organizational change

MEM 642 – Organizational Development and Leadership EffectivenessPolytechnic University of the Philippines (Summer 2014) Briones & Villanueva

Presenters’ Profile

Adrian James A. BrionesBehavior, Safety and Career Development TrainerSerbiz Multi-Purpose [email protected]

Catherine S. VillanuevaTeacher 1Andres Bonifacio Elementary [email protected]

Content of Talk

• Why Change?• Organizational Change

– Need for Organizational Change– Causes of Organizational Change– Types of Organizational Change

• Challenges of Change– Managing Resistance to Change

• Models of Organizational Change– Lewin’s Change Management Model– Kotter’s 8 Step Change Model– Action Research Model– Positive Model

• Organizational Renewal: Adapting to Change

References• Cummings, T. and Worley, C. (2005). Organizational Development and Change, Thomson South

Western• Brown, D.R. & Harvey, D. (2006). An experiential approach to Organizational development, (7 th

Edition). ,Upper Saddle River, NJ: Prentice Hall.• Crandall, M. (2006). Module 10 - Managing Change, The Information School of the University of

Washington• Pierce, J. L., Gardner, D. G., with Dunham, R. B. (2002). Managing Organizational Change and

Development, Management and Organizational Behavior: An Integrated Perspective. Cincinnati, OH: . South-Western College Publishing

• Cummings, T., Worley, C. and Waddell, D. Organizational Change: Development and Transformation (4th Edition), Cengage Brain

• Online References:– http://quickbase.intuit.com/blog/2012/08/28/three-types-of-change-management-models/

• Other References:– Organizational Change Management Methodology– Organizational Change, IBUS 681, Dr. Yang– Organizational Change / Organizational Development, Alexander Settles

Why Change?

• Change is a fact of organizational life, just as it is in human life. An organization that does not change cannot survive long – much less thrive – in an unpredictable world.

• Understanding the triggers that lead people to think change is needed, and what happens when managers try to make changes, is essential given the volatile world we live in.

“There is nothing permanent except

change.” (Heraclitus)

A Greek philosopher of Ephesus (near modern Kuşadası, Turkey) who was active around 500 BCE, Heraclitus propounded a distinctive theory which he expressed in oracular language.http://plato.stanford.edu/entries/heraclitus/

What is Organizational Change?• “Change is the norm in organizational life.”

(Connor et. Al. 2003: 1)• It occurs when a company makes a transition from

its current state to some desired future state.• Organizational change may range from introducing

very micro-scale alterations, such as the introduction of new software in the office, to large-scale organizational restructuring, including the creation of new organizations and the termination of old ones.

Managing Organisational Change, 2011 – Centre for Financial and Management Studies, SOAS, University of London

What is Organizational Change?

• An alteration of an organization’s environment, structure, culture, technology, or people.– A constant force– An organizational reality– An opportunity or a threat

• Reconfigures components of an organization to increase efficiency and effectiveness.

The Information School of the University of Washington, 2006

What is Organizational Change?

Is any action or set of actions resulting in a shift in direction or process that affects the way an organization works. Change can be deliberate and planned by leaders within the organization (i.e., shift from inpatient hospital focus to outpatient primary care model), or change can originate outside the organization (i.e., budget cut by Congress) and be beyond its control.

The Information School of the University of Washington, 2006

Why Do Organizations Need Organizational

Change?

Why Do Organizations Need Organizational Change?

• To remain competitive

• For survival in globalization and rapidly evolving technology

• To respond to a current crisis situation

Van de Ven & Poole (1995) Causes of Organizational Change

1. Teleological Theory – an attempt to achieve an ideal state through a continuous process of goal-setting, execution, evaluation & restructuring

2. Life-Cycle Theory – organization is an entity that depending on the external environments, cycles through stages of birth, growth, maturation & declination

3. Dialectical Theory – organization is like a multi-cultural society with opposing values. When one particular force dominates over others, a new organizational value & goal is established resulting in organizational change

Types of Organizational Change

1. Evolutionary Change – gradual, intermittent & narrowly-focused. The purpose is to make continuous improvement in order to adjust to the environment changes.

2. Revolutionary Change – rapid, dramatic and broadly focused. Happens when the current operation method can no longer fulfill the demand of the external environment & a significant change has to be made

Challenges of Change

Challenges of Change

A. Challenges of Initiating Change

B. Challenges of Sustaining Momentum

C. Challenges of System-Wide Redesign and Rethinking

A) Challenges of Initiating Change

1. “We don’t have time for this stuff!” People who are involved in a group to initiate a change effort need enough control over their schedules to give their work the time that it needs.

2. “We have no help!” Members of a group need enough support, coaching and resources to be able to learn and to do their work effectively.

A) Challenges of Initiating Change

3. “This stuff isn’t relevant.” There need to be people who can make the case for change – who can connect the development of new skills to the real work of the business.

4. “They’re not walking the talk!” A critical test for any change effort: the correlation between espoused values and actual behavior.

B) Challenges of Sustaining Momentum

5. “This stuff is…” Personal fear and anxiety – concerns about vulnerability and inadequacy – lead members of a group to question a change effort.

6. “This stuff isn’t working!” Change efforts run into measurement problems: Early results don’t meet expectations, or traditional metrics don’t calibrate to a group’s efforts.

7. “They’re acting like a cult!” A group falls prey to arrogance, dividing the organization into “believers” and “nonbelievers”

C) Challenges of System-Wide Redesign and Rethinking

8. “They… never let us do this stuff.” The group wants more autonomy; “the powers that be” don’t want to lose control.

9. “We keep reinventing the wheel.” Instead of building on previous successes, each group finds that it has to start from scratch.

10. “Where are we going?” The larger strategy and purpose of a change effort may be obscured by day-to-day activity. Big question: Can the organization achieve a new definition of success?

“There is no permanent organizational chart for the world… It is of supreme importance to be ready at all times to

take advantage of new opportunities.” (Roberto G. Goizueta)

Former Chairman & CEO of Coca-Cola Company

Cuban-born Roberto Goizueta was the CEO of Coca-Cola, overseeing the company's big financial growth during the '80s and '90s.http://www.biography.com/people/roberto-goizueta-9314298#awesm=~oBvt40iAVALs3B

Managing Resistance to Change

• Education and Communication

• Participation and Involvement

• Negotiation and Agreement• Manipulation and Cooptation• Coercion

(William A. Pasmore)Creating Strategic Change

“The first rule of change, therefore, is to begin any process of change with concern for its impact on people. The second rule is to prepare people for the change by educating them in what they need to know in order for the change to be successful; the third, involve them in the change as much as possible; and the fourth, with their involvement, to change what really needs to be changed about the entire system in order for the effort to produce real results.”

Columbia University - Professor of Practice of Social Organizational Psychologyhttp://www.tc.columbia.edu/academics/?facid=wap2112

Models of Organizational Change


A. Lewin’s Change Management ModelB. Kotter’s 8 Step Change ModelC. Action Research ModelD. Positive Model

Other Organizational Change Models: McKinsey 7-S Model, Edgar Huse’s 7 Stage Model of Change, General Model of Planned Change

A. Lewin’s Change Management Models

• Kurt Zadek Lewin• (September 9, 1890 – February 12, 1947)• A German-American psychologist, known

as one of the modern pioneers of social, organizational, and applied psychology. Lewin is often recognized as the "founder of social psychology" and was one of the first to study group dynamics and organizational development.


A. Lewin’s Change Management ModelsModels of Organizational Change

• Phase 1: Diagnosis (Old State)• Phase 2: Unfreezing

– Unfreezing is the process which involves finding a method of making it possible for people to let go of an old pattern that was counterproductive in some way.

– Unfreezing is necessary to overcome the strains of individual resistance and group conformity.

– Unfreezing can be achieved by the use of three methods.• First, increase the driving forces that direct behavior away from the existing situation

or status quo.• Second, decrease the restraining forces that negatively affect the movement from

the existing equilibrium.• Third, find a combination of the two methods listed above.

A. Lewin’s Change Management ModelsModels of Organizational Change

• Phase 3: Movement– This stage involves a process of change in thoughts, feeling, behavior, or all

three, that is in some way more liberating or more productive.

• Phase 4: Refreezing– Refreezing is establishing the change as a new habit, so that it now becomes

the “standard operating procedure.”– Without this stage of refreezing, it is easy to go back to the old ways.

• Phase 5: Renewal (New State)

B. Kotter’s 8 Step Change Model

• John P. Kotter• Born 1947• An author and American professor. He is

currently the Head of Research at Kotter International and teaches in the High Potentials Leadership Program at the Harvard Business School.


ESTABLISHING A SENSE OF URGENCY


FORMING A POWERFUL GUIDING COALITION



DEVELOP A CLEAR SHARED VISION AND STRATEGY




COMMUNICATE THE VISION





EMPOWER PEOPLE TO ACT ON THE VISION






CREATE SHORT-TERM WINS







CONSOLIDATE AND BUILDON THE GAINS







CONSOLIDATE AND BUILDON THE GAINS

ANCHORING NEW APPROACHES IN THE FUTURE

C. Action Research Model

• Cumming & Huse• 1989• It focuses on planned change as a cyclical

process involving joint activities between organization members and OD practitioners. It involves multiple steps that overlap and interact in practice. It places heavy emphasis on data gathering and diagnosis prior to action planning and implementation and an assessment of results after action is taken.


D. Positive Model

• Focuses on what the organization is doing right

• Helps members understand their organization when it is working at its best

• Seeks to build on positive opportunities that can lead to extraordinary performance


Organizational Renewal: Adapting to

Change

Renewal

• Organizational renewal requires that top managers make adaptive changes to the environment.

• Manager must analyze the organization, its departmental system interrelationships, and the possible effects on the internal environment.– This approach, termed the system approach provides

a way of observing, analyzing, and solving problems in organizations.

Constant Change

• Organizations exist in constant changing environment and therefore must have the capacity to adopt.

• Managers must do more than react; they must be able to anticipate the changing patterns of people, markets, product, and technology.

What is Organizational Renewal?

• Organizational renewal may be defined as an ongoing process of building innovation and adaptation into the organization.

• Develops a data-driven understanding of the key exposures your business faces in these unprecedented times as well as your specific opportunities for achieving greater success in the future.

Key Areas of Organizational Renewal

A. Customer StrategyB. Operational EffectivenessC. Technology OptimizationD. People Performances

A) Customer Strategy

Analyze market positioning, customer engagement, demand creation, satisfaction drivers, changes in purchasing patterns, selling efficiency, and customer-service efficiency. This analysis creates a renewed understanding of your key strategic drivers and the alignment of your existing business model with current market requirements.

B) Operational Effectiveness

Focus on the processes in your business that must provide repeatable, high-quality, cost-efficient outcomes. This systemic approach analyzes operational fit, not just identifying but also assessing the areas of your business’s extended footprint that must integrate seamlessly to deliver high levels of customer satisfaction and operating efficiency.

C) Technology Optimizer

Review each functional area’s utilization of technology. The review focuses on workload, cost, complexity, and service levels. It also covers areas such as knowledge management, technology proficiency, technology utilization, and support for new strategies and processes.

D) People Performance

Recognize the critical role your employees play in the SOR process - they are the glue that integrates the important facets of your business. Take a pulse of your staff and review the overall effectiveness of your people practices, including performance systems, engagement processes, HR policies, retention strategies, and organizational culture.

Executing Your Renewal Strategy

• Recognizing that your ultimate success is dependent on execution, a Roadmap for Renewalsm is required to guide your implementation efforts. This roadmap includes a prioritization of needs, proper phasing of new elements, sequencing of activities, milestones, training, and a compilation of resource and capital requirements.

The principle of physics stating that everything that is organized will

break down unless it is maintained.

(Entropy)

“Be the change that you wish to

see in the world.” (Mahatma Gandhi)

organizational change

Education

clear shared

vision create

term wins

vision empower

information

organizational

wide redesign

strategy communicate