Organizational Change Management

The Case for Change

• Organizational change involves altering people, structure, or technology
• A change agent is someone who catalyzes and manages the change process

External and Internal Forces for Change

• External factors include changing consumer needs, new governmental laws, technology, and economic shifts
• Internal factors involve new organizational strategies, workforce composition, equipment, and employee attitudes

Calm Waters Metaphor

• Unfreezing the status quo starts the process
• Changing to a new state is next
• Refreezing makes the change permanent

Kurt Lewin's Three-Step Change Process

• The process involves unfreezing, changing, and refreezing stages

White-Water Rapids Metaphor

• Lack of stability requires constant adaptation from managers and organizations

Reactive vs. Proactive Change

• Reactive change responds to an occurred situation
• Proactive change acts in advance

Four Types of Change

• Strategy: Modifying approach to ensure organizational success
• Structure: Changing structural components and design
• Technology: Incorporating new work processes, methods, and equipment
• People: Focusing on attitudes, expectations, and behavior.

Change: Strategy

• Failure to adapt strategy can undermine a company's success

Change: Structure

• This includes changing structural components
• This also includes changing structural design

Change: Technology

• This comprises of new equipment, tools, or methods
• Also includes automation
• As well as Computerization

Change: People

• Organizational development methods can improve interpersonal work relationships

Popular OD Techniques

• Sensitivity Training: Changing behavior through unstructured group interaction
• Survey Feedback: Assessing attitudes/perceptions and resolving discrepancies
• Team Building: Activities that help team members learn how each member thinks and works
• Intergroup Development: Changing attitudes between work groups
• Process Consultation: Using an outside consultant to understand interpersonal processes

Resistance to Change

• People resist change because of uncertainty
• Also due to habit
• Fear of loss
• Belief it is inconsistent with goals

Reducing Resistance to Change

• Education and communication
• Participation
• Facilitation and support
• Negotiation
• Manipulation and co-optation
• Coercion

Techniques for Reducing Resistance to Change

• Education & Communication: Best when resistance stems from misinformation
• Advantage: Misunderstandings are cleared up
• Disadvantage: May fail if trust/credibility are lacking
• Participation: Best when resisters have expertise to contribute
• Advantage: Increases Involvement and acceptance
• Disadvantage: It is time-consuming and may yield poor solutions
• Facilitation & Support: Best when resisters fear anxiety
• Advantage: Needed adjustments can be facilitated
• Disadvantage: It is expensive with no guaranteed success
• Negotiation: Best when resistance comes from a powerful group
• Advantage: Can buy commitment
• Disadvantage: It is potentially high cost and may open doors for others to apply pressure
• Manipulation & Co-Optation: Best when a powerful group's endorsement is required
• Advantage: Inexpensive, easy way to gain support
• Disadvantage: Can backfire, causing the change agent to lose credibility
• Coercion: Best when a powerful group's endorsement is required
• Advantage: Inexpensive, easy way to gain support
• Disadvantage: It may be illegal and may undermine a change agent's credibility

Leading Change

• Managers ensure Organizational change capability
• Managers understand own role in process
• Managers gives Employees a role in the change

Change-Capable Organizations

• Link the present and future, incorporate future issues into today’s decisions
• Make learning a way of life with active sharing of knowledge
• Actively encouraging day to day improvements and changes
• Having a multitude of individuals from all walks of life creating diverse teams
• Encourage Mavericks to challenge to status quo, bringing radical change
• Shelter breakthroughs and protect the ideas
• Integrating new technologies to make way for organizational change
• Building trust through integrity and having managers with credibility
• Couple permanence to make way for all constants during times of change
• Support an entrepreneurial mindset enabling employees catalysts to catalyze radical change

Culture for Change

• Stable organizational culture resists change

Situational Factors Facilitating Change

• A dramatic crisis occurs
• Leadership changes hands
• Culture is weak

Managing Cultural Change

• Management should set a positive tone
• Create new stories, symbols, and rituals
• Select, promote and support employees who adopt new values
• Redesign socialization processes
• Change the reward system to encourage new values.
• Set clearly specified expectations replacing unwritten norms
• Shakeup current subcultures through job transfers and terminations
• Work to create a high level of trust through employee participation

Employee Stress

• Stress is the adverse reaction from excessive pressure
• Stressors are factors causing stress

Causes of Stress

• Task demands
• Role demands: conflicts, overload, ambiguity
• Interpersonal demands
• Organization structure
• Organizational leadership

Personal Factors for Stress

• Type A personality is a chronic sense of urgency and excessive competitive drive
• Type B personality is relaxed, easygoing, accepts change easily

Stress Symptoms

• Physical: metabolism changes, increased heart/breathing rates, raised blood pressure, headaches, heart attack potential
• Psychological: job dissatisfaction, tension, anxiety, irritability, boredom, procrastination
• Behavioral: productivity changes, absenteeism, job turnover, changes in eating habits, increased smoking/alcohol consumption, rapid speech, fidgeting, sleep disorders

How To Reduce Stress

• Realistic job previews during selection
• Performance planning programs like MBO
• Job redesign
• Addressing personal stress includes counseling
• Time management programs
• Wellness programs

Creativity vs Innovation

• Creativity: Combining ideas uniquely or unusually
• Innovation: Turning creative ideas into useful products or methods

Stimulating/Nurturing Innovation

• Innovation is stimulated when the structure, culture, and HR practices are right

Innovation Variables

• Structural Variables: Organic structures, Abundant resources, High Interunit communication, Minimal time pressure, Work and nonwork Support
• Cultural Variables: Acceptance of Ambiguity, Tolerance of the Impractical, Low External Controls, Tolerance of Risks, Tolerance of Conflict, Focus on Ends, Open-System Focus, Positive Feedback
• Human Resource Variables: High Commitment to Training and Development, High Job Security, Creative People

Structural Variables

• Organic structures
• Abundant resources
• High Interunit Communication
• Minimal Time Pressure
• Work and Nonwork Support

Cultural Variables

• Embrace ambiguity
• Be tolerant of impractical ideas
• Have low external controls
• Tolerate Risks
• Do not shy away from conflict
• Focus on end goals
• Use a Open-System Focus
• Give Positive Feedback

Human Resource Variables

• The Idea champion actively supports new ideas and overcomes resistance

Innovation and Design Thinking

• Emphasis on a deeper understanding of what customers need and want drives innovation in design thinking

Disruptive Innovation

• Disruptive Innovation: changes an industry's rules
• Sustaining Innovation: Incremental changes to established products

Disruptive Innovation Examples

• A compact disc disrupted by Apple iTunes
• Carbon paper disrupted by Xerox copy machines
• Canvas tennis shoes disrupted by Nike athletic shoes
• Portable radio disrupted by Sony Walkman
• TV networks disrupted by Cable and Netflix
• Stockbrokers disrupted by eTrade
• and many others

Disruptive Innovation Importance

• Businesses need to respond to disruptive innovations

Vulnerability

• Organizations are vulnerable when large, profitable and established.

Implications:

• For Entrepreneurs
• For Corporate managers: Utilize Skunk works, a small group within the organization given autonomy
• For Career planning