Change Management Strategies

The Nature of Planned change

SyllabusModule 1: Introduction to Organizational Change: Module 2: The Nature of Planned ChangeModule 3: The Process of Organizational Development: Diagnosing organizationsModule 4: Designing InterventionsModule 5: Leading and Managing changeModule 6: Strategic Change InterventionsModule 7: Transformational changeModule 8: Continuous changeModule 9: Trans organizational Change

Why is Executing Change so Challenging?• People will resist change. Why? “Uninformed Optimism is always followed by

“Informed Pessimism” and humans will choose the comfort of familiarity over the anxiety that comes with the unknown.

• We live in an era of perpetual change/unrest. We have only just crossed the threshold of perpetual unrest. We need to expect more change.

• We’ve run out of the resources required to deal with change. Absorbing change requires physical, emotional, and intellectual energy.

• We incorrectly focus an inordinate amount of energy into trying to make people feel comfortable during a major change. Reality is they won’t – it is necessary that they make adjustments that will help them succeed in the new environment.

• We focus on getting the change “installed” (e.g. # people trained, spent, computers on desks) and miss “realizing” the return on investment expected from the change (i.e. the fundamental purpose for the change, the outcomes that were promised). People need to be readied to absorb the disruption and adapt to the change.

• Source: Adapted from a presentation by Daryl Conner – Organizational Change: Installation vs. Realization)

Organization Strategies for Successfully Realizing the Results in Change:

• Look for ways to decrease unnecessary demands on existing resources. • To consider the aggregate effect of incremental changes. • Change projects need to be driven by whether or not they are an organizational

imperative. • Change projects should generate “such value that the cost for failing to implement

them would be prohibitively high”.

• Increase the organization’s capacity and resilience for dealing with the disruption of change.

• People need to be able to absorb change if organizations are going to be effective. • We can increase capacity by carefully and diligently managing the human side of

change (i.e. the transition). • We can increase resilience by seeking out and enhancing personal resilience.

• Follow a process for managing change and transition.• What is changing and the impact of that change on the people.

Managing Change vs. Managing Transition

• Change is the shift in the external situation; the thing that has changed. It can happen fast.

• Transition is the reorientation people need to make in response to the change. This can take time.

• To be successful in both the implementation and in helping people we need to manage both the change and the transition.

• A transition management plan is a necessary component of a change management plan and presumes that the underlying change is being well managed.

• Source: Bridges, William. (1991). Managing Transition: Making the Most of Change.

A well-managed change ensures that:

•There is an identified Executive Sponsor for the change

•Leaders understand the shifting roles of Sponsors, Implementers Agents and Advocates during change •Change teams are set up as needed (e.g. implementation, transition, communication, etc.) •The need for the change has been effectively established and communicated to everyone – more than once using a variety of medium. •The impacts of the planned change - indirect, as well as direct - have been identified and communicated. •Those who will be impacted by the change have been involved in the planning, or at the very least, will be involved in its implementation. •The details of the implementation are generally understood as they emerge and are modified to fit changing circumstances

Detail of Steps for Managing Change:

1. Identify/Accept the Need for Change:List the issues, indicators or symptomsAsk stakeholders to confirm the issues, indicators or symptomsDecide whether change is necessarySet up change team(s)/support mechanisms (implementation,

transition, communication etc.)Clarify Roles (Sponsor, Implementer, Agent, Advocate)

Detail of Steps for Managing Change

2. Assess and Define the Change Required:Identify the preferred future stateAssess the current stateIdentify the gap or differenceClearly define what must be changedEstablish measures of success

Detail of Steps for Managing Change

3. Analyze the Impact of Alternatives and Select the Best:List reasonable alternatives (including making no change)Assess the cost/benefits, pros/cons, outcomes/risks and potential side effectsChoose the best alternative Identify restraining and supporting forces (i.e. people, events, rules and policies)

Detail of Steps for Managing Change:

4. Develop the Plan and Strategies:Explain the change and rationaleDescribe the current situation vs. the desired futureExplain the options considered and decisionDescribe objectives, action plans, and measures of successDevelop strategies:

Operational (Physical/Plant Legal, Financial, and Service Issues) Training and Learning Human Resource (HR/LR, Staff Transfer, Selection) Communication Transition Team Development Budget Implications

Detail of Steps for Managing Change

5. Implement the Plan and Strategies:Enlist othersDetermine readiness for changePrepare and educate those implementing the changeFollow the timetable and sequence of events for communication, training, team development etc.)

Detail of Steps for Managing Change

6. Manage the Transition:Monitor transition issues and people’s response to the changeImplement strategies to help people with the transitionRecognize results

7. Evaluate the Change:Monitor progress and debriefDesign and conduct evaluation based on the measure of successDocument and report on the outcomeAdjust or alter based on evaluation

Model for Managing Transition This model for Managing Transition is influenced by the separate work of Elisabeth Kubler-Ross, Cynthia Scott

and William Bridges

Key factors in achieving change

 Key factors in achieving change

Scale of change

• Hammer and Champy (1993) defined BPR as

the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.

• Fundamental rethinking – re-engineering usually refers to changing of significant business processes such as customer service, sales order processing or manufacturing.

• Radical redesign – re-engineering is not involved with minor, incremental change or automation of existing ways of working. It involves a complete rethinking about the way business processes operate.

• Dramatic improvements – the aim of BPR is to achieve improvements measured in tens or hundreds of percent. With automation of existing processes only single figure improvements may be possible.

• Critical contemporary measures of performance – this point refers to the importance of measuring how well the processes operate in terms of the four important measures of cost, quality, service and speed.

Different scales of change

Term Involves Intention Risk of failure

Business process re-engineering

Fundamental redesign of all main company processes

Large gains in performance (>100%?)

Highest

Business process improvement

Targets key processes in sequence for redesign

(<50%) Medium

Business process automation

Automating existing process

(<20%) Lowest

Project management activities• Estimation – identifying the activities involved in the

project, sometimes referred to as a work breakdown structure (WBS).

• Resource allocation – after the initial WBS, appropriate resources can be allocated to the tasks.

• Schedule/plan – after resource allocation, the amount of time for each task can be determined according to the availability and skills of the people assigned to the tasks.

• Monitoring and control – monitoring involves ensuring the project is working to plan once it has started. Control is taking corrective action if the project deviates from the plan. In particular the project manager will want to hit milestones

Stages in developing an e-business solution

 Stages in developing an e-business solution

An example web site development schedule for the B2C Company

Figure 10.3  An example web site development schedule for The B2C Company

Automating the employee development process

Figure 10.4  Automating the employee development process

Source: Confirmit Copyright © 2003 FIRM

Organisational structures for e-business and e-commerce

Organizational structure Circumstances Advantages Disadvantages

(a) No formal structure for e-commerce

Initial response to e-commerce or poor leadership with no identification of need for change.

Can achieve rapid response to e-commerce service responses (e-mail, phone). Priorities not decided logically. Insufficient resources

Poor quality site in terms of content quality and customer

(b) A separate committee or department manages and coordinates e-commerce

Identification of problem and response in (a)

Coordination and budgeting and resource allocation possible.

May be difficult to get different departments to deliver their input due to other commitments

(c) A separate business unit with independent budgets

Internet contribution (Chapter 6) is sizeable (>20%)

As for (b), but can set own targets and not be constrained by resources. Lower risk option than (d)

Has to respond to corporate strategy. Conflict of interests between department and traditional business

(d) A separate operating company

Major revenue potential or flotation. Need to differentiate from parent

As for (c), but can set strategy independently. Can maximize market potential

High risk if market potential is overestimated due to start-up costs

Summary of alternative organizational structures for e-commerce suggested in Parsons et al.

Figure 10.5  Summary of alternative organizational structures for e-commerce suggested in Parsons et al. (1996)

Transition curve indicating the reaction of staff through time from when change is first suggested

Transition curve indicating the reaction of staff through time from when change is first suggested

Source: Bocij et al. (2003)

Key staff in systems acceptance• System sponsors

• • System owners

• • System users

•

• Stakeholders•

• Legitimizer•

• Opinion leaders•

The role of organisational culture• Survival (outward-looking, flexible) – the external environment plays a

significant role (an open system) in governing company strategy. The company will likely be driven by customer demands and will be an innovator. It may have a relatively flat structure.

• Productivity (outward-looking, ordered) – interfaces with the external environment are well structured and the company is typically sales-driven and is likely to have a hierarchical structure.

• Human relations (inward-looking, flexible) – this is the organization as family, with interpersonal relations more important than reporting channels, a flatter structure and staff development and empowerment is thought of as important by managers.

• Stability (inward-looking, ordered) – the environment is essentially ignored with managers concentrating on internal efficiency and again managed through a hierarchical structure.