Managing Change
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This document provides an overview of managing change in the workplace. It discusses various forces that can drive the need for organizational change, including external factors like technology and internal factors like changes in management. It then outlines Lewin's three-stage change model of unfreezing, changing, and refreezing. Alternative strategies for overcoming resistance to change are presented, such as the ADKAR model. Organization development is introduced as a way to create change through improved communication, employee development, and continuous improvement. Finally, examples are given of companies like PayPal, Google, Facebook, and Apple that succeeded by changing their business models when needed.
Managing Change
- 1. MANAGING CHANGE IN THE WORKPLACE By Elizabeth Ibarra, MBA Human Resources Department
- 2. AGENDA Learn the external and internal forces that can create the need for organizational change.Learn Lewin’s Change Model.Review Identify alternative strategies for overcoming resistance to change.Identify Creating change through Organization DevelopmentCreate Open floor discussion.Conclusion
- 3. Forces of Change EXTERNAL forces for change Originate outside the organization Technology Marketing Conditions Social Changes Political Forces INTERNAL forces for change Originate inside the organization. Nature of the Workforce Change in Managerial Personnel Deficiencies in Existing Management Structure Inflexibility (Avoiding Developing Inertia)
- 4. External Forces Technological advancements Customer and market changes Social changes Political forces
- 5. Internal Forces Nature of the Workforce Change in Managerial Personnel Deficiencies in Existing Management Structure Inflexibility (Avoiding Developing Inertia)
- 7. Unfreezing One of the more important stages to understand in the world of change It involves getting to the point of understanding that change is necessary First stage is about preparing ourselves, or others, before the change Focus is to create the motivation to change Setting up a deadline emphasizes the important of change. Lower motivation can delay the process and decrease the urgency of change This first 'Unfreezing' stage involves moving ourselves, or a department, or an entire business towards motivation for change. The Kurt Lewin Force Field Analysis is a useful way to understand this process and there are plenty of ideas of how this can be done.
- 8. Change (Transition) Change is not an event, but rather a process. Kurt Lewin called this process a “Transition” Transition is the inner movement or journey we make in reaction to a change. This stage is often the hardest as people are unsure or even fearful Transition is a process that occurs within each of us. There's no set time limit as each of us is different Support is really important here and can be in the form of training, coaching, and expecting mistakes as part of the process It's really useful to keep communicating a clear picture of the desired change - and the benefits - so people don't lose sight of where they are heading
- 9. Freezing (Refreezing) This stage is about establishing stability once the changes have been made The changes are accepted and become the new norm People form new relationships and become comfortable with their routines Lewin's concern is about reinforcing the change and ensuring that the desired change is accepted and maintained into the future. Without this, people tend to go back to doing what they are used to doing. This is probably what Kurt Lewin meant by freezing - supporting the desired change to make sure it continues and is not lost.
- 11. The ADKAR Model The model is developed from a study of 900 organizations across 59 countries over a 14-year period, carried out by the US research organization, Prosci. The research found that getting employees to support a change strategy was the key to its success, and there are 5 key steps to ensuring employee support. Awareness – Employees need to be aware of exactly what change is occurring and why it is necessary. If employees are not aware of these things, they can lose motivation and direction within the strategy. The manager has a crucial role in ensuring employees are fully aware of every element of the change process. Desire – Support for the change strategy should come naturally from the employees. Rather than forcing the change upon your employees, including them in developing the project and vision will ensure their support for the final outcome. Knowledge – Change will likely bring a change in routine and skills for your employees, as well as the overall organization change. For this reason, employees should be fully supported in their acquisition and development of these skills. Ability – This knowledge must then de developed, but this can only happen if the individuals have the necessary ability. Reinforcement – The change process, and rewards for individuals changing their methods, should be reinforced long after the change has occurred. This ensure employees resist the temptation of slipping back into old habits.
- 12. Creating Change Through Organization Development Organization Development (OD) The OD Process is based on the action research model which begins with an identified problem or need for change. The OD process begins when an organization recognizes that a problem exists which impacts the mission or health of the organization and change is desired.
- 13. Benefits of OD The purpose of OD is to enable an organization to better respond and adapt to industry/market changes and technological advances. In today’s post we will focus on five benefits of OD from continuous improvement to increased profits. 1) Continuous Improvement – The OD process creates a continuous cycle of improvement whereby strategies are planned, implemented, evaluated, improved and monitored. Organizational development is a proactive approach that embraces change (internal and external) and leverages it for renewal. 2) Increased Communication – One of the key advantages to OD is increased communication, feedback and interaction within the organization. The goal of improving communication is to align all employees to shared company goals and values. Candid communication also leads to increased understanding of the need for change within the organization. Communication is open across all levels of the organization and relevant feedback is recurrently shared for improvement. .
- 14. Benefits of OD 3) Employee Development – Organizational development focuses on increased communication to influence employees to bring about desired changes. The need for employee development stems from constant industry and market changes. This causes an organization to regularly enhance employee skills to meet evolving market requirements. 4) Product & Service Enhancement – A major benefit of OD is innovation, which leads to product and service enhancement. Innovation is achieved through employee development, which focuses on rewarding successes and boosting motivation and morale. 5) Increased Profit- Organizational development affects the bottom line in a variety of ways. Through raised innovation and productivity, efficiency and profits are increased. Costs are also reduced by minimizing employee turnover and absenteeism. As OD aligns objectives and focuses on development, product/service quality and employee satisfaction are increased.
- 15. Companies that Succeeded by Changing Their Business Model PayPal PayPal, believe it or not, was not founded to be the online payment service that it is today. In her book Founders at Work, Jessica Livingston interviews PayPal founder Max Levchin. During the interview, Levchin reveals that PayPal was originally envisioned as a cryptography company, and then later as a means of transmitting money via PDAs. Only after several years of trial and error (and overcoming user fraud that almost destroyed the company) did PayPal find its sweet spot as the default online payment system of millions. The transition wasn’t effortless, and the company, at various points in time, deliberated the merits of the staying the course or changing business models. But ultimately, their flexibility proved to be a major asset. Despite being founded in 1998, PayPal was swift enough to change course in time to go public in 2002 and later get bought out by eBay for $1.5 billion.
- 16. Companies that Succeeded by Changing Their Business Model Google For much of its early life, Google had no business model to speak of. As Wired co-founding editor John Battelle explains in his book The Search, Google was once a maddeningly unprofitable company, fumbling left and right for a stable revenue source. After making marginally profitable forays into selling search appliances to businesses and its own search technology to other search engines, Google radically changed course. In 2003, the company launched its AdWords program which allowed businesses to advertise to people searching for things on Google.com. Almost overnight, Google took the leap from popular search tool to advertising juggernaut. In 2008, Google reported to the SEC that it had generated $21 billion in advertising-driven revenue alone. To this day, AdWords comprises the lion’s share of Google’s total revenue and profits. AdWords also paved the way for other search engines, such as Yahoo’s Search Marketing service and MSN’s Bing platform among others
- 17. Companies that Succeeded by Changing Their Business Model Facebook In its early years, Facebook consisted entirely of college students. Unlike contemporaries Friendster and MySpace, which exhausted themselves to acquire as many users as possible from all ends of the Earth, Facebook operated more like a “secret society”, going so far as to require .edu e-mail addresses in order to join. And many of their users liked it that way, preferring Facebook’s exclusivity to the “the more the merrier” approach of other social networks. The problem was that Facebook could only expand so much by catering to only college students. So despite much protest and uproar, Facebook founder Mark Zuckerberg decided to open Facebook to high school students in 2005. By 2006, the service had opened to anyone 13 years or older with a valid e-mail address. By and large, the strategy change has worked. A 2009 study by Compete.com found Facebook to be the most popular social network in terms if unique views and monthly visits. The company has also sold a 1.6% stake to Microsoft for $240 million, and rumors of an IPO continue to appear
- 18. Companies that Succeeded by Changing Their Business Model Apple Not long ago, Apple was on the brink of fizzling out. From about 1993-1997, Apple found itself struggling to find a consistently profitable source of revenue, trying and failing to market everything from digital cameras to portable CD players to TV appliances. With Steve Jobs ouste1d due to internal squabbles, the company attempted to right ship with a revolving door of stopgap CEOs (including one former head of Pepsi-Cola.) Finally, in 1997, Jobs returned as CEO and instituted a bold change of direction. Instead of continuing to aimlessly follow marginal product ideas down the rabbit hole, Apple began to focus once more on creating beautiful consumer electronics, starting with the iMac in 1998. Apple also acquired several companies in the video editing and digital production space, which comprises much of its customer base. The iPod was an even bigger success, selling over 100 million units within six years of its 2001 launch according to the BBC. The iPhone, another smash hit, recently produced a 100% year- over-year rise in sales according to CNN Money. None of this would have been possible without a drastic change in business models.
- 19. Why Change is Necessary For change to be beneficial, the people involved must possess sufficient energy to absorb and incorporate new behaviors and accompanying mindsets. The capacity necessary to absorb the disruption is known as resilience. Resilience is the ability of an individual or a system to deal with change and continue to develop. In the book Resilience Thinking, Scientist Brian Walker and Science Writer David Salt present a conceptual overview along with five case studies in the real world investigating how the interacting systems of people and nature can best be managed in the face of disturbances, surprises, and uncertainty. On an organizational level, staying relevant in today’s complex, dynamic marketplace requires new innovative, adaptive behaviors that embrace change. Change is important for any organization if they intend to retain their competitive edge and meet the needs of their steady customer base. To do otherwise would constitute failure. Organizations and people that embrace change and effectively innovate, adapt and perform through a hardship will survive. Those who resist the change may fail in the face of adversity.
Editor's Notes
- #4: 1. Technology : Technology is the major external force which calls for change. The adoption of new technology such as computers, telecommunication systems and flexible manufacturing operations have profound impact on the organizations that adopt them. The substitution of computer control for direct supervision, is resulting in wider spans of control for managers and flatter organizations. Sophisticated information technology is also making organizations more responsive. Both the organizations and their employees will have to become more adaptable. Many jobs will be reshaped. Individuals who do routine, specialized and narrow jobs will be replaced by workers who can perform multiple tastes and actively participate in decision making. Managements will have to increase their investment in training and education of the employees because employees' skills are becoming obsolete more quickly. Japanese firms have progressed rapidly because they are very fast in adopting new technological innovations.2. Marketing Conditions : Marketing conditions are no more static. They are in the process of rapid change as the needs, desires and expectations of the customers change rapidly and frequently. Moreover, there is tough competition in the market as the market is flooded with new products and innovations everyday. New methods of advertising are used to influence the customers. Today the concept of consumerism has gained considerable importance and thus, the consumers are treated as the kings. 3. Social Changes : Social and cultural environment also suggest some changes that the organizations have to adjust for. There are a lot of social changes due to spread of education, knowledge and a lot of government efforts. Social equality, e.g., equal opportunities to women, equal pay for equal work, has posed new challenges for the management. The management has to follow certain social norms in shaping its employment, marketing and other policies. 4. Political Forces : Political environment within and outside the country have an important impact on business especially the transnational corporations. The interference of the government in business has increased tremendously in most of the countries. The corporate sector is regulated by a lot of laws and regulations. The organizations do not have any control over the political and legal forces, but they have to adapt to meet the pressure of these forces. 1. Nature of the Work Force : The nature of work force has changed over a passage of time. Different work values have been expressed by different generations. Workers who are in the age group of 50 plus value loyalty to their employers. Workers in their mid-thirties to mid-forties are loyal to themselves only. The youngest generation of workers is loyal to their careers. The profile of the workforce is also changing fast. The 1990s has been described as a decade where organizations will have to learn to manage diversity. The new generation of workers have better educational qualifications, they place greater emphasis on human values and question authority of managers. Their behavior has also become very complex and leading them towards organizational goals is a challenge for the managers. The employee turnover is also very high which again puts strain on the management. The work force is changing, with a rapid increase in the percentage of women employees, which in turn means, more dual career couples. Organizations have to modify transfer and promotion policies as well as make child care and elder care available, in order to respond to the needs of two career couple. 2. Change in Managerial Personnel : Change in managerial personnel is another force which brings about change in organization. Old managers are replaced by new managers which is necessitated because of promotion, retirement, transfer or dismissal. Each manager brings his own ideas and way of working in the organization. The informal relationships change because of changes in managerial personnel. Sometimes, even though there is no change in personnel, but their attitudes change. As a result, the organization has to change accordingly. 3. Deficiencies in Existing Management Structure : Sometimes change are necessary because of some deficiencies in the existing organizational structure, arrangement and processes. These deficiencies may be in the form of unmanageable span of management, larger number of managerial levels, lack of co-ordination among various departments, obstacles in communication, multiplicity of committees, lack of uniformity in policy decisions, lack of cooperation between line and staff and so on. However, the need for change in such cases goes unrecognized until some major crisis occurs. 4. To Avoid Developing Inertia : In many cases, organizational changes take place just to avoid developing inertia or inflexibility. Conscious managers take into account this view that organization should be dynamic because any single method is not the best tool of management every time. Thus, changes are incorporated so that the personnel develop liking for change and there is no unnecessary, resistance when major changes in the organization are brought about.
- #8: Stage 1: Unfreezing The Unfreezing stage is probably one of the more important stages to understand in the world of change we live in today. This stage is about getting ready to change. It involves getting to a point of understanding that change is necessary, and getting ready to move away from our current comfort zone. This first stage is about preparing ourselves, or others, before the change (and ideally creating a situation in which we want the change). The more we feel that change is necessary, the more urgent it is, the more motivated we are to make the change. Right? Yes, of course! If you understand procrastination (like I do!) then you'd recognize that the closer the deadline, the more likely you are to snap into action and actually get the job started! With the deadline comes some sort of reward or punishment linked to the job. If there's no deadline, then the urge to change is lower than the need to change. There's much lower motivation to make a change. If there's no urgency or motive to change most of us will do....nothing!
- #11: While many change management projects focus on the steps necessary for organizational change, ADKAR® emphasizes that successful organizational change occurs only when each person is able to transition successfully. It makes sense then that this model, developed by Jeff Hiatt, CEO of Prosci® Change Management (www.prosci.com), and first published in 2003, focuses on 5 actions and outcomes necessary for successful individual change, and therefore successful organizational change.