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KEY STEPS OF THE CHANGE MANAGEMENT PROCESS 1. A PROCESS PRESPECTIVE OF MANAGING CHANGE Changing environment: - Customers: costumer expectation forced firms to customize products, cultivate relationships and learn new skill; - Technology: firms change the way they operate int...

KEY STEPS OF THE CHANGE MANAGEMENT PROCESS 1. A PROCESS PRESPECTIVE OF MANAGING CHANGE Changing environment: - Customers: costumer expectation forced firms to customize products, cultivate relationships and learn new skill; - Technology: firms change the way they operate internally and how compete externally (new info, new production and services, new costumer); - Competitors: other firms on the markets; - Legal, regulatory and ethical standards; New competition, globalization, information revolution and rapid technological advances and breakthroughs have as consequence: increased risk, decreased ability to forecast, fluid firm and industry boundaries, unlearn traditional principle and new structural form; CHANGE MANAGEMENT: set of activities and tools with which a firm manages the introduction of a technological innovation or the change of its setting and its organizational structure; Boundaries are not always clear-cut. 7 steps: - RECOGNISING and STARTING: o Eternal events or internal circumstances require to create opportunities for change; o Complex process of percetions, interpretations and decision making; o Involve new people to get new ways of thinking; o Translating the need or opportunity for change into a desire for change; decide who will manage the change and build effective relationships; - DIAGNOSING: o Reviewing where the organisation is today and where it might be in the future; o Present state: identify required changes and establishing a baseline; o Future state: developing a vison for the whole organization, visioning impact; - PLANNING: o Articulate how the change goal will be achieved, paying attention to: ▪ Overall change strategy; ▪ Type and sequence of intervention; ▪ Details to be managed; ▪ People issues; ▪ Long-term implications; - IMPLEMENTING: o From planning to action; o Competing goals, motivating, communicating, reviewing and lack of coordination; - SUSTAINING CHANGE: o New ways of working and improved outcomes become the norm; o The thinking and attitudes are fundamentally altered and the systems are transformed in support; o Affected by: change strategy, leaders behavior post implementation, success in leadership; - LEADING AND MANAGING:  o Attention to people issues: different goals and priorities, internal politics, ethics, motivation and commitment, support; - LEARNING: o Effective leaders are those who can learn from their experience; o Single loop learning: focus on detecting errors and acting on feedback; o Double loop learning: challenges accepted ways of thinking and behaving; 2. RECOGNIZING THE NEED FOR CHANGE Organization need to be able to recognize and respond to changes; some are proactive and search out for potential threats and opportunities, other are more reactive and respond when pressing need; 2 views: Gradualism paradigm: adapt to opportunities and threats with a process of continuous incremental change; Punted equilibrium: alternation of periods of equilibrium (incremental; improving efficiency and “doing things better”) and periods of revolution (transformational; transform organization); Approach: - Proactive: search threats, prepare events and anticipate changes; - Reactive: act only when there is a clear and pressing need to respond; Typology of organizational change: - TUNING: no immediate need to change, initiated internally to make minor adjustments; - ADAPTION: incremental and adaptive response to a pressing external demand for change; - REORENTATION: redefinition of enterprise, anticipate future opportunities and problems; - RE-CREATION: transform organization through fast and simultaneous change; Affected change : - Focus for change effort: - Locus for change: Source of change: - External: PEST Analysis focus attention on 4 factors: o Political: new legislation areas, regulation of markets, fiscal policies; o Economic; o Socialcultural: demographic trend and shifting attitudes; o Technological: levels of R&D investment, availability, rate of absolence, digital technology and developments in AI and robotics; ▪ DIGITAL TECHNOLOGY new business models: On demand Subscription Freemium Completely free The marketplace Access over ownership Ecosystem - Internal: o Greiner’s model of the 5 phases of growth; evolutionary period have a dominant management style and a management problem; 1) Identifying markets and creating products; 2) Differentiation of activities and develop functional structures; 3) Delegation, gives rise to a need for greater coordination; 4) Formal system and procedures to facilitate coordination; 5) Developing interpersonal competences, matrx and network structures;  Recognize the need for change: - Purpose and desired outcome; - Stakeholder perspectives; - Level of assessment; - Alignment; - Time perspectives; - Constraints and enabling factors; - Benchmark standards; Balance scorecard: helps managers widen the criteria, allow reviewing performance along 4 perspectives: - Financial measures; - customer measures; - internal business process measures; - innovation, learning and growth measures; Start the change process: - alerting people; - desiding who leads; - developing change relationships; 3. DIAGNOSING WHAT NEEDS TO BE CHANGED Organizational diagnosis: process of research into the functioning of an organization that leads to recommendations for improvement and change. Five main steps: - SELECTING A CONCEPTUAL MODEL FOR DIAGNOSIS Managers must develop or adopt a conceptual model that: o simplifies the real world; o focuses attention on key elements and the way in which these elements relate and interact each other, the output produced by these interactions; o helps decide which aspects of organisational behaviour require attention o provides a focus for infos gathering, a basis for interpreting the infos and a basis to decide how to act; 2 types of models: o Component model: look at particular aspects of organisational functioning; Assessments can be combined; o Holistic model: start by looking at the “big picture” before focusing on specific components and issues; Open System Theory Framework that view an organization as a system of interrelated components that interact with larger environments. Organizations are o embedded on a larger system, o able to avoid entropy through input-output transactions, o regulated by feedback (infos about output) to regulate inputs, o subject to equifinality (same outcomes with different types of organisation configurations), o cyclical (events occur repitetively), o equilibrium seeking (all component parts of the system are in equilibrium), o bounded (external and internal) HOLISTIC MODEL TYPES o KOTTER’S INTEGRATIVE MODEL OF ORGANIZATIONAL DYNAMICS ▪ 6 structural elements; ▪ Set of key organizational processes; ▪ This model highlights which aspects of organizational functioning impact effectiveness over: Short term: effective organization are those that have key processes; Medium term: effectiveness is determined by the state of alignment between the structural elements; organizations move towards the solutions that require the minimum use of energy; Long term (6-60 years): structural elements have influence on key organizational processes, elements emerges as driving force; effectiveness is determined by an organization that maintain internal and external alignment; o MCKINSEY 72 MODEL ▪ 7 elements that when aligned make an important contribution to organizational effectiveness; o WEISBORD’S 6-BOX MODEL ▪ Conceptual map of 6 elements that assessed, reveal connections and relationships between each other; the effectiveness depends on what goes on in and between the six elements that have both formal and informal aspects;  o BURKE-LITWIN CASUAL MODEL OF ORGANIZATIONAL ▪ The level of performance and affect change is determined by the relative weight of the elements; o KLOFSTEN’S BUSINESS PLATFORM MODEL ▪ Business survival and subsequent success are affected by the founder’s ability to build and maintain a business platform that compromise 8 elements; To select the best one, we need to check the relevant issues and identify the core elements. - CLARIFYING INFORMATION REQUIREMENTS Once selected the diagnostic model, the change manager can identify the types of information required to: o Assess how the organization is performing; o distinguish what is going well; - INFORMATION GATHERING Begins with a series of planning decisions related to: o which methods of data collection to employ (interviews, questionaries, observations and secondary sources), o whether data can be collected from every possible source, - ANALYSIS Analyzation of collected information. 2 types of techniques: o Qualitative: concerned with meaning and underlying patterns; o Quantitative: focus on data with numerical significance; - INTERPRETATION Conceptual model provides basis for interpreting diagnosis information and identifying what needs to be changed. The are some examples of change tools: the 7S matrix (combined with the McKinsey 7S model) or the SWOT analysis. o 7S MATRIX Identifying the information need for diagnosis; Interpret the infos and asses the degree of alignment between 7 elements; Decide areas and actions aimed for change; o SWOT ANALYSIS To assess internal and external alignment and identifying what needs to be changed to improve organizational effectiveness. The organisation is assessed to identify strengths and weaknesses. PRIMO-F framework (people, resources, innovation, marketing, operations and finance). The external environment is examined to discern opportunities and threats. PEST factor (political, economic, sociocultural, technological). 4. LEADING AND MANAGING THE PEOPLE ISSUES 4 main aspects: - LEADING CHANGE Management and leadership involves: deciding what needs to be done, develop the capacity to do it and ensuring that it is done. All managers have a leadership role. 7 tasks that leaders need to perform to ensure change success: o Sense making Make sense of the world and identify the opportunities and threats that require attention. Leaders can improve it by making multiple sources, checking different prospective and design small experiments to test ideas. They need to be continually on alert to new developments and their impact. o Visioning Identifying a vision and what needs to be done to move towards this better future. The vision should be realistic of a situation and to have a good vision, needs to be: imaginable, desirable, feasible, focused, flexible, communicable. o Sense giving Communicating the vision to a wider audience and responding to feedback to win the commitment. Translate the vision into a desire for change; the vision is aligned with values and promises to deliver personal benefit. o Aligning Promoting a shared sense of direction so that people can work together to achieve the vision. The direction should be clear and shared. o Enabling Removing obstacles and creating the conditions that empower others to implement the change. Leaders should ensure about the what needs to be done, create a clear structure and framework of the work, design and delegate tasks, provide access to information and monitor the progresses. o Supporting Recognising and responding to the concerns of the people affected by the change. o Maintaining momentum and sustaining change Showing commitment and demonstrating that they are prepared to change their behaviour as well to keep people focused on the change. The problem is that when the processes are on way, leaders tend to turn their attention elsewhere and perceive a lack of support. - MANAGING STAKEHOLDERS Organizations are a collection of individuals and groups, each with their own objectives. Individuals and groups attempt to influence each other. In times of change, power and influence as political behaviour tends to be more intense. Change managers need to know the identity of important stakeholders, their predispositions to the change and how to influence and persuade them.  Stakeholder: any individual or group who can affect/is affected by the achievement of the organisation’s objectives. To identify stakeholders: o Identify who could be affected by the change’s outcome; o Assess how much power and influence has; o Assess stakeholders attitudes towards the change; After, leaders need to win their support and reduce the power of people that could “block” it and increase the influence of the supportive building a coalition and new sponsors. - COMMUNICATING CHANGE Communication goals help change managers to identify: information, key stakeholders. Features of communication strategy: o Directionality: two-way effective change communication; continuous improvement also requires intense and open lateral communication. o Role: isolates to the organization’s affairs, boundary spanners and gatekeepers. o Content: balance information about strategic issues, attend to unfamiliar content and attend to perceptions of fairness and justice. o Channel: infos and meaning can be communicate in different ways (different vocabulary and problems orientation, needs to get feedback and exchange views). Communication strategies: o Spray and pray: gives all kinds of information assuming that as a better communication; o Tell and sell: limited set of messages and sell the other infos; o Underscore and explore: give set of fundamental issues that have to be explored; o Identify and reply: listening and respond to organisational members concerns; o Withhold and uphold: giving information only until necessary; - MOTIVATING OTHERS TO CHANGE Motivating to support the change, employees have to be at the centre of organizational change. Past experience can affect the employee level of commitment and support. Organization expect loyal employee and employee expect renumeration, security and opportunity to learn and develop. If they feel an organization failure, they could redefine their thinking. Why individuals resist to change: o Misunderstanding and lack of trust; o Low tolerance for change; o Different assessments of the need for and consequences of the change; o Parochial self-interest; Motivating people to support the change:  o Education o Persuasion o Participation and involvement o Facilitation and support o Negotiation o Manipulation o Explicit or implicit coercion o Goal setting How expectation influence motivation: o Diagnose whether others will be motivated to support or resist a change ▪ Behaviour is a function of the attractiveness of the outcomes; ▪ The expectancies about the achievement of the valued outcome; ▪ Equity of treatment; ▪ understanding and competence; o Intervene to increase their motivation to support the change; o Using expectancy theory to enhance motivation and support for change ▪ Assessing how the change will affect the availability of valued outcomes in the change situation; ▪ Different people value different outcomes; ▪ Less resistance and more support when stakeholders expect to deliver a satisfactory level of performance in the change situation; 5. PLANNING AND PREPARING FOR CHANGE Providing attention to 3 main aspects: - Shaping implementation strategies: o Approaches to managing change: ▪ Economic strategies: Technical solutions to problems; Large groups of consultants are employed; Restructuring of organisations, re-engineering (change the aspects of the organization), search of efficiencies, layoffs (reduce the number of employees); ▪ Organization development (OD) strategies: Create the capabilities required to sustain competitive advantage and high performance; Emphasize the importance of shared purpose, a strong culture, bottom-up change and involvement rather than financial incentives as the motivator for change; o Combined economic/ OD strategies:  ▪ Need of a vision and of a direction; ▪ Need to manage stakeholder; ▪ Need to adopt sociotechnical approach; - Shaping change strategies: o Internally consistent and compatible with key situational variables: ▪ Stability of external environment; ▪ Urgency and stakes involved; ▪ Level of support; ▪ Clarity of the desired future state; ▪ Alignment of values; ▪ Coordination; o Contingency model: ▪ A mistakes that occur when there is a single approach to implementing change; ▪ Alternative change strategies can be adopted; ▪ Burnes model: 3 dimensional model: o Type of change (incremental vs transformational); o Time available for change (no time vs time); o Level of support for the change (low vs high); - Developing a change plan Thinking about what needs to happen; 9 tasks: o Appoint a transition manager ▪ In charge during transition phase ( requires sufficient power, respect and ability to win support and commitment);  ▪ Stay in close contact with others involved in the process and with the post- transition manager; ▪ Might be: senior manager, project manager, consultant, person in charge in the pre/post-change state; ▪ Might establish a task force or a temporary team; o Specify the end state ▪ Known end state: specify tasks and time frame → “blueprint” plan; ▪ Unknown end state: plan one step at time, implement and review, plan next step; o Identify what needs to be done ▪ Which aspects change / work on; ▪ Use of a tool to stimulate thinking: fishbone or Awakishi diagram; o Develop an implementation plan maximizing stakeholders’ engagement implementation plan based on appeal and likelihood; o Use multiple and consistent leverage points for change ▪ Change something will change also the others to have an equilibrium; o Schedule activities ▪ Any developing plan involve: many tasks, different lead times, interdependencies, resources and other constraints; ▪ Use critical path analysis: useful tool to schedule and identify resource requirements; ▪ attention on: tasks, order, dependencies, resources, milestones, time and the possible ways of shortening the project; ▪ CRITHICAL PATH ANALYSIS: Define the tasks, time and dependencies to be implemented (make a list);  Use the data listed to create a diagram (arrow = activities and time, circles = start and end, number in circle= required end state); o Provide needed resources o Reward transition behaviours ▪ Provide sufficient incentive for people to support the change and reward transition behaviours; o Develop feedback mechanisms - Types of intervention 6. IMPLEMENTING CHANGE, REVIEWING PROGRESS, SUSTAINING CHANGE AND LEARNING Implement the change → review the progress and adjust → sustain the change; - IMPLEMENTATION o Translate intention into actual change; o Initial diagnosis identify problems; o Change has to be developed as a series of incremental steps where at the end should be a review of everything; o Factors that affect implementation: ▪ Quality of diagnosis and specification of change goals; ▪ Clarity of plans for implementation (planning is a two-step process); ▪ The way the change is communicated (unambiguous information); ▪ The way stakeholders are managed (the change threats the interests of stakeholders); ▪ Degree of alignment and coordination (communication); ▪ Adoption of management practices (members feel respect); ▪ Provision of socio-emotional support (support to managers); - REVIEW PROCESS o Lack of commitment, communication and support; o Reward system; o Insufficient resources; o Monitoring and reviewing how change are implemented can help managers to adjust: ▪ The plan; ▪ The implementation of the plan; o Cause-and-effect hypothesis: ▪ Set of operational goals and related measures used to monitor: Implementation of change plan; Validity of change hypothesis; ▪ To evaluate the hypotheses, 3 questions: Are interventions being implemented as intended? Are interventions producing the desired effect? Is the change plan still valid? (implemented as intended) o Measure the performance  ▪ Collecting and feeding back information about how interventions affect performance; ▪ Performance measure related to outcomes important to stakeholders and hypotheses about cause-and-effect relationships; ▪ Instruments: Balance scorecard (integrate financial); Change management indicator (design to get feedback); - SUSTAINING CHANGE o Where new ways of working and improved outcomes become the norm; o Can be affected by: change strategy, leaders’ behaviour post implementation, success in leadership; - LEARNING o Learn from past experience; o Adopt an “observing” mode; o Reflect and identify critical junctures; o Explore alternative ways of acting o Theory: ▪ Espoused theory: when someone asks how to behave, how to answer; ▪ Theory-in-use: the way individual acts based on past experiences and subjective mental maps; o To be effective, leaders need to be aware of their theories-in-use and be prepared to revise them; o REFLECTION ▪ To become more aware and learn; ▪ Reflection-in-action: immediate, shapes what change managers does next; ▪ Reflection-on-action: reflection occurs after the event, used to faced future similar situation; o Types of learning: ▪ Single-loop learning: attention on detecting error, acting on feedback to modify behaviour; ▪ double-loop learning: challenges accepted ways of thinking and behaving; CHANGE MANAGEMENT INDICATOR (CMI) Find out how your change programme is going while you have time to do something about it. The success of planned changes can be assessed against performance indicators such as time-to-market, customer satisfaction and the changes. Lack of enthusiasm on the part of employees is inevitable and so the employees’ perceptions are not good indicators of the change management, but their feedback provide a good indication of well things are going. The CMI was developed as a structured means of providing feedback. Purpose: help organisations manage change more effectively by providing change managers with feedback on how organisational members perceive the change itself, how well it is being managed and its impact on them. Can be used to: - As a diagnostic instrument to identify major areas of concerns for remedial action; - To indicate if a trend is in the desired direction; - To compare the situation in different departments and functions; - To get people thinking about the issues and to promote dialogue; People organisational changes’ experience and their attitudes are influenced by 4 key elements: - The inherent nature of the change; - The change management practices adopted by the overall managers of the change; - How the overall strategy for change is represented by local line management; - Individual personality and temperamental characteristics; STRUCUTRE THE QUESTIONAIRE