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In Chapter Sixteen , I reviewed all the ways in which culture can and does change, noting how leaders can infl uence these processes. However, many of the mechanisms described are either too slow or cannot be conveniently implemented. Subcultural diversity may not be suffi cient, outsiders with the right new assumptions may not be available, and creating scandals or introducing new technology may not be practical. How then does a leader systematically set out to change how an organization operates, recognizing that such change may involve varying degrees of culture change?

In this chapter, I will describe a model of planned, managed change and discuss the various principles that have to be taken into account if the changes involve culture. It is my experience that culture change is rarely the primary change goal even though it is announced as such. Instead, change occurs when leaders perceive some problems that need fi xing or identify some new goals that need to be achieved. Whether these changes will involve culture change remains to be seen. In the context of such orga- nizational changes, culture change may become involved, but the leader must fi rst understand the general processes of organizational change before managed culture change as such becomes relevant.

The Psycho - Social Dynamics of Organizational Change

The fundamental assumptions underlying any change in a human system are derived originally from Kurt Lewin (1947). I have elaborated and refi ned his basic model in my studies of coercive persuasion, professional education, group dynamics training, and management development (Schein, 1961a,

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1961b, 1964, 1972; Schein and Bennis, 1965). This elaborated model is shown in Exhibit 17.1

All human systems attempt to maintain equilibrium and to maximize their autonomy vis - à - vis their environment. Coping, growth, and survival all involve maintaining the integrity of the system in the face of a changing environment that is constantly causing varying degrees of disequilibrium. The function of cognitive structures such as concepts, beliefs, attitudes, values, and assumptions is to organize the mass of environmental stimuli, to make sense of them, and to provide, thereby, a sense of predictability and meaning to the individual members (Weick, 1995; Weick and Sutcliffe, 2001). The set of shared assumptions that develop over time in groups and organizations serves this stabilizing and meaning - providing function. The evolution of culture is therefore one of the ways in which a group or orga- nization preserves its integrity and autonomy, differentiates itself from the environment and other groups, and provides itself an identity.

Unfreezing/Disconfi rmation

If any part of the core cognitive structure is to change in more than minor incremental ways, the system must fi rst experience enough disequilibrium to force a coping process that goes beyond just reinforcing the assumptions

Exhibit 17.1. The Stages of Learning/Change.

Stage 1 Unfreezing: Creating the Motivation to Change

• Disconfi rmation

• Creation of survival anxiety or guilt

• Creation of psychological safety to overcome learning anxiety

Stage 2 Learning New Concepts, New Meanings for Old Concepts, and New Standards for Judgment

• Imitation of and identifi cation with role models

• Scanning for solutions and trial - and - error learning

Stage 3 Internalizing New Concepts, Meanings, and Standards

• Incorporation into self - concept and identity

• Incorporation into ongoing relationships

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that are already in place. Lewin called the creation of such disequilibrium unfreezing , or creating a motivation to change. Unfreezing, as I have sub- sequently analyzed it, is composed of three very different processes, each of which must be present to a certain degree for the system to develop any motivation to change: (1) enough disconfi rming data to cause serious dis- comfort and disequilibrium; (2) the connection of the disconfi rming data to important goals and ideals, causing anxiety and/or guilt; and (3) enough psychological safety, in the sense of being able to see a possibility of solving the problem and learning something new without loss of identity or integ- rity (Schein, 1980, 2009b).

Transformative change implies that the person or group that is the tar- get of change must unlearn something as well as learning something new. Most of the diffi culties of such change have to do with the unlearning because what we have learned has become embedded in various routines and may have become part of our personal and group identity. The key to understanding “ resistance to change ” is to recognize that some behavior that has become dysfunctional for us may, nevertheless, be diffi cult to give up and replace because it serves other positive functions. Psychotherapists call this “ secondary gain ” as an explanation of why we sometimes continue to live with our neurotic behavior.

Disconfi rmation is any information that shows the organization that some of its goals are not being met or that some of its processes are not accom- plishing what they are supposed to: sales are off, customer complaints are up, products with quality problems are returned more frequently, managers and employees are quitting in greater numbers than usual, employees are sick or absent more and more, and so on. Disconfi rming information can be eco- nomic, political, social, or personal — as when a charismatic leader chides a group for not living up to its own ideals and thereby induces guilt. Scandals or embarrassing leaks of information are often the most powerful kind of disconfi rmation. However, the information is usually only symptomatic. It does not automatically tell the organization what the underlying problem might be, but it creates disequilibrium in pointing out that something is wrong somewhere. It makes members of the organization uncomfortable and anxious — a state that we can think of as survival anxiety in that it implies that unless we change, something bad will happen to the individual, the group, and/or the organization.

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Survival anxiety does not, by itself, automatically produce a motivation to change because members of the organization can deny the validity of the information or rationalize that it is irrelevant. For example, if employee turn- over suddenly increases, leaders or organization members can say, “ It is only the bad people who are leaving, the ones we don ’ t want anyway. ” Or if sales are down, it is possible to say, “ This is only a refl ection of a minor recession. ”

What makes this level of denial and repression likely is the fact that the prospect of learning new ways of perceiving, thinking, feeling, and behaving also creates anxiety — what we can think of as learning anxiety , a feeling that “ I cannot learn new behaviors or adopt new attitudes without losing a feeling of self - esteem or group membership. ” The reduction of this learning anxiety is the third and most important component of unfreezing — the creation of psychological safety . The learner must come to feel that the new way of being is possible and achievable, and that the learning process itself will not be too anxiety provoking or demeaning.

For example, in the case of Amoco, the new reward and control system required engineers to change their self - image from being members of an orga- nization to being self - employed consultants who now had to sell their services. The Amoco engineers simply could not imagine how they could function as freelance consultants; they had no skills along those lines. In the case of the Alpha Power Company, the electrical workers had to change their self - image from being employees who heroically kept power and heat on to being respon- sible stewards of the environment, preventing and cleaning up spills produced by their trucks or transformers. The new rules required them to report incidents that might be embarrassing to their group, and even to report on each other if they observed environmentally irresponsible behavior in fellow workers. But they were in a panic because they did not know how to diagnose environmen- tally dangerous conditions — how to determine, for example, whether a spill required a simple mop - up or was full of dangerous chemicals such as PCBs, or whether a basement was merely dusty or was fi lled with asbestos dust.

Sometimes disconfi rming data have existed for a long time but because of a lack of psychological safety, the organization has avoided anxiety or guilt by denying the data ’ s relevance, validity, or even its existence. It is our capacity both as individuals and as organizations to deny or even repress disconfi rming data that makes whistle blowing or scandals such power- ful change motivators. The failure to pay attention to disconfi rming data

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occurs at two levels — leaders who are in a position to act deny or repress the data for personal psychological reasons, and/or the information is avail- able in various parts of the organization but is suppressed in various ways. In the analysis of accidents, it is routinely found that some employees had observed various hazards and did not report them, were not listened to, or were actually encouraged to suppress their observations (Gerstein, 2008; Perin, 2005). The organizational dynamic is to deny information because to accept it would compromise the ability to achieve other values or goals, or would damage the self - esteem or face of the organization itself.

Survival Anxiety Versus Learning Anxiety

If the disconfi rming data “ get through ” the learners ’ denial and defensive- ness, they will recognize the need to change, the need to give up some old habits and ways of thinking, and the need to learn some new habits and ways of thinking. However, this produces learning anxiety. The interaction of these two anxieties creates the complex dynamics of change.

The easiest way to illustrate this dynamic is in terms of learning a new stroke in tennis or golf. The process starts with disconfi rmation — you are not beating some of the people you are used to beating, or your aspirations for a better score or a better - looking game are not met, so you feel the need to improve your game. But, as you contemplate the actual process of unlearn- ing your old stroke and developing a new stroke, you realize that you may not be able to do it, or you may be temporarily incompetent during the learning process. These feelings are “ learning anxiety. ” Similar feelings arise in the cultural area when the new learning involves becoming computer competent; changing your supervisory style; transforming competitive rela- tionships into teamwork and collaboration; changing from a high - quality, high - cost strategy into becoming the low - cost producer; moving from engi- neering domination and product orientation to a marketing and customer orientation; learning to work in nonhierarchical diffuse networks; and so on.

It is important to understand that learning anxiety can be based on one or more valid reasons:

• Fear of loss of power or position: The fear that with new learning, we will have less power or status than we had before.

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• Fear of temporary incompetence: During the learning process, we will be unable to feel competent because we have given up the old way and have not yet mastered the new way. The best examples come from the efforts to learn to use computers.

• Fear of punishment for incompetence: If it takes a long time to learn the new way of thinking and doing things, we fear that we will be pun- ished for lack of productivity. In the computer arena, there are some striking cases in which employees never learned the new system suf- fi ciently to take advantage of its potential because they felt they had to remain productive and thus spent insuffi cient time on the new learning.

• Fear of loss of personal identity: We may not want to be the kind of people that the new way of working would require us to be. For exam- ple, in the early days of the break - up of the Bell System, many old - time employees left because they could not accept the identity of being a member of a hard - driving, cost - conscious organization that “ would take phones away from consumers who could not afford them. ” Some elec- trical workers in Alpha Power resigned or retired because they could not stand the self - image of being environmental stewards.

• Fear of loss of group membership: The shared assumptions that make up a culture also identify who is in and who is out of the group. If by devel- oping new ways of thinking or new behavior, we will become a deviant in our group, we may be rejected or even ostracized. This fear is perhaps the most diffi cult to overcome because it requires the whole group to change its ways of thinking and its norms of inclusion and exclusion.

One or more of these forces lead to what we end up calling resistance to change . It is usually glibly attributed to “ human nature, ” but as I have tried to indicate, it is actually a rational response to many situations that require people to change. As long as learning anxiety remains high, an individual will be motivated to resist the validity of the disconfi rming data or will invent various excuses why he or she cannot really engage in a transfor- mative learning process right now. These responses come in the following stages (Coghlan, 1996):

1. Denial: Convincing ourselves that the disconfi rming data are not valid, are temporary, don ’ t really count, refl ect someone just crying “ wolf, ” and so on.

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2. Scapegoating, passing the buck, dodging: Convincing ourselves that the cause is in some other department, that the data do not apply to us, and that others need to change fi rst.

3. Maneuvering, bargaining: Wanting special compensation for the effort to make the change; wanting to be convinced that it is in our own interest, and will be of long - range benefi t.

Given all of these bases of resistance to change, how then does the change leader create the conditions for transformative change? Two prin- ciples come into play:

• Principle 1: Survival anxiety or guilt must be greater than learning anxiety.

• Principle 2: Learning anxiety must be reduced rather than increasing survival anxiety.

From the change leader ’ s point of view, it might seem obvious that the way to motivate learning is simply to increase the survival anxiety or guilt. The problem with that approach is that greater threat or guilt may simply increase defensiveness to avoid the threat or pain of the learn- ing process. And that logic leads to the key insight about transformative change embodied in Principle 2: The change leader must reduce learning anxiety by increasing the learner ’ s sense of psychological safety — the third component of unfreezing.

How to Create Psychological Safety

Creating psychological safety for organizational members who are undergo- ing transformational learning involves eight activities that must be carried on almost simultaneously. They are listed chronologically, but the change leader must be prepared to implement all of them.

1. A compelling positive vision: The targets of change must believe that the organization will be better off if they learn the new way of think- ing and working. Such a vision must be articulated and widely held by

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senior management and must spell out in clear behavioral terms what “ the new way of working ” will be. It must also be recognized that this new way of working is nonnegotiable.

2. Formal training: If the new way of working requires new knowledge and skill, members must be provided with the necessary formal and informal training. For example, if the new way of working requires teamwork, then formal training on team building and maintenance must be pro- vided. As we will see, this will be especially relevant in multicultural groups.

3. Involvement of the learner: If the formal training is to take hold, the learners must have a sense that they can manage their own informal learning process. Each learner will learn in a slightly different way, so it is essential to involve learners in designing their own optimal learn- ing process. The goals of learning are nonnegotiable, but the method of learning can be highly individualized.

4. Informal training of relevant “ family ” groups, and teams: Because cultural assumptions are embedded in groups, informal training and practice must be provided to whole groups so that new norms and new assumptions can be jointly built. Learners should not feel like deviants if they decide to engage in the new learning.

5. Practice fi elds, coaches, and feedback: Learners cannot learn some- thing fundamentally new if they don ’ t have the time, the resources, the coaching, and valid feedback on how they are doing. Practice fi elds are particularly important so that learners can make mistakes without disrupting the organization.

6. Positive role models: The new way of thinking and behaving may be so different from what learners are used to that they may need to be able to see what it looks like before they can imagine themselves doing it. They must be able to see the new behavior and attitudes in others with whom they can identify.

7. Support groups in which learning problems can be aired and dis- cussed: Learners need to be able to talk about their frustrations and dif- fi culties in learning with others who are experiencing similar diffi culties

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so that they can support each other and jointly learn new ways of deal- ing with the diffi culties.

8. Systems and structures that are consistent with the new way of thinking and working: For example, if the goal of the change program is to learn how to be more of a team player, the reward system must be group oriented, the discipline system must punish individually aggres- sive selfi sh behavior, and the organizational structures must make it possible to work as a team.

Most transformational change programs fail because they do not create the eight conditions outlined here. And when we consider the diffi culty of achieving all eight conditions and the energy and resources that have to be expended to achieve them, it is small wonder that changes are often short - lived or never get going at all. On the other hand, when an organization sets out to really transform itself by creating psychological safety, real and signifi cant changes can be achieved.

When and how does culture become involved? The disconfi rming data are only symptoms, which should trigger some diagnostic work, focusing on the underlying problem or issue that needs to be addressed. Before we even start to think about culture, we need to (1) have a clear defi nition of the operational problem or issue that started the change process, and to (2) formulate specifi c new behavioral goals. It is in this analysis that we may fi rst encounter the need for some culture assessment to determine to what degree cultural elements are involved in the problem situation. At this point, an assessment of the kind I will describe in the next chapter fi rst becomes relevant. It should not be undertaken, however, until some effort has been made to identify what changes are going to be made, what the “ new way of working ” will be to fi x the problem, and how diffi cult and anxiety - provoking the learning of the “ new way ” will be (Coutu, 2002; Schein, 2009b).

After the desired changes have been made behaviorally specifi c, it is now relevant to ask: “ How will the existing culture help us or hinder us? ” Some form of cultural assessment now becomes relevant and will be described in detail in the next chapter. The remainder of this chapter must now examine how change actually takes place.

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Cognitive Restructuring

After an organization has been unfrozen, the change process proceeds along a number of different lines that refl ect either new learning, through trial and error based on scanning the environment broadly, or imitation of role models, based on psychological identifi cation with the role model. The Amoco change initiative to redefi ne the roles of the engineers falls into the scanning model in that engineers had to fi gure out for themselves how to make the transition to the consulting role. Alpha ’ s program of environmental responsibility was primarily a case of teaching employees how to follow procedures based on extensive training, which is based more on identifi cation with role models. In either case, the essence of the new learning is some “ cognitive redefi nition ” of some of the core concepts in the assumption set. For example, when companies which assume that they are lifetime employers who never lay anyone off are faced with the eco- nomic necessity to reduce payroll costs, they cognitively redefi ne layoffs as “ transitions ” or “ early retirements, ” make the transition packages very gen- erous, provide long periods of time during which the employees can seek alternative employment, offer extensive counseling, provide outplacement services, and so on, all to preserve the assumption that “ we treat our people fairly and well. ” This process is more than rationalization. It is a genuine cognitive redefi nition on the part of the senior management of the organi- zation and is viewed ultimately as “ restructuring. ”

Most change processes emphasize the need for behavior change. Such change is important in laying the groundwork for cognitive redefi nition, but behavior change alone will not last unless it is accompanied by cognitive redefi nition. For example, the Alpha environmental program began with the enforcement of rules but eventually became internalized as employees cognitively redefi ned their job/role and their identity. Some engineers at Amoco were able to redefi ne their self - image quickly and become comfort- able with the new job structure.

Behavior change can be coerced at the beginning of a change program, but it will not last after the coercive force is lifted unless cognitive redefi ni- tion has preceded or accompanied it. Some change theories (for example, Festinger, 1957) argue that if behavior change is coerced for a long enough period of time, cognitive structures will adapt to rationalize the behavior

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change that is occurring. The evidence for this is not clear, however, as recent developments in former Communist countries reveal. People liv- ing under communism did not automatically become Communists even though they were coerced for fi fty years or more.

Learning New Concepts and New Meanings for Old Concepts

If someone has been trained to think in a certain way and has been a mem- ber of a group that has also thought that way, how can that person imagine changing to a new way of thinking? As pointed out earlier, if you were an engineer in Amoco, you would have been a member of a division working as an expert technical resource with a clear career line and a single boss. In the new structure of a centralized engineering group “ selling its services for set fees, ” you were now asked to think of yourself as a member of a consult- ing organization selling its services to customers who could purchase those services elsewhere if they did not like your deal. For you to make such a transformation would required you to develop several new concepts — “ freelance consultant, ” “ selling services for a fee, ” and “ competing with outsiders who could underbid you. ” In addition, you would have to learn a new meaning for the concept of what it meant to be an “ engineer ” and what it meant to be an “ employee of Amoco. ” You would have to learn a new reward system — that you would now be paid and promoted based on your ability to bring in work. You would have to learn to see yourself as much as a salesman as an engineer. You would have to defi ne your career in differ- ent terms and learn to work for lots of different bosses.

Along with new concepts would come new standards of evaluation. Whereas in the former structure you were evaluated largely on the quality of your work, now you had to estimate more accurately just how many days a given job would take, what quality level could be achieved in that time, and what it would cost if you tried for the higher - quality standard you were used to. This might require a whole new set of skills of how to make esti- mates and create accurate budgets.

If standards do not shift, problems do not get solved. The computer designers at DEC who tried to develop products competitive with the IBM PC never changed their standards for evaluating what a customer expected.

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They over - designed the products, building in far too many bells and whis- tles, which made them too expensive.

Imitation and Identifi cation Versus Scanning and Trial - and - Error Learning

As I stated at the outset of this section, there are basically two mechanisms by which we learn new concepts, new meanings for old concepts, and new standards of evaluation — either we learn through imitating a role model and psychologically identifying with that person, or we keep inventing our own solutions until something works. The leader as change manager has a choice as to which mechanism to encourage. Imitation and identifi cation work best when (1) it is clear what the new way of working is to be, and when (2) the concepts to be taught are themselves clear. For example, the leader can “ walk the talk ” in the sense of making himself or herself a role model of the new behavior that is expected. As part of a training program, the leader can provide role models through case materials, fi lms, role - plays, or simulations. Learners who have acquired the new concepts can be brought in to encourage others to get to know how they did it. This mechanism is also the most effi cient, but has the risk that what the learner learns does not integrate well into his or her personality or is not acceptable to the groups he or she belongs to. This means that the new learning may not be internalized, and the learner will revert to prior behavior after the coercive pressure to perform is no longer there.

If the change leader wants us to learn things that really fi t into our per- sonality, then we must learn to scan our environment and develop our own solutions. For example, Amoco could have developed a training program for how to be a consultant, built around engineers who had made the shift successfully. However, senior management felt that such a shift was so per- sonal that they decided merely to create the structure and the incentives but to let individual engineers fi gure out for themselves how they wanted to manage the new kinds of relationships. In some cases, this meant people leaving the organization. But those engineers who learned from their own experience how to be consultants genuinely evolved to a new kind of career that they integrated into their total lives.

The general principle here is that the leader as change manager must be clear about the ultimate goals — the new way of working that is to be

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achieved — but that does not necessarily imply that everyone will get to that goal in the same way. Involvement of the learner does not imply that the learner has a choice about the ultimate goals, but it does imply that he or she has a choice of the means to get there.

Refreezing

The fi nal step in any given change process is refreezing , by which Lewin meant that the new learning will not stabilize until it is reinforced by actual results. The Alpha employees discovered that not only could they deal with environmental hazards but that it was satisfying and worthwhile to do so, hence they internalized the attitude that a clean and safe environment was in everyone ’ s interest even if it meant slowing jobs down when a haz- ard was encountered. If the change leaders have correctly diagnosed what behavior is needed to fi x the problems that launched the change program, then the new behavior will produce better results and be confi rmed.

If it turns out that the new behavior does not produce better results, this information will be perceived as disconfi rming information and will launch a new change process. Human systems are, therefore, potentially in perpetual fl ux, and the more dynamic the environment becomes, the more that may require an almost perpetual change and learning process.

Principles in Regard to Culture Change

When an organization encounters disconfi rming information and launches a change program, it is not clear at the outset whether culture change will be involved and how the culture will aid or hinder the change program. To clarify these issues, a culture assessment process of the kind described in the next chapter becomes appropriate. However, it is generally better to be very clear about the change goals before launching the culture assessment.

• Principle 3: The change goal must be defi ned concretely in terms of the specifi c problem you are trying to fi x, not as “ culture change. ”

For example, in the Alpha Power Company case, the court said that the company had to become more environmentally responsible and more

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open in its reporting. The change goal was to get employees (1) to become more aware of environmental hazards, (2) to report them immediately to the appropriate agencies, (3) to learn how to clean up the hazardous conditions, and (4) to learn how to prevent spills and other hazards from occurring in the fi rst place. Whether or not the “ culture ” needed to be changed was not known when the change program was launched. Only as specifi c goals were identifi ed could the change leaders determine whether or not cultural elements would aid or hinder the change. In fact, it turned out that large portions of the culture could be used positively to change some specifi c elements in the culture that did have to be changed. The fact that the entire workforce could be trained immediately in how to identify hazards and what to do about them was a refl ection of the highly structured, technical, autocratic Alpha culture. The bulk of the existing culture was used to change some peripheral cultural elements.

One of the biggest mistakes that leaders make when they undertake change initiatives is to be vague about their change goals and to assume that “ culture change ” would be needed. When someone asks me to help him or her with a “ culture change program, ” my most important initial question is “ What do you mean? Can you explain your goals without using the word ‘ culture ’ ? ”

• Principle 4: Old cultural elements can be destroyed by eliminating the people who “ carry ” those elements, but new cultural elements can only be learned if the new behavior leads to success and satisfaction.

Once a culture exists, once an organization has had some period of success and stability, the culture cannot be changed directly unless the group itself is dismantled. A leader can impose new ways of doing things, can articulate new goals and means, and can change reward and control systems, but none of those changes will produce culture change unless the new way of doing things actually works better and provides the members a new set of shared experiences that eventually lead to culture change.

• Principle 5: Culture change is always transformative change that requires a period of unlearning that is psychologically painful.

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Many kinds of changes that leaders impose on their organizations require only new learning and therefore will not be resisted. These are usu- ally new behaviors that make it easier to do what we want to do anyway, such as learning a new software program to make our work on the computer more effi cient. However, once we are adults and once our organizations have developed routines and processes that we have become used to, we may fi nd that new proposed ways of doing things look like they will be hard to learn or will make us feel inadequate in various ways. We may feel comfortable with our present software and may feel that to learn a new system is not worth the effort. The change leader therefore needs a model of change that includes “ unlearning ” as a legitimate stage and that can deal with transformations, not just enhancements.

Summary and Conclusions

Culture change inevitably involves unlearning as well as relearning and is, therefore, by defi nition, transformative. This chapter describes a general change model that acknowledges from the outset the diffi culty of launch- ing any transformative change because of the anxiety associated with new learning. The change process starts with disconfi rmation, which produces survival anxiety or guilt — the feeling that we must change — but the learn- ing anxiety associated with having to change our competencies, our role or power position, our identity elements, and possibly our group membership causes denial and resistance to change. The only way to overcome such resistance is to reduce the learning anxiety by making the learner feel “ psy- chologically safe. ” The conditions for creating psychological safety were described. If new learning occurs, it usually refl ects “ cognitive redefi nition, ” which consists of learning new concepts, learning new meanings for old concepts, and adopting new standards of evaluation. Such new learning occurs either through identifi cation with role models or through trial - and - error learning based on scanning the environment.

The change goals should initially be focused on the concrete problems to be fi xed; and only when those goals are clear is it appropriate to do a cul- ture assessment to determine how the culture will aid or hinder the change process. How such a culture assessment would be done is the topic of the next chapter.

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