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The Nature of Change

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- Future Shock (transience, novelty, diversity, adaptive breakdown) - Incremental / Discontinuous Change - Time Pressure - Impacts on Organizations / Individuals

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Organizational Effectiveness

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Criteria to be considered when assessing the effectiveness of an organization or unit within an organization (purpose, stakeholder perspective, level of assessment, alignment, time perspective, benchmark, constraints and enabling factors)

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Change Agency and Organizational Effectiveness

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Ability of a manager or change agent to affect the way an organization responds to change (goals perspective, systems perspective, organization development perspective, political arena perspective)

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Effectiveness and Conceptualizations of Organizations

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Our preferred definitions of organizational effectiveness are closely linked to the ways we "conceptualize" organizations (determinist vs voluntarist)

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Determinist view

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Manager has limited influence

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Voluntarist View

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Manager can make an important difference (conceptual models, action tools/interventions, change agency skills, belief in own ability)

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Beliefs about Change Agency

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Managers belief in his/her own ability to affect outcomes (locus of control - overcommitted to deterministic view, learned helplessness - previous experiences)

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Open Systems Theory

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Framework to view organizations as a system of interrelated components that transact with a larger environment

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Organization Characteristics

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Embedded within a larger system, ability to avoid entropy, regulated by feedback, subject to equinifinality, cyclical in their mode of functioning, equilibrium seeking, bounded

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Contingency Theories

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- Mechanistic vs Organic - Lawrence and Lorsch - Research findings suggest a link between the internal characteristics of an organization and the external environment - Integrative Model of Organizational Dynamics - Congruence Model of Organizations - "The alignment and fit between an organization and the environment and also between the various internal elements of the organization is a critical determinant of organizational effectiveness"

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Mechanistic vs Organic (Burns and Stalker 1961)

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Examined link between internal structure of 20 British Firms and the environments in which they operated - Mechanistic (specialized tasks, narrow in scope, tasks rigidly defined, strict hierarchy, centralized knowledge and control, hierarchical communication) - Organic (common tasks and interdependencies, tasks adjusted and redefined as required, less adherence to formal authority and control, decentralized knowledge and control, network communication)

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Lawrence and Lorsch 1967

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Examined 3 departments (manufacturing, research and sales) and found that departmental structures varied with environmental uncertainty

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Integrative Model of Organizational Dynamics (Kotter 1980)

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Effective organizations are those that have key processes which help ensure resources are used effectively and that the six structural elements are aligned to each other. The adaptability of the six structural elements predicted as the underlying determinant of organizational effectiveness in the longer run.

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Congruence Model of Organizations (Nadler and Tushman 1980)

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Effectiveness can be assessed in terms of how well the organizations performance meets the goals of strategy. The greater the total degree of congruence between the various components the more effective will be the organizations behaviour.

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Importance of Organizational Learning

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- The quality of organizational learning has been identified as an important determinant of an organization's effectiveness - The ability of an organization to learn faster than it's competitors may be the only sustainable competitive advantage - Organizations have leeway and choice in terms of how they adjust to a changing environment and it is this choice that offers the opportunity for learning

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The Nature of Strategy and Strategic Change Management

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Differing views on how strategy is formulated

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Organizational Learning

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Enhancing the collective ability to act more effectively. Quality of collective learning affects both strategy formulation and strategy implementation.

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Strategy Formulation

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- 2 key approaches (planning and emergent) - No matter how sophisticated they have to be applied by someone: all data has to be perceived and constructed, perceivers values and norms are influence by shared beliefs characteristic of the cultures to which they belong - Organizations need to have the capacity to learn from experience and use the learning to modify the shared mental model that guides the way we manage strategic change

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The Planning Approach of Strategy Formulation

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Logical nature of process, analysis, forecasting and planning, supported by tools and models (SWOT, PESTEL), to assist with ensuring the organization remains aligned with its environment Strategies developed in this way often fail to be implemented successfully, formulation and implementation viewed as two separate processes, strategies well developed before implementation and developers may not have the power to implement.

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The Emergent Approach of Strategy Formulation

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Key decisions are the outcome of cultural and political considerations Shared Mental Model - taken for granted assumptions and routines which affect strategic decisions and own world view of functional and professional groups

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Rational Planning vs Logical Implementation Approach

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Mid way between planning and emergent approaches, strategies need to work in practice even if this involves political compromise, successful senior managers deliberately decide to act incrementally. Small steps building on experience gained improves quality of information in decision making, helps overcome personal and political pressures resisting change, copes with variety of lead times and sequencing problems, builds overall awareness and commitment to secure implementation.

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The Organizational Paradigm / Shared Mental Model

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- Influences how managers perceive, interpret and make sense of their environment - Determines whether changes in environment are perceived as relevant - Determines whether changes are perceived as threats or opportunities

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Organizational Learning and Strategy Formulation

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- Strategy emerges from the way organizations process information - Quality of information processing is influenced by the shared mental model - Need to be able to learn from experience to modify the shared mental model

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Impediments to Organizational Learning

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1. Poor appreciation of the systematic qualities of organizations 2. Lack of accessible channels for dialogue and the sharing of meaning 3. Ideologies

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Poor Appreciation of the Systematic Qualities of Organizations

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- Individuals have parochial and limited view of their role - Restricts ability to contribute to organizational learning - Focus on immediate tasks and lack appreciation of how this relates to the overall purpose of the organization - Business thinking: relates to organizations overall mission, markets, competitors, customers, and products that satisfy customer needs and wants - Organization thinking: inward focus about the way the organization organizes its structures and processes to engage in its business, important but ignores impact of individual task on the overall effectiveness of the business

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Lack of Accessible Channels for Dialogue and the Sharing of Meaning

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- Willingness of individual organizational members to share with others the meaning they have constructed for themselves as they encountered new experiences and ideas - Joint construction of meaning is essence of organizational learning - Knowledge may be withheld due to confidentiality, political and logistical reasons, personal competitive advantage - When learning is shared data on which it is based is open to challenge, others can reassess the reasoning and logic that led to the conclusions, meanings are not just exchanged, shared meaning is constructed in the dialogue between organizational members - Interventions include whole system in the room and conference model

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Ideologies

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- Ideology can distort the free flow of meaning - Shared mental models (culture and values) can be detrimental to organizational learning; eg. allied commanders failure to accept futility of saturation bombing in WWII, distorted understanding of the information world - Group think: dysfunctional consequences of when people are dominated by a single self reinforcing schema, people see what they have been conditioned to see, 8 symptoms of group think are group feel invulnerable, warnings discounted in the name of rationality, unquestioned belief in groups morality, opposition considered evil, weak and stupid, direct pressure on those holding opposing views, self censoring of views if deviating from group norms, illusion of unanimity, silence taken as agreement/consent, self appointed mind guards who protect group form adverse information

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Process Models of Change

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- Continuous Change - Discontinuous Change - Intentional Management of Change (stable quasi-stationary equilibrium / force field) - Achieving lasting change (unfreezing, moving to a new level, refreezing, Lewin's 3 stage procedure)

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Stages in the Process of Managing Change

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- Clarification or diagnosis of the problem - Examination of alternative goals and establishing goals for action - Transformation of plans into change

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6 Overlapping Stages of Change

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- Demonstrating leadership commitment - Understanding the need for change - Shaping the vision - Mobilizing commitment at all levels - Aligning structures, systems and incentives - Reinforcing the change

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Managing the People Issues

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Power, leadership and management, stakeholder management, communication, training and development, motivation, support

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Required Change Agent Skills

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Conceptual understanding, communication, leadership, working with teams, issue confrontation, negotiation, managing relationships

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Assessing Organizational Effectiveness

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- Identify key stakeholders - List performance indicators that each stakeholder group might use to assess effectiveness - List how you think each stakeholder would rate their own effectiveness - Change agents indicators vs stakeholder indicators - Change agents ratings vs stakeholders ratings

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Diagnostic Models

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The role of models in organizational diagnosis: collaborative model building

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Diagnosing Organizations Environmental Fit

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- PESTEL analysis - SWOT analysis - Evolutionary cycle of competitive behaviour

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Diagnosing Internal Alignment

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- 7S Model - Six Box Model

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Models that attend to both internal and external alignment

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- Integrative Model of Organizational Dynamics - Congruence Model - Causal Model of Organizational Performance and Change

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7S Model

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Structure, Systems, Style, Staff, Skills, Strategy all interacting with Shared Values

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Six Box Model

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Formal and Informal Aspects: Purpose, Structure, Rewards, Helpful Mechanisms and Relationships all relating to leadership What goes on in the environment between all the different aspects

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Integrative Model of Organizational Dynamics

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Employees and other tangible assets, formal organization arrangements, dominant coalition, external environment, technology, social system impacting on and being sources of potential behaviour ad constraint on key organizational processes (information gathering, communication, decision-making, matter-energy transporting, matter-energy conversion)

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Congruence Model

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Inputs to Environment Resources History become Strategy in the Transformation Process which leads to Organization, Group or Individual Transformation Process: Task, Informal Organization, Formal Organizational Arrangements, Individual

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Causal Model

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Management Practices works with Leadership, Organizational Culture, Systems, Work Unit Climate, Structure, Mission and Strategy with work with the External Environment, Motivation, Individual Needs and Values, Task Requirements and Individual Skills/Abilities, Individual and Organizational Performance

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Selecting a Diagnostic Model

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1. Models are key in the diagnostic process as they provide a focus for information gathering, provide a basis for interpreting the information that has been collected 2. The primary objective in selecting the model is to ensure that it is relevant to the issues under consideration 3. An effective model should allow you to identify specific elements and cause and effect relationships and should indicate which elements have the most effective on the overall organizational performance

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Main Steps in the Diagnostic Process

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1. Selecting a diagnostic model 2. Clarifying the information requirements 3. Information gathering 4. Methods for collecting information: interviews, questionnaires, projective methods, observations, unobtrusive measures 5. Sampling 6. Analysis: qualitative (content analysis, force-field analysis) and quantitative 7. Interpretation: political considerations

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Organizations as Political Arenas

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The most powerful constituencies in a position to deal with the organizations important problems, control of valuable resources, centrally connected with the workflow of the organization, not easily replaced, have successfully used power in the past

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Sensemaking

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Making sense of the world and identifying the opportunities and threats that require attention

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Visioning

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Identifying a vision of what a more desirable state of affairs might look like and what needs to be done to move towards this

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Sensegiving

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Communicating the vision to a wider audience and responding to feedback as required to win commitment to the change

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Aligning

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Promoting a shared sense of direction so that people can work together to achieve the vision

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Enabling

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Removing obstacles and creating the conditions that empower others to implement

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Supporting

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Recognizing and responding to the concerns of those affected by the change

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Maintaining Momentum and Sustaining the Change

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Showing commitment and "walking the walk" to keep people focused on the change

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A Checklist for Leading Change

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- Establishing a sense of urgency - Forming a powerful coalition - Creating a vision - Communicating the vision - Empowering others to act on the vision - Planning for and creating short-term wins - Consolidating improvements - Institutionalizing new approaches

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Stakeholder Management

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- Identifying and influencing individuals and groups who might support or resist the change - Who is affected by the change? - What is their commitment to and ability to influence the outcome of the change?

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Directionality of Communication Networks

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- Top Down (need for change, what is changing, what is required) - Bottom Up (provides management with information to clarify the need for change and develop and implement a change)

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Role of Communication Networks

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- Inter Role Relationships (nature of what is communicated can be affected by the role held, role can determine whether the role holder is an isolate or participant in corporate affairs, physical environment) - Boundary Spanning Roles (may obtain information but not in a position to use it, distortion "gatekeepers")

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Content of Communication Networks

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- External (unfamiliar, can lead to disruption and uncertainty, need to integrate with other readily available information) - Internal (familiar, organizational members may prefer the familiar)

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Channel of Communication Networks

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- Written (paper, email) - Videoconferencing - Face to face (one on one, one to group, group to one)

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Interpersonal Effects on the Quality of Communication

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- Factors which influence the quality of information (trust and influence) - The nature of the encounter influences how both parties will interpret what they see and hear - Change agents / managers need to consider how others will interpret their actions - Their interpretation will be an important determinant of what others are prepared to communicate to change managers, how they will behave in response to information passed to them by change managers

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Questions to be considered about communication issues

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- No magic answers - Complete openness vs highly restricted / commercially sensitive - Keeping control of communications vs grapevine

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Effective Training

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1. Training needs analysis (provides information to identify who needs to be trained and specify training objectives in terms of knowledge and behaviours, behavioural objectives) 2. The design and delivery of training (imparting knowledge and information, attitudes, cognitive strategies, perceptual) 3. The evaluation of training effectiveness

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What is Motivation?

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Getting better results (improved quality / performance) from a group of people than they would have got if you were not there

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Motivating others to change

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- General level of commitment in an organization - Utility of expectancy theory for assessing resistance to change - 6 methods for dealing with resistance to change - Organizational commitment and the level of support for change - Reasons for resisting specific changes - Expectancy Theory and the motivation to support or resist change - Assessing the availability of valued outcomes - Expectancies about effort-performance and performance-outcome relationships and equity of net benefits - Resistance and the need to motivate people to change

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Expectancy Theory and the motivation to support or resist change

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- What will I have to do / What will be required of me in the new world? - Do I like what I see and do I want to do this new work? - Will I have the skills / competencies to do the new work? - Do I have the capability to learn the new skills / competencies required? - How much effort will I have to put in? - What will the reward for doing this new work be? - Is the reward something that I want / meaningful to me? - Do I feel that the reward is worth the effort? - Do I believe that the rewards as outlined will actually be available to me in reality? - Do I feel what is expected of me in the new world is fair when compared to what is expected of my peers / other groups in the new world? - Do I feel that my expected rewards in the new world is fair relative to others?

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Resistance and the need to motivate people to change

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1. Education and Persuasion 2. Participation and Involvement 3. Facilitation and Support 4. Negotiation and Agreement 5. Manipulation and Co-option 6. Direction and a Reliance on Explicit and Implicit Coercion

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Continuum of Intervention Strategies

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- Successful change strategies (internally consistent, compatible with key variables) - Direct Approach (expert / well-informed, sufficient power, urgent, desired end state clearly specified, little resistance anticipated, CM has necessary access to relevant information, high trust in CM, CM does not have to rely on commitment of others) Collaborative Approach (draw on experience, generate ownership, non-urgent, problem / opportunity recognized but "exploit opportunity" not clear from start, great resistance anticipated, CM needs information, low trust, highly dependent on commitment of others

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Situational Variables

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- Urgency and stake involved - Clarity of desired future state - Amount and type of resistance anticipated - Extent of required data available - Degree stakeholders trust CM - Reliance on others commitment / energy to implement

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Range of Approaches for Implementing Change

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Coercion, involvement and support, manipulation, education and influence, bargaining and negotiation

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Variations Over Time

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- Focus of change strategy may need to change: short term (critical requirement, approach to impose changes) vs long term (incremental strategy of tuning, collaborative approach to continuous improvement) - Factors which may influence the way CMs attempt to influence others: high complexity and communicability, compatibility and relative advantage, divisibility

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Seven Steps a CM can take to help maintain control during the transition state

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1. Develop and communicate a clear vision for future (provide sense of direction, develop a series of transition points) 2. Appoint a transition manager (respect of current operational leadership and development, get things done and win support) 3. Develop a transition plan (purposeful, task specific, integrated, temporal, adaptable, agreed by top management, cost effective) 4. Provide the resource for the transition (cost of training, hardware, software, design of structures, staff time) 5. Reward transition behaviour (balance keeping current system operating while also supporting the change initiatives) 6. Use multiple and consistent leverage points for change (development of competencies may require new technology, new work practices / procedures and training) 7. Develop feedback mechanisms (with specific focus on change, old mechanisms may not track the changes, surveys, focus group discussions and feedback)

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Interventions - Who Does What

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- Experts: solve specific problems - Groups: solve their own problems - Experts: solve system wide problems - Everybody: improve capability of whole system

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Interventions - Issues Being Addressed

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- Human Process Issues - Technology / Structural Issues - Strategic Issues - Human Resources Issues

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Human Process Issues

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Focus on people and processes used to achieve goals (communication, problem solving, decision-making, leadership) - Interventions include exploring group dynamics and impact of behaviour, solutions for issues undermining effectiveness, third part interventions, team building interventions - Organizational level interventions include confrontation meetings, intergroup relations interventions, large group interventions, grid interventions

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Technology / Structural Issues

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Focus on structure, task methods and job design - structure, downsizing, business process re-engineering Focus on improving employee commitment - job enrichment, self-managed teams, quality circles

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Human Resource Issues

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Focus in integrating people into the organization - career planning, workforce diversity, employee wellness

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Strategic Issues

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Focus on the organization / environment fit - open systems planning, integrations of strategic planning and operational and tactical actions, trans-organizational development

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Selecting Interventions

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1. To achieve goals of a change programme, some interventions will be required 2. Factors which will influence the intervention selected include nature of the issue, level of the change target, depth of intervention, time available for change, efficiency of different types of intervention 3. Also factors that influence the sequencing of interventions include the purpose of the change, politics, need for early success, stake involved, dynamics of change

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Transformational Change

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- Targets sytem wide changes such as leadership, mission, strategy and culture - Whole system interventions: whole system in room, conference model, open systems planning - Integration of strategic planning and operational and tactical actions - Trans-organizational development

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Transactional Issues

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- Targets elements like structure, systems, climate, tasks and roles - Intervention: work redesign

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Managing the Implementation Stage

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1. Blueprint change (relocation, new technology, new appraisal system, new computerized accounts system; plan --> monitor of intervention --> corrective action) 2. Evolutionary Change End Point not known (broadly defined goals and a general direction, change is monitored using an open approach and is done in incremental steps with constant feedback, sometimes the ideas about the desired endpoint have to be revised constantly)

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Monitoring the Implementation

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- Reflecting hypotheses on cause and effect - Measurement and review process as a means of making the hypotheses about change and effect relationships explicit - Performance drivers are the variables that determine whether goals will be reached - Key questions: are the interventions being implemented as intended, are the interventions producing the desired effect, is the change plan still valid?

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Change "Score Cards"

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1. Corporate Scorecard (traditional financial measures, delivery times, production cycle times, market effectiveness of new product) 2. Balanced Scorecard (developed and used to communicate the plan for change)

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Balanced Scorecard

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A strategic management system that forcing management to focus on the important performance metrics that drive success. It balances a financial perspective with customer, internal process, and learning and growth perspectives and how well the organization is positioned to perform in the future.

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Purpose of the Balanced Scorecard

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- Clarify and update strategy - Communicate strategy throughout the company - Alignunit and individual goals with strategy - Link strategic objectives to long term targets and annual budgets - Identify and align strategic initiatives - Conduct peroiodic performance reviews to learn about and improve strategy

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