Chapter 6
Managing Change and Innovation
What is Change?
• Change refers to an event that occurs when
something passes from one state or phase to
another.
• In ano...
Few changes over the years

Nobody can go back and start a new beginning, but anyone can start today and make
a new ending...
When change is likely to happen
Beckhard’s Change
Equation

Kurt Lewin’s Formula of Change

C={D x V x A x FS > R}
Organis...
What is Change Management?
Change Management is management of
transition from the present state to desired
state.
Present
...
Current State
• Employees (including management and executives!) generally
prefer the current state, because that is where...
Future State
• The future state is unknown to the employee; will it be
better, or worse?
• This is where Project teams “li...
Transition State
• The transition state creates stress and anxiety

Current
State

Transition
State

Future
State
Change vs. Transition
Change is the shift, transition is the process of one state of being to another
CHANGE

•
•
•
•
•
•
...
Change vs. Transition
The Change Process
• The Calm Waters Metaphor
– Lewin’s description of the change
process as a break in the
organisation’s...
External and Internal Forces for Change
Types of forces to consider  


Competition



Economic Factors



Political Fa...
Organisational Change and
Change Agents
• Organisational Change - any alterations in the
people, structure, or technology ...
Types of Change Agents
• Managers: internal
entrepreneurs
• Non-managers: change
specialists
• Outside consultants:
change...
The Three-Step Change Process
Force Field Analysis
Driving Forces

Restraining Forces

Proposed Change

1. Customers want new products

1. Loss of staff...
Three Types of Change
Types of Change
• Structure
– Changing an organisation’s structural components or its
structural design

• Technology
– Ad...
Organisational Development
• Organisational Development (OD) techniques or programmes to change people
and the nature and ...
Popular OD Techniques
Managing Resistance to Change
• Why People Resist Change
– The ambiguity and uncertainty
that change introduces
– The comf...
Techniques for Reducing Resistance to Change
Changing Organisational Culture
• Cultures are naturally resistant to change.
• Conditions that facilitate cultural change...
Changing Culture
Stress and Stressors
• Stress - the adverse reaction people have to
excessive pressure placed on them from
extraordinary d...
What Causes Stress?
• Role Conflicts - work expectations that are
hard to satisfy.
• Role Overload - having more work to
a...
Personal Factors Causing Stress
• Type A personality people who have a
chronic sense of
urgency and an
excessive competiti...
Symptoms of Stress
Stimulating Innovation
• Creativity - the ability to combine ideas in a
unique way or to make an unusual
association.
• In...
Stimulating Innovation (cont.)
• Idea Champions individuals who actively
and enthusiastically
support new ideas,
build sup...
Change-Capable Organisations
World’s Most
Innovative Companies
Innovation Variables
Structural Variables
• Adopt an organic structure
• Make available plentiful resources
• Engage in frequent inter-unit com...
Cultural Variables
• Accept ambiguity
• Tolerate the impractical
• Have low external controls
• Tolerate risk taking
• Tol...
Human Resource Variables
• Actively promote training and development to
keep employees’ skills current
• Offer high job se...
•

What can happen if change is NOT
managed?

•

What can happen if change is EFFECTIVELY
managed?

•

Productivity declin...
Waqas khichi management lecture chp 6
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Waqas khichi management lecture chp 6

  1. 1. Chapter 6 Managing Change and Innovation
  2. 2. What is Change? • Change refers to an event that occurs when something passes from one state or phase to another. • In another way, Change occurs when one state of equilibrium is disturbed and ends at other state of equilibrium.
  3. 3. Few changes over the years Nobody can go back and start a new beginning, but anyone can start today and make a new ending.
  4. 4. When change is likely to happen Beckhard’s Change Equation Kurt Lewin’s Formula of Change C={D x V x A x FS > R} Organisations go for a change only when above equation holds true for it. C=Change D= Dissatisfaction with present state or status quo. V=Vision, Where to go? How to go? What to do? A=Ability, resources, money, time, expertise. FS=First Step R=Resistance Unfreezing Changing Refreezing
  5. 5. What is Change Management? Change Management is management of transition from the present state to desired state. Present State Transition State Desired State Hence, change management is management of transition between the current and desired state. Any change that does not require management of transition state does not require change management
  6. 6. Current State • Employees (including management and executives!) generally prefer the current state, because that is where they live Current State Transition State Future State “better the devil you know is better than the devil you don’t”
  7. 7. Future State • The future state is unknown to the employee; will it be better, or worse? • This is where Project teams “live” Current State Transition State Future State
  8. 8. Transition State • The transition state creates stress and anxiety Current State Transition State Future State
  9. 9. Change vs. Transition Change is the shift, transition is the process of one state of being to another CHANGE • • • • • • • External Organisational Quicker More visible More predictable Physical Tangible TRANSITION • • • • • • • Internal Personal Slower Less visible Less predictable Psychological Intangible
  10. 10. Change vs. Transition
  11. 11. The Change Process • The Calm Waters Metaphor – Lewin’s description of the change process as a break in the organisation’s equilibrium state. • Unfreezing the status quo • Changing to a new state • Refreezing to make the change permanent • White-Water Rapids Metaphor – The lack of environmental stability and predictability requires that managers and organisations continually adapt (manage change actively) to survive. Metaphor: a figure of speech in which a word or phrase literally denoting one kind of object or idea is used in place of another to suggest a likeness or analogy between them. “He was drowning in paperwork” is a metaphor in which having to deal with a lot of paperwork is being compared to drowning in an ocean of water
  12. 12. External and Internal Forces for Change Types of forces to consider    Competition  Economic Factors  Political Factors  Available Resources  Traditions  Vested interests  Introduction of new technology  Organisational structures  Relationships  Social or organisational trends  Attitudes of people  Present or past practices  Union Pressures  Institutional policies or norms  Costs
  13. 13. Organisational Change and Change Agents • Organisational Change - any alterations in the people, structure, or technology of an organisation. • Change Agents - persons who act as catalysts and assume the responsibility for managing the change process.
  14. 14. Types of Change Agents • Managers: internal entrepreneurs • Non-managers: change specialists • Outside consultants: change implementation experts
  15. 15. The Three-Step Change Process
  16. 16. Force Field Analysis Driving Forces Restraining Forces Proposed Change 1. Customers want new products 1. Loss of staff overtime 3 4 2. Improved speed of production 2 3. Enhanced volume of output 3 4. Maintenance costs increasing 1 Upgrading Factory with new manufacturing machinery 2. Staff frightened of new technology 3 3. Environmental impact of new techniques 1 4. High cost of the technology 3 5. Disruption 3 Total = 10 Total = 13
  17. 17. Three Types of Change
  18. 18. Types of Change • Structure – Changing an organisation’s structural components or its structural design • Technology – Adopting new equipment, tools, or operating methods that displace old skills and require new ones • Automation - replacing certain tasks done by people with machines • Computerisation • People – Changing attitudes, expectations, perceptions, and behaviours of the workforce
  19. 19. Organisational Development • Organisational Development (OD) techniques or programmes to change people and the nature and quality of interpersonal work relationships. • Global OD - OD techniques that work for U.S. organisations may be inappropriate in other countries and cultures.
  20. 20. Popular OD Techniques
  21. 21. Managing Resistance to Change • Why People Resist Change – The ambiguity and uncertainty that change introduces – The comfort of old habits – A concern over personal loss of status, money, authority, friendships, and personal convenience – The perception that change is incompatible with the goals and interest of the organisation ADKR Model
  22. 22. Techniques for Reducing Resistance to Change
  23. 23. Changing Organisational Culture • Cultures are naturally resistant to change. • Conditions that facilitate cultural change: – The occurrence of a dramatic crisis – Leadership changing hands – A young, flexible, and small organisation – A weak organisational culture
  24. 24. Changing Culture
  25. 25. Stress and Stressors • Stress - the adverse reaction people have to excessive pressure placed on them from extraordinary demands, constraints, or opportunities. • Stressors - factors that cause stress.
  26. 26. What Causes Stress? • Role Conflicts - work expectations that are hard to satisfy. • Role Overload - having more work to accomplish than time permits. • Role Ambiguity - when role expectations are not clearly understood.
  27. 27. Personal Factors Causing Stress • Type A personality people who have a chronic sense of urgency and an excessive competitive drive. • Type B personality people who are relaxed and easygoing and accept change easily.
  28. 28. Symptoms of Stress
  29. 29. Stimulating Innovation • Creativity - the ability to combine ideas in a unique way or to make an unusual association. • Innovation - turning the outcomes of the creative process into useful products, services, or work methods.
  30. 30. Stimulating Innovation (cont.) • Idea Champions individuals who actively and enthusiastically support new ideas, build support, overcome resistance, and ensure that innovations are implemented.
  31. 31. Change-Capable Organisations
  32. 32. World’s Most Innovative Companies
  33. 33. Innovation Variables
  34. 34. Structural Variables • Adopt an organic structure • Make available plentiful resources • Engage in frequent inter-unit communication • Minimise extreme time pressures on creative activities • Provide explicit support for creativity
  35. 35. Cultural Variables • Accept ambiguity • Tolerate the impractical • Have low external controls • Tolerate risk taking • Tolerate conflict • Focus on ends rather than means • Develop an open-system focus • Provide positive feedback
  36. 36. Human Resource Variables • Actively promote training and development to keep employees’ skills current • Offer high job security to encourage risk taking • Encourage individuals to be “champions” of change
  37. 37. • What can happen if change is NOT managed? • What can happen if change is EFFECTIVELY managed? • Productivity declines as people become more consumed with the change being introduced. Passive resistance festers. Active resistance emerges and sabotages the change. Valued employees leave the organization, a very costly proposition in terms of the lost contribution and the cost to replace them. Employees become disinterested in the current state and the future state. Employees begin arguing about change and the direction of the company. People are left to wonder why the change is happening. More people begin taking sick days or not showing up for work. People find work-around to avoid implementing the new way of doing things. Employees revert back to the old way of doing things. Changes are not fully implemented. Changes are scrapped and cancelled due to the lack of support throughout the organization. Divides are created in the organization between 'us' and 'them'. The organization builds a history of failed and painful changes. Many types of risk are created - risk to the project, to the organization, to the employees involved and to the individuals supporting or chartering the change • Employees have a solid understanding of why change is happening. Employees engage in both the solution and the change. Training is used to build knowledge after employees have made the personal decision to support the change. Resistance is identified and dealt with early in the process. Senior leaders demonstrate their own and the organization's commitment to the change. Communications are segmented and customized for different audiences, answering the questions that they care about. Momentum is built throughout different areas and levels within the organization. Changes are less painful to the organization and to the employees. A coalition of support among senior leaders and managers creates momentum throughout the organization. Probability of meeting project objectives is increased. The organization begins to build a history of successful change, creating a better 'backdrop' for the next change initiative • • • • • • • • • • • • • • • • • • • • • • • •
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