Chapter 14Chapter 14

Managing ChangeManaging Change

Managing ChangeManaging Change Change is a critical uncertainty facing the Change is a critical uncertainty facing the

organization, and the ability to manage change organization, and the ability to manage change is a valuable skill.is a valuable skill.

Organizations are becoming more change-Organizations are becoming more change-oriented, responding to various forces in oriented, responding to various forces in increasingly dynamic environments.increasingly dynamic environments.

Change is difficult, and may not always be good.Change is difficult, and may not always be good. Change may often be necessary, but it may also Change may often be necessary, but it may also

be painful.be painful. People may differ in the degree to which they People may differ in the degree to which they

resist change and in their motivations to change.resist change and in their motivations to change.

Forces for ChangeForces for Change

Some external forces for Some external forces for change:change: globalizationglobalization the growing diversity of the the growing diversity of the

workforceworkforce the explosion of the Internetthe explosion of the Internet new legislationnew legislation changing customer desires changing customer desires

and expectationsand expectations heightened levels of heightened levels of

competitioncompetition

Some internal forces Some internal forces for change:for change: performance gapsperformance gaps new leadershipnew leadership a new missiona new mission employee employee

pressurespressures

Planned Versus Reactive ChangePlanned Versus Reactive Change

Managers can respond to change either by Managers can respond to change either by planning or reacting.planning or reacting.

Planned changePlanned change occurs when managers occurs when managers develop and install a program that serves to develop and install a program that serves to alter organizational activities in a timely and alter organizational activities in a timely and orderly way.orderly way.

Reactive changeReactive change occurs when managers occurs when managers simply respond to the pressure for change simply respond to the pressure for change when that pressure comes to their attention.when that pressure comes to their attention.

Planned change is typically regarded as Planned change is typically regarded as superior to reactive change.superior to reactive change.

The Change Process -- Lewin’s The Change Process -- Lewin’s Change Model (Figure 14-1)Change Model (Figure 14-1)

• Create High Felt Need for Change• Minimize Resistance to Change

Phase 1Unfreezing

• Change People, Tasks, and Structure• Encourage Ongoing Support

Phase 2Changing

• Reinforce Outcomes• Constructive Modification

Phase 3Refreezing

Targets of ChangeTargets of Change(Figure 14-2)(Figure 14-2)

Structural

Purpose or Task Technological

Human

Web Wise: Robot Information Web Wise: Robot Information CentralCentral

The installation of robots is The installation of robots is a good example of a good example of technological change.technological change.

For a huge listing of robotic For a huge listing of robotic links, go to Robot links, go to Robot Information Central at the Information Central at the website of Arrick Robotics.website of Arrick Robotics.

http://www.robotics.com/rohttp://www.robotics.com/robots.htmlbots.html

Sources of Resistance to ChangeSources of Resistance to Change(Figure 14-3)(Figure 14-3)

Resistanceto Change

Uncertainty Lack ofUnderstanding

and Trust

DifferingPerceptions

Lack ofTolerance for

Change

Habit

Rejection ofChangeSource

Self-Interest

Focus on Management: Trust Focus on Management: Trust Building at Eastman ChemicalBuilding at Eastman Chemical

Earnest Deavenport, CEO of Eastman Earnest Deavenport, CEO of Eastman Chemical, credits the company’s substantial Chemical, credits the company’s substantial success to the way in which Eastman has success to the way in which Eastman has retooled the traditional contract between retooled the traditional contract between company and employees.company and employees.

One element of Eastman’s trust-building One element of Eastman’s trust-building strategy is an incentive and compensation strategy is an incentive and compensation system, system, Eastman’s Performance PlanEastman’s Performance Plan, that , that encourages employees worldwide to become encourages employees worldwide to become stewards of the company.stewards of the company.

Through the system, Eastman employees will Through the system, Eastman employees will soon own 20% of the company’s stock.soon own 20% of the company’s stock.

Lighten Up: Bad FadsLighten Up: Bad Fads

While change is often desirable, While change is often desirable, people may implement change for people may implement change for questionable reasons.questionable reasons.

For example, some change efforts are For example, some change efforts are essentially impression management, essentially impression management, attempts to give the appearance of attempts to give the appearance of progress or to detract attention from progress or to detract attention from other problems.other problems.

In addition, change may sometimes In addition, change may sometimes take the form of blindly following fads.take the form of blindly following fads.

Check out the Bad Fads museum at:Check out the Bad Fads museum at:

http://www.badfads.comhttp://www.badfads.com

Change ApproachesChange Approaches(Figure 14-4)(Figure 14-4)

Tactic Characteristics

Education andCommunication

Explaining the need for and the logic ofthe change

Participation andInvolvement

Having members participate in theplanning and implementation of change

Facilitation andSupport

Gradual introduction of the changeprocess and provision of support topeople affected by the change

Negotiation andAgreement

Negotiating or bargaining to winacceptance or reduce resistance tochange

Manipulation andCo-optation

Covertly steering individuals or groupsaway from resistance to change

Coercion Demanding that members support thechange or be threatened with the lossof rewards and resources

The Rhetorical TriangleThe Rhetorical Triangle(Figure 14-5)(Figure 14-5)

Logos

Pathos Ethos

LogosLogos

LogosLogos refers to convincing another person refers to convincing another person to accept change through reason, logic, to accept change through reason, logic, and data.and data.

When people are told about a change at When people are told about a change at work that will affect them, they normally work that will affect them, they normally first react by asking “Why?”first react by asking “Why?”

When you initiate change, be prepared to When you initiate change, be prepared to provide a clear rationale in a direct, well-provide a clear rationale in a direct, well-supported manner, using education and supported manner, using education and communication as your persuasive method.communication as your persuasive method.

Logos GuidelinesLogos Guidelines

Do your homework, gathering relevant facts Do your homework, gathering relevant facts that prove that a real problem exists.that prove that a real problem exists.

Identify sources of help.Identify sources of help. Anticipate questions and objections.Anticipate questions and objections. Sell the benefits of the change in terms of the Sell the benefits of the change in terms of the

perspective of those who will have to go perspective of those who will have to go through it. It is easiest to sell the need for through it. It is easiest to sell the need for change when there is a “burning platform.” A change when there is a “burning platform.” A burning platform is a dramatic, vivid burning platform is a dramatic, vivid demonstration that the current situation is demonstration that the current situation is unacceptable.unacceptable.

Logos Guidelines (Continued)Logos Guidelines (Continued)

Use Use catalytic mechanismscatalytic mechanisms to reinforce the to reinforce the change; catalytic mechanisms help to translate change; catalytic mechanisms help to translate objectives into performance by making “stretch” objectives into performance by making “stretch” goals reachable. They generally involve a goals reachable. They generally involve a dramatic policy that requires people to act in new dramatic policy that requires people to act in new ways that further the overarching goal.ways that further the overarching goal.

Listen in depth to concerns, questions, and fears.Listen in depth to concerns, questions, and fears. Create an implementation plan that answers the Create an implementation plan that answers the

key questions most people have when faced with key questions most people have when faced with change: who, what, where, when, why, and how.change: who, what, where, when, why, and how.

WingwalkingWingwalking General Dennis Reimer, the U.S. Army’s Chief of General Dennis Reimer, the U.S. Army’s Chief of

Staff, explained that the army is now in a Staff, explained that the army is now in a different world and has to be able to change to different world and has to be able to change to serve the nation’s needs.serve the nation’s needs.

He noted that the army is a conservative He noted that the army is a conservative organization that believes in “the first rule of organization that believes in “the first rule of wingwalking: You don’t let go of what you’ve wingwalking: You don’t let go of what you’ve got in your hands until you’ve got something got in your hands until you’ve got something else in your hands.”else in your hands.”

As such, change can best be “sold” when the As such, change can best be “sold” when the present situation is unacceptable and there is present situation is unacceptable and there is something else to hold on to -- some promising something else to hold on to -- some promising new beginning.new beginning.

Short Pay at Granite RockShort Pay at Granite Rock The copresidents of Granite Rock, a century-old California The copresidents of Granite Rock, a century-old California

company that sells crushed gravel and related products set an company that sells crushed gravel and related products set an audacious goal: Granite Rock would provide total customer audacious goal: Granite Rock would provide total customer satisfaction and achieve a reputation for service that met or satisfaction and achieve a reputation for service that met or exceeded that of Nordstrom.exceeded that of Nordstrom.

To achieve this goal, Granite Rock implemented a radical new To achieve this goal, Granite Rock implemented a radical new policy: “short pay.” Every Granite Rock invoice contains the policy: “short pay.” Every Granite Rock invoice contains the words, “If you are not satisfied for any reason, don’t pay us for words, “If you are not satisfied for any reason, don’t pay us for it. Simply scratch out the line item, write a brief note about it. Simply scratch out the line item, write a brief note about the problem, and return a copy of this invoice along with your the problem, and return a copy of this invoice along with your check for the balance.”check for the balance.”

The policy impells managers to identify the root causes of The policy impells managers to identify the root causes of problems to prevent repeated short payments.problems to prevent repeated short payments.

It also signals to employees and customers the sincerity of the It also signals to employees and customers the sincerity of the company’s commitment to customer satisfaction.company’s commitment to customer satisfaction.

EthosEthos

EthosEthos refers to convincing another person to accept refers to convincing another person to accept a change through the strength of your moral a change through the strength of your moral character and the trust that followers have in you.character and the trust that followers have in you.

People tend to cooperate with a leader who has high People tend to cooperate with a leader who has high credibility, a combination of competence and credibility, a combination of competence and trustworthiness.trustworthiness.

When faced with a persuasive argument, the When faced with a persuasive argument, the audience asks, “Does this person audience asks, “Does this person knowknow the truth?” the truth?” They ask if the person is informed, skilled, and They ask if the person is informed, skilled, and intelligent.intelligent.

They also ask, “Does this person They also ask, “Does this person telltell the truth?” To the truth?” To answer this, they consider the person’s answer this, they consider the person’s trustworthiness: one’s character, moral fiber, and trustworthiness: one’s character, moral fiber, and personal integrity.personal integrity.

PathosPathos

PathosPathos refers to convincing others to accept a refers to convincing others to accept a change through appeals to emotional and change through appeals to emotional and psychological needs.psychological needs.

One effective way to satisfy people’s emotional needs One effective way to satisfy people’s emotional needs and to stimulate high motivation is to get them and to stimulate high motivation is to get them actively involved in the change itself.actively involved in the change itself.

When people feel they have had a voice and a hand in When people feel they have had a voice and a hand in shaping the change and its implementation, they tend shaping the change and its implementation, they tend to adopt ownership of it.to adopt ownership of it.

Using participation in planning and implementing Using participation in planning and implementing changes enriches people’s work, raises self-esteem changes enriches people’s work, raises self-esteem and self-confidence, and hones problem-solving skills.and self-confidence, and hones problem-solving skills.

Deciding When to Use the Change Deciding When to Use the Change Approaches (Figure 14-6)Approaches (Figure 14-6)

Tactic Best Used When

Education andCommunication

Resistance to change is due to lack of information orinaccurate information and analysis.

Participation andInvolvement

The initiators of change don’t have all the informationthey need to design the change, and others haveconsiderable power to resist.

Facilitation andSupport

People are resisting change because of fear oradjustment problems.

Negotiation andAgreement

Someone or some group will clearly lose out in thechange and that party has considerable power toresist.

Manipulationand Co-optation

Other tactics won’t work or are too expensive.

Coercion The initiator of change has power, and change mustoccur quickly.

Bottom Line:Bottom Line:Overcoming Resistance to ChangeOvercoming Resistance to Change

Identify PotentialSources of Worker

Resistance to aChange

Involve Workers inThe Design ofThe Change

Develop and ImplementA Comprehensive

Communications PlanFor Educating Workers

About the Change

Provide Support forWorkers Who Will Be

Implementing theChange (e.g., Training,

Budget, Direction)

Offer Rewards toWorkers forSuccessfully

Implementing a Change

Reinforce the ChangeBy Realigning Jobs,

Processes, Systems, andOrganization Culture

with the Change

Managing Difficult TransitionsManaging Difficult Transitions

Clearly explain the reasons for the transition: Clearly explain the reasons for the transition: Show how endings ensure continuity.Show how endings ensure continuity.

Explain why the transition is occurring Explain why the transition is occurring in the way in the way it is occurringit is occurring..

Minimize uncertainty: Define what is over and Minimize uncertainty: Define what is over and what is not.what is not.

Identify who is losing what.Identify who is losing what. Acknowledge losses openly and sympathetically.Acknowledge losses openly and sympathetically. Expect and accept signs of grieving.Expect and accept signs of grieving.

Managing Difficult Transitions Managing Difficult Transitions (Cont.)(Cont.)

Provide fair compensation for losses.Provide fair compensation for losses. Facilitate the coping of those with Facilitate the coping of those with

losses.losses. Mark the endings.Mark the endings. Treat the past with respect.Treat the past with respect. Plan for new beginnings.Plan for new beginnings.

Signs of GrievingSigns of Grieving(Figure 14-7)(Figure 14-7)

SIGNS OFGRIEVING

Anger

Bargaining

Anxiety

Sadness

Depression

Disorientation

Organizational Development (OD)Organizational Development (OD)

Organizational development (OD) has been Organizational development (OD) has been defined as “an effortdefined as “an effort

(1) planned,(1) planned, (2) organization-wide, and(2) organization-wide, and (3) managed from the top, to(3) managed from the top, to (4) increase organizational effectiveness and (4) increase organizational effectiveness and

health throughhealth through (5) planned interventions in the (5) planned interventions in the

organization’s ‘process,’ using behavioral organization’s ‘process,’ using behavioral science knowledge.”science knowledge.”

OD Assumptions and ValuesOD Assumptions and Values People as individuals:People as individuals:

people in the organization seek to satisfy higher-order needspeople in the organization seek to satisfy higher-order needs people desire to make a contribution to the organizationpeople desire to make a contribution to the organization people have the potential to make a contribution to the people have the potential to make a contribution to the

organizationorganization People as group members:People as group members:

the nature of group relationships will determine the the nature of group relationships will determine the satisfaction and contribution of individual members of the satisfaction and contribution of individual members of the group.group.

It is important that group members feel that acceptance in It is important that group members feel that acceptance in the work group is meaningful and that the group is capable of the work group is meaningful and that the group is capable of generating trust, support, and cooperation among members.generating trust, support, and cooperation among members.

The nature of the group should be such that members are The nature of the group should be such that members are capable of acting both as leaders and as followers when capable of acting both as leaders and as followers when necessary.necessary.

OD Assumptions and Values OD Assumptions and Values (Continued)(Continued)

People as members of the People as members of the organization:organization: organization structures have an impact on organization structures have an impact on

member attitudes and behaviorsmember attitudes and behaviors win-lose conflict strategies are not healthy in win-lose conflict strategies are not healthy in

the organizationthe organization upper management must have a long-term upper management must have a long-term

commitment to change within the organizationcommitment to change within the organization

The OD ProcessThe OD Process

Identify a Need for Change

Select a Technique for Change

Gather Top Management Support

Plan the Change Process

Overcome Resistance to Change

Evaluate the Change Process

OD Intervention TechniquesOD Intervention Techniques

Diagnostic techniquesDiagnostic techniques Team buildingTeam building Survey feedbackSurvey feedback EducationEducation Intergroup activitiesIntergroup activities Third-party peacemakingThird-party peacemaking

OD Intervention Techniques OD Intervention Techniques (Continued)(Continued)

Sociotechnical activitiesSociotechnical activities Process consultationProcess consultation Life and career planningLife and career planning CoachingCoaching Planning and goal settingPlanning and goal setting

Conditions for Successful OD Conditions for Successful OD ProgramsPrograms

Recognition by managers and members that Recognition by managers and members that the organization has problems.the organization has problems.

Use of an external change agent to start the Use of an external change agent to start the process.process.

Support from top management for the change Support from top management for the change process.process.

Involvement of work group leaders.Involvement of work group leaders. Early success with the change effort.Early success with the change effort. Understanding of the change process and its Understanding of the change process and its

goals.goals.

Conditions for Successful OD Conditions for Successful OD ProgramsPrograms

(Continued)(Continued) Support of managerial strengths.Support of managerial strengths. Inclusion of human resource managers in Inclusion of human resource managers in

the OD program.the OD program. Development of internal OD resources.Development of internal OD resources. Effective management of the OD program.Effective management of the OD program. Measurement and evaluation of results.Measurement and evaluation of results.

The Learning OrganizationThe Learning Organization According to Peter Senge, in According to Peter Senge, in

learning organizationslearning organizations “people “people continually expand their capacity to continually expand their capacity to create the results they truly desire, create the results they truly desire, where new and expansive patterns where new and expansive patterns of thinking are nurtured, where of thinking are nurtured, where collective aspiration is set free, and collective aspiration is set free, and where people continually learn how where people continually learn how to learn together.”to learn together.”

Learning organizations develop Learning organizations develop specific learning capabilities not specific learning capabilities not present in traditional organizations. present in traditional organizations.

Peter Senge

The Five Disciplines of Learning The Five Disciplines of Learning Organizations (Figure 14-8)Organizations (Figure 14-8)

LearningCapabilities

PersonalMastery

MentalModels

SharedVision

TeamLearning

SystemsThinking

The Seven Learning DisabilitiesThe Seven Learning Disabilities ““I am my position.” People often identify with I am my position.” People often identify with

their jobs rather than with the larger enterprise.their jobs rather than with the larger enterprise. ““The enemy is out there.” We have a tendency The enemy is out there.” We have a tendency

to “externalize,” finding someone or something to “externalize,” finding someone or something outside ourselves to blame when things go outside ourselves to blame when things go wrong.wrong.

““The illusion of taking charge.” All too often, The illusion of taking charge.” All too often, proactiveness is just reactiveness in disguise.proactiveness is just reactiveness in disguise.

““The fixation on events.” We are conditioned to The fixation on events.” We are conditioned to see life as a series of events and to believe that see life as a series of events and to believe that there is one obvious cause for each event.there is one obvious cause for each event.

The Seven Learning Disabilities The Seven Learning Disabilities (Cont.)(Cont.)

““The parable of the boiled frog.” We often fail to notice The parable of the boiled frog.” We often fail to notice gradual change. It is critical to remain attuned to the gradual change. It is critical to remain attuned to the gradual processes that often pose the greatest threats.gradual processes that often pose the greatest threats.

““The delusion of learning from experience.” We never The delusion of learning from experience.” We never experience the consequences of our most important experience the consequences of our most important decisions; these have system-wide consequences that decisions; these have system-wide consequences that play out over years.play out over years.

““The myth of the management team.” Members of The myth of the management team.” Members of management teams, instead of battling these management teams, instead of battling these disabilities, often fight for turf, try to avoid blame, and disabilities, often fight for turf, try to avoid blame, and work to give the appearance of a cohesive team.work to give the appearance of a cohesive team.

Developing Learning OrganizationsDeveloping Learning Organizations

LearningOrganizations

LearningLeaders

LeadershipCommunities

LearningInfrastructures

LearningCultures

Bottom Line:Bottom Line:

Developing a Learning OrganizationDeveloping a Learning Organization

Leaders Generate“Creative Tension” byConvincing Workers

That a Significant GapExists Between theStatus Quo and a

Future Vision

Leaders ProvideSupport for a WideRange of Learning

Activities ThroughoutVarious Units in an

Organization toCreate Learning

Communities

Leaders Help toCreate and EstablishFormal Systems andProcesses to Support

Learning ActivitiesThroughout the

Organization

Leaders ModelBehaviors That

Support a LearningOrganization andFoster a Culture

That Values Learning

Leaders Evaluate thePerformance of

Workers, Units, andThe Organization

Based on Learning-Related Outcomes