COST EFFECTIVE CHANGE MANAGEMENT PROCESS

BY: SEEKERS INTERNATIONAL TRAINER: MR. SHAHNAWAZ KHAN WORKSHOP DATE: 16TH JUNE 2011 AT LAL QILA WWW.SEEKERSINTL.COM

Change Management
Change is the alteration / modification in any thing Change is the only element which remains constant and always remained unchanged Change is necessary for survival Change is always comes from with in MANAGEMENT OF Change Organizational perspective Organizational change is the movement of an organization from the existing plateau toward a desired future state in order to increase organizational efficiency and effectiveness (Cummings and Worley, 2005; George and Jones, 2002). Today change is constant and organizational leaders who anticipate change and react rapidly and responsibly are successful. However, the organizational leaders who anticipate and invent the future are even more successful because those who invent the game are the leaders in their industry. Other organizations are followers that adapt to change. Still others are the organizations that do not survive. Winners respond to the pace and complexity of change. They adapt, learn and act quickly. Losers try to control and master change in the environment. Change with expense Change without expense

Areas to be focused: Planning Setting objectives Implementation of policies Organizing Decision making Structure Departmentation Hierarchy of Authority/ responsibility relationship Span of control/ Directing Leadership styles Motivation theories Controlling Strategic management domain Within the strategic domain we have two concerns: One is Strategy formulation that is formulating mission, vision and objectives after going through 2

environmental assessment (a key feature of strategic management) Second pertains to strategy implementation means organization structure, culture and politics. While the whole focus of the popular framework of strategic management is the development and sustenance of competitive advantage of a firm or organization, at multiple levels of strategy making functional, business, corporate and societal levels. Major differences in changes today and those of previous eras are: (1) the simultaneous nature of the changes; (2) the speed at which the different types of change occur; (3) the complexity of changes, (4) the immediate communication and impact of the changes throughout the world (5) the need for individuals as well as leaders of organizations and nations to step up and immediately make decisions and address problems, issues and resolution. Change revolves around 3 Major Factors Change People Mentality Attitude / Behavior Expectation Perception Resistance It is the people who can make change implementation either a successful or failure. So, peoples traits, psyches, attitudes, behaviors and their orientation is required to be analyzed particularly at lower levels where masses of people directly involved in change orientation and execution. Fear of failure non performance and humiliation It is a general tendency that whenever a change program, or a plan introduced in an organization and is perceived negative by greater majority of managers in the organization as against the established patterns, norms, and conventions then the resistance level will quite high. One such reason for higher resistance towards change plan has been the perceived threat of non-performance which acts as a source of failure associated with humiliation. Fear of change lead the individuals or groups from a comfort zone to a non comfort zone where learning about new values, new technologies, new patterns or fears about unknowns produce resistance. This resistance to change can cause considerable loss of efficiency in organizations.

Model of Employee Decision to Actively Resistant Organizational Change Effort

Following Techniques can be effective for reducing Resistance towards Change 1. Communicate and educate your employees the logic of change 2. Participation 3. Facilitation and support 4. Negotiation 5 Manipulation and Cooptation using a threat with no intentions just to get an advantage Buy off the leaders of resistance group by giving them a key role in change decision People respond differently to change. Some people find it exciting and enjoy change, while others vehemently resist it. Resistance is a normal reaction to change and should be expected. This is especially true during the development stages of groups undergoing change and working on improvement projects Leaders need to understand this reaction and support the teams as they go through these phases of change. Transformational organizations recognize normal resistance and plan strategies to enable people to work through their resistance (Kohles, Baker and Donaho, 1995). Change Structure Complexity Centralization Redesign How authority and responsibility is distributed across the organization. Authority pattern in organization shows who reports whom and who is answerable and accountable to whom. Departmentation or task grouping, hierarchy layers, span of control and the extent of formalization (bureaucratic or participative one). Technology Induction 4

Work process Methods Equipments Technology is considered the engine of growth in todays world. Perhaps the greatest challenge for contemporary organizations is the acquisition and integration of technology in its strategy, structure and process. As such the concern of top managers is how to avoid organization being obsolete and how to cope and absorb the impact of changing information and communication technologies which have decisively influencing production and consumption behavior? Why Change is necessary Organization has an articulated purpose or objective There is a kind of constant questioning, verifying, changing and re-defining of organization objectives by interacting with environment. Once objectives are revised consequently lead to modification of structure of roles & managerial process. Organization process The word process refers to the transformation input to out put. For e.g. production process means conversion of raw material to finished goods. Such types of processes are technology-driven most of the time. Broadly speaking viz. a process we have two types of changes; Total Quality Management (TQM) working with in the system and Business Process Restructuring (BPR) working on the system. Similarly in context of organization there are other processes such as decision making, objective setting, communicating, controlling & coordinating Organization structure: As discussed above Organization Culture Values, beliefs and mind-set of a manager at work Corporate Culture Cognitive style (thought process), Personality, Behavior Individualism - Collectivism Masculinity - Feminism Power Distance - Low or High Uncertainty Avoidance - Low or High Time orientation - Low or High Organization Politics Changes have political consequences Change disturbs power-distribution in organization Managers have interests & groupings Therefore power may enable or resist change. Role of External Environment Social Issues Political Issues Cultural Issues Government Policies 5

Legal system Economic Scenario Consumer Behavior Globalization Todays Changing World Economic conditions change as they are impacted by organizational failures, terrorist attacks, natural disasters, etc. Consumer behavior changes, e.g., children use computers at a very early age Suppliers fail as big customers force them to lower prices or as other changes impact them e.g., Mattel toys manufactured in China containing lead Employee unions strike as organizational leaders give themselves bigger bonuses salaries and ask for concessions from unions Violence spills over from society to the work place and schools. Children and adults are injured and/or Natural disasters occur throughout the world and individuals, organizations and nations try to respond to the impact of hurricanes, earthquakes, tornadoes, tsunamis, fires and floods Countries and terrorists threaten and attack each other verbally and physically; and the pictures of attacks are shown 24 hours a day 7 days a week throughout the world Individuals and families experience pain from addictions to credit card debt, illegal and legal drugs, pornography, gambling, etc. Types of Change Natural Evolutionary Change Something which is all the time going on in an organization. This is known as learning process occurring in organization taking placing knowingly and unknowingly. This refers to environmental adaptation, synonymous with evolutionary change, may be progressive leading to growth and development or regressive or degenerating one leading to organization illness or death Planned & Managed Change As the name suggests this type of change means one can control the direction of change and learning. Learning can be controlled. Managers can stabilize the processes that need to be stabilized, even organization culture can be changed and managed. So one can change and stabilize some ways of working Unplanned Revolutionary Change Refers to impact of turbulent and unstable environment which creates disequilibrium and high uncertainty for organizations strategy and structure. In any situation which involves changing from one state to another there are 3 Phases 1. The Known The present state is known familiar and predictable , comfort zone unfreeze 2. The transition It involves moving into the unknown, the unpredictable the uncertain 3. The future or desired state FREEZE Present state Certain Transition stage Fear of loss Desired Stage Certain 6

Predict Stable Defined Comfortable Identify Safe

Anxiety Alteration Mini identified Unknown confused Active

Predictable Stable Defined Comfortable identified Safe

Tangible Controllable Action Research Models

unsettled Ambiguous

Tangible Controllable

Action research is a combination of changing not only attitudes and behavior, but also testing the change method being utilized (McShane and Von Glinow, 2005; Collier, 1945; Lewin, 1945, 1951; French,1969; Schein, 1980; Argyris, 1970, 1968). The first part of the change process must be action-oriented because the ultimate goal is to make change happen. The second part revolves around trying different frameworks in a real situation to verify whether or not the theories really work or applying the various theories in various situations that require change. The process of action research is first to diagnose a need for change (unfreezing), then to introduce an intervention (moving) and finally to valuate and stabilize change (refreezing). Lewins Model In Lewins Model, there is a stipulation for three distinct steps in change you can cause needed change to occur. However, in order for change to be permanent, you must dismantle the present (and the capability to move back to the present), move from the present to the future and put in place the people and processes to ensure permanency (Lewin, 1951). This model is still relevant in terms of what to do. Scheins (1980) Extension of Lewins Change Model Schein (1992, 1985, 1980) discusses the three steps of Lewins Change Model as three stages of change and describes ways to unfreeze an organization, move it from the status quo to a future state and freeze the changes. He indicates that for unfreezing to work and for people in the organization to embrace change, they must experience a need for change, i.e., dissatisfaction with the status quo. Then, once the need for change and the desired change are introduced, people will see the gap between what exists and what will exist. Because of guilt and/or anxiety, people will be motivated to reduce the gap and achieve the desired change. Kotters Model Kotter (1996, 1998) developed a model which should be used at the strategic level of an organization to change its vision and subsequently transform the organization. Studies using this model have shown that the change process goes through a set of phases. Each phase lasts a certain amount of time and mistakes at any phase can impact the success of the change. Kotters eight step approach to change management is as follows: 1. People typically prefer the status-quo. Change means uncertainty about what the future looks like. Uncertainty makes people uncomfortable.

2. This step is similar to interventions in drug treatment You can try and battle the resistance to change that people have by yourself, or you can make your life much easier by enlisting the help of others. To counteract resistance, one option is to form a powerful coalition of managers to work with the most resistant people (Kotter, 1996, 1998). 3. Clear plan in place. 4. If people do not know that change is coming or has occurred, they are more likely to resist the change. 5. People must be encouraged or inspired to change. Also, if you want them to do something new, you will probably get more cooperation from them if you teach them how first and then give them the new tools necessary to do things the new way. This step empowers others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving change (Kotter, 1996, 1998). 6. People need to be rewarded when they break away from old behaviors and do something that is new and desirable. Basically it is positive reinforcement. 7. Still need to observe actions. 8. Make the changes more permanent, you should reinforce them by demonstrating the relationship between new behaviors and organizational success change (Kotter, 1996, 1998). Shields Model Shields (1999) model builds on the idea that when change fails, it is because of insufficient attention to the human and cultural aspects of business. Shields suggests that there are critical components that are necessary for leaders to change an organization. If a change occurs in one component and one does not align the other components, this will lead to inefficient work processes. This system integrates human resources management with business process innovations. Organizational leaders who are considering change should clearly understand which strategies they want to change and define critical success factors so that they will know the extent to which the desired change is possible. Some of the change models do not address this phase of change. Organizations must communicate the strategic objectives to the work force. If this is not done, the transformation effort will be reduced to a series of unrelated change initiatives. Finally, organizational leaders must review each of the work elements to identify their degree of alignment in support of the business strategy (Shields, 1999). Shields (1999) suggest five steps to accomplish change: 1. Define the desired business results and change plans 2. Create capability as well as capability to change 3. Design innovative solutions 4. Develop and deploy solutions 5. Reinforce and sustain business benefits. Wischnevsk Wischnevsky (2004), organizational leaders are more likely to act if they perceive a gap between the actual level of performance compared to an internal or external benchmark or if there are changes that 8

require their action. Research has shown that certain circumstances tend to increase the likelihood that leaders will engage in major organizational change initiatives. These circumstances include top management changes, environmental shifts and a decline in performance. World class organizations are known for their workplaces which are customer-focused and which empower people to change. All of the models incorporate the idea of reinforcing and creating small improvements to encourage additional change. Most organizations have a model for improvement. One of the most common is the Shewhart (or Deming) Cycle, also known as the Plan-Do-Check/Study-Act Cycle (Deming, 1986).

Management of COMPLEX CHANGE

ACTION PLAN ACTION PLAN

VISION

+ +

SKILLS

+ + +

INCENTIVES

+ + + +

RESOURCES

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=CHANGE

SKILLS

INCENTIVES

RESOURCES

=CONFUSION

VISION

+ + + +
SKILLS

INCENTIVES

RESOURCES

ACTION PLAN ACTION PLAN ACTION PLAN

=ANXIETY

VISION

+ + +
INCENTIVES

RESOURCES

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=GRADUAL

CHANGE
VISION SKILLS

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RESOURCES

=FRUSTRA-

TION
VISION SKILLS INCENTIVES =FALSE

STARTS

Kirk Patrick Philip method of Change evaluation

These channels enable project team to facilitate organization through phases

Communications Sponsor Roadmap Training

Awareness Desire Knowledge Ability Reinforcement

Readiness / Resistance Mgt.

Coaching

10

Role Change mgmt resource/team Executives and senior managers Middle managers and front-line supervisors

Ideal implementation I develop the change management strategy and plans. I am an integral part of project success. I launch (authorize and fund) changes. I sponsor change.

I coach my direct reports through the changes that impact their day-to-day work. I manage the technical side of the change. I integrate change management into my project Project team plans. I support different activities of the change Project support functions management team and project team. * Change management group, dept or office We own the change management methodology and support its implementation in the organization.

Mapping change management roles

Authorize and fund Participate actively and visibly Create coalition
Change management resource/team Executives and senior managers Middle managers and supervisors

Apply methodology Formulate strategy Develop plans

Communicator Advocate Coach Liaison

Design the change Manage technical side Engage with CM

Project team

Project support functions

Experience Knowledge Tools

WORK SHEETS If given you an opportunity, what kind of change you want to bring in your Company and most importantly WHY What kind of change/s is required in Pakistan, elaborate your views in detail First on paper and then come on stage and discuss THE END BY:SEEKERS INTERNATIONAL 11