What is the environment telling you prior to, at the beginning, during and following the implementation of the change?

25 Aug What is the environment telling you prior to, at the beginning, during and following the implementation of the change?

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Chapter 1: Changing Organizations in Our Complex

World

Chapter Overview • The goal of the book: develop your ability to initiate and

manage change

• Environmental factors affecting change are outlined: social/ demographic, technological, political, and economic forces

• Four types of organizational change are discussed: tuning, adapting, reorienting, and recreating

• Four change roles are described: initiators, implementers, facilitators, and recipients. The terms “change leader” and “change agent” are used interchangeably and could mean any of the four roles.

• The difficulties in creating successful change are highlighted and characteristics of successful change leader are described.

Your Experiences with Change Management

Talk with one another (in small groups) about your experiences with change

management.

What does this suggest organizational change management is about?

Organizational Change: Defined

• The intentional and planned alteration of organizational components to improve organizational effectiveness.

Organization Components

• Organization components include the organization’s: • Mission and vision • Strategy • Goals • Structure • Processes or systems • Technology • People

• When organizations enhance their effectiveness, they increase their ability to generate value for those they serve

The “Knowing−Doing” Gap

• Change capability has become a core managerial competency • But managers’ abilities to deliver on change

are modest at best

• There is a major “knowing−doing” gap • Knowing concepts and theories is not

enough • Managers need to become effective agents

of change, possessing the will and skills to make positive change happen

Orientation of the Book

There is a story of two stone cutters:

The first, when asked what he was doing,

responded: “I am shaping this stone to fit into

that wall.”

The second, however, said: “I am helping to

build a cathedral.”

This book is orientated towards those who want to be builders.

Why is change a Hot Topic? • Environmental Forces Driving Changes (PESTEL

factors): • Political Changes • Economic Changes • Social, Cultural and Demographic • New Technologies • Legal Changes • Ecological/Environmental Factors

• Turbulence and ambiguity define the landscape for both the public and private sectors

Toolkit Exercise 1.2 Analyzing Your Environment

Select an organization you are familiar with. What are the key environmental issues affecting it? List these and their implications for the organization.

Political Factors …………… Implications?

Economic Factors …………… Implications?

Social Factors …………… Implications?

Ecological/Environmental Factors ……… Implications?

Legal Factors …………… Implications?

New Organizational Forms & Management Challenges Due to Environmental Change

Macro Changes and Impact

• Digitization leading to:

• Faster information transmission

• Lower cost information storage and transmission

• Integration of states and opening of markets

• Geographic dispersion of the value chain

• All leading to globalization of markets

New Organizational Forms & Management Challenges (cont.)

New Organizational Forms and Competitive Dynamics • Global small and medium-sized enterprises • Global constellations of organizations (i.e., networks) • Large, focused global firms • All leading to:

• Spread of autonomous, dislocated teams • Digitally enabled structures • Intense global rivalry and running faster while

seeming to stand still

New Organizational Forms & Management Challenges (cont.)

New Management Challenges • Greater diversity • Greater synchronization requirements • Greater time-pacing requirements • Faster decision making, learning and innovation • More frequent environmental discontinuities • Faster industry life-cycles • Faster newness and obsolescence of knowledge • Risk of competency traps where old competencies no

longer produce desired effects • Greater newness and obsolescence of organizations

The Causal Model Driving Change

Macro Changes and Impacts in

the Environment

New Organizational

Forms & Competitive Dynamics

Management Challenges in “A New Time”

Macro Changes and Impact

Digitization

Integration of States and Opening of

Markets

Faster Information Transfer

Lower-cost information storage and transmission

Geographic dispersion of the

value chain

Globalization of Markets

New Org Dynamics

New Organizational Forms and Competitive Dynamics

Rise of global SME’s

Rise of global constellations

Rise of large, focused global

firms

More intense “Red Queen”

More intense competitive rivalry

Spread of digitally enabled structures

Spread of autonomous, dislocated teams

Management Challenges

Management Challenges in “A New Time”

16Faster decision making, learning and innovation

Greater Time Pacing Requirements

Greater Synchronization Requirements

Greater Diversity

Faster newness and obsolescence

of knowledge

More frequent environmental discontinuities

Faster industry lifecycles

Greater Risk of competency traps

Faster newness & obsolescence of

organizations

Common Management Responses to Competitive Pressures

• Running hard, but for all purposes standing still

• Called the Red Queen phenomenon (Alice Through the Looking Glass, by Lewis Carroll)

• In global competition, what matters is not the firm’s absolute rate of learning and innovation, but the relative pace of its development compared to its rivals.

Toolkit Exercise What Change Challenges do You See?

Pick an Organization

What are the change challenges you see it facing?

How well are they doing?

Four Types of Organizational Change

Tuning Re-orientation

Adaptation Re-creation

Incremental Strategic

Anticipatory

Reactive

Types of Organizational Change

Incremental/Continuous Discontinuous/Radical A N T I C I P A T O R Y

Tuning • Incremental and anticipatory • Need is for internal alignment • Focuses on individual

components or sub-systems • Middle management role • Implementation is the major task

Redirecting or Reorienting • Strategic proactive changes based on

predicted major changes in the environment

• Need is for positioning the whole organization to a new reality

• Focuses on all organizational components

• Senior management create sense of urgency and motivate the change

R E A C T I V E

Adapting • Incremental changes made in

response to environmental changes

• Need is for internal alignment • Focuses on individual

components or sub-systems • Middle management role • Implementation is the major task

Overhauling or Recreating • Response to a significant

performance crisis • Need to reevaluate the whole

organization, including its core values • Focuses on all org. components to

achieve rapid, system-wide change • Senior management create vision

and motivate optimism

Nature of the Impact of Change

• Short-term impact/consequences • Direct and indirect effects • Moderating factors

• Intermediate impact/consequences

• Long-term impact/consequences

THE LESSON: Planned changes don’t always produce the intended results

Common Causes of Difficulty with Organizational Change

• Managers don’t do their analytic homework • Managers are action oriented and assume others will

see the inherent wisdom in the proposed change • Managers under or overestimate their own power

and influence (and that of others) • Managers see transition periods as a cost, not an

investment • They underestimate the resources & commitment

needed to integrate the human dimensions with other aspects of the change

Common Causes of Difficulty with Change (cont.)

• Managers are unaware their actions (and those of other key managers) may be sending conflicting messages

• Managers find human processes unsettling or threatening

• Managers lack capacity (attitudes, skills, and abilities) to manage complex changes that involve people

• Managers’ critical judgment is impaired due to overconfidence, under confidence, and/or group think

• Unanticipated external factors can play a huge role

Four Organization Change Roles 1. Change Initiators

• Identify need and vision • Act as a champion

2. Change Implementers • Chart the detailed path forward & make it happen • Nurture support and alleviate resistance

3. Change Facilitators • Aids in analysis and issue management along the way • Provides advice and council • Sometimes helps smooth the way through helping

resolve issues, alleviate resistance and nurture support

4. Change Recipients • Those affected by the change who have little input to the

process or content of the organizational change • Have to alter behaviors to ensure change success

Toolkit Exercise 1.3 Change Roles in Organizations

Think of a time when you have been involved in change. What roles did you play? How comfortable were you with each of those roles?

1. Change Initiator

2. Change Implementer

3. Change Facilitator

4. Change Recipient

How did each of these roles feel? What did you accomplish in each role?

Characteristics and Skills of the Change Leader

• Formal change leaders (or agents) spearhead the change, and may play any or all of the change roles.

• Informal change leaders can emerge anytime throughout the change process

• What are the key characteristics and skills of the change leader?

What’s Required to be a Successful Change Leader?

• Keen insight into the external environment and skilled anticipator of what is evolving

• Rich understanding of organizational systems and processes, power structures and stakeholder networks

• Excellent analytic, interpersonal and communication skills

• Driving passion for action, yet patient and persistent • Well-developed sense of timing and tactics • Ability to assess and manage risk

• An ability to focus on outcomes while also paying very close attention to process

What’s Required to be a Successful Change Leader? (cont.)

• Tolerance for ambiguity and risk taking

• Emotional maturity and courage

• Self-confidence and optimism

• Honest and trustworthy

• Capacity to engage others and inspire confidence

• Deep understanding of themselves and their impact

• Curiosity and strong desire to learn

Change Leaders Embrace Change Paradoxes

• Recognize that change leaders sometimes drive change from the front, while at other times they empower others and stay out of the way

• Recognize resistance to change is both a problem and an opportunity

• Focus on the outcomes of change, but are very careful about the management of the process

• Recognize the tension between “getting on with it” and reassessing and changing direction

• Capacity to balance patience and impatience

• Recognize the absolute rate of learning is less important than the relative rate of learning in comparison to competitors

Critical Questions when Considering Change

1. What is the environment telling you prior to, at the beginning, during and following the implementation of the change? In particular: a.What is the broader environment telling you about

future economic, social and technological conditions and trends?

b.What are your customers or clients (both inside and outside the organization) telling you?

c. What are your competitors doing and how are they responding to you?

d.What are the partners within your network doing and how are they responding to you?

e.What do the people who will potentially be the leaders, managers and recipients of change want and need?

Critical Questions when Considering Change (cont.)

2. Why is change needed? Who sees this need?

3. What is your purpose and agenda? • How does that purpose project to a

worthwhile vision that goes to the heart of the matter?

Critical Questions when Considering Change (cont.)

4. How will you implement and manage the change? a.How will you resource the change initiative? b.How will you select and work with your change

team? c.How will you work with the broader

organization? d.How will you monitor progress so that you can

steer, alter speed and course, if necessary?

Critical Questions when Considering Change (con’t.)

5. How will you ensure that you act (and are seen to act) ethically and with integrity? What have I learned about change and how can I remember it for the future? How can I pass on what I learned?

6. Once the change is completed, what comes next? The completion of one change simply serves as the starting point for the next.

Summary

• Need for change often originates in the external environment.

• Change upsets the internal equilibrium in an organization and thus may be resisted.

• People can play many different change roles.

• How they play these roles makes a significant difference!

Appendix 1: Roots of Organizational Development

• Small group training: • Focused on creating change by improving self-awareness

and the group’s dynamics • Survey research and feedback:

• Intervened with sophisticated surveys and analysis to create the need for change

• Action research: • Encouraged the use of action, based on research, in

continuous cycles (in essence, learning by doing, followed by observation, doing and more learning)

• Socio-technical systems: • Focused on the interaction between the sociological and

technical subsystems of the organization and described change in more holistic terms

Organizational Development vs. Organizational Change

Organizational Development Change Management

Underlying Theory & Analytical framework

Based primarily on psychology

Individual/group functioning

Includes principles and tools from sociology, information technology and strategic change theories

Individual/group functioning AND systems, structures, work processes (congruence model)

Role of Change Agent

Facilitator or process consultant

Content expert (organization design and human performance) AND process consultant

Member of cross-functional team, which includes strategists and technologists

Part of project organization, which includes client managers/employees

Organizational Development vs. Organizational Change

Organizational Development Change Management

Intervention Strategies

Not directly linked to strategy

Focus on one component at a time

Normative-re-educative (change attitudes to change behavior)

Driven by strategy

Simultaneous focus on several components (strategy, human resources, organization design, technology)

Action-oriented (change behavior before attitudes)

Positioning the Course

Management Focused Change

OD / HR Focused Change

• Re-Structuring • Re-Engineering • Re-Design

• Surveys • QWL Programs • Hi-Perf Systems

• Visioning • Stakeholder • Analysis • Action Planning

• Process Skills • Team Building • Third Party • Intervention

This Course

25 Aug What is the environment telling you prior to, at the beginning, during and following the implementation of the change?

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