Incongruent organizational systems

Organizational Change

McGraw-Hill/Irwin

McShane/Von Glinow OB 5e

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

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Umpqua Bank’s

Umpqua Bank has become the largest regional community bank in the Pacific Northwest by applying effective organizational change practices

OrganizationalChange

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Lewin’s Force Field Analysis Model

Developed by Kurt Lewin

Driving forces

Push organizations toward change

External forces or leader’s vision

Restraining forces

Resistance to change -- employee behaviors that block the change process

Driving

Forces

Restraining

Forces

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Desired

Conditions

Current

Conditions

Before

Change

After

Change

Force Field Analysis Model

During

Change

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Not Hoppy About Change

Mina Ishiwatari(front) wanted to improve Hoppy drink’s brand image, but most staff didn’t want to change. “I tried to take a new marketing approach to change the image of Hoppy . . . but no one would listen to me.” She improved Hoppy’s popularity with limited support or budget. Most employees who opposed Ishiwatari’s changes have since left the company.

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Restraining Forces (Resistance to Change)

Many forms of resistance

e.g., complaints, absenteeism, passive noncompliance

View resistance as a resource

Symptoms of deeper problems in the change process

A form of constructive conflict -- may improve decisions in the change process

A form of voice – helps procedural justice

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Why People Resist Change

Direct costs

Losing something of value due to change

Saving face

Accepting change acknowledges own imperfection, past wrongdoing

Fear of the unknown

Risk of personal loss

Concern about being unable to adjust

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Why People Resist Change

(con’t)

Breaking routines

Organizational unlearning is part of change process

But past practices/habits are valued by employees due to comfort, low cognitive effort

Incongruent organizational systems

Systems/structures reinforce status quo

Career, reward, power, communication systems

Incongruent team dynamics

Norms contrary to desired change

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Creating an Urgency for Change

Inform employees about driving forces

Most difficult when organization is doing well

Customer-driven change

Adverse consequences for firm

Human element energizes employees

Sometimes need to create urgency to change without external drivers

Requires persuasive influence

Use positive vision rather than threats

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Minimizing Resistance to Change

Highest priority and first strategy for change

Improves urgency to change

Reduces uncertainty (fear of unknown)

Problems -- time consuming and costly

Communication

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Minimizing Resistance to Change

Provides new knowledge/skills

Includes coaching and other forms of learning

Helps break old routines and adopt new roles

Problems -- potentially time consuming and costly

Communication

Involvement

Stress Mgt

Coercion

Negotiation

Learning

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Minimizing Resistance to Change

Employees participate in change process

Helps saving face and reducing fear of unknown

Includes task forces, future search events

Problems -- time-consuming, potential conflict

Learning

Involvement

Stress Mgt

Coercion

Negotiation

Involvement

Communication

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Minimizing Resistance to Change

When communication, learning, and involvement are not enough to minimize stress

Potential benefits

More motivation to change

Less fear of unknown

Fewer direct costs

Problems -- time-consuming, expensive, doesn’t help everyone

Learning

Involvement

Coercion

Negotiation

Stress Mgt

Communication

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Minimizing Resistance to Change

Influence by exchange -- reduces direct costs

May be necessary when people clearly lose something and won’t otherwise support change

Problems

Expensive

Gains compliance, not commitment

Learning

Involvement

Stress Mgt

Coercion

Communication

Negotiation

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Minimizing Resistance to Change

When all else fails

Assertive influence

Radical form of “unlearning”

Problems

Reduces trust

May create more subtle resistance

Encourage politics to protect job

Coercion

Learning

Involvement

Communication

Stress Mgt

Negotiation

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Refreezing the Desired Conditions

“When you are leading for growth, you know you are going to disrupt comfortable routines and ask for new behavior, new priorities, new skills… Even when we want to change, and do change, we tend to relax and the rubber band snaps us back into our comfort zones.”

Ray Davis, CEO, Umpqua Bank

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Refreezing the Desired Conditions

Realigning organizational systems and team dynamics with the desired changes

Alter rewards to reinforce new behaviors

Change career paths

Revise information systems

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Change Agents

Change agent -- anyone who possesses enough knowledge and power to guide and facilitate the change effort

Engage in transformational leadership

Develop the change vision

Communicate the vision

Act consistently with the vision

Build commitment to the vision

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Strategic Vision & Change

Need a vision of the desired future state

Identifies critical success factors for change

Minimizes employee fear of the unknown

Clarifies role perceptions

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Diffusion of Change

Begin change as pilot projects

Effective diffusion considers MARS model

Motivation – pilot project is successful, reward diffusion of pilot project

Ability – Train employees to adopt pilot project

Role perceptions –Translate pilot project to new situations

Situational factors – Provide resources to implement pilot project elsewhere

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Action Research Approach

Action orientation and research orientation

Action – to achieve the goal of change

Research – testing application of concepts

Action research principles

Open systems perspective

Highly participative process

Data-driven, problem-oriented process

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Form

client-

consultant

relations

Disengage

consultant’s

services

Action Research Process

Diagnose

need for

change

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BBC Takes the Appreciative Journey

To become a more creative organization, the British Broadcasting Company sponsored an appreciative inquiry process of employee consultation, called Just Imagine. “It gave me a powerful mandate for change,” said BBC’s chief executive at the time.

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Appreciative Inquiry Approach

Frames change around positive and possible future, rather than traditional problem focus.

Application of positive organizational behavior

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Four-D Model of Appreciative Inquiry

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Large Group Interventions

Future search, open space, and other interventions that involve “the whole system”

Large group sessions

May last a few days

High involvement with minimal structure

Limitations of large group interventions

Limited opportunity to contribute

Risk that a few people will dominate

Focus on common ground may hide differences

Generates high expectations about ideal future