Why do organisations need to change?

 

Many things cause organisational change. These include:

 

·        market changes eg declining growth as markets mature

·        changes in strategy by management

·        technological changes eg impact of web based marketing

·        impact of competition from new products and new market entrants

·        customer demands

·        need to learn new organisation behaviour and skills through market changes

·        impact of government legislation, initiatives and policies

 

Research suggest that organisations both public and private undergo major change approximately once every three years, whilst smaller changes are occurring almost continually. There are no signs that this pace of change will slow down and every indication that the pace is accelerating.

 

Managers therefore have to be able to introduce and manage change to ensure the organisational objectives of change are met, and they have to ensure that they gain the commitment of their people, both during and after implementation.

 

Thus it is important that the way change is managed is carefully considered by those responsible for initiating and managing change. Whilst the circumstances of each change will be unique, there are nevertheless common themes in all organisational change that if understood and dealt with will help ensure that the objectives of the change process are successfully achieved.

Change business models

There three main but contrasting models of organisational change.

Lewin’s model

Lewin considers that change involves a move from one static state via a state of activity to another static status quo. There is a three-stage process of managing change:

 

·         unfreezing

·         changing

·         re-freezing.

 

The first stage involves creating a level of dissatisfaction with the status quo, which creates conditions for change to be implemented. The second stage requires the organising and mobilising of the resources required to bring about the change. The third stage involves embedding the new ways of working into the organisation.

Beer’s model

Beer and his colleagues advocate a model that recognises that change is more complex and therefore requires a more complex, albeit still uniform set of responses to ensure its effectiveness. They prescribe a six-step process to achieve effective change. They concentrate on ‘task alignment’, whereby employees’ roles, responsibilities and relationships are seen as key to bring about situations that enforce changed ways of thinking, attitudes and behaving. Their stages are:

 

·        Mobilise commitment to change through joint diagnosis.

·        Develop a shared vision of how to organise.

·        Foster consensus, competence and commitment to shared vision.

·        Spread the word about the change.

·        Institutionalise the change through formal policies.

·        Monitor and adjust as needed.

Shaw’s model

This model looks at change in a different form. Change is seen as both complex and also evolutionary. The starting point for their (and a number of other more recent models) model is that the environment of an organisation is not in equilibrium. As such the change mechanisms within organisations tend to be ‘messy’ and to a certain extent operate in reverse to the way outlined by Lewin. It is not appropriate to consider the status quo as an appropriate starting point, given that organisations are not static entities. Rather the forces for change are already inherent in the system and emerge as the system adapts to its environment.

Such different models will have implications on the way organisations and their leaders view change, the way they manage change and the effectiveness of any change initiative.

Some examples of change strategies

These can be considered as the different strategies and procedures that are used to categorise the change environment. The relevance of different change strategies is that they build upon different assumptions about human motivation and hence willingness to engage in change at a particular point in time.

 

Four differing views are presented below. These strategies are not intended to be mutually exclusive. Rather they may each be appropriate at a different stage of a particular change process. Once the environment is identified, an effective implementation plan can be created.

Normative-re-educative strategy

This approach believes that changing the norms, attitudes and values of individuals will lead to changes in their behaviours. (As such this strategy is the reverse of the model Beer et al propose above.) It is based upon core beliefs, values and attitudes.

 

So change will occur as individuals change their attitudes and this leads them to want to behave differently.

Rational- empirical strategy

This strategy is based on persuasion, and assumes that individuals are rational and as such they will follow their own self-interest once this is made clear to them. The benefits of a change therefore need to be highlighted and sold to the individuals as being of personal benefit to them.

Power-coercive strategy

This strategy is based on the application of power, with the belief that most people are compliant to those who have greater power. A potential issue with this process is that once the power is removed, individuals may revert to previous behaviours.

Action-centred strategy

This focuses on problem solving, looking at problems and focussing on remedial actions.

Why is change management relevant?

Change management is relevant because although change is taking place at an ever-increasing pace, the evidence suggests that most change initiatives fail. For example, recent CIPD research suggested that less than 60% of re-organisations met their stated objectives which are usually profitablility improvement.

 

The impact of the failure to introduce effective change can also be high: loss of market position, removal of senior management, loss of stakeholder credibility, loss of key employees.

 

Finally, one organisational response to change is that organisational forms are themselves evolving. Therefore, the change management response will have to be adaptive. For example, increased competitive challenges and the need to be responsive to the changing environment are resulting in new organisational models. Traditional organisational models following functional or matrix lines are being supplemented by new models. These might rely on project teams, on networks or  on virtual structures eg virtual organisations that exist based on electronic links.

 

In theory, certain of these newer models, for example virtual and project-based structures, allow increased flexibility to respond to change. However such models are not always introduced uniformly, and in practice often introduce other issues that also impact upon change management, for example the ability to share knowledge and to operate efficiently. Also, as more companies rely on these ‘new structures’, for example, sub-contractors and agency staff, the traditional psychological contract between organisation and employee can no longer be relied upon to elicit employee engagement, motivation and ultimately superior performance, all of which are particularly important in times of change. These ‘structures’ may also impact effectiveness of communication, which again has implications for change effectiveness.

What issues have been identified in the change management process?

A large number of issues have been identified as having negative impact on effective change management. Some of the key themes are identified below, covering organisational issues and individual resistance to change.

Organisational issues

Individual change initiatives are not always undertaken as part of a wider coherent change plan, for example through considering linkages between strategy, structure and systems issues. Therefore a change that considers a new structure but fails to establish the need to introduce new systems to support such a structure is less likely to succeed.

 

Lack of effective project management and programme management disciplines can lead to slippages in timings, in achievement of desired outcomes, in ensuring that the projects do deliver as planned.

 

Insufficient, relevant training, for example in project management, change management skills, leadership skills can all impact negatively on the effectiveness of any change initiative.

 

Poor communication has been linked to issues surrounding the effectiveness of in achieving effective change in various ways. For example, imposed change can lead to greater employee resistance (see section below also).

 

Finally, lack of effective leadership has been identified as an inhibitor of effective change.

Individual/group resistance to change

Resistance to change can be defined as an individual or group engaging in acts to block or disrupt an attempt to introduce change. Resistance itself can take many different forms from subtle undermining of change initiatives, withholding of information to active resistance eg via strikes.

 

Resistance to change can be considered along various dimensions:

 

·        individual versus collective

·        passive versus active

·        direct versus indirect

·        behavioural versus verbal or attitudinal

·        minor versus major.

 

Similarly two broad types of resistance can be considered:

 

·        Resistance to the content of change - for example to a specific change in technology, to the introduction of a particular reward system.

·        Resistance to the process of change. This concerns the way a change is introduced rather than the object of change per se, for example, management re-structure jobs, without prior consultation of affected employees.

 

Management need to be aware of these different criteria to ensure they respond appropriately.

 

Suggested reasons for resistance include: loss of control, shock of new, uncertainty, inconvenience, threat to status, competence fears. It is important to try to diagnose the cause of employee resistance as this will help determine the focus of effort in trying to reduce/remove the issue.

What can be done to make change management more effective?

From the issues raised in the section above, it can be seen that change is complex and there is not a single solution. However, a number of key areas of focus emerge.

Effective leadership is a key enabler as it provides the vision and the rationale for change. Different styles of leadership have been identified, for example coercive, directive, consultative and collaborative. These different styles may each be appropriate depending on the type and scale of change being undertaken. For example, when there is a large-scale organisation-wide change a directive style has been identified as most effective.

 

Appropriate and timely training is frequently identified as key to effective change.

 

Examples of training requirements might include:

 

·        Project and programme management skills to ensure change initiatives are completed both on time and to budget.

·        Change management skills, including communication and facilitation.

·        leadership coaching.

 

Two-way communication with employees (see our factsheet on Managing the psychological contract) and their active involvement in implementation has also been identified as a key enabler of change. Active participation is one suggested means of overcoming resistance to change. However, research has indicated that part of the communication/participation issue might arise from a potential mismatch between what the employer and employee opinions are regarding levels of communication.

 

For example, in a recent study of both employers and employees, employers believed they were involving and communicating with employees at a considerably higher level than was reported by employees.

 

Finally, linking all the change initiatives within an organisation coherently, rather than completing changes in isolation is vital to ensure that change effectiveness is maximised. CIPD research has identified seven areas of activity that make successful change happen - ‘the seven c’s of change’:

 

·        Choosing a team.

·        Crafting the vision and the path.

·        Connecting organisation-wide change.

·        Consulting stakeholders.

·        Communicating.

·        Coping with change.

·        Capturing learning.

HR’s role in change management

People management and development professionals have significant role to play in any change management process. Arising from CIPD research, HR’s involvement in certain areas was identified as sometimes being the difference between successful and less successful projects:

 

·        Involvement at the initial stage in the project team.

·        Advising project leaders in skills available within the organisation – identifying any skills gaps, training needs, new posts, new working practices etc

·        Balancing out the narrow/short-term goals with broader strategic needs.

·        Assessing the impact of change in one area/department/site on another part of the organisation.

·        Being used to negotiating and engaging across various stakeholders.

·        Understanding stakeholder concerns to anticipate problems.

·        Understanding the appropriate medium of communication to reach various groups.

·        Helping people cope with change, performance management and motivation.

 

This is based on a factsheet by the staff of the Chartered Institute of Personnel and Development, the United Kingdom’s leading professional body for those involved in the management and development.  Copyright CIPD 2006