1. Organization Development
a. Concept
b. Values
c. Assumptions
2. Organizational Change
a. Concept of planned change
b. Internal and External Factors of Change
c. Skills of Change Agent
d. Resistance to Change
3. Models of Change
a. A Three Stage Model of the Change Process (Kurt Lewin and others)
b. Burke-Litwin Model of Organizational Change
c. Porras-Robertson Model of Organizational Change
4. Process of Organization Development
a. Understanding the organizational issues
b. Diagnosing the problems
c. Feedback on diagnostic information
5. Organizational Development Interventions
a. Team Interventions
b. Inter-group and third part interventions
c. Comprehensive OD Interventions
d. Structural Intervention
6. Key issues in Organization Development
a. Consultant-client Relationship
b. Power and Politics
c. Leadership
Suggested Reading
A.Thornhill et al., Managing Change, Prentice Hall.
Anderson, A.H. and Barker D., Effective Enterprise and Change Management, Blackwell Publishers Ltd, Oxford.
Bernard Burns, Managing Change, Pitman Publishers.
Cummings G. Thomas & Christopher G. Worley, Organization Development and Change, Thomson Southwestern
French, W.E. and Bell, C.H., Organisation Development, Prentice-Hall of India, New Delhi.
Khandwalla, P.N., Organisation Design for Excellence, Tata McGraw Hill, New Delhi.
Luthans, F., Organisational Behaviour, McGraw Hill, New York.
Peter Drucker, Managing in a Time of Great Change
Wednesday, August 5, 2020
Monday, October 18, 2010
ODC Handout # 4
Organizational Diagnosis
Organizational diagnosis refers to continuous collection of data about the total system, its sub-units, its processes and its culture.
We try to obtain answers to the following questions while engaging in organizational diagnosis:
What are the strengths of the organization?
What are the problem areas?
What are its unrealized opportunities?
Is there a discrepancy between the vision of the desired future and current state of affairs?
A pioneering OD expert Beckhard has outlined the importance of organizational diagnosis as under:
The development of a strategy for systematic improvement of an organization demands an examination of the present state of things. Such an analysis usually looks at two broad areas. One is a diagnosis of the various subsystems that make up the total organization. These subsystems may be natural teams such as top management, the production department, or a research group; or they may be levels such as top management, middle management or the workforce. The second area of diagnosis is the organization processes that are occurring. These include decision-making processes, communication patterns, and styles, relationships between interfacing groups, the management of conflict, the setting of goals, and planning methods.
Diagnostic Tools
Questionnaire surveys: This tool is used in large organizations to assess the total organization, large complex and heterogeneous subsystems, small simple and homogeneous subsystems, goal setting patterns, and superior-subordinate relationships
Interviews: This tool is very effective in assessing performance related problems, culture and climate, competency, conflict resolution patterns, leadership styles, visioning process, organizational learning etc.
Observations: This tool is effective in assessing decision-making patterns, organizational structure, culture and climate, roles, role behaviour etc.
Formal Group Meetings for Self Diagnosis: This tool is effective in assessing organizational culture, climate, attitudes, inter-group and intra-group relations etc.
Confrontation Meetings: This is an effective tool to assess how two groups perceive each other, collaborate with each other, compete with each other and how far such interactions affect performance of the group members.
Role Analysis Technique: This is an effective tool to find out team dysfucntions.
Organizational Mirroring: This is an effective tool to assess how two groups perceive each other, collaborate with each other, compete with each other and how far such interactions affect performance of the group members.
Third-party observation: This is an effective tool to assess how two groups perceive each other, collaborate with each other, compete with each other and how far such interactions affect performance of the group members.
Diagnostic Models
Six Box Model of Organizational Diagnosis
The six-box model is a framework developed by the American analyst Marvin Weisbord to assess the functioning of organizations. It is a generic framework and is intended for use across a wide variety of organizations. It is based mainly on the techniques and assumptions of the field of organizational development.
The model represents a particular way of looking at organizational structure and design. It gives attention to issues such as planning, incentives and rewards, the role of support functions such as personnel, internal competitions among organizational units, standards for remuneration, partnerships, hierarchies and the delegation of authority, organizational control, accountability and performance assessment. The model also follows the basic 'systems' approach to organizational functioning including the well-known inputs and 'outputs' categories.
The six-box model is comprised of the following components (boxes):
Purposes: What 'businesses' are we in?
Structure: How do we divide up the work?
Relationships: How do we manage conflict (coordinate) among people? With our technologies?
Rewards: Is there an incentive for doing all that needs doing?
Leadership: Is someone keeping the boxes in balance?
Helpful mechanisms: Have we adequate coordinating technologies?
According to Weisbord, the proponent of Six Box model, the consultant must attend to both the formal and informal aspect of each box. The formal system defines the official ways things are supposed to happen; the informal system is the ways things actually happen. Weisbord recommends a thorough diagnosis, looking at multiple boxes, before choosing any intervention.
Organizational diagnosis refers to continuous collection of data about the total system, its sub-units, its processes and its culture.
We try to obtain answers to the following questions while engaging in organizational diagnosis:
What are the strengths of the organization?
What are the problem areas?
What are its unrealized opportunities?
Is there a discrepancy between the vision of the desired future and current state of affairs?
A pioneering OD expert Beckhard has outlined the importance of organizational diagnosis as under:
The development of a strategy for systematic improvement of an organization demands an examination of the present state of things. Such an analysis usually looks at two broad areas. One is a diagnosis of the various subsystems that make up the total organization. These subsystems may be natural teams such as top management, the production department, or a research group; or they may be levels such as top management, middle management or the workforce. The second area of diagnosis is the organization processes that are occurring. These include decision-making processes, communication patterns, and styles, relationships between interfacing groups, the management of conflict, the setting of goals, and planning methods.
Diagnostic Tools
Questionnaire surveys: This tool is used in large organizations to assess the total organization, large complex and heterogeneous subsystems, small simple and homogeneous subsystems, goal setting patterns, and superior-subordinate relationships
Interviews: This tool is very effective in assessing performance related problems, culture and climate, competency, conflict resolution patterns, leadership styles, visioning process, organizational learning etc.
Observations: This tool is effective in assessing decision-making patterns, organizational structure, culture and climate, roles, role behaviour etc.
Formal Group Meetings for Self Diagnosis: This tool is effective in assessing organizational culture, climate, attitudes, inter-group and intra-group relations etc.
Confrontation Meetings: This is an effective tool to assess how two groups perceive each other, collaborate with each other, compete with each other and how far such interactions affect performance of the group members.
Role Analysis Technique: This is an effective tool to find out team dysfucntions.
Organizational Mirroring: This is an effective tool to assess how two groups perceive each other, collaborate with each other, compete with each other and how far such interactions affect performance of the group members.
Third-party observation: This is an effective tool to assess how two groups perceive each other, collaborate with each other, compete with each other and how far such interactions affect performance of the group members.
Diagnostic Models
Six Box Model of Organizational Diagnosis
The six-box model is a framework developed by the American analyst Marvin Weisbord to assess the functioning of organizations. It is a generic framework and is intended for use across a wide variety of organizations. It is based mainly on the techniques and assumptions of the field of organizational development.
The model represents a particular way of looking at organizational structure and design. It gives attention to issues such as planning, incentives and rewards, the role of support functions such as personnel, internal competitions among organizational units, standards for remuneration, partnerships, hierarchies and the delegation of authority, organizational control, accountability and performance assessment. The model also follows the basic 'systems' approach to organizational functioning including the well-known inputs and 'outputs' categories.
The six-box model is comprised of the following components (boxes):
Purposes: What 'businesses' are we in?
Structure: How do we divide up the work?
Relationships: How do we manage conflict (coordinate) among people? With our technologies?
Rewards: Is there an incentive for doing all that needs doing?
Leadership: Is someone keeping the boxes in balance?
Helpful mechanisms: Have we adequate coordinating technologies?
According to Weisbord, the proponent of Six Box model, the consultant must attend to both the formal and informal aspect of each box. The formal system defines the official ways things are supposed to happen; the informal system is the ways things actually happen. Weisbord recommends a thorough diagnosis, looking at multiple boxes, before choosing any intervention.
McKinsye’s 7-S Framework
How do you go about analyzing how well your organization is positioned to achieve its intended objective? This is a question that has been asked for many years, and there are many different answers. Some approaches look at internal factors, others look at external ones, some combine these perspectives, and others look for congruence between various aspects of the organization being studied. Ultimately, the issue comes down to which factors to study.While some models of organizational effectiveness go in and out of fashion, one that has persisted is the McKinsey 7S framework. Developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm, the basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful.
The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you:
Improve the performance of a company.
Examine the likely effects of future changes within a company.
Align departments and processes during a merger or acquisition.
Determine how best to implement a proposed strategy.
The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements
Hard Elements: Strategy, Structure, System
Soft Elements: Shared values, Skills, Style, Staff
"Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.
"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.
Let's look at each of the elements specifically:
Strategy: the plan devised to maintain and build competitive advantage over the competition.
Structure: the way the organization is structured and who reports to whom.
Systems: the daily activities and procedures that staff members engage in to get the job done.
Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the employees working for the company.
One can use the 7S model to help analyze the current situation (Point A), a proposed future situation (Point B) and to identify gaps and inconsistencies between them. It's then a question of adjusting and tuning the elements of the 7S model to ensure that your organization works effectively and well once you reach the desired endpoint.
7S Checklist QuestionsHere are some of the questions that you'll need to explore to help you understand your situation in terms of the 7S framework. Use them to analyze your current (Point A) situation first, and then repeat the exercise for your proposed situation (Point B).Strategy:
What is our strategy?
How do we intend to achieve our objectives?
How do we deal with competitive pressure?
How are changes in customer demands dealt with?
How is strategy adjusted for environmental issues?
Structure:
How is the company/team divided?
What is the hierarchy?
How do the various departments coordinate activities?
How do the team members organize and align themselves?
Is decision making and controlling centralized or decentralized? Is this as it should be, given what we're doing?
Where are the lines of communication? Explicit and implicit?
Systems:
What are the main systems that run the organization? Consider financial and HR systems as well as communications and document storage.
Where are the controls and how are they monitored and evaluated?
What internal rules and processes does the team use to keep on track?
Shared Values:
What are the core values?
What is the corporate/team culture?
How strong are the values?
What are the fundamental values that the company/team was built on?
Style:
How participative is the management/leadership style?
How effective is that leadership?
Do employees/team members tend to be competitive or cooperative?
Are there real teams functioning within the organization or are they just nominal groups?
Staff:
What positions or specializations are represented within the team?
What positions need to be filled?
Are there gaps in required competencies?
Skills:
What are the strongest skills represented within the company/team?
Are there any skills gaps?
What is the company/team known for doing well?
Do the current employees/team members have the ability to do the job?
How are skills monitored and assessed?
Wednesday, August 4, 2010
Introduction to Organization Development
What is Organization Development?
"Organization Development is an effort – planned, organization-wide and managed from the top – to increase organizational effectiveness and health through planned interventions in the organization’s processes, using behavioural science knowledge".– Richard Beckhard
"Organization Development is a systemwide process of data collection, diagnosis, action planning, intervention and evaluation aimed at
i. enhancing congruence among organizational structure, process, strategy, people and culture;
ii. developing new and creative organizational solutions;
iii. developing the organization's self-renewing capacity.
It occurs through the collaboration of organizational members working with a change agent using behavioural science knowledge". –Michael Beer
"Organization Developemt refers to a long-range effort to improve an organization's problem solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioural scientist consultants or change agents as they are sometimes called" –Wendell French
Value system of Organization Developemt
The basic value underlying all organization development theory and practice is that of choice. Through focused attention, and through the collection and feedback of relevant data to relevant people, more choices become available and hence better decisions are made.
More specifically, the value system of Organization Development revolves around humanistic, optimistic and democratic principles.
According to a survey conducted by the American Society of Training and Development, the managers ranked the values absolutely necessary for success of any Organization Developemt intervention in terms of importance in the following order:
Empowerment
Openness in communication
Ownership of process and outcome
Collaboration
Continuous learning
Assumptions in Organization Development:
The basic building blocks of an organization are groups (teams). Therefore the basic units of change are groups and not individuals.
An always relevant change goal is the reduction of inappropriate competition between parts of the organization and the development of a more collaborative condition.
Decision making in a healthy organization is located where the information sources are, rather than in a particular role or level of hierarchy.
Organizations, subunits, of organizations and individuals continuously manage their affairs against goals. Controls are interim measures and not the managerial strategy.
One goal of a healthy organization is to develop generally open communication, mutual trust, and confidence between and across levels.
“People support, what they help create”. People affected by change must be allowed active participation and a sense of ownership in planning and conduct of change.
According to French & Bell, following assumptions hold good in Organization Developemt:
Most individuals have drives towards personal growth
Most people desire to make and are capable of making, a higher contribution to the attainment of organizational goals than most organizational environment will permit.
The most psychologically relevant reference group for most people is the work-group
Most people wish to be accepted and to interact cooperatively with at least one small reference group and usually with more than one group.
The formal leader cannot perform all the leadership and maintenance functions in all all circumstances at all times; hence group members must assist each other with effective leadership and member behaviour
Suppressed feelings and attitudes adversely affect problem solving, personal growth and job satisfaction.
The level of inter-personal trust, support, and cooperation is much lower in many groups and organizations than is either necessary or desirable.
The solution to many attitudinal and motivational problems are transactional.
The key movers in an OD effort need to have a relatively long range time perspective
Improved performance stemming from OD efforts needs to be sustained by appropriate changes in appraisal, training, staffing, tasks, and communication sub-systems.
Tuesday, August 3, 2010
Organizational Change
"Change is the only constant in the universe". --Heraclitus, 500 BC
What is change?
Change implies the following:
To make or become different.
Dissatisfaction with the old and belief in the new.
A qualitatively different way of perceiving, thinking, and behaving to improve over the past and present.
Continuity without change leads to stagnation, and change without continuity leads to conflicts.
The rate of change is faster than our ability to comprehend and cope with it.
What is organizational change?
Organizational change implies changes in the following:
Goals, Vision and Mission
Boundaries
Pattern of activities/administrative practices
Assumptions, values and belief
Culture
Structure
"Organizational change consists of goal-oriented and to a degree, pre-planned actions, the final result of which can be, more or less, clearly formulated in advance". --Van der Vlist
What is planned change?
"Planned change is a conscious, deliberate and collaborative effort to improve the operation of a system -whether it be a self-system, a social system, or a cultural system -through the utilization of scientific knowledge". --Bennis, Benne & Chin.
"...conscious, deliberate and collaborative effort to improve the operation of human system through utilization of valid knowledge". --Lippit
Elements of Planned Change
Outcome: goals, results, direction, improvement, renewal
History: causes, need, motive, context
Actors: External/Internal
Phases: steps, sequences
Communication: interaction, cultural aspects
Steering: monitoring, directing, guiding
Taxonomy of Change
Directional Change: Occurs under conditions of severe competitions, regulatory shifts in government policy, and unsuccessful business strategy.
Fundamental Change: Redefinition of current purpose or mission.
Operational Change: Improvement of quality, quantity, timeliness, unit cost of operations, in developing products and services.
Total Change: Developing a new vision, achieving a turnaround; a drastic surgery of the existing system.
Planned Change: Basically an operational change on a calculated basis as a response to internal and external demands e.g. downsizing.
Happened Change: Unpredictable. Occurs due to external causes over which one my have no control.
Transformational Change: Change involving the entire or a greater part of the organization due to a severe threat to its survival. The threat may occur from industrial discontinuities, shifts in a product’s life cycle or internal change e.g. union-management conflicts.
Revolutionary Change: Abrupt changes in the organization’s strategies and design.
Recreation: Tearing down the old structure and building a new one. A metamorphosis –becoming not just better but different.
Strategic Change: Change of all or most of the organization’s components.
Anticipatory Change: Changes carried out in expectation of an event. In anticipation of such change, the organization may tune-in (incremental change) or re-orient itself.
Reactive Change: Response to an event or series of events. Adaptive changes are limited t a sub-system or apart of the sub-system. Recreation can also be reactive but involves the whole organization.
[Source: Management of Organizational Changeby K Harigopal (Response Books)]
External Factors of Change
Political forces: Political environment is an importnat trigger for organizational change. Managers need to understand the political system of the country where they work. During the 1990s, an all-emcompassing phase of globalozation began throughout the world. Globalization in turn facilitated free markets. Governments began to withdraw their stake from the business enterprises. A number of countries de-regulated industries and thus created new opportunities for entrepreneurs. From regulators, the governments have become facilitators. As a result of new thrust given to free market and foreign direct investment, the companies have changed their strategies and they are growing by leaps and bounds.
Certain developments in the international political scene such as the transition of the East-European nations to democracy and market economy, opening up of the economy of South-East Asia, the collapse of the erstwhile Soviet Union, the Unification of Germany, the Gulf War, the crisis in Yugoslavia etc. have had profound impact on economy and business thereby triggering organizational change in a number of companies.
V Nilakant and S Ramnarayan in their seminal work Change Management (Response Books) mention that organizational change itself is a political process because it involves influencing, persuading, and negotiating with people in order to bring about a change in their mental models. The manager tries to ensure the support of the key and influential individuals in the organization while implementing any intervention programme.
Economic forces: The uncertainty about future trends in the economy is a major cause of change. For example, fluctuating interest rates, declining productivity, uncertainties arising from inflation or deflation, low capital investments, etc. have significant impact on industrial organizations.
Economic forces usually determine the direction an industrial organization takes. For instance, Infosys has changed its startegy from being a profitability-driven organization to growth-oriented one due to economic slowdown in the USA from where they got maximum number of clients. Accroding to a report published in Mint (New Delhi) on 29 July 2008, Infosys’ new approach is a consequence of what is happening in the market in which it operates. Excerpts from the news item:
By focusing on growth now, they (Infosys) will be looking to add new customers as their existing clients are cagey about increasing their budgets further. Infosys has said it will look to add new customers even as it expands its presence in businesses such as health care, pharmaceuticals, logistics, energy and utilities. Currently, much of its revenue comes from four major areas: financial services, telecommunications, manufacturing and retail. The company expects to grow revenue 6% in the three months to September as compared with the corresponding period in 2007.
The emphasis on growth could mean a further dip in Infosys’ operating profit margin, measured as operating profit (or earnings before interest, taxes, depreciation and amortization) expressed as a percentage of revenue. In the quarter ended June, the company’s operating profit margin was 30.4%, down 2 percentage points from the previous quarter in the wake of higher salaries and visa costs. Over the past two years, the company’s operating profit margin has stayed in the 30-32% range. Infosys’ push for growth reflects the new business reality in the software services business.
“Our existing customers are not growing and we need to find new growth engines,” Gopalakrishnan said. As part of growth strategy, the company plans to add new customers and newer service lines such as learning services and offering software as a service (where companies pay not for the entire solution but for what they use) by investing in solutions and intellectual property. The company is focusing on newer geographies such as West Asia, India, Latin America and South Africa.
Infosys, which serves customers such as British Telecom Plc. and Cummins Inc., derives about 63% of its revenues from North America, 27% from Europe and about 10% from the rest of the world including India. “We want to reduce our dependence on the US by growing operations in other geographies such as Europe and rest of the world,” Gopalakrishnan said, adding that the target revenue ratio from these three geographies for the company would be 40:40:20. He did not elaborate on the time it would take the company to achieve this revenue mix.
Infosys ended 2007-08 with revenue of Rs16,692 crore and a net profit of Rs4,659 crore. The company has issued a guidance of revenue up to Rs21,622 crore and earnings per share of up to Rs101.06 in 2008-09, a growth of 29.5% and 24%, respectively.
Shares of Infosys closed flat at Rs1,538.9 each on the Bombay Stock Exchange even as the exchange’s benchmark Sensex index closed marginally down at 14,349 points and the technology index ended marginally lower at 3,606.81 points. In the past year, shares of Infosys have touched a high of Rs2,140 each and a low of Rs1,212 each.
(Source: http://www.livemint.com/ 29 July, 2008)
Global Competition: Companies often change due to explict or implicit pressure from their competitors who might have better technologies, better systems, better products, better brand image, better HR practices, better aftersales service or better supply-chain. sometimes, the competitors might have advantages of being a first mover in the market or having a monoploy in raw material procurement (a captive mine for Steel companies, for example).
When the competition is sharp-edged, the companies have no choice but to usher in necessary changes. Nokia's strategic move to reengineer its Research and Development unit is a case in point as reported in Economic Times (New Delhi) on 6 August 2008. Excerpts from the news item:
In a major strategy change, handset major Nokia is re-engineering its research and development (R&D) model world-wide to tackle growing competition from unconventional sources of competition like Apple’s iphone and Google’s mobile phone platform Android. Taking a cue from companies like P&G, Nokia which till now largely carried out in-house innovation and R&D, is looking at external collaborations for product innovation. Nearly 50% of its new innovations are expected to come from external sources, a fact which is expected to help the company cut R&D costs significantly. It is expected to spare higher resources for product design and marketing, reduce time-to-market and improve return on investment (ROI), sources said. The Finnish giant’s move, which will be implemented throughout the company, is based on findings that breakthrough innovation sometimes originates from external sources. The company has also initiated a company-wide cultural change program, called `Living it working’ to directly involve and expose employees to consumers The major change in the way Nokia will now look at R&D has been caused by a slew of reasons. Not only are consumer preferences changing faster than ever, competition is emerging from hitherto unknown quarters. Computermaker Apple has swept the world with its iPhone, which now poses a huge challenge for Nokia. Google, which started as a search engine, has now launched a mobile phone platform called Android and the first handsets from this initiative are expected in the second half of this year.
(Source: The Economic Times, New Delhi, 6 August 2008)
There are other illustrations of completion-led organizational change as well. Facing stiff competition from the American automobile majors, the Japanese automobile companies such as Toyota, Nissan and Mitsubishi have been forced to relocate their manufacturing and assembly operations to South East Asia where the cost of labour is quite low. Simultaneously, they have established their plants all over Europe and America to get past the import restrictions. In this process, they have been able to retain their competitive edge in catering to the global automobile market.
Technological forces: The world is characterized by the dramatic technological shifts. The technological advancements, particularly in information and communication technologies, have revolutionized the workplaces and have helped create new range of products and services. For example, a super communication system is on the anvil in which about 20 Japanese companies will join a Motorola-led project to set up a sattelite cellular telephone system that can be used anywhere on the earth. The partner companies include Sony, Mitsubishi, Kyocera, among others. The estimated cost of the project is US$ 132 million or 15 billion Yen.
Globalization: Globalozation means integration of cpaital market, labour market and commodity market. This integration has touched almost all the aspects of business lifecycle. Hence, globalization is a unique trigger of change present everywhere.
Internal Factors of Change
System dynamics: An organization is made up of sub-systems, similar to that of the sub-personalities in human brain. The sub-personalities in the brain are in constant interaction with each other creating changes in human behaviour. Similarly, the sub-systems within an organization are in constant and dynamic interaction. The factors that influence the alignment and relationships are, for example, technology, internal politics, dominant groups, and formal and informal relationships within it.
Inadequacy of administrative process: An organization functions through a set of procedures, rules, and regulations. With changing times and the revision of organizational goals and objectives, some of the existing rules, regulations and procedures could be at variance with the demands of reality. To continue with such functionally autonomous processes can lead organizational in-effectiveness. Realization of their inadequacy induces change in the organization.
Individual/group expectations: The organization as an entity is a convergence f people, each one aiming to satisfy his/her needs and aspirations. In anthropological context, man is a social animal whose needs and desires keep changing. This creates differing expectations among individuals and groups as to the needs they intend to satisfy in the organizational context. Positive factors such as one’s ambition, need to achieve, capabilities, career growth, and negative aspects such as fear, insecurities, frustrations, etc operate as complex inter-individual and inter-group processes inducing change in n organization’s functioning and performance.
Organization design and structure: Over the years, structure of a company might become redundant due to new technologies and paradigm shift in managerial practices. At times, structure becomes a stumbling block in retaining competitive edge because of cost as well as procedural issues. Such a situation invariably leads to structural changes in the organizations. Many companies have launched structural reforms in their endeavour to remain at the top. Examples include: IBM, Tata, Ford, Hyundai etc.
Skills of a Change Agent
Any person who has the power and knowledge to make a difference, challenge the stereotypes and create prototypes can be termed as change agent. A change agent must possess the following:
· Knowledge of the business environmental (understanding);
· A value system and self-concept to support and under gird the actions of a change agent (motivation);
· Change agent abilities (skills).
· Change Agent Abilities: The following is a listing of change agent abilities compiled from numerous sources.
· Resilient
· Optimistic·
· Tenacious
· Committed
· Passionate·
· Patient·
· Emotionally intelligent
· Assertive
· Persuasive
· Empathetic
· Authentic
· Ethical
· Self-Aware
· Competent
· Curious
· They can:
· Communicate ideas clearly, concisely, and precisely both orally and in writing·
· Listen to others and incorporate their ideas and perspectives·
· Accommodate individual differences (cultural, socioeconomic, global, etc.) in your decisions and actions and be able to negotiate across these differences.
· Engage in self-assessment, self-reflection, and analysis·
· Reflect on what is happening to make meaning, gain perspective and understanding·
· Engage in civil discourse and debate·
· Mediate and resolve conflicts·
· Analyze power, structures of inequality, and social systems that govern individual and communal life·
· Recognize the global implications of their actions·
· Span boundaries·
· Challenge the status quo effectively when appropriate·
· Creatively and collaboratively solve problems using critical thinking skills; search for “families” of solutions for complex multi-faceted issues·
· Collaborate, network
What makes good change agents?
When assessing potential candidates for roles as change agents, three questions need to be asked: Do they have the right attitude? Do they possess the appropriate knowledge? And do they have the necessary skills? Here is an exploration of each of these questions:
The Right Attitude
Change agents cannot succeed without great persistence. Change is a complex and labor-intensive process that arouses feelings and emotions. Angry people, frustrated teammates, conflicting priorities, unforeseen problems and behind-the-scene resistance are typical daily challenges. Project leaders or managers cannot lead teams through these difficulties without determination and stamina.
To avoid changes in leadership in the midst of change, change agents must be fully committed to see projects through to completion. A good way to ensure such commitment is to appoint ambitious and enthusiastic individuals who have potential for career advancement within the organization. They will look at the challenges as a career-development opportunity and will be highly motivated to succeed. These high potential employees will gain a broader understanding of the business, an extended network of relationships and stronger leadership skills.
Attitude is one aspect of good change agents that is often overlooked.
A person with relevant knowledge and skills but inappropriate attitude will not be able to contribute as much to the organization and the community. Moreover, the higher the skills and knowledge of a person, the greater damage they can do to the organization if their attitude is flawed. Change agents must be prepared to stand up for their projects, even if it means tactfully challenging powerful executives – including the senior leadership. In many cases, implementation problems are due to the project sponsors or top management under-estimating the significance of their own duties. They are reluctant to commit the necessary resources; they sometimes send conflicting messages about the importance of change by failing to apply enough pressure to those who resist; or they alter priorities half-way through the change.
Change agents must act as "voices of conscience" when any mid-course corrections are contemplated. It is the responsibility of change agents to make sure such issues get a complete airing in order to avoid the project ending in failure. One effective change agent summed up the attitude needed: "My primary goal is to ensure this project succeeds, no matter what. My secondary objective is to preserve my personal relationship with all senior management." The best change agents are tactful and diplomatic. "Political skills" are necessary, not so change agents can join in the game, but so they can better understand it. Change leaders must make their own judgments and keep their own counsel. No one can do that for them.
The Appropriate Knowledge
Project sponsors should be seasoned change agents with a general understanding of the business. However, project managers should be subject-matter experts in their respective area of responsibility. Having someone with excellent project management skills is simply not enough. They will crash due to lack of detailed understanding of the subject area. Expertise also brings the credibility and respect needed to succeed in their role.
Simply put, change agents better understand how a business works – in particular, the business in which they are involved. This entails understanding money – where it comes from, where it goes, how it goes and how to keep it. The job also requires knowledge of markets and marketing, products and product development, customers, sales, selling, buying, hiring, firing and just about every other aspect of the business.
In addition to the relevant expertise, change agents also should be well-connected throughout the organization. Active relationships in all areas of the organization are important in communicating effectively with stakeholders, developing coalitions and designing a successful rollout.
The Necessary Skills
The pressure on the project leadership can be tremendous. Change agents have to be able to operate during times of instability and uncertainty. They have to manage conflicting priorities, multiple constituencies and fast-approaching deadlines. They are responsible for guiding the organization through the numerous challenges of transition. Therefore, in order to survive, change agents must possess the ability to remain highly effective under intense pressure.
In addition to being well organized and disciplined, change agents need strong analytical skills. Guessing won't do. Insight is nice, even useful and is sometimes mistaken for brilliance, but insight is often difficult to sell and almost impossible to defend. A rational, well-argued analysis can be ignored, but not successfully contested. Change agents must learn to take apart and reassemble operations and systems in novel ways, and then determine the financial and political impacts of what they have done. At the same time, good change agents must be flexible enough to work around roadblocks and handle evolving priorities. In short, a disciplined and yet flexible approach is needed to tackle the challenges of change.
People skills – team-building, forging strong interpersonal relationships and communicating within groups – are mandatory for good change agents. The challenge is to build the project team, putting the team members' competencies to best use. To succeed, change agents must create a strong sense of identity, purpose and joint-ownership, as well as a high-performing mindset. To manage resistance – a natural part of the change process – change agents must start by understanding and acknowledging the resistance. They need a lot of empathy, with good listening skills. Change agents must be able to put themselves in the shoes of people affected by the change. Resistance is most damaging when it remains unnoticed. It usually occurs when the feelings and concerns of employees are ignored or when they feel change is forced upon them. In order to avoid resistance or the risk of hidden resistance, change agents must learn to listen to the voice of employees and involve them in decisions whenever possible.
During the change, communication is the glue that keeps the organization together and moving toward the desired goal. Change agents need to be able to communicate effectively at all levels and across all organization boundaries.
Choosing a Good Leader for a Change…
Change is never easy and the failure rate can be high. Top management must take a hard look at the candidates for change agent positions. If none of the in-company candidates closely match requirements of the job, then a search outside the company is required. And, once an organization finds the right individual to be its change agent for a project, management has one more commitment to make – assuring the change agent has between 50 and 100 percent of their work time available to dedicate to the success of the initiative.
Resistance to Change
People like
Comfort Zone
Stability
Predictability
Familiarity
Conventions
Status quo
People do not like
Change
Risk
Instability
Uncertainty
Both these factors have an impact on how people react to any change programme at a workplace.
More precisely, why people resist change?
Fear of Unknown
Fear of Failure
Disagreement on need for change
Losing something of value
False beliefs/Misunderstanding
Lack of Trust
Personality Conflicts
Peer pressure
Loss of status/job
Phases of Organizational Change
Organizational change causes individuals to experience a reaction process comprising four phases:
Initial Denial: Employees feel that chnage is not at all required in the company.
Resistance: Employees try to prevent the implementation of change programme
Gradual Exploration: Employees try to explore their role in the new scheme of things and start cooperating with the management
Eventual Commitment: Employees commit themselves to new way of doing things.
Resistance is a natural and normal response to change because it involves going from known to unknown.
Conceptual Framework of Resistance to Change
Perception-Cognition-Affect-Resistance
Perception: Employees try to perceive the impact of change at this stage. The force or resistance is directly proportionate to the perceived impact of change on an individual.
Cognition: During organizational change, individuals create their own interpretations of what is going to happen, how they themselves are perceived, and what others are thinking or intending. Generally, peopel have a tendency to develop a negative self-schema about themselves and their life events (organizational change, for example). This results in cognitive distortions as they are not able to remain objective in the cognitive process.
In case of any change programme, the employees construct irrational ideas as part of cognition.
Affect: Affective processes are usually operatinalized as emotions and feelings that are related to actions. Emotions in the context of organizational change can be described as a state of arousal involving facial and bodily changes, brain activation, sujective feelings, cognitive appraisals, which can be either conscious or unconscious, rational or irational.
Psychologists have identified a number of primary emotions experienced by individuals universally such as fear, anger, sadness, joy surprise, disgust, contempt, etc.
Organizational change generally leads to feelings of anger, denial, loss and frustration.
Individuals experience loss and grief when estbalished ways of doing a job are changed. Changes and losses role identity can lead to feeling of anger, sadness, anxiety and low self-esteem.
Resistance: At this stage, the employees display physical actions that can be seen and heard. Moreover, it also includes mental process which cannot be seen or heard.
So the employees may oppose, argue, obstruct, stall, dismantle and undermine a change effort. At the same time, they may withdraw, avoid or ignore the change efforts.
How the companies respond to change
Failure of many corporate change programmes is often directly attributed to employee resistance. For example, a longitudinal study of 500 large organizations found that employee resistance was the most frequently cited problem encountered by management while implementing change. The study was conducted by Waldersee and Griffiths in 1997. More than half the organizations in that survey experienced difficulties with employee resistance.
Management usually focusses on the technical aspects of change with a tendency to neglect the equally important human element which is often crucial to the successful implementation of change.
In order to successfully lead an organization through change, it is importnt for management to balance both technical and human aspects. Organizational change is driven by personal change. So engineering personal change should be tackled by the management with great care.
What is change?
Change implies the following:
To make or become different.
Dissatisfaction with the old and belief in the new.
A qualitatively different way of perceiving, thinking, and behaving to improve over the past and present.
Continuity without change leads to stagnation, and change without continuity leads to conflicts.
The rate of change is faster than our ability to comprehend and cope with it.
What is organizational change?
Organizational change implies changes in the following:
Goals, Vision and Mission
Boundaries
Pattern of activities/administrative practices
Assumptions, values and belief
Culture
Structure
"Organizational change consists of goal-oriented and to a degree, pre-planned actions, the final result of which can be, more or less, clearly formulated in advance". --Van der Vlist
What is planned change?
"Planned change is a conscious, deliberate and collaborative effort to improve the operation of a system -whether it be a self-system, a social system, or a cultural system -through the utilization of scientific knowledge". --Bennis, Benne & Chin.
"...conscious, deliberate and collaborative effort to improve the operation of human system through utilization of valid knowledge". --Lippit
Elements of Planned Change
Outcome: goals, results, direction, improvement, renewal
History: causes, need, motive, context
Actors: External/Internal
Phases: steps, sequences
Communication: interaction, cultural aspects
Steering: monitoring, directing, guiding
Taxonomy of Change
Directional Change: Occurs under conditions of severe competitions, regulatory shifts in government policy, and unsuccessful business strategy.
Fundamental Change: Redefinition of current purpose or mission.
Operational Change: Improvement of quality, quantity, timeliness, unit cost of operations, in developing products and services.
Total Change: Developing a new vision, achieving a turnaround; a drastic surgery of the existing system.
Planned Change: Basically an operational change on a calculated basis as a response to internal and external demands e.g. downsizing.
Happened Change: Unpredictable. Occurs due to external causes over which one my have no control.
Transformational Change: Change involving the entire or a greater part of the organization due to a severe threat to its survival. The threat may occur from industrial discontinuities, shifts in a product’s life cycle or internal change e.g. union-management conflicts.
Revolutionary Change: Abrupt changes in the organization’s strategies and design.
Recreation: Tearing down the old structure and building a new one. A metamorphosis –becoming not just better but different.
Strategic Change: Change of all or most of the organization’s components.
Anticipatory Change: Changes carried out in expectation of an event. In anticipation of such change, the organization may tune-in (incremental change) or re-orient itself.
Reactive Change: Response to an event or series of events. Adaptive changes are limited t a sub-system or apart of the sub-system. Recreation can also be reactive but involves the whole organization.
[Source: Management of Organizational Changeby K Harigopal (Response Books)]
External Factors of Change
Political forces: Political environment is an importnat trigger for organizational change. Managers need to understand the political system of the country where they work. During the 1990s, an all-emcompassing phase of globalozation began throughout the world. Globalization in turn facilitated free markets. Governments began to withdraw their stake from the business enterprises. A number of countries de-regulated industries and thus created new opportunities for entrepreneurs. From regulators, the governments have become facilitators. As a result of new thrust given to free market and foreign direct investment, the companies have changed their strategies and they are growing by leaps and bounds.
Certain developments in the international political scene such as the transition of the East-European nations to democracy and market economy, opening up of the economy of South-East Asia, the collapse of the erstwhile Soviet Union, the Unification of Germany, the Gulf War, the crisis in Yugoslavia etc. have had profound impact on economy and business thereby triggering organizational change in a number of companies.
V Nilakant and S Ramnarayan in their seminal work Change Management (Response Books) mention that organizational change itself is a political process because it involves influencing, persuading, and negotiating with people in order to bring about a change in their mental models. The manager tries to ensure the support of the key and influential individuals in the organization while implementing any intervention programme.
Economic forces: The uncertainty about future trends in the economy is a major cause of change. For example, fluctuating interest rates, declining productivity, uncertainties arising from inflation or deflation, low capital investments, etc. have significant impact on industrial organizations.
Economic forces usually determine the direction an industrial organization takes. For instance, Infosys has changed its startegy from being a profitability-driven organization to growth-oriented one due to economic slowdown in the USA from where they got maximum number of clients. Accroding to a report published in Mint (New Delhi) on 29 July 2008, Infosys’ new approach is a consequence of what is happening in the market in which it operates. Excerpts from the news item:
By focusing on growth now, they (Infosys) will be looking to add new customers as their existing clients are cagey about increasing their budgets further. Infosys has said it will look to add new customers even as it expands its presence in businesses such as health care, pharmaceuticals, logistics, energy and utilities. Currently, much of its revenue comes from four major areas: financial services, telecommunications, manufacturing and retail. The company expects to grow revenue 6% in the three months to September as compared with the corresponding period in 2007.
The emphasis on growth could mean a further dip in Infosys’ operating profit margin, measured as operating profit (or earnings before interest, taxes, depreciation and amortization) expressed as a percentage of revenue. In the quarter ended June, the company’s operating profit margin was 30.4%, down 2 percentage points from the previous quarter in the wake of higher salaries and visa costs. Over the past two years, the company’s operating profit margin has stayed in the 30-32% range. Infosys’ push for growth reflects the new business reality in the software services business.
“Our existing customers are not growing and we need to find new growth engines,” Gopalakrishnan said. As part of growth strategy, the company plans to add new customers and newer service lines such as learning services and offering software as a service (where companies pay not for the entire solution but for what they use) by investing in solutions and intellectual property. The company is focusing on newer geographies such as West Asia, India, Latin America and South Africa.
Infosys, which serves customers such as British Telecom Plc. and Cummins Inc., derives about 63% of its revenues from North America, 27% from Europe and about 10% from the rest of the world including India. “We want to reduce our dependence on the US by growing operations in other geographies such as Europe and rest of the world,” Gopalakrishnan said, adding that the target revenue ratio from these three geographies for the company would be 40:40:20. He did not elaborate on the time it would take the company to achieve this revenue mix.
Infosys ended 2007-08 with revenue of Rs16,692 crore and a net profit of Rs4,659 crore. The company has issued a guidance of revenue up to Rs21,622 crore and earnings per share of up to Rs101.06 in 2008-09, a growth of 29.5% and 24%, respectively.
Shares of Infosys closed flat at Rs1,538.9 each on the Bombay Stock Exchange even as the exchange’s benchmark Sensex index closed marginally down at 14,349 points and the technology index ended marginally lower at 3,606.81 points. In the past year, shares of Infosys have touched a high of Rs2,140 each and a low of Rs1,212 each.
(Source: http://www.livemint.com/ 29 July, 2008)
Global Competition: Companies often change due to explict or implicit pressure from their competitors who might have better technologies, better systems, better products, better brand image, better HR practices, better aftersales service or better supply-chain. sometimes, the competitors might have advantages of being a first mover in the market or having a monoploy in raw material procurement (a captive mine for Steel companies, for example).
When the competition is sharp-edged, the companies have no choice but to usher in necessary changes. Nokia's strategic move to reengineer its Research and Development unit is a case in point as reported in Economic Times (New Delhi) on 6 August 2008. Excerpts from the news item:
In a major strategy change, handset major Nokia is re-engineering its research and development (R&D) model world-wide to tackle growing competition from unconventional sources of competition like Apple’s iphone and Google’s mobile phone platform Android. Taking a cue from companies like P&G, Nokia which till now largely carried out in-house innovation and R&D, is looking at external collaborations for product innovation. Nearly 50% of its new innovations are expected to come from external sources, a fact which is expected to help the company cut R&D costs significantly. It is expected to spare higher resources for product design and marketing, reduce time-to-market and improve return on investment (ROI), sources said. The Finnish giant’s move, which will be implemented throughout the company, is based on findings that breakthrough innovation sometimes originates from external sources. The company has also initiated a company-wide cultural change program, called `Living it working’ to directly involve and expose employees to consumers The major change in the way Nokia will now look at R&D has been caused by a slew of reasons. Not only are consumer preferences changing faster than ever, competition is emerging from hitherto unknown quarters. Computermaker Apple has swept the world with its iPhone, which now poses a huge challenge for Nokia. Google, which started as a search engine, has now launched a mobile phone platform called Android and the first handsets from this initiative are expected in the second half of this year.
(Source: The Economic Times, New Delhi, 6 August 2008)
There are other illustrations of completion-led organizational change as well. Facing stiff competition from the American automobile majors, the Japanese automobile companies such as Toyota, Nissan and Mitsubishi have been forced to relocate their manufacturing and assembly operations to South East Asia where the cost of labour is quite low. Simultaneously, they have established their plants all over Europe and America to get past the import restrictions. In this process, they have been able to retain their competitive edge in catering to the global automobile market.
Technological forces: The world is characterized by the dramatic technological shifts. The technological advancements, particularly in information and communication technologies, have revolutionized the workplaces and have helped create new range of products and services. For example, a super communication system is on the anvil in which about 20 Japanese companies will join a Motorola-led project to set up a sattelite cellular telephone system that can be used anywhere on the earth. The partner companies include Sony, Mitsubishi, Kyocera, among others. The estimated cost of the project is US$ 132 million or 15 billion Yen.
Globalization: Globalozation means integration of cpaital market, labour market and commodity market. This integration has touched almost all the aspects of business lifecycle. Hence, globalization is a unique trigger of change present everywhere.
Internal Factors of Change
System dynamics: An organization is made up of sub-systems, similar to that of the sub-personalities in human brain. The sub-personalities in the brain are in constant interaction with each other creating changes in human behaviour. Similarly, the sub-systems within an organization are in constant and dynamic interaction. The factors that influence the alignment and relationships are, for example, technology, internal politics, dominant groups, and formal and informal relationships within it.
Inadequacy of administrative process: An organization functions through a set of procedures, rules, and regulations. With changing times and the revision of organizational goals and objectives, some of the existing rules, regulations and procedures could be at variance with the demands of reality. To continue with such functionally autonomous processes can lead organizational in-effectiveness. Realization of their inadequacy induces change in the organization.
Individual/group expectations: The organization as an entity is a convergence f people, each one aiming to satisfy his/her needs and aspirations. In anthropological context, man is a social animal whose needs and desires keep changing. This creates differing expectations among individuals and groups as to the needs they intend to satisfy in the organizational context. Positive factors such as one’s ambition, need to achieve, capabilities, career growth, and negative aspects such as fear, insecurities, frustrations, etc operate as complex inter-individual and inter-group processes inducing change in n organization’s functioning and performance.
Organization design and structure: Over the years, structure of a company might become redundant due to new technologies and paradigm shift in managerial practices. At times, structure becomes a stumbling block in retaining competitive edge because of cost as well as procedural issues. Such a situation invariably leads to structural changes in the organizations. Many companies have launched structural reforms in their endeavour to remain at the top. Examples include: IBM, Tata, Ford, Hyundai etc.
Skills of a Change Agent
Any person who has the power and knowledge to make a difference, challenge the stereotypes and create prototypes can be termed as change agent. A change agent must possess the following:
· Knowledge of the business environmental (understanding);
· A value system and self-concept to support and under gird the actions of a change agent (motivation);
· Change agent abilities (skills).
· Change Agent Abilities: The following is a listing of change agent abilities compiled from numerous sources.
· Resilient
· Optimistic·
· Tenacious
· Committed
· Passionate·
· Patient·
· Emotionally intelligent
· Assertive
· Persuasive
· Empathetic
· Authentic
· Ethical
· Self-Aware
· Competent
· Curious
· They can:
· Communicate ideas clearly, concisely, and precisely both orally and in writing·
· Listen to others and incorporate their ideas and perspectives·
· Accommodate individual differences (cultural, socioeconomic, global, etc.) in your decisions and actions and be able to negotiate across these differences.
· Engage in self-assessment, self-reflection, and analysis·
· Reflect on what is happening to make meaning, gain perspective and understanding·
· Engage in civil discourse and debate·
· Mediate and resolve conflicts·
· Analyze power, structures of inequality, and social systems that govern individual and communal life·
· Recognize the global implications of their actions·
· Span boundaries·
· Challenge the status quo effectively when appropriate·
· Creatively and collaboratively solve problems using critical thinking skills; search for “families” of solutions for complex multi-faceted issues·
· Collaborate, network
What makes good change agents?
When assessing potential candidates for roles as change agents, three questions need to be asked: Do they have the right attitude? Do they possess the appropriate knowledge? And do they have the necessary skills? Here is an exploration of each of these questions:
The Right Attitude
Change agents cannot succeed without great persistence. Change is a complex and labor-intensive process that arouses feelings and emotions. Angry people, frustrated teammates, conflicting priorities, unforeseen problems and behind-the-scene resistance are typical daily challenges. Project leaders or managers cannot lead teams through these difficulties without determination and stamina.
To avoid changes in leadership in the midst of change, change agents must be fully committed to see projects through to completion. A good way to ensure such commitment is to appoint ambitious and enthusiastic individuals who have potential for career advancement within the organization. They will look at the challenges as a career-development opportunity and will be highly motivated to succeed. These high potential employees will gain a broader understanding of the business, an extended network of relationships and stronger leadership skills.
Attitude is one aspect of good change agents that is often overlooked.
A person with relevant knowledge and skills but inappropriate attitude will not be able to contribute as much to the organization and the community. Moreover, the higher the skills and knowledge of a person, the greater damage they can do to the organization if their attitude is flawed. Change agents must be prepared to stand up for their projects, even if it means tactfully challenging powerful executives – including the senior leadership. In many cases, implementation problems are due to the project sponsors or top management under-estimating the significance of their own duties. They are reluctant to commit the necessary resources; they sometimes send conflicting messages about the importance of change by failing to apply enough pressure to those who resist; or they alter priorities half-way through the change.
Change agents must act as "voices of conscience" when any mid-course corrections are contemplated. It is the responsibility of change agents to make sure such issues get a complete airing in order to avoid the project ending in failure. One effective change agent summed up the attitude needed: "My primary goal is to ensure this project succeeds, no matter what. My secondary objective is to preserve my personal relationship with all senior management." The best change agents are tactful and diplomatic. "Political skills" are necessary, not so change agents can join in the game, but so they can better understand it. Change leaders must make their own judgments and keep their own counsel. No one can do that for them.
The Appropriate Knowledge
Project sponsors should be seasoned change agents with a general understanding of the business. However, project managers should be subject-matter experts in their respective area of responsibility. Having someone with excellent project management skills is simply not enough. They will crash due to lack of detailed understanding of the subject area. Expertise also brings the credibility and respect needed to succeed in their role.
Simply put, change agents better understand how a business works – in particular, the business in which they are involved. This entails understanding money – where it comes from, where it goes, how it goes and how to keep it. The job also requires knowledge of markets and marketing, products and product development, customers, sales, selling, buying, hiring, firing and just about every other aspect of the business.
In addition to the relevant expertise, change agents also should be well-connected throughout the organization. Active relationships in all areas of the organization are important in communicating effectively with stakeholders, developing coalitions and designing a successful rollout.
The Necessary Skills
The pressure on the project leadership can be tremendous. Change agents have to be able to operate during times of instability and uncertainty. They have to manage conflicting priorities, multiple constituencies and fast-approaching deadlines. They are responsible for guiding the organization through the numerous challenges of transition. Therefore, in order to survive, change agents must possess the ability to remain highly effective under intense pressure.
In addition to being well organized and disciplined, change agents need strong analytical skills. Guessing won't do. Insight is nice, even useful and is sometimes mistaken for brilliance, but insight is often difficult to sell and almost impossible to defend. A rational, well-argued analysis can be ignored, but not successfully contested. Change agents must learn to take apart and reassemble operations and systems in novel ways, and then determine the financial and political impacts of what they have done. At the same time, good change agents must be flexible enough to work around roadblocks and handle evolving priorities. In short, a disciplined and yet flexible approach is needed to tackle the challenges of change.
People skills – team-building, forging strong interpersonal relationships and communicating within groups – are mandatory for good change agents. The challenge is to build the project team, putting the team members' competencies to best use. To succeed, change agents must create a strong sense of identity, purpose and joint-ownership, as well as a high-performing mindset. To manage resistance – a natural part of the change process – change agents must start by understanding and acknowledging the resistance. They need a lot of empathy, with good listening skills. Change agents must be able to put themselves in the shoes of people affected by the change. Resistance is most damaging when it remains unnoticed. It usually occurs when the feelings and concerns of employees are ignored or when they feel change is forced upon them. In order to avoid resistance or the risk of hidden resistance, change agents must learn to listen to the voice of employees and involve them in decisions whenever possible.
During the change, communication is the glue that keeps the organization together and moving toward the desired goal. Change agents need to be able to communicate effectively at all levels and across all organization boundaries.
Choosing a Good Leader for a Change…
Change is never easy and the failure rate can be high. Top management must take a hard look at the candidates for change agent positions. If none of the in-company candidates closely match requirements of the job, then a search outside the company is required. And, once an organization finds the right individual to be its change agent for a project, management has one more commitment to make – assuring the change agent has between 50 and 100 percent of their work time available to dedicate to the success of the initiative.
Resistance to Change
People like
Comfort Zone
Stability
Predictability
Familiarity
Conventions
Status quo
People do not like
Change
Risk
Instability
Uncertainty
Both these factors have an impact on how people react to any change programme at a workplace.
More precisely, why people resist change?
Fear of Unknown
Fear of Failure
Disagreement on need for change
Losing something of value
False beliefs/Misunderstanding
Lack of Trust
Personality Conflicts
Peer pressure
Loss of status/job
Phases of Organizational Change
Organizational change causes individuals to experience a reaction process comprising four phases:
Initial Denial: Employees feel that chnage is not at all required in the company.
Resistance: Employees try to prevent the implementation of change programme
Gradual Exploration: Employees try to explore their role in the new scheme of things and start cooperating with the management
Eventual Commitment: Employees commit themselves to new way of doing things.
Resistance is a natural and normal response to change because it involves going from known to unknown.
Conceptual Framework of Resistance to Change
Perception-Cognition-Affect-Resistance
Perception: Employees try to perceive the impact of change at this stage. The force or resistance is directly proportionate to the perceived impact of change on an individual.
Cognition: During organizational change, individuals create their own interpretations of what is going to happen, how they themselves are perceived, and what others are thinking or intending. Generally, peopel have a tendency to develop a negative self-schema about themselves and their life events (organizational change, for example). This results in cognitive distortions as they are not able to remain objective in the cognitive process.
In case of any change programme, the employees construct irrational ideas as part of cognition.
Affect: Affective processes are usually operatinalized as emotions and feelings that are related to actions. Emotions in the context of organizational change can be described as a state of arousal involving facial and bodily changes, brain activation, sujective feelings, cognitive appraisals, which can be either conscious or unconscious, rational or irational.
Psychologists have identified a number of primary emotions experienced by individuals universally such as fear, anger, sadness, joy surprise, disgust, contempt, etc.
Organizational change generally leads to feelings of anger, denial, loss and frustration.
Individuals experience loss and grief when estbalished ways of doing a job are changed. Changes and losses role identity can lead to feeling of anger, sadness, anxiety and low self-esteem.
Resistance: At this stage, the employees display physical actions that can be seen and heard. Moreover, it also includes mental process which cannot be seen or heard.
So the employees may oppose, argue, obstruct, stall, dismantle and undermine a change effort. At the same time, they may withdraw, avoid or ignore the change efforts.
How the companies respond to change
Failure of many corporate change programmes is often directly attributed to employee resistance. For example, a longitudinal study of 500 large organizations found that employee resistance was the most frequently cited problem encountered by management while implementing change. The study was conducted by Waldersee and Griffiths in 1997. More than half the organizations in that survey experienced difficulties with employee resistance.
Management usually focusses on the technical aspects of change with a tendency to neglect the equally important human element which is often crucial to the successful implementation of change.
In order to successfully lead an organization through change, it is importnt for management to balance both technical and human aspects. Organizational change is driven by personal change. So engineering personal change should be tackled by the management with great care.
Monday, August 2, 2010
Models of Change
Three-Stage Model of Change
Kurt Lewin propounded a three-stage model of change in 1951 that has come to be known as
the unfreezing-change-refreeze model. This model requires prior learning to be rejected and replaced by a new method.
Unfreezing
Unfreezing as a concept entered the change literature early to highlight the observation that the stability of human behavior was based on "quasi- stationary equilibria" supported by a large force field of driving and restraining forces. For change to occur, this force field had to be altered under complex psychological conditions because, as was often noted, just adding a driving force toward change often produced an immediate counterforce to maintain the equilibrium. This observation led to the important insight that the equilibrium could more easily be moved if one could remove restraining forces since there were usually already driving forces in the system. Unfortunately restraining forces were harder to get at because they were often personal psychological defenses or group norms embedded in the organizational or community culture.
How to unfreeze?
1. Disconfirmation
All forms of learning and change start with some form of dissatisfaction or frustration generated by data that disconfirm our expectations or hopes. Disconfirmation, whatever its source, functions as a primary driving force in the quasi-stationary equilibrium. Disconfirming information is not enough, however, because we can ignore the information, dismiss it as irrelevant, blame the undesired outcome on others or fate, or, as is most common, simply deny its validity. In order to become motivated to change, we must accept the information and connect it to something we care about.
2. Anxiety/Guilt
The disconfirmation must arouse what we can call "survival anxiety" or the feeling that if we do not change we will fail to meet our needs or fail to achieve some goals or ideals that we have set for ourselves ("survival guilt"). In order to feel survival anxiety or guilt, we must accept the disconfirming data as valid and relevant. What typically prevents us from doing so, what causes us to react defensively, is a second kind of anxiety which we can call "learning anxiety," or the feeling that if we allow ourselves to enter a learning or change process, if we admit to ourselves and others that something is wrong or imperfect, we will lose our effectiveness, our self-esteem and maybe even our identity. Most humans need to assume that they are doing their best at all times, and it may be a real loss of face to accept and even "embrace" errors.
3. Creation of Psychological Safety or Overcoming of Learning Anxiety
Unless sufficient psychological safety is created, the disconfirming information will be denied or in other ways defended against, no survival anxiety will be felt, and, consequently, no change will take place. The key to effective change management, then, becomes the ability to balance the amount of threat produced by disconfirming data with enough psychological safety to allow the change target to accept the information, feel the survival anxiety, and become motivated to change.
The true artistry of change management lies in the various kinds of tactics that change agents employ to create psychological safety. For example, working in groups, creating parallel systems that allow some relief from day to day work pressures, providing practice fields in which errors are embraced rather than feared, providing positive visions to encourage the learner, breaking the learning process into manageable steps, providing on-line coaching and help all serve the function of reducing learning anxiety and thus creating genuine motivation to learn and change.
Change
How to Change?
Changing through Cognitive Restructuring : Helping the clients to see things, judge things, feel things and react to things differently based on a new point of view obtained through
a. Identifying with a new role model, mentor etc.
b. Scanning the environment for new relevant information.
Refreeze
How to Refreeze?
New way of doing things has to be reinforced through rewards and punishment mechanizm as also through various motivational techniques.
The main point about refreezing is that new behavior must be to some degree congruent with the rest of the behavior and personality of the learner or it will simply set off new rounds of disconfirmation that often lead to unlearning the very thing one has learned. The classic case is the supervisory program that teaches individual supervisors how to empower employees and then sends them back into an organization where the culture supports only autocratic supervisory behavior. Or, in Lewin's classic studies, the attempt to change eating habits by using an educational program that teaches housewives how to use meats such as liver and kidneys and then sends them back into a community in which the norms are that only poor folks who can't afford good meat would use such poor meat.
The implication for change programs are clear. For personal refreezing to occur, it is best to avoid identification and encourage scanning so that the learner will pick solutions that fit him or her. For relational refreezing to occur, it is best to train the entire group that holds the norms that support the old behavior.
It is only when housewives groups met and were encouraged to reveal their implicit norms that change was possible by changing the norms themselves, i.e. introducing collectively a new set of standards for judging what was"ok" meat.
Burke-Litwin Model of Organizational Change
This model was developed by Warner Burke and George Litwin. This model identifies the variables involved in creating first-order and second order change which are also termed as transactional and transformational change respectively.
First Order Change/Transactional Change
First Order change aims at improving the organizational climate by implementing incremental changes in the workplace. Organizational climate is peopl'e collective assessment in terms of whether it is a good or bad place to work, whether it is friendly, warm, cold, hard-working, easy-going and so on. These perceptions are based on managerial practices and organizational systems and procedures.
In case of First Order change, Structure, Management Practices and Management Systems (Procedures and Polices) are altered.
First Order change can be brought about by a transactional leader (generally a proactive manager) who can motivate people to accomplish organizational objectives within stipulated time-frame.
Second Order Change/Transformational Change
Second Order Change is aimed at altering the organizational culture.
Organizational Culture has three aspects: Artefacts, Values and Assumptions.
In case of Second Order Change, Vision/Mission, Organizational strategy, Leadership and Organizational Culture are altered.
Second Order Change is brought about by trasnformational leader who enables his followers to transcend their abilities to perform exceedingly well and thus contribute towards organizational effectiveness.
Porass-Robertson Model of Planned Change
Basic Premises
OD interventions alter features of work settings.
Change in the work settings lead to change in the individual behaviour at workplace.
Change in the individual behaviour leads at workplace leads to individual development and improvement in organizational outcomes/performance.
Porras-Robertson Model shows how OD interventions can be linked to factors in the work setting. For example, OD interventions that focus on goals, strategies, and rewards will affect organizing arrangements. Interventions that focus on culture, management style and interaction process will affect social factor. Interventions that focus on job design and workflow design will affect technology.
Work settings
· Organizing Arrangements
· Social Factors
· Physical Setting
· Technology
Organizing Arrangements
Organizing arrangements comprise of formal elements of organizations developed to provide the coordination and control necessary for organized activity.
Elements of Organizing Arrangements:
i. Goals: a projected state of affairs that a person or a system plans or intends to achieve—a personal or organizational desired end-point in some sort of assumed development.
ii. Strategies: a plan of action designed to achieve a particular goal or set of goals.
iii. Structure: hierarchy and reporting arrangements.
iv. Administrative policies and procedures: while policies are framework for decision-making, procedures are how the policy rolls down step by step.
v. Administrative systems: a set of interacting or interdependent policies and procedures forming an integrated whole administrative mechanism.
vi. Reward systems: how the fruits of labour are distributed in the organization.
vii. Ownership: the pattern of accountability towards accomplishing desired outcomes.
Social Factors
Social factors comprise of the individual and group characteristics of the people in an organization, their patterns and processes of interaction, and the organizational culture.
Elements of Social Factors:
i. Culture
ii. Management Style: characteristic ways of making decisions and relating to subordinates. It may be autocratic, paternalistic, democratic, and laissez faire.
iii. Interaction Processes: patterns of feedback, comment, questioning, doubting, clarifying etc.
iv. Informal patterns and networks
v. Individual attributes: self-esteem, physical fitness and moral reasoning
Physical Setting
Physical setting refers to the characteristics of the physical space in which organizational activity occurs.
Elements of Physical Setting:
i. Space configuration
ii. Physical ambience
iii. Interior design
iv. Architectural design
Technology
Technology refers to everything directly associated with the transformation of organizational inputs into outputs.
Elements of Technology:
i. Tools, equipments, machinery
ii. Information Technology
iii. Job design
iv. Workflow design
v. Technical expertise
vi. Technical procedures
vii. Technical systems
[P.S. The content in this blog-post is based on Organization Development: Behavioural Science Interventions for Organization Improvement by Wendell L French and Cecil H Bell, Jr. and Kurt Lewin's Change Theory in the Field and in the Classroom: Notes Toward a Model of Managed Learning by Edgar H. Schein (sourced from the website of Society for Organizational Learning)]
Kurt Lewin propounded a three-stage model of change in 1951 that has come to be known as
the unfreezing-change-refreeze model. This model requires prior learning to be rejected and replaced by a new method.
Unfreezing
Unfreezing as a concept entered the change literature early to highlight the observation that the stability of human behavior was based on "quasi- stationary equilibria" supported by a large force field of driving and restraining forces. For change to occur, this force field had to be altered under complex psychological conditions because, as was often noted, just adding a driving force toward change often produced an immediate counterforce to maintain the equilibrium. This observation led to the important insight that the equilibrium could more easily be moved if one could remove restraining forces since there were usually already driving forces in the system. Unfortunately restraining forces were harder to get at because they were often personal psychological defenses or group norms embedded in the organizational or community culture.
How to unfreeze?
1. Disconfirmation
All forms of learning and change start with some form of dissatisfaction or frustration generated by data that disconfirm our expectations or hopes. Disconfirmation, whatever its source, functions as a primary driving force in the quasi-stationary equilibrium. Disconfirming information is not enough, however, because we can ignore the information, dismiss it as irrelevant, blame the undesired outcome on others or fate, or, as is most common, simply deny its validity. In order to become motivated to change, we must accept the information and connect it to something we care about.
2. Anxiety/Guilt
The disconfirmation must arouse what we can call "survival anxiety" or the feeling that if we do not change we will fail to meet our needs or fail to achieve some goals or ideals that we have set for ourselves ("survival guilt"). In order to feel survival anxiety or guilt, we must accept the disconfirming data as valid and relevant. What typically prevents us from doing so, what causes us to react defensively, is a second kind of anxiety which we can call "learning anxiety," or the feeling that if we allow ourselves to enter a learning or change process, if we admit to ourselves and others that something is wrong or imperfect, we will lose our effectiveness, our self-esteem and maybe even our identity. Most humans need to assume that they are doing their best at all times, and it may be a real loss of face to accept and even "embrace" errors.
3. Creation of Psychological Safety or Overcoming of Learning Anxiety
Unless sufficient psychological safety is created, the disconfirming information will be denied or in other ways defended against, no survival anxiety will be felt, and, consequently, no change will take place. The key to effective change management, then, becomes the ability to balance the amount of threat produced by disconfirming data with enough psychological safety to allow the change target to accept the information, feel the survival anxiety, and become motivated to change.
The true artistry of change management lies in the various kinds of tactics that change agents employ to create psychological safety. For example, working in groups, creating parallel systems that allow some relief from day to day work pressures, providing practice fields in which errors are embraced rather than feared, providing positive visions to encourage the learner, breaking the learning process into manageable steps, providing on-line coaching and help all serve the function of reducing learning anxiety and thus creating genuine motivation to learn and change.
Change
How to Change?
Changing through Cognitive Restructuring : Helping the clients to see things, judge things, feel things and react to things differently based on a new point of view obtained through
a. Identifying with a new role model, mentor etc.
b. Scanning the environment for new relevant information.
Refreeze
How to Refreeze?
New way of doing things has to be reinforced through rewards and punishment mechanizm as also through various motivational techniques.
The main point about refreezing is that new behavior must be to some degree congruent with the rest of the behavior and personality of the learner or it will simply set off new rounds of disconfirmation that often lead to unlearning the very thing one has learned. The classic case is the supervisory program that teaches individual supervisors how to empower employees and then sends them back into an organization where the culture supports only autocratic supervisory behavior. Or, in Lewin's classic studies, the attempt to change eating habits by using an educational program that teaches housewives how to use meats such as liver and kidneys and then sends them back into a community in which the norms are that only poor folks who can't afford good meat would use such poor meat.
The implication for change programs are clear. For personal refreezing to occur, it is best to avoid identification and encourage scanning so that the learner will pick solutions that fit him or her. For relational refreezing to occur, it is best to train the entire group that holds the norms that support the old behavior.
It is only when housewives groups met and were encouraged to reveal their implicit norms that change was possible by changing the norms themselves, i.e. introducing collectively a new set of standards for judging what was"ok" meat.
Burke-Litwin Model of Organizational Change
This model was developed by Warner Burke and George Litwin. This model identifies the variables involved in creating first-order and second order change which are also termed as transactional and transformational change respectively.
First Order Change/Transactional Change
First Order change aims at improving the organizational climate by implementing incremental changes in the workplace. Organizational climate is peopl'e collective assessment in terms of whether it is a good or bad place to work, whether it is friendly, warm, cold, hard-working, easy-going and so on. These perceptions are based on managerial practices and organizational systems and procedures.
In case of First Order change, Structure, Management Practices and Management Systems (Procedures and Polices) are altered.
First Order change can be brought about by a transactional leader (generally a proactive manager) who can motivate people to accomplish organizational objectives within stipulated time-frame.
Second Order Change/Transformational Change
Second Order Change is aimed at altering the organizational culture.
Organizational Culture has three aspects: Artefacts, Values and Assumptions.
In case of Second Order Change, Vision/Mission, Organizational strategy, Leadership and Organizational Culture are altered.
Second Order Change is brought about by trasnformational leader who enables his followers to transcend their abilities to perform exceedingly well and thus contribute towards organizational effectiveness.
Porass-Robertson Model of Planned Change
Basic Premises
OD interventions alter features of work settings.
Change in the work settings lead to change in the individual behaviour at workplace.
Change in the individual behaviour leads at workplace leads to individual development and improvement in organizational outcomes/performance.
Porras-Robertson Model shows how OD interventions can be linked to factors in the work setting. For example, OD interventions that focus on goals, strategies, and rewards will affect organizing arrangements. Interventions that focus on culture, management style and interaction process will affect social factor. Interventions that focus on job design and workflow design will affect technology.
Work settings
· Organizing Arrangements
· Social Factors
· Physical Setting
· Technology
Organizing Arrangements
Organizing arrangements comprise of formal elements of organizations developed to provide the coordination and control necessary for organized activity.
Elements of Organizing Arrangements:
i. Goals: a projected state of affairs that a person or a system plans or intends to achieve—a personal or organizational desired end-point in some sort of assumed development.
ii. Strategies: a plan of action designed to achieve a particular goal or set of goals.
iii. Structure: hierarchy and reporting arrangements.
iv. Administrative policies and procedures: while policies are framework for decision-making, procedures are how the policy rolls down step by step.
v. Administrative systems: a set of interacting or interdependent policies and procedures forming an integrated whole administrative mechanism.
vi. Reward systems: how the fruits of labour are distributed in the organization.
vii. Ownership: the pattern of accountability towards accomplishing desired outcomes.
Social Factors
Social factors comprise of the individual and group characteristics of the people in an organization, their patterns and processes of interaction, and the organizational culture.
Elements of Social Factors:
i. Culture
ii. Management Style: characteristic ways of making decisions and relating to subordinates. It may be autocratic, paternalistic, democratic, and laissez faire.
iii. Interaction Processes: patterns of feedback, comment, questioning, doubting, clarifying etc.
iv. Informal patterns and networks
v. Individual attributes: self-esteem, physical fitness and moral reasoning
Physical Setting
Physical setting refers to the characteristics of the physical space in which organizational activity occurs.
Elements of Physical Setting:
i. Space configuration
ii. Physical ambience
iii. Interior design
iv. Architectural design
Technology
Technology refers to everything directly associated with the transformation of organizational inputs into outputs.
Elements of Technology:
i. Tools, equipments, machinery
ii. Information Technology
iii. Job design
iv. Workflow design
v. Technical expertise
vi. Technical procedures
vii. Technical systems
[P.S. The content in this blog-post is based on Organization Development: Behavioural Science Interventions for Organization Improvement by Wendell L French and Cecil H Bell, Jr. and Kurt Lewin's Change Theory in the Field and in the Classroom: Notes Toward a Model of Managed Learning by Edgar H. Schein (sourced from the website of Society for Organizational Learning)]
Sunday, August 1, 2010
Assignment # 1
Case Study
Out with the Old, In with the New
The Anderson Corporation was started in 1962as a small consumer products company. During the first 20 years, the company’s R&D staff developed a series of new products that proved to be very popular in the marketplace. Things went so well that the company had to add a second production shift just to keep up with the demand. During this time period, the firm expanded its plant on three separate occasions.
In an interview with a national magazine, the firm’s founder, Paul Anderson, said, “We don’t sell our products. We allocate them.” This comment was in reference to the fact that the firm had only 24 salespeople and was able to garner annual revenues in excess of $62 million. Three years ago, Anderson suffered its first financial setback. The company had a net operating loss of $1.2 million, and last year it was $4.7 million. The accountant estimates that this year the firm will loose approximately $10 million.
Alarmed by this information, Citizen’s Bank, the company’s largest creditor, insisted that the firm make some changes and start turning things around. In response to this request, Paul Anderson agreed to step aside. The Board of Directors replaced him with Mary Hartmann, head of the marketing division of one of the country’s largest consumer products firm.
After making an analysis of the situation, Mary has come to the conclusion that there are a number of changes that must be made if the firm is to be turned around. The three most important are as follows:
1. More attention must be given to the marketing side of business. The most vital factor for success in the sale of the consumer goods produced by Anderson is an effective sales force.
2. There must be an improvement in product quality. Currently 2% of Anderson’s output is defective as against 0.5% for the average firm in the industry. In the past, the demand for Anderson’s output was so great that quality control was not an important factor. Now it is proving to be very costly area.
3. There must be a reduction in the number of people in the operation. Anderson can get by with two-thirds of its current production personnel and only half of its administrative staff.
Mary has not shared these ideas with the Board of Directors, but she intends to do so. For the moment, she is considering the steps that will have to be taken in making these changes and the effect that all of this might have on the employees and the overall operation.
Questions:
1. What is wrong with the old organizational culture? What needs to be done to change it?
2. Why might it be difficult for Mary to change the existing culture?
3. What specific steps does Mary need to take in changing culture?
4. Suggest a change agenda for Mary that is, how should she go about ushering change in the organization, what should she do and what would be the sequence of intervention programme.
Out with the Old, In with the New
The Anderson Corporation was started in 1962as a small consumer products company. During the first 20 years, the company’s R&D staff developed a series of new products that proved to be very popular in the marketplace. Things went so well that the company had to add a second production shift just to keep up with the demand. During this time period, the firm expanded its plant on three separate occasions.
In an interview with a national magazine, the firm’s founder, Paul Anderson, said, “We don’t sell our products. We allocate them.” This comment was in reference to the fact that the firm had only 24 salespeople and was able to garner annual revenues in excess of $62 million. Three years ago, Anderson suffered its first financial setback. The company had a net operating loss of $1.2 million, and last year it was $4.7 million. The accountant estimates that this year the firm will loose approximately $10 million.
Alarmed by this information, Citizen’s Bank, the company’s largest creditor, insisted that the firm make some changes and start turning things around. In response to this request, Paul Anderson agreed to step aside. The Board of Directors replaced him with Mary Hartmann, head of the marketing division of one of the country’s largest consumer products firm.
After making an analysis of the situation, Mary has come to the conclusion that there are a number of changes that must be made if the firm is to be turned around. The three most important are as follows:
1. More attention must be given to the marketing side of business. The most vital factor for success in the sale of the consumer goods produced by Anderson is an effective sales force.
2. There must be an improvement in product quality. Currently 2% of Anderson’s output is defective as against 0.5% for the average firm in the industry. In the past, the demand for Anderson’s output was so great that quality control was not an important factor. Now it is proving to be very costly area.
3. There must be a reduction in the number of people in the operation. Anderson can get by with two-thirds of its current production personnel and only half of its administrative staff.
Mary has not shared these ideas with the Board of Directors, but she intends to do so. For the moment, she is considering the steps that will have to be taken in making these changes and the effect that all of this might have on the employees and the overall operation.
Questions:
1. What is wrong with the old organizational culture? What needs to be done to change it?
2. Why might it be difficult for Mary to change the existing culture?
3. What specific steps does Mary need to take in changing culture?
4. Suggest a change agenda for Mary that is, how should she go about ushering change in the organization, what should she do and what would be the sequence of intervention programme.
Saturday, October 18, 2008
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