Organizational Change Part 2 Steven E. Phelan July 2005.

Organizational ChangeOrganizational ChangePart 2Part 2

Steven E. PhelanSteven E. Phelan

July 2005July 2005

PlanPlan

• Resistance to change

• Shaping approaches to change

• Controlling approaches to change

• Merger plan simulation

DilbertDilbert

• The goal of change management is to dupe slow-witted employees into thinking change is good for them by appealing to their sense of adventure and love of challenge

• This is like convincing a trout to leap out of a stream to experience the adventure of getting deboned

Signs of Resistance to ChangeSigns of Resistance to ChangeActive signs of resistance• Being critical• Finding fault• Ridiculing• Appealing to fear• Using facts selectively• Blaming or accusing• Sabotaging• Intimidating or threatening• Manipulating• Distorting facts• Blocking• Undermining.• Starting rumors• Arguing

Passive signs of resistance• Agreeing verbally but not

following through (“malicious compliance”)

• Failing to implement change• Procrastinating or dragging

one’s feet• Feigning ignorance• Withholding information,

suggestions, help, or support• Standing by and allowing

change to fail

•Which of the various ways of resisting change are the most common?•Which are the most difficult to deal with?

Why Do People Resist Change?Why Do People Resist Change?• Dislike of change

People don’t resist change, they resist pain! Boredom can be pain, too.

• Discomfort with uncertainty Low tolerance for ambiguity

• Perceived negative effects of interests Authority, status, rewards, salary, social ties

• Attachment to the established culture/ways of doing things

• Perceived breach of psychological contract

Why Do People Resist Change?Why Do People Resist Change?• Lack of conviction that change is needed• Lack of clarity as to what is needed• Belief that the specific change being proposed is

inappropriate• Belief that the timing is wrong• Excessive change• Cumulative effects of other changes in one’s life • Perceived clash with ethics• Reaction to the experience of previous changes• Disagreement with the way the change is being

managed

Why do people support Why do people support change?change?

• Security• Money• Authority• Status/prestige• Responsibility• Better working conditions• Self-satisfaction• Better personal contacts• Less time and effort

Managing Resistance – The Managing Resistance – The Situational ApproachSituational Approach

• The classic steps: Education and communication Participation and involvement Facilitation and support Negotiation and agreement Manipulation and cooptation Explicit and implicit coercion

• Does a successful change manager needs skills in all six areas?

• Where do you need development?

The Resistance CycleThe Resistance Cycle• Resistance is a natural (even necessary)

psychological stage in any change: Denial / Shock Resistance / Anger Exploration / Mourning Commitment / Acceptance

• Do we just ‘let nature take its course’ then?

• Can people get stuck in a stage?

Behavioral StrategiesBehavioral Strategies• Creative counters (Karp)

Prepared counters to blocks, stalls, rollovers, threats, etc.

• Thought Self-Leadership Based on RET Activating event -> (Beliefs) ->Emotional Consequence Change dysfunctional beliefs and thus change

emotional consequences• Assumptions, self-talk, mental imagery• Rooting out: Shoulds, musts, oughts • From ‘obstacle thinking’ to ‘opportunity thinking’• Monitoring self-cognition

Behavioral Strategies 2Behavioral Strategies 2• Tinkering, Kludging, & Pacing (Abrahamson)

The reconfiguration of existing practices and business models rather than the creation of new ones

Tinkering is small (e.g. sharing of best practice or adapting a process from another business)

Kludging creates a new business from existing capabilities

Pacing is mixing disruptive change with tinkering and kludging

• Deliberately avoids lots of large scale change because that generates ‘change fatigue’ and major resistance

The “Power of Resistance”The “Power of Resistance”(Maurer)(Maurer)

• Use the power of resistance to build support Showing respect towards resistors creates stronger

relationships and thereby improves the prospects of success

• Fundamental touchstones Maintain clear focus Embrace resistance Respect those who resist (assume good faith) Relax Join with the resistance

• Look for points of commonality

Maurer’s Default OptionsMaurer’s Default Options• Use power• Manipulate those who oppose• Apply force of reason• Ignore resistance• Play off relationships• Make deals• Kill the messenger• Give in

QuestionQuestion

• Which approach to the management of resistance attracts you? Why?

Shaping Approaches to Shaping Approaches to ChangeChange

Organization DevelopmentOrganization Development

• Values Humanistic

• Openness, honesty, integrity

Democratic• Social justice, freedom of choice, involvement

Developmental• Authenticity, growth, self-realization

History of ODHistory of OD• T-groups (Lewin, 1946)

Training groups – a form of group therapy

• Socio-technical systems Tavistock Institute Focus on social teams and industrial democracy

• Surveys with Likert scales from 1946 Often used for diagnosis of organizational climate and

post-intervention

• Participative Action research A Plan-Do-Check-Act cycle that involves those who

are affected by the changes

Role of OD practitionerRole of OD practitioner• Steps

Problem identification Consultation/collaboration with OD consultant Data gathering and problem diagnosis Feedback Joint problem diagnosis (with group) Joint action planning (with group) Change actions Further data gathering

Second generation ODSecond generation OD• Focus on transformational change, culture, and

learning organizations Argyris undiscussables, double loop learning, and triple

loop learning Senge’s system dynamics for learning

• New interest in teams High performance work organizations Self managed teams

• TQM• Visioning, diversity, large meetings• Large-scale OD

The New Agenda for ODThe New Agenda for OD• Loss of community

People pretend to care more about one another than they really do

• Loss of employer-employee social contract I must take care of myself

• Employability Is my employer giving me the skills to find another job if I have to?

• Trust Widening gap between have and have nots Difference between what managers say and do Lack of openness

• Culture Clash Need for negotiation and conflict resolution skills

Appreciative InquiryAppreciative Inquiry

• Participation by large-scale intervention

• Shows a shift from problem solving to joint envisioning of the future

• Involves a four-step technique: Discovering current best practices Building on existing knowledge Designing changes Sustaining the organization’s future

AI ExerciseAI Exercise• Goal: Quality executive education

Step 1: Describe your peak experience in quality education

Step 2: Generate some ‘provocative propositions’ for the UNLV EMBA program based on step 1.

Step 3: Describe times when the UNLV program approached peak experience

Step 3: Develop a vision of what could be Step 4: What needs to change in skills, structure,

processes and systems, management style, and staffing to enhance this vision

Sense-Making ApproachSense-Making Approach

• Eight Lessons Sense-making and identity construction have a symbiotic

relationship Social relations influence sense making People look at a variety of cues to make sense of their

situation Sense making changes over time in response to new cues

and events Sense making often occurs retrospectively Stories have to be plausible but not necessarily accurate Our own actions (enactments) influence sense making Powerful actors can shape the interpretations of others

through their actions – how?

Controlling Approaches to Controlling Approaches to ChangeChange

Change Management ApproachChange Management Approach

• Focuses on strategic, intentional and usually large-scale change

• Entails following a variety of steps; the exact steps vary depending upon the model used

• Belief that achieving organizational change is possible through a coordinated and planned approach

Some SystemsSome Systems• Ten Steps

Define the vision Mobilize Catalyze Steer Deliver Obtain

participation Handle emotions Handle power Train and coach Actively

communicate

• 12 Actions Get support of key power groups Get leaders t model change behavior Use symbols and language Define areas of stability Surface dissatisfaction Promote participation Reward behavior that supports change Disengage from the old Communicate image of future Use multiple leverage points Develop transition mgt arrangements Create feedback

Some SystemsSome Systems• 10 Commandments

Analyze the need for change Create a shared vision Separate from the past Create a sense of urgency Support a strong leader role Line up political sponsorship Craft an implementation plan Develop enabling structures Communicate and involve

people Reinforce and institutionalize

change

• Eight-step model Establish the need for

urgency Ensure there is a power

change group to guide the change

Develop a vision Communicate the vision Empower staff Ensure there are short term

wins Consolidate gains Embed the change in the

culture

ExerciseExercise• Compare and contrast the various steps in these

models. What is left out of different models?• Create your own composite model.

Is there a preferred sequence of steps? Why?

• Identify the key management skills associated with each step Which ones are you strongest on? Weakest on?

• In your experience: Which steps have been best handled? Worst handled? Why?

Change Management vs. ODChange Management vs. OD• Critics of change management depict it as being

“faddish” and the product of management consultancy firms

• There is a debate between proponents of OD and proponents of change management: OD is criticized for being less relevant to modern

organizations which require strategic, often large scale change rather than slower, incremental change often associated with a traditional OD

Change management is criticized for lacking a humanistic set of values and for having a focus on the concerns of management rather than on those of the organization as a whole

Contingency ApproachContingency Approach• Contingency approaches challenge the view that

there is “one best way” The style of change will vary, depending upon the

scale of the change and the receptivity of organizational members for engaging in the change.

• In the Dunphy-Stace model the style of change varies from collaborative to coercive What are the implications of this? Why are almost all large scale changes seen as

coercive (by top management and employees) How does this knowledge change your step-model?

Processual ApproachProcessual Approach• Draws on a navigator approach and views change as a

continuous process which unfolds differently depending upon the time and the context It sees the outcome of change as occurring through a complex

interplay of different interest groups, goals, and politics. Only some outcomes will be able to be achieved given the “messiness” of change

• This approach does not provide a list of “what to do” steps as in the change management approaches. Rather it alerts the change manager to the range of influences

which they will confront and the way in which these will lead to only certain change outcomes being achieved

Rules of thumb for change agentsRules of thumb for change agentsShepard (1975)Shepard (1975)

• Stay alive Learn to greet absurdity with laughter Use your skills, emotions, labels, and positions don’t be used by them Don’t get trapped in other people’s games

• Start where the system is Understand how others see themselves (empathy)

• Never work uphill Work in the most promising arenas Don’t build hills as you go Build resources Don’t over organize Don’t argue if you can’t win Don’t drift – remain focused on your purpose

More rules of thumbMore rules of thumb• Light many fires

Load experiments for success

• Innovation requires a good idea, initiative, and a few friends Find the people who are ready and able to work,

introduce them to one another, and work with them Those who need to rebel or submit are not reliable

partners

• Keep an optimistic bias• Capture the moment

timing is everything

Quinn’s logical incrementalism revisitedQuinn’s logical incrementalism revisited

• Key propositions Proceed experimentally and flexibly Conceal true goals and intentions Build awareness and credibility to legitimize new

viewpoints Tactical shifts, partial solutions

• Use serendipity to promote supporters, replace opponents, fund pet projects

Broaden political support and overcome opposition Encourage others to trial new ideas and create

pockets of commitment (but don’t be associated with failure).

• Why is this a navigator/processual view of change?

The Merger Plan SimulationThe Merger Plan Simulation• Task

Develop a formal integration plan (with decisions on branch closures, systems conversion, product alignment, layoffs, and communication strategy) that will maximize shareholder value while keeping as much support as possible from the stakeholders at the two banks and external organizations.

5 minutes = 1 news cycle = 1 day

RolesRoles

• Integration manager

• 2 HR directors

• 2 CEOs

• 2 Heads of retail banking

• Rest to choose from: Largest customers, newspaper editors,

funds managers, regulators, banking unions, CIOs, CFOs, branch managers