Deze samenvatting is gebaseerd op het studiejaar 2013-2014.

Chapter A: Organizational change in today’s world

Organizational change: planned alterations of organizational components to improve the effectiveness of the organization.

These components include:

• Mission and vision
• Strategy
• Goals
• Structure
• Processes
• Technology
• People

Change drivers can be internal and external, managers should adapt to the organization’s environment. Some changes are very tangible and thus easier, others – such as a change in culture – are intangible and more difficult.

The focus of the book is on organizational change as a planned activity designed to improve the organization’s effectiveness.

The book has an active, action-oriented emphasis coupled with a deep understanding of organizations. The twin theme of knowing what to do and how to do it is the main approach in order to fill the knowing-doing gap that the authors believe to exist.

Environmental forces for change

Environmental forces may be a surprise where others are anticipated. We will discuss some environmental trends.

Social, cultural, and demographic environment

Demographic changes influence the social, cultural, and economic environment. The Western world has an ageing population which has financial consequences. When economies are poor, the fertility rate is high and there are many young dependents relying o working adults for sustenance. When fertility rates drop, the ratio of working adults to dependents increases, leading to surplus wealth. Then all those people age and dependent, seniors become a larger percentage of the population. Other issues are gender, race, diversity, global warming, sustainability, and social responsibility.

Technologies

Data mining is the transformation of data into information. Technological forces result in shorter product development and life cycles. Technological breakthroughs can result in obsolescence. So change leaders should be aware of trends and be proactive.

Political changes

As organizations become global, they need to clarify their own ethical standards. They need to understand the law and determine what norms of behavior they will work to establish for their organizational members.

The politics of globalization have created opportunities and issues. They influence market development and attractiveness, competitiveness, and pressures on boards and executives.

The economy

The lessons from the economic crisis concern risk management and capacity building. To be able to respond quickly, capacity is necessary and thus mechanisms to anticipate.

Influences of worldwide trends on change management

Barkema described new organizational forms and management challenges based on environmental change:

Macro changes and impacts – digitization leading to:

• Faster information transmission
• Lower-cost information storage and transmission
• Integration of states and opening of market
• Geographic dispersion of the value chain
• All leading to globalizations of markets

New organizational forms and competitive dynamics:

• Global small and medium-sized enterprises
• Global constellations of organizations (networks)
• Large, focused global firms
• All leading to:
• Spread of autonomous, dislocated teams
• Digitally enabled structures
• Intense global rivalry
• Running faster while seeming to stand still

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

Barkema argues that much change today deals with mid-level change (more than incremental but not revolutionary). Middle managers will play increasingly significant roles in making change effective.

Four types of organizational change

Change literature classifies changes into:

• Episodic or discontinuous change
  • Organizations have significant inertia
  • Change is infrequent and discontinuous
  • Re-engineering programs
• Continuous change
  • Emergent and self-organizing
  • Change is constant, evolving and cumulative
  • Kaizen programs in Japanese automobile manufacturers

A second dimension of change is:

• Proactive, planned, and programmatic: managers anticipate events and shift their organizations
• Reactively in response to external events: shifts in the external world lead to a reaction

Nadler and Tushman combine these two dimensions, offering four types of change:’

1. Tuning: incremental/continuous and anticipatory (need for internal alignment)
   1. Focuses on individual components or subsystems
   2. Middle management role
   3. Implementation is the major task
   4. E.g.: quality improvement initiative from an employee improvement committee
2. Adapting: incremental/continuous and reactive (need for internal alignment)
   1. Focuses on individual components or subsystems
   2. Middle management role
   3. Implementation is the major task
   4. E.g.: modest changes to customer services in response to customer complaints
3. Redirecting/reorienting: discontinuous/radical and anticipatory (need for positioning the whole organization to a new reality)
   1. Focuses on all organizational components
   2. Senior management crates sense of urgency and motivates the change
   3. E.g.: major change in product or service offering in response to opportunities identified
4. Overhauling/re-creating: discontinuous/radical and reactive (need to reevaluate the whole organization, including core values)
   1. Focuses on all organizational components to achieve rapid, systemwide change’
   2. Senior management creates vision and motivates optimism
   3. E.g.: a major realignment of strategy, involving plant closures and changes to product and service offerings, to stem financial losses and return the firm to profitability

The last two are more time-consuming and have a greater impact on individuals.

Plans and intentions

Despite the high failure rate of change, inaction and avoidance are no options. Hamel and Pralahad argue that re-engineering and restructuring are to catch up but that strategy and industry should be reinvented by building competing capacities.

Common managerial difficulties:

• Managers are action-oriented and assume others behave rationally
• Managers assume to have power and influence
• Managers look at the transition period as accost, not an investment
• Managers cannot estimate the resources and commitment needed
• Managers are unaware that their behavior sends out conflicting messages
• Managers find managing human processes threatening because of the potential emotionality and difficulties regarding prediction and quantification
• Managers lack the capacity to manage complex changes involving people
• Managers’ critical judgment is impaired due to overconfidence and/or groupthink

Organization change roles

• Change leader/agent: leads the change. Plays any or all of the initiator, implementer, or facilitator roles. Often the formal change leader but informal change leaders will emerge.
• Change initiator: identifies need and vision for change and champions change.
• Change implementer: has responsibility for making certain the change happens. Nurtures support, alleviates resistance.
• Change facilitator: assists initiators, implementers, and recipients with the change management process. identifies process and content change issues and helps resolve these. Fosters support, alleviates resistance.
• Change recipient: is affected by the change. Has to change behavior to ensure change is effective.

Becoming a successful change leader

Successful change leaders have a balance between insight and a passion for action. They are sensitive to the external world and can anticipate the external world. They understand organizational systems, themselves, and their influence and image. Personal characteristics:

• Tolerance for ambiguity
• Emotional maturity
• Self-confidence
• Comfort with power
• Sense of risk assessment
• Need for action and results
• Persistence due to optimism and tenacity
• Curious
• Desire to learn
• Distrust of organizational fads

Also, they embrace the paradoxes of change:

• Driving change and enabling change
• Resistance is a problem and an opportunity
• Focus on outcomes and carful about process
• Getting on with it and changing direction (modify objectives and respond to environment)
• Balance patience and impatience

Chapter B: Frameworks for organizational diagnosis: HOW to change

Managers should be aware of the PEST (political, economical, sociological, technological) environment. Diagnosing that provides the basis for the vision and direction for change. This chapter focuses on the HOW: HOW might a change agent think about making change happen?

How to change: the processes

The “failure of success”: practices that were effective in the past but are no longer appropriate. The pattern of success over time (Handy) describes a curve that shows when change should begin and where it becomes obvious that change is needed. See page 44. Change should be introduced at point B when the system is growing but starting to grow less than before. If pint A is reached, the need for change is obvious and it is maybe even too late.

Lewin made the three-step model of change: unfreeze, change, refreeze. He says the situation and system should be understood as a whole as well as the component parts.

Beckhard and Harris’s change-management process

1. Initial organization analysis: understanding the forces for and against change and the organizational situation
2. Why change?: determine the need for change, the degree of choice about whether to change, define the vision
3. Gap analysis: describe the present state and define the desired future state
4. Action planning: assessing the present in terms of the future to determine the work to be done
5. Managing the transition

Many assume that the need for change is easily recognizable but people may not accept the fact that they need to change or think others should change. So the perception of the need for change can be different for different persons. It may also be that top management is aware of what competition is doing but employees have no idea and thus do not see a need for change. Gap analysis addresses the question of WHY change.

Why change?

The reason for change should be communicated to key stakeholders so that they will understand it and move to positive action. Gap analysis and visioning help to fulfill this challenge.

The model by Beckhard and Harris is strong because it lays out a linear process for change. The risk is that managers oversimplify the challenge.

Chapter C: Frameworks for organizational diagnosis: WHAT to change

Figure 3.1 on page 64 combines the WHAT and the HOW. The model of Beckhard and Harris can be put on the vertical axis and the model by Nadler and Tushman that we will discuss later on the horizontal axis (the latter can be used for gap analysis).

A systems approach

The model by Nadler and Tushman is used as a framework to structure thinking and improving analysis. It links environmental input factors to organizational components and outputs. It is an open systems model. Open systems perspective:

• Exchange information, material, and energy with environment
• System is the product of interrelated and interdependent parts, it is a complex set of interrelationships rather than a linear chain of cause-effect relationships
• System seeks equilibrium, once in equilibrium it only changes if energy is applied
• Individuals have different views of the system’s function and purpose
• Things that occur within and/or to open systems should not be viewed in isolation

Open systems perspective helps to identify areas of misalignment and risk and to develop a rich understanding of the current condition and the possible alternatives and actions. Creative destruction: disrupt to sow seeds for removal.

Nadler and Tushman congruence model

This model focuses on the fit between different components of an organization and its invironment.

Input:

• Environment (PEST)
• Resources
• History/culture
• Strategy (as an arrow from the above three to transformation process)

Transformation process

• Tasks (key success factors)
• Formal organization (systems and structures)
• Informal organization (relationships that can facilitate and block change)
• People (knowledge, skills, abilities)

Output:

• Systems
• Unit/group
• Individual

Three critical assumptions are made in this model:

• System is dynamic (diagnosis will change over time)
• Fit is significant in diagnosing performance
• The better the fit, the more effective the organization
  • It is easiest to picture fit in logical terms but change agents need to consider it in terms of the informal system and the key individuals in the change process

Not everybody agrees that strategy should drive structure. Also, the need for change may not always be identified by looking at the environment. Some argue that in the long run, tight congruence in a stable environment leads to ingrained patterns. These patterns can be change resistance and ineffective when the environment changes. Also, too much emphasis on congruence potentially could have an adverse or dampening effort on organizational change.

Dynamic organizational systems – Sterman’s systems dynamics model

Nadler and Tushman’s model focuses more on alignment and this model more on the interplay of dynamic forces of the environment, managerial decisions, and actions of others. Sterman says that managers often have a rational causative view to identify a gap between what is and what is desired. Then they make a decision and take action. They may fail to anticipate the side effects of their decisions and competitive responses. So he says that managers should be aware of the complexity involved and the challenges involved in developing alignments. Managers should not think in static and linear ways, rather in complex and nonlinear ways. He builds on the work of Argyris and Schon on double loop and triple loop learning. Also consistent with Senge on organizational learning, innovation and change. Page 76 provides a picture of the model.

Individual vs organizational analysis

Quinn’s competing values model: bridges individual and organizational levels and encourages change agents to think about the interaction between the systems at both levels. There are two dimensions in the model: internal vs external focus and control vs flexibility, four outcomes:

• Human resources view (flexible, internal focus)
  • How to work with individuals and groups
  • Teamwork and HR development
  • Mentor and group facilitator roles
• Internal processes view (control, internal focus)
  • How to understand and control the work unit
  • Consolidation and continuity
  • Internal monitor and coordinator roles
• Open systems view (flexible, external focus)
  • How to use power and manage change
  • Challenge of change
  • Innovator (understanding of change, ability to think creatively, development of risk taking) and broker (development and maintenance of power and influence base, ability to negotiate solutions, skills of persuation and coalition building) roles
• Rational economic view (control, external focus)
  • How to stimulate individual and collective achievement
  • Maximization of output
  • Producer and director roles

Individuals tend to operate from one quadrant more than from the others. But all four should be attended to know what is going on internally while understanding the external environment. The model can be used to describe the culture, the dominant tasks, the focus of the reward systems or a needed shift in tasks emphasis or in types of people that are needed. So it bridges individual and organizational levels of analysis and helps understanding competing value paradigms. But it suggests a static situation.

Organizational change over time

Greiner’s model of growth provides a framework for predicting the stages of change over time as organizations grow from entrepreneurial to multidivisional/multinational. Greiner thinks organizations experience periods of relative stability, punctuated by radical transformations. During the former periods they are in equilibrium and evolutionary changes are done. During the crises, revolutionary changes take place. The phases:

• Phase 1
  • Growth through creativity
  • Crisis of leadership
• Phase 2
  • Growth through direction
  • Crisis of autonomy
• Phase 3
  • Growth through delegation
  • Crisis of control
• Phase 4
  • Growth through coordination
  • Crisis of red tape
• Phase 5
  • Growth through collaboration
  • Crisis of ???

Managers will change their views on how to operate incrementally. Pressure increases due to increasing incongruence until a crisis occurs. The model is prescriptive in that organizations must pass through these crises in order to grow. It is logic and simple but suggestively prescriptive while not all organizations develop this way. The model reinforces the notion of competing values that mangers must keep in the right state of dynamic tension. For instance from the crisis of autonomy to growth through delegation there should be a shift in values and perspectives from control to flexibility (Quinn).

Organizations as complex entities

Complexity theory says that change agents should move beyond gap analysis to recognize the importance of interdependence and interrelationships. It could be that managers have no control. Stacey identifies propositions of complexity theory:

• Organizations are webs of nonlinear feedback loops connected with other individuals and organizations by webs of nonlinear feedback loops
• These feedback systems can operate in stable and unstable states of equilibrium until chaos ensues
• Organizations are inherently paradoxical. Pulled toward stability by forces for integration and control, security, certainty, and environmental adaptation. Pulled toward instability by forces for division, innovation and isolation.
• Giving into forces for stability means becoming ossified. Giving into forces for instability means becoming disintegrated.
• Short-run dynamics are irregular cycles and discontinuous trends but long-term trends are identifiable
• Successful organizations face unknowable specific futures
• Agents can’t control the long-term future, can only act in relation to the short term
• Long-term development is a spontaneous self-organizing process (political interaction, learning in groups)
• Managers create and come to know the environments and long-term futures through that process.
   

The job of the change leader is crating conditions and ground rules allowing innovation and efficiency to emerge through the encouragement of the interactions and relationships of others. Vision and strategy are still valued because they provide a sense of the hoped for direction.

It seems very different from the gap analysis view adopted by the book but the book also recognizes the environment as uncertain and complex and that organizations should adapt. Complex and uncertain futures can be made more understandable and predictable of we look at data in nonlinear and linear terms, assess different perspectives and consider different scenarios and approaches.

Chapter D: Building the need for change

The need for change is often vague and appropriate action is unclear. People may because complacent and cynical about warnings due to past experiences. Also, when leaders change too often, they are not taken seriously anymore. Change agents should show that the need for change is real and important, then people can be unfrozen from past patterns. Often, change fails due to confusion and disagreement about:

• Why there is a need for change
• What needs to be changed

People often blame others for not understanding the situation. Due to different perspectives, people see and experience differently and see different causes and beliefs. This chapter addresses the WHY change.

Develop knowledge for the need for change

People may even feel that some things are not right but only until the need for change is framed, understood and believed they will undertake action. The following questions help:

• What is the need for change and the important dimensions and issues that underpin it?
• What are the perspectives of internal and external stakeholders?
• Can different perspectives be integrated to get a collaborative solution?
• Is the message concerning the need for change developed and communicated so that the readiness for and willingness to change is higher?

The steps that managers should take:

• Seek out and make sense of external data
  • Disciplined approach
  • Tangible and intangible data
• Seek out and make sense of perspectives of other stakeholders
  • Internal and external
  • Pay attention to bottom-up thoughts
• Seek out and make sense of internal data
  • Hard, numerical data
  • Soft, intuitive information
• Seek out and assess one’s personal concerns and perspectives

Organization’s readiness for change

Dissatisfaction with the status quo helps to make the organization ready for change but is not enough. The readiness depends on previous organizational experiences, managerial support, openness to change, exposure to disquieting information about the status quo, and the systems promoting or blocking change in the organizations.

Past success can lead to active inertia (doing more of the same), wrong environmental scanning and more. If change failed before, employees may become disillusioned and cynical. Support of top management is important but they might disagree and send ambiguous messages.

Judge and Douglas identified eight dimensions related to change readiness:

• Capable champions
• Involved middle management
• Trustworthy leadership
• Innovative culture
• Systems thinking
• Accountable culture
• Trusting followers
• Effective communications

Change readiness should identify factors promoting and inhibiting change readiness.

Creating awareness of the need for change

Once leaders understand the need for change they can take the following approaches to increase the awareness of the need throughout the organization:

• Create a crisis or communicate that crisis is coming (shock treatment)
  • Extension: burn or sink your boats approach: no going back
• Develop a vision that creates dissatisfaction with the status quo
  • Transformational vision based on higher-order values
• Find a champion of change leader who builds awareness and articulates a change vision (transformational leadership)
• Focus on common or superordinate goals (focus on what can be gained)
• Create dissatisfaction with the status quo through education, information, and exposure to superior practices and processes of others

The history and culture of an organization can block people from recognizing the need for change. Cultural artifacts are the stories, rituals, and symbols that influence employees’ attitudes and beliefs. They help defining and operationalizing the culture. Also, senior management may withhold critical information to preserve cohesions and commitment to a course of action. Groupthink should be prevented by:

• Letting leader play impartial role, asking information and input before expressing and opinion
• Actively seek dissenting views
• Discuss costs, benefits, and risks of diverse alternatives
• Take a methodical decision making process at the beginning
• Open climate for discussion and decision making, ask information from experts
• Take time for reflection and do not think silence is consent

Creating a powerful vision for change

A change vision clarifies the direction and purpose of change and action. Visions can strengthen or transform existing cultures. They define a future state and are thus essential in gap analysis. Storytelling is one technique to communicate a vision the vision should be connected to the mission (fundamental purpose) and shows core philosophy and values. A good vision can mobilize and motivate people and have a positive impact on performance and attitudes. Jick shows three methods for creating a vision:

• Leader-developed: developed in isolation and then announced and shared
• Leader-senior team developed vision: members senior team involved
• Bottom-up visioning: employee-centric, time consuming and difficult but valuable because it aligns the vision of organizational members with the overall vision for change

Jick: good change visions are:

• Memorable
• Exciting and inspiring
• Clear, concise, easily understood
• Challenging
• Excellence centered
• Stable but flexible
• Implementable and tangible

Lipton says effective vision statements should have three key messages:

• Mission or purpose
• Strategy for achieving the mission
• Elements of the culture that are necessary to achieve the mission and support the strategy

Organizations should watch to be trapped by the existing vision. Too narrow definitions, failure to challenge the accepted boundaries and inability to understand the context may leave to inadequate visions. If the vision is clear, enactment by employees is necessary.

Difference between organizational vision and change vision

The focus of the vision shifts depending upon the level and position of the change leader. The message of change leaders should appeal to particular groups of people critical to the change. There are often tensions between the changes proposed and what other parts of the organization are attempting to accomplish. A balance should be stroke between a tight clear vision and a broad vision to gain a broad base of support for change. Common interests are important here.

Chapter E: Navigating change through formal structures and systems

Systems and structures shape the behavior of organizational members. They play a role in coordination, communication and control roles.

Formal structure: how tasks are formally divided, grouped, and coordinated. The organization chart is the common document of organizational design. Formal systems include planned routines and processes which set out how things are supposed to be done, the rules and procedures, the collection and dissemination of information, rewards, etc.

Change leaders should understand how existing structures and systems influence outcomes and how they facilitate or block change. Then, that system and structural awareness should be used to promote and enact change.

Making sense of organizational structures and systems

Some common structural elements:

• Differentiation: degree to which tasks are subdivided into separate jobs or tasks
• Integration: coordination of the various tasks or jobs into a department or group
• Chain of command: reporting architecture in a hierarchical organization
• Span of control: number of individuals who report to one manager
• Centralization vs decentralization: how and where decision making is distributed
• Formal vs informal: degree to which organizational charts exist, are codified and followed.

Impact of uncertainty and complexity on formal structures and systems

Structural alignment can also be sought based on reflection on the environment, Thompson came up with the impact of uncertainty and complexity on structure. Organizations can be classified as (see table 5.1 page 150):

• Mechanistic:
  • Formal hierarchies
  • Centralized decision making
  • Clear division of labor
  • Rules and procedures clear, employees follow them
  • Work is specialized and routine
• Organic:
  • Flexible
  • Fewer rules and procedures
  • Less reliance on hierarchy of authority for centralized decision making
  • Flexible structure
  • Jobs less specialized
  • Informal communication, lateral communications more accepted

The one is not better than the other, just more suitable for a certain environment.

Formal structures and systems from an information perspective

A third way to understand structure is to assess how they formally manage information. The right information should be in the hands of the right individuals on time. Gailbraith came up with the information processing view of organizations. There should be a fit between the information processing requirements and its capacity to process information through its structural design. The more uncertainty, the more information must be processed between individuals. Figure 5.2 on page 151 shows Gailbraith’s work. The more uncertainty the less effective traditional vertical information strategies. The need for information processing should be reduced (ad slack resources, create self-contained tasks) or the capacity to process information increased (use the hierarchy, increase horizontal communication capacity).

There should be fit between the strategy, the information processing requirements and the information processing capacity.

Putting the structural concepts to work

Aligning systems and structures with the environment

A mechanistic approach is more appropriate when cost strategies in a traditional manufacturing context are critical. An organic approach when innovation is key. So there should be alignment with the environment. Nadler and Tushman would say there should be congruence between the outside world, the strategy and how the inside world is formally organized. Even in mechanistic organizations there may be differences between departments (R&D more dynamic and uncertain).

Structural changes to handle increased uncertainty

Increasing organizational effectiveness starts by looking at how best to break things down and allocate the work. If that has been done already, one can look at how to integrate components. The vertical and horizontal information linkage strategies of Galbraith can help to achieve the latter. Wetzel and Buch say that firms are more comfortable with increasing both differentiation and integrating mechanisms than with other approaches and tend to overuse these strategies. They think a reduction in the amount of structural differentiation is useful (flattened structure, multiskilled workers, automated processes, self-managed teams). Then congruent interventions are easier. It is a way to reduce information processing linkage need.

Making formal structure and system choices

Bolman and Deal say that all organizational designs have structural dilemmas:

• Differentiation versus integration
• Gaps versus overlaps

Wishnevsky and Damanpour found that continuing poor performance was likely to produce strategic change and that that was likely to produce structural change. Several types of reporting structures can be used at the team or departmental level (brainstorming to get ideas, authority at the top for implementation).

Using structures and systems to influence the approval and implementation of change

Using formal structures and system to advance change

Formal structures can be leveraged to advance change, even without fighting with employees. They can be used to facilitate understanding, build support, and legitimize change among those with doubts.

Using systems and structures to obtain formal approval of a change project

The change leader should understand when and how to access and use existing systems. The formal approval processes are often well defined in larger organizations. Timing is important; approval is less likely if the organization is in the middle of the budget cycle and budgets have already  been allocated. Before, we discussed two dimensions of change: the magnitude (size) and the proactive-reactive initiation dimension.

• Incremental: fewer resources needed and lower levels of organization approval
• Bigger: formal approval processes more important, support should be sought
• Exceptions: areas with safety and regulatory compliance implications (significant change decisions delegated to frontline staff to be able to respond quickly)

Using systems to enhance the prospects for approval

Factors to consider can be found in figure 5.3 on page 161. If formal approval is required, the change agent should show that the change is aligned with the vision and strategy and has more benefits than costs. If there is time, the leader can frame and introduce the change so that comfort with the proposal increases. It there is no time, attention should be focused and motivation generated to proceed. Acceptance sometimes increases if the ones with resistance believe a rigorous review process is in place for assessment of change. Formal approval systems can increase that perception.

Ways around the approval process

Mastering the formal approval process

Howell and Higgins identified 3 ways of dealing with the formal approval process:

• Rational approach: brought forward, reviewed, rejected or accepted
  • Essence: decision makers decide whether they trust the judgment of the change leaders and the skills of the change team
  • Ensures that decision making is thorough and reasoned
• Creeping commitment
  • “Foot-in-the-door-approach”
  • Or less bad; coalition building
  • Key players should be understood
  • Risks: time, more complex, political
• Bypassing the formal approval process
  • But keep people such as supervisors in the loop
  • Renegade process: easier to gain forgiveness than permission

Aligning strategically, starting small, and “morphing” tactics

Chance acceptance is higher if can be shown that the project is better than alternatives and aligns with the mission, vision and strategy. Also if the change is incremental, not disruptive and has higher benefits than costs, it is more likely to be accepted.  The perceived risk can be reduced by breaking the change down into smaller stages. Then the incongruence with existing systems is smaller and the change leader can learn and modify systems and structures in ways that look incremental but have significant long-term effects. Morphing means a slow and steady transformation of the organization over time.

The interaction of structures and systems with change during implementation

Structures and systems may be an element of change in that the change agent has to work with them or they may be an aspect of the actual change. They can present challenged or be used to facilitate change and to assess that their nature and impact should be assessed.

Using structures and systems to facilitate the acceptance of change

Change agents should not assume that approval leads to acceptance. They should be able to understand the view of the recipients. If the recipients do not accept the change they will not modify their behavior. Acceptance may come after compliance. If new systems are implemented, users may accept them after that they have been using them for a while. Acceptance and commitment can be gained through:

• Reward systems
• Clarity of purpose and direction
• Employee involvement
• Rewards for desired behavior
• Passage of time

Beware of making assumptions!

Adaption to change is also easier if the organization is able to learn. The latter can be done by several things, listed on page 171 and 172. Organizational structures influence the learning opportunities. Flexibility and adaptability is needed to deal with complex and turbulent environments. The past can be learned from and systems and structures can be evolved to help achieve success in the future. Acquiring knowledge and spreading it into the organization is good.

Chapter F: Navigating the informal organization: power and culture

There are always different players with different perspectives and needs, if they are understood implementation is easier. How change leaders deal with the organizational culture affects the speed and nature of change. Also the individual and organizational history matters.

Power dynamics

Everyone responds to power and authority. The ones involved often have options that the change leader is unaware of or vaguely aware of that can have a profound impact. When concerns are raised, change managers should pay attention. If people feel like they are not listened to they may shift tactics and gain support for their perspective. Power is also a resource of the change agent, which he should assess in terms of what type of power he has and what the sources are, etc. Power can be real (knowledge, personality, integrity, ability to reward and punish) but the perception of power is just as important. Definition of power:

“The capacity to influence others to accept one’s ideas or plans”.

Three types of power:

• Positional power
• Knowledge power
  • Expert power
  • Information power
  • Connection power
• Personality power

Departments can also have power, depending on:

• Centrality (to survival and strategy)
• Ability to cope with environmental uncertainty
• Low substitutability

Hardy defined three dimensions of power:

• Resource power (similar to individual power)
• Process power (control over formal areas)
• Meaning power (ability to define meaning of things; “we do things that way”)

Using power is often political and involves the development of coalitions, dealing with the personality of the decision maker and using the network to obtain information.

Tactics managers use to influence superiors, from used most to used least:

• Using and giving reasons
• Developing coalitions
• Friendliness
• Bargaining
• Being assertive
• Referring to higher authority

Tactic managers use to influence subordinates, from used most to used least:

• Using and giving reasons
• Being assertive
• Friendliness
• Developing coalitions
• Bargaining
• Referring to higher authority
• Applying sanctions

Understanding the perceptions of change

Individuals will adopt or accept change only when they think that their perceived personal benefits are greater than the perceived costs of change. In a formula:

Perceived benefits of change > perceived cost of change

That observation highlights that:

• Agents have to deal with the reality of change and its perceptions
• The costs are often more evident than the benefits

So the formula becomes:

Perception of dissatisfaction with the status quo x perception of the benefits of change x perception of the probability of success > perceived cost of change.

So the dissatisfaction with the status quo should be increased by providing data that other option are better, the overall benefits are worth the effort and by showing that success is likely. Early successes are important. There is a difference between costs and benefits to the organization and those to the individuals. The individual level is often missed by change agents. Traditions, interpersonal bonds, shared values, goals, and norms are to be considered, especially if there are shifts in roles and responsibilities and thus a shift in power.

Identifying the organizational dynamics at play

In organizational change, the key is to understand the forces and how they respond to shifts in pressure.

Homeostasis means a system in dynamic but relatively stable balance that tends to return to its original conditions.

Two tools are useful in understanding forces:

• Force field analysis: identifying and analyzing the driving and restraining forces impacting an organization’s objectives.
• Internal and external sources
• External factors often give rise to internal pressures, they include benchmark data and market forces, but they can also be opportunities.
• Steps in force field analysis:
  • 1: identify forces and estimate their strength (immediate and long-term forces)
  • 2: Identify how they can be altered to produce a better climate for change
  • 3: Look beyond the immediate impact and identify ways to increase support and reduce resistance. For instance, financial rewards may reduce resistance in the short term but commitment may be reduced and unethical behavior increased.
• Strebel shows the force field analysis graphically like on page 194 so that four areas of change are shown:
• Constant change (pressure high and resistance low)
• High resistance (no change) (pressure low and resistance strong)
• Breakpoint change (pressure high and resistance strong)
• Sporadic/flip-flop change (pressure low and resistance weak)
• Stakeholder analysis: identifying the key individuals or groups who can influence or who are impacted by the proposed change, then identifying how they can made more positive towards the change.
• Who has the authority to say yes/no to the change?
• Which areas/departments will be influence by the change? Who leads and has influence there?
• Who has to change their behavior to make change successful?
• Who will be helpful and who will be disruptive?
• Savage developed a model with two dimensions: potential for threat and potential for cooperation
• High threat and high cooperation: collaborative approach
• Low threat and high cooperation: strategy of involvement
• High threat and low cooperation: defense
• Low threat and low cooperation: monitored to ensure assessment is correct

These two (force field and stakeholder analysis) can be integrated by letting stakeholders be forces that need to be considered, and the analysis will then help to deal with them as forces.

One can also draw a stakeholder map with wants and needs of the stakeholders, their responses to change, how they are linked, their sources and power and the actual influence patterns.

Cross and Prusak argue organizational members can be:

• Central connectors: link with one another
• Boundary spanners: connect formal and/or informal networks to other parts of the organization
• Information brokers: link various subgroups
• Peripheral specialists: have specialized expertise in the network

The AIDA (awareness, interest, desire for action, take action) continuum can be used to assess where the stakeholders are and what change tools should be used. To create awareness, one-on-one communication to organizationwide publicity counts. Articles in a newspaper, forums or open session and addresses by senior executives can inform and generate interest in a topic. Benchmark data can convince and a pilot project can be used to try it out. The tactic to use depends on the situation, the culture and the previous experiences with change. The general rule is that change leaders should shift from low-intensity forms of communication to higher intensity forms.

There are also several individual predispositions to change:

• Innovators/early adopters: seek change and want variety
• Early majority: are receptive to change but are not first adopters
• Late majority: follow others once the change has been introduced and tried
• Laggards/late adopters: are reluctant to change and do so only after many others have adopted
• Non-adopters: will not change or adapt under most circumstances

The innovators and early adopters need to be worked with. The willingness to change depends on the personality but also on the degree of understanding and commitment. Floyd and Wooldridge differentiate:

• High positive commitment, high understanding: strong consensus
• High, positive commitment, low understanding: blind devotion
• Low, positive commitment, high understanding: informed skeptics
• Low, positive commitment, low understanding: weak consensus
• Negative commitment to change, high understanding: informed opponents
• Negative commitment to change, low understanding: fanatical opponents

All first four may be needed, not only the first one. Sometimes the change is a strategic secret and people need to accept it and be committed without asking questions.