Organizational Change

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Organizational Change




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Presentations text content in Organizational Change

Slide1

Organizational Change

McGraw-Hill/Irwin

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Slide2

Organizational Change at Ford

Ford Motor Co. CEO Alan Mulally successfully transformed the troubled automaker by having a compelling vision and applying several other organizational change practices.

Slide3

Lewin’s Force Field Analysis Model

Developed by Kurt LewinDriving forcesPush organizations toward changeExternal forces or leader’s visionRestraining forcesResistance to change -- employee behaviors that block the change process

DrivingForces

RestrainingForces

Slide4

Desired

Conditions

CurrentConditions

BeforeChange

AfterChange

Force Field Analysis Model

During

Change

Driving

Forces

Restraining

Forces

Driving

Forces

Restraining

Forces

Driving

Forces

Restraining

Forces

Slide5

Not Hoppy About Change

Mina Ishiwatari (front left) wanted to improve Hoppy drink’s brand image, but most staff resisted these changes. “I tried to take a new marketing approach to change the image of Hoppy . . . but no one would listen to me.” Ishiwatari’s persistence improved Hoppy’s popularity in Tokyo with limited support or budget.

Slide6

Restraining Forces(Resistance to Change)

Many forms of resistancee.g., complaints, absenteeism, passive noncomplianceView resistance as a resourceSymptoms of deeper problems in the change processA form of constructive conflict -- may improve decisions in the change processA form of voice – helps procedural justice

Slide7

Direct costsLosing something of value due to changeSaving faceNot invented here syndromeFear of the unknownRisk of personal lossConcern about being unable to adjust

Why People Resist Change

Slide8

Breaking routinesCost of moving away from our “comfort zones”Requires time/effort to learn new routinesIncongruent team dynamicsNorms contrary to the desired changeIncongruent organizational systemsSystems/structures reinforce status quoCareer, reward, power, communication systems

Why People Resist Change

(con’t)

Slide9

Inform employees about driving forcesMost difficult when organization is doing well Customer-driven changeAdverse consequences for firmHuman element energizes employeesSometimes need to create urgency to change without external driversRequires persuasive influenceUse positive vision rather than threats

Creating an Urgency for Change

Slide10

Minimizing Resistance to Change

Highest priority and first strategy for changeGenerates urgency to changeReduces uncertainty (fear of unknown)Problems -- time consuming and costly

Communication

Learning

Involvement

Stress Mgt

Coercion

Negotiation

Slide11

Minimizing Resistance to Change

Provides new knowledge/skillsIncludes coaching and other forms of learningHelps break old routines and adopt new rolesProblems -- potentially time consuming and costly

Communication

Involvement

Stress Mgt

Coercion

Negotiation

Learning

Slide12

Minimizing Resistance to Change

Employees participate in change processHelps saving face and reducing fear of unknownIncludes task forces, future search eventsProblems -- time-consuming, potential conflict

Learning

Involvement

Stress Mgt

Coercion

Negotiation

Involvement

Communication

Slide13

Minimizing Resistance to Change

When communication, learning, and involvement are not enough to minimize stressPotential benefitsMore motivation to changeLess fear of unknownFewer direct costsProblems -- time-consuming, expensive, doesn’t help everyone

Learning

Involvement

Coercion

Negotiation

Stress Mgt

Communication

Slide14

Minimizing Resistance to Change

Influence by exchange -- reduces direct costsMay be necessary when people clearly lose something and won’t otherwise support changeProblemsExpensiveGains compliance, not commitment

Learning

Involvement

Stress Mgt

Coercion

Communication

Negotiation

Slide15

Minimizing Resistance to Change

When all else failsAssertive influenceRadical form of “unlearning”ProblemsReduces trustMay create more subtle resistanceEncourage politics to protect job

Coercion

Learning

Involvement

Communication

Stress Mgt

Negotiation

Slide16

Refreezing the Desired Conditions

We tend to revert to previous behaviors and practices, unless systems and structures hold (refreeze) the desired changes.“Even when we want to change, and do change, we tend to relax and the rubber band snaps us back into our comfort zones.” (Ray Davis, CEO, Umpqua Bank)

Ray Davis, Umpqua Bank

Slide17

Change agent -- anyone who possesses enough knowledge and power to guide and facilitate the change effortInvolves transformational leadershipDevelop the change visionCommunicate the visionModel the visionBuild commitment to the vision

Change Agents

Slide18

Strategic Vision & Change

Need a vision of the desired future stateIdentifies critical success factors for changeMinimizes employee fear of the unknown Clarifies role perceptions

Slide19

Social Networks and Viral Change

Change agents need a guiding coalitionRepresentative across the firmInfluence leaders – respectedViral changeInformation seeded to a few people is transmitted to others based on patterns of friendshipRelies on social networks -- high trust, referent powerChange also occurs through behavior observation

Slide20

Begin change as pilot projectsEffective diffusion considers MARS modelMotivation – Pilot project employees rewarded; motivate others to adopt pilot projectAbility – Train employees to adopt pilot project Role perceptions – Translate pilot project to new situationsSituational factors – Provide resources to implement pilot project elsewhere

Diffusion of Change

Slide21

Action orientation and research orientationAction – to achieve the goal of changeResearch – testing application of conceptsAction research principlesOpen systems perspectiveHighly participative processData-driven, problem-oriented process

Action Research Approach

Slide22

Formclient-consultantrelations

Disengageconsultant’sservices

Action Research Process

Diagnoseneed forchange

Introduce

intervention

Evaluate/

stabilize

change

Slide23

Frames change around positive and possible future, rather than traditional problem focus.Positive principle – focus on opportunities, not problemsConstructionist principle – conversations shape realitySimultaneity principle – inquiry and change are simultaneousPoetic principle – we can choose how to perceive events and situationsAnticipatory principle – people are motivated by desirable visions of the future

Appreciative Inquiry Approach

Slide24

Four-D Model of Appreciative Inquiry

Designing

Engaging in dialogue about “what should be”

Dreaming

Forming ideas about “what might be”

Discovery

Discovering the best of “what is

Delivering

Developing objectives about “what will be”

Slide25

Future search, open space, and other interventions that involve “the whole system” Large group sessionsMay last a few daysHigh involvement with minimal structureLimitations of large group interventionsLimited opportunity to contributeRisk that a few people will dominateFocus on common ground may hide differencesGenerates high expectations about ideal future

Large Group Interventions

Slide26

Highly participative social structures Members representative across the formal hierarchySufficiently free from firm’s constraintsDevelop solutions for organizational change which are then applied back into the larger organization

Parallel Learning Structure Approach

Slide27

Cross-Cultural ConcernsLinear and open conflict assumptions different from values in some culturesEthical ConcernsPrivacy rights of individualsManagement powerIndividuals’ self-esteem

Cross-Cultural and Ethical Concerns with Managing Change

Slide28

Organizations are About People

“Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory.”Andrew Carnegie (1835-1919)

Slide29

Organizational Change

Slide30

Discussion of

Team Exercise 15.2

Strategic Change Incidents

Slide31

Scenario #1: “Latté Troubles”

Refers to Starbucks, which suffered from the financial downturn and competition, resulting in closing 900 stores and laying off staff.Chairman Howard Schultz lamented that aggressive growth had led to “a watering down of the Starbucks experience.” Shultz stepped back into the CEO role with an agenda for change.

Slide32

Starbucks’ Change Strategy

Schultz publicly apologized to employees for “letting our people down”; stated his commitment to transform the company.Sought customer feedback. Specially trained employees (“idea partners”) hosted conversations and act as advocates for customers’ suggestions. Introduced new products and quality control processes.Empowered employees to design better Starbucks experience.

Slide33

Scenario #2: “Greener Telco”

Scenario #2 refers to Bell Canada’s Zero Waste program, which successfully changed employee behavior by altering the causes of those behaviors.Pilot project in Toronto – 12 floor building of 1000 staff reduced waste from 1800 lb per day to just 75 lb per day within 3 years.

Courtesy of Bell Canada

Slide34

Bell Canada’s Change Strategy

Relied on the MARS model to alter behavior:Motivation -- employee involvement, respected steering committee (photo)Ability -- taught paper reduction, email, food disposalRole perceptions – made waste reduction salient (everyone’s job) through banners, trainingSituation -- created barriers to wasteful behavior (e.g. Coffee mugs, removed garbage bins)

Courtesy of Bell Canada

Slide35

Scenario #3: “Go Forward Airline”

Scenario #3 refers to Continental Airline’s “Go Forward” change strategy, which catapulted the company “from worst to first” within a couple of years.

Slide36

Continental Airlines’ Change Strategy

Communicate, communicate, communicateIntroduced 15 performance measuresEstablished stretch goals (repainting planes in 6 months)Replaced 50 of 61 executivesRewarded new goals (on-time arrival, stock price)Customers as drivers of change


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