CHANGE MANAGEMENT“THE GREATEST DISCOVERY OF ANY GENERATION IS THAT AHUMAN BEING CAN ALTER HIS LIFE BY ALTERING HIS ATTITUDE.”
• In 1997, Jack Welch General Electric CEO then, decided to send some mortgage and insurance application work to a small team in Gurgaon.• By 2002, that work had expanded to 10000 people company and was biggest part of GE Capital.• Genpact, the BPO, today is a $1.5 billion industry. Last estimates, some 2/3 of outsourced BPO work in the world is serviced from India by 1.5 million workers.
Change & Change Management.• Adoption of a new idea or behavior by an organization. – Organizations need to continuously adapt to new situations if they are to survive and prosper – Constant change keeps organizations agile – Indicative of “learning” organizations
Shifting Demographics World Technology Politics Forces For Change EconomicGlobalization Shocks Competition
Types of changes• Strategic• Structural• Process- oriented• People centered
ORGANIZING FOR CHANGE… Doing the right things Leadership How you achieve Who is responsible your goals Structure for what Strategy Purpose shared vision/ values/goals Organization Ongoing Culture systemsUnderlying processesassumptionsthat drive behavior Workforce Capacity and capabilities of the people who do the work
HUMAN SIDE OF IT.• Change is fundamentally about feelings. It needs people’s heads and hearts together.• “Winning Attitudes” do make a difference, and it is important to market new ideas and approaches within the organization very carefully.• Culture and attitude has a very important role to play.
Issues in Managing Change• Changing Organizational Cultures – 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 organization • A weak organizational culture
The Road to Cultural Change• Conduct a cultural analysis to identify cultural elements needing change.• Make it clear to employees that the organization’s survival is legitimately threatened if change is not forthcoming.• Appoint new leadership with a new vision.• Initiate a reorganization.• Introduce new stories and rituals to convey the new vision.• Change the selection and socialization processes and the evaluation and reward systems to support the new values.
Issues in Managing Change• Handling Employee Stress due to Change – Stress • The physical and psychological tension an individual feels when confronted with extraordinary demands, constraints, or opportunities and their associated importance and uncertainties. • Functional Stress – Stress that has a positive effect on performance. – How Potential Stress Becomes Actual Stress • When there is uncertainty over the outcome. • When the outcome is important.
Issues in Managing Change• Making Change Happen Successfully – Embrace change—become a change-capable organization. – Create a simple, compelling message explaining why change is necessary. – Communicate constantly and honestly. – Foster as much employee participation as possible—get all employees committed. – Encourage employees to be flexible. – Remove those who resist and cannot be changed.
Characteristics of Change-Capable Organizations• Link the present and • Ensure diverse teams. the future. • Shelter breakthroughs• Make learning a way of • Integrate technology. life. • Build and deepen trust.• Actively support and encourage day-to-day improvements and changes.
Four Roles in Organizational ChangeInventor Champion Sponsor Critic· Develops and · Believes in idea ·High-level · Provides reality understands · Visualizes benefits manager test technical aspects of · Confronts who removes · Looks for short- ideas organization organizational comings· Does not know how realities of cost, barriers · Defines hard- to win support for benefits ·Approves and nosed the idea or make a · Obtains financial protects idea criteria that idea business of it and political within must pass support Overcomes organization obstacles
Types of Changes:1) Planned2) Accidental Organizational Change Accidental Changes • Changing employee demographics planned Changes • Performance gaps • Changes in products and services • Governmental regulations • Changes in administrative systems • Economic competition in the • Changes in organizational size or global arena structure • Introduction of new technologies • Advances in information processing and communication
Types of Planned ChangesTwo TypesOperational Changebased on efforts to improve basic work and organizational processesTransformational Change involves redesign and renewal of the total organization
Key Roles in Sequential Process of Organizational ChangeCorporateManagement InvolvementConsultant in processCounterpartImplementor Involvement in taskImplemen.TeamTask forces Information Collection Stabilization Implementation Action Proposal Motivation Diagnosis Deliberation Initiation
Lewin’s 3 step Change process. Unfreezing Changing RefreezingUnfreezing Old behavior creates motivation to learn.
Lewin’s Three-Step Process• The first step, “unfreeze” involves the process of letting go of certain restricting attitudes during the initial stages of an outdoor education experience.• The second step, "change" involves alteration of self-conceptions and ways of thinking during the experience.• The third step, "refreeze" involves solidifying or crystallizing the changes into a new, permanent form for the individual
Unfreezing Techniquespeople are taken from a state of being unready to change tobeing ready and willing to make the first step.• Burning platform: Expose or create a crisis.• Challenge: Inspire them to achieve remarkable things.• Evidence: Cold, hard data is difficult to ignore.• Education: Learn them to change.• Management by Objectives (MBO): Tell people what to do, but not how.• Visioning: Form Visions. Visions work to create change.
Burning Platform• Show how staying where you are is not an option, and that doing nothing will result in disaster.• Look for a crisis that you can highlight. They are often lurking nearby, forlorn and unnoticed.• You can also engineer your own crisis that forces change.
Challenge• Stimulate people into change by challenging them to achieve something remarkable. Show confidence in their ability to get out of their comfort zone and do what has not been done before.• Once the group has bought the challenge, then they will bounce off each other to make it happen.
Evidence• Find evidence that supports the need for change.• Use data and statistics to create impressive graphs and charts.• Cold, hard evidence is a good way of changing minds as counter-arguments require better data.
Education• Teach people about the need for change and how embracing change is a far more effective life strategy than staying where they are or resisting.• Teach people the methods of change, about how to be logical and creative in improving processes and organizations.
Management by Objectives (MBO)• Set formal objectives for people that they will have to achieve, but do not tell them how they have to achieve this.• Give people objectives that they can only achieve by working in the intended change.•Give them relatively free rein in howthey go about achieving theobjectives. Encourage them to lookoutside the box for creative new waysof achieving the objective.
Vision• Create a motivating vision of the future.• Share it with others.• Live it until it comes true.• Visions work only when they act to motivate and inspire the large numbers of people that are needed to make the change happen.• For the vision to be motivating, then it must be memorable.• For it to be memorable, it must be exciting and short.• To be believed, it must be a regular part of the conversation of senior people.
Changing Techniques Once you have unfrozen the people, the next question is how you keep them going.• Coaching: Psychological support for executives.• Facilitation: Use a facilitator to guide team meetings.• First steps: Make it easy to get going.• Involvement: Give them an important role.• Open Space: People talk about what concerns them.• Step wise change: Break the work into packages.
Coaching• When you have individual people who are having difficulty in managing to adapt to change, be a Coach to them.• Coaching helps explore deeper motivations and beliefs about other people, and find practical ways to change these.
Facilitation• Use skilled facilitators (HR) to support change activities.• Facilitators can be used to guide various group events, from brainstorming and planning to improvement projects and change activities.• Facilitators can also act as team coaches, helping people to improve within themselves and work together in better ways.
First Steps.• Actually starting something is often the hardest thing. The Greek poet Horace said, ‘He has half the deed done who has made a beginning.’• Make the first steps of change particularly easy. Make them the most obvious thing to do.• Then make the next steps easy that it takes away all reasonable objections to enacting it.
Involvement• Get them involved in the change.• Invite them to participate in discussions.• Give them things to do.• When people are a part of something, they bond with it, making it a part of their identity.
Open space• It started when Harrison Owen was running conferences and found that people preferred talking to others during the breaks than listening to speakers. He then began running conferences without speakers.• The underlying philosophy is that trying to control a naturally chaotic universe just makes things worse. If you want people to collaborate, the basic principle is to bring them together and then get out of the way. For managers and facilitators this can be a very difficult part of the Open Space process. Yet the most successful Open Spaces are managed with but a very light touch.• In change, this is useful for getting people talking together. For example, you can use it to get people to talk about their fears and concerns.
Stepwise Change• Have clear steps in the change. Break the work into distinct packages and talk about each separately.• Communicate about the change not as a single, but as a set of activities, each of which gains specific value.
Refreezing techniques people are taken from a state of being in transition and moved to a stable and productive state• Burning bridges: Ensure there is no way back.• Evidence stream: Show them time and again that the change is real.• Institutionalization: Building change into the formal systems and structures.• Reward alignment: Align rewards with desired behaviors.• Socializing: Build it into the social fabric
Burning the bridges• When changes are instituted, it is not uncommon for people to seek ways to go back the old way of working, hence ensure that there is no way back to previous ways of working.• Burning bridges is a deliberate way of preventing any backsliding by removing any method by which people can go back.• Managers who may be not fully committed to the change are now strongly motivated to continue.
Evidence Stream• Get people to accept that a change is real by providing a steady stream of evidence to demonstrate that the change has happened and is successful.• Communicate through a range of media. Get people who have been involved to stand up and tell their stories of challenge and overcoming adversity.• Evidence is a powerful tool for persuasion, particularly when people are doubtful whether something is real. This is particularly powerful when presented by people who are trusted by the audience for the information.• A steady stream of evidence is needed because people are not always convinced by a few pieces of early evidence.
Institutionalization• Make changes stick by building them into the formal fabric of the organization.• Make them an organizational standard, building them into the systems of standards.• Put them or aspects of them into the primary strategic plan.• Build them into people personal objectives.• Ensure people are assessed against them in personal reviews.• The formal systems and structures within the organization are those which are not optional. People do them because they are business as usual‘.
Reward Alignment.• When you make a change, ensure that you align the reward system with the changes that you want to happen.• The saying Show me how Im paid and Ill show you how I behave is surprisingly common.
Socialize.• Seal changes by building them into the social structures.• Give social leaders prominent positions in the change. When they feel ownership for it, they will talk about it and sell it to others.
Kotter’s Eight-Step Plan for Implementing Change1. Establish a sense of urgency by creating a compelling reason for why change is needed.2. Form a coalition with enough power to lead the change.3. Create a new vision to direct the change and strategies for achieving the vision.4. Communicate the vision throughout the organization.5. Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving.6. Plan for, create, and reward short-term “wins” that move the organization toward the new vision.7. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs.8. Reinforce the changes by demonstrating the relationship between new behaviors and organizational success.
Case ExampleICICI Bank merger with Bank of Madura (December 2000)What does it reveal ? It reveals the importance of change management for the Bank of Madura and how effective management of change could bring out best results from the employees in the Bank of Madura.
ICICI Bank Ltd. Bank of Madura (BoM)ICICI was established by the Established in 1943, in Madurai,Government of India in 1955. Tamilnadu. By 2000, it became the no. 1 in Tamilnadu.Three times to that of Bank of One third the size of ICICI.MaduraStaff strength was only 1,400. Staff strength was 2,500.Departments into individual Management concentrated onprofit centers. the profitability of the overall bank.