CHANGE MANAGEMENT

THE FRAME WORK FOR CHANGE The effective management of change involves three steps: We focus on the executive’s organizational ability which is concerned with changes, when change needs to occur and review strategies for managing the change process. Understanding the current state of the organization. Establishing the state in which the organization wants to be in the future. Moving the organization through a transition towards the foreseen state. CHANGE MANAGEMENT

THE FRAME WORK FOR CHANGE

The effective management of change involves three steps:

Understanding the current state of the organization.

Establishing the state in which the organization wants to be in the future.

Moving the organization through a transition towards the foreseen state.

WHY IS CHANGE NECESSARY ? Identifying the present condition and problem(s). Determining whether there is a need for change. Establishing change goals and the new state or condition after the change.

Identifying the present condition and problem(s).

Determining whether there is a need for change.

Establishing change goals and the new state or condition after the change.

WHAT NEEDS TO BE CHANGED ? Examining the various elements of an organization and short-listing those which need to be changed in order to achieve the new state. Identifying the hurdles or impediments to change.

Examining the various elements of an organization and short-listing those which need to be changed in order to achieve the new state.

Identifying the hurdles or impediments to change.

HOW SHOULD CHANGE OCCUR? Selecting a change strategy. Implementing the change strategy. Establishing systems and processes to maintain the new situation. Evaluating the change effort.

Selecting a change strategy.

Implementing the change strategy.

Establishing systems and processes to maintain the new situation.

Evaluating the change effort.

IDENTIFYING PROBLEMS AND DETERMINING THE NEED FOR CHANGE The level and the need for change is determined by the extent of mismatch of internal competencies with that of external demands. Another reason for change could also be the estimated mismatch between internal and external factors in the future. Several pointers which help indicate a potential mismatch. A decline in financial indicators of effectiveness. A change in other indicators such as market share. Increased turnover of key personnel. Lowering of results on quality indices. Increased clients complaints. Increasing stress among employees. Decreasing morale among employees.

The level and the need for change is determined by the extent of mismatch of internal competencies with that of external demands.

Another reason for change could also be the estimated mismatch between internal and external factors in the future.

Several pointers which help indicate a potential mismatch.

A decline in financial indicators of effectiveness.

A change in other indicators such as market share.

Increased turnover of key personnel.

Lowering of results on quality indices.

Increased clients complaints.

Increasing stress among employees.

Decreasing morale among employees.

ESATABLISHING CHANGE GOALS AND THE NEW END STATE Defining explicitly what the organization should look like will serve as a descriptive guide for determining the change strategy to be adopted. Executives need to clearly identify the kind of organization they are trying to create, in as much detail as possible. Executives should specify the expected organizational structure, reward system, personnel policies, authority and task responsibility distributions, managerial styles and roles, performance review systems and performance outcomes.

Defining explicitly what the organization should look like will serve as a descriptive guide for determining the change strategy to be adopted.

Executives need to clearly identify the kind of organization they are trying to create, in as much detail as possible.

Executives should specify the expected organizational structure, reward system, personnel policies, authority and task responsibility distributions, managerial styles and roles, performance review systems and performance outcomes.

WHAT NEEDS TO CHANGE? The key components of the organization may be used as a starting point. These are six critical areas viz., key tasks and work process, individual competencies, technology, organizational structures, systems and culture. These points help to identify where to initiate change and highlight where change may evolve from internally. Change in one area will probably result in compensatory or retaliatory changes in another, as these components are interdependent. Identify points from where change can be initiated:

The key components of the organization may be used as a starting point.

These are six critical areas viz., key tasks and work process, individual competencies, technology, organizational structures, systems and culture. These points help to identify where to initiate change and highlight where change may evolve from internally.

Change in one area will probably result in compensatory or retaliatory changes in another, as these components are interdependent.

TECHNICAL V. PEOPLE FACTORS: This aspect is important, it is often unclear whether changes in the way organizations work can be achieved by first changing the people or the technical factors. Most change programmes focus on changing individual attitudes, though at times the most effective way to change behaviour is to put people into a new organizational context, which imposes new rules, responsibilities and relationships.

This aspect is important, it is often unclear whether changes in the way organizations work can be achieved by first changing the people or the technical factors.

Most change programmes focus on changing individual attitudes, though at times the most effective way to change behaviour is to put people into a new organizational context, which imposes new rules, responsibilities and relationships.

DEPTH OF CHANGE REQUIRED Minor changes take place on a continuous basis in any organization. Organizations evolve as a result of relatively long periods of continuous and incremental change. This is known as ‘ first order ’ change. This level of change may have an impact on systems, structures or people to improve the effectiveness of the organization, but, at this depth, the change process, largely, leaves the underlying infrastructure and core patterns of behaviour and thinking intact. This change can be easily reversed. Due to major mismatches between internal capabilities and external factors, at times major fundamental reorganizations must occur which disturb the organizational equilibrium. Here, mere first-order changes are inappropriate: the need is to transform . Transformational change, or ‘ second order ' change involves alteration of the system’s basic governing rules and is a multi-dimensional, multi-component and multi-level alteration that shifts the systems irreversibly to a new and revolutionary state.

Minor changes take place on a continuous basis in any organization.

Organizations evolve as a result of relatively long periods of continuous and incremental change.

This is known as ‘ first order ’ change. This level of change may have an impact on systems, structures or people to improve the effectiveness of the organization, but, at this depth, the change process, largely, leaves the underlying infrastructure and core patterns of behaviour and thinking intact. This change can be easily reversed.

Due to major mismatches between internal capabilities and external factors, at times major fundamental reorganizations must occur which disturb the organizational equilibrium. Here, mere first-order changes are inappropriate: the need is to transform .

Transformational change, or ‘ second order ' change involves alteration of the system’s basic governing rules and is a multi-dimensional, multi-component and multi-level alteration that shifts the systems irreversibly to a new and revolutionary state.

LEVEL OF MANAGEMENT INVOLVED Change is often aimed at the lower or middle levels of the organization. Organization frequently get into trouble because the senior staff do not support the change strategy. The senior executives either need to be won over or worked around and this requires considerable skill on the part of the executive initiating change.

Change is often aimed at the lower or middle levels of the organization.

Organization frequently get into trouble because the senior staff do not support the change strategy.

The senior executives either need to be won over or worked around and this requires considerable skill on the part of the executive initiating change.

IMPEDIMENTS TO CHANGE Major problems that had not been foreseen. Co-ordination of activities (for example, by task force, committees, supervisors) not effective enough. Competing activities distracted attention from the change effort. Insufficient skills / abilities of employees involved with the change. Inadequate training of and instruction to lower level employees. Uncontrollable factors in the external environment (e.g., competitive, economic, governmental control, laws) having an adverse affect. Some of the impediments to change are:

Major problems that had not been foreseen.

Co-ordination of activities (for example, by task force, committees, supervisors) not effective enough.

Competing activities distracted attention from the change effort.

Insufficient skills / abilities of employees involved with the change.

Inadequate training of and instruction to lower level employees.

Uncontrollable factors in the external environment (e.g., competitive, economic, governmental control, laws) having an adverse affect.

RESISTANCE AND HOW TO DEAL WITH IT

Can be risky if it leaves people angry at the initiators It is fast and can overcome any kind of resistance Where speed is essential, and the change initiators possess considerable power Explicit & Implicit Coercion Can lead to future problems if people feel manipulated It can be a relatively quick and inexpensive solution Where other tactics will not work or are too expensive Manipulation & Co-opting Can be very expensive in may cases if it alerts others to also negotiate for compliance Sometimes it is a relatively easy way to avoid major resistance Where someone or some group will clearly lose out in a change, and where that group has considerable power to resist Negotiation & Agreement Can be time – consuming, expensive and still not be successful This approach works best with adjustment problems Where people are resisting change because of adjustment problems Facilitation & Support Can be very time consuming if the participators design an inappropriate change and may defeat the purpose of the whole process People who participate will be committed and any relevant information they have will be integrated into the change plan Where the initiators do not have all the information they need to design the change and where others have considerable power to resist Participation & Involvement Can be very time consuming if many people are involved Once persuaded, people will often help with the implementation of the change Where there is a lack of information or inaccurate information and analysis Education & Communication DRAWBACKS ADVANTAGES COMMONLY USED APPROACH…

MINDSET- ‘UNFREEZING, CHANGING AND REFREEZING’: The ‘unfreezing’ process involves the individuals unlocking their current mental approach towards doing things. They need to be prepared to accept new ideas and behaviour, which is helped by adopting a more flexible mindset. A mindset, which is ‘unfrozen’, offers the possibility for new learning to take place. Finally, there is a process of ‘refreezing’ or consolidation. In other words, new patterns of behaviour and thinking must be supported by social cues and a reward systems both formal and informal, so they become more natural processes.

The ‘unfreezing’ process involves the individuals unlocking their current mental approach towards doing things. They need to be prepared to accept new ideas and behaviour, which is helped by adopting a more flexible mindset.

A mindset, which is ‘unfrozen’, offers the possibility for new learning to take place.

Finally, there is a process of ‘refreezing’ or consolidation. In other words, new patterns of behaviour and thinking must be supported by social cues and a reward systems both formal and informal, so they become more natural processes.

HOW SHOULD CHANGE OCCUR? SELECTING A CHANGE STRATEGY: Three areas in particular, need to be reviewed- the style , depth and method of change . STYLE: Different styles may need to be adopted for implementing different change strategies. Collaborative approaches and participative leadership are more effective styles. One of the major reasons why change interventions falter is because of a lack of two-way communication and a lack of participation and involvement .

SELECTING A CHANGE STRATEGY:

Three areas in particular, need to be reviewed- the style , depth and method of change .

STYLE:

Different styles may need to be adopted for implementing different change strategies.

Collaborative approaches and participative leadership are more effective styles.

One of the major reasons why change interventions falter is because of a lack of two-way communication and a lack of participation and involvement .

DEPTH: It is necessary to establish if the change will be incremental or more transformational in nature. First-order change may be large and significant, that usually occurs within the existing framework of the organization and may leave the basic support systems and ways of thinking within the organization untouched . Transformational change fundamentally redefines what the organization is, or changes its basic framework . Implementing transformational change requires more skill, determination and effort than incremental change .

DEPTH:

It is necessary to establish if the change will be incremental or more transformational in nature.

First-order change may be large and significant, that usually occurs within the existing framework of the organization and may leave the basic support systems and ways of thinking within the organization untouched .

Transformational change fundamentally redefines what the organization is, or changes its basic framework .

Implementing transformational change requires more skill, determination and effort than incremental change .

METHODS : Diagnostic activities : Fact-finding activities designed to ascertain problems. Traditional data-collection methods -including interviews and questionnaires are commonly used. Team-building activities : Activities designed to enhance the effective operation of system teams. Intergroup activities : Activities designed to improve effectiveness of interdependent groups. The focus is on joint activities. Survey feedback activities : Analysing data produced by a survey and designing action-plans based on these data. Education and training activities : A wide range of possible activities designed to improve skill, abilities, and knowledge of individuals. Organizational Development to initiate incremental change :

Diagnostic activities : Fact-finding activities designed to ascertain problems. Traditional data-collection methods -including interviews and questionnaires are commonly used.

Team-building activities : Activities designed to enhance the effective operation of system teams.

Intergroup activities : Activities designed to improve effectiveness of interdependent groups. The focus is on joint activities.

Survey feedback activities : Analysing data produced by a survey and designing action-plans based on these data.

Education and training activities : A wide range of possible activities designed to improve skill, abilities, and knowledge of individuals.

Structural activities : Activities designed to improve the effectiveness of the technical or structural aspects affecting individuals or groups. Examples include job enrichment, cooperation and conflict. Process consultation activities : Activities on the part of the consultant that help manager understand and act on human processes in organizations, such as leadership, cooperation and conflict. Grid organization development activities : Activities developed by Blake and Mouton, constituting a six-phase change model involving the entire organization. Third-party peacemaking activities : Activities designed to manage conflict between two parties, and conducted by third party, usually a skilled consultant. Coaching and Counseling activities : Activities that entail working with individuals to better enable them to define learning goals, learn how other see their behaviour, explore alternative bahaviours and learn new behaviours.

Structural activities : Activities designed to improve the effectiveness of the technical or structural aspects affecting individuals or groups. Examples include job enrichment, cooperation and conflict.

Process consultation activities : Activities on the part of the consultant that help manager understand and act on human processes in organizations, such as leadership, cooperation and conflict.

Grid organization development activities : Activities developed by Blake and Mouton, constituting a six-phase change model involving the entire organization.

Third-party peacemaking activities : Activities designed to manage conflict between two parties, and conducted by third party, usually a skilled consultant.

Coaching and Counseling activities : Activities that entail working with individuals to better enable them to define learning goals, learn how other see their behaviour, explore alternative bahaviours and learn new behaviours.

Life and career planning activities : Activities that help individuals identify life and career objectives, capabilities, areas of strength and deficiency and strategies for achieving objectives Planning and goal setting activities : Activities that include theory and experience in planning and goal setting. They may be conducted at the level of the individual group and organization. Strategic management activities : Activities that help key policymakers identify their organization's basic missions and goals; ascertain environmental demands, threats and opportunities; and engage in long range action planning.

Life and career planning activities : Activities that help individuals identify life and career objectives, capabilities, areas of strength and deficiency and strategies for achieving objectives

Planning and goal setting activities : Activities that include theory and experience in planning and goal setting. They may be conducted at the level of the individual group and organization.

Strategic management activities : Activities that help key policymakers identify their organization's basic missions and goals; ascertain environmental demands, threats and opportunities; and engage in long range action planning.

DEPTH OF CHANGE : COMBINING INCREMENTAL & TRANSFORMATIONAL CHANGE STYLES OF CHANGE MANAGEMENT Incremental Change Transformational Change Collaborative Styles Coercive Styles Type 1 Participative Evolution Type 2 Charismatic Transformation Type 4 Dictatorial Transformation Type 3 Forced Evolution

PARTICIPATION EVOLUTION : Emphasizes incremental changes achieved by collaborative methods. It is most appropriate where only minor adjustments are needed i.e. first order change or where there is disparity between performance and demand (out of sync), but time is available to change and key interest groups are in favour of this. CHARISMATIC TRANSFORMATION : Also emphasizes collaborative approaches but under different circumstances compared to participation evolution scenario. Here, time is not on the executive’s side and radical, or second-order change is needed because the organization is “ not in sync ” with the environment. Participation is possible because key employee’s support the need for radical change. This approach, however, also requires inspirational leadership at the top.

FORCED EVOLUTION: The methods needed to implement change in these circumstances are more autocratic, top down, and in some cases, coercive. This approach is necessary where change needs to occur, time is less pressing, but key employee’s are opposed to change. This approach is appropriate in situations where the organization is characterized by, for instance, entrenched middle management or union groups who have rejected participation and may have resorted to unresponsive or even spoiling tactics. DIRECTORIAL TRANSFORMATION: Is necessary when the organization is “ out of sync ” there is no time for extensive participation and no support within the organization for radical change, but such change is vital to organization survival and fulfillment of its basic mission. In this case, the methods to be used have to be radical in order to achieve the revitalization of the organization.

IMPLEMENTING CHANGE Has two important sequences: First Stage : RECOGNITION Stimulus: Initially there will be some kind of stimulus, such as a downturn in profits or the loss of key personnel, which will caus ethe executive to consider whether change is necessary. Reaction: A stimulus will usually give rise to some kind of reaction, however, it is unlikely that one’s initial response will give rise to anything deeper than first order change. Response: The four responses which are related to mindsets are Despair, Denial, Resistance or Consideration

First Stage : RECOGNITION

Stimulus: Initially there will be some kind of stimulus, such as a downturn in profits or the loss of key personnel, which will caus ethe executive to consider whether change is necessary.

Reaction: A stimulus will usually give rise to some kind of reaction, however, it is unlikely that one’s initial response will give rise to anything deeper than first order change.

Response: The four responses which are related to mindsets are Despair, Denial, Resistance or Consideration

Second Stage : DEVELOPMENT & ACTION Development: To progress, people not only have to be prepared to consider new ways of operating, they must also discard old patterns of thinking and behaving before they genuinely try to adopt different approaches Full Transition: As the organization or individual begins to master most aspects of the situation they experience feelings of rising certainty and capability

Second Stage : DEVELOPMENT & ACTION

Development: To progress, people not only have to be prepared to consider new ways of operating, they must also discard old patterns of thinking and behaving before they genuinely try to adopt different approaches

Full Transition: As the organization or individual begins to master most aspects of the situation they experience feelings of rising certainty and capability

Establishing maintenance systems and evaluating the change effort Having gone through a period of change, and in some cases quite traumatic change, it is but natural to feel exhausted or easy to become complacent. There is a real danger that having achieved a major organizational transformation, capability then gives way to complacency; exhilaration to fatigue; strategizing to habituation. This must be avoided and steps should be taken to evaluate the change effort and also to strengthen the employees so that complacency does not set in at any time.

Having gone through a period of change, and in some cases quite traumatic change, it is but natural to feel exhausted or easy to become complacent.

There is a real danger that having achieved a major organizational transformation, capability then gives way to complacency; exhilaration to fatigue; strategizing to habituation.

This must be avoided and steps should be taken to evaluate the change effort and also to strengthen the employees so that complacency does not set in at any time.