Plan Change

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Organizational Culture

The key characteristics that the organization values and that distinguish it from other organizations.

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What is Organizational Culture?

The set of important assumptions (often unstated) that members of an organization share in common.

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Culture

CULTURE IS TO HUMAN COLLECTIVITY WHAT PERSONALITY IS TO AN INDIVIDUAL

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Why is Culture Important?

Even firms doing well on traditional business criteria can stumble in blending their corporate personalities.

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Dimensions of Culture

Innovation and Risk Taking

Attention to Detail

Outcome Orientation

People Orientation

Team Orientation

Aggressiveness

Nonstability

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Innovation and Risk Taking

The degree that employees are encouraged to be innovative and take risks

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Attention to Detail

The degree that employees are expected to exhibit precision, analysis, and attention to detail

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Outcome Orientation

The degree that management focuses on results rather than process used to produce those results

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People Orientation

The degree that management decisions take into account how people in the organization will be affected

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Team Orientation

The degree that work is organized around teams rather than individuals

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Aggressiveness

The degree that people are aggressive and competitive rather than easygoing

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Non-stability

The degree that organizational activities emphasize growth as opposed to maintaining the status quo

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Reasons to Strive for a Strong Culture

They are associated with high organizational performance.
Increased employee commitment and loyalty
Yield a sustainable competitive advantage

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Where Does
Culture Come From?

Founders hire and keep employees who think and feel the way they do.
Founders indoctrinate and socialize these employees to their way of thinking.
Founders act as role models.

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How is Culture Transmitted to Employees?

Stories
Rituals
Material Symbols
Language

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How to Read an Organization’s Culture

Observe the physical surroundings
Ask to sit in on a team meeting
Listen to the language
Note to whom you’re introduced and how they act
Ask different people the same questions and compare their answers
Get the views of outsiders

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Conditions for Changing Culture

A Dramatic Crisis
Turnover in Leadership
Young and Small Organization
Weak Culture

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Changing the Culture

Actions to Change Culture
Do a Cultural Analysis
Create Sense of Urgency
Appoint a Visionary Change Agent
Create Supporting Conditioning Components

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Why is it Important to Adapt to Change?

Individuals, teams, or organizations that do not adapt to change in timely ways are unlikely to survive.

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Adapting to Change

Individuals, teams and organizations that recognize the inevitability of change, learn to adapt to it, and attempt to manage it, will be the most successful.

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What is Change?

Coping process of moving from a unsatisfactory present state to a desired state

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Reacting to Change

Unplanned
“Fire fighting”

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Planned Change

Results from deliberate attempts by managers to improve organizational operations

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Change Language

The literature usually refers to these forms of change as:

Emergent change

Deliberate change

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Unfreeze

Change

Refreeze

Three Phases of Planned Change

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Unfreezing

Help people accept that change is needed because the existing situation is not adequate

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Changing

Involves rearranging of current work norms and relationships to meet new needs

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Refreezing

Reinforces the changes made so that the new ways of behaving become stabilized

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I Disagree

“Disagree” is probably not the right word. Let’s just say I have concerns over this terminology.

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Managing the Planned Change Process

Improving the organization’s ability to cope with unplanned changes that are thrust upon it
Modifying employee’s attitudes and behaviors to make them more effective contributors to the organization’s goals

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Steps in the Planned Change Process

Recognize the need
for change

Diagnose and
plan change

Manage the
transition

Measure results
Maintain change

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Initiating the Planned Change Process

Recognize the need for change
Diagnose and plan change
Formulate Goals
Determine stakeholders’ needs
Examine driving and restraining forces

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Force-Field Analysis

Process of analyzing the forces that drive change and the forces that restrain it

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Driving Forces

Factors that push toward the new, more desirable status quo

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Restraining Forces

Factors that exert pressure to continue past behaviors or to resist new actions

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Force-Field Analysis Model

Restraining Forces

Driving Forces

Quasi-
Stationary
Equilibrium

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Managing the Planned Change Process

Consider contingencies to determine the best interventions
Manage the transition
Measure results
Maintain change

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Targets for Organizational Change

Strategy – Develop new visions, missions, strategic plans
Structure – Add a new department or division, or consolidate two existing ones
People – Replace a person or change knowledge, skills, attitudes, or behaviors
Technology – upgrade a data processing system
Management –Encourage participation by those involved in solution of problems

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Reasons for Resistance to Change

Selective Perception
Lack of Information
Fear of the Unknown
Habit

Resentment Toward the Initiator
Sub-Optimization
Structural Stability

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Overcoming Resistance to Change (Kotter & Schlesinger, 2008)

Education and Communication
Participation and Involvement
Facilitation and Support
Negotiation and Agreement
Manipulation and Co-optation
Coercion
Promote Positive Attitudes Toward Change

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Leading Organizational Change (Kotter, 1998)

Establish a Sense of Urgency
Form a Powerful Guiding Coalition
Develop a Compelling Vision and Strategy
Communicate Widely
Empower Others to Act on the Vision
Generate Short-term Wins
Consolidate Gains and Create Greater Change
Institutionalize Changes in the Organizational Culture

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Key Levers to Implement Strategy

Leadership (Style, staffing, and skills)

Structure (Organization of firm’s activities)

Culture (Shared values creating behavioral norms)

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Remember …

Strategy must always drive structure, NOT the other way around !

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Guidelines to Match Structure to Strategy

Restructure to emphasize and support strategically critical activities

Reengineer strategic business processes

Downsize, outsource, and self-manage

Recognize that strategy and structure often evolve in a predictable pattern

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Restructuring

Concept - Some activities within a business’s value chain are more critical to the success of the strategy than others
Considerations in restructuring
Strategically critical activities must be the building blocks for designing the structure
Organizational structure must be designed to help coordinate and integrate support activities to
Maximize their support of primary activities
Minimize their costs and time

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Reengineering Processes

Concept - Involves reorganizing a company to create value for the customer by eliminating barriers that create distance between employees and customers
Potential outcomes of BPR
Reduces fragmentation by crossing traditional department lines
Reduces overhead by compressing formerly separate tasks that are strategically intertwined in the process of focusing on the customer

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Steps Involved in Business Process Reengineering

Develop a flow chart of the total business process

Try to simplify the process first, eliminating unnecessary tasks and streamlining remaining tasks

Determine which parts of the process can be automated

Benchmark strategy-critical activities

Consider outsourcing non-critical activities

Design a structure for performing remaining activities and reorganize personnel accordingly

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Guidelines Regarding the Strategy-Structure Fit

1. A single-product firm or dominant product business should employ a functional structure

2. A firm in several related businesses should employ a multidivisional structure

3. A firm in several unrelated lines of business should be organized into strategic business units

4. Early achievement of a strategy-structure fit can be a competitive advantage

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Advantages

Already know key people, practices, and conditions

Personal qualities are better known and understood by associates

Have established relationships with peers, subordinates, suppliers, and buyers

Symbolizes organizational commitment to individual careers

Disadvantages

Less adaptable to major strategic changes because of their knowledge, attitudes, and values

Past commitments hamper the hard decisions required in executing a new strategy

Have less ability to become inspired and credibly convey the need for change

Using existing executives to implement a new strategy

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Advantages

May already believe in and have “lived” the new strategy

Are unencumbered by internal commitments to people (the “poor ol’ Fred” problem)

Come to the new assignment with heightened commitment and enthusiasm

Can send powerful signals throughout the organization that change is expected

Disadvantages

Is often costly in terms of compensation and “learning-to-work-together” time

Candidates suitable in all respects may not be available, leading to compromise choice

Uncertainty in selecting the right outsiders to bring in

“Morale costs”

Bringing in outsiders to implement a new strategy

Organizational Transformation …,

However, does NOT require mystical capacities, it simply requires effective leadership, thought, planning, formulation, and implementation. In short, it requires MANAGEMENT.

My Experience as a Change Agent

Just to provide some foundation for my thoughts going forward, let me describe to you the last change effort I was involved with during my corporate career.

Successful Transformation …

Requires significant knowledge of:

Change leadership

Change processes

Change strategies

Change techniques

Change implementation

The Essence of Leadership

“For without leaders, nothing good or noble, to put it concisely, was ever wrought anywhere.”

Xenophon (Anabasis II:39)

Why Should I Care?

The plain truth is, your organization has a noble mission – but to accomplish that mission, you must have people who are willing and able to become effective leader/managers.

Leaders & Managers

“What is a leader/manager?”

Managers

Administer
Maintain
Focus on systems
Rely on control
Have a short-range view
Ask how and when
Focus on the task
Do things right

Leaders

Innovate
Develop
Focus on people
Inspire trust
Have a long-range perspective
Asks what and why
Focus on the horizon
Do the right thing

The Truth

Of course, the truth is for optimal performance, an organization must have individuals in positions of authority and responsibility that have the ability to be both.

And No Offense but …

You likely have important organizational members that have very little training in either.

Vision

Many people also focus on vision when discussing leadership.

Unfortunately, many people misunderstand the vision element and view it as some sort of mysticism.

In Reality …

Vision associated with change management should be the by- product of competent analyses.

Leadership

Leadership is the ability to influence others.

Leadership

Truly effective leadership, then, must be tied to organizational goals. In other words, leaders must influence followers to consistently demonstrate goal-directed behavior.

Leaders & Followers

This suggests that true leadership CANNOT exist without the full inclusion, initiatives, and the cooperation of followers.

In other words, one cannot be a great leader without great followers!

So, What Enhances Goal-Directed Behavior of Followers?

Although most people think that money is the primary motivator in most organizations, research suggests effective leadership is a much more powerful indicator of follower satisfaction and commitment.

And That’s A Good Thing …

Because real-world organizations operate with resource constraints.

What’s It Mean?

It means that if your followers are unmotivated, dissatisfied, and uncommitted to the organization and its change efforts –

IT’S YOUR FAULT!

So, What Do We Know About Leadership?

Trait Theory

Trait theory was also called the “great man” theory. The idea was that only those people born with certain leadership traits and abilities could effectively lead others.

NOT TRUE!

Leadership

Effective leadership is NOT about leadership traits, it IS about:

BEHAVIOR.

Transformational Leadership

Idealized Influence – Provides vision and sense of mission, instills pride.

Inspiration – Communicates high expectations, expresses important purposes in simple ways.

Intellectual stimulation – Promotes rationality in problem solving.

Individual consideration – Treats each employee individually, coaches, mentors.

Transformational Leaders

This is important, as transformational leaders view themselves as change agents.

Moreover, transformational leaders have more successful change projects than do transactional leaders.

This is Possible Because …

Transformational leaders operate from a base of expert power and referent power.

The Good News

Research indicates that leadership skills are in great part learned behavior.

Therefore, transformational leadership skills can be taught and enhanced.

Transformation Steps

Effective leadership, however, is just a beginning point.
Based upon my experience and the work of numerous change researchers, we can systematically conceptualize, formulate, and implement an effective transformation plan.

Change as Strategy

Successful transformation efforts cannot be divorced from effective strategic management processes.
And remember, strategy must guide structure, not the other way around.

Establish a Sense of Urgency

Using the information from strategic analyses, you must build an authentic and compelling case for transformation.

Consider the Culture

Understanding the organizational culture is critical to change plans.

In fact, what is radical in one culture might be considered incremental in another.

Establish a Change Agent(s)

In my experience, organizational transformations are most successful when a change agent is identified and tasked with leading the change effort.

Determine Point A and Point B

Successful change efforts require change agents to deliberately define the scope and parameters of needed changes.
This includes determining whether needed transformation is evolutionary or revolutionary.

Establish a Time Frame

While direction is important, it is also helpful if an optimal time frame can be established for moving from Point A to Point B.

Form a Powerful Coalition

Even an effective change agent must have sufficient backing form a wider group if the transformation process is to be successful.

Firm up the Vision

Define an appropriate vision that emerges from the strategic analyses and operational definitions.
Create strategies for achieving the vision.

Communicate the Vision

Use multiple avenues to communicate the new vision and strategies.
Show followers how they fit into the vision and what the organization will look like on the other side of transformation.

Manage Resistance to Change

Determine appropriate methods for dealing with resistance to change.
In most organizations this will require some combination of communication, education, and participation.

Empower Others to Act on the Vision

Eliminate obstacles and change systems or structures that undermine or are inconsistent with the new vision.

Plan Change

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