creating a new change model

Creating a New Change Model

CREATING A NEW CHANGE MODEL

CREATING A NEW CHANGE MODEL

by

Michael Phan

UNIVERSITY OF PHOENIX SCHOOL OF ADVANCED STUDIES

© 2011 by MICHAEL PHANALL RIGHTS RESERVED

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Introduction

It is possible to implement successful organizational change. There are examples of

organizations that have successfully changed their direction, processes, structures, performance

levels, and their capacity to deal with change. Despite the change success stories, more typical

are dismal failures and the disturbing facts and tales that remain. In order to stay competitive in a

global environment, organizations have chosen to use activities such as reengineering,

downsizing, re-strategizing, mergers, and cultural renewal projects. Commonly these approaches

have become ongoing initiatives that have been implemented poorly and do not achieve the

desired outcomes. With powerful macroeconomic forces continually at work that will grow

stronger in the next few decades, (Kotter, 1996b) it is hoped that organizations will consider and

apply different approaches to organizational change in the future (Wheatley & Kellner-Rogers,

1998).

Why Do Change Effort Fail

Given that there is so much material researched and written about organizational change

management, one wonder—why do so many change efforts fail to meet their objectives? Over

70% of change efforts fail or fall short of their expected results (Wheatley & Kellner-Rogers,

1998), and what is more astounding is that a recent Oxford University’s study on change found

that over 68% of employees welcomed meaningful involvement in change (Axelrod, R.,

Axelrod, E., Jacobs, & Beedon, 2006).

According to Kotter (1996) addresses eight reasons why organizations fail to transform:

1. Allowing too much complacency.

2. Failing to create a sufficiently powerful guiding coalition.

3. Underestimating the power of vision.

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4. Under-communicating the vision by a factor of ten.

5. Permitting obstacles to block the new vision.

6. Failing to create short-term wins.

7. Declaring victory too soon.

8. Neglecting to anchor changes firmly in the corporate culture (Kotter, 1996a).

The reason why organizational change fails according to Bridges (1991) is that, nobody

thinks about the planned endings and their impact on people. Concerned about the future,

leaders move forward and forget that people need to let go of their present. In managing change,

it is often forgotten that the future needs to be understood along with how to get there. The first

task in change management is to convince people to leave home (Bridges, 1991).

Between leadership and employee engagement, Kegan (2001) identifies five orders of

consciousness that holistically represent principles of mental organization affecting the

incorporation of thinking, feeling, and social relating between leaders, actors, and the institution.

Since leaders and followers in the organization may be operating at various levels of

consciousness, a variety of epistemologies exist. These differences may lead to an assortment of

reactions to change, conflicts, and resistance. For example, a manager at a level three is

concerned with concrete self-consciousness points of view, roles, and subjectivity. This may not

sit well if the leader has followers that may be at a level four. At the fourth level the followers

relate to abstract systems, multiple role consciousness, and autonomy. In this case, the

disconnection between levels and world-views will create tension in the leader-follower

relationship and will surely lead to resistance to change, and other initiatives, along with

disengagement (Kegan, 2001).

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The positive relationship of employee engagement to the failure rate of organizational

change is apparent to Axelrod, Jacobs, and Beedon (2006). Often, the scenario where, the few

design for the many, sparks resistance from those not involved. This scenario reduces ownership,

creates disagreement due to lack of context, and amplifies change fatigue language—we have

seen it all before. This creates resentment and resistance about being told what to do. Therefore,

the engagement gap needs to be closed in order to avert resistance (Axelrod et al., 2006). The

lack of engagement creates a negative feedback loop, which worsens and creates mistrust, while

wasting energy on the uninitiated group that has been labeled as the problem. As a result, the

energy focus shifts from the goals of the change program, to the less strategic tactic of

converting the "heathens" (Axelrod et al., 2006).

Finally, managing employee resistance seems to be a priority in change efforts. Managers

and employees view change efforts differently (Strebel, 1996). For employees, change is

disruptive, intrusive, and it upsets the balance. In the eyes of employees, there exists a personal

compact consists of three dimensions:

1. A formal dimension where the following questions are apparent: What I am supposed

to do for the organization? What help will I get to do my job? How often will my performance

get evaluated? What is my rate of pay?

2. The psychological commitment of the employee and employer relationship. This

dimension is unwritten and underpins the employee's personal commitments and loyalty.

3. The social dimension where employees gauge an organization's culture. Employees

look for congruency of values between beliefs and how the company really works. This

dimension is often undermined most in a change effort (Strebel, 1996). Therefore, unrevised

personal compacts will block change.

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Evaluation of Process

Literature describing a number of organizational change theories, embedding processes,

and elements about why organizational change efforts tend to fail has been summarized. What do

these processes have in common and how do they differ? When synthesizing the elements it is

important to recognize that each element does not act alone, since each is a part of a system. The

derailment factors are potential weaknesses that should be mitigated with both of the change and

embedding processes discussed. From this analysis, a new model is creating emerge on six

themes that may help shape a process for embedding organizational change:

1. Leadership.

2. Planning.

3. Communication.

4. Engagement.

5. Action.

6. Evaluation.

Each theme will be discussed in the next six sections.

Leadership

To gain change effectiveness, commitment from the leaders needs to be high. When

leadership commitment is high, productivity gains are stated to be five times greater than if

commitment was low (Rogers, Hunter, & Rogers, 1993). Similarly, there exists a high positive

relationship between the success of change and skilled leadership in both public and private

sectors. However, the relationship between successful change and good leadership is much

higher in public sector organizations (Beatty, 2007).

The Leadership Coalition

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The importance of leadership to the change management process is underscored by the

fact that change requires creating new systems and then institutionalizing new approaches

(Kotter, 1995). Embedding change requires creating better performance through a combination

of production and customer oriented behavior, better leadership, and effective management

(Kotter, 1996a). Although it is necessary for leaders to have the authority and capacity to lead,

not to simply manage change; good change leadership will build a coalition or community

through linking actors together and sharing information (Senge et al., 2007).

Bad Leadership

How do leaders produce negative change outcomes, and why? Three skill areas can

contribute to these problems. They include the strategic vision of leaders, their communications

and impression-management skills, and their general management practices (Conger, 1990).

Occasionally, employees in large or older firms have difficulty beginning a transformation

process. This is due, in part, because of poor leadership coupled with arrogance, insularity, and

bureaucracy (Kotter, 1996b).

New Leadership

In many cases, new leadership or a change in leadership style is warranted for the change

to take hold because the worldview of the new leader is different than the lenses of the former

leaders (Koestenbaum, 2003). By eliminating key people, new leadership helps to punctuate the

existing equilibrium (Romanelli & Tushman, 1994) and will help create a new sense of urgency

(Kotter, 1996a). The new sense of urgency will reduce complacency and create threats and

opportunities for organizational action (George et al., 2006). When leading change, it is desired

to validate the sense of urgency, create a coalition of leaders, grow non-complacent leadership,

and create an environment that will move the current equilibrium to a new state, and anchor it

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there.

Build Community

It is very important given a change setting, for leaders to create a climate that enables

employees to work to their potential and to set up systems where employees and leaders will

want to listen and converse (Block, 2008). Organizational change should be from the bottom up,

vision centered, and values driven (Zohar, 1998). Leaders should set the stage for the right

environment, and the organizational culture should create a desire for employees to change;

change should not just be an employee requirement (Seijts & Crim, 2006). True systemic change

means enacting new ways of thinking, creating new organizational structures, and new

transforming relationships.

Planning

In the case of embedding organizational change, planning includes creating a shared

vision, designing the strategy and actions required to implement and continue the change, and

accommodate for competing priorities or roadblocks.

Compelling Vision

Through a compelling vision, leaders need to establish the case for change and create a

container where others are enabled and encouraged to contribute (Higgs, 2006). In this role, the

change leader makes or approves significant organizational decisions and, accordingly,

leadership needs to apply appropriate resources to create effective change and shepherd the

change in step with the vision of the organization. To achieve this end, the leadership of the

organization needs to develop a shared vision and foster consensus for the new vision in order to

uphold change, and involve the employees to help overcome resistance (Beer et al., 1990).

Organizational Values

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In addition to a shared vision, organizational values need to be recreated to reflect the

organization’s new direction. Values are a description of the core beliefs that reside in, and drive,

the organization (Nadler & Tushman, 1989). When working to change and uphold values and

culture, it is also important to consider that organizational incompetence has its roots in, and is

maintained by, culture (Ott & Shafritz, 1994). Thus, organizational incompetence is changed

through altering the culture. This is accomplished through individuals learning to see the

organization differently. Employees are empowered to recognize meaning and their own place in

the end state (Zohar, 1998).

Planning

Although both sound vision and values are important to sustain the changes, developing a

physical plan to implement and embed the changes is also critical. The plan needs to address the

gaps found between the current organizational state and the desired future state. The plan should

include: values, culture, processes, critical success factors, standards required, capacity, and

learning solutions for required competencies, and building ongoing relationships with involved

actors (Tromenaars & Woolliams, 2003).

Engagement

An engaged employee is one who is fully involved in, and is enthusiastic about his or her

work (Seijts & Crim, 2006). If it is important to create a competitive advantage through

organizational change and maintain the results; employee engagement is an important element.

Employee engagement involves the interplay between the following factors: cognitive

commitment, emotional attachment, and the resulting behavioral outcomes (Gibbons, 2007).

Personal Compacts

The employee’s personal compacts include formal, psychological, and social aspects of

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the written (or unwritten) contracts between employee and employer. These aspects often

become disregarded during or after organizational change efforts (Strebel, 1996). Change often

fails because the employee's personal compacts have been breached (Strebel, 1996). The key to

creating successful organizational change is to create psychological safety, and balance the

amount of threat with allowing the individuals targeted by the change to understand and accept

the information given, feel survival anxiety, and become motivated to change (Schein, 1996).

Trust and Integrity

Individuals need to feel that managers and senior leaders are concerned with the well

being of the employees, and that the leaders can be relied on to execute effectively (Sirkin,

Keenan, & Jackson, 2005). Leaders need to tell the truth handle difficult messages well, listen to

the employees, and follow up with applicable action (Gibbons, 2007). To gain integrity, leaders

need to stick to the core ideology of the organization (Collins & Porras, 1997) and demonstrate

the values and goals of the organization, by dealing effectively with obstacles that block action

(Kotter & Cohen, 2002). Listening to employees and trying to understand the differences

between orders of consciousness, will help create understanding, minimize conflict, and build

cohesiveness (Kegan, 1994).

Coworkers and Team Members

Team members highly influence individual levels of engagement (Gibbons, 2007). Teams

today need to evolve beyond cooperation, goodwill, and consensus. They need to challenge

individual and collective assumptions to see new alternatives (Robinson & Rose, 2007).

Teamwork needs to be redefined as the coordination of individual activities for pragmatic ends,

not the subordination of the individual to the group (Schein, 1996). It is very clear that

relatedness, belonging, and community are keys to the future and that real change takes time, and

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creates uncertainty. Groups and teams create the foundation by which the entire system can

move (Block, 2008).

Employee Development

Employee development differs from career growth, since it refers to the degree to which

the employee feels that specific organizational efforts are being made to develop the employee's

skills (Gibbons, 2007). Confidence is based on three cornerstones: accountability, collaboration,

and initiative, along with challenging and meaningful work. To increase confidence, and foster

employee development, organizational change initiatives should include proper development

opportunities (Seijts & Crim, 2006).

Action

It has been said that actions speak louder than words and in organizational change,

communication and engagement need to be followed by meaningful action to continue the

change and legitimatize what was communicated. Action is the stage where individuals, or

organizations, will modify their behavior, experiences, or environment in order to overcome their

problems (Prochaska et al., 1992). The actions the organization takes to embed organizational

change need to be supported by rules, myths, and beliefs in order to become a social reality.

Additionally, new supporting processes need to be instilled with value and social meaning, in

order to continue change. These will further influence the organizational structure, change, and

strategic behaviors that occur in response to institutionalization (Oliver, 1991).

As mentioned by Oliver (1992), "An institutionalized practice is one which is perceived

by organizational members to possess intrinsic worth or legitimacy beyond its technical

requirements" (p. 571). Rules and processes that develop trust, confidence, and stability in

outputs are required in order to solidify change (Meyer & Rowan, 1977). Functional pressures

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incorporate technology, or the functions of the tasks, and should make the tasks better for the

individuals and improve legitimacy. These normative pressures define the conditions and

methods of the work and help establish a base of legitimacy for the occupations (DiMaggio &

Powell, 1983).

Stimulate progress

Finally, actions should include stimulating the progress of the organizational change.

Short-term wins need to be created (Kotter, 1996b), built upon, and revitalization spread to all

departments and individuals without forcing from above (Beer et al., 1990). Creating and sharing

short-term wins will help to refreeze the change initiative and fashion win-win actions to

leverage more momentum for change (Nutt & Backoff, 1997). It is important not to declare

victory too early (Kotter, 1996b), however, it is also important to celebrate and communicate

wins in order to gain momentum and reduce change fatigue. Therefore, visibly recognizing

gains, rewarding teams and individuals for the right reasons, and sharing examples of success

will help to generate the short-term wins (Kotter, 1996a).

Evaluation

The final theme that emerged from the review of the literature is evaluation. With action

and experimentation, which can be unplanned and undirected, sometimes new and unexpected

paths arise. Through branching and pruning, it is important to try a lot of stuff and keep what

works (Collins & Porras, 1997). Often a change will be implemented, unintended consequences

are realized, and actions to avoid being blamed are taken instead of learning and correcting the

problems (Wheatley & Kellner-Rogers, 1998). Since, organizations often act to legitimize

processes, people are often culturally led to think that what works well in one place is bound to

be successful everywhere. This is not the case. The question is, how does one know what is

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really working without reflection and evaluation of the organizational situation?

Without constant monitoring, individuals pursuing organizational interests can quickly

undo the work that others have accomplished (DiMaggio & Powell, 1983). It is important to

recognize that organizations manage physical, tangible, and intangible assets such as customer

relationships, innovative products and services, quality methodologies, employee skills and

motivation, and information technology systems (Kaplan & Norton, 1996). Evaluation should

include a systematic process that will include both financial and non-financial measures. This

system will need to translate vision and strategy, help to communicate and link goals with the

employee's line of sight, set targets and align initiatives, and enhance feedback and learning

(Kaplan & Norton, 1996).

In order to reflect and evaluate the organizational change, measures should be balanced

around four perspectives:

1. Financial—return on investment and economic value added.

2. The customer—satisfaction, retention, and market share.

3. Internal processes—quality, time responses, efficiency, and innovation.

4. Learning and growth—employee engagement, information systems, learning, and

culture (Kaplan & Norton, 2004).

It is also critical to take regular readings of the sense of meaningfulness, choice,

competence, and progress from the employee’s perspective (Thomas, 2000). It is hoped that

measuring within a balanced system will provide feedback, and enable people to make better

vision related decisions (Kotter & Cohen, 2002). Taking the time to reflect, gather data, learn,

and measure will help real change to occur, and prevent the organization from slipping back into

the norms that support the old behavior (Schein, 1996). The alternative is organizational

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incompetence demonstrating persistent actions of inability or, unwillingness to reflect and learn

from failures or the environment; failing to use accessible information available to avoid making

mistakes (Ott & Shafritz, 1994).

Conclusion and Recommendations

First, it is essential for any organizational change initiative to create a solid leadership

foundation to drive and support the change. This foundation should include strong leaders who

have the capacity to sponsor and lead an organizational change initiative. The study shows that

the leaders can either be new to the organization or existing; however, they do need to be able to

model behaviors required to support the new organizational culture while leading followers

(Kotter et al, 2001).

Second, it is essential to choose appropriate planning methodologies that also consider

timing for the change, in order to provide a sense of direction. Providing a sense of direction and

applying sound planning processes are important steps to help followers understand where they

are going, and how they will get there. This minimizes the fear of the unknown. Additionally,

recognizing the potential impacts of external changes, the resources, and the appropriate timing

required are essential components to help embed the planned changes (Kotter et al, 2001).

Third, it is important to create and implement ongoing communications by leaders

through using genuine language. When studied as a derailment factor, communication was not

ongoing, not done by leaders, was uninspiring, and used jargon. Good communication needs to

be values based, honest, and seem real to followers. It needs to be delivered by leaders, so that it

is inspirational and regarded as important. The messages need to be planned and create a desire

to change within each individual, so each can see what is in the change for them. The results of

this behavior include improved employee ownership, buy in, and motivated behavior. Failure to

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communicate properly leads to speculation, guessing, frustration, fear of the unknown, and,

finally, resistance. Although communication takes time, sometimes confrontation, and energy

from the leaders, it is a necessary task for embedding change (Kotter, 1996b).

Fourth, the leadership needs to engage employees in the organizational change, by

encouraging and offering genuine ways for the employees to participate in the change. Personal

compacts, and the psychological contract between employees and employer, need to be honored

to create an engaging environment. It is critical that the leadership be visible, communicate what

they will do, do what they said they would do, and share and build momentum by engaging

employees (Kotter et al, 2001).

Fifth, some kind of action needs to take place. Again, the action needs to be consistent

with what was shared. It needs to support the values and personal compacts of the employees,

and deliver results that can be shared and built on. The actions should begin with an assessment

of the issues and the environment surrounding the change. Systems need to be created to support

the changes for the longer term. These systems should include elements of learning and

development, internal processes, client-focused practices, and ways to become financially

responsible. Support for employees is essential, to move them from an existing organizational

culture and climate to embed a new one. Finally, results that are delivered need to be shared, and

the positive momentum generated should be built upon, not wasted (Kotter et al, 2001).

Finally, the study shows that an evaluation needs to take place in order to reflect on the

progress of the organizational change, share results, build momentum and correct if required. To

accomplish this, measures need to be created early on, and individuals need to be accountable to

deliver results. Once again, in order to build engagement, trust, and positive momentum, result

information needs to be shared. Sharing information and creating mechanisms for continuous

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improvement provide solid opportunities to engage staff and build momentum (Kotter, 1996a).

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