BUS 272 Organizational Change PDF

BUS 272 – E100 Week 9: Organizational Change Melissa McCrae, EdD Change is Common At an given time more than a third of large organizations have a transformation underway 50% of CEOs interviewed reported 2 or more major change efforts within the past 5 years, 20% reported 3+ (Mankins & Lit...

BUS 272 – E100 Week 9: Organizational Change Melissa McCrae, EdD Change is Common At an given time more than a third of large organizations have a transformation underway 50% of CEOs interviewed reported 2 or more major change efforts within the past 5 years, 20% reported 3+ (Mankins & Litre, 2024) ¾ change efforts ‘fail’, 12% produce lasting results Fail to deliver anticipated benefits Abandoned before complete Forces for Change Force Examples Nature of the workforce More cultural diversity Aging population Technology Faster, cheaper, and more mobile computers Online music sharing AI Economic shocks Rise and fall of crypto stocks Changing interest rates Turbulent financial markets Competition Global competitors Mergers and consolidations Social trends Social media ”Great resignation”—an unusually high number of COVID resignations Rise of discount and “big box” retailers World politics Global financial crises Government shakeups around the world Extreme weather Targets for Change Change Pace Evolutionary versus revolutionary Incremental versus radical Underestimated resources, time, complexity Individual, group, organizational, system Change Agents Act as catalysts & assume the responsibility for managing change activities, can be: managers or non-managers, employees, or outside consultants Outside agents: Can offer an objective perspective Less understanding of history, culture, operating procedures, and people Don’t have to live with the repercussions after the change is implemented Internal agents: Have to live with the consequences of their actions May be more thoughtful May be more cautious Change Champions Strong informal networks (Battilana Casciaro) Pathfinders team (annual, cross-functional) = distributed change agents Not just top and senior leaders Strongest resistors = Psychological commitment Problem diagnosis and solution generation Participation Who is diagnosing, planning Takes more time up front, but saves later Change Management Lewin’s Three-Step Model Kotter’s Eight-Step Plan for Implementing Change Action Research Appreciative Inquiry  Lewin Unfreezing happens when: 1. Driving forces direct behaviour away from the status quo 2. Restraining forces hinder movement from the existing equilibrium 3. Driving forces higher than restraining forces Kotter – 1-4 = Unfreezing Create a Sense of Create a compelling reason for why change is needed. This can help jar Urgency employees out of complacency as well as helping push past their fear of change. Create a Guiding No one person can create change by themselves. Therefore, good leaders will Coalition and Mobilize create a coalition of influential people who can assist them with change. Commitment Develop & In order to transform an organization, employees need to know the direction Communicate a they are moving. The vision should be: Shared Vision Simple Communicated through multiple forums Repeated frequently Demonstrated by leaders Empower Employees Most change is accomplished by the actions of employees. Therefore, it is to make the change important to empower employees to make the change. Encourage risk-taking and creative problem-solving. Kotter – 5-7 = Moving; 8 = Refreezing Generate Short Term Most people need reinforcement as they progress through a change. Setting Wins short term goals that are achievable can help employees see their success. Consolidate Gains and Reinforce changes by demonstrating the relationship between new behaviours Produce more Change and organizational success. Anchor New Ways of Once change behaviours are shown, they need to be rewarded or celebrated in doing things in the order for them to become part of the culture. Employees need to change their Company Culture shared values in order to create a culture that will support new behaviours. Monitor Progress and Organizations need feedback on their progress and it is important to have a Adjust the Vision as mechanism in place to monitor the change. Consolidate improvements, reassess required changes, and make necessary adjustments. Action Research Change process based on systematic collection of data & then selection of a change action based on what the analyzed data indicate: Diagnosis, Analysis, Feedback, Action, Evaluation A: problem-focused (solution focused not ideal), employee involvement lowers resistance  Appreciative Inquiry Change approach that seeks to ID the unique qualities and special strengths of an org and build on them to improve performance Discovery – Identify what people think are the strengths of the org; employees recount times they felt the organization worked best Dreaming – Speculate on possible futures for the organization Design – Find a common vision on how the organization will look and agree on unique qualities Destiny – Define the organization’s destiny, action plans, implementation strategies Resistance to Change Can be found at all levels in an Individual organization Can be positive if it leads to open discussion and debate Does not necessarily surface in standardized ways Can be overt and immediate or implicit and deferred (which is then much harder to manage, esp if last straw) Resistance to Change Overcoming Resistance Education and communication: often inaccurate or a lack of information, ees need to know why and why now and how Participation and involvement: Prior to making a change, those opposed can be brought into the decision process, but takes time, psychological ctt Building support and commitment: Help employees emotionally commit to the change Developing positive relationships: Establish trust in the managers implementing the change Implementing changes fairly: Make sure change is implemented fairly Overcoming Resistance Manipulation and co-optation: Twisting and distorting facts to make them appear more attractive, should only be used when other tactics won’t work or are too expensive, can backfire, damage LT trust Selecting people who accept the change: Open to the experience and take a positive attitude toward change Explicit and implicit coercion: The application of direct threats or force upon resisters; only when speed is essential, and initiators have power How to Speed up Change Attain leader buy-in: confront reality and agree on ground rules Limit change initiatives to 2-3 Move quickly and dialogue with those not on board Get all employees engaged, explain how changes are personally relevant Offer rewards and incentives Celebrate milestones Anticipate and defuse post-launch blues and midcourse overconfidence Paradox Paradox theory is the theory that the key paradox in management is that there is no final optimal status for an organization As the environment and members of the organization change, different elements take on more or less importance There is some evidence that managers who think holistically and recognize the importance of balancing paradoxical factors are more effective, especially in generating adaptive and creative behaviour in those they are managing Culture of Innovation Innovation = new idea applied to initiating or improving a product, process, or service Structural variables as sources of innovation: Organic structures Long tenure in management Slack resources High inter-unit communication Cultures are sources of innovation Encourage experimentation Reward both successes and failures Celebrate mistakes Culture of Innovation Human resources are a source of innovation: Actively promote the training and development Offer high job security Encourage individuals to become idea champions Champions have common personality characteristics: high self- confidence, persistence, energy, and a tendency to take risks Creating a Learning Organization Learning organization is an organization that has developed the continuous capacity to adapt and change Single-loop learning is a process of correcting errors using past routines and present policies Double-loop learning is a process of correcting errors by modifying the organization’s objectives, policies, and standard routines Creating a Learning Organization 1. The organization has a shared vision that everyone agrees on 2. People discard their old ways of thinking and the standard routines they use for solving problems or doing their jobs 3. Members think of all organizational processes, activities, functions, and interactions with the environment as part of a system of interrelationships 4. People openly communicate with each other (across vertical and horizontal boundaries) without fear of criticism or punishment 5. People suppress their personal self-interest and fragmented departmental interests to work together to achieve the organization’s shared vision Deciding What to Change Fully understand: Catalyst for change, balance of efficiencies and investing in growth Underlying quest Leadership capabilities & Diversity Debate priorities Talk about enablers and blockers Reconcile perspectives & priorities Develop a shared understanding Anand & Barsoux, 2017, What everyone gets wrong about change management, HBR 6 Critical Practices 1. Make transformations continuous 2. Build transition into the company’s rhythm (planning & operating processes) 3. Manage organizational energy (don’t overload + reward + recognize) 4. Aspirations to set goals versus targets based on others 5. Drive change from the middle out (deep exper, x-comp) 6. External capital or at least resource it Mankins and Litre 2024 Transformations that Work, HBR  Success Factors for Change - GE Key Success Factors for Questions to Assess and Accomplish The Key Success Factors for Change Change Do we have a leader... Who owns and champions the change? Leading change Who publicly commits to making it happen? (Who is responsible?) Who will garner the resources necessary to sustain it? Who will put in the personal time and attention needed to follow through? Do employees... Creating a shared need See the reason for the change? (Why do it?) Understand why it is important? See how it will help them and the business in the short term and long term? Do employees... Shaping a vision See the outcomes of the change in behavioural terms (that is, in terms of what (What will it look like they will do differently as a result of the change)? when we are done?) Get excited about the results of accomplishing the change? Understand how it will benefit customers and other stakeholders? Key Success Factors for Questions to Assess and Accomplish The Key Success Factors for Change Change Do the sponsors of the change... Mobilizing commitment Recognize who else needs to be committed to the change to make it happen? (Who else needs to be Know how to build a coalition of support for the change? involved?) Have the ability to enlist support of key individuals in the organization? Have the ability to build a responsibility matrix to make the change happen? Do the sponsors of the change... Modifying systems and Understand how to link it to other HR systems such as staffing, training, appraisal, structures (How will it be rewards, structure, and communication? institutionalized?) Recognize the systems implications of the change? Do the sponsors of the change... Monitoring progress Have a means of measuring its success? (How will it be Plan to benchmark progress against both the results of the change and the measured?) process of implementing it? Do the sponsors of the change... Making it last (How will Recognize the first steps in getting started? it get started and last?) Have a short-term and long-term plan to keep attention focused on the change? Have a plan to adapt the change over time? How to Support Employees Don’t overload them! Resource & care - give them time Vision & aspirations (exciting, motivating) Show progress and wins Break down into bite-sized pieces so it feels manageable (SMART) Have change agents throughout so people feel seen, understood, represented Listen to concerns, have many options/places for it, many discussions, safe/trusting space Be willing to adjust vision Communicate behaviour shifts (& determine together) Recognize it is hard for all and very hard for some - individualized consideration Kick off and celebration Grounded in strengths/positive Transparency Allow for flexibility on how to do it and transition time Consider all systems How to Prepare Org Continuous transformation Document processes Establish cross-functional relationships Develop potential change leaders (e.g. leadership development program) Visioning to set up exciting goals Clear out the time wasting elements of processes, create efficiencies to be ready Connections and trust Understand culture (values, what people care about) Understand who the influencers are – map your network Talk about enablers and blockers generally or historically Strong strategic planning process so we know what to change and why (market/process analysis) Assess leadership capabilities Document/assess/debrief past change initiatives for lessons Get some wins to boost confidence (from historical change initiatives Give some control so the change will feel less like a pattern of no control (2 leadership gears) Change Planning Scenario Planning Expect it to be hard Don’t expect it to be linear Resource