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Joakim Tell

The practicalities of managing change

Chapter 7 - 8

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Administration SI• On Friday, the SI meeting with master 1 year students.• I miss some of your SI plans (De Wulf send it again)• The agenda on Friday (13.15 – 15.00) is:• Ingrid Svetoft (supervisor SI) Starts with an introduction (15 minutes)• 2-4 master 2 year students inform about SI from a student

perspective and how the group meetings will be organized (15 minutes)

• The large group of 80 students split up in smaller groups (master 2 year students organize this).

• Conference rooms in O building and one class room have been booked (lists for booking on Navid’s door) the following days:15 Sep 9 -15, 24 Sep 13 -17, 1 Oct 9 -16, 8 Oct 10 -16 and12 Oct 9 -16

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SIMBIZ

Group 2 has not simulated yet!

?

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Strategies for managing change

• Two different approaches to managing change processes, each built on a different philosophy and encompassing various methodologies, are discussed in the book.

• One change approach that is based on rational logical models which are most appropriate for situations of hard complexity (difficulties) where the ”people issues” are low is discussed in chapter 7. This is the model used by the majority of managers.

• Another change approach, that take in consideration that many change situations involve ”people issues” (leadership, culture and politics), soft complexities, is discussed in chapter 8.

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What is an Organisation?

Focus of hard models for change

”Problems”

Focus of soft models for change ”messes”

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Different philosophies Between Hard & Soft Change Approaches HARD (Problems/efficiency)

• Clear objectives and quantifiable data• Evolved first to meet needs of modern engineering and

industrial systems (Scientific management)• Only a formal organization exists with one common

goal. A unitary view• A ”good” relation between workers and management

through division of work, (”hands wanted” – manager thinks)

• Regards conflict as a rare phenomenon that can be removed through appropriate managerial action (troublemakers).

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Different philosophies Between Hard & Soft Change Approaches

SOFT (Messes/effectiveness)• An organization is a Social system, that is, has a purpose of its

own, so do its parts, and so do the systems that contain it. People act in accordance with their own view of what is rational for them. They are not puppets. A pluralist view.

• Evolved later (1960s) in response to difficulties in using hard approaches (HR)

• Parallel to the formal organization exists an informal organization.• The values in the workgroup are more important for productivity

than economical incentives and interest from management increases motivation.

• Regards conflict as an inherent characteristic of organizational affairs and stresses its potentially positive aspects.

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The Hard Systems Models of Change Ch. 7

1, A description phase (describing and diagnosing the situation, understanding what is involved, setting the objectives and performance measures for the change).

• Clear objectives and quantifiable data.

2, An options phase (generating options for change, selecting the most appropriate option, thinking about what might be done.

3, An implementation phase (putting feasible plans into practice and monitoring the results). Often implementation no problem!

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Hard Systems Models of Change• An example of a problem characterized by hard

complexity is presented at p. 312, ”Dissatisfaction with the system for providing IT support services”

• The case is as follows ”Susan is calling IT-support – as usual there is no one there. No use sending an e-mail – experience from before is that it takes at least two days to get an answer- Susan is not satisfied with the IT support – If she was responsible, she would definitely make changes”.

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1, Diagnose the situation. Objectives and performance measures

2, Generate options for change

3, Implementation often no problem!

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Soft Systems Models of Change• Often, the signals arriving on manager’s desks are not

as clearly categorised – the only thing managers percive are problems or messes.

• Soft Systems Models of Change challanges the rationallity to organizational change taken by the Hard System Models of Change!

• SSMC recognises that some change situations (problems/oppurtunities), by nature of their complexity and particular characteristics (messes), require soft rather than hard systems approaches to change.

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The philosophy behind soft systems models of change

Ackoff (1981) suggests there are 3 ‘kinds of things’ which can be done about soft complexity.

1. Resolve them• Select a solution that yields a “good enough” outcome.

Patch and mend (fix it for the moment), survival-oriented.

2. Solve them (optimizing)• Select quantitative approaches based on research and

rational-logical methods of analysis. Focuses on the parts rather than the whole; (The idea behind the hard system models of change)

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3. Dissolve them • Change the nature of the problem context by

challenging underlying purposes and assumptions (or system involved) so as to remove the problem.

• In double-loop learning, individuals, groups or the organization question the values, assumptions and policies that led to the actions in the first place; if they are able to view and modify those, then double-loop learning has taken place. (Argyris & Schön, 1978)

• This is what the soft systems approach tries to do.

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Exercise: Apply Ackoff’s three ways of dealing with problems (Resolve, Solve and Dissolve) on

company X below (taken from Ackoff, 1981). (Hand out assignment 2).

• A large machine tool manufacturing company is confronted with abrupt changes in the demand for its products.

Company X

Current situation Reactions to the

fluctuations are both disruptive and costly

for the company.

Desired situation First reduce cost and then also fluctuations

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Resolving the problem

• Among other things, the company (by using past experience and using ’good sound judgement’) alternated continually between hiring and firing personell, many of whom were highly skilled. This made for low morale, low productivity, not to mention hostility between labour and management, but lowered the cost.

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Solving the problem• The managers brought in researchers

who formulated the problem as one of production smoothing, the solution to which depended critically on the accuracy of forecast demand. Unfortunately, they could not develop very good forecasts. Therefore, the solutions yielded by optimizing (solving) were only marginally better than those previously obtained by problem resolving.

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Resolve• Finally, a design attack was made on the

problem. It was reformulated into one of reducing fluctuations of demand rather than one of responding to them. This was done by adding a new product line, the demand for which was counter-cyclical realtive to that for machine tools, but its production required the same technology, and some of the same parts and subassemblies. The new product line, road building equipment, also used the same distribution and marketing system as machine tools.

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OD as a process for managing change• OD is a process of change which has a framework of

recognizable phases that take the organization from its current state to a more desired future state.

• Two important concepts in OD are Action research and Change agent.

• An example of OD process is Levin's three-phase model of change (one of the earlier and most influential models) Unfreezing, Moving and Refreezing

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Action Research • Action research a collaborative effort between the leaders and

facilitators of any change and those who have to enact it. Context bound (real life problems).

• It involves data gathering, continuous feedback of data to the client group, data discussion, action planning, and action. Co-generation of knowledge.

• Therefore, action research is, as its name suggests, a combination of research and action lead by an internal or external change agent/s.

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Unfreezing

RefreezingMoving

Time

Organizational efficiency

2, New possibilities are investigated and a promising way is chosen

3, The new way to work is implemented through symbolic actions

1, Shake up people's habitual modes of thinking to heighten the awareness of the need for change

Lewin’s three-phase model of changetake the organization from its current state to a more

desired future state.

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1, Unfreezing• Develop a vision for the need to change (transformational leadership)

through the process of organizational diagnosis and creative thinking. • Resistant to change is the most problematic issue in management of

change.• To describe the current state, use for instance the PEST analyze. Even

temporal (historical) and internal environment must be assessed (info about total system)! Questionnaires, interviews, observations and organisational documents, can be used

• Disturb the status quo by strengthing or weakening the resistant to change through an awareness of what will happen if nothing changes. Use for instance Force Field Analyze (FFA).

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FFA modelVisualize the power balance and the strong forces in the form of feelings, values,

power and politics that are restraining change.

Bal

ance

Driving forces Restraining forces

Old values

Missunderstanding and a lack of trust

Better quality

Faster manufacturing process

1, An automatisation of the production process, due to uneven quality and long lead times

No change Change

3

5

4

4

Action plan

1, Involve all the personal in the design of the new process and educate them in the new system

2, The increased competition will otherwise put us out of business

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2, Changing

• A systematic (brainstorming – research) search for new ideas to take the organization from its current state to a desired future state through dialogue with all concerned in order to create an understanding for the need to change and to use all ideas and creativeness of the people involved.

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3, Refreezing• The use of continuous data collection and feedback is

essential to keep track of how the change is progressing and to monitor for further change in the light of environmental changes.

• The use of surveys and interviews is one way of collecting data. (Data to be collected depends on the situation)

• Symbolic actions, such as change of logo, forms of dress and ways of grouping people, as well as leadership could be one way to manifest ”the new way to work”.

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Why are these steps so important? • If you skip the phase unfreezing, the change will meet resistant (old

values will increase and lead to misunderstandings and a lack of trust) when prevailing forces are increased. Use for instance the FFA model to visualize!

• If you don’t base your decisions on a rigor and systematic process when making the actual change, and instead base your decisions on a hunch that yields a ”good enough” outcome (Resolve, Ackoff, 1981) and don’t involve all that are concerned by the change, the suggestions are often ill founded, when you lack important knowledge and/or an internal acceptance.

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The 8-Step Process of Successful Change (Kotter, 1996)

SET THE STAGE • 1. Create a Sense of Urgency.

Help others see the need for change and the importance of acting immediately.

• 2. Pull Together the Guiding Team. Make sure there is a powerful group guiding the change—one with leadership skills, bias for action, credibility, communications ability, authority, analytical skills.

DECIDE WHAT TO DO• 3. Develop the Change Vision and Strategy.

Clarify how the future will be different from the past, and how you can make that future a reality.

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MAKE IT HAPPEN• 4. Communicate for Understanding and Buy-in.

Make sure as many others as possible understand and accept the vision and the strategy.

• 5. Empower Others to Act. Remove as many barriers as possible so that those who want to make the vision a reality can do so.

• 6. Produce Short-Term Wins. Create some visible, unambiguous successes as soon as possible.

• 7. Don’t Let Up. Press harder and faster after the first successes. Be relentless with instituting change after change until the vision becomes a reality.

MAKE IT STICK• 8. Create a New Culture.

Hold on to the new ways of behaving, and make sure they succeed, until they become a part of the very culture of the group.

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Criticisms of the OD Model for Change

OD cannot be applied in the same way across all cultures. Supposedly it is not suited to high Power Distance, high Uncertainty Avoidance, and high Masculinity cultures.

• Power Distance focuses on the degree of equality, between people in the country's society. A high Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society.

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• Uncertainty Avoidance focuses on the level of tolerance for uncertainty and ambiguity within a society. A high Uncertainty Avoidance ranking indicates that the country has a low tolerance for uncertainty and ambiguity (people will tend to be heavily driven by laws and rules).

• Masculinity focuses on the degree to which the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control and power. A high Masculinity ranking indicates that the country experiences a high degree of gender differentiation. “Money before relationships”.

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• What kind of consequences does this create for international companies and their work with ”soft” changes?