Hayes (2014): The theory and practice of change management
This chapter examines change from a process perspective, that is, the ‘how’ of change and the way a
transformation occurs.
States and processes
The state perspective focuses attention on ‘what’ it is that needs to be changed, is being changed or
has been changed.
The process perspective attends to the ‘how’ of change and focuses on the way a transformation
occurs. It draws attention to issues such as the pace of change and the sequence of activities, the
way decisions are made and communicated, and the ways in which people respond to the actions of
others. Change managers play a key role in this transformation process.
The change process
4 ideal types of process theories:
- Teleological theories: Assume that organizations are purposeful and adaptive, and present
change as an unfolding cycle of goal formulation, implementation, evaluation and learning.
Learning is important because it can lead to the modification of goals, or the actions taken to
achieve them.
- Dialectical theories: Focus on conflicting goals between different interest groups and explain
stability and change in terms of confrontation and the balance of power between the
opposing entities.
- Life cycle theories: Assume that change is a process that progresses through a necessary
sequence of stages that are cumulative, in the sense that each stage contributes a piece to
the final outcome, and related – each stage is a necessary precursor for the next.
- Evolutionary theories: Posit that change proceeds through a continuous cycle of variation,
selection and retention.
o Variations just happen and are not therefore purposeful but are then selected on the
basis of best fit with available resources and environmental demands.
o Retention is the perpetuation and maintenance of the organizational forms that arise
from these variations via forces of inertia and persistence.
Ordering of stages
Some theories place more emphasis on the order of the stages in the change process
- Life cycle theories are more prescriptive about this
- Teleological theories are less prescriptive about the ordering of stages. They present
development and change as a repetitive sequence of goal formulation, implementation and
evaluation, leading to the modification of an envisioned end state based on what was
learned or intended by the people involved. The sequence does not have to unfold in a way
that follows the ordered linear sequence.
Predetermined vs. constructed trajectories
- Life cycle and evolutionary theories present change as a predetermined process that unfolds
over time in a prespecified direction. This kind of change involves incrementally adapting
organizational forms in predictable ways. The process may be prescribed by some inherent
code or by the limits imposed by a wider system. For example, an organization’s institutional
context can limit the possibilities for change.
- Teleological and dialectical theories view change trajectories as constructed, in the sense that
goals, and the steps taken to achieve goals, can be changed at the will of those involved in
the process. The process is not unduly constrained by an inherent code or factors external to
, the immediate system. Those leading the change have the power to intervene and act in
ways that can make a real difference. Teleological and dialectical theories highlight the role
of human agency and assert that change agents can act to affect change.
The impact of sequence on outcome
The nature of the change sequence, whether reactive or self-reinforcing, will affect the extent to
which those leading the change will be able to realize this possibility.
Reactive sequences
Dialectical theories focus on the conflicting goals of those involved in a situation. These conflicts give
rise to reactive sequences, which are subsequent events that challenge, rather than reinforce, earlier
events. This highlights the importance of not only working to set a viable direction for change, but
also acting in ways that will align all those involved to support it.
Self-reinforcing sequences
Occur when a decision or action produces positive feedback that reinforces earlier events and
supports the direction of change. This reinforcement induces further movement in the same
direction.
While self-reinforcing sequences can deliver benefits over the short term, change managers need to
be alert to the possibility that they may draw them into a path that will deliver suboptimal outcomes
over the longer term. Three drivers of self-reinforcing sequences:
- Increasing returns:
o A particular technology that is first to market or widely adopted by early users, may
generate increasing returns and achieve a decisive advantage over competing
technologies.
o Four conditions that can promote increasing returns:
Set-up costs: If set-up costs are high, there is an incentive to stick with a
chosen option so as to spread costs over a longer run of activity.
Learning: Knowledge gained from repetitive use can lead to increased
proficiency and continuous improvement.
Coordination: Benefits received from a particular activity increase as others
adopt the same (more electric cars > more chargers > more electric cars).
Betting on the right horse: Options that fail to win broad acceptance will
have drawbacks later on. Therefore, people are motivated to select the
option they think will be adopted by most others. They anticipate that
persisting with this choice will generate increasing returns in the future.
o Increasing returns can create a situation where a company sticks with a winning
formula too long and fails to respond to new opportunities and threats as they
emerge.
- Psychological commitment to past decisions:
o Escalation of commitment: When faced whit negative outcomes following a
decision, leaders may commit additional resources in order to justify the earlier
decision and demonstrate the ultimate rationality of their original course of action.
, But the additional investment may not rescue the situation. Instead, it might lead to
further negative consequences, which, in turn, trigger another decision to invest yet
more in an attempt to secure a positive outcome. Two factors encourage this:
Leaders feel a need to demonstrate their own competence and justify earlier
decisions self-justification.
Leaders’ perceived pressure for consistency.
o Lecture: Sunk cost bias: continue behavior as a result of previous invested resources.
- Cognitive bias and interpretive frames
o Cognitive bias: Seek for information that confirms our beliefs as opposed to
alternative viewpoints. This cognitive bias may be reinforced if change managers
have a history of past successes, because a successful track record can promote a
sense of self-belief and the perception that they are able to exercise sufficient
control to achieve desired outcomes (trap of success).
o Where a change is led by a cohesive leadership team, this self-reinforcing mechanism
can be further strengthened if members suppress dissent and impede reality testing
by engaging in groupthink: When there is a lot of cohesion in a group, it’s difficult to
have alternative viewpoints.
Path dependence
An important feature of many self-reinforcing sequences is that early steps in a particular direction
can produce further movement in the same direction and, over time, this process can constrain
change leaders’ freedom to construct and manage an effective change trajectory. This is called
organizational path dependence. This begins with a critical event that triggers a pattern of self-
reinforcing practices, which eventually squeeze out alternatives and limit a change manager’s scope
for action. This is a three-phase process: preformation, path formation, and lock-in.
- Preformation phase: Few constraints to act other than organization’s established routines
and practices. However, one or more decisions trigger a self-reinforcing sequence. This point
is a critical juncture that marks the start of the second phase.
- Path formation phase: Self-reinforcing sequences lead to the development of a pattern of
events, decisions and actions that begins to dominate and divert change managers’ attention
away from alternative ways forward. The available options decrease and it becomes
progressively difficult to change course.
- Lock-in phase: Further narrowing of options and the process becomes locked into a
particular path. The risk of becoming locked into a particular way of functioning is that, when
faced by more efficient alternatives or critical changes in the environment, established
processes and practices persist and the system fails to adjust.
A minimum condition for breaking out of the path dependency that is often associated with self-
reinforcing sequences is the restoration of choice. Change managers need to do whatever they can
to maintain an awareness of and the freedom to adopt alternative courses of action.
This chapter examines change from a process perspective, that is, the ‘how’ of change and the way a
transformation occurs.
States and processes
The state perspective focuses attention on ‘what’ it is that needs to be changed, is being changed or
has been changed.
The process perspective attends to the ‘how’ of change and focuses on the way a transformation
occurs. It draws attention to issues such as the pace of change and the sequence of activities, the
way decisions are made and communicated, and the ways in which people respond to the actions of
others. Change managers play a key role in this transformation process.
The change process
4 ideal types of process theories:
- Teleological theories: Assume that organizations are purposeful and adaptive, and present
change as an unfolding cycle of goal formulation, implementation, evaluation and learning.
Learning is important because it can lead to the modification of goals, or the actions taken to
achieve them.
- Dialectical theories: Focus on conflicting goals between different interest groups and explain
stability and change in terms of confrontation and the balance of power between the
opposing entities.
- Life cycle theories: Assume that change is a process that progresses through a necessary
sequence of stages that are cumulative, in the sense that each stage contributes a piece to
the final outcome, and related – each stage is a necessary precursor for the next.
- Evolutionary theories: Posit that change proceeds through a continuous cycle of variation,
selection and retention.
o Variations just happen and are not therefore purposeful but are then selected on the
basis of best fit with available resources and environmental demands.
o Retention is the perpetuation and maintenance of the organizational forms that arise
from these variations via forces of inertia and persistence.
Ordering of stages
Some theories place more emphasis on the order of the stages in the change process
- Life cycle theories are more prescriptive about this
- Teleological theories are less prescriptive about the ordering of stages. They present
development and change as a repetitive sequence of goal formulation, implementation and
evaluation, leading to the modification of an envisioned end state based on what was
learned or intended by the people involved. The sequence does not have to unfold in a way
that follows the ordered linear sequence.
Predetermined vs. constructed trajectories
- Life cycle and evolutionary theories present change as a predetermined process that unfolds
over time in a prespecified direction. This kind of change involves incrementally adapting
organizational forms in predictable ways. The process may be prescribed by some inherent
code or by the limits imposed by a wider system. For example, an organization’s institutional
context can limit the possibilities for change.
- Teleological and dialectical theories view change trajectories as constructed, in the sense that
goals, and the steps taken to achieve goals, can be changed at the will of those involved in
the process. The process is not unduly constrained by an inherent code or factors external to
, the immediate system. Those leading the change have the power to intervene and act in
ways that can make a real difference. Teleological and dialectical theories highlight the role
of human agency and assert that change agents can act to affect change.
The impact of sequence on outcome
The nature of the change sequence, whether reactive or self-reinforcing, will affect the extent to
which those leading the change will be able to realize this possibility.
Reactive sequences
Dialectical theories focus on the conflicting goals of those involved in a situation. These conflicts give
rise to reactive sequences, which are subsequent events that challenge, rather than reinforce, earlier
events. This highlights the importance of not only working to set a viable direction for change, but
also acting in ways that will align all those involved to support it.
Self-reinforcing sequences
Occur when a decision or action produces positive feedback that reinforces earlier events and
supports the direction of change. This reinforcement induces further movement in the same
direction.
While self-reinforcing sequences can deliver benefits over the short term, change managers need to
be alert to the possibility that they may draw them into a path that will deliver suboptimal outcomes
over the longer term. Three drivers of self-reinforcing sequences:
- Increasing returns:
o A particular technology that is first to market or widely adopted by early users, may
generate increasing returns and achieve a decisive advantage over competing
technologies.
o Four conditions that can promote increasing returns:
Set-up costs: If set-up costs are high, there is an incentive to stick with a
chosen option so as to spread costs over a longer run of activity.
Learning: Knowledge gained from repetitive use can lead to increased
proficiency and continuous improvement.
Coordination: Benefits received from a particular activity increase as others
adopt the same (more electric cars > more chargers > more electric cars).
Betting on the right horse: Options that fail to win broad acceptance will
have drawbacks later on. Therefore, people are motivated to select the
option they think will be adopted by most others. They anticipate that
persisting with this choice will generate increasing returns in the future.
o Increasing returns can create a situation where a company sticks with a winning
formula too long and fails to respond to new opportunities and threats as they
emerge.
- Psychological commitment to past decisions:
o Escalation of commitment: When faced whit negative outcomes following a
decision, leaders may commit additional resources in order to justify the earlier
decision and demonstrate the ultimate rationality of their original course of action.
, But the additional investment may not rescue the situation. Instead, it might lead to
further negative consequences, which, in turn, trigger another decision to invest yet
more in an attempt to secure a positive outcome. Two factors encourage this:
Leaders feel a need to demonstrate their own competence and justify earlier
decisions self-justification.
Leaders’ perceived pressure for consistency.
o Lecture: Sunk cost bias: continue behavior as a result of previous invested resources.
- Cognitive bias and interpretive frames
o Cognitive bias: Seek for information that confirms our beliefs as opposed to
alternative viewpoints. This cognitive bias may be reinforced if change managers
have a history of past successes, because a successful track record can promote a
sense of self-belief and the perception that they are able to exercise sufficient
control to achieve desired outcomes (trap of success).
o Where a change is led by a cohesive leadership team, this self-reinforcing mechanism
can be further strengthened if members suppress dissent and impede reality testing
by engaging in groupthink: When there is a lot of cohesion in a group, it’s difficult to
have alternative viewpoints.
Path dependence
An important feature of many self-reinforcing sequences is that early steps in a particular direction
can produce further movement in the same direction and, over time, this process can constrain
change leaders’ freedom to construct and manage an effective change trajectory. This is called
organizational path dependence. This begins with a critical event that triggers a pattern of self-
reinforcing practices, which eventually squeeze out alternatives and limit a change manager’s scope
for action. This is a three-phase process: preformation, path formation, and lock-in.
- Preformation phase: Few constraints to act other than organization’s established routines
and practices. However, one or more decisions trigger a self-reinforcing sequence. This point
is a critical juncture that marks the start of the second phase.
- Path formation phase: Self-reinforcing sequences lead to the development of a pattern of
events, decisions and actions that begins to dominate and divert change managers’ attention
away from alternative ways forward. The available options decrease and it becomes
progressively difficult to change course.
- Lock-in phase: Further narrowing of options and the process becomes locked into a
particular path. The risk of becoming locked into a particular way of functioning is that, when
faced by more efficient alternatives or critical changes in the environment, established
processes and practices persist and the system fails to adjust.
A minimum condition for breaking out of the path dependency that is often associated with self-
reinforcing sequences is the restoration of choice. Change managers need to do whatever they can
to maintain an awareness of and the freedom to adopt alternative courses of action.
