibit 2 Partial Organization Chart for the Canadian Operations
Assumptions:Call staff answering norms are 15 minutes per call or 26 calls per 8-hour shift(1 hour is allocated for post call documentation and follow-up work + two 15-minute breaks)It takes approximately 2 months (1 month of training and 1 month on thephones) before an operator is fully able to operate at capacity, handling bothdirect customer contact and call documentation with < 1% error rateOne full-time, trained employee equates to approximately 18 availing workingdays per month. Absenteeism is estimated at 5%. Since all non-statutoryholidays are taken in the July-August period, available days during the winterremains at 18 daysFurther capacity could be created by scheduling overtime and statutoryholiday work.A maximum of 80 call cubicles are available, leading to a maximum shiftcapacity of 2,080 calls per 8-hour shift.At a staffing level of 140 full-time employees on the phones, total call volumecapacity per month = 65,520.Exhibit 3 Call Center Call Volumes by MonthExhibit 4 Call Center Turnover Data by Quarter and With the Year-End Total* © Noah Deszca,Teacher, Durham Board of Education and Gene Deszca,Professor Emeritus, Lazaridis School of Business and Economics, Wilfrid LaurierUniversity, 2019. Not to be copied or reproduced without permission.
Chapter Eight Becoming a MasterChange AgentChapter OverviewThe success of a change agent involves knowing yourstrengths and weaknesses and how these interplay among theteam, the situation, and a vision.Successful change agents have a set of skills and personalcharacteristics: interpersonal, communication, and politicalskills; emotional resilience and tolerance for ambiguity andethical conflicts; persistence, pragmatism, and dissatisfactionwith the status quo; and openness to information, flexibility, andadaptability. They act in a manner likely to build trust. Changeagents develop their skills with experiences in changingsituations.This chapter describes four change agent types: EmotionalChampion, Developmental Strategist, Intuitive Adapter, andContinuous Improver. Each has a different preference for his orher method of persuasion (vision versus analytical) andorientation to change (strategic versus incremental).This chapter considers different change roles: an internalchange agent, an external consultant, and a member of achange team.This chapter examines what makes a change agent. It looks atchange agents’ individual characteristics and how these interactwith a situation and vision to determine change agenteffectiveness. We contrast change managers from leaders andexamine how change leaders develop. Four types of changeleaders are identified: Emotional Champion, DevelopmentalStrategist (particularly important for a transformational change),Intuitive Adapter, and Continuous Improver. We examine the skillsof internal change agents, the roles of the external change agents,and the usefulness of change teams. The chapter ends with rulesof thumb for change agents from the wisdom of organizationaldevelopment and change agent experts. Figure 8.1 highlights thischapter’s place in the Change Path.
The role of change agent is a double-edged sword. While it canprove exciting, educational, enriching, and career enhancing, itcan also be hazardous to your career, frustrating, anddemoralizing when risks escalate and failure looms. In general,people who become change agents will improve theirunderstanding of organizations, develop special skills, andincrease their networks of contacts and visibility in theorganization.1 Those who choose not to respond to the challengeof leading change, on the other hand, run the risk of becomingless central and relevant to the operation of their organizations.When changes fail, there is the sense that the change agent’scareer has ended. However, this is seldom the case. While failureexperiences are painful, change agents are resilient. For example,when Jacques Nasser left his CEO position at Ford in 2001, manythought he was a spent force. However, about a year after leavingFord, he took over as chairman of Polaroid after it was acquiredby One Equity Partners in a bankruptcy auction. In 2½ years,Nasser turned it around and its resale resulted in a $250 milliongain for One Equity.2 In August 2009, Nasser again hit thebusiness press news when he was nominated chairman of BHPBilliton, the world’s largest mining company; he took office inMarch, 2010.3 Nasser served in that role until 2017. AlthoughCEO Nasser instituted a number of controversial—some wouldeven say unsuccessful—changes at Ford, he also acquired skillsand personal attributes that have served him well since he leftFord in 2001.Many individuals find it difficult to identify where and how they fitinto the change process. They believe that they cannot ignitechange with their low- or mid-level roles and titles, and minimalexperiences in organizations. Years of autocratic or risk-aversebosses and top-down organizational cultures make it hard tobelieve that this time the organization wants change andinnovation. Critics of present-day educational systems havesuggested that schools encourage dependent rather than change-agent thinking. If teachers and professors see the students’ roleas absorbing and applying within prescribed boundaries ratherthan raising troubling questions, independent and innovativethinking will not be advanced.
In the turbulent years that have defined the first couple of decadesof the 21st century, however, individuals find themselves living inorganizations that challenge them to take up one of the roles ofchange agency: initiator, implementer, facilitator, and/or task forceteam member. Leaders in organizations are asking people to stepforward and make a difference. While the specific role will varyover time and context, moving to a more active role is critical.Simply providing information or offering armchair solutions seldomproduces meaningful change. To disrupt inertia and drift, someindividuals must move from an observer status to active changeagent. Those who want to advance their careers and add value totheir organizations will challenge themselves to take on changeleadership roles.For many, their implicit model of change assumes that they musthave the involvement and support of the CEO or some othersenior sponsor before they can create meaningful change. Thereis no question that if a change initiative has the commitment andbudget of a senior change champion, the job is immeasurablyeasier. However, for many individuals acting from subordinateorganizational roles (e.g., technical professionals, first-line andmiddle managers, frontline staff), the changes they want topromote require them to question existing systems andprocesses, with little top-level, visible support when they begin.In Leading the Revolution, Hamel argues that every “companyneeds a band of insurrectionists” who challenge and break therules and take risks.4 One teacher provides an example.Reflections on a TeacherThe teacher that influenced me the most was concerned with ourlearning and not with the power and influence of the administration.For example, when Catcher in the Rye was deemed unfit for ouryouthful eyes, he informed the class that this book was classed asunsuitable. This teacher reported that the book by J. D. Salingershould be avoided and while it was recognizable because of its redcover with yellow print and found in most bookstores, libraries, andmagazine stores, we should not seek it out. Later, the same teacherwas instructed to black out certain risqué phrases from one of theassigned books for class. Of course, he marched into the class,
described that the phrases on p. 138, lines 7 and 8, that were to beblacked out and that he was enlisting the class’s help to do the workfor him.Anonymous caller, CBC Radio, January 2004.Testing orthodoxies will become critical in the drive to keep pacewith environmental demands.5 The individuals wanting to removestudent exposure to the perceived immorality in the books likelythought they were change agents as well. However, by doing so,they were limiting student access to information and theopportunity to think about common realities. For the teacher in theexample, this was viewed as violating the prime purposes of aschool system—educating the students and instilling a desire forlearning. It drove him to action.With the ever-increasing need for innovation and change inorganizations, there is the recognition that change management isan essential part of every good manager’s skill set.6 Changeagency has shifted from notions of “lone ranger,” top-down heroicleadership to ones involving leaders who enable change teamsand empower workers to envision change and make it happen.7As Jick points out, “implementing their own changes as well asothers.”8While we might think that change is led from the top, Jick andothers dispute this. “Most well-known change initiatives (that are)perceived as being “top-down” or led by a senior executive or theCEO, probably started at the bottom or the middle, years earlier.”9As Rosabeth Moss Kanter states, real change is for the long haul.It “requires people to adjust their behavior and that behavior isoften beyond the direct control of top management.”10 Boldstrokes taken by top management likely do not build the long-termcapabilities of the organization unless they are buttressed by aconcerted commitment to an underlying vision. Bold strokes canreduce, reorganize, and merge organizations, but each of thesetakes a toll on the organization. Unfortunately, the long-termbenefits can prove to be illusory if the initiative fails to sustainablyembrace the hearts as well as the heads of organizational
members in ways that generate internal and externalenvironmental congruence.Figure 8.1 The Change Path Model
Factors That Influence ChangeAgent Success
The Interplay of Personal Attributes, Situation,and VisionImages of organizational change agents often revolve aroundpersonalities that appear to be bigger than life: Jack Welch,former CEO of GE; Bill Gates, former CEO of Microsoft; and MegWhitman, former CEO of eBay and HP. If such grand standardsare the benchmarks employed to assess personal qualities andpotential as a change agent, most people will inevitably fall farshort of the mark.However, history suggests that leading change is about more thanjust the person. In the 1930s, Winston Churchill was a politician indecline. When World War II began, suddenly his skills andpersonality matched what was needed, and the British publicbelieved he was uniquely qualified to be prime minister. Churchilldid not change who he was, but the situation changeddramatically and, as prime minister, Churchill projected a vision ofvictory and took actions that changed history and his reputation.This match of person and situation is further highlighted by thefact that Churchill experienced electoral defeat in the postwarenvironment despite his enormous popularity during the war.In other words, it was the person and it was more than the person.Change agent effectiveness was a function of the situation, thevision the person had, and the actions he took. A robust model forchange considers the interaction between personality, vision, andsituation. Michael J. Fox exemplifies a person who became achange agent extraordinaire in the fight against Parkinson’sdisease.Michael J. Fox Becomes a Change AgentMost people get Parkinson’s disease late in life. Michael J. Fox, atelevision and movie star, contracted it when he was 29 years old.Before his disease, Fox was focused on his career, but he has sincerefocused his energies. By 2000, Fox was a major player in fundingresearch into analyzing and curing Parkinson’s. Fox created theMichael J. Fox Foundation (MJFF), which has become an
exceptionally effective organization in fundraising and in shaping theresearch agenda for Parkinson’s disease.11 In August 2018, Varietymagazine named Fox as their “Philanthropist of the Year” for hiscommitment to mobilizing patients and research to bring an end toParkinson’s disease.Fox’s basic personality didn’t change with the onset ofParkinson’s. But suddenly he was faced with a situation thatgenerated a sense of purpose and vision that both transcendedhis self-interest and captured the attention and emotions of others.This powerful vision was crucial to Fox’s transformation frommovie star to change agent. He deployed his energy,interpersonal skills, creativity, and decision-making abilities topursue this vision. His contacts, profile, and reputation gave himaccess to an influential board of directors. In record time, herecruited a key executive director and created a foundation thatbecame a funding force. Most important, he chose to act. Hearticulated values that resonated with key stakeholders and raisedawareness and interest through his strategies and tactics. Theability to create alignment among stakeholders on values hasbeen shown to be valuable in reducing resistance and advancingchange.12 His is far from an isolated incident. From PaulNewman’s social entrepreneurship and philanthropy with saladdressing13 to Andrea Ivory’s initiative to bring early breast cancerdetection to uninsured women in Florida,* individuals from allwalks of life are choosing not to accept the status quo and aremaking a difference.* CNN’s Heroes Project seeks to inspire people to take action byannually recognizing the change initiatives of everyday people intheir communities and celebrating the impact they are having.Their initiatives are highlighted onhttp://www.cnn.com/SPECIALS/us/cnn-heroes.In the above cases, the interaction of the person, situation, andpowerful vision transformed a person into a change agent. Thiscan be summarized in the following equation:Being a Change Agent = Person × Vision × Situation
Situations play a crucial part in this three-way interchange. Somesituations invigorate and energize the change agent. Enthusiasmbuilds as coalitions form and the proposed change gainsmomentum and seems likely to succeed. Other situations suckenergy out of the change agent and seem to lead to a never-ending series of meetings, obstacles, and issues that prevent asense of progress. Borrowing from the language of chemicalreactions, Dickout calls the former situations exothermic changesituations. Here energy is liberated by actions.14 Conversely, thelatter situations he calls endothermic. Here the change programconsumes energy and arouses opposition—which in turn requiresmore energy from the change agent.Change agents need exothermic situations that “liberate theenergy to drive the change.”15 However, they will experience bothexothermic and endothermic periods in a change process. Initialexcitement and discovery are followed by snail-paced progress,setbacks, dead ends, and perhaps a small victory. The question ishow do agents develop the staying power and the ability tomanage their energy flows and reserves during this ultra-marathon? What type of team do they need and have to helpreplenish their energy and keep them going? Colleagues whoserve as close confidantes can play an important role insustaining energy. They can help to keep things in perspective,enabling the change leader to face challenges and pitfalls. Whileaction taking is the defining visible characteristic of change,discussion and reflection play important and often undervaluedroles in the development and maintenance of change leaders.16Reflection as a critical practice of change leaders is discussedlater in this chapter.
Change Leaders and Their EssentialCharacteristicsAn examination of the literature on the personal characteristics ofchange leaders yields a daunting list of personal attributes rangingfrom emotional intelligence to general intelligence, determination,openness to experience, and so forth.17 Textbook treatments ofleadership provide lists of the traits and behaviors that provedifficult to reconcile. While most of the literature is inconclusiveabout attributes that matter and can be generalized, six stand outas particularly relevant for change leaders.1. Commitment to ImprovementThe essential characteristic of change leaders is that they arepeople who seek opportunities to take action in order to bringabout improvement. They possess restlessness with the waythings are currently done, inquisitive minds as to what alternativesare possible, and the desire to take informed risks to make thingsbetter. Katzenbach argues that change leaders are significantlydifferent in their orientation from traditional managers.18 ForKatzenbach, the basic mindset of a “real change leader” issomeone who does it, fixes it, tries it, changes it, and does it again—a trial-and-error approach rather than an attempt to optimizeand get it perfect the first time.2. Communication and Interpersonal SkillsDoyle talks about potential change agents and argues that theyneed sophisticated levels of interpersonal and communicationskills to be effective.19 He describes change agents as requiringemotional resilience, tolerance for ethical conflicts andambiguities, and they need to be politically savvy. Conflict goeswith the territory when stakeholders believe the changes willnegatively impact them, and researchers have noted theimportance of conflict-facilitation skills in change agents, includingskills related to constructive confrontation and the development of
new agreements through dialogue and negotiation.20 BarackObama’s soaring oratorical skills allowed him to speak directly tothe American people and bypass much of the Washingtonestablishment when he was pushing for changes to the Americanhealth system in 2009. This set the stage for the difficultdiscussions, negotiations, and tactical maneuvers that followedand resulted in new health care legislation in March 2010. By2016 –2018 the Affordable Care Act, or Obamacare, was back onthe agenda for the U.S. Congress. Because of the diversity ofperspectives about healthcare in the United States and becauseof the fragmentation of the U.S. healthcare system, it is likely thatthere will be continuing debates in Congress on this policy area.Kramer maintains that political awareness about what needs to bedone may lead, in certain situations, to abrasive, confronting,intimidating behavior (yes, Kramer said this before the nationalelections in the United States in 2016).21 Such challengingbehavior may be what is needed to “unfreeze” a complacentorganization. Stories of Churchill’s arrogant behavior, for example,which was appropriate in wartime, cost him the prime ministry inthe postwar election.The communication and interpersonal skills needed to navigatethe political environment and awaken the organization to neededaction receive a lot of attention. However, this more muscularimage of the transformational communications skill of changeleaders is but a subset of the range of approaches they maydeploy. Not all change leaders have a gift for rhetoric, and manyare not charismatic in the traditional sense of the term.* In hisbook From Good to Great, Jim Collins22 explores the skill sets ofchange leaders who successfully transformed their averageorganizations into great ones. He highlights the quiet, humble,grounded, and committed way in which many of these changeleaders interacted with others on a day-to-day basis and theinfluence this had on the outcomes their organizations were ableto achieve. Their positive energy was clearly visible, andfrustration didn’t give rise to the communication of cynicism thatcan taint the perspectives of others and derail a change.23
* Charisma is defined as a trait found in persons whosepersonalities are characterized by a personal charm andmagnetism/attractiveness along with innate and powerfullysophisticated abilities of interpersonal communication andpersuasion (http://en.wikipedia.org/wiki/Charisma).McCall and Lombardo identified a number of other characteristicsthat derail change leaders when they are communicated to others:being cold and aloof, lacking in critical skills, displayinginsensitivity to others, being arrogant, being burned out, lackingtrustworthiness, and being overly ambitious from a personalperspective.24 When Malcolm Higgs looked at the question of badleadership, he identified four recurring themes: abuse of power,inflicting damage on others, over-exercise of control to satisfypersonal needs, and rule breaking to serve the individual’s ownpurposes. He saw these actions as caused by narcissism in theleader—a view of oneself as superior, entitled, and central to allthat happens.253. DeterminationChange agents need a dogged determination to succeed in theface of significant odds and the resilience to respond to setbacksin a reasoned and appropriate manner. After all, in the middle ofchange, everything can look like a failure. Change agents need tobe able to persist when it looks like things have gone wrong andsuccess appears unlikely.4. Eyes on the Prize and FlexibilityChange agents also need to focus on the practical aspect of“getting it done.” They must have a constant focus on the changevision, inspiring and keeping others aligned with the change goal.Change agents must keep their eyes on the prize to avoid gettingbogged down in day-to-day stresses and abandoning the changevision. At the same time, they must be ready to take informedrisks, modify their plans to pursue new options, or divert theirenergies to different avenues as the change landscape shifts—sometimes because of their actions, sometimes because of the
actions of others, or sometimes because of shifts in theenvironment. Doggedness is balanced by flexibility andadaptability, and impatience is balanced by patience. Time fordialogue and reflection on the change process is needed to giveperspective and make informed judgments.26 Change agentsmust reflect this delicate balance of being driven by the changevision, but not so much that they are unwilling to makemodifications to the process as the environment inevitably shiftsalong the way.5. Experience and NetworksGiven their desire to make things happen, it is not surprising tofind that experience with change is an attribute common to manysuccessful change agents. These individuals embrace changerather than avoiding it and seeing it as “the enemy.” They areconstantly scanning the environment, picking up cues that allowthem to develop a rich understanding of their organization’ssituation and the need for change. As the situation shifts, they areaware of those shifts and respond appropriately to them. Theymake this easier for themselves by ensuring that they are part ofnetworks that will tell them what they need to hear—not what theywant to hear. They build these networks over time through theirtrustworthiness, credibility, and interpersonal skills and through thevalue other members of these networks derive from them.Networks don’t work for long if others don’t feel they are gettingvalue from them. To ensure that members of the networks andothers continue to communicate with them, change leaders arewell advised to remember to never be seen as shooting themessenger. If messengers believe the act of communicating willput them at risk, they will alter their behavior accordingly.276. IntelligenceIntelligence is needed to engage in analysis, to assess possiblecourses of action, and to create confidence in a proposed plan.28In general, one has more confidence in a proposal developed by abright individual than one brought forward by a dullard. However,traditionally defined intelligence is not enough. Interpersonal skills,
empathy, self-regulation, a positive and yet realistic outlook,attention to detail, and the motivational drive to see things throughare needed to frame proposals effectively and implement them.These factors make up what is called emotional intelligence and itis often highlighted in discussions of change agentcharacteristics.29 In his investigation of the characteristics ofchange leaders, Caldwell differentiates the attributes of changeleaders from those he calls change managers.30 Table 8.1outlines his view of the differences. Caldwell argues that changeleaders operate from a visionary, adaptable perspective whilechange managers are much more hands on and work with people.Of course, there is nothing that says a change agent cannotpossess the attributes of both change leaders and changemanagers (as defined by Caldwell). In fact, they will need accessto both, depending upon their role(s) and the change challengesthey are addressing. Another way to think about the variousattributes of change agents is to consider the sorts of behaviorsthey give rise to. The following three categories of changebehaviors are a helpful way of grouping their actions:31Framing behaviors: behaviors oriented toward changing thesense of the situation, establishing starting points for change,designing the change journey, and communicating principlesCapacity-creating behaviors: behaviors focused on creatingthe capacity for change by increasing individual andorganizational capabilities and creating and communicatingconnections in the organizationShaping behaviors: actions that attempt to shape what peopledo by acting as a role model, holding others accountable,thinking about change, and focusing on individuals in thechange processTable 8.1 Attributes of Change Leaders andChange ManagersTable 8.1 Attributes of Change Leaders and ChangeManagersAttributes of ChangeLeadersAttributes of Change Managers
Attributes of ChangeLeadersAttributes of Change ManagersIs a visionaryIs an entrepreneurHas integrity andhonestyLearns fromothersIs open to newideasTakes risksIs adaptable andflexibleNurtures creativityExperimentsUses powerEmpowers othersBuilds teamsLearns from othersIs adaptable and flexibleIs open to new ideasManages resistanceResolves conflictNetworksHas in-depth knowledge ofthe businessSolves problemsSource: Adapted from Caldwell, R. (2003). Change leaders and changemanagers: Different or complementary?” Leadership & OrganizationDevelopment Journal, 24(5), 285–293.Higgs and Rowland examined such behaviors and discovered that“framing change and building capacity are more successful thanshaping behavior.”32 They suggested that change leaders shouldshift from a leader-centric, directive approach to a morefacilitating, enabling style in today’s organizations.The attributes were ranked by experts. The most highly rankedare at the top of the list, with the others following in order. Notethat Table 8.1 identifies attributes not specifically mentioned in thepreceding pages.Kouzes and Posner provide an important model of the behavioralcharacteristics of effective change leaders, based on answersfrom thousands of managers and executives to the fundamentalquestion: When you were a leader at your best, what did you do?In the Leadership Challenge, the authors synthesize theirextensive research and argue that leaders who are adept at
getting extraordinary things done know how to do the following:(1) model the way; (2) inspire a shared sense of vision; (3)challenge the status quo; (4) enable others to act; and (5)encourage the heart of those involved with the change.33 Theauthors do an excellent job setting out how to accomplish thesethings, and their book is recommended reading for thoseinterested in pursuing these ideas further.** As you reflect on the material in this section, you may find ituseful to review the story in Chapter 7 of Monique Leroux’schange leadership at Desjardin.See Toolkit Exercise 8.2 to rate yourself as a change leader.
Developing into a Change Leader
Intention, Education, Self-Discipline, andExperienceMany change leadership skills can be learned, which means thatthey can be taught.** The acquisition of concepts and languageestablishes mental frameworks for want-to-be change leaders.Reading about best practices and landmines can alert novices topredictable success paths and mistakes. The Center for CreativeLeadership34 is one of a number of organizations that producepublications about relevant leadership challenges and practices.In a 2007 article, Corey Criswell and Andre Martin identified anumber of trends that future leaders need to be aware of that arecreating change to the way business is done. They include (a)more complex challenges, (b) a focus on innovation, (c) anincrease in virtual communication and leadership, (d) theimportance of authenticity, and (e) leading for long-term survival.35The awareness of these macro-level trends will help changeagents better understand the environment and use and developnecessary skills to lead change internally.** Like many fields, formal study and education play their role indeveloping change leaders—thus this book!Change leaders also need to understand and embrace the notionof experiential learning. It is rare that someone is a change agentonly once. Change leadership capacities are a sought-out skill set.These skills are developed similarly to the way individualsstrengthen their physical skills. Once you start toning a muscleset, it feels good and you strive to continue to maintain anddevelop that muscle. But performance typically is tied to ourcapacity to have our muscles act interdependently. When one setof muscles develops, you may find others that need strengtheningto improve your overall capacity to perform. Similarly, within anorganization, change agents seek opportunities to continuouslyimprove both themselves and their organizations. They may havegreat interpersonal skills, but they need expertise in craftingfinancial arguments, or vice versa. Over time, this process of
development becomes part of one’s professional identity. Thejourney never ends.As part of this process, self-discovery, discipline, and reflectionare critical to ongoing success and growth. Jeanie Daniel Duckargues that an organization will not change if the individuals withinthat organization do not develop themselves. As a change leader,if you intentionally model reflective behavior, you will encourageothers to do the same. The key questions to ask, according toDuck, are these:Questions for oneself:Behavior to modify:Which of your behaviorswill you stop, start, orchange?Identify this behavior andreplace it with something else.What, specifically, are youwilling to do?Brainstorm different actionsand how you might measurethem.How will others know?Help yourself by engagingothers to hold youaccountable.How might you sabotageyourself?Identify ways in which youmight hold yourself back.What’s the payoff in this foryou?Construct an encouragingreward and motivateyourself.36Bennis describes four rules that he believes change leadersshould accept to enhance their self-development:1. You are your own best teacher.2. You accept responsibility and blame no one.3. You can learn anything you want to learn.
4. True understanding comes from reflection on yourexperience.37Bennis’s fundamental message is to take responsibility for yourown learning and development as a change leader. This requiresreflection. Of course, reflection implies something to reflect on—thus, the role of experience. It is through reflection that a changeleader hones existing skills and abilities, becomes open to newideas, and begins to think broadly, widening the lens throughwhich he or she looks at the situation at hand. In a disciplinedmanner, a would-be change leader needs to establish personalchange goals and write them down. This calls for intentionalreflection and continuous learning, which are important for boththe individual level, as described by Duck, as well as theorganizational level, in developing the ability to change.
What Does Reflection Mean?Organizations are able to change more effectively whenindividuals and change leaders within the organization shift theirmental maps and frameworks, and this requires openness andreflection. The skill of communication is essential here, as it isthrough conversation and open dialogue that change occurs.There is a need to think with others in a reflective way to seechange happen. In order to do this, an individual needs tounderstand what the group thinks and why. The group then needsto identify its shared assumptions, seek information, and developa mutual understanding of the current reality. This involves openand honest communication in a space where no one is wrong andthere is a commitment to finding that common ground—for thepresent situation and the vision for the future. Change leaders arein the position to create safe spaces for reflection where membersof the organization have a voice that is listened to and valued.Appreciative inquiry (AI), a concept introduced by Dr. David L.Cooperrider at Case Western Reserve University, is critical inthese conversations of reflection. AI is the engagement ofindividuals in an organizational system in its renewal. If you canfind the best in the organization and individuals—that is,appreciate it—Cooperrider argues that growth will occur andrenewal will result. Through AI, people seek to find andunderstand the best in people, organizations, and the world byreflecting on past positive experiences and performance. In doingso, the positive energy and commitment to improve isembraced.38 By framing positively, a different type of energy isfound within the organization to move forward in the direction ofchange.AI provides an interesting approach for change agents to considerwhen thinking about how best to approach change, because itrecognizes the value of ongoing individual and collective reflectionto the enactment of effective change. In order for reflection to addvalue, there can’t be a “wrong” understanding. Everyone muststrive to fully understand people’s perceptions, assumptions, andvisions through discussing and challenging one another’s views.
In a global society with relationships developing and evolving at alllevels, organizations operate in an ever-changing context, makingthe development of shared understanding and mutual respect allthe more important.
Developmental Stages of ChangeLeadersMiller argues that there are developmental stages of a changeagent. He believes that individuals progress through stages ofbeliefs about change, increasing in their complexity andsophistication.39 (See Table 8.2 for an outline of his belief stages.)He believes that movement from Stage 1, Novice, to Stage 2,Junior, to Stage 3, Experienced, might be learned vicariously—byobserving others or by studying change. However, movement toStage 4, Expert, requires living with a change project andsuffering the frustrations, surprises, and resistance that come withthe territory.There is evidence that these change agent skills andcompetencies can be acquired through the systematic use ofdevelopmental assignments.40 See Toolkit Exercise 8.3 toevaluate your development as a change agent.Table 8.2 Miller’s Stages of Change BeliefsTable 8.2 Miller’s Stages of Change BeliefsStageDescriptionStage 1NoviceBeliefs: People will change once theyunderstand the logic of the change. Peoplecan be told to change. As a result, clearcommunication is key.Underlying is the assumption that people arerational and will follow their self-interest onceit is revealed to them. Alternately, power andsanctions will ensure compliance.
StageDescriptionStage 2JuniorBeliefs: People change through powerfulcommunication and symbolism. Changeplanning will include the use of symbols andgroup meetings.Underlying is the assumption that people willchange if they are “sold” on the beliefs.Again, failing this, the organization can usepower and/or sanctions.Stage 3ExperiencedBeliefs: People may not be willing or able orready to change. As a result, change leaderswill enlist specialists to design a change planand the leaders will work at change but resistmodifying their own vision.Underlying is the assumption that the idealstate is where people will become committedto change. Otherwise, power and sanctionsmust be used.Stage 4ExpertBeliefs: People have a limited capacity toabsorb change and may not be as willing,able, or ready to change as you wish.Thinking through how to change the people iscentral to the implementation of change.Underlying is the assumption thatcommitment for change must be built andthat power or sanctions have majorlimitations in achieving change and buildingorganizational capacity.Source: Adapted from Miller, D. (2002). Successful change leaders: Whatmakes them? What do they do that is different? Journal of ChangeManagement, 2(4), 383.
Four Types of Change LeadersRegardless of their skill sets, change agents’ ability to sense andinterpret significant environmental shifts is of particular importanceto their capacity to respond. Part of such an ability comes from thedeep study of a field or industry. As well, some might have theintuition to understand significant changes in the environment bytheir ability to detect and interpret underlying patterns.41 Take, forexample, Glegg Industries of Glegg Water Treatment Services.Glegg Water Systems42In 2000, GE bought Glegg Industries. Glegg Water TreatmentServices had been an entrepreneurial organization that grew at acompound growth rate of 20% to 25% in the 1980s and 1990s. Theexecutives had a clear and strong vision: “pure water for the world.”They used this vision to pull the organization in the direction theywanted. They were tough, realistic analyzers of data that provided asophisticated understanding of the company’s market. Three times intheir history, the leadership forecasted a decline in growth rates inthe technology that the organization was using —so they shifted intocompletely new but related areas. For example, the organizationdelivered water treatment systems for power industries. As thatmarket matured, the company shifted to produce high-quality watersystems for computer makers. Later, it shifted to a new membranetechnology, which permitted integrated systems to be sold.When GE bought the company, it branded the products as GE GleggWater Technologies. By 2002, however, GE rebranded the productsagain to GE Water Technologies.At Glegg Water Treatment Services, change leaders understoodthe strategic shifts in the industry and what that implied for theirorganization. Between these major disruptions, they workedincrementally to improve operations and to change theorganization for the better. To do this, they motivated people byreinforcing their belief in the importance of what they were doing—providing the purest water possible. However, they did not just usethese visionary or emotional appeals, they also used data topersuade. Hard, calculated numbers pushed their perspectives
forward and provided convincing evidence of the need for changeand the value of the vision.Much of the change literature differentiates between the types ofchange that Glegg experienced: strategic or episodic changefollowed by incremental or continuous change.43 Episodic changeis change that is “infrequent, discontinuous, and intentional.”Continuous change is change that is “ongoing, evolving andcumulative.” Weick and Quinn suggest that the appropriate modelhere is “freeze, rebalance and unfreeze.” That is, change agentsneed to capture the underlying patterns and dynamics (freeze theconceptual understanding); reinterpret, relabel (reframe andrebalance those understandings); and resume improvisation andlearning (unfreeze).44 Further, Weick and Quinn suggest that therole of change agents shifts depending on the type of change.Episodic change needs a prime mover change agent—one whocreates change. Continuous change needs a change agent who isa sense maker who is then able to refine and redirect theorganization’s actions.The Glegg Water example also shows that change agents andtheir agendas can act in “pull” or “push” ways. Pull actions bychange agents create goals that draw willing organizationalmembers to change and are characterized by organizationalvisions of higher-order purposes and strategies. Push actions, onthe other hand, are data based and factual and are communicatedin ways that advance analytical thinking and reasoning and thatpush recipients’ thinking in new directions. Change agents whorely on push actions can also use legitimate, positional, andreward-and-punishment power in ways that change the dynamicsof situations.45 At Glegg Water, markets were assessed and planswere created and implemented based on the best data available.Table 8.3 outlines a model that relates the motivationalapproaches of the change agent (analytical push versusemotional pull) to the degree of change needed by theorganization (strategic versus incremental). The model identifiesfour change agent types: Emotional Champion, DevelopmentalStrategist, Intuitive Adapter, and Continuous Improver. Somechange agents will tend to act true to their type due to the nature
of their personalities, predispositions, and situations. Others willmove beyond their preferences and develop greater flexibility inthe range of approaches at their disposal. The latter will thereforeadopt a more flexible approach to change, modifying theirapproach to reflect the specific situation and the people involved.The Emotional Champion has a clear and powerful vision ofwhat the organization needs and uses that vision to capture thehearts and motivations of the organization’s members. Anorganization often needs an emotional champion when there is adramatic shift in the environment and the organization’sstructures, systems, and sense of direction are inadequate. To bean emotional champion means that the change agent foresees anew future, understands the deep gap between the organizationand its future, can articulate a powerful vision that gives hope thatthe gap can be overcome, and has a high order of persuasionskills. When Glegg Water Treatment Services was faced withdeclining growth and needed to find new growth markets, itneeded the visionary who could picture the strategic shift andcreate an appealing vision of that future.Table 8.3 Change Agent TypesAn Emotional Champion
is comfortable with ambiguity and risk;thinks tangentially and challenges accepted ways of doingthings;has strong intuitive abilities; andrelies on feelings and emotions to influence others.The Developmental Strategist applies rational analysis tounderstanding the competitive logic of the organization and how itno longer fits with the organization’s existing strategy. He or shesees how to alter structures and processes to shift theorganization to the new alignment and eliminate the major gapbetween the organization and the environment’s demands. Again,in Glegg Water, the strategic shifts resulted not only from thecapturing of a new vision but also from market intelligence andanalysis. Hard-nosed thinking enabled Glegg Water to see how totake its company to a new level by finding a new market focus.A Developmental Strategistengages in big-picture thinking about strategic change andthe fit between the environment and the organization;sees organizations in terms of systems and structures fittinginto logical, integrated components that fit (or don’t) withenvironmental demands; andis comfortable with assessing risk and taking significantchances based on a thorough assessment of the situation.The Intuitive Adapter has the clear vision for the organizationand uses that vision to reinforce a culture of learning andadaptation. Often the vision will seem less dramatic or powerfulbecause the organization is aligned with its environment and thechange agent’s role is to ensure the organization stays on track.The change agent develops a culture of learning and continuousimprovement where employees constantly test their actionsagainst the vision. At Glegg Water, continuous improvement was abyword. Central to this were the people who understood the purewater vision and what it meant to customers. Efficiency was notallowed to overrule a focus on quality.An Intuitive Adapter
embraces moderate risks;engages in a limited search for solutions;is comfortable with the current direction that the vision offers;andrelies on intuition and emotion to persuade others to propelthe organization forward through incremental changes.The Continuous Improver analyzes micro environments andseeks changes such as reengineering systems and processes.The organization in this category is reasonably well aligned withits environment and is in an industry where complex systems andprocesses provide for improvement opportunities. At Glegg Water,information systems captured data on productivity and processes.These data were used to improve efficiency and profits.A Continuous Improverthinks logically and carefully about detailed processes andhow they can be improved;aims for possible gains and small wins rather than greatleaps; andis systematic in his or her thinking while making careful gains.The purpose of this model is to marry types of change withmethods of persuasion. Each change agent will have personalpreferences. Some will craft visions that could sweep employeesonto the change team. Others will carefully and deliberately builda data-based case that would convince the most rational financeexpert. Change agents will have their preferred styles but, asnoted earlier, some will be able to adapt their approach andcredibly use other styles as the situation demands. By knowingyour own level of flexibility, you can undertake initiatives that willdevelop your capacity to adapt your approach as a change agentin a given situation. Alternatively, if you’re concerned about yourown capacity to respond, you can ally with others who possessthe style that a particular situation demands.In Chapter 1, we briefly discussed the preferences of adaptors(those with an orientation toward incremental change) andinnovators (those who prefer more radical or transformational
change).46 Kirton’s work with these two orientations points out thatindividuals tend to have clear preferences in their orientation andsometimes fail to recognize the value present in the alternativeapproach to change as they focus on what they are mostcomfortable with. When this occurs, there may be aninappropriate fit of approach with the situation or the peopleinvolved. Alternatively, when individuals with both preferences arepresent, this can lead to disagreement and conflict concerninghow best to proceed. While constructive disagreement and debateabout alternatives is valuable, managers need to avoiddysfunctional personal attacks and defensive behavior. This pointsagain to the importance of developing greater awareness of thedifferent change styles and the benefits of personal flexibility.When managers lack the needed orientation and style, they needaccess to allies with the requisite skills.Many organizations expect their managers to develop skills aschange agents. As a result, managers need to improve theirunderstanding of internal change agent roles and strategies.Internal organizational members need to learn the team-building,negotiating, influencing, and other change-management skills tobecome effective facilitators. They need to move beyond technicalskills from being the person with the answer to being the personwith process-management change skills: the person who helpsthe organization find the answers and handles the complex andmultivariate nature of the reality it faces.47 Hunsaker identified fourdifferent internal roles a change agent can play: catalyst, solutiongiver, process helper, and resource linker.48 The catalyst isneeded to overcome inertia and focus the organization on theproblems faced. The solution giver knows how to respond andcan solve the problem. The key here, of course, is having yourideas accepted. The process helper facilitates the “how to” ofchange, playing the role of third-party intervener often. Finally, theresource linker brings people and resources together in waysthat aid in the solution of issues. All four roles are important, andknowing them provides a checklist of optional strategies for theinternal change agent. See Toolkit Exercise 8.4 to find yourchange agent preference.
Internal Consultants: Specialists inChangeInternal change agents involved with leading projects often haveline responsibilities for the initiative. However, larger organizationsalso advance change through the use of individuals who areinternal consultants. Organizational-development specialists,project-management specialists, lean or Six Sigma experts, andspecialists from other staff functions such as accounting and ITare examples of this. When internal change agents are operatingfrom a consulting role, Christopher Wright found that they managethe ambiguity and communicate the value associated with suchroles by developing a professional persona that highlights theirdistinctive competencies as well as reinforces their internalknowledge and linkages.49Internal change agents are critical to the process because theyknow the systems, norms, and subtleties of how things get done,and they have existing relationships that can prove helpful.However, they may not possess needed specialized knowledge orskills, lack objectivity or independence, have difficulty reframingexisting relationships with organizational members, or lack anadequate power base. When there are concerns that these gapscannot be sufficiently addressed by pulling in other organizationalmembers to assist with the process, organizational leaders maybelieve that it is necessary to bring in external consultants toassist with the project. Sometimes the external consultants aresought out by the internal change agents, while at other timesthey are thrust upon them. Wise organizational leaders know thatexternal consultants need strong credentials if they are to win overthe skeptics about a change project. In fact, poorly performingexternal consultants can create resistance to a change initiative.
External Consultants: Specialized,Paid Change Agents
Provide Subject-Matter ExpertiseExternal change agents are often hired to promote changethrough the technical expertise and credibility they bring to aninternal change program. This was the case at Simmons College.Using an External Consultant at Simmons University50In 2006, the School of Business, Simmons University, Boston,Massachusetts, turned to an external consultant when working togain AACSB International accreditation. The faculty had flounderedfor several years about how to assess students’ learning of theoverall management curriculum. Required by the AACSB’sStandards to illustrate that its graduating students have learned aprogram’s curriculum, some schools institute standardized tests toassess students’ learning. However, the School of Business wanteda customized approach to evaluate the unique aspects of itsmanagement curriculum. The faculty struggled to envisionmethodologies and content to reach its goals. Finally, KatherineMartell, an assessment guru, was hired, bringing with her knowledgeof how 50 other business schools conducted their assessmentprocesses. When she left the school after two days of working withthe faculty, the assessment processes and plans were in place andreadily implemented in the following months.Katherine Martell, the external consultant, was able to help facultysolve the “assessment of learning” problem that had stalled theirprogress in attaining AACSB accreditation. She did so by helpingthem work their way through the issues and find a solution. Inaddition to her technical skills and professional credibility, she wasalso retained because she possessed well-developed team-process skills that were instrumental in helping them work theirway through the problem. When internal change agents or theirteams feel they lack the technical skills needed in these areas,they often turn to external expertise.
Bring Fresh Perspectives From Ideas That HaveWorked ElsewhereToo often, insiders find themselves tied to their experiences, andoutside consultants can help extricate them from these mentaltraps.51 Much can be learned from the systems and proceduresthat others have used elsewhere. In the following example, theleadership team at Knox Presbyterian Church (Waterloo)recognized it had a problem with how to approach fundraising andturned to RSI Consulting, who had helped many other churchesaddress similar challenges through the use of establishedprocedures. Once it had examined RSI’s approach, the church’sleadership team retained Craig Miller’s services and was able tosuccessfully adopt the approach.External Consultants as Process Experts52When Knox Presbyterian Church, Waterloo, Canada, was planning anew building, church leaders decided they needed a capitalcampaign to bring life to their change initiative. However, thecoordinating team knew that their view of fundraising was tied to pastapproaches and they recognized that these would not be able toraise the funds required. They searched out and hired RSIConsulting, specialists in church campaigns, with more than 9,000conducted in 38 years. Craig Miller of RSI brought standardtemplates, which he used to guide church volunteers in framing thecampaign and organizing their fundraising work. The KnoxCongregation had the vision and the manpower but lacked theexpertise and structure in how to handle the fundraising. By hiringRSI, they did not have to design the structure for a capital campaign;they borrowed it. As a result, Knox church members raised morethan $2.3 million in pledges, in the 90th percentile of results for thatsize of church, and they did so very economically.
Provide Independent, Trustworthy SupportTo help them manage the change process, internal change agentsmay find they need access to outside consultants who are viewedas independent, credible, competent, and (most importantly)trustworthy by others in the organization. In addition to guidance,they may be able to lend external credibility and support foranalyses that advance the change initiative. Such consultants canprove extremely helpful with internal and external data gatheringand the communication of the findings and their implications.Organizational members may feel more comfortable sharing theirthoughts and concerns with the consultants than they would withinternal staff. Finally, the external validation their analyses andconclusions provide may be the nudge needed to generate highlevels of internal support for the change and action.
Limitations of External ConsultantsExternal consultants can be instrumental in helping foster anatmosphere conducive to change by leveraging their reputationsand skill sets through the way they manage the process. However,they have their limitations. They lack the deep knowledge of thepolitical environment and culture of the organization that the insidechange agents should have, and in the end it is the organizationthat needs to take responsibility for the change, not the externalconsultant. As a result, external change consultants may be ableto assist internal agents, but they cannot replace them. Finaldecision- making needs to reside with the internal change leaderand the organization.How an internal change leader selects, introduces, and usesexternal consultants will have a lot to do with the ultimate successor failure of a change initiative. Consultants come in many forms,with different backgrounds, expertise, price tags, and ambitions.They often come with prescribed methodologies and offerprepackaged solutions. As a result, some consultants areinsensitive to the organization’s culture. The provision of ready-made answers not based in specific organizational research canbe frustrating, and prescription without diagnosis is arguablymalpractice.53 Responsibility for this failure will fall back on themanager who retained the consultant, since he or she isaccountable for managing this relationship.Another risk factor is that consultants may receive signals thatthey are expected to unquestioningly support the position of theleader of the organization that brought them in, even when theexternal consultants have serious concerns with the course ofaction being undertaken. When external consultants lose theirability to provide independent judgment, their value and credibilityare seriously reduced and their reputations may suffer irreparableharm if they succumb to pressure and the change subsequentlyfails in a very public manner.54 In spite of these and other risks,many organizations continue to use external consultants toadvance their change agendas and mitigate the risks of failure.One study reports that 83% of organizations that used consultants
said they would use them again.55 To increase the chances ofsuccess, consider the following advice on how to select anexternal consultant.How Should You Select an External Consultant?56Since the appropriate consultant or consulting team will eitheradvance or detract from the success of your change initiative,selecting a suitable one is a critical step. The following process isrecommended for complex organizational change situations:1. Ensure that you have a clear understanding of what you wantfrom the consultants. Too often organizations hire consultantswithout thinking through exactly what value they can and willbring. Know who they will report to, what roles they will play,and how much you are willing to pay for their services.2. Talk with multiple (up to five) consultants and/or consultingorganizations. Internal change leaders will learn a great dealabout the organization’s problems and how they might besolved by talking with multiple vendors. They will also be able tocompare and contrast the consultants’ working styles, allowingthem to gauge the chemistry between the change leader andteam and the consultant. The internal change leader needs toask, Do we have complementary or similar skills and outlook?Does this consultant bring skills and knowledge that I lackinternally? Does the organization have the budget that isneeded to engage this consultant?3. Issue a request for proposals (RFP). Only ask thoseconsultants with whom you would like to work, since writing andresponding to RFPs is a time-consuming and labor-intensiveprocess. Ask the internal leaders of the change process toobjectively review the RFPs and provide you with feedback.4. Make your decision and communicate expectations. Indicateclearly to the internal change leaders, the consultant(s), and allstakeholders the time line, roles, expectations, deliverables,and reporting relationships
Change TeamsTo balance access to needed perspectives, organizational leadersare moving toward the use of change teams that embody bothinternal and external perspectives. Change initiatives that arelarge require the efforts of more than one change agent. Outsideconsultants may be helpful, but as was noted earlier, they may betoo expensive, and lack credibility. As a result, change agents lookto extend their reach by using change teams. Worren suggeststhat teams are important because “employees learn newbehaviors and attitudes by participating in ad-hoc teams solvingreal business problems.”57 Further, as change agents becomeimmersed in the change, the volume of work increases and theroles and skills required of them vary. A cross-functional changeteam can be used to bring different perspectives, expertise, andcredibility to bear on the change challenge inherent in thosedifferent roles.58Organizational downsizing and increasing interest in the use ofself-managed teams as an organizing approach for flattenedhierarchies and cross-functional change initiatives have spurredawareness of the value of such teams.59 Involvement in self-managed teams gives people space and time to adjust their viewsand/or influence the change process. It moves them out of the roleof recipient and makes them active and engaged stakeholders.In a benchmarking study focused on the best practices in changemanagement, Prosci describes a good change-management teammember as follows:Being knowledgeable about the business and enthusiasticabout the changePossessing excellent oral and written communications skills,and a willingness to listen and shareHaving total commitment to the project, the process, and theresultsBeing able to remain open minded and visionary
Being respected within the organization as an apoliticalcatalyst for strategic change.60Some of these characteristics of a good change team memberappear contradictory. For example, it is tricky to be simultaneouslytotally committed and open-minded. Nevertheless, skilled changeleaders often exhibit paradoxical or apparently contradictorycharacteristics. For example, the need to both be joined with andyet separate from other members of the change team in order tomaintain independence of perspective and judgment is a difficultbalance to maintain.61 See Toolkit Exercise 8.5 to analyze yourskills as a change team member.Working with and in teams is a baseline skill for change leaders.They must not only work to achieve the change, but they mustalso bring the change team along so that it accepts, isenthusiastic about, and effectively contributes to theimplementation of the change initiative. Many might believe thatthis requires individuals who are adept at reducing stress andstrain in the team, but this is not always the case.Bill Gates: Team LeaderGates rarely indulges in water-cooler bantering and social nicetiesthat put people at ease. But while Microsoft’s former CEO andchairman was not considered a warm, affable person, he was aneffective hands-on manager, says one former employee. “Bill is anexceptional motivator. For as much as he does not like small talk, heloves working with people on matters of substance,” says ScottLangmack, a former Microsoft marketing manager.62The most effective response will depend upon the needs of thesituation. Bill Gates, for example, developed high-performancechange teams in spite of a dominating personality and awkwardsocial skills because of his abilities in the areas of vision and hiscapacity to attract and motivate highly talented individuals.In the summer of 2008, Gates announced that he would ceasefull-time work at Microsoft to focus on his charitable foundations.63With this announcement, change agents and teams within
Microsoft faced a new set of challenges related to managing thistransition. Teams were essential components in making changehappen.A Successful Change Team at Case Western Reserve UniversityMany years ago, a group of students at Case Western ReserveUniversity decided that there had to be better ways of teachingorganizational change and development. This small group dedicateditself to changing the system. In two years, they transformed parts ofCase Western and created the first doctoral program inorganizational development with themselves as potential graduates.They planned and plotted. They identified key stakeholders andassigned team members to each stakeholder with the responsibilityof bringing that stakeholder onside—or at least neutralizing theiropposition. It was the team that made the change happen. They putinto practice what they were learning as students.64Creating the conditions for successful change is more than having anexcellent change project plan. Equally important is recognizing thedifferent change roles that need to be played and then developing astrong change team. This section covers the different change rolesthat team members play and how you design an excellent changeteam.Possible Roles Within Change Teams** In Chapter 1, we discussed the roles that an individual can play:change recipient, initiator, facilitator, and implementer. Thesesame roles are looked at here in relation to change teams.Many change examples point out the need for a champion withinthe team who will fight for the change under trying circumstancesand will continue to persevere when others might have checkedout and given up. These change champions represent thevisionary, the immovable force for change who will continue topush for the change regardless of the opposition. Seniormanagers need to ensure that those to whom the change isdelegated possess the energy, drive, skills, resilience, andcredibility needed to make it happen. If these are lacking, steps
need to be taken to ensure that they are either developed orappropriate team members pick up the slack.Change champions should consider two further organizing rolesthat are often better operationalized through the use of twoseparate teams: a steering team and a design andimplementation team. The steering team provides advice to thechampion and the implementation team directs the change in lightof other events and priorities in the organization. As suggested bythe name, the steering team plays an advisory and navigationalfunction for the change project. It provides direction to the team’smandate, helps secure needed resources, suggests higher-orderpolicies, and participates in major go/no-go decisions.The design and implementation team plans the details of thechange, deals with the stakeholders, and has primaryresponsibility for the implementation. The responsibilities of thedifferent team members will vary over time, depending upon whatis needed and their skill sets. The team will often have a changeproject manager who will coordinate planning, manage logistics,track the team’s progress toward change targets, and manage theadjustments needed along the way.Senior executives who act as sponsors of change fostercommitment to the change and assist those charged with makingthe change happen.65 Sponsors can act visibly, can shareinformation and knowledge, and can give protection. Visiblesponsorship means the senior manager advocates for thechange and shows support through actions (i.e., use of influenceand time) as well as words. Information sharing and knowledgedevelopment has the sponsor providing useful information aboutchange and working with the team to ensure that the plans aresound. Finally, sponsors can provide protection for those towhom the change has been delegated. Without such protection,the individuals in the organization will tend to become more riskaverse and less willing to champion the change.66Developing a Change Team
Developing the team is an important task for the change leadersbecause the ability to build teams, motivate, and communicate areall predictors of successful change implementation.67 If changeteams can be developed that are self-regulating, change canoften be facilitated because teams leverage the change leader’sreach. The engagement and involvement of team members tendsto heighten their commitment and support for the initiative,68 andbecause they operate independently, self-managed teams canreduce the amount of time senior managers must commit toimplementation-related activities. Self-managed teams share anunderstanding of the change goals and objectives, sort out thedifferentiation and execution of tasks, and have control over thedecision process.Wageman has identified the following seven factors as critical toteam success with self-managed teams:clear, engaging direction;a real team task;rewards for team excellence;the availability of basic material resources to do the job;authority vested in the team to manage the work;team goals; andthe development of team norms that promote strategicthinking.69A similar list was developed by the Change Institute and is set outin Table 8.470Table 8.4 Design Rules for Top TeamsTable 8.4 Design Rules for Top Teams1. Keep it small: 10 or fewer members.2. Meet a minimum of biweekly and demand fullattendance—less often breaks the rhythm ofcooperation. How the team meets is less important—itmay be face to face or through virtual means.3. Everything is your business. That is, no information isoff-limits.4. Each of you is accountable for your business.
5. No secrets and no surprises within the team.6. Straight talk, modeled by the leader.7. Fast decisions, modeled by the leader.8. Everyone’s paid partly on the total results.The dedication and willingness to give it their “all” is the mostobvious characteristic of highly committed change teams. Thedogged determination to make changes regardless of personalconsequences because of a deep-rooted belief in a vision createsboth the conditions for victory and the possibilities oforganizational suicide. In the earlier example at Case WesternReserve University, if the changes were not successful, theindividuals involved would have sacrificed several years of theirlives to no organizational effect. In the case of Lou Gerstner’sturnaround at IBM,71 there was a distinct possibility that the firmwould not survive and members of his inner circle would beforever known as the individuals who oversaw the collapse of thisAmerican corporate icon. Instead, they are known as the innercircle who helped Gerstner turn around IBM from losing $8.1billion in 1993 to renewal, profitability, and growth. At the time ofhis retirement in 2002, the value of a share of IBM’s stock hadrisen from $13 to $80, adjusted for splits. Wanting to create one“Big Blue,” Gerstner reorganized the corporation from individualfiefdoms to one integrated organization and tied the pay of his top10 executives (his inner circle) to the overall company’sperformance. In reflecting upon his success in transforming IBM,Gerstner stressed “how imperative it was for a leader to love theirbusiness and to ‘kill yourself to make it successful.’ There is nosubstitute for hard work and the desire to win. CEOs face amultitude of choices, often peddled by a multitude of self-interested advisors, but they need to focus on exploitingcompetitive advantages in core businesses” (p. 2).72In forming a change team, the personalities and skills of themembers will play a significant role in the team’s success. Thechange process demands a paradoxical set of skills: the ability tocreate a vision and the intuition to see the connections betweenthat vision and all of the things that will need to be done. Thisincludes identifying who will need to be influenced; thinking
positively about stakeholders while recognizing what will influencethem and why they may resist you; caring passionately for aninitiative and yet not interpreting criticism as a personal attack;and translating strategy and vision into concrete change plans.Having the capacity to deal with these paradoxes requires comfortand skill in dealing with ambiguity and complexity.Developing Change Teams at Federal Express73Federal Express has developed a checklist for using change teams.1. Ensure that everybody who has a contribution to make is fullyinvolved, and those who will have to make any change areidentified and included.2. Convince people that their involvement is serious and not amanagement ploy—present all ideas from management as“rough” ideas.3. Ensure commitment to making any change work—the teammembers identify and develop “what is in it for them” when theymove to make the idea work.4. Increase the success rate for new ideas: identify problems in aproblem-solving, rather than blame-fixing, approach.5. Deliver the best solutions: problem-solving teams self-select tofind answers to the barriers to successful implementation.6. Maintain momentum and enthusiasm: the remainder of theteam continues to work on refining the basic idea.7. Present problem solutions, improve where necessary, approve,and implement immediately.8. Refine ideas, agree upon them, and plan the implementationprocess.Adapted from Lambert, T. (2006). Insight. MENAFN.com.While the tasks around change demand the paradoxical expertiseexplained above, functional and technical competencies also playa very important role. It is difficult to imagine a team establishingcredibility if it lacks such basics. However, the personalitiespresent in the team will influence how the team interacts andperforms, including its ability to manage the inherent paradoxes.While it is usually not necessary for the team to be highlycohesive, cohesion, rooted in a shared sense of purpose, will lendstrength to the change effort and focus the team’s activities.Implementing change requires considerable energy and can be
frustrating and exhausting. At such times, having access to acohesive and committed team can be invaluable in sustaining theteam during difficult times.The boxed insert below describes how Federal Expresssystematically develops a team approach to change.Use to your advantage the Checklist: Structuring Work in aChange Team that follows the Key Terms section in this chapter.
Change from the Middle: EveryoneNeeds to Be a Change AgentIncreasingly, successful organizational members will find that theyneed to act as change agents in their organizations. AsKatzenbach suggests, the real change leader will take action—dothings, try them out, and then do it again while getting better.74While this book applauds this type of initiative, remember the firstrule for change agents: Stay alive.When managers find themselves involved with change, most willbe operating from the middle of the organization. At times, theywill have those above them attempting to direct or influencechange while they are trying to influence those superiors aboutwhat needs to be initiated and how best to proceed. At othertimes, middle managers will need to deal with subordinates andpeers who will be on the receiving end of the change or who arethemselves trying to initiate activities.Oshry recognized the feelings of middle powerlessness thatmany feel when operating in the “middle” and outlined strategiesfor increasing one’s power in these situations.75 Problemownership is one of the key issues. Far too often, managers insertthemselves in the middle of a dispute and take on others’ issuesas their own when, in fact, intervention is not helpful. As well,when the issue is the managers, they may refuse to use theirpower. They need to take responsibility, make a decision, andmove on. Or, they need to refuse to accept unreasonabledemands from above and attempt to work matters out rather thansimply acquiesce and create greater problems below.Oshry’s advice to those in the middle is as follows:1. “Be top when you can and take responsibility for being top.”2. “Be bottom when you should.” Don’t let problems just flowthrough you to subordinates.
3. “Be coach” to help others solve their own problems so theydon’t become yours.4. “Facilitate” rather than simply carry messages when you findyourself running back and forth between two parties who arein conflict.5. “Integrate with one another” so that you develop a strongpeer group that you can turn to for advice, guidance, andsupport.Whether a manager uses logic or participation to engage others ina change initiative, or acts on his or her own,76 the message isclear: managers are increasingly being held accountable fortaking action. Scanning the environment, figuring out what willmake things better, and creating initiatives are the newresponsibilities today’s managers carry. This text argues that anychange agent role—initiator, implementer, facilitator, or teammember—is preferable to constantly finding yourself on thereceiving end of change. A strategy of passively keeping one’shead down and avoiding change increases a person’s career riskbecause he or she will be less likely to be perceived as addingvalue.From a Change ExpertGreg Brenneman has made a career out of turning large companiesaround and encourages people to work with sick organizations. “Ifyou have a chance of working for a healthy or a sick one, choose thesick one. The sickest ones need the best doctors and it’s a lot easierto stand out in a company that needs help,” he said to MBA studentsin 2008.77 These companies are the ones where you really get intothe work and help a company truly succeed. The successfulingredients in turnarounds, according to Brenneman, are thefinancials; developing and sticking to a clear strategy, especially in atime of crisis; identifying new leaders from the industry to lead thecompany; and plain hard work.
Rules of Thumb for Change AgentsHow should managers act as change agents? Several authorshave proposed useful insights and wisdom from their experiencesand analysis of change leaders. These rules of thumb forchange agents which have been integrated, combined, andadded to, are listed below:78Stay alive—“Dead” change agents are of no use to theorganization. The notion that you should sacrifice yourself atthe altar of change is absurd unless you truly wish it. At thesame time, the invocation to “stay alive” says you need to bein touch with those things that energize you and give youpurpose.Start where the system is—Immature change agents startwhere they are. Experienced change agents diagnose thesystem, understand it, and begin with the system.Work downhill—Work with people in the system in acollaborative fashion. Confront and challenge resisters inuseful ways. Don’t alienate people if at all possible. Work inpromising areas and make progress.Organize, but don’t over-organize—Plans will change. Ifyou are too organized, you risk becoming committed to yourplan in ways that don’t permit the inclusion and involvementof others.Pick your battles carefully—Don’t argue if you can’t win. Awin/lose strategy deepens conflict and should be avoidedwherever possible. The maxim “If you strike a king, strike tokill” fits here. If you can’t complete the job, you may notsurvive.Load experiments for success—If you can, set up thesituation and position it as positively as possible. Change isdifficult at the best of times—if you can improve the odds, youshould!Light many fires—High-visibility projects often attract bothattention and opposition. Work within the organizationalsubsystems to create opportunities for change in manyplaces, not just a major initiative.
Just enough is good enough—Don’t wait for perfection.Beta test your ideas. Get them out there to see how theywork and how people react.You can’t make a difference without doing thingsdifferently—Remember that definition of insanity—“doingthings the same way but expecting different results.” Youhave to act and behave differently to have things change.Hope is not an action.Reflect—As individuals, as change teams, and asorganizations, a commitment to learning from eachexperience and creating space for reflection on both positiveand challenging moments is essential to effective andproductive change.Want to change: focus on important results and get them—Not only does success breed success, but gettingimportant results brings resources, influence, and credibility.Think and act fast—Speed and flexibility are critical.Sensing the situation and reacting quickly will make adifference. Acting first means others will have to act secondand will always be responding to your initiatives.Create a coalition—Lone ranger operatives are easy todismiss. As Gary Hamel says, an “army of like-mindedactivists cannot be ignored.”SummaryThis chapter describes how anyone, from any position in theorganization, can potentially instigate and lead change, assuming achange agent role is a matter of personal attributes, a function of thesituation, and the vision of the change agent. Four types of changeleaders are described: the emotional champion, the intuitive adapter,the continuous improver, and the developmental strategist. Finally,the use of change teams was discussed. There was also advice tomanagers on how to handle the middle-manager role they might findthemselves in when dealing with change.The management of change is an essential part of the role ofleaders. Leading change will tax your skills, energize and challenge,exhaust, depress, occasionally exhilarate, and leave you, at times,with a profound sense of accomplishment. What it will not do is leaveyou the same.
The demands of organizations are clear—managers are expected toplay an increasingly significant role in the management of change.Earlier, this book advised managers to know themselves, assess thesituation carefully, and then take action. The next chapter outlinesaction planning to assist leaders of change. See Toolkit Exercise8.1 for critical thinking questions for this chapter.Key TermsChange agent effectiveness—a function of the person, his or hervision, and the characteristics of the situation.Exothermic—describes a change situation when energy is liberatedby actions.Endothermic—describes a change program that consumes energyand arouses opposition, which then requires more energy from thechange agent.Change leaders—pull people to change through the use of apowerful change vision.Change managers—create change by working with others,overcoming resistance, and problem solving situations.Developmental stages of a change agent—vary from a novicestage to an expert stage through successful experiences withincreasingly complex, sophisticated change situations.
Types of Change LeadersThe Emotional Champion—has a clear and powerful vision of whatthe organization needs and uses that vision to capture the hearts andmotivations of the organization’s members.The Developmental Strategist—applies rational analysis tounderstanding the competitive logic of the organization and how it nolonger fits with the organization’s existing strategy.The Intuitive Adapter—has the clear vision for the organization anduses that vision to reinforce a culture of learning and adaptation.The Continuous Improver—analyzes micro environments andseeks changes such as re-engineering systems and processes.
Hunsaker’s Change RolesThe catalyst—needed to overcome inertia and focus theorganization on the problems faced.The solution giver—knows how to respond and can solve theproblem as well as convince others to pursue their solutions.The process helper—facilitates the “how to” of change, playing therole of third-party intervener often.The resource linker—brings people and resources together in waysthat aid in the solution of issues.An internal change agent—an employee of the organization whoknows the organization intimately and is attempting to create change.An external change agent—a person from outside the organizationtrying to make changes. Often this person is an outside expert andconsultant.The change team—the group of employees, usually from a cross-section of the organization, that is charged with a change task.The champion—the person within the change team who will fight forthe change under trying circumstances and preserve throughoutadversity.The steering team—plays an advisory and guidance role to changeleaders and design and implementation teams.The design and implementation team—responsible for the actualdesign and implementation of the change initiatives.The change project manager—coordinates planning, manageslogistics, tracks the team’s progress toward change targets, andmanages the adjustments needed along the way.A sponsor of change—senior executive who fosters commitment tothe change and assists the change agents who are actively makingthe change happen.Visible sponsorship—entails actions including leveraging ofinfluence and time to advocate for the change.Information sharing and knowledge development—when thesponsor provides useful information to the change team and ensures
that the team’s change plans are sound.Sponsors may also provide protection for those who are delegatedwith change tasks, allowing change agents to be less risk averse andmore willing to champion the change.Middle powerlessness—the feeling of a lack of power and influencethat those in middle-level organizational roles often experience whenorganizational changes are being implemented. Pressure comesfrom above and below and they see themselves as ill-equipped torespond.Rules of thumb for change agents—things for change agents tokeep in mind to ensure their survival and success over the long term.
Checklist: Structuring Work in a ChangeTeamOnce the nature of the change initiative has been set out, teammembers will need to sort out what needs to be done when and whowill do it.A shorthand designation, BART, is a useful way to structure tasksamong a working group. Talking about BART in the context of anewly forming team can make the roles and responsibilities amongpeople clear and decrease conflict among group members.To be a useful tool, start with Tasks and end with Boundaries. It iswise to have a conversation about these issues, put what has beenagreed-upon in writing, and then revisit the structure at a designatedtime.1. Tasks: This is the work that needs to be completed in aparticular situation. Make a comprehensive list of tasks; next,assign the tasks to specific roles; then decide how muchauthority an individual has in the role; and, finally, describe howone role interfaces with another.2. Authority: This is the scope of decision making that a particularteam member has in her or his role.3. Roles: These are the parts that individual team members havebeen explicitly assigned to be responsible for in the executionof specific tasks.4. Boundaries: The edge where one person’s responsibilities endand another’s begins.In addition to the above items, team members need to come toagreement on how they will operate as a team. This includesa. values the team shares and norms of behavior,b. performance expectations they have for themselves and for oneanother,c. how they will communicate with and support one another,d. how they will manage and resolve conflicts,e. how they will manage documents and reports,f. how they will track and measure progress, andg. how they will otherwise manage their team processes.Once again, it is useful to put what has been agreed-upon in writingand then revisit it, as needed.
End-of-Chapter Exercises
Toolkit Exercise 8.1
Critical Thinking QuestionsThe URL for the video listed below can be found in two places. Thefirst spot is next to the exercise and the second spot is on thewebsite at study.sagepub.com/cawsey4e.1. LeadersAngle Gene Deszca Organisational Change—14:59 minuteshttps://www.youtube.com/watch?v=n9lzudH-uJIEvaluate yourself on the core competencies mentioned inthe video.What do you think that you need to do to improve yourskills or create a situation where you can be a successfulchange agent?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 8.2
Myself as Change Agent1. The following list of change agent attributes and skills represents anamalgam drawn from the previous section. Rate yourself on thefollowing dimensions on the seven-point scale.
Attributes of Change Leaders from CaldwellLow 1 2 3 4 5 6 7 HighInspiring vision 1 2 3 4 5 6 7Entrepreneurship 1 2 3 4 5 6 7Integrity and honesty 1 2 3 4 5 6 7Learning from others 1 2 3 4 5 6 7Openness to new ideas 1 2 3 4 5 6 7Risk taking 1 2 3 4 5 6 7Adaptability and flexibility 1 2 3 4 5 6 7Creativity 1 2 3 4 5 6 7Experimentation 1 2 3 4 5 6 7Using power 1 2 3 4 5 6 7
Attributes of Change Managers fromCaldwellEmpowering others 1 2 3 4 5 6 7Team building 1 2 3 4 5 6 7Learning from others 1 2 3 4 5 6 7Adaptability and flexibility 1 2 3 4 5 6 7Openness to new ideas 1 2 3 4 5 6 7Managing resistance 1 2 3 4 5 6 7Conflict resolution 1 2 3 4 5 6 7Networking skills 1 2 3 4 5 6 7Knowledge of the business 1 2 3 4 5 6 7Problem solving 1 2 3 4 5 6 7
Change Agent Attributes Suggested byOthersInterpersonal skills 1 2 3 4 5 6 7Communication skills 1 2 3 4 5 6 7Emotional resilience 1 2 3 4 5 6 7Tolerance for ambiguity 1 2 3 4 5 6 7Tolerance for ethical conflict 1 2 3 4 5 6 7Political skill 1 2 3 4 5 6 7Persistence 1 2 3 4 5 6 7Determination 1 2 3 4 5 6 7Pragmatism 1 2 3 4 5 6 7Dissatisfaction with the status quo 1 2 3 4 5 6 7Openness to information 1 2 3 4 5 6 7Flexibility 1 2 3 4 5 6 7Capacity to build trust 1 2 3 4 5 6 7Intelligence 1 2 3 4 5 6 7Emotional intelligence 1 2 3 4 5 6 72. Do you see yourself as scoring high on some items compared toothers? If so, you are more likely to be comfortable in a changeagent role. Lack of these attributes and skills does not mean youcould not be a change agent—it just means that it will be moredifficult and it may suggest areas for development.3. Are you more likely to be comfortable in a change leadershiprole at this time, or does the role of change manager or implementerseem more suited to who you are?4. Ask a mentor or friend to provide you feedback on the samedimensions. Does the feedback confirm your self-assessment? Ifnot, why not?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 8.3
Your Development as a Change AgentNovice change leaders often picture themselves as being in the right andthose that oppose them as somehow wrong. This certainty gives themenergy and the will to persist in the face of such opposition. It sets up adynamic of opposition—the more they resist, the more I must try tochange them, and so I persuade them more, put more pressure on them,and perhaps resort to whatever power I have to force change.1. Think of a situation where someone held a different viewpoint thanyours. What were your assumptions about that person? Did youbelieve they just didn’t get it, were wrong headed, perhaps a bitstupid?Or did you ask yourself, why would they hold the position theyhave? If you assume they are as rational and as competent asyou are, why would they think as they do? Think back to Table8.2. Are you at Stage 1, 2, 3, or 4?2. Are you able to put yourself into the shoes of the resister? Askyourself: What forces play on that person? What beliefs does he orshe have? What criteria is he or she using to evaluate the situation?3. What are the implications of your self-assessment with respect towhat you need to do to develop yourself as a change agent?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 8.4
What Is Your Change Agent Preference?1. How comfortable are you with risk and ambiguity?Do you seek order and stability or change and uncertainty?Describe your level of comfort in higher-risk situations.Describe your degree of restlessness with routine, predictablesituations.2. How intuitive are you?Do you use feelings and emotion to influence others? Or areyou logical and systematic?Do you persuade through facts and arguments?3. Ask someone who knows you well to reflect on your changepreferences and style. Does that person’s judgment agree ordisagree with yours?Why? What data do each have?4. Given your responses to the above, how would you classifyyourself?An Emotional ChampionAn Intuitive AdapterA Developmental StrategistA Continuous Improver5. How flexible or adaptive are you with respect to the approach youuse?Do you always adopt the same approach, or do you use otherapproaches, depending onthe needs of the situation?Which ones do you feel comfortable and competent in using?Again, check out your self-assessment by asking a significantother for comments.Comment on their response.Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 8.5
Your Skills as a Change Team Member1. Think of a time when you participated in a team. What was theteam’s goal?How well did the team perform? Were the results positive?Why or why not?2. Did the team members exhibit the characteristics listed by Prosci,below? Rate your team members’ performance on thesecharacteristics.Being knowledgeable about the business and enthusiasticabout the changePossessing excellent oral and written communications skillsand a willingness to listen and shareHaving total commitment to the project, the process, and theresultsBeing able to remain open-minded and visionaryBeing respected within the organization as an apoliticalcatalyst for strategic change793. What personal focus do you have? Do you tend to concentrate ongetting the job done—a task focus? Or do you worry about bringingpeople along—a process focus?4. How would you improve your skills in this area? Who might help youdevelop such skills?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Master Change Agent: Katherine Gottlieb,Southcentral FoundationBy Erin E. Sullivan, Research Director, PhDCenter for Primary Care, Harvard Medical School, Boston, MAKatherine Gottlieb, president and chief executive officer (CEO) ofSouthcentral Foundation (SCF) in Anchorage, Alaska, was up at 4 a.m.She thought about how much SCF had changed since she started as areceptionist in 1987. In June 2014, Gottlieb was leading 1,750 staffmembers, and had grown the organization to include the robustAnchorage Native Primary Care Center, and other community healthcenters across Southern Alaska. These centers provided services thatsupported the wellness of the American Indian and Alaska Native (AIAN)population. With all her accomplishments at SCF, Gottlieb still maintainedan endless list of ideas for SCF. At the same time, Gottlieb had been atthe helm of SCF for more than two decades and was approachingretirement. She had worked hard to develop a cadre of leaders within theorganization and a culture that could be sustained while managing the21st-century challenges of leading a large health system.
Katherine Gottlieb: LeaderGottlieb, who belonged to three tribes in the AIAN community, grew up inthe remote fishing village of Seldovia, Alaska. The village had noelectricity and a population of about 100 people. In 1987, Gottlieb walkedinto SCF with a grin on her face, in search of a job and proclaimed shewanted to be CEO. Although the organization responded by making her areceptionist, Gottlieb defied circumstances by finding ways to serve as aleader in every role she held. She understood that leadership was notexclusive to those with the title of “CEO.”Shortly after joining SCF, Gottlieb requested funds and purchased a newsturdy, oak desk to replace the metal one that clanged and rattled as shesat welcoming patients all day. Gottlieb intentionally replaced the deskbecause she recognized that she was the face of SCF. Her goal, inserving the AIAN people, was to immediately raise their self-esteem bywelcoming them into an environment that was inviting and safe asopposed to sterile or run-down. Gottlieb’s own experience with the healthsystem inspired her departure from the status quo:I began my experience in the healthcare field as patient number32041 in a hospital system that was managed by a verybureaucratic government system. No matter what I needed, if itwas dental care, strep throat, pregnancy, or eye care, I wentthrough the emergency room, and that was our entry level. Noone was happy, the waiting room was filled with sick babies, andeverybody was sick. . . .Our wait time could be up to 7–9 hours.If I went with babies, I would just bring a blanket and food andwe would picnic over off in the corner because we knew we weregoing to be stuck. . . .So as a patient, everybody wasgrumpy. . . .Our lines were really, really long and I felt like cattle,like cattle being prodded through the system—that is the feelingthat I had.Over the next four years at SCF, Gottlieb proceeded to create newpositions for herself. They included administrative assistant, corporatecompliance director, and associate director. Gottlieb was appointeddeputy director of SCF in 1989 and executive director in 1991 (see Exhibit1 for a timeline of Gottlieb’s accomplishments). In 1996, Gottlieb changedher title from executive director to president and CEO of SCF, and workedto build partnerships across Alaska. One of those seminal relationshipswas with former U.S. Senator Ted Stevens, an avid supporter of the AIANpeople. Gottlieb routinely cultivated relationships with both local and
Washington politicians. Furthermore, Gottlieb and her VPs spentapproximately 25% of their time engaging constituents and stakeholdersin dialogue.During her tenure as president and CEO, Gottlieb demonstrated that itwas possible to be both family oriented and to serve as an organizationalleader. Gottlieb was not only devoted to her large family, but alsoestablished herself as a visionary leader. SCF’s VP of medical servicesasserted, “One of the most powerful things is that she [Gottlieb] hasalmost a vision of limitless possibility. Most human beings are limited intheir ability to dream about what’s possible. Gottlieb has practically nolimits, especially considering where we started from.”Gottlieb’s leadership was nationally recognized, earning her a MacArthurFellowship in 2004 and the Harry S. Hertz Leadership Award from theFoundation for the Malcolm Baldrige National Quality Award in 2015.
SCF: Organizational CultureIn 1998, the Alaska Area Indian Health Service (IHS) transferredownership of the Alaska Native Medical Center to SCF and the AlaskaNative Tribal Health Consortium (ANTHC). This transfer of ownership toSCF and the ANTHC marked the beginning of SCF’s implementation oftheir “customer-owner” approach, the bedrock of its health care deliverymodel. This approach centered on renaming and reframing patients ascustomer-owners based on the premise that Alaska Native people ownedtheir health system and should therefore fully engage with their healthcare.1 Focus groups, interviews, tribal leadership meetings, and surveyswere used to engage customer-owners. Through this process, SCFcreated its current mission and vision statements. SCF’s vision statementdescribed “a Native Community that enjoys physical, mental, emotionaland spiritual wellness.” SCF’s mission statement emphasized “workingtogether with the Native Community to achieve wellness through healthand related services” (see Exhibit 2 for SCF’s operational principles).SCF’s mission and vision worked to support the Nuka System of Care(Nuka), which was the name SCF used to describe its approach toworking together with the Native Community to achieve health andwellness in Alaska. The word Nuka represented “big living things” in manyindigenous cultures. Named by Gottlieb, Nuka “addresses the challengesthat health care systems around the world face—how to improve healthcare outcomes and customer satisfaction without skyrocketing costs.”2 Inother words, it was about customer-ownership, relationships, and systemtransformation. According to SCF leadership, trust and accountability,maintained over time, were central to Nuka and formed the basis for therelationships between employees and between the customer-owner andthe health care provider.3 To understand and then implement Nuka, SCFrequired its employees to attend mandatory Core Concepts training.
Core ConceptsSCF leadership developed a three-day program called Core Concepts asa way to teach the story of SCF and Nuka. This training also providedemployees with the tools of empathy, compassion and relationship-building. Core Concepts explored how individual narratives and storiesaffected and shaped relationships people had with themselves and withothers. SCF developed a pilot training program focused on setting goals,managing conflict, understanding personal motivations and assumptionsabout the world, and building relationships through sharing personalnarratives. This program was piloted with 100 managers and programdirectors. “Putting the managers and directors through the program wasessential to achieve buy-in for the concept,” remembered Gottlieb.Core Concepts officially started in 2008. Once the majority of theworkforce was trained, SCF offered Core Concepts three to four timesannually. Gottlieb also conducted mini-sessions to refresh Core Conceptsprinciples for SCF division and department leaders. Additionally, SCF puttheir operations on hold for an Annual Learning Event for all staff. OneSCF staff member noted that she applied Core Concepts outside of theworkplace. Applying Core Concepts tools at home added to the holisticwellness of the AIAN community, and provided a common language forhealthy communication in families and relationships.
A Culture of ImprovementGottlieb, along with her executive team, developed a cultural andoperational structure to support continuous change and improvement.SCF leadership had looked to corporations like Disney and Ritz Carletonfor best practices in customer service, and created multiple ways ofsoliciting and responding to feedback from customer-owners. SCFreceived customer-owner feedback via multiple channels, including iPadsplaced in primary care clinics, social media platforms, direct emails toGottlieb, the Gathering (an annual SCF community event attended bymore than 2,000 people each year), satisfaction surveys, comment cards,and a 24-hour phone hotline. Customer-owners were also present inSCF’s workforce (50 –60%) and were another valuable source offeedback. SCF’s joint operating boards and advisory committees, entirelycomprised of customer-owners, periodically met with SCF’s seniorleadership team.According to an SCF improvement advisor, this constant feedback loopwithin SCF empowered staff to think constantly about improvement and aculture of change. Improvement work was an essential part of every jobfunction at SCF, and the organization provided ongoing trainingopportunities so that every employee could meet that expectation. SCFreceived and responded to an average of 10 customer-owner commentsper day. Gottlieb explained that SCF’s practice was to act directly on thefeedback and then close the loop with customer-owners. Gottliebelaborated: “We say we changed this because you asked for it. We builtthis because you said to. Pretty soon you own the change, not us, not wewho are working on the job.” SCF’s customer-owner satisfaction rateconsistently exceeded 90%.
SCF: Governance structureAs Gottlieb expanded SCF, she reflected on its governance structure andnoted, “to be successful at working with a governance body, buildingrelationships is essential.” Gottlieb worked to build high trust andtransparency throughout all levels of the organization. She explained thattrust and transparency were important not only between executiveleadership and the board, but also between the board and employees. Todemonstrate her commitment to trust and transparency, Gottlieb removedthe walls of the SCF boardroom and replaced them with glass—earning itthe nickname “the fishbowl.” Gottlieb made sure that the SCF Boardremained involved in SCF events, from special visits from externalorganizations to celebrations. Gottlieb reported, “There’s a relationshipbetween the governance and community of employees we have. Andthey’re customer-owners—they’re Alaska Native people so they have astake in the community and that’s a pretty big deal.”
SCF’s Vice PresidentsGottlieb’s executive team had all “grown up” in the organization together.Joining SCF between 1980 and 1996, the VPs had extensive knowledgeof the organization having served in various administrative and clinicalroles before assuming leadership positions as VPs. All six VPs reportedto Gottlieb and were housed in the same location. She stated, “SCF’s VPsare all located in the same area so they interact as a team and have easyaccess to one another.” She met with SCF’s VPs frequently, and thegroup made many of the high priority decisions. If consensus could not bereached, Gottlieb made the final decision. Gottlieb explained, “We work asa team, encourage each other to voice opinions, oppose ideas and arewilling to struggle through long, hard discussions in order to reachconsensus. . . .We’ve never brought an idea or concept to the Boardwithout us [the VPs and Gottlieb] all in 100% agreement.”
Annual Strategic Planning ProcessSCF’s annual strategic planning process engaged the entire organization,from individual employees to the board. This process was grounded inSCF’s mission, vision, and corporate goals (shared responsibility,commitment to quality, family wellness, and operational excellence). Theprocess involved implementing new initiatives and evaluating ongoinginitiatives generated through the organization’s improvement processes.Starting in January, SCF leadership generated a strategic input documentthat assessed both external (e.g., customer-owner feedback) and internal(e.g., staffing needs) factors, including strategic challenges andadvantages, that might affect the organization.After reviewing the strategic input document, SCF’s board assessed howSCF’s corporate objectives would be impacted. With a set of corporateinitiatives, linked to the corporate objectives, SCF divisions, committees,and departments completed their annual work plans every summer toaddress any new or ongoing initiatives in the strategic plan. SCFemployees then met with their managers in November to create PersonalDevelopment Plans (PDPs) that outlined how they would support theannual work plans in the year ahead. SCF’s board also approved thebudget in August/September. To keep the entire organization uptodate,any employee could log in to the corporate intranet to view all documentsdeveloped during the strategic planning process.
Planning for SCF’s FutureGottlieb partnered with SCF leadership to build the infrastructure andservices required to meet the community’s needs. In order to ensure thecontinuity of those resources after she retired, Gottlieb explained that she“put systems in place that are flexible, but very hard to change.” Inparticular, Gottlieb implemented structures to ensure SCF’s growth, whichincluded creating several leadership development programs to ensure apipeline of talent within the organization (see Exhibit 3 for the fiveleadership training programs launched with Gottlieb’s support). SCF alsoworked to retain as many employees as possible once they were hired.The only person who could officially fire an employee at SCF wasGottlieb, and she believed in “first, second, third, and fourth chances.”As she contemplated retirement, Gottlieb recognized that a new CEOwould inherit all of the challenges associated with running a health careorganization in Anchorage, Alaska. The increasing number of olderAlaska Native people with chronic diseases and a demand for specialtycare would stretch the services SCF needed to provide. SCF would needto consider strategies for increasing preventive services and healtheducation for the younger Alaska Native community. As the AIANcommunity moved from rural areas to Anchorage, this in turn increasedthe number of customer-owners that SCF served. However, despiteSCF’s growing customer-owner population, IHS funding remainedconstant and did not increase accordingly. Recruiting physicians to Alaskawas never easy. The political climate in the United States and health carereform also had the potential to affect the Alaska Native community.Gottlieb believed that what mattered most was that a new CEO wouldcontinue the commitment she had made to all SCF employees and the60,000+ AIAN people that SCF served. Gottlieb had nurtured a specificculture over the last twenty-five years, and it was important that a newCEO embody and sustain it. However, she wanted a new CEO to havehis or her own dreams for SCF, and thought to herself, “If you get a newleader and nothing changes, what did you hire that person for?”Exhibit 1 Timeline of Accomplishments During Katherine Gottlieb’sTenure at SCF
Source: Compiled by case writer based on biographical informationavailableExhibit 2 Operational Principles of Southcentral FoundationSource: Southcentral Foundation
Exhibit 3 Five Leadership Programs Developed Through Gottlieb’sSupportSource: Southcentral Foundation
References1. Gottlieb, K. (2013). “The Nuka System of Care: improving healththrough ownership and relationships.” International Journal ofCircumpolar Health, 72.2. Ibid.
Chapter Nine Action Planning andImplementationChapter OverviewChange leaders recognize the usefulness of plans and the imperative of action. Prepare,take action, and learn from the results. Change initiators have a “do it” attitude.Action planning and implementation involves planning the work and working the plan.“Right” decisions mean approximately “right” as change agents obtain feedback from actionand make adjustments as they act.Change agents learn to specify who does what, when, and how to monitor and track theirchange initiatives. Agents use a variety of management tools, such as responsibility andproject planning charts, surveys and survey feedback, and critical path methods tosuccessfully plan and implement their change programs.Successful change agents develop detailed communications plans and understand how tomanage transitions from the present to a future desired state.This book has a philosophical bias for taking action. Rather than passively waiting orcomplaining from the sidelines, change agents get engaged. However, the goal is notaction simply for novelty and excitement. Action must increase the likelihood of positivechange. Great ideas don’t generate value until they are effectively executed. One of theways to improve the quality of action is to use proven tools to execute a change agenda.Tools in Chapter 9 translate plans to action. If this were a political campaign, these toolswould be steps that are deployed after the candidate has been selected, the platformfinalized, and the election called. The chapter provides advice on implementation tacticsand project management tools. It addresses communication and influence tactics duringthe change process. And finally, the management of transition, or the process of keepingthe organization operating while implementing the change, is detailed. In terms of themodel in Figure 9.1, these are the implementation issues of “getting from here to there”—assessing the present in terms of the future, determining the work that needs to be done,and implementing the change.
Without a “Do It” Orientation, Things Won’tHappenMany major change initiatives start in the C-suite. Boards of directors and executives atthe top of organizations have access to all of the data that an organization generates,and from this perspective and input they can observe a myriad of organizationalproblems and envision viable solutions. Two examples of boards who hired strong,change agent CEOs are IBM’s board when they brought in Lou Gerstner in 1993 and theboard of New England Medical Center, Boston (now called Tufts Medical Center) whenthey hired Ellen Zane in 2002 to lead the transformation of the then-foundering nonprofithospital (see cases on the website for the story about Zane’s turnaround of the medicalcenter).Figure 9.1 The Change Path ModelGerstner and Zane were seasoned executives when they took on the extremely difficulttask of pushing change from the top down into the basements of their organizations. Bothhad a “do it” orientation and both were authorized by their boards and by their titles,jobs, and positions to lead change within their institutions. Having the authority to actmakes certain aspects of the job of change agent easier than working from the middle.Gerstner, for instance, when he claimed the title of CEO, quickly changed the rewardsystem for his top executives, focusing their attention on the performance of IBM as a
whole, rather than just their divisions or areas. Such quick structural change is unlikely ina mid-level role.In an ideal world, change leaders located in the middle of the organization will also findsupport for their projects. They need ready access to supportive executives who providedirectional clarity, ensure their organizations are ready for change, approve neededresources, provide other modes of support and oversight, and cultivate broad employeecommitment for the change. In some instances, this is not the case. Many executives willhave little or no knowledge of the initiative or its value and implications. If they haveheard of the idea, they may lack interest because of other priorities and political realities;some may have heard of it and have concerns, while others will simply want to distancethemselves from the change in the event it doesn’t work out. Some will fail to understandthe important role they have to play in nurturing innovation from within the organization;others will not see it as their role.Organizations are complex systems, and their prospects for successful adaptation areadvanced when they can also learn and grow from the bottom up. This is one of thereasons that firms such as 3M, Procter & Gamble, and Deloitte have demonstrated suchstaying power: They grow from within and from the bottom up. Wise senior managersknow how to nurture and leverage employees’ adaptive energy.Wise change agents know how to save short-sighted senior managers from themselves.If you work in an organization such as 3M, then “lucky you!” If you do not, an early task isto seek—and hopefully acquire—senior-level support for your initiative. An e-mail fromthe CEO or SVP announcing her support for your project will help garner support fromother organizational members.Innovation and Change at 3MFront-line freedom to innovate and senior-level support have been critical ingredients to 3M’ssuccess. Technical and marketing employees commit 15% of their time to work on projects oftheir own choosing, without supervision. The environment is open and informal, input fromcustomers and lead users is sought, and collaboration and inquisitiveness are valued. Socialmedia facilitates front-line collaboration and helps to overcome the communication barriers thatorganizational size and complexity bring. At the same time, 3M’s culture is demanding, and theprocess for funding new ideas is highly structured.The degree of management scrutiny and oversight increases as new ideas evolve to requiresignificant resources. Products that are eventually successful in the marketplace are typicallyrejected several times in management’s funding process before receiving funds, requiringpersistence from innovators. Management and employees embrace and learn from failuresbecause innovation won’t happen otherwise. George Buckley, 3M’s CEO from 2005 to 2012, aPhD in engineering, was deeply interested in innovation. He regularly visited the labs to find outwhat people were exploring, believing that “creativity comes from freedom, not control.”1As it had in the past, this commitment to innovation has allowed new products and services topercolate and develop from the ground up throughout the years.2 Inge Thulin (2012-18) andMichael Roman (the current CEO) have demonstrated their commitment to sustaining thiscommitment in more recent years. This spirit is captured in the following statement of 3M’spurpose:“3M captures the spark of new ideas and transforms them into thousands of ingenious products.Our culture of creative collaboration inspires a never-ending stream of powerful technologies thatmake life better. 3M is the innovation company that never stops inventing.”3If senior-level support for change is unlikely to develop in the near future, changeinitiators may feel that abiding by formal organizational protocols and waiting for official
support will slow progress unduly. Faced with this situation, change agents may chooseto follow the advice of Rear Admiral Grace Hopper, a pioneering female softwareengineer in the U.S. Navy, who said, “It is easier to seek forgiveness than permission.”4Pfeffer and Sutton state “actions count more than elegant plans or concepts” and that“there is no doing without mistakes.” They ask, however, a crucial question: “What is thecompany’s response?”5 If the organization’s response to reasoned initiatives and honestmistakes is to scapegoat and blame, people quickly learn not to take risks that might leadto mistakes. Or, they learn to cover up mistakes. Either way, the organization suffers.*However, beliefs about likely organizational responses can also become a convenientexcuse for inaction and the avoidance of risk taking (e.g., What if my idea really won’twork or what will I do if it does work?). If such beliefs are never challenged, their stabilitywill produce self-fulfilling prophecies.* This does lead to an accountability paradox. Accountability is a needed and usefulattribute. However, there needs to be a fine balance between holding change leadersaccountable for what they do and encouraging the risk-taking behavior that leads toneeded learning and change.Effective executives and managers of change are aware of the consequences of theiractions and intuitively test their organizational assumptions by engaging in an action–learning–reaction cycle.6 Sayles recognized this when he wrote, “Working leadersinstead of simply waiting for and evaluating results seek to intervene. And theinterventions they undertake require a more intimate knowledge of operations, and moreinvolvement in the work than those of traditional middle managers.”7For employees lower in the hierarchy, action is also key. Instead of being discouraged bylack of authority or reach, one must fully understand the resources and tools they have attheir disposal. Dr. Ross Wirth, retired dean of the College of Business, FranklinUniversity, reflected on his 32-year career at Citgo Petroleum with the following wisdom:8“Traditional thought says that nothing happens without top management’s approval (but)change need not be something that is ‘done to you.’ Here is another way to think of it:empowerment is something you grasp until you find its limits. I tell people that they canconstantly test the limits of their empowerment, carefully reading internal politics to seewhen they are pushing up against a boundary. Too many people think they are notempowered, but actually they have failed to test their limits.”The reality of much organizational life is somewhere between an environment thatpunishes those who dare to challenge the status quo and one in which all such initiativesare unconditionally embraced and rewarded. When the latter is the case, disciplineddevelopment and governance processes help organizations and their members to sortthrough those ideas, nurture their development, and bring the most viable to life. If suchprocesses are absent, it can lead to the organization running off in all directions.Organizational members who choose not to wait on formal permission and undertakereasonable self-initiated change initiatives may experience some chastisement for notfirst seeking approval, particularly if the initiative runs into difficulty. However, in manyorganizations, they are also commended for showing initiative and having a positiveimpact. The organization’s culture and the personality of a boss (e.g., managerial styleand tolerance for ambiguity) will obviously influence what response the initiator receives,but most managers value initiative.What can be done to increase the likelihood that taking action will produce desiredresults? The following sections address this question by exploring a variety of planning
and implementing tools. The purpose of these tools is to assist change leaders indesigning and then managing their initiatives in ways that increase their prospects forsuccess.
Prelude to Action: Selecting the Correct PathAny action plan for change needs to be rooted in a sophisticated understanding of howthe organization works and what needs to be achieved. Since there are a variety ofaction paths available, how do you decide which to take? Mintzberg and Westley provideguidance in this matter by setting out three generic approaches: thinking first, seeing first,and doing first.9Thinking first strategy works best when the issue is clear, data are reliable, contextis structured, thoughts can be pinned down, and discipline can be established as inmany routine production processes. The introduction of an initiative such as SixSigma is an example where management needs to think first.Seeing first strategy works best when many elements have to be combined intocreative solutions, commitment to those solutions is key, and communication acrossboundaries is essential. New product development is an example of the need to seefirst.Doing first strategy works best when the situation is novel and confusing,complicated specifications would get in the way, and a few simple relationship rulescan help people move forward. For example, if a manager is testing a variety ofapproaches to customer service and wants feedback about what works best underwhat conditions, then doing first is appropriate. At the macro level, this approachoften makes sense for organizations attempting to figure out how to deal withdisruptions to their business models—something firms are experiencing withincreasing frequency.As complexity and ambiguity rise, Mintzberg and Westley argue that the preferredapproach to action shifts. Thinking first fits when the situation is well structured, amanager has the needed data, and there is not much confusion about how to proceed.As ambiguity and complexity rise, though, certainty over how best to proceed becomesless clear. Seeing first approaches the challenge by experimentation, prototyping, andpilot programs so that commitment can be gained by having others see and experiencean initiative. Doing first is a response to even more ambiguous situations and takes theprocess of exploration further in the search for new paths forward. As these paths beginto emerge, the approach can then be altered to seeing first or doing first, depending onwhat is suitable for the next stage.Nitin Nohria offers a slightly different assessment of the generic change strategiesavailable.10 He identified three strategies, defined their characteristics, explained thetypical implementation, and highlighted their risk points. Programmatic change (similarto Mintzberg and Westley’s thinking first change) involves the implementation ofstraightforward, well-structured solutions. It is best suited to contexts that are clear andwell defined and where the magnitude of the change is incremental in nature. Risks withthis approach lie in potential problems with inflexibility, overreliance on a “one-size-fits-all”solution, and a lack of focus on behavior.Discontinuous change involves a major break from the past. If the environment isshifting dramatically and a continuation of activities based on existing assumptions willnot work, then discontinuous, top-down change may be fitting. Organizationalrestructuring due to downsizing, rapid growth, or the realignment of markets is anexample of this category. Risks with this approach come from political coalitions that mayform and derail the change, a lack of sufficient resources and control to support sustain
and enforce (if needed) the changes, and the loss of talented people who becomefrustrated and quit.Emergent change (similar to Mintzberg and Westley’s doing first change) grows out ofincremental initiatives and can create ambiguity and challenge for staff members. Anemployee-centered change initiative to modify the culture of the organization thatemerges from customers’ and staff’s feedback would be an example. If the organizationhas a talented, knowledgeable workforce that understands the risks and possibilities,utilizing an emergent change approach may be appropriate. Risks with this approachcome in the form of confusion over direction, uncertainty as to the impact of the change,and slow progress (see Table 9.1).To counteract the pitfalls of programmatic or “thinking first” change, consider usingemployee engagement and feedback to connect with those on the receiving end, learnfrom their experiences, and decentralize decision making to allow for adaptation to localconditions. The pitfalls (including unintended consequences) from change will belessened by processes that reduce ambiguity, promote feedback and learning, and buildsupport by enhancing member understanding of the change and why it was undertaken.Table 9.1 Three Generic Change StrategiesTable 9.1 Three Generic Change StrategiesChange TypeCharacteristicImplementationIssues or ConcernsProgrammaticchangeMissions,plans,objectivesTraining, timelines,steeringcommitteesLack of focus on behavior,one solution for all, inflexiblesolutionsDiscontinuouschangeInitiated fromtop, clearbreak,reorientationDecrees, structuralchange, concurrentimplementationPolitical coalitions derailchange, weak controls,stress from the loss ofpeopleEmergentchangeAmbiguous,incremental,challengingUse of metaphors,experimentation,and risk-takingConfusion over direction,uncertainty and possibleslow resultsSource: Adapted from Nohria, N., & Khurana, R. (1993, August 24). Executing change: Three genericstrategies. Harvard Business School Note. #494–039.The issues related to emergent or “doing first” change may be managed through the useof field experiments, evaluation tools and task forces to provide engagement andfeedback on an ongoing basis. These can be used to enhance awareness of what isgoing on and why, create greater clarity concerning the implications of what is emergingand build understanding and support for the next steps in the change process. Inmetaphorical terms, this points to a move from “ready—aim—fire” to “ready—fire—aim—re-fire—re-aim”† for an emergent approach to planning. In fast-moving contexts, it islikely that a traditional planning process will be too lengthy and that by the time theplanning is finished, the opportunity may have been missed. This metaphor recognizesthat significant information can be obtained from action feedback. When a change leaderinitiates action, reactions will occur that can provide insight into how to respond and takecorrective actions.
† The managerial use of this metaphor is usually credited to T. Peters and R. H.Waterman Jr., In Search of Excellence (New York: Harper & Row, 1982). Ourunderstanding is that its presence in its modified form has its roots in missile defense. Ifyou are defending against incoming missiles, you don’t have time to wait and plan aresponse. You do need to fire before you aim your missile. Then once you have things inmotion, you can re-aim your missile based on new, current information.A third approach to thinking about change strategies is found in the unilateral versusparticipative approaches to change. Advocates of a unilateral approach to changebelieve that if one first changes systems and structures, forcing behavioral changes, thataction will in turn produce changes in attitudes and beliefs over time. Those who promotea participative approach believe the opposite. They argue that you first need to engageand change attitudes and gain acceptance of an initiative before restructuring systemsand organizational structures.Waldersee and Griffiths note that change initiatives have been traditionally grouped intotwo broad categories. Techno–structural change refers to change that is based instructures, systems, and technology. Behavioral–social change is focused on alteringestablished social relationships. After investigating 408 change episodes, they concludedthat the unilateral approach was perceived to be more appropriate for techno–structuralchange, while participative approaches were seen as more appropriate when behavioral–social changes such as cultural change were involved.11 When Australian managerswere asked about the perceived effectiveness of these two change approaches, they sawunilateral methods as more effective in bringing about successful change, regardless ofthe type of change. What does all of this mean for action planning? Waldersee andGriffiths concluded the following:Concrete actions taken by change managers are often superior to the traditionalprescriptions of participation.12 Forcing change through top-down actions suchas redeploying staff or redesigning jobs may effectively shift employee behavior.With the context and behavior changed, interventions targeting attitudes maythen follow. (p. 432)While a unilateral approach may have appeal for those who want to ensure that thingsare done, such an approach can be risky and needs to be managed with care. Whenimplementation lacks sensitivity, stakeholders may feel that their perspectives andconcerns have been ignored. This can result in fallout and resistance that could havebeen avoided, and missed opportunities for valuable input.What conclusions can be drawn from this material on a “do it” orientation and changestrategies? Start a change process rather than waiting to get things perfect. Be willing totake informed risks and learn as you go. Finally, pick your change strategy with care andremember to take steps to manage the risks associated with the adopted approach.Regardless of how difficult change appears to be, Confucius was right—“a journey of athousand miles begins with a single step.”13 You need to plan your work, work the planand be prepared to adapt as you go.
Plan the WorkIf the change leader’s approach to planned change has followed what this booksuggests, then much planning will have already been done. In addition, Beer, Eisenstat,and Spector14 offer a prescriptive list of “steps to effective change.” Here are Beer et al.’ssteps:1. Mobilize commitment to change through joint diagnosis of business problems.2. Develop a shared vision of how to organize and manage for competitiveness.3. Foster consensus for the new vision, competence to enact it, and cohesion to moveit along.4. Spread revitalization to all departments without pushing it from the top.5. Institutionalize revitalization through formal policies, systems, and structures.6. Monitor and adjust strategies in response to problems in the revitalization process.For many change situations, this checklist provides valuable guidance in thedevelopment of an action plan. However, assuming a “one-size-fits-all” approach tochange is risky. For example, the above list assumes a fundamental cooperativeorientation. That is, there is sufficient commonality of goals that a shared vision ispossible. The list also suggests that change should evolve and not be pushed down bytop management. However, change agents will need approaches that allow them to facesituations in which cooperation and commonality of goals is weak or absent and wherechanges are being pushed from the top. Table 9.2 below compares Beer et al.’s stepswith the prescriptions of others, which may be helpful in thinking about planning throughmultiple perspectives.15As well, the need for contingent thinking needs to be addressed. That is, an action plandepends significantly upon the action-planning context. In complex and ambiguoussituations, plans and tactics must be able to adapt as events unfold. As such, it is usefulto remember the old saying: “No plan survives first contact.”16In summary, while careful planning is critical, change leaders must also recognize thatplanning is a means—not an end in itself. Don’t ignore vital emerging information justbecause it does not fit with carefully conceived plans. The abilities to think contingently,consider alternative paths forward, and adapt are important contributors to enhancedadaptive capacity.17Table 9.2 A Comparison of Four Models of ChangeTable 9.2 A Comparison of Four Models of ChangeBeer et al.’s Six Stepsfor Change (1990)Jick’s TenCommandments(1997)Kotter’s Eight-Stage Processfor SuccessfulOrganizationalTransformation(1996)Lueck’s Seven Stepsfor Change (2003)
Beer et al.’s Six Stepsfor Change (1990)Jick’s TenCommandments(1997)Kotter’s Eight-Stage Processfor SuccessfulOrganizationalTransformation(1996)Lueck’s Seven Stepsfor Change (2003)Mobilize commitmentto change throughjoint diagnosis ofproblems.Analyze theorganizationand its need forchange.Establish a senseof urgency.Mobilize energy,commitment throughjoint identification ofbusiness problemsand their solutions.Develop a sharedvision of how toorganize and managefor competitiveness.Create a visionand a commondirection.Create a guidingcoalition.Develop a sharedvision of how toorganize andmanage forcompetitiveness.Foster consensus forthe new vision,competence to enactit, and cohesion tomove it along.Separate fromthe past.Develop a visionand strategy.Identify theleadership.Spread revitalizationto all departmentswithout pushing itfrom the top.Create a senseof urgency.Empower broad-based action.Focus on results, notactivities.Institutionalizerevitalization throughformal policies,systems, andstructures.Support astrong leaderrole.Communicate thechange vision.Start change at theperiphery, then let itspread to otherunits, pushing it fromthe top.Monitor and adjuststrategies in responseto problems in therevitalization process.Line up politicalsponsorship.Generate short-term wins.Institutionalizesuccess throughformal policies,systems, andstructures.Craft animplementationplan.Consolidategains andproduce morechange.Monitor and adjuststrategies inresponse toproblems in thechange process.Developenablingstructures.Anchor newapproaches inthe culture.
Beer et al.’s Six Stepsfor Change (1990)Jick’s TenCommandments(1997)Kotter’s Eight-Stage Processfor SuccessfulOrganizationalTransformation(1996)Lueck’s Seven Stepsfor Change (2003)Communicate,involve people,and be honest.Reinforce andinstitutionalizechange.Source: Based on Todnem, R. (2005). Organisational change management: A critical review. Journalof Change Management, 5(4), 369–381; and Beer, M., Eisenstat, R., & Spector, B. (1990, November-December). Why change programs don’t produce change. Harvard Business Review, 1000, 158–166.
Engage Others in Action PlanningOccasionally, change planning must be undertaken under a cloak of secrecy, such aswhen a merger is in the works and the premature release of information wouldsignificantly affect the price and the level of competitive risk. In general, though, theactive involvement of others and information sharing enhances the quality of actionplanning for most change strategies. Consider one of the experiences of Barbara Waugh,who spent 25 years as a change agent at Hewlett-Packard:Change at HP LabsBarbara Waugh’s campaign for change at HP Labs began when its director asked her, “Whydoes no one out there consider HP Labs to be the best industrial research lab in the world?”Rather than propose answers, she and the director began by asking questions through a survey.The inquiry generated 800 single-spaced pages of feedback related to programs (e.g., too manyprojects and too few priorities), people (e.g., poor performers are not removed quickly enoughand researchers lack sufficient freedom to do their jobs well), and processes (e.g., theinformation infrastructure is inadequate).The feedback, says Waugh, was “800 pages of frustrations, dreams, and insights.” But howcould she capture and communicate what she learned? She drew on her experience with streettheater and created a play about HP Labs. She worked passages from the surveys into dialogueand then recruited executives to act as staff members and junior people to act as executives.The troupe performed for 30 senior managers. “At the end of the play, the managers were veryquiet,” Waugh remembers. “Then they started clapping. It was exciting. They really got it.”18Waugh’s approach is instructive because it illustrates the power of presenting potentiallyboring data in an engaging and compelling manner. This was not the first time shenurtured change in an emergent, grassroots fashion. Her approach leveraged listeningand questioning, built networks with individuals with complementary ideas, and whenneeded, arranged for access to financial resources for worthy endeavors.‡‡ In planning the work, interviews, surveys, survey feedback, and appreciative inquiry (arigorous commitment to active listening, feedback, mutual development, and renewal) arepowerful action planning tools. They come from the Organizational Development (OD)approach to change. For more information, two good sources are D. L. Cooperrider, D.Whitney, and J. M. Stavros, Appreciative Inquiry Handbook: For Leaders of Change(Brunswick, OH: Crown, 2008); and T. G. Cummings and C. G. Worley, OrganizationDevelopment and Change (Mason, OH: South-Western, 2009).Underlying planning-through-engagement strategies are assumptions regarding top-down (unilateral) versus bottom-up (participative) methods of change. AlthoughWaldersee and Griffiths’s study19 showed that unilateral implementation methods havemuch to offer, the success of a change is enhanced when people understand what itentails, why it is being undertaken, what the consequences of success and failure are,and why their help is needed and valued. All too often, techno–structural changes havefloundered because of design problems getting tangled up with acceptance andimplementation issues that never get sorted out.Regardless of the change strategy preferred, the plan needs to be examined carefully forlogic and consistency. The next section highlights a series of questions (contained inTable 9.6) that can help change agents enhance their performance in this area.
Ensure Alignment in Your Action PlanningChange agents often understand what needs to be done but get the sequence ofactivities wrong. They might leave a meeting after a productive discussion but fail to sortout who is responsible for what. Sometimes critical steps in the plan are risky andalternative strategies need to be considered in case things do not go as planned. At othertimes, change agents may over- or underestimate the available resources andconstraints, the time and energy required by various steps, or their own power andcompetence. Table 9.8 (later in this chapter) provides a checklist of questions to usewhen reviewing an action plan. This checklist tests the viability of the plan and asks for arethinking of the connections between the analysis of the situation and the plan itself.Tough-minded thinking can improve the coherence and thoughtfulness of action plans.
Action Planning ToolsAfter all is said and done, more is often said than done! – Aesop or Lou HolzThis section explores a selection of action planning tools that change agents findparticularly useful (see Table 9.3). Selecting the appropriate tool is both an art andscience: An art as the story of Waugh at HP illustrated (see above), and a science as oneanalyzes data carefully and makes appropriate selections. In addition to the tools listedhere, remember to reflect on action planning tools discussed in other chapters such astools for assessing and/or handling: the need for change (Chapter 3); gap analyses,readiness for change and the framing of the vision for the change (Chapter 4); formalsystems and processes (Chapter 5); the political and cultural dimension of change,including stakeholder and force field analyses (Chapter 6); recipients of change (Chapter7), your own skills and competencies as a change agent (Chapter 8); and the use ofmeasurement in the advancement of change (Chapter 10).Table 9.3 Tools for Action PlanningTable 9.3 Tools for Action Planning1. To-do list—a checklist of things to do2. Responsibility charting—who will do what, when, where, why, and how3. Contingency planning—consideration of what should be done when things donot work as planned on critical issues4. Flow charting—a way of diagramming the nature of the existing process youwish to examine and set out how you propose to change it5. Design thinking—an approach used to engage others collectively in creativeproblem solving around what needs to change and the design of the change itself— a tool that can be used in conjunction with visioning initiatives6. Surveys, survey feedback, and appreciative inquiry—capturing people’sopinions and tracking their responses, observations, and insights over time, toassist in identifying what needs changing, nurturing engagement and support, andin tracking progress7. Project planning and critical path methods—operations research techniques forscheduling work. These methods provide deadlines and insight as to whichactivities cannot be delayed to meet those deadlines.8. Tools that assess forces that affect outcomes and stakeholders—thesetools are closely related to force field and stakeholder analysis discussed inChapter 6:a. Commitment charts—an evaluation of the level of commitment of majorplayers (against, neutral, let it happen, help it happen, make it happen)b. The adoption continuum or awareness, interest, desire, adoption (AIDA)analysis—examination of major players and their position on the AIDA
continuum related to the proposed changesc. Cultural mapping—an approach that provides for a more detailedassessment of the cultural context the change is occurring in; particularlyuseful when the goal is cultural change9. Leverage analysis—determination of methods of influencing major groups orplayers regarding the proposed changes10. Training and development tools—tools related to the design and delivery ofeducational initiatives that advance employee knowledge and ability to performeffectively, given the changes11. Diverse change approaches—a variety of techniques and tools that bringsabout change and that continues to grow
1. To-Do ListsWhen managers engage in action planning, they often begin by outlining in detail thesequence of steps they will take initially to achieve their goals. That is, they make a list. Ato-do list, a checklist of things to do, is the simplest and most common planning tool.Sometimes this is all the situation requires. As the action planning becomes moresophisticated, simple to-do lists will not suffice and responsibility charting provides morecontrol.
2. Responsibility ChartingResponsibility charting can be a valuable tool to detail who should do what, when, andhow. As well, it can be used to help keep projects on track and provide a basis for recordkeeping and accountability. Table 9.4 provides an example responsibility chart. Theprocess begins by defining the list of decisions or actions to be taken. Then individualsare assigned responsibility for achieving specific actions at specified deadlines.Table 9.4 Example Responsibility ChartTable 9.4 Example Responsibility ChartDecisions or Actions to BeTakenResponsibilitiesSusanTedSonjaRelevant DatesAction 1RAIFor meeting on Jan. 14Action 2RIMay 24Action 3SAADraft Plan by Feb. 17; actionby July 22Etc.Coding:R = Responsibility (not necessarily authority)A = Approval (right to veto)S = Support (put resources toward)I = Inform (to be consulted before action)Note that if there are a large number of As on your chart, implementation will bedifficult. Care must be taken to assign As only when appropriate. Likewise, if thereare not enough Rs and Ss, you will need to think about changes needed here andhow to bring them about.Source: For a further discussion on responsibility charting, see Beckhard, R., & Harris, R. (1987).Organizational transitions (p. 104). Reading, MA: Addison-Wesley.
3. Contingency PlanningContingency planning is the importance of thinking through what should be doneshould events not go as planned. Two tools that aid in contingency planning are decisiontree analysis and scenario planning.§§ Readers are encouraged to consult standard operations research texts for furtherinformation on these tools.Decision tree analysis asks change agents to consider the major choices and thepossible consequences of those alternatives. Analysts are then asked to plan for thepossible next actions and consider what the consequences of those actions might be.Such alternating action–consequence sequences can be extended as far as reasonable.As well, probabilities can be assigned as to the likelihood of each consequence. Formany applications, a simple scale (very likely, likely, possible, unlikely, or very unlikely) issufficient. This approach helps model the possible consequences to change decisionsand assess the benefits and risks associated with the different pathways (see Figure9.2).A second tool that helps managers with contingency planning is scenario planning.Here a change strategy is formed by first developing a limited number of scenarios abouthow the future may unfold and then assessing what the implications of each of thesewould be to the organization.20 Change leaders typically frame these around an issue ofstrategic and/or tactical importance. For example, if a firm producing paper forms isconcerned about the long-term viability of its business model, then management coulddevelop scenarios of what a paperless form producer would look like. Once the scenarioswere developed, managers would ask themselves, How likely is this scenario? Whatwould need to happen to make the scenario a reality? And what contingencies mightarise that would need to be addressed? If one or more of these future scenarios seemedworth investing in, then management would develop its plans accordingly. To openpeople’s minds to possibilities and avoid blind spots, external parties are often broughtinto the process to offer data and insights, challenge assumptions, and stimulate thinkingand discussion.Figure 9.2 Example Decision Tree
Scenario planning is different from forecasting. Forecasting starts in the present and usestrend lines and probability estimates to make projections about the future. Scenarioplanning starts by painting a picture of the future and works backward, asking what wouldhave to happen to make this future scenario a reality and what could be done.21While most uses of scenario planning are at a strategy level, the principles can beapplied to frame possible visions for change and develop the action pathways that willincrease the likelihood that the vision will be achieved. Royal Dutch Shell22 was one ofthe first users of scenario planning. The firm used it as a way to link future uncertaintiesto today’s decisions.
4. Flow ChartingFlow charting is a technique used to track the sequences in an existing process(including key decision points and who is involved in those decisions) and to assist in thedesign of the change through setting out an improved or new approach forimplementation consideration.** Visual representations of existing processes are typicallyundertaken early in the change process when change agents are seeking to understandwhat needs to change. While the visual representation of the future process is alsodeveloped early in the change process, it is used in conjunction with the vision forchange throughout the change process to help recipients better understand what is beingundertaken and why.** For introductory information on flowcharting, see Lucidchart’s website:https://www.lucidchart.com/pages/what-is-a-flowchart-tutorial; or MindTool’s website:https://www.mindtools.com/pages/article/newTMC_97.htm.
5. Design ThinkingDesign thinking has its roots in multiple areas including architecture, new productdevelopment and the pursuit of processes that will advance creative thinking in theorganization. It is used with matters that have proven difficult to effectively address in thepast and is used early in the change process. It seeks to engage individuals collectivelyin context assessment; problem finding and framing; ideation; prototyping and pilottesting; evaluation; and the translation of those designs into actionable initiatives. It is aniterative process so the cycle can be repeated and designs refined several times until theparties are satisfied with the proposed solution.Design thinking seeks to address matters in a less linear and more creative manner.Rather than approach matters through deductive or inductive reasoning (the traditionalapproaches), it seeks to do so through abductive reasoning. Abductive reasoning issolution rather than problem focused and involves looking for and exploring plausiblesolutions, trialing and refining different options, and so on until the desired path forward isselected and committed to. The more traditional deductive approach in organizationstypically involves situational analyses, the development of decision criteria, thedevelopment and assessment of three to five alternatives, and the selection of therecommended path forward. Because design thinking is based on plausible solutions thathave more uncertainty attached to them, they form the basis for the iterative explorationof options in the search for new approaches that can effectively address difficultproblems and challenges that have resisted resolution.23This human-centered, collaborative approach has at its core the interests andperspectives of the users that one is trying to design for. Users are engaged in theprocess to make sure that their interests and concerns are recognized and attended to.The goal of design thinking is to identify and address problems with creative solutionsand create new opportunities. The nature of the process enhances the prospects for buy-in by the recipients of change due to their involvement in the design process.
6. Surveys and Survey FeedbackChange agents may find it is helpful to use surveys to capture people’s attitudes,opinions, and experiences at particular points in time and then track those attitudes overtime, including their readiness for change that was discussed in Chapter 4. Tools in thisarea can provide anonymity to the respondents and make it possible to capture theopinions of a larger proportion of the participants than might otherwise be possible.Political agendas don’t disappear with the use of a survey, but they may make it possiblefor people to say things that they would not feel comfortable stating publicly. Servicessuch as SurveyMonkey.com and EmployeeSurveys.com have made the design, delivery,and analysis easy to manage.Surveys are used to access the opinions of internal and external stakeholders andassess attitudes and beliefs of relevance to the change. For example, how do customersview the firm’s and its competitor’s service levels, innovativeness, and productperformance? What ideas do they have concerning new product offerings or serviceimprovements? Employees can be sampled to assess the organization’s readiness forchange, the culture or work climate, their satisfaction and commitment levels, or what ishelping or hindering their ability to do their jobs. Sometimes surveys are deployed todevelop options and assess opinions on their viability. Later in the change process,surveys may sample understanding and knowledge levels, emerging attitudes andissues, and levels of acceptance and satisfaction with the change.Some organizations go further in this area and adopt approaches to directly andsystematically assess actual customer and employee actions in response to change(directly or via software monitoring tools) in order to recognize issues and address themin a timely manner.The possible approaches in this area are restricted only by imagination, people’swillingness to respond, and legal and ethical considerations. Privacy/anonymityconsiderations, transparency (people know what you are doing and why), and relatedethical matters need to be carefully thought through. When this is not the case, therepercussions and potential for reputational damage can be serious, as seen in publicreactions to Facebook’s sharing of private user data.24Ready-made surveys are available on virtually any topic. Some are publicly available atno cost, while others are proprietary and have charges attached to their use. Costs canvary from a few dollars per survey to thousands of dollars when outside consultants areused to design, administer, assess, and report the findings. When it comes to scoring andinterpretation, some are straightforward and easy to interpret, while others require theassistance of a skilled practitioner. Some of these instruments have been carefullyassessed for reliability and validity, while others have nothing more than face validity.The bottom line with respect to surveys is that they can prove very helpful to changeagents but need to be approached with care. Their design, administration, and analysisrequire the assistance of someone well trained in survey research. Even when a changeagent is sampling opinions, the ability to frame good questions is a prerequisite to gettinguseful information. The same holds true for analysis and interpretation.†††† For further information on survey research, see L. M. Rea and R. A. Parker, Designingand Conducting Survey Research (San Francisco: Jossey-Bass, 2005).
A powerful use of surveys is an approach called survey feedback.25 It is an actionresearch method developed by organizational development (OD) practitioners as a wayto stimulate and advance conversations concerning what is going on in the organization,how members are feeling, and how things could be improved. As the name suggests, itinvolves the sharing of survey results with the individuals affected by the findings. Thoseinvolved in the discussion will have responded to the survey.Skilled facilitators guide work groups through the discussion of the findings. They use thisas an opportunity to enrich their interpretation of what the data means, and to more fullyexplore the implications for action. The process is used to raise awareness andunderstanding, advance the analysis, and build support and commitment for actions thatwill benefit both the individuals and the organization. Appreciative inquiry approachesdiscussed earlier in this chapter and in Chapter 8 can be married effectively with surveyfeedback to engage and energize participants, learn from them, and set the stage forfuture actions.
7. Project Planning and Critical Path MethodsProject planning and critical path methods can provide valuable assistance to changemanagers as they think about what action steps to take.‡‡ These methods have beendeveloped into sophisticated operations research techniques to aid the planning of majorprojects. Critical path methods ask planners to identify when the project should becompleted and to work backward from that point, scheduling all tasks that will requiretime, effort, and resources. These are arranged in time sequence such that tasks thatcan occur simultaneously can be identified. These tasks are then plotted on a timeline.Sequential tasks are plotted to determine the needed time to complete the project.‡‡. Software packages are available in this area. A commonly used one, Microsoft OfficeProject (http://www.microsoft.com/project/en/us/default.aspx), allows you to track steps,resource requirements, and costs; see the impact of possible changes; trace the sourceof issues; visually communicate project information to others; and collaborate with themon the plans.With this done, managers can assess potential bottlenecks, resource requirements,points in the process where there appears to be excess resources or idle time (referredto a slack resources) that could be deployed elsewhere, and progression paths. Thecritical path, the path with the least slack time, can be identified and special attention canbe paid to it. If there are concerns about the time to completion, the project manager canadd resources to speed up the project, revisit the specifications, look for viable alterationsto the implementation path, or increase the amount of time required to complete theproject. Likewise, if there are concerns over the cost of the project, the project managercan explore alternatives on this front.The critical path method introduces the notion of parallel initiatives. That is, it recognizesthat different things may be able to be worked on simultaneously if the work is properlyorganized. Phase 1 tasks don’t have to be totally completed before beginning work onPhase 2 tasks. Care and sophistication are required with this approach because it carriesthe risk of increasing confusion and redundant effort. When properly applied, though, itcan shrink the time required to complete the change. This is readily visible in areas suchas new product development. Figure 9.3 gives an example of a sequential and a parallelplan for new product development. In the upper half of the figure, the tasks are plottedsequentially. In the lower half of the figure, the tasks overlap. Concept developmentbegins before opportunity identification ends and the cycle time to completion is reduced.In summary, change leaders involved with implementation will find it useful to review theadvice found in the project management literature before undertaking major changes as itcontains information related to tools and techniques that may prove helpful.§§§§ Colleges, universities, and organizations such as the Project Management Institute(http://www.pmi.org/Pages/default.aspx) offer professional training in projectmanagement.Figure 9.3 Sequential Versus Partly Parallel Process in New Product Development
Source: Shilling, M. A., & Hill, W. L. (1998). Managing the new product developmentprocess: Strategic imperatives. Academy of Management Executive, 12(3), 67–81.
8. Tools to Assess Forces That Affect Outcomes andStakeholdersForce field analysis asks change agents to specify the forces for and against change.Stakeholder analysis and related maps ask that the key players be identified and therelationships among players and the change initiative be examined. (See Chapter 6 fordiscussion of these topics.) Three additional tools that are helpful when planning actionsrelated to stakeholders are commitment analysis charts, AIDA (awareness, interest,desiring, action) charts, and cultural mapping tools.A. Commitment Analysis ChartsManagers can use commitment charts to analyze the engagement of each stakeholder.Stakeholders can be thought of as being weakly to strongly opposed (against) to yourchange project, “neutral” (let it happen), slightly positive (help it happen), or stronglypositive (make it happen). Change leaders also need to consider the level ofunderstanding that underpins stakeholders’ commitment level and the reasons thatunderpin their levels of support at the present time. Identifying the existing level ofcommitment is the first step in planning tactics designed to alter those preexistingpatterns. Table 9.5 provides an example commitment chart. (Note that the “X” in the tableshows where the person is and the “O” shows where a change agent wants them to be.)Table 9.5 An Example Commitment Chart26Table 9.5 An Example Commitment Chart26KeyPlayersLevel of CommitmentLevel ofUnderstanding(high, med, low)OpposedStrongly toWeaklyNeutralLet ItHappenHelp ItHappenMake ItHappenPerson1X→OMedPerson2X→OHighPerson3X→OLowEtc.Source: Beckhard, R., & Harris, R. (1987). Organizational transitions (p. 95). Reading, MA: Addison-Wesley.B. The Adoption Continuum or AIDAStakeholder analysis will have identified the people who are critical to the changeprocess. With this information in hand, change agents need to consider how theypropose to encourage those individuals to move along the adoption continuum until the
needed stakeholders are aligned with the change, or at least their opposition and/orpotential to disrupt the change initiative has been minimized.As noted in Chapter 6, change agents can think of the process of getting people onsidewith change as one of first creating awareness and then encouraging them to move fromawareness of the issues to interest in the change to desiring action and, finally, to takingactions related to adopting the change. This is called the AIDA or adoption continuum.Table 9.6 provides an example of how a change agent might map people on to theadoption continuum as a method of tracking their change attitudes.Different individuals will be at different points on the AIDA continuum, which makeschange strategies complex. For each stage, change agents need to use different tactics.For example, to raise initial awareness, well-designed general communication vehiclessuch as e-mails, newsletters, reports, and videos can be used. The messages shouldraise awareness of the need for change, set out the vision for the change, and provideaccess to thought-provoking information and images that support the initiative.To move people to the interest phase, managers need to outline how the change willaffect stakeholders personally and/or why this change should be of interest to them.Discussion groups on the issue, benchmark data, simulations, and test runs showingresults can be effective in stimulating interest. Once interest is aroused, specific tactics todemonstrate and reinforce the benefits and build commitment are needed. Changeagents might use one-on-one meetings to influence stakeholders, to persuade them toget directly involved with the change, or to connect them with influential supporters of thechange. Change agents might reallocate resources or designate rewards in ways thatreinforce adoption. Influencing people one at a time or in small groups can be valuable ifinfluential individuals are identified and the right message is communicated to them.Table 9.6 Mapping People on the Adoption ContinuumTable 9.6 Mapping People on the Adoption ContinuumPersons orStakeholder GroupsAwarenessInterestDesiringActionMoving to Action orAdopting the ChangePerson 1Person 2Person 3 . . .C. Cultural Mapping ToolsCultural mapping tools are used to conduct deeper dives into understanding the nature ofthe cultural context, including subcultures, which influence how and why the organizationoperates as it does. These tools are also used to help set out the desired culture andassess what needs to change in order to bring it to fruition. Scholars such as Schein,Cameron and Quinn27 have provided change agents with cultural categorizationframeworks that can be used to assist them in the above tasks.Cultural mapping approaches seek to understand subcultures (e.g., ones present inmarketing, production, quality control, finance, etc.) as well as the dominant culture. It
seeks to understand the outcomes achieved, the knowledge and beliefs nested in culturalnorms and artifacts, the behaviors observed and the enablers and blockers that promotethose behaviors and outcomes. Given that change typically involves the goal of movingaway from certain behaviors and outcomes in order to move toward different behaviorsand outcomes, the approach shares similarities with force field analyses. A key questionrevolves around how enablers and blockers can be worked with in order to help parties tomove away from certain cultural practices and move toward those desired practices.Cultural mapping tools can be used at the team level or extended to assessdepartmental, divisional or the organization level cultural challenges and conflicts.Practices in this area have become increasingly interdisciplinary in nature. Theirapplications have extended to areas such as the development of products and services,the development of marketing campaigns, urban planning and community development,and a full treatment on this topic is beyond the scope of this book.28
9. Leverage AnalysisPeople’s position on the adoption continuum is influenced by their general orientation tochange—whether they tend to be an innovator, early adopter, early majority, late majority,or laggard in matters related to change. One of the action planning challenges for thechange leaders is to sort out people’s overall predisposition to change in general and theproposed change in particular.Moving individuals on the adoption continuum is aided by engaging in leverageanalysis. Leverage analysis seeks to identify those actions that will create the greatestchange with the least effort. For example, if opinion leaders of a key group of individualscan be identified and persuaded to back the proposed organizational change, the job ofthe change leader is easier. Likewise, if the task is to persuade senior management, oneneeds to identify influential individuals in this group who support the change. Identifyinghigh-leverage methods will depend on the quality of your knowledge of the participantsand your analysis of the organization and its environment. For example, one successfulchange agent ensured the adoption of a new software system by persuading the CEO topersonally call every regional manager as they were key stakeholders in the change, andask for their support.29Gladwell presents an excellent example of the notion of leverage in his book The TippingPoint.30 Gladwell points out how little things can have large consequences if they occurat the right moment and are contagious. If things catch on and momentum builds,eventually a tipping point is reached. This is the point where a critical level of support isreached, the change becomes more firmly rooted, and the rate of acceptanceaccelerates. As Burke puts it, change agents need to find the critical few individuals thatcan connect with others in ways that change the context and tip things into a new reality.The vision needs to be sticky (i.e., cast as a story so that it will stay in people’s minds),and change agents need to understand the connectors in the organization who can getthe message out.31Moore notes that one of the biggest challenges to reaching the tipping point is to buildsufficient support to allow the acceptance of the change to cross the “chasm” betweenthe early adopters and visionaries and the early majority.32 Once this gap has beenbridged, the rate of progress accelerates. As things accelerate, new challenges emerge,such as how to scale your efforts so that momentum is maintained and enthusiasm is notsoured due to implementation failures or stalled progress.Tipping Points and the Momentum for Change in the Obama ElectionBarack Obama’s path to the presidency was dotted with several tipping points during the stateprimaries and the federal campaign. Some were related to specific things done by the candidate;some related to the actions of others; and some tied to specific situations (e.g., themortgage/banking crisis). His creative use of social media (e.g., Facebook) is particularlynoteworthy. It allowed him to reach out virally to groups of electors and move them along thecommitment continuum at speeds not seen before. This generated grassroots financial supportand media buzz that legitimized his candidacy very early on.During the primaries, Representative James E. Clyburn, a prominent uncommitted SouthCarolina Democrat, felt the tipping point occurred around midnight on Tuesday, May 6, 2008. “Icould tell the next day, when I got up to the Capitol that this thing was going to start a slidetoward Obama. I don’t believe that there is any way that she (Hillary Clinton) can win thenomination.” Contentious remarks by former President Bill Clinton created a rift with AfricanAmericans, Obama’s 14-point North Carolina victory exceeded expectations, and Hillary
Clinton’s weaker-than-expected win in the Indiana primary all conspired to take the wind out ofher campaign while energizing Obama’s.Superdelegates were still not committing in large numbers to Obama in early May. Clyburn sawthis as “the long shadow of the Clintons in the Democratic Party stretching back more than adecade and the reservoir of goodwill.” However, he expected to see a steady and significantmovement in the days ahead. “That’s pretty much where everybody knows it’s going to end up.”Representative Rahm Emanuel, the Democratic conference chairman, went further and labeledObama the presumptive nominee.33
10. Employee Training and DevelopmentTraining and development play critical roles in any change initiative that requiresindividuals to assess and respond differently to things they are accountable for. Changesin reporting structures, task designs, work flow, team structures, and the technologiesdeployed will often require the acquisition of new skills, abilities and attitudes to supportthe initiative. Even supportive individuals will become frustrated if they don’t understandwhat they are being asked to do, or if they don’t have the skills to perform the new tasks.Well thought through and effectively delivered training initiatives will facilitate change byproviding individuals with an opportunity to raise concerns, and develop theircompetences and confidence with the new work. Change agents would be well advisedto explore the training and development literature when considering which initiatives topursue in this area and how best to structure them.∗∗∗∗∗∗ The following provide a good overview: Saks, A., & Haccoun, R. (2015). Managingperformance through training and development (5th ed.). Toronto: Nelson; Biech, E.(Editor). (2014). ASTD handbook: The definitive reference for training and development.Danvers, MA: American Society for Training and Development.
11. Diverse Change ApproachesThe variety of techniques and tools to bring about change continues to grow. Over theyears, Darrell Rigby and Barbara Bilodeau have tracked management’s use of differentchange tools on a global basis and assessed managerial satisfaction with them (seeTable 9.7 and Figure 9.4).34 By tracking usage patterns by region and types of firms,differences in the sorts of change issues seen as most needing attention becomeapparent. This generic listing of change approaches provides a useful touch point forchange leaders when they are considering how to proceed given the needs for changethat they have identified.In summary, planning the work asks change leaders to translate the change vision intospecific actions that people can take. The plan outlines targets and dates and considerscontingencies—what might go wrong (or right), how managers can anticipate thosethings, and how they can respond. Further, it examines how realistic the chances are forsuccess and how a change agent increases the probabilities for success.Table 9.8 provides you with a checklist of things to think about when developing andassessing your action plan.Figure 9.4 Management Tool Usage Rate and Satisfaction LevelSource: Darrell Rigby and Barbara Bilodeau (2018), “Management Tools & Trends”,Bain & Company. Used with permission from Bain & Company, www.bain.comTable 9.7 Usage Patterns of Change Approaches From 1993 to2017Table 9.7 Usage Patterns of Change Approaches From 1993 to 20171993200020142017
1993200020142017Mission andVisionStatements(88%)CustomerSatisfaction(86%)Total QualityManagement(72%)CompetitorProfiling (71%)Benchmarking(70%)Pay-for-Performance(70%)Reengineering(67%)StrategicAlliances (62%)Cycle TimeReduction(55%)Self-DirectedTeams (55%)StrategicPlanning (76%)Mission andVisionStatements(70%)Benchmarking(69%)Outsourcing(63%)CustomerSatisfaction(60%)GrowthStrategies(55%)StrategicAlliances (53%)Pay-for-Performance(52%)CustomerSegmentation(51%)CoreCompetencies(48%)CustomerRelationshipManagement(46%)Benchmarking(44%)EmployeeEngagementSurveys (44%)StrategicPlanning (44%)Outsourcing(41%)BalancedScorecard(38%)Mission andVisionStatements(38%)Supply ChainManagement(36%)ChangeManagementPrograms(34%)CustomerSegmentation(30%)StrategicPlanning (48%)CustomerRelationshipManagement(48%)Benchmarking(46%)AdvancedAnalytics (42%)Supply ChainManagement(40%)CustomerSatisfaction(38%)ChangeManagementPrograms(34%)Total QualityManagement(34%)DigitalTransformation(32%)Mission andVisionStatements(32%)Source: Bain Management Tools & Trends survey, 2017Note: Tool rankings based on usageTable 9.8 Action Planning ChecklistTable 9.8 Action Planning Checklist1. Given your vision statement, what is your overall objective? When must it beaccomplished?2. Is your action plan realistic given the level of organizational support, yourinfluence, both formal and informal, and the resources likely to be available to you?What can you do to address shortfalls?3. Are you and your team committed to implementing the change and does it havethe competences and credibility needed to implement the action steps? If not, howwill you address the shortfall?4. Is your action plan time-sequenced and in a logical order? What would be thefirst steps in accomplishing your goal?
5. What is your action plan? Who will do what, when, where, why, and how? Canyou do a responsibility chart?6. What would be milestones along the way that will allow you to determine if youare making progress? What is the probability of success at each step?7. Have you anticipated possible secondary consequences and lagging effects thatyour plans may give rise to and adjusted your plans accordingly?8. Do you have contingency plans for major possible but undesirable occurrences?What things are most likely to go wrong? What things can you not afford to havego wrong? How can you prevent such things from happening?9. Do you have contingency plans in the event that things go better thananticipated and you need to move more quickly or in somewhat different directionsthan initially planned, to take advantage of the opportunities?10. Who does your plan rely on? Are they onside? What would it take to bringthem onside?11. Does your action plan take into account the concerns of stakeholders and thepossible coalitions they might form?12. Who (and what) could seriously obstruct the change? How will you managethem?
Working the Plan Ethically and AdaptivelyWorking the plan requires change agents to focus, develop support and delivery capacity,test their thinking, see things as opportunities, adapt to changes in the environment, andtake appropriate risks. At the same time, change agents need to proceed ethically.Otherwise they risk destroying credibility and the trust others have in them. Relationshipscan and do recover from strong disagreements, but recovery is less likely if people feelthey have been lied to. A permanent sense of betrayal tends to ensue when you havebeen dealt with unethically.Working the plan recognizes the importance of being able to roll with the punches andlearn as you go. Chris Argyris warns, “People who rarely experience (and learn from)failure end up not knowing how to deal with it.”35 De Bono echoes this sentiment, saying,“Success is an affirmation but not a learning process.”36 Post-hoc memories of what ledto success (or failure) tend to be selective; valuable learning will be lost if steps aren’ttaken to actively and objectively reflect on the process as you go. There will be misstepsand failures along the way, and a key attribute of a “do it” orientation to working the planis the capacity to learn and adapt the paths to change along the way.When working the plan, generating stakeholder and decision-maker confidence in theviability of the initiative is critical. However, it is also important not to be deluded by yourown rhetoric. Russo and Shoemaker provide us with guidelines for managing under- andoverconfidence; in particular, they differentiate the need for confidence when one is animplementer as opposed to a decision maker. Decision makers need to be realistic;implementers can afford to be somewhat overconfident if it provides others with thecourage to change.37
Developing a Communication PlanWhen implementing a change program, change leaders often find that misinformationand rumors are rampant in their organization. The reasons for change are not clear toemployees, and the impact on employees is frequently exaggerated, both positively andnegatively. In all organizations, the challenge is to persuade employees to move in acommon direction. Good communication programs are essential to minimize the effectsof rumors, to mobilize support for the change, and to sustain enthusiasm andcommitment.38In a study on the effectiveness of communications in organizations, Goodman and Trussfound that only 27% of employees felt that management was in touch with employees’concerns, regardless of the fact that the company had a carefully crafted communicationsstrategy.39 Often, much of the confusion over change can be attributed to the differentlevels of understanding held by different parties. Change agents and senior managementmay have been considering the change issues for months and have developed a sharedunderstanding of the need for change and what must happen. However, frontline staffand middle managers may not have been focused on the matter. Even if they have beenconsidering these issues, their vantage points will be quite different from those leadingthe change.Rumors and Reality in Organizational ChangeIn an inbound call center of an insurance firm, employees became convinced that the realpurpose of an organizational change initiative was to get rid of staff. Management made publicannouncements and assurances that the reorganization was designed to align processes andimprove service levels, not reduce headcount. However, staff turnover escalated to more than20% before leaders convinced employees that the rumor was false.The purpose of the communication plan for change centers on four major goals: (1)to infuse the need for change throughout (in particular) the affected portions of theorganization; (2) to enable individuals to understand the impact that the change will haveon them; (3) to communicate any structural and job changes that will influence howthings are done; and (4) to keep people informed about progress along the way. As thechange unfolds, the focus of the communication plan shifts.
Timing and Focus of CommunicationsA communication plan has four phases: (a) pre-change approval, (b) developing the needfor change, (c) midstream change and milestone communication, and (d) confirming andcelebrating the change success. The messages and methods of communication will varydepending upon which phase your change is in. Table 9.9 outlines the communicationneeds of each phase.Table 9.9 Communication Needs for Different Phases in theChange ProcessTable 9.9 Communication Needs for Different Phases in the Change ProcessPre-changeApprovalPhaseDeveloping theNeed for ChangePhaseMidstream Change andMilestoneCommunication PhaseConfirming andCelebrating theChange PhaseCommunicationplans to sell topmanagementCommunicationplans to explainthe need forchange, provide arationale,reassureemployees, clarifythe steps in thechange process,and generatingenthusiasm and asense of urgencyCommunication plans toinform people ofprogress, to obtain andlisten to feedback onattitudes and issues; toaddress anymisconceptions; to clarifynew organizational roles,structures, and systems;and to continue tonurture enthusiasm andsupportCommunicationplans to informemployees of thesuccess, tocelebrate thechange, tocapture learningfrom the changeprocess, and toprepare theorganization forthe next changesSource: Based on Klein, S. M. (1996). A management communications strategy for change. Journalof Organizational Change, 9(2).A. Pre-change phase: Change agents need to convince top management that thechange is needed. They will target individuals with influence and/or authority to approve aneeded change. Dutton and her colleagues suggest that packaging the change proposalinto smaller change steps helps success. She found that timing was crucial in thatpersistence, opportunism, and involvement of others at the right time were positivelyrelated to the successful selling of projects. Finally, linking the change to theorganization’s goals, plans, and priorities was critical.40B. Developing the need for the change phase: When creating awareness of the needfor change, communication programs need to explain the issues and provide a clear,compelling rationale for the change. If a strong and credible sense of urgency andenthusiasm for the initiative isn’t conveyed, the initiative will not move forward. There aresimply too many other priorities available to capture people’s attention.41 Increasingawareness of the need for change can also be aided by the communication ofcomparative data. For example, concrete benchmark data that demonstrate howcompetitors are moving ahead can shake up complacent perspectives. Spectordemonstrates how sharing of competitive information can overcome potential conflictingviews between senior management and other employees.42The vision for the change needs to be articulated and the specific steps of the plan thatwill be undertaken need to be clarified. People need to be reassured that they will be
treated fairly and with respect.43 The vision for change can be used to underpin yourelevator pitch—that succinct message that helps others to capture the essence of whatyou have in mind and why it is worth pursuing.Birshin and Kar use the term “sticky messages” to convey the notion that recipients willbe more likely to remember messages if they share the following characteristics: simple,unexpected, concrete, credible, emotional, and tell a story. When it comes to telling thestory, they recommend not being constrained by solely the business rationale for thechange. In addition, they recommend the stories include why it is important to theindividual doing the work, the working team, customers, and society—aspects that arelikely to heighten the sense of purpose and meaning surrounding the change.44C. Midstream change phase and Milestone Communication Phase: As the changeunfolds, people will want to have specific information communicated to them about futureplans and how things will operate. If the organization is being reorganized, employeeswill want to understand how this reorganization will affect their jobs. If new systems arebeing put into place, training needs to happen in order to help employees understand anduse the systems properly. If reporting relationships are altered, employees need to knowwho will do what in the organization. Thus, intentional strategies are needed tocommunicate this information.In the middle phases of change, people need to understand the progress made in thechange program. Management needs to obtain feedback regarding the acceptance of thechanges and the attitudes of employees and others (e.g., customers, suppliers) affectedby the initiative. Change leaders need to understand any misconceptions that aredeveloping and have the means to combat such misconceptions. During this phase,extensive communications on the content of the change will be important asmanagement and employees begin to understand new roles, structures, and systems.45As the newness of the initiative wears off, sustaining interest and enthusiasm andremaining sensitive to the personal impact of the change continue to be important.Change leaders need to remain excited about the change and communicate thatenthusiasm often. Recognizing and celebrating progress, and milestones all help in thisregard.46 The power of small, unexpected rewards to recognize progress should not beunderestimated, if they are offered forward with sincerity. In addition, communicationapproaches that offer individuals the opportunity to participate in exploring ideas,identifying paths forward, and setting targets will enhance the sense of engagement andcommitment.The Power of Apple Fritters: The launch of a new MBA class requires the concerted efforts ofmany people and the day following the launch coincided with one of the days when the localfarmers’ market is open in our community and one of the vendors sells freshly made, hot applefritters. I was relatively new to the MBA director’s role and by chance, while driving into theuniversity, I stopped and picked up two dozen apple fritters, plus coffee and tea for the team. Thepositive impact was immediate and sustained and instantly reinforced for me the importance ofsuch acts to communicate thanks (personal experience of one of the authors).Unrelated messages, rumors, and gossip will compete with the messages from thechange leaders, and the frequency of the latter two rises when the change leader’scredibility declines, ambiguity increases, and setbacks are encountered. Employees tendto believe friends more than they do supervisors and tend to turn to supervisors beforerelying on the comments of senior executives and outsiders. Change agents have achoice: they can communicate clear, timely, and candid messages about the nature andimpact of the change or they can let the rumors fill the void. An effective communications
campaign can reduce the number of rumors by lowering uncertainty, lesseningambivalence and resistance to change, and increasing the involvement and commitmentof employees.47Change websites, electronic bulletin boards, online surveys to sample awareness andopinions, change blogs, and other types of social media can all play useful roles in thecommunications strategy. The earlier discussion in this chapter of Obama’s campaignpoints to the value that social media can play in raising awareness and advancingcommitment levels. Political parties of all stripes have recognized this and are becomeincreasingly sophisticated in its use. Trump’s sustained use of Twitter to shift theconversations dominating the media on a given day, focus news cycles in directions morefavorable to him, and otherwise advance his presidential prospects was readily apparentin 2016.Blogs, Facebook pages, Twitter, Instagram, Pinterest—the terrain continues to evolve,and change agents need to pay attention to how these technologies can be used toleverage their plans. In their global survey of the corporate deployment of social mediatools in change initiatives, McKinsey and Company reports their use has becomemainstream and that they are playing significant roles in the success of changeinitiatives. They are being used to communicate with and inform staff; seek feedback;and engage, energize, and otherwise enhance the sense of front-line ownership inchange initiatives.48However, when uncertainty rises on things of importance, don’t forget the power of face-to-face communications. Positive reactions tend to increase and negative reactions arelessened when people have an opportunity to hear directly from those in authority andask them questions about the change and its impact.49D. Confirming and Celebrating the Change Phase: The final phase of a changeprogram needs to communicate and celebrate the success of the program. Celebration isan undervalued activity. Celebrations are needed along the way to mark progress,reinforce commitment, and reduce stress. They are certainly warranted at the conclusion!The final phase also marks the point at which the change experience as a whole shouldbe discussed (more will be said about this in the next section on transition management)and unfinished tasks identified. The organization needs to be positioned for the nextchange. Change is not over—only this particular phase is.As change agents attend to the different phases in the change process, they need toalign the communications challenge with the communications channel selected.50Channel richness ranges from standard reports and general information e-mails at oneend through to personalized letters and e-mails, telephone conversations,videoconferencing, and face-to-face communications at the other end. When theinformation is routine, memos and blanket e-mails can work well. However, when thingsbecome more complex and personally relevant to the recipient, the richness of thecommunication channel needs to increase. A change agent can follow up with adocument that provides detailed information, but face-to-face approaches are valuablewhen matters are emotionally loaded for stakeholders or when you want to get therecipients’ attention.Goodman and Truss suggest using line managers and opinion leaders as lynchpins inthe communications strategy, but this requires that they be properly briefed and engagedin the change process. They also stress that change agents need to recognizecommunication as a two-way strategy.51 That is, the gathering of information from peopledown the organizational ladder is as important as delivering the message.
Key Principles in Communicating for ChangeKlein52 suggests six principles that should underlie a communications strategy:1. Message and media redundancy are key for message retention. That is, multiplemessages using multiple media will increase the chance of people obtaining andretaining the message. Too often, management believes that since the message wassent, their work is done. It is the employee’s fault for not getting the message! Asone author pointed out, it takes time for people to hear, understand, and believe amessage, especially when they don’t like what they hear.53 Some change agentsbelieve that it takes 15 to 20 repetitions before a message gets communicatedeffectively. The value of communicating messages in multiple ways to increaseretention and meaningfulness that was discussed in Chapter 7 and the use ofappropriate social media channels advance change initiatives speak to this.542. Face-to-face communication is most effective. While the impact of face-to-face ishighest, the cost is also higher. Face-to-face permits two-way communication, whichincreases the chance of involvement of both parties and decreases the probability ofmiscommunication. When undertaking change in a larger organization and directcommunication is not possible, video conferencing and related technologies can beused to approximate face-to-face.3. Line authority is effective in communications. Regardless of the level ofparticipative involvement, most employees look to their managers for direction andguidance. If the CEO says it, the message packs a punch and gets attention.4. The immediate supervisor is key. The level of trust and understanding between anemployee and his or her supervisor can make the supervisor a valuable part of acommunications strategy. People expect to hear important organizational messagesfrom their bosses.5. Opinion leaders need to be identified and used. These individuals can be criticalin persuading employees to a particular view.6. Employees pick up and retain personally relevant information more easily thangeneral information. Thus, communication plans should take care to relate generalinformation in terms that resonate with particular employees.The importance of communications in helping recipients deal with change was discussedin Chapter 7. Creating a sense of fairness, trust, and confidence in the leadership, andinterest and enthusiasm for the initiative is important to the success of change initiatives.Well-executed communications strategies play an important role here.55 However,change leaders seldom give enough attention to this topic. They intuitively understandthe importance of the timely communication of candid, credible change-relatedinformation through multiple channels, but they get busy with other matters. Ascommunication shortcomings escalate, so too do downstream implementationdifficulties.56
Influence StrategiesInfluencing others is a key concern for change leaders when working the plan. It involvesconsideration of how they can bring various stakeholders onside with the change. Thesooner this is addressed, the better. When implementing change, there is a tendency togive insufficient attention to the constructive steps needed to foster employee supportand alleviate dysfunctional resistance. When considering your communication plan anduse of influence strategies, think about who you are communicating with and neverunderestimate the importance of the reputation (including their competence andtrustworthiness) of those who are the face and voice of the change initiative.Below are seven change strategies for influencing individuals and groups in theorganization:571. Education and communication: This strategy involves using education andcommunication to help others develop an understanding of the change initiative, what isrequired of them, and why it is important. Often people need to see the need for and thelogic of the change. Change leaders may fail to adequately communicate their messagethrough the organization because they are under significant time pressure and therationale “is so obvious” to them they don’t understand why others don’t get it.2. Participation and involvement: Getting others involved can bring new energy andideas, and cause people to believe they can be part of the change. This strategy worksbest when the change agent has time and needs voluntary compliance and activesupport to bring about the change. Participation fits with many of the norms of today’sflattened organizations, but some managers often feel that it just slows everything down,compromising what needs to be done quickly.3. Facilitation and support: Here change agents provide access to guidance and otherforms of support to aid in adaptation to change. This strategy works best when the issuesare related to anxiety and fear of change, or where there are concerns over insufficientaccess to needed resources.4. Negotiation and agreement: At times, change leaders can make explicit deals withindividuals and groups affected by the change. This strategy can help deal with contextswhere the resistance is organized, “what’s in it for me” is unclear, and power is at play.The problem with this strategy is that it may lead to compliance rather than wholeheartedsupport of the change.5. Manipulation and co-optation: While managers don’t like to admit to applying thistactic, covert attempts to influence others are very common. Engaging those who areneutral or opposed to the change in discussions and engaging in ingratiating behavior willsometimes alter perspectives and cause resistors to change their position on the change.However, trust levels will drop and resistance will increase if people believe they arebeing manipulated in ways not consistent with their best interests.6. Explicit and implicit coercion: With this strategy, as with the previous one, there is anegative image associated with it. Nevertheless, managers often have the legitimate rightand responsibility to insist that changes be done. This strategy tends to be used whentime is of the essence, compliant actions are not forthcoming, and change agents believeother options have been exhausted. Change leaders need to recognize the potential forresidual negative feelings and consider how to manage these.
7. Systemic or system adjustments: Open systems analysis argues that adjustmentscan be made to formal structures, systems, and processes that reduce resistance whileadvancing the desired changes. For example, if employee resistance has coalesced in agroup of employees who are employed in a particular function, organizationalrestructuring or the reassignment of group members to other areas may reduceresistance markedly. However, if it is mishandled, it can mobilize and escalate resistancein others.System Adjustments (i.e., closing stores and eliminating jobs) at WalmartWalmart has used systemic adjustments over the years as a change tool to assist in maintainingmanagerial discretion in employment practices by retaining their non-union status. In 2005, 200employees at the store in Jonquière, Quebec, Canada, were attempting to negotiate the first-ever union contract with the firm. However, after nine days of meetings, over three months,Walmart announced it was closing the store because of concerns over its profitability. In 2008,the same approach was adopted when six employees in Gatineau, Quebec, won the right tounionize their small operation within Walmart. Walmart employees in Weyburn, Saskatchewan,voted to unionize, but quickly reversed field and voted to decertify in 2010.The unions in both Quebec and Saskatchewan sued the employer for unfair labor practices andtook their respective cases all the way to the Supreme Court of Canada. After years of litigation,the Quebec suit against Walmart’s store closure met with limited success (some financialrestitution was ordered), but the Saskatchewan case was unsuccessful. Currently no Walmartoperation in Canada is unionized. The only other time a unionization drive had been close tosucceeding was in 2000. Eleven meat cutters in their Jacksonville, Texas, store voted to join theUFCW. Walmart responded by eliminating the meat cutting job companywide.58See Toolkit Exercise 9.2 to think about influence strategies you’ve experienced.Another way to think about influence strategies is to consider whether they attempt topush people in the desired direction or pull them. Push tactics attempt to move peopletoward acceptance of change through rational persuasion (the use of facts and logic in anon-emotional way) and/or pressure (the use of guilt or threats). The risk with the use ofpush tactics is that they can lead to resistance and defensiveness. Recipients mayoppose the pressure simply because it is pressure and they feel a need to defend theirpositions.Alternatively, change leaders can rely on pull tactics: inspirational appeals andconsultation. Inspirational appeals can arouse enthusiasm based on shared values orideals. Consultation (as it is used here) refers to when you seek the participation ofothers through appeals to the individuals’ self-worth and positive self-concept. Both theseapproaches are designed to pull individuals in the desired direction.†††††† These styles are described more fully in Chapter 8.Falbe and Yukl examined the effectiveness of nine different influence tactics. The mosteffective strategies were two pull tactics: (1) inspirational appeals and (2) consultation(seeking the participation of others). When considering these, never underestimate theimportance of the credibility of the change leader.The strategies of intermediate effectiveness were a combination of push and pullstrategies: (3) rationale persuasion (facts, data, logic); (4) ingratiation (praise, flattery,friendliness); (5) personal appeals (friendship and loyalty); and (6) exchange tactics(negotiation and other forms of reciprocity).
The three strategies that were least effective were push strategies: (7) direct pressure,(8) legitimating tactics (framing of the request as consistent with policy and/or theinfluencer’s authority), and (9) coalition building (creation of subgroups or linkages withother groups to exert pressure).59Nutt categorizes four influence tactics used during implementation: (1) intervention, (2)participation, (3) persuasion, and (4) edict. Intervention is where key executives justifythe need for change (often through the use of data) and provide new norms to judgeperformance. Participation involves engaging stakeholders in the change process.Persuasion is the use of experts to sell a change. And edict is the issuing of directives.Table 9.10 summarizes Nutt’s data on the frequency of use, initial and ultimate adoptionrate, and the time to install for each of these tactics.This table demonstrates the value of a well-respected sponsor who acts as a lightningrod and energizes and justifies the need for change. The frequency of the use ofparticipation as a strategy is somewhat higher than intervention and may reflect thechallenge of managing change from the middle of the organization. Adoption takeslonger, but it has the second-best success rate. Persuasion is attempted more frequentlythan the other three tactics, but its success rate is significantly lower than participationand the time to adoption slightly longer. Finally, it is difficult to understand the frequencyof use of edict as a tactic, given its poor adoption rate and length of time to install.When considering these four strategies, think about the value that a blended approachcould bring to advancing change. In many cases a combination of both intervention andparticipation may make a great deal of sense, with edict only used as a last-ditch strategywith those who continue to resist.When individuals actively resist change, it’s useful to remember that some of them maysee themselves as committed change agents who are acting to oppose what they believeis a problematic initiative. Keep that perspective in mind when considering how best toapproach and engage them. However, there comes a time in a change initiative when theanalysis of alternatives and the assessment of paths forward have been fully vetted anddecisions made. At this point, individuals must decide if they are on the bus or off of it. Atsuch times edict (including the option of transferring or removing such individuals) mayneed to come into play, to prevent resisting individuals from passively or activelyobstructing and even sabotaging a change initiative.Enact edict-like approaches only after giving the matter careful consideration. It istempting to strike out at others, in the face of their opposition, and such temptations mayinclude undertaking a preemptive strike. However, acting on these impulses bringssignificant risks and often unanticipated consequences that can derail the change andruin your reputation and relationship with others, so approach with extreme care andcareful consideration before taking such action.Table 9.10 Implementation Tactics and Success60Table 9.10 Implementation Tactics and Success60TacticPercentageUseInitial AdoptionRateUltimateAdoption RateTime to Adopt(Months)Intervention16%100%82%11.2Participation20%80.6%71%19.0
TacticPercentageUseInitial AdoptionRateUltimateAdoption RateTime to Adopt(Months)Persuasion35%65%49%20.0Edict29%51%35%21.5This section has outlined a variety of influence tactics that can be used to buildawareness, reduce ambivalence and resistance, and move people to acceptance andadoption of the initiative. In general, it is wise to move as slowly as is practical. Thispermits people to become accustomed to the idea of the change, adopt the changeprogram, learn new skills, and see the positive sides. It also permits change leaders toadjust their processes, refine the change, improve congruence, and learn as they go.However, if time is of the essence or if going slowly means that resisters will be able toorganize in ways that will make change highly unlikely, then change leaders should plancarefully, move quickly, and overwhelm resistance where possible. Just remember,though, that it is far easier to get into a war than it is to build a lasting peace after thefighting ends. Don’t let your impatience and commitment to moving the change forwardget the better of your judgment concerning how best to proceed.‡‡‡ See Toolkit Exercise9.3 to think about push and pull tactics.‡‡‡ These styles are described more fully in Chapter 8.
Transition ManagementChange management is about keeping the plane flying whileyou rebuild it.61When dealing with an ongoing operation, you typically don’t have the luxury to puteverything on hold while making a major change happen. You can’t say, “Sorry, we aren’table to deliver the product we promised because we are making improvements.” Mostorganizations have many change projects underway simultaneously. One part of theorganization may be reengineering itself. Another might be introducing a quality programwhile another part focuses on employee empowerment. All of these must be managedconcurrently while continuing to produce products and services.Morris and Raben argue for a transition manager (a change agent or implementer in thelanguage of this book) who has resources, structures, and plans.62 The transitionmanager has the power and authority to facilitate the change and is linked to the CEO orother senior executive. Resources are the people, money, training, and consultingexpertise needed to be successful. Transition structures are outside the regular ones—temporary structures that allow normal activities to take place as well as changeactivities. The transition plan sets out how the organization will operate (including thedelivery of goods and services) while undertaking the change and includes clearbenchmarks, standards, and responsibilities for the change. Table 9.11 outlines achecklist for transition management.Transition management is making certain that both the change project and thecontinuing operations are successful. The change leader and the transition manager areresponsible for making sure that both occur. The change leader is visibly involved inarticulating both the need for change and the new vision, while others involved inimplementing the change manage the organization’s structural and system changes andthe individuals’ emotional and behavioral issues so that neither is compromised to adanger point.63 Ackerman described the application of a transition management model atSun Petroleum.64 She addressed the question, “How can these changes be put intoplace without seriously straining the organization?” Her solution was to create a transitionmanager who handled the social system requirements. Ackerman also argued for the useof a transition team to create a transition structure that would enable the organization tocarry on operating effectively while the major changes take place.Beckhard and Harris focus on the transition details in organizational change.65 Theyreinforce the importance of specifying midpoint goals and milestones, which helpmotivate the members of the organization. The longer the span of time required for achange initiative, the more important these midcourse goals become. The goals need tobe far enough away to provide direction but close enough to provide a sense of progressand an opportunity for midcourse changes in plans.A second component of transition management is keeping people informed to reduceanxiety. During major reorganizations, many employees are assigned to new roles, newbosses, new departments, or new tasks. Those individuals have a right to know their newwork terms and conditions. Transition managers will put systems in place to ensure thatanswers to questions (such as “how will I, my co-workers, and my customers beaffected?” “Who is my new boss?” “Who will I be working with and where will I be
located?” or “What is my new job description?”) can be provided in a timely manner. Anexample of this need occurred in the Ontario (Canada) Ministry of Agriculture, Food andRural Development. As the designer of a major change in that organization, Bill Allencommented that the ministry “underestimated the importance of a well thought outtransition structure and plan. Employees of the Ministry had hundreds of questions aboutthe organizational change and there was no formal structure to handle these in aconsistent and professional manner.”66 The transition manager needs to be authorizedand given the capacity to address such matters.The final phase in transition management occurs in and around the same time as thecelebrations are occurring in recognition of what has been accomplished. Projectcompletion can be a bittersweet time for participants because they may not be workingdirectly with one another in the future. They’ve worked hard, developed close friendships,and shared emotional highs and lows along the way. The experience can be extremelyinfluential to their future development, and it needs to be processed and brought toclosure in ways that do it justice.Table 9.11 A Checklist for Change: Transition ManagementTable 9.11 A Checklist for Change: Transition ManagementThe following questions can be useful when planning transition managementsystems and structures.1. How will the organization continue to operate as it shifts from one state to thenext?2. Who will answer questions about the proposed change? What decision powerwill this person or team have? Will they provide information only or will they beable to make decisions (such as individual pay levels after the change)?3. Do the people in charge of the transition have the appropriate amount ofauthority to make decisions necessary to ease the change?4. Have people developed ways to reduce the anxiety created by the change andincrease the positive excitement over it?5. Have people worked on developing a problem-solving climate around thechange process?6. Have people thought through the need to communicate the change? Who needsto be seen individually? Which groups need to be seen together? What formalannouncement should be made?7. Have the people handling the transition thought about how they will capturelearning throughout the change process and share it?8. Have they thought about how they will measure and celebrate progress alongthe way and how they will bring about closure to the project at its end and capturethe learning so it is not lost (after-action review)?One way to approach closure (in addition to the celebration) and maximize the learningfor all is to conduct an after-action review.67 An after-action review involves reviewing
the change experience as a whole and learning from what transpired along the way.There needs to be a candid assessment from multiple perspectives of the changeprocess and the strengths and weaknesses of the various approaches used along theway. It asks, (a) what were the intended results, (b) what were the actual results, (c) whydid the actual results happen, and (d) what can be done better next time? As theparticipants explore these questions, the approaches, tools, sources of information, andinsights that have the potential to improve performance in the future need to be identified,and the knowledge must be codified in ways that will allow others to access and learnfrom it. This knowledge is potentially the most significant legacy that those involved withthe change can leave for themselves and others who will follow.Summary“Doing it” demands a good plan and a willingness to work that plan. To advance a “do it”orientation, the chapter assesses several strategies for approaching the change and planningthe work. The chapter examines various action planning tools and considers how to handle thecommunications challenges that arise during a change initiative. Finally, transition managementis considered, because the delivery of services and products typically needs to continue whilethe change initiative is underway. See the Toolkit Exercises for critical thinking questions forthis chapter.Key Terms“Do it” orientation—a willingness to engage in organizational analysis, see what needs to bedone, and take the initiative to move the change forward:Thinking first strategy—an approach used when the issue is clear, data are reliable, thecontext is well structured, thoughts can be pinned down, and discipline can be established, as inmany production processes.Seeing first strategy—an approach that works best when many elements have to be combinedinto creative solutions, commitment to those solutions is key, and communication acrossboundaries is essential, as in new product development. People need to see the whole beforebecoming committed.Doing first strategy—an approach that works best when the situation is novel and confusing,complicated specifications would get in the way, and a few simple relationship rules can helppeople move forward. An example would be when a manager is testing an approach and wantsfeedback about what works.Programmatic change—a traditional approach to planned change; starts with mission, plans,and objectives; sets out specific implementation steps, responsibilities, and timelines.Discontinuous change—an approach adopted for a major change that represents a clear breakfrom the previous approach, often involving revolutionary ideas.Emergent change—a change that grows out of incremental change initiatives. It often evolvesthrough the active involvement of internal participants. As it emerges, it can come to challengeexisting organizational beliefs about what should be done.Unilateral approach—top-down change. Change requirements are specified and implemented—required behavioral changes are spelled out, and it is anticipated that attitude changes willfollow once people acclimatize themselves to the change.Participative approach—bottom-up participation in the change initiative focuses on attitudinalchanges that will support the needed behavioral changes required by the organizational change.Techno–structural change—includes change initiatives focused on the formal structures,systems, and technologies employed by the organization.
Behavioral–social change—includes change initiatives focused on altering established socialrelationships within the organization.
Action Planning ToolsTo-do list is a checklist of things to do.Responsibility charting is who will do what, when, where, why, and how.Contingency planning is consideration of what should be done when things do not work asplanned on critical issues.Decision tree analysis asks change agents to consider the major choices and the possibleconsequences of those alternatives.Scenario planning is a change strategy formed by first developing a limited number ofscenarios or stories about how the future may unfold and then assessing what the implications ofeach of these would be to the organization.Surveys involve the use of structured questions to collect information from individuals andgroups in systematic fashion.Survey feedback is an organizational development technique that involves participants in thereview and discussion of survey results. The goal is to actively engage them in the interpretationof the findings, the discussion of their implication, and the identification of how best to proceed.Project planning and critical path methods are operations research techniques for schedulingwork. These methods provide deadlines and insight as to which activities cannot be delayed tomeet those deadlines.Force field analysis examines the forces for and against change.Stakeholder analysis is the position of the major players and why they behave as they do.Commitment charts is an evaluation of the level of commitment of major players (against,neutral, let it happen, help it happen, make it happen).The adoption continuum is an examination of major players and their position on theawareness, interest, desire, and adoption continuum related to the proposed changes.Leverage analysis determination of methods of influencing major groups or players regardingthe proposed changesPurpose of the communication plan for change: (1) to infuse the need for change throughoutthe organization; (2) to enable individuals to understand the impact that the change will have onthem; (3) to communicate any structural and job changes that will influence how things are done;and (4) to keep people informed about progress along the way.Four phases in the communications process during change are outlined:Pre-change phase centers on communicating need and gaining approval for the change;Developing the need for change phase focuses on communicating the need for change morebroadly, reassuring recipients, clarifying steps, and generating enthusiasm and a sense ofurgency for the change;Midstream phase involves disseminating details of the change and should include obtainingand listening to feedback from employees, addressing any misconceptions and nurturingenthusiasm and support;Confirming the change phase focuses on communicating about and celebrating success,capturing learning from the process and preparing the organization to the next changes.Richness of the communication channel different channels vary in the richness of theinformation they can carry. Standard reports and general-information e-mails represent the leanend of the continuum. Richness increases as one moves to personalized letters and e-mails,
telephone conversations, video conferencing, and face-to-face communications (the richestchannel).Alternatives to reducing negative reactions to change and building support developed by Kotterand Schlesinger:Education and communication is a strategy that helps others develop an understanding of thechange initiative, what is required of them, and why it is important;Participation and involvement get others involved and can bring new energy and ideas, andcause people to believe they can be part of the change;Facilitation and support is a strategy that provides access to guidance and other forms ofsupport to aid in adaptation to change;Negotiation and agreement is when change leaders can make explicit deals with individualsand groups affected by the change;Manipulation and co-optation include covert attempts to influence others;Explicit and implicit coercion rests on change leaders’ legitimate right and responsibility toinsist that changes be done; andSystemic adjustments are those made to formal systems and processes that reduce resistancewhile advancing the desired changes.Push tactics attempt to move people in the desired direction through rational persuasion (e.g.,the use of facts and logic) and/or direct or indirect pressure (e.g., guilt, threats).Pull tactics attempt to draw people in the desired direction through arousing interests andenthusiasm through inspirational appeals, consultation, and their active participation.Intervention is a strategy of influence identified by Nutt, which involves key executives justifyingthe need for change and providing new norms to judge performance.Participation is a strategy of influence identified by Nutt, which involves engaging stakeholdersin the change process.Persuasion is a strategy of influence identified by Nutt, which involves the use of experts to sella change.Edict is a strategy of influence identified by Nutt, which is the issuing of directives.Transition management is the process of ensuring that the organization continues to operateeffectively while undergoing changeAfter-action review is a final phase of the transition-management process. It seeks to bringclosure to the experience and engage participants in a process that will allow the learning gainedthrough the change process to be extracted and codified in some manner for future use.
End-of-Chapter Exercises
Toolkit Exercise 9.1
Critical Thinking QuestionsThe URLs for the videos listed below can be found in two places. The first spot is next to the exerciseand the second spot is on the website at study.sagepub.com/cawsey4e.Consider the questions that follow.1. Terms of Engagement—3:32 minuteshttps://www.youtube.com/watch?v=O5-kI67mSAEBerrett-Koehler Publishers’s “Change Authors” series focuses on four principles: wideningthe circle of involvement, connecting people to each other and to ideas, creatingcommunities for action, and embracing democracy. Terms of Engagement: Changing theWays We Change Organizations is a B-K Business Book by Richard H. Axelrod.Explain the four principles using examples from your own change experience.Brainstorm how you might begin to instill one of these principles in an organizationyou are familiar with.2. It Starts With One: Changing Individuals Changes Organizations—26:25 minuteshttps://www.youtube.com/watch?v=1klZD0nKOF4Two professors from INSEAD (Hal Gregersen and Stewart Black) discuss the idea that youcan’t change organizations if you don’t focus on change with individuals first. Investigatethree barriers: the failure to see, failure to move (developing the capacity of individuals todo something new), and failure to finish (following through with support until capacities arewhere they need to be; need champions at the front line as well as elsewhere in theorganization, as well as signposts that help people understand where they are in terms ofimplementing the change initiative). This includes helping leaders to understand thechanges required within themselves.Which barrier resonated with your experience the most?How do you think these principles might facilitate a successful change project?3. Appreciative Inquiry—3:53 minutes, https://www.bing.com/videos/search?q=appreciative+inquiry+4%3a50+minutes&&view=detail&mid=C831E9F54B9B6ADF7EF5C831E9F54B9B6ADF7EF5&&FORM=VDRVRVWhat is the basic idea of appreciative inquiry?What emotions does this strategy center on?How does an appreciative approach change process?Please see study.sagepub.com/cawsey4e for access to videos and a downloadable template of thisexercise.
Toolkit Exercise 9.2
Action Plans for Influencing Reactions to Change1. What methods have you seen used in organizations to influence people’s reactions to a specificchange? Think specifically about a change instance and what was done:a. Education and communicationb. Participation and involvementc. Facilitation and supportd. Negotiation and agreemente. Manipulation and co-optationf. Explicit and implicit coerciong. Systemic adjustments2. What were the consequences of each of the methods used? What worked and what did notwork? Why?3. What personal preferences do you have regarding these techniques? That is, which ones doyou have the skills to manage and the personality to match?Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Toolkit Exercise 9.3
An Additional Lens on Influence Tactics1. Think specifically of change situations in an organization you are familiar with. What influencetactics did people use? Describe three situations in which three different tactics were used.a. Inspirational appealsb. Consultation (seeking the participation of others)c. Relying on the informal system (existing norms and relationships)d. Personal appeals (appeals to friendship and loyalty)e. Ingratiationf. Rational persuasion (use of facts, data, logic)g. Exchange or reciprocityh. Coalition building (creation of subgroups or links with other groups to exert pressure)i. Using organizational rules or legitimating tactics (framing of the request as consistent withpolicy and/or your authority)j. Direct pressurek. Appeals to higher authority and dealing directly with decision makers2. Which of these would you classify as pull tactics and which would you classify as push tactics?Push tactics attempt to move people toward change through rational persuasion. Pull tacticsattempt to move people toward change through inspirational appeals to shared values or idealsthat arouse enthusiasm.3. How successful were each of the tactics? Why did they work or not work?4. How comfortable are you with each tactic? Which could you use?Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Turning Around Cote Construction CompanyBy Cynthia Ingols, Professor of PracticeSchool of Business, Simmons University, Boston, MAGene Deszca, Professor EmeritusLazaridis School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario, CATupper F. Cawsey, Professor EmeritusWilfrid Laurier University, Waterloo, Ontario, CA
IntroductionWhen Liam Cote decided to help his cousin Felix Cote turn around his business, he had no idea thatthings were as bad as they were. Liam knew that the bank’s loan was coming due and the companycould not pay it. However, Liam was shocked at the number of other problematic issues there were atCote Construction. In his mind, the company’s business model was straightforward: renting outspecialized heavy construction equipment, either with or without operators, to a relatively easilydefined set of customers, that is contractors who needed such equipment. Liam believed that thebusiness had solid prospects that could sustain a solid return on investment. However, it certainlywas not doing so now. Perhaps the strategy was clear, mused Liam, but things were a mess!Nevertheless, three weeks earlier, Liam and Felix had signed papers at their local bank and at theirlawyer’s office. Based on Liam’s reputation as a successful entrepreneur and his willingness to makea significant investment to improve liquidity, the bank agreed to renegotiate the operating loan andline of credit. This would provide the company with the breathing space needed to execute aturnaround. At their lawyer’s office Felix authorized Liam to take on the role of CEO, while Felixbecame Head of Equipment and Operations.After they signed the various papers, Liam and Felix enjoyed lunch together and then returned to theworkplace to set up Liam’s office. Since Liam was optimistic—and wanted—Felix to be an activepartner with him in the areas that Felix found compelling, Liam took the office down the hall fromFelix. While the office was slightly smaller, Liam wanted to send a signal that Felix was still animportant partner in Cote Construction. About 4 p.m., Liam went to look for Felix and learned that hehad left the offices an hour earlier with no word about where he was going or if he would return for theday. Alice Williams, the bookkeeper, said that Felix had stayed in the office later than he usually didand she did not expect that he would return that afternoon.Liam found the supply room and searched for wall-sized flip chart paper to put up on his office wall. Atthe top of the paper, he wrote, “Problems at Cote Construction.” His first entry was “Felix left the officeabout 3 pm without communicating to anyone where he was going or what he intended to do.” Liamdecided that he would give himself three weeks to diagnose what was wrong at Cote Constructionand that he would write down every problem on the flip-chart paper in his office. He debated withhimself about how he should manage the flip-chart papers: keep them up for all who entered hisoffice to see; or, take them out each night in private as he added to the list. Liam was still ambivalentas he closed and locked his door at 7 p.m.
BackgroundFelix founded the company in 2003. He had grown it steadily through the first five years, but theGreat Recession of 2008 had dramatically slowed construction in the area and Felix’s business hadbeen hit hard. In fact, a key competitor went bankrupt. By 2011-2012 the economy and areabusinesses had largely recovered, and business at Cote Construction began to boom. From 2013 to2016 there was unprecedented growth in the area and Cote Construction grew dramatically, too. Stafflevels more than doubled during the three years to 57 employees. Fifteen employees worked in theoffice area, handling administrative, sales, and accounting/finance functions. The remainder were inthe repair shop, in the yard, or on the road, dealing with maintenance and delivery of equipment.In the past year, however, sales had begun a modest decline. Other financial indicators showedworrying trends. Margins had gone down by almost 30%, and cash flow was negative. For two years,operating expenses had risen significantly. While Liam wasn’t sure why, he thought that equipmentpurchases had led to higher interest charges and that labor costs had risen dramatically. It was as ifFelix and his fellow managers had lost their capacity to manage the company’s business and itscycles.For the previous six months things had gone from difficult to worse. The company’s bank loan wascoming due. Felix had varied his management approach from requesting to pleading and finally toavoiding issues at work. Because Felix was impossible to find to make decisions or ask questions,employees referred to him as Waldo, after the character in the children’s book, Where’s Waldo?When Felix turned over decision-making authority and power to Liam, he agreed to focus on what heknew best: the equipment and operations. He had grown up with a love for heavy equipment, andfamily members said that the only reason that he was in business was so that he had newer andbigger toys to play with. He had specialized knowledge about which equipment was suitable for whichjobs and, prior to the past couple of years, had been adept at developing relationships with customersthat generated repeat business. However, the agreement and Liam’s arrival did not reverse Felix’sdisappearing act. To his direct reports he seemed depressed and distant, with little appetite forassuming a more active operational role in the business.
Diagnosing and articulating the problemsAs Liam began to investigate the problems at Cote Construction, he was shaken to find a culture ofpermissiveness and waste. As he walked through the parts and maintenance areas, he found parts,tools, and equipment scattered about. Grease on the floor made walking a risky proposition. Pizzaboxes, pop cans, and bottles were littered around. He thought he smelled liquor on some employees.He observed lateness and absenteeism were problems. No one seemed to be doing anything aboutthese matters. Part of the problem was a tight labor market: supervisors were afraid if theyreprimanded employees that they would walk.The housekeeping within the administrative office area was somewhat better than in other parts of theoperation, but it still left much to be desired. Some employees smoked in work areas despite no-smoking rules. Dishes often sat in the sink of the small kitchen area and it was only when left-overfoods began to smell did someone in the office begin the task of throwing away old foods.While Liam noted problems to address on the flip-chart papers in his office, he took immediate actionwhen necessary. One day, for example, Liam smelled alcohol on the breath of an employee whoappeared to be under the influence. He fired him on the spot. On another day Liam entered theworkspace of people with dogs and asked, “Are these employees or pets?” The next day theemployees—but not the dogs—came to work.After reviewing sales information, Liam also found himself wondering about the source of orders.Most came from brokers rather than directly from customers. Taking into account their fee, hedetermined that Cote Construction was losing money by relying on brokers. Liam phoned one of theircustomers who regularly leased their equipment through a broker. After chatting and thanking thecustomer for doing business with Cote, Liam asked the customer why they did not place ordersdirectly. The customer responded, “Because you never called us before!” Before he ended theconversation, he had a $50,000 work order placed directly. When Liam relayed this conversation andits results to the sales staff, they were at first defensive. Further conversation assured Liam that thesales staff wanted to make money, but they seemed unsure as to how they should change their salesapproach.During his third week, Liam noticed that certain pieces of equipment that had been in for repair inweek one were still inoperable. He asked, “Why?” He was told that the maintenance supervisor wasin a dispute with the field service foreman and sales staff over the allocation of repair andmaintenance charges, and as a result, needed repairs had not been undertaken. The argument hadbeen going on for more than a month, and he was told this was not the first time. This resulted, Liamnoted, in lost rental sales. He blew up and called an urgent meeting of those involved. He ordered theequipment to be repaired immediately and stated that this was no way to resolve conflict. When Liamwent back to his office, he added “unclear lines of authority” to his list of issues on the flip charts.The accounting and finance area had difficulty providing the performance data that Liam requested.When he asked them to calculate the profit margin for each piece of equipment, the initial responsewas “Why do you want that?” After he explained his rationale to them, they began pulling together theinformation. But, employees in other departments saw the new cost reporting requirements as morepaperwork that might get in the way of sales and servicing.When Liam began to explore equipment repair invoices, he noted that many expensive repairs hadbeen done on-site at their clients’ premises. Much of the work looked routine but was made muchmore expensive because of the location and because the company had to negotiate with clients overoperational losses incurred while the machine was down. Liam wondered why the equipment hadn’tbeen serviced prior to leaving the shop. When he inquired, he learned that there was no formalpreventive maintenance program in place. Back in his office Liam added more problems to his flipchart list:1. No formal preventive maintenance system2. Questionable inventory management system; missing parts in some areas and excess inventoryin others; and a significant volume of obsolete parts that were held in inventory3. Missing tools and equipment, including some big-ticket items, such as a $35,000 loader and a$25,000 compressor
4. Sales relationships not actively managed; clients not phoned in a timely manner; customercomplaints not acted upon until threats were invoked5. Logistics, scheduling, customer delivery and pickups, and on-site servicing of equipment nothandled well. Customers complained about downtime and their inability to predict when taskswould be accomplished6. Lags between order fulfillment and client billing; slow payment of accounts payable7. Poor relations with suppliers of parts and equipment, due in part to slow payment;disagreements over terms and conditions; and lack of supplier responsiveness to emergencyrequestsIn an inspection of the operations Liam found seven new tires and rims stashed behind a building.When he checked purchasing invoices, he learned that nine had been bought the week before. Onfurther investigation, he was told that no new tires had been counted on any equipment. Liam couldnot locate the missing two tires and rims, worth more than $2,000 each. It was a low point for Liam ashe concluded that employees might be stealing from Cote Construction.However, Liam thought that many members of the firm wanted to do a good job. That was the sensethat he got as he visited departments, talked with individuals one-on-one, and heard about theirfrustrations. Still, he did have a few concerns. Some employees resented that others seemed tocome and go as they wished. He had listened to one customer complaint about late delivery ofequipment and learned that the person delivering the machinery had stopped for three hours onroute. The driver’s excuse was lunch and engine problems that had miraculously resolvedthemselves. Employees’ morale was in the toilet, but turnover had yet to become a problem.
How to begin the turnaroundAs Liam sat in his office, he stared at the flip-chart sheets on his walls. During his first week, he hadput up the sheets and began listing every issue or problem that he or others identified. After threeweeks, there were now more than two dozen items. With this substantial list, Liam thought that hehad a handle on the magnitude of the problems at Cote Construction. What he needed to do now wascome up with a plan to address them. To begin, he had a number of decisions to make:What problems should he tackle first? Which were operational and which were organizational?What timeline should he establish?How should he consider the people in the company? What should he ask them? How should heapproach them to solicit their ideas for the turnaround?How should he deal with Felix? Should he allow him to continue as head of Equipment andOperations? Should he sideline Felix and formally reduce his authority at Cote Construction?Would it, in fact, be a relief to employees to know that Felix no longer played a role in thecompany?
Chapter Ten Get and Use Data Throughout theChange ProcessChapter OverviewMeasurement and control processes play a critical role in guiding change andintegrating the initiatives and efforts of various parties.Though measurement is specifically included in the institutionalization phase of theChange Path Model, it plays an important role throughout the change process.Four types of management control processes are identified: Interactive controls,Boundary systems, Belief systems, and Diagnostic/steering controls. Different types ofcontrols are needed as the change project shifts along the Change Path fromAcceleration to Institutionalization.The use of strategy maps as an alignment tool is explored.Three measurement tools are presented: the Balanced Scorecard, the risk exposurecalculator, and the DICE model: duration, integrity, commitment, and effort.When British Columbia implemented its carbon tax in 2008, a key element in itsclimate strategy, there was significant anxiety and commentary in the press that itwould kill economic development in this resource-rich province of Canada. However,that has not been the experience. This change initiative, designed to be revenueneutral, has resulted in this province having the lowest personal income tax rate inCanada. Fossil fuel use has been reduced by 16%, while consumption in the rest ofCanada has risen by 3%, and BC’s economy has performed slightly better, onaverage, than the rest of Canada. These results suggest that carefully designedprograms such as this can reduce our appetite for fossil fuels while playing a positiverole in economic growth. Challenges remain in achieving their carbon reduction targetsbut progress is being made in BC.1 THis example also shows the importance ofmeasurement and the power it has to dispel commonly held, though inaccurate,beliefs. For British Columbia, despite the fact that the carbon tax worked to improvenot only the economy but also sustainability in the province, it took hardmeasurements to legitimize the change.Measurements matter. What gets measured affects the direction, content, andoutcomes achieved by a change initiative. Measurements influence what people payattention to and what they do.2 When organizational members see particularquantifications as legitimate, believe their actions will affect the outcomes achieved,and think those actions will positively affect them personally, the motivational impactincreases. But when the legitimacy or impact of the measures is questioned or whenpeople believe they can’t affect the outcomes, the measurements are seen asinterference and can result in cynicism and alienation. Change agents know thatmeasurement is important, but sometimes they need to understand more fully howmeasures can be used to help frame and guide the change.3Figure 10.1 The Change Path Model
For a variety of reasons, data collection and measurement are often given lessattention than they deserve during change initiatives. The change is seen as complex,requiring multidimensional measurements tools that seem too complex and difficult totrack; measures are not viewed as focusing on what is important; the evolution ofchange initiatives makes end-point measures difficult to quantify; or end-pointmeasures suggest commitment to a line in the sand that is then difficult to modify tomatch changing conditions.4 In addition, change leaders often explain that they lacktime to assess outcomes, that they are too busy making the change happen, and/orthat they did not get around to thinking fully about measurement of outcomes.The reality is that measurement and control systems incorporated into changeinitiatives can clarify expected outcomes and enhance accountability. This leavessome change agents feeling vulnerable. They worry that critics will use the measuresto second-guess an initiative and even undermine both the change and the changeagent.In spite of these concerns, well-thought-out measurement and control processesprovide change leaders with valuable tools. Information from these measurementsystems enables change managers to (1) frame the need for change and theimplications of the change vision in terms of expected outcomes; (2) monitor theenvironment; (3) make monitoring and decision criteria more explicit and testable; (4)help protect against biases when measures are wisely selected; (5) help others
involved and/or affected by the change to better understand what is expected of them;(6) guide the change, gauge progress, and make midcourse corrections; and (7) bringthe change to a successful conclusion.5 Key change leadership skills includeidentifying assessment measures, building them into the change process, adaptingthem as needed, and using them as tools to aid in decision making, communication,and action taking.6 At RE/MAX (described below), the measurement system supporteda change to the employment relationship that allowed the firm to attract and retainsuperior agents.Measurement Systems at RE/MAXFor RE/MAX, the Denver, Colorado–based real estate franchise network, a redefinition ofcustomers away from industry norms was crucial. Cofounder and chairman David Linigernoted that the firm’s success came from the simple idea that RE/MAX customers were thereal estate agents themselves, not the buyers and sellers of real estate. More specifically,RE/MAX targeted high-performing agents who represented just 20% of the entire pool of realestate agents but accounted for approximately 80% of all sales.RE/MAX’s focus on high-performing agents originally consisted of changing the industry’straditional 50–50 fee split between broker and agent to a franchise system in which agentskept all commissions after payment of a management fee and expenses. In some cases, thatshift changed retention rates of real estate agents as much as 85%. RE/MAX followed thechange in the reward system with additional services, including national marketingcampaigns, training of agents in sales techniques by satellite, and coordinated administrativesupport.The results have been impressive: According to CEO Liniger, in 2003, the average RE/MAXagent earned $120,000 per year on 24 transactions versus an industry average of $25,000on seven transactions. “The customer comes second,” he says, but hastens to add, “If ouremphasis is on having the best employees, we’re going to have the best customer service.”7The real estate sales meltdown in 2007–2008 and the subsequent slow recovery proved verychallenging for the industry, but RE/MAX has rebounded. In North America it was recognizedas one of the top 50 franchises for minorities in both 2012 and 2014, where it was the onlyreal estate firm on the list.8 It has been named the best real estate franchiser 15 times in thepast 19 years and was ranked #10 in the Entrepreneur’s Franchise 500 ranking in 2018. Ithas been named the highest ranked real estate franchise globally for four years in a row inthe Franchise Times Top 200 survey.A 2018 assessment of the top brokerages in the industry found that RE/MAX agentsaveraged almost twice as many transactions when compared with their major competitors,resulting in an average of $4.6 million in sales, or 78% more than that achieved by theaverage of all other agents in the survey. With over 120,000 agents and 6,000 offices in morethan 100 countries and territories in 2018, it is arguably the number one brand in its industry.9At RE/MAX, management’s strategic realignment was anchored in a change to thereward system from fee-splitting the sales commission to one based on a franchisemodel. This example demonstrates that what is measured and rewarded will have amajor impact on what outcomes are achieved. Sometimes measures are a matter ofpersonal goal setting, as in the case of an athlete who links training metrics toperformance goals and then celebrates small steps that lead to the accomplishment ofa major milestone. In other situations, assessment grows out of expectations and/orrequirements established by others, such as just-in-time measurement and costreduction systems imposed on suppliers by automobile firms.
Employees’ acceptance or rejection of measurements of a change initiative isimportant. When employees’ acceptance of such measures increase, peopleexperience less work stress, more job satisfaction, improved job performance, betterwork/family balance, less absenteeism, less job burnout, and more organizationalcommitment.10 Because RE/MAX’s executives structured a win–win strategy for thefirm and for higher-performing agents, agents accepted the firm’s measures and, inturn, the firm attracted and retained above-average real estate agents.11 RE/MAXbelieves that the alignment of its strategy with its measurement system, innovativetechnology and sales approaches, and an ongoing commitment to agent educationhas been instrumental to its success.This chapter looks at the role of measurement in change management and howassessment influences people’s behavior. Issues over the development, use, andimpact of measures are examined. The role of measurement and control in riskmanagement is discussed, as is the question of what to measure at different stages inthe life cycle of the change. Finally, strategy maps and balanced scorecards areintroduced to demonstrate how to address the alignment of action with the changevision and strategy. Throughout this chapter, the goal remains the same: to learn howto use measurement and control mechanisms to increase the prospects for successfulchange.Figure 10.1 suggests that measurement and control occur at the end of the changeprocess, but in fact measurement and control aspects of a change need to begin at itsinception. Change leaders should use these analytic tools throughout the life of theprocess. They can assist in helping to define the need for change, quantify what isexpected from a change initiative, assess progress at specified intervals, and, at theend of the process, evaluate the change initiative’s impact. Measures can help changeagents in five ways:a. clarify expectations,b. assess progress and make mid-course corrections,c. assess the extent to which initiatives are being internalized and institutionalized,d. assess what has been ultimately achieved, ande. set the stage for future change initiatives.12Many managerial discussions of measurement systems and control processes focuson how they impede progress.13 Though measurement systems can get in the way,well-designed and effectively deployed systems have the potential to overcomeorganizational barriers and contribute to successful change.The following case example outlines how change agents at Control ProductionSystems (CPS) approached their deteriorating market position. The example showshow change agents benefited from consultation with key participants14 andcollaboration with diverse groups15 and how they used measurement and controlprocesses to frame and reinforce the needed changes.A Case Study in the Value of Realigning MeasuresControl Production Systems (CPS), a mid-sized firm that designs, manufactures, sells, andservices customized production control systems, had noticed an erosion of its market shareto competitors. Declining customer loyalty, greater difficulty selling product and serviceupdates, and an increased reliance on price to win the business were shrinking margins and
making competitive life difficult, even though product and service offerings were innovativeand of a high quality. The firm possessed a strong, positive culture that reflected the values ofinnovation, quality, and open communications, but recent setbacks had shaken people’sconfidence.As a result of a town hall meeting called to discuss the corporation’s situation, the CEO actedon a suggestion to form a cross-functional change team to assess the firm’s circumstancesand recommend a course of action. The team included sales agents and customer supportstaff and was led by the director of sales and service. The director reported to the seniormanagement team on a monthly basis, and the team was expected to diagnose and analyzethe problem and frame recommendations for change within two months, which would befollowed by implementation activities. An intranet website facilitated communications aboutthe change, and transparency, candor, and no reprisals were the watchwords for the changeteam’s approach. As well, the team received sufficient resources to allow it to get on with itstask.Prior to the change, sales agents were organized geographically and paid on a salary-plus-commission basis. After a sale, agents handed off responsibility to customer support staff toaddress order fulfillment and post-sales servicing. The customer support staff was rewardedon the basis of cost control and throughput. If customers never contacted the firm for help,that was considered good because no contact generated no cost and suggested customersatisfaction. Short calls were seen as better than long ones due to cost implications, andstandardized responses and online help were preferred over trouble-shooting phone calls forthe same cost reasons. The firm kept no systematic record of customer calls and respondedto customers on a first-come, first-served basis.Analysis by the change team showed that customers who had minimal contact with thecustomer support staff were less likely to develop a relationship with the firm, were likelyderiving less value from their purchases, and were less likely to be aware of product andservice innovations and applications that could benefit them. In other words, the activities thatkept short-term costs low hurt customer loyalty and long-term profitability. Benchmark dataconcerning service models, customer satisfaction, and purchase decisions confirmed thatCPS was falling behind key competitors.After the diagnosis, the team concluded that there was a need to change the way the firmdealt with and serviced its major customers. The team determined that the way to increasesales and profitability was to ensure that customers saw CPS as a trusted partner who couldfind ways to enhance customers’ productivity and quality through improvements in CPS’scontrol systems.The company realigned how it managed its relationships with customers. The firm integratedsales and customer support services, created sub-teams with portfolios of customer accountsby industry, and assigned the sub-teams to manage customers as ongoing relationships. Thevision was a customer-focused partnership in which one-stop shopping, customer intimacy,service excellence, and solution finding would frame the relationship rather than simplyselling and servicing in the traditional manner.During the change, the change team measured employees’ understanding and commitmentto the new service model, employees’ skill acquisition, and results of pilot projects. Further,the team measured service failures in areas of delivery, response time, quality, andrelationship management to identify and deal with problems quickly if they occurred duringthe transition period. The team searched for systemic problems, developed remedies,encouraged openness and experimentation, and avoided finger pointing. Milestones for thechange were established and small victories along the transition path were identified,monitored, and celebrated.Once the team initiated the changes, it aligned performance measures by focusing oncustomers’ satisfaction with the breadth and depth of services, response time, customers’referrals, repeat sales, and margins. The reward system shifted from a commission base forsales personnel and salary plus small bonus for customer service staff to a salary-plus-team-based performance incentive that included customers’ satisfaction and retention, share of the
customers’ business in their product and service area, and customers’ profitability over time.In the three years since implementation, there have been significant improvements in all thetargeted measures, and feedback from customer service has become an important influencerof product refinement and development.The case above demonstrates how measurements can support a change initiative ateach stage of the process. At the beginning, change leaders used measurements inproblem identification, in root cause analysis, and in the development of awareness fora new vision and structure. The leaders recognized the misalignment betweenmeasures that reinforced cost reductions in servicing clients (first-order effects) andthe desired but unrealized long-term outcome of customer loyalty and profitability(second-order or lag effects). As the change leaders and team continued to diagnosetheir organization’s structure and systems, at each step data were collected, analyzed,and used to fine-tune plans. Employees came to trust using data to make savvydecisions. In the end, clients’ satisfaction with CPS’s products and services (first-ordereffects) gave rise to customer loyalty and follow-up purchases and profitability(second-order effects) that management had not previously measured or really paidattention to.To make the question of the impact of measures and control processes all the morereal, consider a change you are familiar with and complete Toolkit Exercise 10.2.
Selecting and Deploying MeasuresThere is no shortage of possible measurement indicators: cycle time, machineefficiency, waste, sales per call, employee satisfaction, waiting time, market share,profitability per sale, cost of sale, and customer retention, to name a few. If changeagents try to measure everything concurrently, they are likely to lose focus. To focusattention, agents need to be clear about the stage of the change process and whatdimensions are most important to monitor at a particular stage given the desired endresults. Here is a list of six criteria to help change leaders determine which measuresto adopt.
1. Focus on Key FactorsAn accurate analysis of the change challenges will mean that change leaders willknow which factors are key and what levers will move people in the direction of thedesired change. Measures influence what people pay attention to and how they act,even when they believe those actions are ill advised.16 Consider the all-too-commonpractice of trade loading, the inefficient and expensive practice of pushing excessinventory onto distributors and retailers in order to make the manufacturer’s numberslook better in the short term.17 For years, staff at Gillette knew that the practice oftrade loading was having a negative effect on pricing, production efficiencies,customer relationships, and profitability. Trade loading meant unsold inventory washidden from Gillette’s eyes in the distribution channels and price discounting waseroding margins (distributors quickly learned how to time purchases to take advantageof such discounts). In spite of the widespread awareness that this practice was illadvised, it continued until new leadership realigned key measures and practices tosupport the desired changes and finally brought an end to an unhealthy practice.18Knowing the critical measures to develop, deploy, and monitor at the different stagesof the change process is a complex issue. In the Gillette case, this involved measuresthat demonstrated the negative consequences of trade loading, showed the positiveconsequences of the change vision, and assessed progress with the change andperformance in ways that aligned with the change vision and targeted outcomes.When considering what to focus on assessing, be cognizant of the role bias can playin your assessment, as noted in Chapter 3. Factors such as confirmation bias (seekingout supportive data), recency bias (expectation that previous events will repeatthemselves, loss aversion (losses have a larger psychological affect than gains),herding (we should do it because it’s worked for others), and outcome bias (belief thata successful outcome means our analysis was correct) will cloud your judgement andpotentially put you on a risky path. Take steps to buffer the effects of such biases sothat you are able to approach the change challenge with your eyes wide open. DanielKahneman’s work on decision making provides excellent advice concerning how toavoid these pitfalls.19
2. Use Measures That Lead to Challenging but AchievableGoalsEmployees need to believe that they can achieve challenging goals. Measurementsthat note small steps to the larger goal and measures within an individual’s control willtap into desired motivations.
3. Use Measures and Controls That Are Perceived as Fair andAppropriateEmployees’ perception of the appropriateness and fairness of the measures andcontrol processes is driven as much by the process used to develop and legitimizethem as by the outcomes they deliver.20 Even reasonable measures may not beacceptable if people feel the measures were forced on them. Good processes willreduce resistance through communication, as communication provides opportunitiesfor input and feedback while building trust and support. Avoid applying measures inways that punish people who take reasonable actions based on their understanding ofthe change goals and what is expected of them.Measurement and control processes are more likely to be accepted if the processused in developing them is seen as reasonable and fair, even if those measures leadto negative outcomes for those being measured (this matter of fair process wasdiscussed earlier and in more detail in Chapter 7). It is very beneficial if individualswho are responsible for delivering on measures see them as relevant and fair.Participation in the development of goals and how they will be measured is well worthconsidering because it has been shown to have the potential to increase the level ofunderstanding of what the organization is attempting to do, heighten legitimacy of thetargets, and increase commitment to them.21 Be careful when you are assigningincentives to the accomplishment of goals, because excessively high rewards forsuccess or severe sanctions for failure can lead to dysfunctional and unethicalbehavior (e.g., game playing, falsification of data). Approach financial incentives withcare, because, mishandled, they can impair progress and get in the way of the positiverole the participants’ sense of autonomy, mastery, and a purpose can play inmotivating desired actions.22
4. Avoid Sending Mixed SignalsMeasurement systems related to change often send conflicting signals, and it is notunusual for change leaders to say one thing but signal another through what theymeasure and reward. For example, an organization may initiate changes aimed atenhancing quality and customer satisfaction but then “wink at” the shipment of flawedproducts to meet just-in-time delivery metrics and avoid exceeding its internal scrapand rework targets. Managers do this even though they know that substandardproducts will increase warranty work, require customers to do rework, and put thefirm’s reputation with the customer at risk. The fundamental problem in this example isthat measures are not aligned with goals.Aligning measurements and avoiding mixed signals is tricky because there are alwaystrade-offs. For example, employees’ acceptance of a particular step (as measured bysurvey results) and the achievement of a particular performance milestone (e.g., going“live” with a new customer service module) may end up conflicting. The firm may havesucceeded in going “live” with the new module, but employees and customers may beunaware of or confused about the advantages associated with the new module versusthe costs and benefits of remaining with the existing approach. Change leaders needto address such matters by providing advice on how these trade-offs associated withthe change and the potentially conflicting signals generated by different measuresshould be handled. If this isn’t done, change initiatives may flounder in the subsequentconfusion and create cynicism and game playing.The Canadian division of a U.S. auto parts firm initiated a change initiative in the formof a new quality program and reinforced it with a gigantic display board preaching,“Quality is important because General Motors demands it!” However, next to this signsat pallets of completed parts with supervisory tags that approved shipment, overridingquality control inspection reports that had ordered rework prior to shipment. The firm’smanagement had not addressed how to resolve conflicts between the new qualityinitiative and their just-in-time obligations. Supervisors looked at how they weremeasured and concluded that delivery trumped quality. Employees looked at how theirsupervisors reversed decisions on substandard quality and concluded the new qualityprogram was a joke and a waste of money. The inability to reconcile the handling ofthe quality problems with their delivery obligations led to the loss of the GM contractand the closure of the plant approximately 18 months after the display board was firstunveiled.23Employees are aware of such conflicting messages. Confusion, frustration, sarcasm,and eventually alienation are the natural consequences. When such inconsistenciesare built into a change initiative and go undetected or unaddressed by the changeleader, cynicism about the change increases, and the change process falters. Kerr’swell-known paper, “On the Folly of Rewarding A, While Hoping for B,” explores manyof the issues around measurement and the production of unintended consequences.24When establishing such measures, remember to keep your eye on the end goal. If theend goal is cooperation and collaboration, avoid rewarding “A” (incentives forindividually oriented, competitive behavior) if you are hoping to motivate “B”(incentives to promote collaborate, cooperate behavior). One common cause of suchdisconnects is related to what is rewarded by the legacy systems versus what is beingpromoted by the change initiative. Make sure the actions being nurtured through
challenging but achievable goals in the short term will help you to get to yourintermediate and long-term objectives.
5. Ensure Accurate DataEmployees, customers, and others are likely to supply accurate and timely data whenthey trust the measurement system and believe that data will not be used to harmthem. Excessive rewards for success, undue sanctions for missed targets, or a verystressful work environment can lead to flawed information from carefully designed setsof measures.25 These pressures create incentives for individuals to report inaccuratelyor to shade the reality of the situation. To ensure accurate and timely data from themeasurement system, those supplying the data need to trust who it is going to andbelieve that it is their responsibility to comply fully and honestly. Keep pressure atreasonable levels and avoid excessive rewards for success or excessiveconsequences for not achieving targets.
6. Match the Precision of the Measure With the Ability toMeasureA measurement motto might read, “Better to be approximately right than preciselywrong!” Change leaders need to match the measures to the environment. If thechange is significant, clearly structured, and predictable, leaders can devote time andresources to developing precise, sophisticated measures. However, if the changeenvironment is turbulent and ambiguous, approximate measures are moreappropriate.26 Change agents need to make their choices based upon (a) how quicklythey need the information, (b) how accurate the information needs to be, and (c) howmuch it will cost. Information economics point to the fact that designing the neededinformation for a change initiative inevitably involves trade-offs among these threecomponents.27The general rule of thumb is to keep the measures as simple and understandable aspossible, and make sure that they attend to the important elements of the change in abalanced way. Table 10.1 looks at the nature of the change context and considerswhat types of measures will be appropriate.Regardless of the measures chosen, change leaders need to be seen as “walking thetalk.” When leaders treat the measures as relevant and appropriate, employees willsee that they are serious about what they are espousing. Use sound communicationpractices when dealing with questions related to what to measure, who to engage indiscussions about measurement and control, how to deploy the measures, and how tointerpret and use the data effectively to manage the change. Change leaders’behaviors that reinforce perceptions of the fairness and appropriateness of themeasures and instill confidence in their proper application are very important inlegitimizing measurement as a powerful tool in the change process.28Table 10.1 The Change Context and the Choice of MeasuresTable 10.1 The Change Context and the Choice of MeasuresChangeContextChoose More Precise,Explicit, Goal-FocusedMeasuresChoose More Approximate Measures,Focus on Vision and Milestones, andLearn as You GoWhencomplexityand ambiguityare:LowHighWhen time tocompletion is:ShortLong
Measurement Systems and ChangeManagementRobert Simon, an expert in the area of managerial measurement systems (also calledmanagement control systems), believes that managers focus too much on traditionaldiagnostic control systems developed from management accounting. He argues thatmanagers need to think about four types of control levers as constituting the internalcontrol systems when considering change. That is why strategy lies at the center of hismodel, because what one attempts to do needs to consider the influence of all four ofthese levers.29Interactive controls systems—the systems that sense environmental changescrucial to the organization’s strategic concerns. For example, this would be marketintelligence data that helps firms better understand and anticipate competitoractions.Boundary systems—the systems that set the limits of authority and action anddetermine acceptable and unacceptable behavior. For example, these would belimits to spending authority placed on managerial levels. These focus on what isunacceptable and identify both what is prohibited and what is sanctioned.Belief systems—the fundamental values and beliefs of organizational employeesthat underpin the culture and influence organizational decisions. For example,these are the stated organizational values that often accompany the vision andmission.Diagnostic and steering controls systems—the traditional managerial controlsystems that focus on key performance variables. For example, these would besales data based on changed selling efforts.Each of these systems can help in implementing change, but they serve differentpurposes depending upon where you are in the change process. Interactive controlsystems help sensitize change leaders to environmental shifts and strategicuncertainties and the relevance of these on the framing of the change initiative. Thiswill allow them to modify change plans in the face of environmental factors and tend toplay the biggest role when dealing with issues related to assessing the need forchange and vision for the change.Understanding the organization’s boundary system means change leaders know whatsorts of actions are appropriate and which are viewed as inappropriate or off limits.The firm’s rules or boundaries need be respected and place limits on what actions areappropriate. If it is believed that such boundaries need to be questioned, changeleaders can discuss and debate them explicitly, but they need to do so in an ethicaland transparent manner.An understanding of the organization’s belief system informs leaders about the cultureand how beliefs and values influence action. This allows change leaders to frameinitiatives in ways that are aligned with the core beliefs and the organizations, and thehigher-order values of individuals, and use this alignment to help motivate desiredactions and overcome resistance to change. Data in this area comes from directexperience with others in the organization, employee surveys, and a systematicevaluation of past decisions, practices, and behaviors. As in the case of boundarysystems, change leaders may wish to address the need to modify those beliefs as partof the change, but should again approach the matter in an ethical and transparent
manner. Otherwise they risk being accused of misleading people and actinginappropriately. This will destroy trust in them and the initiative.Finally, a well-developed diagnostic and steering control system helps change agentsunderstand and track critical performance variables and milestones, and modify theirapproach to encourage desired behaviors and outcomes while discouragingdysfunctional ones. These are the steering controls and metrics they use to help themnavigate their way on the change journey. As you can see, these controls and theirrelated measures address the determination of the nature of the desired change, howit will be framed, and how progress will be monitored and assessed along the way(see Figure 10.2).Table 10.2 sets out the different elements of the control system and relates them to themeasures used at different stages of the change process. As the change progressesfrom initial planning to wrap-up and review, the control challenges and measurementissues also shift. The key is to align the controls and measures to the challengesposed at each stage of the change and prepare for the next. This helps to ensure thatchange leaders have the information and guidance they need to assess matters, makedecisions, and manage their way forward.30Figure 10.2 Strategy and the Four Levers of ControlSource: Simons, R. (1995, March-April). Control in the age of empowerment.Harvard Business Review, 85.Table 10.2 Control Systems, Measures, and the Stage of theChangeTable 10.2 Control Systems, Measures, and the Stage of the ChangeControlsWhenDesigning andPlanning theChangeControls inBeginningStages of theChange ProjectControls inMiddle Stagesof the ChangeProjectControlsToward theEnd of theChangeProject
ControlsWhenDesigning andPlanning theChangeControls inBeginningStages of theChange ProjectControls inMiddle Stagesof the ChangeProjectControlsToward theEnd of theChangeProjectInteractiveControls(Environmentalscanning;assessingpossible pathsand targets)Environmentalassessment;assessstrengths,weaknesses,opportunities,and threats(SWOT);considerpossibilities.Test theviability ofexistingvision,mission, andstrategy giventheenvironmentalsituation, andassess theneed forchange.Affirm that thechange projectis aligned withenvironmentaltrends.Assess how toalign theorganization toincrease thechances of thechange’ssuccess andassess whatspecificallyneeds tochange.Ongoingmonitoring.Confirm thatenvironmentalassessmentcontinues tosupport thechange.Obtainfeedbackregarding thesuccess ofchangeinitiativerelative to theenvironmentalfactors.Ongoingenvironmentalscanning andassessmentoforganizationalstrengths,weaknesses,opportunities,and threats(SWOT).
ControlsWhenDesigning andPlanning theChangeControls inBeginningStages of theChange ProjectControls inMiddle Stagesof the ChangeProjectControlsToward theEnd of theChangeProjectBoundarySystem (Whatbehaviors arenot OK?)Limit thechangeoptions tothose withinthe boundaryconditions.Test the limitsof what isacceptable. Ifboundaryconditionsrepresentissues orchallengesthat needdiscussing,bring themforward andassess needfor newboundaries.Go/no goguidance as toappropriatenessof actions.Go/no-goguidance as toappropriatenessof actions.Reassess risks.Reestablishboundaries ifneeded.Test newboundarieswhereappropriate.Reevaluatethe boundarylimits.
ControlsWhenDesigning andPlanning theChangeControls inBeginningStages of theChange ProjectControls inMiddle Stagesof the ChangeProjectControlsToward theEnd of theChangeProjectBelief System(What are ourbeliefs andvalues? Whatis ourpurpose?)Assesscongruencebetween corevalues of thefirm, itsmission, andthe purpose ofthe changeproject.Communicatehow thechangerelates to thecore valuesand mission.Considerimplications ifchangeinvolvesmodificationsof the beliefsystem andhow tofacilitate thechange.Congruenceassessment.Appeal tofundamentalbeliefs toovercomeresistance oraddress needfor change inthose beliefs.Congruenceassessment.Reaffirm corevaluesthroughout thechange projectand/or assessprogress in theneededmodifications tothe beliefsystem.Congruenceassessment.Reassessandpotentiallyreaffirm thecore valuesand missionbased onlearningduring thechangeproject.
ControlsWhenDesigning andPlanning theChangeControls inBeginningStages of theChange ProjectControls inMiddle Stagesof the ChangeProjectControlsToward theEnd of theChangeProjectDiagnostic andSteeringControls(Focusingresources ontargets;measuringprogress;takingcorrectiveaction andlearning as wego)Assess theimpact ofexistingcontrols onthe changeproject.Consider whatdiagnosticsystems willneed to bedevelopedand/or alteredto provideguidance forthe change.Developmilestones,diagnosticmeasures, andsteeringcontrols for thechangeinitiative.Develop tacticsto alter controlsystems asneeded.Monitorprogress on anongoing basisand celebratetheachievement ofmilestones.Assess whethersystems andprocesses areworking as theyshould.Modifymilestones andmeasures asneeded.Determinewhen theproject hasbeencompleted.Confirm thatnew systems,processes,and behaviorsestablishedby the changeare workingappropriately.Evaluateproject andpursuelearning onhow toimprove thechangeprocess.
Data Used as Guides During Design and Early Stages of theChange ProjectAt the beginning of a major change, mission, and vision (i.e., belief systems),interactive control systems (e.g., environmental assessments), and boundary systems(risks to be avoided) play particularly important roles in clarifying the overall direction,as options and potential courses of action are explored. Data from primary andsecondary research, exploratory discussions, internal organizational assessments,and initial experimentation are helpful at this stage because they allow projects andalternatives to be considered in a grounded manner. The organization’s readiness forchange (discussed in Chapter 4) can be assessed and steps taken to enhancereadiness. Information from multiple sources is used to sort out options, assess whatshould be done next, and make an initial go/no-go decision on whether to proceed inthe development of the initiative.In the early stages, change leaders need to have systems that will identify who to talkto and who will tell them what they need to hear, not what they want to hear.Enthusiasm and commitment on the part of change leaders are beneficial to thechange but can create serious blind spots if not tempered by the reality checks thatcontrol systems can provide. As go/no-go decisions are made, change agents need todevelop and refine the directional and steering control measures and specify importantmilestones. Project planning tools, such as the critical path method, can play a usefulrole (see Chapter 9).
Data Used as Guides in the Middle of the Change ProjectIndicators that define the overall purpose, direction, boundary conditions (what actionsare acceptable and unacceptable) for the change, and core values and beliefs are stillimportant in clarifying and framing what change is intended. However, diagnostic andsteering controls (e.g., budgets and variance reports, project and activity schedules,and tracking of content from e-mails, phone conversations, and tracking of socialmedia feed, if its use and content are relevant to the change) play an increasinglyimportant role in the middle of the change project. At this point, change leaders wantto be able to track and receive timely and accurate feedback on progress and people’sreactions to what is going on. Change leaders need to recognize whether the people’sreactions are leading or lagging the desired outcomes at that stage of the changeprocess. As in the example of CPS discussed earlier in this chapter, customersatisfaction was a lead indicator of an improved sales climate, while repeat sales andprofitability were lag indicators of the improved situation. If this had not beenrecognized, initiatives undertaken to improve customer satisfaction may have beendiscontinued because there was no immediate improvement in sales.Milestones and road markers need to be developed through project planning and goal-and objective-setting activities. These markers can then be used to track progress andreinforce the initiative of others by recognizing their achievement. For example, if afirm were implementing a new performance management system, the completion andsign off on the design of the system, the completion of a training schedule, theachievement of needed levels of understanding and acceptance of the system (asassessed by measures of comprehension and satisfaction with the system), and thecompletion of the first cycle of performance reviews (with system evaluation data fromthose using the system) are possible road markers.At important milestones, go/no-go controls once again enter the picture, withconscious decisions made about refinements to the change initiative. Change leadersneed to make decisions about the appropriateness and desirability of proceeding tothe next stage. If milestones are not being achieved, change leaders need to considerwhat sorts of actions, if any, should be undertaken or they may need to revisit thetimeline or refine the measures used to track progress. In that respect, change leadersalso need to consider how measures can help them think about contingencies andadapt to unforeseen situations.
Data Used as Guides Toward the End of the Change ProjectAs the end of a planned change approaches, diagnostic and steering measures arereplaced by concrete outcome measures. What was accomplished and what has beenthe impact? How do the results compare with what change agents expected at thebeginning? What can be learned from the change experience? Change leaders needto capture the observations and insights from those who have been involved in thechange, as it will help them prepare for future initiatives.Toolkit Exercise 10.3 asks you to apply Simon’s four levers of control model to achange initiative.
Other Measurement ToolsFour tools that can assist in planning, deploying, and managing change are discussedin the next section. These are the strategy map, the balanced scorecard, the riskexposure calculator, and the DICE model. They can enhance internal consistency andalignment and aid in assessing risk.
Strategy MapsOnce change leaders have framed their vision and strategy for the change, they willneed to be able to communicate the end state and the action paths that will get themthere. When complex changes are being pursued, change agents may find a visualrepresentation of those end states and the action paths to be useful. This can beundertaken to help others understand what the change is attempting to accomplishand how actions in one area will influence outcomes in another. Further, in can beused to help change agents set out and test their assumptions concerning what theybelieve needs to be undertaken and aligned, in order to achieve the desired ends.The tool developed by Robert Kaplan and David Norton called a strategy map canassist change agents in this regard.31 As can be seen from Figure 10.3, financialoutcomes are viewed as driven by customer results, and by contributions that comedirectly from internal systems and processes in the form of efficiencies. The customerresults are viewed as coming from the performance of internal systems andprocesses, which in turn rest on the nature and quality of the organization’s resources(human, informational, and capital).32Once the change vision and strategy are defined in a for-profit organization, Kaplanand Norton recommend starting with financial goals and objectives of the change (thefinancial perspective) and then setting out the objectives, initiatives, and pathsneeded throughout the organization to generate those outcomes.If the vision for change is achieved, how will it look from the perspective of thefinancial results achieved?To accomplish these financial outcomes, what initiatives have to be undertakenfrom a customer perspective to deliver on the value proposition in ways thatgenerate the desired financial results? In addition, will the change produce directcontributions to the bottom line from the internal business processes, in the formof efficiency improvements?To accomplish these customer outcomes and/or generate contributions directly tothe financial outcomes through efficiencies, what changes must be tackled froman internal business process perspective?Finally, to attain those internal process goals and objectives, what changes mustbe undertaken from a learning and growth perspective to increase theorganization’s capacity to do what is needed with the internal processes andcustomers? The learning and growth perspective embodies people, information,and organizational capital (e.g., culture, intellectual property, leadership, internalalignment, and teamwork).For not-for-profit organizations, many advocates for the strategy map recommendplacing the customer perspective at the top of the model (some have relabeled it asthe stakeholder perspective) since this is the reason for the organization’s existence.Some place the financial perspective parallel with the customer or stakeholderperspective, while others place it below learning and growth or elsewhere. Othershave added levels or changed labels on the strategy map.33 However, the goalremains the same: develop a coherent picture that helps people understand howyou’ve aligned your change strategy with the organization’s purpose so it generatesthe desired outcomes. It is all about translating the change vision into a visualrepresentation of the action plan that is designed to support that change vision;
communicating those actions and the change vision to key constituents so that theywill better understand the change initiative and the underlying assumptions; testingassumptions so that modifications can be made in a timely manner; and implementing,learning and refining as you go.The assumption underlying strategy maps in for-profit organizations is that financialoutcomes are the end goals that they are striving for and that other objectives withinthe change program should be aligned to produce and support those desiredoutcomes. If particular activities and the objectives don’t support the changes, theyshould be seriously questioned and either dropped or reduced in importance. Each ofthe change initiatives identified by the strategy map will need to be managed as togoals and objectives, success measures, timelines, resource requirements, and anaction plan. These, in turn, need to be integrated with the other change initiatives thatare embodied in the strategy map.When properly deployed, strategy maps provide change leaders with a powerfulorganizing and communication tool.34 This visualization helps people understand whatis being proposed and why. It clarifies why certain actions are important and how theycontribute to other outcomes that are critical to achieving the end goals of the change(i.e., cause–effect relationships). It helps people focus and align their efforts andappropriately measure and report progress. It can assist change leaders to identifygaps in their logic, including missing objectives and measures. When Mobil usedstrategy maps, it helped them to identify gaps in the plans that had been developed forone of their business units. Objectives and metrics were missing for dealers—a criticalcomponent for a strategy map focused on selling more gasoline.35To give you a concrete example of how a strategy map can be used to help, one is setout in Figure 10.4. It shows the vision and mission for Control Production Systems,Inc. (discussed earlier in this chapter). Then it shows the specific measures used ineach category.Figure 10.3 Generic Strategy Map
Source: From Armitage, H. M., & Scholey, C. (2007). Using strategy maps to driveperformance. CMA Management, 80(9), 24. The figure sets out Kaplan andNorton’s model discussed earlier in the chapter.Figure 10.4 Strategy Map for Control Production SystemsSource: Adapted from: Simon, T. “ How Risky is Your Company?”, HarvardBusiness Review, Vol. 77, #3, 1999, 85–94.
The Balanced ScorecardWhile the strategy map links capabilities, change strategies, and outcomes, thebalanced scorecard integrates measures into a relatively simple way of tracking thecritical success factors. Kaplan and Norton argue that four categories of goals andmeasurement data need to be highlighted in a balanced scorecard: financial, acompany’s relationship with its customers, its internal business process, and itslearning and growth. In doing so, management can achieve a balanced, integrated,and aligned perspective concerning what needs to be done to produce the desiredstrategic outcomes.36Among these four indicators, some will lead while others will lag. For example,improvements in service levels, such as the response time to a customer’s inquiry,could be a lead indicator of improvements in customer satisfaction. However, this maynot immediately translate into new sales and increased profitability. Improvements insuch measures will often be lag indicators of improvements in service levels becauseof the length of the purchase cycle. The balanced scorecard recognizes that not alleffects are immediate. By setting out assumptions concerning what leads to what, itmakes it easier for the change leader to test assumptions, track progress, and makeappropriate alternations as necessary.Figure 10.5 Generic Balanced Scorecard for ChangeSource: Adapted from Kaplan, R. S., & Norton, D. P. (1996). Using the balancedscorecard as a strategic management system. Harvard Business Review, 74(1),76.When developing a balanced scorecard for an internal change initiative, rememberthat the relevant customers may be employees in other departments of theorganization, rather than the external customers of the firm. Kaplan and Norton argue
that the use of multiple measures ensure a more balanced perspective on what asuccessful change will require. The likelihood that multiple measures will inadvertentlymislead change leaders about what a successful change will require is much less thanif they rely on a single indicator. Figure 10.5 outlines a generic balanced scorecard fora change project. Figure 10.6 outlines the balanced scorecard for Control ProductionSystems.Figure 10.6 Balanced Scorecard for CPSToolkit Exercise 10.4 asks you to construct a strategy map and balanced scorecardfor an organization that you know and a change you have some knowledge of.Remember that customers can be internal or external to the firm.
Risk Exposure CalculatorRobert Simon has developed a risk exposure calculator for use in assessing thelevel of risk associated with a company’s actions.37 Simon argues that risk is related tothe rate of growth of the company, its culture, and how information and data aremanaged. The tool focuses primarily on internal rather than external environmentalrisks. Although it was designed for use on the overall organization, it has beenmodified to assess the risk exposure related to a particular change initiative as well asmaintaining the status quo.The first three risk drivers are grouped under change pressure. When the changeleader is (a) under significant pressure to produce, (b) there is a great deal ofambiguity, or (c) employees are inexperienced in change, then the risks associatedwith the change initiative will be higher than if the pressures being experienced werelower for one or more of these three factors.Change culture identifies the second set of risk drivers. If (a) the culture pushes risk-taking, (b) executives resist hearing bad news, or (c) there is internal competition, thenrisks will be further elevated.The final set of risk drivers is grouped under information management. When (a) thechange situation is complex and fast changing, (b) there are gaps in the diagnosticdata that change measures, and (c) decision making regarding change isdecentralized, then risks will rise once again. These nine risk factors are cumulative innature. The overall level of change risk rises as the total number of significant riskfactors rises.If Simon’s risk calculator had been applied to AIG’s mortgage arm prior to theeconomic meltdown in 2007–2008, or Lehman Brothers by those knowledgeableabout their internal operations, then scores indicating extreme risk in virtually all nineareas would have been recorded. The environments these organizations wereoperating in were complex, fast moving, and highly ambiguous. Many seniormanagers lacked knowledge and experience with the high-risk products and servicesthey were responsible for: risk-taking and competition were pushed to the extreme bysubordinates, and the bearers of concern and bad news put themselves at risk ofbeing fired.There are also dangers for the organization when risk levels get too low. Little positivechange will occur if there is no pressure for change, little cultural support for risktaking, and if people perceive a very stable and predictable environment. Ifperceptions of low risk are sustained for a long periods of time, the capacity of theorganization to be flexible and adapt will tend to atrophy. When low-risk organizationalmembers are then faced with change that can no longer be ignored, their ability torespond will be compromised.There is no optimal risk score that fits all organizations. Optimal risk scores vary,depending on the nature of the environment, the upside and downside consequencesof risk-taking, and the ability to take steps to alleviate risks. The risk appetites ofchange leaders should prudently reflect the needs and opportunities for innovation andchange balanced by the needs for appropriate levels of caution and oversight. Of
course, the organization’s resources and capabilities will also determine the degree ofrisk that is sustainable and desirable.Change leaders can take advantage of the risk calculator by using the informationfrom it to make the risks manageable during the planning and deployment stages. Forexample, ambiguity can be reduced by emphasizing the change vision or by creatingexplicit milestones. Risks related to inexperience can be moderated by addingexperienced managers to the change team. Further, it can be used to monitor risklevels as the change proceeds, with steps taken along the way to moderate levels upor down, depending on the situation.Toolkit Exercise 10.5 sets out a risk calculator based on Simon’s work and allows youto calculate a risk score indicating whether a project is in a safety zone or not.
The DICE ModelA process-oriented approach to assessing and managing the risks associated withchange projects is offered by Sirkin, Keenan, and Jackson. Based upon empiricaldata, they have developed a four-factor model for predicting the success of a changeinitiative. They refer to this as the DICE framework.38Duration asks about how frequently the change project is formally reviewed. If thefrequency of formal review is less than every two months, it receives a score of 1. Ascore of 2 is awarded when the frequency is from two to four months; a 3 for afrequency of between four and eight months; and a 4 for time intervals in excess ofeight months. The message is that the risk of failure increases as the time betweenformal reviews rises. In other words, “out of sight, out of mind” is a bad idea when itcomes to assessing and guiding major changes. Providing timely guidance andassistance requires a rigorous and systematic approach to managing the change—something that won’t happen with a “how’s it going → just fine” form of cursoryassessment.Integrity asks about the team leader’s skills and credibility, and the skills, motivation,and focus of members of the change team. A score of 1 is recorded if the team leaderhas the skills needed and the respect of coworkers, if the team members have theskills and motivation to complete the project on time, and if at least 50% of the teammembers’ time has been assigned to the initiative. If the change team and leader arelacking on all dimensions, a score of 4 is recorded. If the factors lie somewhere inbetween, scores of 2 or 3 are allocated.Commitment is a two-stage measure.The first part assesses the commitment of senior management. If the words anddeeds of senior managers regularly reinforce the need for change and the importanceof the initiative, a score of 1 is given. If senior managers are fairly neutral, scores of 2or 3 are recorded. When senior managers are perceived to be less than supportive, ascore of 4 is applied.Second, the employee or “local level” commitment is evaluated. If employees are verysupportive, a score of 1 is given. If they are willing but not overly eager, the scoreshifts to 2. As reluctance builds, scores shift to 3 and 4.Effort is the final factor in the DICE model and refers to the level of increased effortthat employees must make to implement the change. If the incremental effort is lessthan 10%, it is given a score of 1. Incremental effort of 10% to 20% raises the score to2. At 20% to 40%, the score moves to 3, while additional effort in excess of 40% raisesthe score to 4.The overall DICE score is calculated in the following fashion: The Integrity and SeniorManagement Commitment scores are weighted more heavily in the model, with eachbeing multiplied by 2. This is because the scores on these factors have been found tobe more significant drivers of risk. Then the scores of all factors are added together.
Overall Dice Score = Duration + (2 X Integrity of Performance) + (2 X Senior ManagementCommitment) + Local Level Commitment + EffortThe research shows the following about scores:7–14: high likelihood of success15–17: worry zone17+: extremely risky, woe zone, with higher than 19 very unlikely to succeedThis model is useful in assessing risk and also in pointing to concrete things that canbe done to make the risks manageable during the planning and deployment phases.For example, risks can be reduced by having more frequent formal project reviewsand by the staffing of change initiatives with competent and credible team leaders andmembers. Likewise, increasing local and senior-level commitment and allocatingsufficient time to change leaders and others working on the initiative will also help inreducing risks.Toolkit Exercise 10.6 asks you to apply the DICE model to a change you are familiarwith.SummaryCare taken in the selection of measures and control processes helps clarify what the changeis about and focuses energy and effort. It also saves change agents a great deal of time lateron because it enhances the efficiency and effectiveness of the change process, provides anearly warning system of problems, and thus leads to faster attention to appropriate midcoursecorrections. It also forces change leaders to be honest with themselves and others aboutwhat will be accomplished and what it will take to bring these things to reality. There is an oldmanagement adage that makes a lot of sense: It is far better to under promise and overdeliver than to overpromise and under deliver.The careful selection and use of data can be used to enhance ownership of the changethrough how the measures are selected (i.e., who participates in their selection) and throughensuring that those involved receive the credit for what is accomplished. See ToolkitExercise 10.1 for critical thinking questions for this chapter.Key TermsMeasurement and control systems—developed to focus, monitor, and manage what isgoing on in the organization.Simon’s Four Management Control SystemsInteractive control—the systems that sense environmental changes crucial to theorganization’s strategic concerns, for example, market intelligence that will determinecompetitor actions.Boundary systems—the systems that set the limits of authority and action and determineacceptable and unacceptable behavior, for example, limits to spending authority placed onmanagerial levels. These tend to focus on what is unacceptable and identify not only what isprohibited but also the sanction.Belief systems—the structure of fundamental values that underpin organizational decisions,for example, the stated organizational values that often accompany the vision and mission.
Diagnostic and steering controls—the traditional managerial control systems that focus onkey performance variables, for example, sales data responding to changed selling efforts.Strategy map—the visualization of how the vision and strategy can be systematicallybrought to fruition. Strategy Maps begin by defining the vision and strategy for change.Financial perspective—identifies the financial outcomes that the change will give rise to anddefine the paths that will produce those outcomes.Customer perspective—focuses on service and customer-oriented goals to achievefinancial objectivesInternal business process perspective—focuses on operational and process efficienciesthat help accomplish financial goals and objectives.Learning and growth perspectives—focuses on the internal staffing, training anddevelopment needed to allow staff to reach objectives across the map. This is defined as thehuman capital component. It also addresses the information capital component (theinformation systems related elements) and organizational capital components (e.g.,structures).Balanced scorecard—an integrated set of measures built around the mission, vision, andstrategy. There are four measures: the financial perspective, customer perspective, internalbusiness process perspective, and learning and growth perspective. As such, they provide abalanced perspective on what is required to enact the strategy.Risk exposure calculator—an assessment tool developed by Robert Simon that considersthe impact that nine specific factors, noted below, may have on the risk levels faced by a firm.A. Change pressure—when change leaders feel significant pressure to produce andaccomplish the change, when there are high levels of ambiguity, and the leaders havelittle experience with change, risk is increased.B. Change culture—when the rewards for risk taking are high, when senior executivesresist hearing bad news, and when there is internal competition between units, risk isincreased.C. Information management—necessary when the situation is complex and fastchanging, when gaps in diagnosis exist, and if decision making is decentralized, risk isincreased.DICE framework—a process-oriented approach to assessing and managing the risksassociated with change projects.A. Duration—measures how frequently the change project is formally reviewed. Asduration increases, risk increases.B. Integrity—of performance is a two-part measure. The first part asks about the teamleader’s skills and credibility and the second part asks about the skills, motivation, andfocus of members of the change team. As skills, credibility, and motivation decrease,risk levels increase.C. Commitment is a two-stage measure—The first part assesses senior managementcommitment. The second part evaluates employee or “local level” commitment. Ascommitment decreases, risk levels increase.D. Effort—measures the level of increased exertion that employees must make toimplement the change. As the amount of incremental effort increases beyond 10%, risklevels increase.
Checklist: Creating a Balanced Scorecard1. State the mission, vision, and strategy for the change.2. Consider the mission, vision, and strategy of the organization:Is the proposed change consistent with these?If not, what needs to be done with the change or the existing mission, vision, andstrategy to bring them into line?3. Complete the financial component of the scorecard by answering the followingquestions:If you succeed with the change vision, how will it appear to the shareholders orthose responsible for funding the change?How will you know (objectives and metrics)?Which are leading indicators and which are lagging indicators?4. Complete the customer component of the scorecard by answering the followingquestions:If you succeed with the change, how will it appear to your customers?How will you know (objectives and metrics)?What are the leading and lagging indicators?5. Complete the internal business processes component of the scorecard by answeringthe following questions:If you succeed with the change, how will it appear in your business processes?How will you know (objectives and metrics)?What are the leading and lagging indicators here?6. Complete the learning and growth component of the scorecard by answering thefollowing questions:If you succeed with the change, how will it appear to your employees anddemonstrate itself in their actions?What about the information and organizational capital?How will you and they know (objectives and metrics)?What are the leading and lagging indicators here?7. Seek feedback from trusted colleagues on the scorecard you’ve developed. Does it helpthem to understand the change initiative you have in mind, key data that will indicateprogress, and what will need to be done to achieve the desired outcomes?
End-of-Chapter Exercises
Toolkit Exercise 10.1
Critical Thinking QuestionsThe URLs for the videos listed below can be found in two places. The first spot is next to theexercise and the second spot is on the website at study.sagepub.com/cawsey4e.1. The Beauty of Data Visualization—18:17 minuteshttps://www.bing.com/videos/search?q=the+beauty+of+data+visualization&docid=608019685193287796&mid=FA748A7A9F54F6F67357FA748A7A9F54F6F67357&view=detail&FORM=VIREThis is a TED Talk by David McCandless on the value of visualizing data in order todraw new meaning and insights from complex data in order to better design, innovate,make better decisions, and so on. Can be a useful video prior to discussing thedevelopment of information and metrics to help frame change, change views, andguide change initiatives.Give an example of how the reframing of data might bolster the change process ineach of the four stages.How might the data presented in the video prompt change? Explain.2. Susan Colantuono: The Career Advice You Probably Didn’t Get—13:57 minuteshttps://www.youtube.com/watch?v=JFQLvbVJVMgHow do the skills Colantuono talks about matter to measuring and implementingchange?How should organizational leaders imbed the skills that Colantuono talks aboutinto the organization in order to create continuous change?Please see study.sagepub.com/cawsey4e for access to video and a downloadable template ofthis exercise.
Toolkit Exercise 10.2
Reflecting on the Impact of Measures and ControlProcesses on ChangeThink of a change initiative that you are familiar with.1. What measures and control processes were employed in tracking and guiding the changeinitiative? Were they consistent with the vision and strategy of the change? Were theyviewed as legitimate by those who would be using them?2. How was the measurement information captured and fed back to those who needed to useit? Was it a user-friendly process, and did the information arrive in a useful and timely form?3. Did the change managers consider how the measures might need to evolve over the life ofthe change initiative? How was this evolution managed? By whom?4. Were steps taken to ensure that the measures used during the change would be put toproper use? Were there risks and potential consequences arising from their use that wouldneed to be managed?5. Were goals and milestones established to plot progress along the way and used to makemidcourse corrections if needed? Were the smaller victories celebrated to reinforce theefforts of others when milestones were achieved?6. What were the end-state measures that were developed for the change? Were theyconsistent with the vision and strategy? Were they viewed as legitimate by those who wouldbe using them?7. How was the end-state measurement information captured and fed back to those who wouldneed to use it? Was it a user-friendly process?8. Were steps taken to ensure that the measures would be put to proper use? Were there risksand potential consequences arising from their use that would need to be managed?Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Toolkit Exercise 10.3
Application of Simon’s Four Levers of Control ModelConsider a change you are familiar with.1. Describe the control processes and measures that were used with the change (i.e., thebelief, interactive, boundary, and diagnostic controls). When and how were they used, andwhat was their impact?a. During the earlier stages of the change initiativeb. During the middle stages of the change initiativec. During the latter stages of the change initiative2. Were there forbidden topics in the organization, such as questions related to strategy or corevalues? Were those limits appropriate and did anyone test those limits by raisingcontroversial questions or concerns? Were small successes celebrated along the way?3. What changes could have been made with the control processes and measures that wouldhave assisted in advancing the interests of the change?Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Toolkit Exercise 10.4Aligning the Change With Systems and Building the Balanced Scorecard for the ChangeThink about a change you are familiar with.1. State the mission, vision, and strategy for the change.2. Consider the mission, vision, and strategy of the organization:Is the proposed change consistent with these?If not, what needs to be done with the change or the existing mission, vision, andstrategy to bring them into line?3. Financial component of scorecard: If you succeed with the change vision, how will it appearto the shareholders or those responsible for funding the change?How will you know (objectives and metrics)? Are some of these leading indicators whileothers are lagging indicators?4. Customer component of scorecard: If you succeed with the change, how will it appear toyour customers?How will you know (objectives and metrics)? Are there leading and lagging indicatorshere?5. Internal business processes component of scorecard: If you succeed with the change, howwill it appear in your business processes?How will you know (objectives and metrics)? Are there leading and lagging indicatorshere?6. Learning and growth component of scorecard: If you succeed with the change, how will itappear to your employees and demonstrate itself in their actions?What about the information and organizational capital? How will you and they know(objectives and metrics)? Are there leading and lagging indicators here?7. Lay out the scorecard you’ve designed for your change and seek feedback.8. Show how the different components are connected to each other by developing a strategymap for the change in the space below.Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Toolkit Exercise 10.5
Using the Risk Exposure CalculatorConsider a change initiative that you know is currently being considered for adoption and applythe risk exposure calculator to it.ScoreChangePressurePressure to produceLow High1 2 3 4 5Score:Level of ambiguityLow High1 2 3 4 5Score:Experience withchangeHigh* Low1 2 3 4 5Score:*Note: High and Lowanchors are reversedfor this item.Outof 15___ChangeCultureDegree to whichindividuals arerewarded for risktakingLow High1 2 3 4 5Score:Degree to whichexecutives resisthearing bad newsLow High1 2 3 4 5Score:Level of internalcompetitionLow High1 2 3 4 5Score:Outof 15___InformationSituationDegree to whichsituation is complexand fast changingLow High1 2 3 4 5Score:Level of gaps thatexist in diagnosticmeasuresLow High1 2 3 4 5Score:Degree to whichchange decisionmaking isdecentralizedLow High1 2 3 4 5Score:Outof 15___Total Score =Using scoring criteria consistent with that developed by Simon:If your score is between 9 and 20, you are in the safety zone.Between 21 and 34, you are in the cautionary zone.Between 35 to 45, you are in a danger zone.1. Does the organization have an appropriate level of risk taking given the nature of thebusiness it is in? Does it play it too safe, about right, or does it take excessive risks?2. Does the approach help you in thinking about risk and what factors may be contributing tothe overall risk levels?3. Do the findings help you to think about what can be done to make the levels of risk moremanageable?Source: Adapted from Simon, R. (1999). How risky is your company? Harvard Business Review,77(3), 85–94.
Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Toolkit Exercise 10.6
Applying the DICE ModelConsider a change initiative that you know is currently being considered for adoption and applythe DICE model to it.Duration: How frequently is the project formally reviewed?a. Time between project reviews is less than 2 months—1 pointb. Time between project reviews is 2–4 months—2 pointsc. Time between project reviews is 4–8 months—3 pointsd. Time between project reviews is more than 8 months—4 pointsDuration Score = _____________________________________Integrity: How capable is the project team leader? How capable and motivated are teammembers? Do they have the sufficient time to devote to the change?a. Leader is respected, team is capable and motivated, and members have sufficient timeto commit to the project—1 pointb. If leader or team is lacking on all these dimensions—4 pointsc. If leader and team are partially lacking on these dimensions—2 to 3 pointsIntegrity of Performance Score: (Your Initial Score × 2) =_____________________________________Commitment of Senior Management: How committed is senior management to the project?Do they regularly communicate the reasons for the initiative and its importance? Do theyconvincingly communicate the message and their commitment? Is the commitment to theproject shared by senior management? Have they committed sufficient resources to theproject?a. If senior management clearly and consistently communicated the need for change andtheir support—1 pointb. If senior management appears neutral—2 to 3 pointsc. If senior management is reluctant to support the change—4 pointsSenior Management Commitment Score: (Your Initial Score × 2) =_____________________________________Local Level Commitment: Do those employees most affected by the change understand theneed and believe the change is needed? Are they enthusiastic and eager to get involved orconcerned and resistant?a. If employees are eager to be engaged in the change initiative—1 pointb. If they are willing but not overly keen—2 pointsc. If they are moderately to strongly reluctant to be engaged in the change—3 to 4 pointsLocal Level Commitment Score = _____________________________________Effort: What incremental effort is required of employees to implement the change? Will it beadded on to an already heavy workload? Have employees expressed strong resistance toadditional demands on them in the past?a. If incremental effort is less than 10%—1 pointb. If incremental effort is 10% to 20%—2 pointsc. If incremental effort is 20% to 40%—3 pointsd. If incremental effort is greater than 40%—4 pointsEffort Score = _____________________________________________To calculate your overall DICE score: Add the scores from the above:________________________________1. What score did the change project receive? Was it in the low-risk category (7 to 14), theworry zone (between 14 and 17), or the high-risk area (over 17)?2. Do the findings help you to think about important sources of risk to the success of theproject?3. Do the findings help you to think about what can be done to make the levels of risk moremanageable?Source: Adapted from Sirkin, H. L., Keenan, P., & Jackson A. (2005, October). The hard side ofchange management. Harvard Business Review, 91(9), 108–118.
Please see study.sagepub.com/cawsey4e for a downloadable template of this exercise.
Omada Health: Making the Case for Digital HealthBy Erin E. Sullivan, Research Director, PhD, and Jessica L. Alpert, ResearcherCenter for Primary Care, Harvard Medical School, Boston, MAAdrian James and Sean Duffy’s founded Omada Health (Omada) in 2011 with the initial goal ofusing digital therapeutics and behavioral health interventions for patients with prediabetes. Thedata supporting this approach was strong: in 2002, the Diabetes Prevention Program (DPP)randomized control study concluded that the most effective treatment for prediabetes is preventionand behavioral intervention. However, James and Duffy observed a problematic gap between asurplus of data that confirmed the efficacy of intensive behavioral health counseling in diabetes,and the 86 million individuals with prediabetes who have not yet completed a DPP type program.James and Duffy believed that Omada’s digital approach to scaling a validated DPP programcould resolve a critical need and increase access to DPP for patients with prediabetes.
Pioneering Digital Therapeutics and Digital BehaviorChangeAlthough digital health often refers to health apps and products, James and Duffy weredetermined to design a service to guide participants through an interactive journey that wasintegrated into their everyday lives. As James asserted,The day that our participants see us as a health app is the day of obsolescence. In mysmartphone I’ve got like 10 different health apps, many of which I never click on. We’resaturated in this world of tracking. If you go out and ask someone, “How meaningful arethese apps to you?,” I think many would say that they are something they’re curiousabout and will try, but that they are not really baked into their lives.Above all, the core mission of the company was to empower people to take ownership over theirhealth and to reduce their risk of disease. In keeping with this philosophy, they named theircompany, “Omada,” the Greek word for “group,” which was reflective of their desire to bring peopletogether in a journey toward diabetes prevention.Some of the access barriers associated with in-person DPP were the time and expense requiredto travel to and attend these sessions. James and Duffy sought to mitigate these challenges andalso asked themselves how they could engage individuals in a way that was scalable. The OmadaDPP approach was a 16-week digital behavioral intervention that featured four core elements:educational modules and an evidence-based curriculum; health coaches; peer support andnetworking groups; and tools and food and activity trackers, which included a cell-chip enabledscale that automatically transmitted daily weigh-in data to Omada’s health coaches and datascientists.When individuals qualified for and joined the program, they accessed Omada’s platform usingeither its online web, or a smartphone interface. Omada’s DPP was split into two distinct phases:Foundations and Focus.Foundations: For the first 16 weeks, participants participated in the Foundations Phase. Inthis stage, participants completed weekly lessons designed to reinforce habits,communicated with their virtual group, led by a professional, full-time health coach.Additionally, participants privately worked with their coach to address individual challenges.In this phase, there were four four-week chapters covering nutrition and healthy eating,physical activity, managing environmental stressors and sleep. These chapters were aimedat reinforcing lifelong habits.Focus: After the Foundations Phase, participants entered the eight-month Focus Phase,during which they had continued access to their health coach, initial cohort, and weeklylessons. Participant groups were then merged into larger cohorts so that individuals couldhave access to a wider range of support and experiences.
Using Data to Drive Healthy OutcomesOmada aimed to collect measures in a way that was simplistic and effortless for participants, butalso maintained clinical integrity and monitored clinically meaningful outcomes while doing so. Thedigital scale was easy for patients to use and served as a program integrity safeguard given thathealth coaches and data scientists instantly knew whether or not participants were weighing in.Consequently, Omada data scientists and health coaches were able to closely monitor any spikesin weight and then determine if the observed weight gain was an outlier or a sign that furtherintervention and health coaching was required. The health coach served as the “human touch”between the data scientists and participants, helping the scientists better understand user patternsand the nuances of the large data set they collected.To symbolically capture the dedication to outcomes and data, the Omada office featured a livemap of patient weigh-ins from across the country. As of June 2017, the map amassed acumulative total of 18 million weigh-ins. By thoughtfully collecting these measurements, thecompany increased compliance and therefore facilitated a more effective data collection process.Consistent with their evidence-driven beginnings, Omada was paid by their clients based on theiroutcomes. James and Duffy believed that this outcomes-based pricing model demonstrated theircommitment to delivering results for participants and a return on investment for their clients,namely self-insured employers and a small number of health plans. As part of the program,Omada kept clients up to date on process via real-time, de-identified, aggregate reports.Furthermore, Omada published outcomes data to demonstrate program replicability. One studyindicated that after 16 weeks, Omada participants lost 4–5% of their body weight and kept most ofthe weight off years after completing the program, thereby preventing the progression fromprediabetes to diabetes over time.
The Challenge in Going to ScaleIn the summer of 2017, Omada was eagerly waiting for the Center for Medicare & MedicaidServices (CMS) to release the Medicare Physician Fee Schedule which would include the finalrules for the Medicare Diabetes Prevention benefit. James and Duffy were hopeful for a favorableoutcome, which would include telehealth and digital delivery of DPP programs. If CMS addedthese programs to the fee schedule, Omada planned to deliver their program to Medicarebeneficiaries starting January 1, 2018. Ruminating on the possibilities, Duffy added that “it was anamazing moment because Medicare had the potential to influence private medical policies,” whichwould provoke others to say, “If Medicare is doing it, why don’t we?” Essentially, if Medicarestarted to pay for diabetes prevention, it would help catalyze activity and growth for Omada.In November 2017 the CMS revealed that it would reimburse for in-person DPP programs, but thatit would not yet reimburse for telehealth and digital delivery of DPP programs. CMS asserted thereason was a lack of compelling evidence regarding clinical efficacy. This was not the decisionthat James and Duffy were hoping for and they had to quickly decide how to move the companyforward.If you were James and Duffy, what are your next steps following CMS’s decision not to reimburse?What are the viable options or strategies for addressing CMS’s concerns regarding clinicalefficacy?
Chapter Eleven The Future ofOrganizations and the Future ofChangeChapter OverviewIndividuals wishing to become organizational change agentsneed to recognize that two main routes exist: sophisticatedtechnical specialists and strategic generalists with the formeroften leading to the latter.Several paradoxes in the field of organizational change aresummarized.The chapter ends with a summary checklist of lessons inorganizational change.Change is both normal and pervasive, and the capacity to leadand implement organizational change, denotes a skill set allmanagers need to possess. In summarizing the practical andtheoretical approaches to organizational change, it is important toreiterate that the change process is rarely a straight path. Youmay begin the process of organizational change aiming at aparticular vision and end up at some variation of the original goal.Change processes require adapting, compromising, reevaluating,and having an open mind, while at the same time remainingcommitted to the vision and persevering to see the changethrough.The process contains inherent paradoxes that must be managed,and the journey can be confusing and frustrating for both thosetrying to implement changes and those whose lives are affectedby the changes. However, it also has the potential to energize andexcite, provide focus and hope. It represents the path throughwhich revitalization and renewal occurs, from smaller incrementalmodifications to those larger-scale transformational changes thatneed to be undertaken from time to time.
Change management is not something you simply deal with, thencan ignore. Rather, it is a continuing process of seeking tounderstand what is going on and what is needed, undertakinginitiatives with others, and learning from the experiences andoutcomes achieved. The completion of one change sets the stagefor the changes that lie ahead. In essence, change is the normalstate and if an organization is not attempting to challenge thestatus quo, adapt, and improve, it’s likely undergoing lessdesirable forms of change—stagnation, atrophy, and decline.Developing your capacities to lead and manage this processincreases your ability to add value and will enhance your careerprospects. The search for talented individuals who can help makepositive things happen will only intensify in the years ahead.The paces of change and rates of disruption are acceleratingacross virtually every sector. Bricks and mortar (i.e., retail)businesses such as Sears, Radio Shack, and Toys “R” Us providevivid examples of what happens when you do not effectivelyadapt. However, no one is immune. That is why firms assuccessful as Unilever, IBM, GM, Walmart, McDonald’s,Scotiabank, and Facebook are aggressively pursuing initiativesthat they hope will allow them to rapidly adapt, innovate, and scalesuccessful new initiatives. They do not want to find themselves leftbehind, watching others eat their lunch. No organization—public,private or not-for-profit—that hopes to remain relevant and viablein the intermediate to long term can turn a blind eye to theiremerging challenges and opportunities. Hospitals, governmentdepartments and agencies, school boards, universities, andcharities are all grappling with these realities.
Putting the Change Path Model IntoPracticeThe Change Path Model has provided an organizing frameworkfor this book, and it is presented in its summary form in Figure11.1. This model argues that change agents move systematicallyfrom analyses that stimulate interest in change and awaken theorganization, through to mobilization, acceleration, andinstitutionalization of the change. A summary checklist for changeis presented at the end of this chapter.An important modification has been made to this final presentationof the model. An arrow has been added that links the fourth phaseback to the first to reflect that the enactment of one set of changessets the stage for the next ones. It’s an ongoing process whoseintensity will vary, depending upon the situation, the people, andthe magnitude of what is being undertaken. There is no questionthat we need to rest and reenergize from time to time, celebratewhat we’ve accomplished, and become fully competent inextracting the benefits the changes make possible. But then it’s onto the next challenges. We can’t change the past, but what wechoose to do (or not do) now can change the future. If we chooseto do nothing but more of the same—you get the picture!
Future Organizations and TheirImpactBarkema argues that in the future all organizations will need to beglobal in orientation.1 Small- and medium-sized firms will accessglobal markets through the Internet in low-cost/high-information-transmission ways. Others will form organizational networks,partnering with others to complete the value chain. Some will belarge, focused global firms with worldwide activities.Barkema states that organizations will have autonomous,dislocated teams. That is, organizations, large or small, willrequire motivated teams to coordinate their activities acrossborders and cultures. At the same time, structures will be “digitallyenabled.” They will have the electronic systems to facilitatecoordination. Scanning systems will transmit sales data fromstores and warehouses anywhere to manufacturing facilities inreal time and will be used to determine future production levels.Personal communications devices such as the iPhone and othersmartphones will mean that people can communicate any time, allthe time. Such dispersed systems facilitated by almostinstantaneous communications will make it easy for competitors torespond to each other’s actions. The world will move fast. We canreadily see signs of this increased speed.Figure 11.1 The Change Path Model
Such changes will mean that organizations will need loose/tightcontrols both within and between firms. Inside organizations,critical strategic variables should be closely monitored andcontrolled. Visions will be articulated and adhered to. At the sametime, rapid environmental shifts will demand local responses thatwill vary by region as well as responses that are broad in theirgeographic reach. What works in one country won’t necessarilywork in another. Think of the regional differences in theformulation of branded products such as Coke and McDonald’sand this reality becomes clear. Maharaja burgers and separate
vegetarian and non-vegetarian kitchens are found in McDonald’srestaurants in India, but not the U.S. Managers will need to havethe autonomy and the capacity (skills, abilities, and resources) toeffectively recognize and respond to local needs and conditions,but they will need to do so within the boundaries that areacceptable to the firm.Between organizations, networks of firms will be linked to allow forneeded information exchange. What is shared will vary from thepurely transactional to the strategic, depending on the levels oftrust and intimacy existing between firms. At the same time, thesefirms will maintain their independence on key strategic dimensionsviewed as proprietary and/or sources of competitive advantagecritical to their long-term success.Galbraith suggests that strategy and structure of organizations willcontinue to be closely tied.2 Organizations will come in anenormous variety of forms and complexities. AI (artificialintelligence systems) and robots are taking over straightforwardwork that is repetitive and easily understood and these systemswill become more sophisticated and capable over time. The keymanagement tasks will involve innovation and the mastering ofcomplexity. Galbraith classifies potential strategies and suggestsmatching structures.According to Galbraith, organizations in the 21st century willbecome increasingly customer oriented and focused. In thecustomer-oriented organization, organizations will have threemajor organizational parts: business units, international regions,and customer accounts. These parts will be linked with lateralprocesses: teams and networks. Focused organizations will havesubunits focused on different key criteria: costs, products, orcustomers.Malone argues that tomorrow’s organizations will have thebenefits of both large and small organizations.3 Digitaltechnologies will enable economics of scale and knowledgecreation while preserving the freedom, creativity, motivation, andflexibility of small organizations. There will be a shift from
traditional centralized hierarchies to organizations of loosehierarchies, democracies, and markets—like organizations.Loose hierarchy example: Wikipedia, the free onlineencyclopedia that anybody can edit and when errors occur,others will spot and correct themDemocracy examples: W. L. Gore, where you become amanager by finding people who want to work for you, orMondragon, where employees elect a board of directors tomake decisionsMarket example: An Intel proposal where plant managerspropose to sell futures on what they produce and salespeoplebuy futures for products they want to sell. Prices fluctuate andwill determine what products get produced at what plants andwho gets to sell the products.The above is suggestive of how organizations will evolve in thefuture. As a result of these and other trends, organizationalchange and change agents will need to shift as well. Table 11.1summarizes these potential changes. The table suggests thatchange agents will need both a set of generalist capabilitiesproviding basic competencies as well as change skills orientedaround critical technical competencies.Table 11.1 The Impact of Organizational Trendson Organizational Change and ChangeAgentsTable 11.1 The Impact of Organizational Trends onOrganizational Change and Change AgentsOrganizationalTrendsOrganizationalChangeChange AgentGlobalization—be big, orspecialized,otherwise beacquired,Strategic globalperspective forboth large firmsand niche SMEsPattern finderVision developer andframer
OrganizationalTrendsOrganizationalChangeChange Agentsqueezed, oreliminatedVirtual andnetworkedorganizationsLoose/tightcontrols24/7 responserequirementCost andquality focus,outsourcingand supplychainrationalizationCrowdsourcing forcapital,innovation,and talentUse of bigdata,algorithms,and artificialintelligence(AI) to informdecisionmakingShortenproduct lifecycles andKnowledge ofnetworks andemergentorganizationalformsincreasinglyimportantKnowledge andriskmanagement:ability to usecrowd sourcing,onlinecommunities,and big data toenhanceknowledgecreation,innovation, andrisk managementWeb-enabledcommunication,change-relatedblogs, fastresponsecapacity with ahuman faceNegotiation andthe developmentand leveraging ofnetworks toenhance quality,cost leadership,Organizational analystand alignerMobilizer, empowermentspecialist, enabler,enactorDisintegrator andintegratorCorporate gadfly andtrend surferGeneralist capacities:facilitation, influencing,negotiating andvisioning skills; projectmanagement expertiseSpecialist roles, relatedto expertise needed forspecific changeinitiatives. For example,software systemintegration, customerrelationshipmanagement, flexiblemanufacturing,organizationalintegration followingacquisitionCapacity to develop andsustain the trust andconfidence of multiplestakeholders
OrganizationalTrendsOrganizationalChangeChange Agentincrease incustomerexpectationsInfluentialonlinecommunitiesspreadinginformationaccessIncreasingfocus onintegratedcustomerservices andknowledgemanagementRapidtechnologicalchangefundamentallyalters industrystructures, interms of boththe “what” andthe “how”Changingdemographic,social, andculturalenvironmentPoliticalchangesand/or customerfocusCreativity,innovation, andrapid deploymentcapacityIncreasedimportance ofagility,empowerment,teams,communityengagement,and a strongprocess focusIncreasedimportance of AI,robotics, newmaterials, newprocesses andthe internet ofthings (IOT) inthe creation ofgoods andservices.
OrganizationalTrendsOrganizationalChangeChange Agentrealigninternationalalliances andthecompetitiveenvironmentIn summary, those involved with organizational change need todevelopa strong strategic and global perspective;knowledge of networks and emergent organizational formsand how they work;skills in risk management and knowledge management;understanding of the impact of Web-enabled communication,the use of social media in advancing external and internalchange, and fast response capacity;the ability to communicate worldwide while maintaining ahuman face;perceptiveness of different cultures and norms, and howthese factors affect organizational change; andthe capacity to create, deploy, and work with empoweredteams with the right mix of skills and abilities, operating with afocused vision. The teams’ boundaries come from the visionand agreed-to expectations concerning performance, modesof operation, and other predefined standards and sharedcommitments. These capacities will apply to both co-locatedand virtual teams.
Becoming an Organizational ChangeAgent: Specialists and GeneralistsFor many change agents, their initial involvement begins whenthey are asked to participate in a change initiative—often as amember of a team—due to their particular technical skills, pastperformance, and interest they have demonstrated in changeinitiatives. If the change involves the deployment of new salessupport software, for example, individuals with appropriatetechnical competencies concerning both the software’simplementation and the nature of the sales process will need to beinvolved with the project.Over time, though, the careers of change agents tend to evolve intwo different ways: those who are technically oriented in theirchange skills, and those who possess more generalist changeagent skills.The careers of technically oriented change agents will becharacterized by projects of increasing size and complexity in theirareas of technical expertise. For instance, if their educationalbackground was in computer programming, their initialinvolvement could be the provision of training for corporate usersof a system upgrade. Over time, as their expertise grows, thesechange agents will find themselves taking on bigger and moresophisticated technical change challenges. At their peak,individuals who began their careers providing computer trainingwill have become respected change experts in large-scalesoftware system integration projects.Technically oriented change specialists will require somecompetence in more general change-management skills, such asgap analysis, communication of vision, and interpersonal skills;however, it will be their technical change-management expertisethat will be sought after when an initiative lies within their domain—be it software, merger integration, or foreign marketdevelopment. Individuals pursuing this career path will often befound in consulting firms that specialize in their areas of expertise.
The careers of more general management-oriented changeagents are characterized by a shift away from a technicallyfocused path, as they work to develop change-management skillsthat are appropriate for a wider variety of situations. Those whochoose to orient their development around general change-management skills may initially start their careers in technical andfunctional change management. However, over time, theseindividuals will develop increasingly sophisticated general change-management competencies associated with the Change PathModel. As a result, they will find themselves undertaking diversechallenges of increasing complexity, from turning around a poorlyperforming division to ramping up an operation to cope withgrowth, restructuring and integrating merged operations, ortackling cultural changes needed to increase organizationaleffectiveness in emerging markets.To be successful, organizations need access to individuals withboth technical and more general change-managementcompetencies. At times, certain change skills will be moreimportant than others for obvious reasons, but the management ofcomplex change initiatives benefit from having access to bothperspectives and is further aided when the change agentsinvolved respect this need, recognize each other’s skills andabilities, and understand what each of them is able to contribute tothe initiative. Figure 11.2 outlines these two broad career paths.An additional complexity to consider in the area of changemanagement was noted in Chapters 1 and 8. Some changeagents orient their careers around incremental change initiativeswhile others orient themselves around the management of moredisruptive changes. Once again, it is not a matter of either/or as towhich orientation is best. At different points in time, organizationswill need access to both of these skill sets. When change agentswith different orientations respect and value these differences inapproach and recognize what each can contribute, the interests ofchange are advanced.
Paradoxes in Organizational ChangeThe field of organizational change has a set of underlyingparadoxes that change agents struggle with. Just as quantumphysics considers an electron as both a particle and a wave,*some aspects of organizational change have two perspectives.Both aspects are important and neither should be rejected.* Under certain circumstances, the electron looks like a particleand has the characteristics of a particle (mass, solidity, etc.).Under other circumstances, the electron seems to be a wave. Ithas a frequency and other wave characteristics. This paradox isonly resolved by accepting an electron as both.First, the management of organizations will become morecomplex as the strategic focus of organizations develops a globalperspective. Organizational change will need tools and processesthat encourage the systematic management of a wide number ofelements (organizational systems, structures, cultures, leadership,technology, etc.) while maintaining the speed of change. Clearly achallenge will be to handle complexity without being overwhelmedand frozen by it. Organizational change as a field needs to handlethe paradox of how to maintain the momentum of change(something that may require simplification) while not dismissingthe complexity of an organization’s environment.Figure 11.2 Organizational Change Agents’ Skills
A second paradox involves an organization’s need to besimultaneously centralized and decentralized. Organizations mustbe centralized to have singularity of strategy, yet alsodecentralized so that they can remain competitive by respondingagilely to changes in the environment. Organizational changeagents need to learn how to help organizations understand thisparadox and to evolve mechanisms to handle this tension.As organizational leaders become skilled in promotingdecentralized initiatives, they will face the challenge of handlingmultiple change initiatives simultaneously. Change agents need toconsider which change initiatives will block or run counter toothers and which ones will support and facilitate others.Interaction effects are not always self-apparent, and sometimesinitiatives that look like they are supportive of other activities in theshort run may have adverse consequences over the long term.How can change leaders help an organization institutionalize oneproject while continuing multiple other ones, and how can theyassist in identifying and managing unintended side effects?Organizational change involves both incremental/continuous andradical/discontinuous change. Depending on how rapidly the
environment is changing, organizations may need to engage inboth kinds of change. The challenge for change agents will be todevelop adaptive, flexible organizations while simultaneouslyengaging in radical organizational change when it is needed.Organizational change agents need to develop insights into thisparadox.Finally, the digital world and the rise of the knowledge worker mayshift the territory of organizational change from a hierarchicalframe to a democratic, participative one. But the essence of manychange projects is a new direction that, in the end, is mandated,non-democratically, from above. Most change projects need inputfrom rank-and-file employees but also need some degree ofcentral direction and management. The tension betweenparticipative involvement of many and the pressure to drivechange from the top of an organization creates potentialparadoxes.†† Organizational change will need to be prepared to use andrespond to various social media platforms that discuss openly theissues surrounding change initiatives. Can change leaders acceptand deal positively with open criticism that may show up on suchmedia?Given these paradoxes, change agents must develop a positiveorientation to change that permits them to deal with inherentcontradictions.
Orienting Yourself to OrganizationalChangeEveryone who is a member of an organization will participate inorganizational change. Change is a part of living, andopportunities will emerge that involve you in various roles.Sometimes your involvement will be mandated, whereas at othertimes you may choose to seek it out, or your change roles mayevolve naturally over time. Sometimes you will be asked to takeon the role of change leader; become a member of a teamimplementing the change; take on an advisory role; or, you mayfind yourself a recipient of a change initiative. Sometimes you willbe able to exercise choice as to what roles you play in the changeinitiative, whereas at other times this will not be the case. As youexperience organizational change from whatever role you findyourself in, the following advice will help you deal with it moreeffectively.1. Gain perspective and insight by recognizing the dynamismand complexity of your organization. What connections existbetween parts and how do they work?2. Recognize that people’s perceptions are critical. Theperception of benefits and costs determines a person’sreaction to a change proposal.3. Understand that your perception is only one of many. Yourview is neither right nor wrong. It is just your point of view ofhow things are.4. Gather people as you go. There are multiple ways to achieveyour change (even when you are starting as a recipient), butthe ways that bring others with you are easier and more fun.And remember, people can’t rock the boat when they arebusy rowing.5. Pull people toward you with a powerful change vision. Pushpeople through argument and rewards when you need to, butgain support through their hearts.6. Get active in pursuit of your vision. If you do something, youwill get responses, and you can learn from those. Not doing
anything cuts you off from learning.7. Have a plan oriented around your vision. Having an explicitplan means your thinking can be discussed and challenged.Know that your plan won’t last and will require modificationwhen you start implementing it, but it will be useful in startinga discussion and gaining commitment.8. Do things that are positive. Actions that suck energy from youand the system are difficult to sustain. Growing your energyas a change agent is important.9. To start meaningful change, you need only a few believers. Tocontinue, you need to develop momentum until a critical massof key participants is onside. Some will never join in, andthat’s OK, unless they attempt to sabotage or otherwisedisrupt agreed to initiatives.10. There are many routes to your goal. Find the ones with theleast resistance that still allow you to proceed with integrity.SummaryThat’s it. It’s an evolving list and its further development is up to you.You’ve been reading and thinking about how to develop your skills asan agent of change. It’s time to deploy those ideas; see what workswhen, where, why, and how; and learn as you go. No excuses.If you want to make things happen, you will have to learn to live withthe frustration, excitement, uncertainty, loneliness, and personaldevelopment that come with being a change agent. The learning liesin the journey, while joy, a sense of accomplishment, and feelings offulfillment accompany the completion of milestones and therealization of changes that have a positive impact on the lives ofothers. See Toolkit Exercise 11.1 for critical thinking questions onthis chapter.And the day came when the risk it took to remain tight in a bud wasmore painful than the risk it took to blossom.—Anaïs Nin
End-of-Chapter Exercises
Toolkit Exercise 11.11. Choose a recent CNN Hero: think about how they managed tocreate change.https://www.cnn.com/specials/cnn-heroesHow did the person you chose create successful change?What inspired them to take on the change?Imagine in 10 years you become a CNN Hero. What storywill they tell about you?2. Look also at the We Day website. Consider the vision and successof Craig and Marc Kielburger in their various endeavors.How were the Kielburgers able to create such sweepingchange at such a young age?What challenges do you think they may have faced, and howdid they overcome them?How are the youth involved in “We Day” working to createchange?What is it that you want to change?Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Toolkit Exercise 11.2
Developing Your Change PlanThis toolkit exercise applies the tools from all chapters and asks you todevelop a complete change plan for a change you want to make happen.As a first step, develop your statement of the need for change and yourvision for the change.Once the need for change and vision has been articulated, yourassignment is to begin the development of an action plan for the change.This will be broken into four parts:a. The development of a sequence of action steps and thearrangement of them into a critical path with a clearly defined endgoal, intermediate targets, and specific first step.b. The consideration of contingencies—what might go wrong? How willthese things be handled?c. A responsibility chart, that is, who will do what, where, when, andhow?d. A transition plan including a communications plan. How will thetransition be managed? Who will make the innumerable decisionsrequired to handle the details? Who will provide information to thoseaffected? As well, how will the change be communicated toorganizational members?
The Action PlanBegin the development of an action plan. What are the critical steps thatmust be accomplished? Arrange your action steps in sequence. Cansome be done simultaneously? What activities cannot begin or should notstart until others are completed? What timelines should you observe?Often it is useful to begin at the end of the project and work backward tonow.Who needs to become committed to the project?Where are key players at on the adoption continuum? Are they evenaware of the change? If aware, are they interested or have they movedbeyond that stage to either desiring action or having already adopted?What will it take to move them along the continuum in the direction ofadoption?
The AIDA ContinuumKey PlayerNameAware?Interested?DesiresAction?Adopter?What is the commitment to the adoption of those who have reached theadopter stage? That is, are they at the “let it happen” stage, the “help ithappen” stage, or the “make it happen” stage?How can the commitment levels of key stakeholders be increased?
Responsibility Charting4Actions orDecisionsPerson#1Person#2Person#3Person#?Action #1Action #2Decision #1Action #3. . . . .Who will do what, where, when, and how? Often a responsibility chart canbe useful to track these things.Coding:R = Responsibility (not necessarily authority)A = Approval (right to veto)S = Support (put resources toward)I = Inform (to be consulted before action)Note that if there are a great number of As on your chart, implementationwill be difficult. Care must be taken to assign As only when appropriate.Likewise, if there are not enough Rs and Ss, you will need to think aboutchanges needed here and how to bring them about.Formulate a transition plan including a communications plan. How will thetransition be managed? Who will make the innumerable decisionsrequired to handle the details? Who will provide information to thoseaffected? As well, how will the change be communicated to organizationalmembers?
The Measurement of ChangeHow will you know that your goal or change project is successfullyimplemented? (At times, success will be obvious—e.g., a new system inplace. At other times, success will be more difficult to measure—e.g.,attitudes toward the adoption and acceptance of a new system.)What intermediate signals will indicate that you are making progress?What is the first step or sequence of steps?Your end goal is:You can measure it by:Intermediate measures and milestones are:The first step is:
Contingency PlanningRemember O’Brien’s Law‡? Well, it holds, and things will not go asplanned. But you can plan for the unexpected.‡ O’Brien’s Law states Murphy was an optimist.What are the critical decision points? Who makes those decisions?What will you do if the decision or event does not go as planned?What plans can you make to account for these contingencies? If you can,draw a decision tree of the action plan and lay out the decision–eventsequence.Please see study.sagepub.com/cawsey4e for a downloadable templateof this exercise.
Notes
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35. Kaplan, R. S., & Norton, D. P. (2000). Having trouble with yourstrategy? Then map it. Harvard Business Review, 78(5), 167–176.36. Kaplan, R. S., & Norton, D. P. (1996). Using the balancedscorecard as a strategic management system. Harvard BusinessReview, 74(1), 75–85.37. Simon, R. (1999). How risky is your company? HarvardBusiness Review, 77(3), 85–94.38. Sirkin, H. L., Keenan, P., & Jackson, A. (2005, October). Thehard side of change management. Harvard Business Review,91(9), 108–118.
Chapter 111. Barkema, H. G., et al. (2002). Management challenges in a newtime. Academy of Management Journal, 45(5), 916.2. Galbraith, J. R. (2005, August). Organizing for the future:Designing the 21st-century organization. Strategy and structure.The process will continue. Academy of Management AnnualMeeting, Hawaii.3. Malone, T. (2005, August). Inventing organizations. Academy ofManagement Annual Meeting, Hawaii.4. Refer to Beckhard, R., & Harris, R. T. (1987). Organizationaltransitions: Managing complex change (p. 104). Reading, MA:Addison-Wesley, for a further discussion on responsibility charting.
IndexAbrahamson, E., 174, 256Acceleration stage, 53, 54 (figure), 56–57Acceptance of change, 170, 176–181Accountability, 326nAckerman, L., 358Action planningadapting plans, 331alignment, 334checklist, 348 (table)communication plans, 349–353, 350 (table)engaging others, 333–334ethical issues, 348–349influence strategies, 354–357, 357 (table)path selection, 327–330, 329 (table)reviewing plans, 334Action planning tools, 334–335 (table), 334–346contingency planning, 336–338design thinking, 338–339employee training, 345–346flow charting, 338force field analysis, 209–212, 341–342leverage analysis, 344–345project planning methods, 340–341, 341 (figure)responsibility charting, 335, 336 (table)stakeholder analysis, 341–343surveys, 339–340to-do lists, 335usage and satisfaction, 346, 346 (figure), 347 (table)Adapting, 21–22ADKAR model, 243Adoption continuum, 216–217, 342–343, 343 (table)After-action reviews, 359Agilent, 166–167Aging populations, 7–9AI. See Appreciative inquiryAIDA (adoption continuum), 342–343, 343 (table)
AIG, 391Airbus, 159–160, 161Air Canada, 165, 166Alliance for a Healthier Generation, 38Amazon, 81Apple Computer, 17, 71, 78, 128, 256Appreciative inquiry (AI), 290, 340Argyris, C., 83–84, 348Armenakis, A. A., 112Athos, A., 129Austin, J. T., 251Awakening stage, 52, 54 (figure), 55, 103BA. See British AirwaysBalanced scorecard, 389 (figure), 389–390, 390 (figure)Ballmer, Steve, 109Balogun, J., 236–237Banks, 7, 48Barkema, H. G., 19–20, 408Barra, Mary, 6, 82, 128–129Bauer, Gary L., 132Baum, J. A. C., 19–20Beach, L. R., 125, 130Beckhard, R., 51, 110, 358Beckhard-Harris process model, 51Beer, M., 330Beer et al.’s Six Steps for Change, 330–331Behavioral–social change, 330Belief systems, 381, 382Bennis, W., 289Bethune, Gordon, 121BHP Billiton, 280Bilodeau, B., 346Birshin, M., 350–351BlackBerry, 15, 71, 251Bloodletting, 69Boeing, 159–162Boies, David, 132Bolman, L., 152–153, 162–163, 200Booker, Cory, 231
Boston Children’s Hospital, 128Boundary spanners, 214Boundary systems, 381BP, 12Breakpoint change, 211Brenneman, Greg, 121, 305Bringselius, L., 254British Airways (BA), 23, 165, 166British Columbia, carbon tax, 371Bruch, H., 69Buch, K., 161Buckley, George, 326Burke, W., 344Burton, LeVar, 134Bush administration, 101Caldwell, R., 287Cameron, K. S., 343Canadian Auto Workers (CAW), 102Careers of change agents, 412–413, 414 (figure)Case Western Reserve University, 300, 302Catalysts, 295CAW. See Canadian Auto WorkersCenter for Creative Leadership, 288Central connectors, 214Champions, 301See also Change initiatorsChange. See Organizational changeChange agents. See Change leadersChange culture, 391Change Curve, 50–51Change equation, 207Change facilitators, 26, 27–28Change implementers, 26–27, 28See also Action planningChange initiative approvalsapproaches, 170–173bypassing formal, 172–173coalition building, 172creeping commitment, 172
enhancing prospects, 168–171formal processes, 167–172, 169 (figure)Change initiators, 26, 28Change leaders (agents)advice for, 415–416becoming, 257, 280–281, 283–284, 288–290, 304–305,412careers, 412–413, 414 (figure)characteristics, 29–31, 284–288, 287 (table)developmental stages, 290, 291 (table)effective, 29–31, 282–284external, 296–299followers’ feelings about, 249–251generalists, 413individual power, 200, 201 (table)integrity, 250–251, 392internal, 295–296organizational trends and, 411 (table), 411–412personal concerns and perspectives, 108–110roles, 26rules of thumb, 305–306specialists, 412–413successes and failures, 279–280transition managers, 358types, 290–296, 293 (table)Change managementcommunication, 252–253, 254minimizing negative effects, 253–257, 255 (table)as ongoing process, 407–408Change management skillsacquiring, 288–289communication, 285future needs, 411 (table), 411–412of generalists, 413importance, 5, 281leadership, 29–31technical, 412–413Change managerscompared to change leaders, 287, 287 (table)project managers, 301
Change Path Modelapplication, 55–57, 408description, 51–55stages, 52–57, 54 (figure)Change pressure, 391Change project managers, 301Change recipientsbecoming stakeholders, 227–228as change agents, 257, 304–305coercion, 251–252, 354–355, 356–357coping strategies, 255, 255 (table)defined, 26, 28–29impact of change, 206–209, 208 (table)influence strategies, 354–357, 357 (table)See also Reactions to changeChange strategies, 327–330, 329 (table)Change teams, 299–304, 302 (table)Charan, R., 123Chen, John, 251Cheney, Dick, 109Chief executive officers (CEOs), 197–199, 280, 282, 324–325Churchill, Winston, 283, 285Citigroup, 7Cleveland Clinic, 128Climate change, 12Closed-loop learning, 105Clyburn, James E., 345CNN, 29Coalition building, 172Coercion, 251–252, 354–355, 356–357Collins, J., 108, 252, 253, 285Commitmentcharts, 342, 342 (table)measuring, 392profiles, 218Communicationchannels, 352focus, 349–350importance, 354key principles, 353
plans, 349–352, 350 (table)skills, 285timing, 349–350in transition management, 358See also Social mediaCommunications technology, 14–15, 408–409Competency trap, 245Competing values model, 70, 85–87, 86 (figure)Complacency trap, 245Complexity theory, 70, 90–92Confirmation bias, 245, 378Congruence model, 69, 71–82, 73 (figure)Consultantsexternal, 296–299internal, 295–296Continental Airlines, 121, 250Contingency planning, 336–338Continuous change, 21, 23–24, 174, 211, 292, 413, 414Continuous improvement, 256Continuous improvers, 294Cooperrider, D. L., 290Corruption, 16Coworkers, 246–249Cranston, S., 130, 249Creeping commitment, 172Crisesfinancial (2008), 7, 17–18, 23, 101, 391need for change and, 100, 106, 116, 117Criswell, C., 288Critical path methods, 340–341CRM. See Customer relationship managementCross, R., 214Cuban Missile Crisis, 108Cultural mapping tools, 343–344Culture. See Organizational cultureCustomer perspective, 385–386Customer relationship management (CRM), 176Cynicism, 30, 50, 111, 117, 118, 251, 379Data collection
accuracy, 380in change initiatives, 373, 384–385external data, 105–106, 112, 119internal data, 108, 119See also Measurement and control systemsDeal, T., 152–153, 162–163, 200De Bono, E., 348Decision tree analysis, 336, 337 (figure)Dell, Michael, 78, 79, 82Dell Computers, 77–81, 82, 87, 89–90, 155Deming, W. E., 24, 252Demographicsaging populations, 7–9diversity, 10–12Departmental power, 200–202Department of Homeland Security, 81Design and implementation teams, 301Design thinking, 338–339Desjardins Group, 231–234, 252Developmental stages of change leaders, 290, 291 (table)Developmental strategists, 293–294Diagnostic and steering controls systems, 381, 382DICE framework, 392–393Dickout, R., 284Discontinuous/radical changes, 21, 24, 292, 328, 413, 414Doing first strategy, 328, 329“Do it” orientation, 324–327Douglas, T., 112Doyle, M., 285Duck, Jeanie Daniel, 50–51, 56, 289Duck’s five-stage change curve, 50–51Dunkin’ Donuts, 2Early adopters, 216–217Early majority, 216eBay, 120, 282Economic environment, 16, 17–19See also Financial crisisEdwards, Blake, 254Effort, 392
Egri, C. P., 173Eigen, Peter, 16Eisenstat, R., 330Emergent change, 328, 329Emotional champions, 292–293Emotional stages, 50–51Employees. See WorkersEmpowerment, 327Endothermic change, 284Environment. See External environmentEnvironmental issues, 12–13, 102, 132Ethics, 16–17, 348–349Ethiopian Airlines, 161–162Ethnic diversity, 10Exothermic change, 284External change agents, 296–299External consultants, 296–299External environmentdemographics, 7–12drivers of change, 5–19economic, 16, 17–19future changes, 408–410, 413macro changes, 19–21, 20 (table)organizational structure aligned with, 158–159PESTEL factors, 5–7physical, 12–13political, 16–17scanning, 112technology, 13–16, 408–409, 410, 415External stakeholders, 106–107Facebook, 14, 29, 408Falbe, C., 356FedEx, 81, 124–125, 303Financial crisis (2008), 7, 17–18, 23, 101, 391Financial perspective, 385Fink, S. L., 242Fiorina, Carly, 120Flip-flop changes, 211–212Flow charting, 338
Floyd, S., 217Food Banks Canada, 126Force field analysis, 209–212, 210 (figure), 212 (figure), 341–342Ford Motor Company, 128, 280Formal structures and systemsadvancing change with, 165–167, 252–253centralized or decentralized, 153, 414change acceptance and, 176–181change implementation and, 174–176change project approvals, 167–173complexity, 151defined, 150–151design issues, 162–165environmental alignment, 158–159future of, 410information-processing perspective, 155–158, 156(figure)mechanistic and organic typology, 154 (table), 154–155,163–164networks, 180obstacles, 326purposes, 74restructuring, 159–162, 180, 355strategic alignment, 158, 165understanding, 151, 152–155Fox, Gretchen, 204Fox, Michael J., 283FOX Relocation Management Corp., 204–205Frost, P. J., 173Future organizations, 408–412, 411 (table)Galbraith, J. R., 155–156, 157, 159, 161, 410Gap analysis, 51, 53, 55–56Garriques, Ron, 78Gates, Bill, 109, 282, 300Gaudet, Serge, 18Gawande, A., 155General Electric (GE), 118, 199, 211, 282
General Motors (GM), 6, 9, 22, 82, 102, 128–129, 211, 379,408Gentile, M. C., 48, 49Gerber, P., 69Gerstner, Lou, 302–303, 325Gillette, 377–378Giving Voice to Values (GVV), 48–50Gladden, Brian, 78Gladwell, M., 344GM. See General MotorsGoodman, J., 349, 352Google, 12, 14, 29, 71, 128Goss, T., 129Grant, Peter, 172–173, 174Grant, R. M., 81Greiner, L., 88–90Greiner’s organizational growth model, 70, 87–90, 89 (figure)Griffiths, A., 330, 333Groupthink, 122–123, 234GVV. See Giving Voice to ValuesH1N1 flu pandemic, 101Hamel, G., 25, 29, 280, 306Handy, C., 41Handy-Dandy Vision Crafter, 127, 127 (table)Hannon, Kerry, 9Hardy, C., 202Harley-Davidson, 9Harris, R. T., 51, 110, 358Heins, Thorsten, 251Hewlett-Packard (Canada) Ltd., 177Hewlett-Packard (HP), 17, 78, 120–121, 122, 282, 333Higgins, C., 170, 172, 173Higgs, M., 285–286, 288Holt, D., 112Hopper, Grace, 326Hotel complaint example, 39–41, 44–45, 55–57Howell, J., 170, 172, 173HP. See Hewlett-PackardHunsaker, P., 295
IBM, 78, 133, 302–303, 325, 408Immigration, 10Implementation. See Action planning; Change implementersIncremental/continuous changes, 21, 23–24, 174, 211, 292,413, 414Individual readiness for change, 111Influence strategies, 354–357, 357 (table)Informal organization, 74–75, 76, 196See also Organizational culture; Organizational politicsInformation brokers, 214Information management, 391See also Data collectionInformation-processing view of organizations, 155–158, 156(figure)Information sharing and knowledge development, 301Infosys, 131Innovators, 216–217Institutionalization stage, 54, 54 (figure), 57Integrity, 250–251, 392Intel, 21, 410Interactive controls systems, 381Internal business process perspective, 386Internal consultants, 295–296Internal stakeholders, 106–107Intervention, 356Intuitive adopters, 294ITT, 158Jackson, A., 392Jaguar, 128Jick, T., 23, 125, 131, 242, 244, 255, 281Johnson, G., 236–237Johnson & Johnson, 129Johnson-Sirleaf, Ellen, 228Judge, W., 112Kahneman, D., 109, 378Kanter, R. M., 281Kaplan, R. S., 385, 389, 390Kar, J., 350–351
Karp, David, 198Katzenbach, J. R., 284–285, 304Keenan, P., 392Keller, S., 130, 249Kennedy, John F., 108Keysight Technologies, 167Kidder, Rushworth, 48King, Martin Luther, Jr., 131Kirton, M. J., 295Klein, S., 353Kotter, J. P., 46–48, 56, 239, 242–243Kotter’s eight-stage model, 46–48Kouzes, J. M., 288KPMG, 9Kramer, R. M., 251–252, 285Krishnan, R., 81Kübler-Ross, E., 51, 241–242Laggards, 216Lampert, Eddie, 119Langmack, Scott, 300Lao Tzu, 130Late adopters, 216Late majority, 216Latinos, 10Leader, Joseph, 117Leader-developed visions, 125Leaders. See Change leadersLeader-senior team-developed visions, 125Leadership, transformational, 118Learningclosed-loop, 105employee training, 345–346experiential, 288organizational, 84, 179Learning and growth perspective, 386Lego, 128Lehman Brothers, 7, 391Leroux, Monique, 231–233, 252Leverage analysis, 344–345
Lewin, K., 44Lewin’s stage theory, 44–46Liberia, 227–228LifeSpring Hospitals, 164–165Liniger, David, 373, 374Lion Air, 162Lipton, M., 126–127Lombardo, M., 285Lufthansa, 69Macro changes, 19–21, 20 (table)Malone, T., 410Management support of change, 111–112, 280, 301, 325–326Managers, challenges, 28, 28 (table)Mannix, E. Q., 19–20Martell, Katherine, 296–297Martin, A., 288Mayer, Marissa, 198McCall, M., 285McDonald’s, 38, 84, 408, 410McKinsey and Company, 158, 352McNerney, Jim, 197–199, 211Measurement and control systemsin change initiatives, 373–377, 382–385, 383 (table)control levers, 381–382, 382 (figure)fairness, 378importance, 371–373types, 381–382Measurement toolsbalanced scorecard, 389 (figure), 389–390, 390 (figure)DICE framework, 392–393risk exposure calculator, 391–392strategy maps, 385–386, 387–388 (figures)Measuresconflicting signals, 379–380selecting, 377–382, 380 (table)Mechanistic organizations, 154 (table), 154–155, 163–164Metropolitan Transit Authority (MTA), 117Microsoft, 109, 119, 175, 282, 300Middle powerlessness, 304
Miller, D., 290Mintzberg, H., 327–328Mistry, Cyrus, 133Mobil, 386Mobilization stage, 52–53, 54 (figure), 55–56Mondragon, 410Moore, G., 344–345Morgan, G., 24Morris, K. F., 358Motorola, 92MTA. See Metropolitan Transit AuthorityMuilenburg, Dennis, 162Nadella, Satya, 109, 119, 175Nadler, D. A., 21, 23, 71–77Nadler and Tushman’s Congruence Model, 69, 71–82, 73(figure)Nasser, Jacques, 280National Campaign to Prevent Teen Pregnancy, 131–132Need for changeassessing, 104–110, 105 (figure)awareness of, 100–104, 115–119, 350, 408change leader perspectives, 108–110crises and, 100, 106, 116, 117external data, 105–106, 112, 119factors blocking recognition, 120–124internal data, 108, 119readiness for change and, 110–113sense of urgency, 116–118stakeholder perspectives, 106–108Nehru, Jawaharlal, 110Nesterkin, D. A., 241Networks, 180Nevis, E. C., 179New England Medical Center, Boston, 325Nohria, N., 328Nokia, 71Non-adopters, 216Norton, D. P., 385, 389, 390Nutt, P., 356
Obama, Barack, 285, 345, 352OD. See Organizational DevelopmentOlson, Ted, 132One Equity Partners, 280Ontario (Canada) Ministry of Agriculture, 358Open systems perspective, 71, 106Organic organizations, 155Organizational analysis frameworkscompeting values, 70, 85–87, 86 (figure)complexity theory, 70, 90–92congruence model, 69, 71–82, 73 (figure)gap analysis, 51, 53, 55–56open systems perspective, 71, 106organizational growth phases, 70, 87–90, 89 (figure)systems dynamics, 69–70, 83–85, 84 (figure)Organizational changechallenges, 41–42, 407defining, 2–4failed efforts, 24–25, 119, 176, 280future of, 408–412, 411 (table), 413–415how and what, 39–41, 69, 70as ongoing process, 407–408paradoxes, 30, 413–415roles, 25–29, 27 (table), 415–416types, 21–24, 22 (table), 211–212Organizational change models, 42–44Beckhard-Harris process model, 51Beer et al.’s Six Steps for Change, 330–331Change Path Model, 51–57, 54 (figure), 408comparison, 331–332 (table)Duck’s five-stage change curve, 50–51Giving Voice to Values, 48–50Kotter’s eight-stage model, 46–48Lewin’s stage theory, 44–46Organizational cultureanalysis, 204–206artifacts, 121, 204, 205–206clashes, 205–206defined, 203–204factors blocking change, 121–122
informal organization, 74–75, 76, 196mapping tools, 343–344psychological contracts, 240–241Organizational Development (OD), 333n, 340Organizational growth phases, 70, 87–90, 89 (figure)Organizational politics, 199–203Organizational readiness for change, 110–113Organizational structures. See Formal structures andsystemsOrganizational visions. See VisionsOrganizationscomplexity, 90–92fit, 76–77, 80, 81, 82in future, 408–412, 411 (table)growth stages, 87–90Oshry, B., 27, 304Overhauling, 22Participation, 356Participative approach, 330, 333Pascale, R., 129Peiperl, M., 244, 255Peripheral specialists, 214Perlman, D., 242Personalities, 244–245, 248 (table)Persuasion, 356PESTEL factors, 5–7See also External environmentPfeffer, J., 5, 27, 326Phases of organizational growth model, 70, 87–90, 89 (figure)Piderit, S. K., 235Planning. See Action planningPolaroid, 280Political environment, 16–17Ponemon Institute, 14Porras, J. I., 108, 253Posner, B. Z., 288Powerdynamics, 199–203tactics, 202–203, 203 (table)
Prahalad, D. K., 25Predispositions to change, 244–245Prince, Chuck, 7Process helpers, 295Procter & Gamble, 129Programmatic change, 328–329Project planning methods, 340–341, 341 (figure)Prosci, 299Prusak, L., 214Psychological contracts, 240–241Pull actions/tactics, 292, 293 (table), 355–356Push actions/tactics, 292, 293 (table), 355Quinn, R., 343Quinn, R. E., 292Quinn’s competing values model, 70, 85–87, 86 (figure)Raben, C. S., 358Radical changes. See Discontinuous/radical changesReactions to changeambivalence, 233–234, 235–237evolution, 234feelings about change leaders and, 249–251managing, 253–257, 255 (table)mixed, 229–230, 235–237negative, 237 (table), 237–240peer influences, 246–249, 249 (table)personality differences, 244–245, 248 (table)positive, 228, 229, 233, 234–235previous experiences and, 245–246, 247 (figure), 248(table)psychological factors, 240–241skepticism, 215, 217, 239, 247, 250–251stages, 241–243, 243 (table)of supervisors, 247survivor syndrome, 243–244See also Resistance to changeReadiness for changeassessing, 110–113dimensions related to, 112–113
questionnaire, 113, 113–115 (table)of stakeholders, 215–218, 216 (table), 217 (table), 218(table)Reading Rainbow, 134Recipients of change. See Change recipientsRe-creation, 22Red Cross, 128Redirecting, 22Reflection, 289–290Refreezing, 44, 45–46Reichers, A. E., 251RE/MAX, 373–374Renegade approach, 173Reorienting, 22Resistance to changechange types and, 211–212conflicts with other goals, 131factors in, 229–231, 233, 234, 237–239overcoming, 30, 206–209, 240, 243, 356–357perceived, 229See also Reactions to changeResource linkers, 295Responsibility charting, 335, 336 (table)Responsibility diffusion, 102Rigby, D., 346Risk exposure calculator, 391–392Risk of change, 246Roman, Michael, 326Rowland, D., 288Rules of thumb for change agents, 305–306Rumors, 349, 351Rupert, Althea, 199Russo, J. E., 349Sam, Michael, 10–11Same-sex marriage, 132Samsung, 128Savage, G. T., 213Sayles, L., 326Scenario planning, 336–338
Schein, E., 203–204, 343Schön, D., 83–84Schumpeter, J., 71Scotiabank, 408Sears, 119, 408Sedentary activation, 231Seeing first strategy, 327, 328Self-efficacy and agency, 250, 255, 257Seligman, Martin, 48Senge, P., 17, 84, 240Shani, R., 81Shoemaker, P. J. H., 349Siemens, 17Sigmoid curve, 41–42, 43 (figure)Silver, Adam, 11Simmons University, 296–297Simons, G. F., 124Simons, R., 381, 391Sirkin, H., 392Six Steps for Change model, 330–331Skepticism, 215, 217, 239, 247, 250–251Social media, 11, 15, 158, 181, 252, 352Solution givers, 295Spector, B., 110, 330, 350Sponsors, 301Stacey, R. D., 90Stacey’s complexity theory, 70, 90–92Stage theory of change, 44–46Stakeholder maps, 213–214, 215 (figure)Stakeholdersadoption continuum, 216–217, 342–343, 343 (table)analysis, 209, 212–218, 341–343on change continuum, 215–216change recipients as, 227–228commitment profiles, 218customers, 385–386engaging, 253, 356feelings, 234–240, 243–244identification, 212, 213influence strategies, 354–357, 357 (table)
management, 212need for change, 106–108personalities, 244–245, 248 (table)readiness for change, 215–218, 216 (table), 217 (table),218 (table)types, 214understanding and commitment, 217See also Reactions to change; WorkersStandard & Poor’s, 7Steering teams, 301Sterling, Donald, 11Sterman’s systems dynamics model, 69–70, 83–85, 84(figure)Storytelling, 129–130, 350–351Strategic alignment, 158, 165, 173–174Strategic frames, 122Strategiesfor change, 327–330, 329 (table)developing, 72–73Strategy maps, 385–386, 387–388 (figures)Strebel, P., 211Stumpf, John, 48Sull, D. N., 122Sun Petroleum, 358Supervisors, reactions to change, 247Survey feedback, 340Surveys, 339–340Survive to 5 campaign, 133–134Survivor syndrome, 243–244Sutton, R., 5, 326Systems dynamics model, 69–70, 83–85, 84 (figure)Takacs, G. J., 242Target, 70Tata, Ratan, 133Tata Group, 133Taylor, Charles, 227TD Bank, 11Teams, change, 299–304, 302 (table)Technological innovations, 13–16, 41–42, 408–409, 410, 415
Techno–structural change, 330, 333–334Thinking first strategy, 327, 328–329Thompson, J. D., 1543M, 72, 197–199, 211, 325–326Thulin, Inge, 326Tim Hortons, 2Tipping points, 344–345To-do lists, 335Tolerance for turbulence and ambiguity, 245Total quality management (TQM), 81Toyota, 6, 129TQM. See Total quality managementTraining and development, 345–346Transformational leadership, 118Transformational visions, 118Transformation process, 73Transition management, 357–359, 359 (table)Transparency International, 16Trump, Donald J., 352Truss, C., 349, 352Tsaparis, P., 177Tumblr, 198Tuning, 21Tushman, M. L., 21, 23, 71–77UAW. See United Auto WorkersUncertainty, 155–156, 159Unfreezing, 44–45, 100–102, 292Unilateral approach, 329, 330, 333Unilever, 122, 408United Airlines, 165, 166United Auto Workers (UAW), 102, 211United Nations, Survive to 5 campaign, 133–134Usage and satisfaction, 346, 346 (figure), 347 (table)Useem, J., 123Valuesbelief systems, 381, 382competing values model, 70, 85–87, 86 (figure)corporate, 121, 204, 205
Giving Voice to Values, 48–50Verizon, 198Visible sponsorship, 301Visionsbottom-up, 125boundaries, 131–132communicating, 350defined, 124developing, 124–129enacting, 129–130example, 126examples, 132–135Handy-Dandy Vision Crafter, 127, 127 (table)leader-developed, 125leader-senior team-developed, 125sub- and overall, 124–125, 130–131transformational, 118Wageman, R., 302Wagh, Girish, 133Waldersee, R., 330, 333Walmart, 128, 151, 355, 408Wanous, J. P., 251Waugh, Barbara, 333Weick,K. E., 292Welch, Jack, 118, 282Wells Fargo, 48Westley, F., 327–328Wetzel, D. K., 161Wheatley, M., 130Whitman, Meg, 120, 282WHO. See World Health OrganizationWikipedia, 410Wirth, Ross, 327W. L. Gore, 410Wooldridge, B., 217Workersdiversity, 11–12older, 9roles in organizational change, 26–29, 415–416
supervisors, 247training and development, 345–346See also Change recipients; StakeholdersWorld Health Organization (WHO), 101, 133Wright, C., 295Yahoo, 198Yukl, G., 356Zane, Ellen, 325Zappos.com, 180Ziglar, Zig, 5
About the AuthorsGene Deszcais professor emeritus of business administration and a formerMBA director and associate director in the Lazaridis School ofBusiness and Economics at Wilfrid Laurier University. Heplayed a variety of leadership roles at Laurier, including thedevelopment and launch of the full-time, one-year MBAprogram, the executive MBA program, and the undergraduateinternational business concentration. He was instrumental inthe development of the post-university professionalaccreditation programs for one of Canada’s major accountingbodies and was a member of its national board of directorsfor several years. Gene loves working with students and the excitement of theclassroom and continues to teach graduate and executivecourses, both nationally and internationally, in organizationalbehavior, leading organizational change, and internationalbusiness. His consulting work follows similar themes forclients in both the public and private sectors, with a focus onframing and navigating organizational change and thedevelopment and delivery of executive programs to facilitatetransition management. He is involved in two entrepreneurialinitiatives which are in the process of scaling. The firstinvolves software that simulates organizational disruption, foruse in executive/management education (seechangebydesign.com). The second organization focuses onthe development and deployment of bundled hardware andsoftware solutions (including blockchains), for use across awide array of internet of things (IoT) applications, from smartfactories to smart cities (see terepac.com). Gene is the author or coauthor of over 100 journals,conference publications/presentations, books, monographs,cases, and technical papers. These include the booksCanadian Cases in Human Resource Management, Cases inOrganizational Behaviour, Toolkit for Organizational Change(1st ed.) and the articles Driving Loyalty Through Time-to-Value and Managing the New Product Development Process:
Best-in-Class Principles and Leading Practices. He is anactive case writer, and his current research focuses onorganizational change and the development of high-performance enterprises.Cynthia Ingolsis a Professor of Practice, School of Business, SimmonsUniversity, Boston, Massachusetts. At the School ofBusiness, she is the director of undergraduate programs,leads the internship program for undergraduate students, andteaches courses in organizational change, careermanagement, and leadership. Cynthia works extensively inthe business school’s executive education programs whereshe leads Strategic Leadership for Women, a program with aglobal reach that strengthens the leadership skills and self-confidence of its international participants. In addition, shecoaches women executives who seek interpretation offeedback from bosses, colleagues, and subordinates andthen helps executives determine the actions that they mighttake to strengthen their leadership presence andeffectiveness. Cynthia received her doctorate from the Harvard GraduateSchool of Education in organization behavior and a master’sdegree in political science from the University of Wisconsin–Madison. She taught management communication at theHarvard Business School (HBS), managed the 65-personcase writing and research staff at HBS, and taught qualitativemethods courses at several Boston-area universities. Sheserves as an editorial member of the Case Research Journal.She has served on corporate boards for severalorganizations, including FOX RPM and Biosymposia. Cynthia focuses her consulting work in three areas:conducting diagnostic work to promote change inorganizations; developing and teaching interactive executiveeducation programs, particularly using cases and simulations;and coaching executives to enhance their leadership capacityand careers. Cynthia’s research and publications followsimilar lines. Her research on executive education programshas been published in leading journals, such as HarvardBusiness Review, Organizational Dynamics, and Training.
Her research work on creating innovative organizationalstructures and change was published in the DesignManagement Journal. She has published numerous articlesabout careers in journals such as the Journal of CareerDevelopment and Human Resource Development Quarterly.She coauthored two books on career management: TakeCharge of Your Career (2005) and A Smart, Easy Guide toInterviewing (2003). Cynthia joined the Tupper-Gene team topublish the second and third editions of OrganizationalChange: An Action-Oriented Toolkit (2012 and 2016).Tupper F. Cawseywas professor emeritus of business, Lazaridis School ofBusiness and Economics, Wilfrid Laurier University. Heserved as editor, Case Research Journal, for the NorthAmerican Case Research Association. He served on severalboards of directors and was chair of Lutherwood’s board from2003 to 2008. Tupper was recognized nationally in 2001 asone of Canada’s top five business professors by receiving theLeaders in Management Education award, sponsored byPricewaterhouseCoopers and the National Post. He was alsothe 1994 recipient of the David Bradford Educator Award,presented by the Organizational Behavior Teaching Society,and the 1990 Wilfrid Laurier University “Outstanding TeacherAward.” Tupper created the Case Track for the AdministrativeSciences Association of Canada, a peer review process forcases. He is author or coauthor of over six books andmonographs including Toolkit for Organizational Change—1stEdition, Canadian Cases in Human Resource Management,Cases in Organizational Behaviour, and several monographsincluding Control Systems in Excellent Canadian Companiesand the Career Management Guide. Tupper has over 50refereed journal and conference publications. In 2005, hereceived the Christiansen Award from the KaufmanFoundation and the North American Case ResearchAssociation (NACRA), and in 2007 his case “Board Games atLutherwood” won the Directors College CorporateGovernance Award and the Bronze Case Award at theNACRA Conference. In 2009, his case “NuComm
International” won the Gold Case Award at the NACRAConference. Tupper passed away on August 17, 2015.
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