1. Introduction to Organizational Change
What is change and the need for change
• “Change is necessary for survival” (Smith et al., 2014)
• “Planned alterations of organisational components to improve the
effectiveness of the organisation” (Cawsey, 2011) à Implied
intentionality and purposeful action to change organisational practices
• Specifically, private sector organisations, need to react fast to market
changes to remain competitive. As a result, organisations are moving
towards more entrepreneurial organisations (Apple: driven by
innovation)
• Organisational learning is the process by which organisations learn. Thus
a learning organisation is an organisation in which processes are
imbedded in the organisational culture that allows and encourages
learning (Sunassee, 2004)
• Types of organisational change (Hayes, 2002) à advantages and
examples
o Incremental
§ Quality enhancement program
o Radical
§ Privatisation
o Continuous
Triggers for organisational change
• External
o Political
§ Legislation
§ Regulation
§ Tax
o Economic
§ Exchange rates
§ Wages
§ Competition
o Socio-cultural
§ Demographics
§ Cultural values and habits
o Technological
• Internal
o Organisational workflow
o People
o Structure
o Technology
,Sigmoid Curve:
Developed by Handy, it represents the lifespan of an individual or an organisation. It
suggests that to survive and grow all individuals and organisations must implement
transformational change. The key to future success, is to have the foresight and
discipline to see the new opportunities and make a transformation to a new curve before
the current one is too far in decline. The new curve must begin while the first one can
still support it through resources and energy. The challenge is to know when to start the
new curve
Nokia illustrates how a company with increasing returns can create a situation where
the corporation sticks with a winning formula too long and fails to respond to new
opportunities and threats that may emerge. During the 1990s and early 2000s, Nokia
dominated the pone industry. Eventually competition in the mobile phone sector rose in
2007 when Apple introduced the iPhone and Nokia soon found its market share
decreasing. Nokia failed to understand the wave of radical innovation that
revolutionised the mobile industry and lost against Apple’s redefined software. They
went from accounting 48% of mobile market share in 2007 to 3.5% 5 years later
à Reasons why organisations fail
• Weak culture not aligned with organisational mission
• Vision not communicated effectively
o Only 9% agreed that they would regard their organisation as a model
of best practice in communicating about change
• Lack of communication leading to uncertainty which negatively affects
employee motivation to embrace change
o If change happens rapidly, and support is inexistent, this will lead to
negative experiences, creating lack of loyalty due to uncertainty
• Lack of trust and accountability
, • Lack of time to adapt for reflection and thinking (Doyle at al., 2000) à
Change Curve (Adams et al., 1976)
• Lack of employee involvement
o BA cabin crew dispute: BA was forced to change, in order to
compete against increasing nuber of low-cost airlines, absorb fuel
prices and adapt to the global recession. Cabin crew was reduced to
reduce costs. As a result, heavy strikes and suspensions started.
Strikes were so serious that the company withdrew benefits for
workers participating in the strike. à negative reactions to change
can lead to deviations from the leaders intended transformation path.
Pierson (1998) observes that events can trigger counter-reactions that
are powerful enough to move the system in a completely new
direction
• Not enough training resources
o Navy Seal: constant training to deal with change constantly in
missions à designed to mitigate fear and fatigue so that soldiers stay
focused
• Remember failure of past change management activities
• Unrealistic change (cognitive bias)
o A Dutch bank aimed at introducing voice automation and routing to
reduce costs while using technology to analyse in-bound calls. The
CEO had an excellent history of implementing technological change,
therefore he thought he was right. However, he was advised that
plans were too ambitious. His ego forced him to continue, until
results from focus groups with customers resulted to have an
enormous amount negative feedback that eventually the CEO was
forced to abandon the project
Mixed Results, Lousy Process: the Management Experience of Organisational
Change (Doyle et al., 2000)
The aim is to explore the experience of change. Findings are based on a postal survey of
92 middle and senior managers from 14 public and 14 private sector organisations in the
Midlands in mid-1998. Six themes: Communication, evaluation, learning, attitudes and
relationships, implementation and change and continuity
1. Communication
a. Vertical and cross-functional organisational communication remains
problematic
b. Managers believe that better relationships and employee involvement are
required
2. Change evaluation
a. Change continues to resist systematic pre-planning, monitoring and
assessment
b. Change has been subjectively evaluated by managers as beneficial
c. More change is anticipate over the next five years
3. Learning from experience
a. Change is perceived as a valuable learning experience
b. Change knowledge and skill are now required at all organisational levels
4. Attitudes and relationships
, a. Changes have been perceived by managers as personally beneficial
b. Change has generated cynicism, fatigue and ‘burnout’
c. Change has reduced commitment and loyalty, and damaged relationship
5. Implementation: theory and practice
a. Commitment is now ambivalent
b. Many managers feel that change has been driven too fast and has
damaged people
c. Change is now perceived to be a generic management competence
6. Change and continuity
a. Most managers perceive change to have been real and irreversible
b. The benefits include flatter hierarchies teamwork, flexibility and
improved cooperation
ADKAR Goal Oriented Change Management Model (5 goals to be successful)
o Successful change occurs when individual change matches the stages of
organisational change
1. Awareness
a. Understanding the need to change
b. Routinely, clearly communicate why change is happening
c. à In business there may be individuals who believe that change is a
waste of time, resources and energy à The leader will need to make an
active push for increased awareness of the need to change and explain
how the change will be positive for the business by increasing efficiency,
effectiveness, productivity, sales, etc.
2. Desire
a. Leaders have to appeal to the emotional and logical side of employees à
communicate benefits of change (preferably individually)
3. Knowledge
a. Employees are willing to participate in change and understand the need
to do so, but doesn’t have the knowledge or skills to do it à training and
education is necessary where change involves new knowledge and skills
(for instance: new software)
4. Ability
a. Employee is very knowledgeable, but does not have the ability (skill) to
carry out their new task à coaching activities in an environment where
questions can be asked and mistakes can be made
5. Reinforcement
a. Ensuring the change stays and old habits do not re-emerge à Strong
reinforcement strategy by monitoring (KPI, Critical Success Factors) or
implement reward strategies (Tayloristic perspective) to keep momentum
going
b. If change does not stay, provide new training
c. If change stays, celebrate early successes to create a culture that support
the new vision and keeps change on track
The model is built for incremental change and has a narrow focus. Would apply on
macro-level change initiatives.
What is change and the need for change
• “Change is necessary for survival” (Smith et al., 2014)
• “Planned alterations of organisational components to improve the
effectiveness of the organisation” (Cawsey, 2011) à Implied
intentionality and purposeful action to change organisational practices
• Specifically, private sector organisations, need to react fast to market
changes to remain competitive. As a result, organisations are moving
towards more entrepreneurial organisations (Apple: driven by
innovation)
• Organisational learning is the process by which organisations learn. Thus
a learning organisation is an organisation in which processes are
imbedded in the organisational culture that allows and encourages
learning (Sunassee, 2004)
• Types of organisational change (Hayes, 2002) à advantages and
examples
o Incremental
§ Quality enhancement program
o Radical
§ Privatisation
o Continuous
Triggers for organisational change
• External
o Political
§ Legislation
§ Regulation
§ Tax
o Economic
§ Exchange rates
§ Wages
§ Competition
o Socio-cultural
§ Demographics
§ Cultural values and habits
o Technological
• Internal
o Organisational workflow
o People
o Structure
o Technology
,Sigmoid Curve:
Developed by Handy, it represents the lifespan of an individual or an organisation. It
suggests that to survive and grow all individuals and organisations must implement
transformational change. The key to future success, is to have the foresight and
discipline to see the new opportunities and make a transformation to a new curve before
the current one is too far in decline. The new curve must begin while the first one can
still support it through resources and energy. The challenge is to know when to start the
new curve
Nokia illustrates how a company with increasing returns can create a situation where
the corporation sticks with a winning formula too long and fails to respond to new
opportunities and threats that may emerge. During the 1990s and early 2000s, Nokia
dominated the pone industry. Eventually competition in the mobile phone sector rose in
2007 when Apple introduced the iPhone and Nokia soon found its market share
decreasing. Nokia failed to understand the wave of radical innovation that
revolutionised the mobile industry and lost against Apple’s redefined software. They
went from accounting 48% of mobile market share in 2007 to 3.5% 5 years later
à Reasons why organisations fail
• Weak culture not aligned with organisational mission
• Vision not communicated effectively
o Only 9% agreed that they would regard their organisation as a model
of best practice in communicating about change
• Lack of communication leading to uncertainty which negatively affects
employee motivation to embrace change
o If change happens rapidly, and support is inexistent, this will lead to
negative experiences, creating lack of loyalty due to uncertainty
• Lack of trust and accountability
, • Lack of time to adapt for reflection and thinking (Doyle at al., 2000) à
Change Curve (Adams et al., 1976)
• Lack of employee involvement
o BA cabin crew dispute: BA was forced to change, in order to
compete against increasing nuber of low-cost airlines, absorb fuel
prices and adapt to the global recession. Cabin crew was reduced to
reduce costs. As a result, heavy strikes and suspensions started.
Strikes were so serious that the company withdrew benefits for
workers participating in the strike. à negative reactions to change
can lead to deviations from the leaders intended transformation path.
Pierson (1998) observes that events can trigger counter-reactions that
are powerful enough to move the system in a completely new
direction
• Not enough training resources
o Navy Seal: constant training to deal with change constantly in
missions à designed to mitigate fear and fatigue so that soldiers stay
focused
• Remember failure of past change management activities
• Unrealistic change (cognitive bias)
o A Dutch bank aimed at introducing voice automation and routing to
reduce costs while using technology to analyse in-bound calls. The
CEO had an excellent history of implementing technological change,
therefore he thought he was right. However, he was advised that
plans were too ambitious. His ego forced him to continue, until
results from focus groups with customers resulted to have an
enormous amount negative feedback that eventually the CEO was
forced to abandon the project
Mixed Results, Lousy Process: the Management Experience of Organisational
Change (Doyle et al., 2000)
The aim is to explore the experience of change. Findings are based on a postal survey of
92 middle and senior managers from 14 public and 14 private sector organisations in the
Midlands in mid-1998. Six themes: Communication, evaluation, learning, attitudes and
relationships, implementation and change and continuity
1. Communication
a. Vertical and cross-functional organisational communication remains
problematic
b. Managers believe that better relationships and employee involvement are
required
2. Change evaluation
a. Change continues to resist systematic pre-planning, monitoring and
assessment
b. Change has been subjectively evaluated by managers as beneficial
c. More change is anticipate over the next five years
3. Learning from experience
a. Change is perceived as a valuable learning experience
b. Change knowledge and skill are now required at all organisational levels
4. Attitudes and relationships
, a. Changes have been perceived by managers as personally beneficial
b. Change has generated cynicism, fatigue and ‘burnout’
c. Change has reduced commitment and loyalty, and damaged relationship
5. Implementation: theory and practice
a. Commitment is now ambivalent
b. Many managers feel that change has been driven too fast and has
damaged people
c. Change is now perceived to be a generic management competence
6. Change and continuity
a. Most managers perceive change to have been real and irreversible
b. The benefits include flatter hierarchies teamwork, flexibility and
improved cooperation
ADKAR Goal Oriented Change Management Model (5 goals to be successful)
o Successful change occurs when individual change matches the stages of
organisational change
1. Awareness
a. Understanding the need to change
b. Routinely, clearly communicate why change is happening
c. à In business there may be individuals who believe that change is a
waste of time, resources and energy à The leader will need to make an
active push for increased awareness of the need to change and explain
how the change will be positive for the business by increasing efficiency,
effectiveness, productivity, sales, etc.
2. Desire
a. Leaders have to appeal to the emotional and logical side of employees à
communicate benefits of change (preferably individually)
3. Knowledge
a. Employees are willing to participate in change and understand the need
to do so, but doesn’t have the knowledge or skills to do it à training and
education is necessary where change involves new knowledge and skills
(for instance: new software)
4. Ability
a. Employee is very knowledgeable, but does not have the ability (skill) to
carry out their new task à coaching activities in an environment where
questions can be asked and mistakes can be made
5. Reinforcement
a. Ensuring the change stays and old habits do not re-emerge à Strong
reinforcement strategy by monitoring (KPI, Critical Success Factors) or
implement reward strategies (Tayloristic perspective) to keep momentum
going
b. If change does not stay, provide new training
c. If change stays, celebrate early successes to create a culture that support
the new vision and keeps change on track
The model is built for incremental change and has a narrow focus. Would apply on
macro-level change initiatives.
