1

Leading Change:
An introduction
http://groups.yahoo.com/group/Fall2008_ChangeManagement

Shahnawaz Adil
Assistant professor
 Table of Contents
 What do scholars say about change?
 What do we mean by ‘Change’?
 Kurt Lewin’s Change Management Model
 The Paradigm Shift Model (Richard Beckhard)
 Cycle of Change
 Why people resist change? (11 reasons)
 Psychological Impact
 Cycle of Coping: Five Stages 2
 Table of Contents (cont’d…)


Article: Strebel, P. (1996) Why do employees
resist change? HBR
 Article: Drucker, Peter F. (1988) Management
and the world’s work, HBR
 Book: Welsh, J.; Welsh, S. (2005) Winning,
Harper Collins Publishers
 key points from Chapter 9 ‘Mountains do move’
 Conclusion
 References
3
 What do scholars say about change?
 “The rate of change is not going to slow down
anytime soon. If anything, competition in most
industries will probably speed up even more in the
next few decades”. — John P. Kotter, Leading Change
 “People don't resist change. They resist being
changed!” – Peter Senge (Founder of the concept: Learning
Organization)
 “Your success in life isn't based on your ability to
simply change. It is based on your ability to change
faster than your competition, customers and
business”. – Mark Sanbor 4
 What do scholars say about change?
(Cont’d)

 “Everybody has accepted by now that change is

unavoidable. But that still implies that change is like death
and taxes — it should be postponed as long as possible and
no change would be vastly preferable. But in a period of
upheaval, such as the one we are living in, change is the
norm”.
— Peter Drucker, Management Challenges for the 21st Century (1999)
 “Change is the law of life and those who look only to the
past or present are certain to miss the future. " — John
Fitzgerald Kennedy (JFK), 35th US President, serving from 1961 until his
assassination in 1963.
5
 What do scholars say about change?
(Cont’d)

 Change is inevitable. In a progressive

country change is constant. Benjamin Disraeli
(1804 - 1881); UK Prime Minister (Conservative Party: Feb-Dec 1868;
1874-1880), Speech, Edinburgh (1867)
 We must become the change we want to
see.” Mohandas Karamchand Gandhi (1869 - 1948)
 Slow and steady wins the race. (The Hare and the
Tortoise, Aesop c. 620-c. 560 BC; Greek writer)
 Every act of creation is first of all an act of
destruction. (Pablo Picasso 1881-1973; Spanish artist) 6
 What do we mean by CHANGE?
 Change is a phenomenon we encounter in life both
inside and outside organizations and it is fair to
say that the pace of change has accelerated in
recent years.
 We have witnessed changes in the political
landscape of the world with the disintegration of
the communist system and the collapse of the
eastern bloc.
 This has generated further changes, such as the
creation of independent states within the old
Soviet Union and of course the reunification of
Germany.
7
 What do we mean by CHANGE?
(Cont’d)

 Change is visible in South Africa, where power

sharing between blacks and whites replaced the
previous system of rule by the white population,
and hopefully recent international peace initiatives
may bring about desired changes in Northern
Ireland and in the Israeli-occupied territories.
 At the economic level, greater competition is
experienced as barriers to trade between EU
countries are removed with the creation of the
Single Market.
 This has been accentuated by the rapid
development of global markets.
8
 What do we mean by CHANGE?
(Cont’d)

 The pace of technological developments is

reflected in changes across a broad
spectrum.
 For example, there have been impressive
advances in the application of new
technology to the office and the factory.
 Technological innovation also finds
expression in the development of new
products. 9
 What do we mean by CHANGE?
(Cont’d)

 Change will also impact on how people

perceive careers.
 Already employee expectations are
changing, because now there is a
recognition of the growing need to have a
number of jobs throughout a working life,
with much less attachment to the notion of
a continuous association with one
organization. 10
 What do we mean by CHANGE?
(Cont’d)

 As organizations seek to operate in global markets and to

apply products and processes internationally, they may be
faced with dealing with increased complexity.

 On the one hand, globalization implies a unification to

some extent – e.g. the same product can become sold
more widely, or a particular management technique may
be applied across national boundaries.

 It is commonplace in today’s world for organizations to

bring about a variety of changes to their goals, structures
and processes in response to both internal and external
happenings or in anticipation of those events. 11
 What do we mean by CHANGE?
(Cont’d)

 At the strategic level, corporate goals could

be set or adapted (changed) so that the
organization is well placed to derive
competitive advantage in its market.
 At the operational level, responses or
precipitative action to improve efficiency and
effectiveness could be reflected in changes
to working practices, contracts of
employment, systems and structures. 12
 What do we mean by
CHANGE? (Cont’d)
 Given the degree of change at the social,
political and economical levels the aim must
be to achieve flexibility in response to
external change at the operational level.
 Typically, this will require employees to be
flexible in their attitude towards change and
in the application of their skills and
knowledge to new tasks.
13
Change: in a broader context

14
CM: Venn Diagram

15
Change Management

16
 Change Management:
from organizational perspective

17
CM Route Map

18
CM: How it works?

19
Change Management

20
Kurt Lewin’s Change
Management Model

He explained organizational change using the

analogy of changing the shape of a block of ice
21
 Kurt Zadek Lewin’s CM Model
If you have a large cube of ice, but realize
that what you want is a cone of ice, what do
you do? First you must melt the ice to make
it amenable to change (unfreeze). Then you
must mold the iced water into the shape you
want (change). Finally, you must solidify the
new shape (refreeze).

Unfreeze
Change Refreeze
(1890 - 1947) 22
 Practical steps for using the
Lewin’s framework
 Unfreeze

1. Determine what needs to change

 Survey the organization to understand the current state
 Understand why change has to take place.
2. Ensure there is strong support from upper management
 Use Stakeholder Analysis and Stakeholder Management to identify and win
the support of key people within the organization
 Frame the issue as one of organization-wide importance.
3. Create the need for change
 Create a compelling message as to why change has to occur
 Use your vision and strategy as supporting evidence
 Communicate the vision in terms of the change required
 Emphasize the “why”.
4. Manage and understand the doubts and concerns
 Remain open to employee concerns and address in terms of the need to 23
change.
 Practical steps for using the
Lewin’s framework (Cont’d…)
 Change
1. Communicate often
 Do so throughout the planning and implementation of the changes
 Describe the benefits
 Explain exactly the how the changes will effect everyone
 Prepare everyone for what is coming.

2. Dispel rumors
 Answer questions openly and honestly
 Deal with problems immediately
 Relate the need for change back to operational necessities.

3. Empower action
 Provide lots of opportunity for employee involvement
 Have line managers provide day–to–day direction.

4. Involve people in the process

 Generate short-term wins to reinforce the change
 Negotiate with external stakeholders as necessary (such as employee
organizations).
24
 Practical steps for using the
Lewin’s framework (Cont’d…)
 Refreeze

1. Anchor the changes into the culture

 Identity what supports the change
 Identify barriers to sustaining change.

2. Develop ways to sustain the change

 Ensure leadership support
 Create a reward system
 Establish feedback systems
 Adapt the organizational structure as necessary.

3. Provide support and training

 Keep everyone informed and supported.

4. Celebrate success! 25
 Key Points from Lewin’s Model
 Kurt Lewin’s change model is a simple and easy-to-understand
framework for managing change.

 By recognizing these three distinct stages of change, you can plan to

implement the change required. You start by creating the motivation to
change (unfreeze). You move through the change process by promoting
effective communications and empowering people to embrace new ways
of working (change). And the process ends when you return the
organization to a sense of stability (refreeze), which is so necessary for
creating the confidence from which to embark on the next, inevitable
change.

 Unfortunately, some people will genuinely be harmed by change,

particularly those who benefit strongly from the status quo. Others may
take a long time to recognize the benefits that change brings. You need
to foresee and manage these situations.
26
 Prof. Dr. John P. Kotter
(Harvard University, US)

8 Errors
27
CM Model

Devised by John P. Kotter

Harvard Business School, United States
28
The Paradigm Shift Model
(Richard Beckhard)

29
The Paradigm Shift Model
(Richard Beckhard)

30
 The Paradigm Shift Model
(Explanation)
 Each person in the organization as a whole need to
share a common “database” of dissatisfaction (D)
with things as they are now.
 This requires that the organization to do what Jack
Welsh suggests, to “face reality as it is, not as it
was or as you wish it were.”
 This is a very difficult task for most leaders.
 People also need a common vision (V) of what
organizations needs to be in the future, and the
people need agreement of what the significant
organizational wide first steps (F) are that will
move them in the required direction.
31
 The Paradigm Shift Model:
Explanation Cont’d…
 If you look at the formula if any
of the three elements D, V or F
is zero, the drive for change will
not be sufficient to overcome
the resistance (R) to the change.
• This formula reminded me of the work of Robert
Fritz who describes the necessary structures and
tensions required to propel (mean push) an
organization or individual towards change
discussed in his book “Path of Least Resistance:
Learning to Become the Creative Force in Your
Own Life”
32
Cycle of Change

Daryl R. Conner

33
 Key points to ponder
 Resistance to change DOES NOT reflect
opposition.
 Change in business operations mean that we
need to change employees’ behaviour not
their nature (psychological aspect).
 Helping people overcome their limitations to
become more successful at work is at the
very heart of effective change management.
34
 Key points to ponder Cont’d…
 In general, the more significant a change is, the more
intense the shock will be.
 The stability of an organization will be especially high if
the following elements form a consistent and cohesive
configuration:
 The organizational structure will solidify;
 Formal systems will be installed;
 Key competence areas will be identified;
 Standard Operating Procedures (SOP) will be defined;
 A distribution of power will emerge; and
 A corporate culture will become established.
(Mintzberg,1991) 35
 Key points to ponder Cont’d…
 If an organization experiences a period of success,
this usually strongly reinforces the existing way of
working. (Miller, 1990)
 People resist change because they believe that their
interests will be damaged.
(Allison, 1969; Pettigrew, 1988)
 An organization can be divided into 7s framework
that are interconnected elements that can all be
changed:
1. Structure 4. Style
2. Strategy 5. Staff (Waterman et al., 1980)
3. System 6. Skills
36
7. Subordinate goals
 Key points to ponder Cont’d…
 Announcement of change should be made at
the most appropriate time – otherwise
rumours begin to circulate.
 SWOT analysis of project team itself.
 A great consideration upon the service
people (e.g. call centre advisors)
 Motivation and determination to succeed.

37
Resistance &
Change
Management
38
 Why People resist change?
(11 reasons)
 People perceive that the proposed changes are likely to
threaten their expertise, undermine their influence, dilute
their power base and reduce the resources currently
allocated to their department. If this negative view
prevails, efforts to introduce the change could be hindered.

 There is a lack of trust between management and

employees. This could have arisen because those likely to
be affected by the proposed changes did not receive
adequate explanations about what is due to take place, or
they recall that past changes did not produce the promised
benefits.
39
 Why People resist change?
(Cont’d)

 There are diverse views about the need for

change and the anticipated benefits, and
this creates some confusion.
 For example, management holds optimistic view
about why the change is necessary and the
expected results, whereas the workers are
unable to share these views. Of course, there
could also be difference of opinion within each
group. Whatever the reason, the lack of
consensus acts as an impediment. 40
 Why People resist change?
(Cont’d)

 People have a low tolerance to change,

though it is recognized that there are
certain people who thrive on confronting
change.
 Individuals with low tolerance for change may
feel anxious and apprehensive about the
uncertainty that accompanies change, and as a
result, oppose it even though they recognize it
is for the benefit of the organization.
41
 Why People resist change?
(Cont’d)
 As creatures of habit, people construe (mean: interpret) as
uncomfortable because it poses a challenge to established
routines to which they are grown accustomed and to
organizational processes and practices by resorting to
business process reengineering (BPR).
 People feel uncomfortable about the prospect of a major upheaval
(mean: disturbance) that is likely to result in discarding established ways
of doing things.
 If the proposed reorganization leads to the break-up of established
groups of colleagues, people could feel sad at the disintegration of
teams because of the impact it is likely to have on comradeship
(mean: companionship), mutual support and shared experience.
 Also, there could be a certain sadness at the severing contact with
people who the organization feels are superfluous (mean: surplus) to
requirements and as a result, are being made redundant.

42
 Why People resist change?
(Cont’d)
 There is a perception that the proposed change
challenges cherished values and beliefs.
 For example, the proposal is to remove the system of
promotion based on seniority that was considered an
attractive HR practice in the past (e.g. as in Japan)
 People harbour doubts about their ability to cope
with the demands of the new situation.
 People feel that their future job security and
income could be adversely affected by the
proposed changes, and this is compounded by fear
of a future clouded with ambiguity and uncertainty
(fear of the unknown)
43
 Why People resist change?
(Cont’d)

 People feel a sense of apathy (mean: lack of interest)

due to powerlessness and are not well
disposed to the proposals for change.

 Individuals are influenced by group norms –

for example, the group is critical of
individualized incentive scheme
(performance-related pay – PRP) – and as a
consequence resist the proposed change.
44
 Why People resist change?
(Cont’d)

 Organizational systems are elaborate (i.e.

entrenched bureaucratic processes and practices)
with an inbuilt resistance to overhauling them
even when justified.
 For example, in the case of introducing Total Quality
Management (TQM) which disperses power; this is
because of an attachment to the view that they are
functional in maintaining stability.
 In fact there could be a certain inertia that acts as a
counterbalance to change.
45
 Article No 1:

Strebel, P. (1996) Why do

employees resist change?
HBR

Students will present this article in their own words.

46
 Psychological Impact
Carnall, Colin A. (1990) Managing Change in Organizations, FT: Prentice Hall
 It is understandable that news of profound changes
affecting the individual’s job or place of work can
arouse deep psychological feelings related to self-
esteem and achievement, which in turn, affect the
level of motivation and performance.

47
 Cycle of Coping
 A ‘cycle of coping’, which covers five stages and
traces the individual’s reaction to change, has
been proposed by Colin Carnall in 1990.

 The pronouncements in the cycle of coping that

now follow might be viewed as generalizations;
however, reflecting on them when considering the
management of change could be useful.

48
 Cycle of Coping: Five Stages

 Stage 1: Denial
 Stage 2: Defence
 Stage 3: Discarding
 Stage 4: Adaptation
 Stage 5: Internalisation
Self-esteem means:
1. A realistic respect for or favourable impression of oneself; self-respect.
2. An inordinately or exaggeratedly favourable impression of oneself. 49
 Five stages explained…
 Stage 1: ‘Denial’ as the individual is confronted
with the proposal for change. A typical reaction is
that change is unnecessary, and there could be an
enhancement of the person’s self-esteem because
of an attachment to the present way of doing
things.

 Where a group is involved the threat posed by the

proposal for change could lead to a reinforcement of the
ties between members, and performance remains
stable.
50
 Five stages explained… (Cont’d)

 Stage 2: ‘Defence’ and at this stage the realities

of the decision to institute changing become
apparent as early deliberations lead to the
formulation of concrete plans and programmes.

 Faced with this outcome people become defensive in

order to defend both their job and the way they have
executed their duties and responsibilities.

 This stage produces an adverse effect, which manifests

itself as a lowering of self-esteem, motivation and
performance. 51
 Five stages explained… (Cont’d)

 Stage 3: ‘Discarding’ and, unlike the

previous stage, which emphasized the past,
this stage puts the spotlight on the future.
 There is a change in perceptions as people
realise that change is necessary and inevitable.
 Although the performance is still on the decline,
there are signs that self-esteem is improving as
people get to grips with the new situation.

52
 Five stages explained… (Cont’d)

 Stage 4: ‘Adaptation’, where people are

beginning to come to terms with the new
techniques and processes.
 Naturally it will be necessary to modify and
refine the new system and if people are involved
in this exercise they are likely to experience an
increase in their self-esteem.
 However, performance still lags behind the
growing level of motivation, particularly in
situations where it was necessary to have an
understanding of new methods and techniques.53
 Five stages explained… (Cont’d)

 Stage 5: ‘Internalisation’, where people

finally make sense of what has happened,
and the newly-adopted behaviour is now
becoming part of their repertoire (mean: range, list,
stock, collection) of behaviour.
 One could now expect an improvement in self-
esteem and motivation and this coupled with
better use of people’s abilities could give rise to
raised level of performance.
54
 Article No 2:

Drucker, Peter F. (1988) Management

and the world’s work, Harvard
Business Review

Students will be asked to present this article in their own words.

55
 Learning outcomes
 The truly important problems managers face
come from the success of management
itself.
 For the first time in human history, we can
employ large numbers of educated people
productively.
 Management has made knowledge the true
capital of every economy.
 Management substitutes systems and
information for guesswork, toil, and brawn. 56
 Learning outcomes (cont’d)

 Leadership in management – not technological

innovation – made Japan a great economic power.
 Development requires a knowledge base that few
developing countries possess or can afford.
 What managers do is the same all over the world.
How they do it is embedded in their tradition and
culture.
 Managers who understand the principles of
management leave as a legacy greater capacity to
produce wealth and greater human vision. 57
 Book No. 1

Welsh, J.; Welsh, S. (2005)

Winning, Harper Collins
Publishers
What Warren E. Buffet said about this
book?

“No other management book

will ever be needed.”
58
 Key points from ‘Winning’
Ch. 9 ‘Mountains do move’
 You need to change, preferably before you have to.
 People love familiarity and patterns. They cling (mean: adhere)
to them.
 Managing change can sometimes feel moving a mountain.
 Four practices to implement by company’s leaders with
passion and reward everyone else who buys in…
1. Attach every change initiative to a clear purpose or goal. Change
for change’s sake is stupid and enervating (communicate a sound
rationale for every change).
2. Hire and promote only true believers and get-on-with-it type (have
the right people at your side).
3. Ferret out (mean: hunt and identify) and get rid of resisters, even if
their performance is satisfactory.
4. Look at car wrecks (seize every single opportunity, even those from
someone else’s misfortune).
59
 1. Communicate a sound
rationale for every change
 To avoid change overload, some big companies
adopt ten different change initiatives at once and
run in right different directions.
 Actually, change should be a relatively orderly
process.
 But for that occur, people have to understand –in
their heads and in their hearts –why change is
necessary and where the change is taking them.
 Change is made even easier when the media is
writing stories about your imminent demise –
perhaps the one time you welcome bad press! 60
 1. Communicate a sound
rationale for every change (Cont’d)

 When the whole world knows about your problem,

the wind is at your back.
 Sometimes you don’t know your competitive
threats but still, you have to respond.
 In those cases, lots of data and relentless
communication about the business rationale for
change are the best ammunition you’ve got.
 If the company had been through enough change
programs, employees consider you as gas pains.
You’ll go away if they just wait long enough. 61
 1. Communicate a sound
rationale for every change (Cont’d)

 You don’t always have, at the outset of the change

initiative, every bit of information you’d like to
make your case.
 Regardless, you need to get out of there and start
talking about what you do know and what you
fear.
 Communication about change does get a lot more
challenging as a company gets larger.
 Anyone leading a change process must stay far
away from empty slogans and instead stick to a
solid, persuasive business case.
 Over time, logic will win out.
62
 2. Have the right people at
your side
 It is quite common to see someone describe
himself as a ‘change agent’ right on his résumé.
 Real change agent comprise less than 10% of all
businesspeople.
 These are the true believers who champion
change, know how to make it happen, and love
every second of the process.
 To make change happen, companies must actively
hire and promote only true believers and get-on-
with-its. 63
 2. Have the right people at
your side (cont’d)
 Main challenge:
 When everyone claiming to like change, how can you tell who is for
real?
 Luckily, change agents usually make themselves known.

 Personality attributes of Change Agents:

 They are typically brash (mean: self-confident and aggressive), high-energy
and more than a little bit paranoid (mean: obsessed & suspicious) about
the future.
 Very often they invent change initiatives on their own or ask to lead
them.
 Invariably, they are curious and forward-looking.
 They ask a lots of questions that start with the phrase “Why don’t
we…?” 64
 3. Get rid of resisters
 In any organization, there is a core of people who
absolutely will not accept change, no matter how
good your case.
 Either their personalities just can’t take it, or they
are so entrenched (mean: ingrained/well-established) –
emotionally, intellectually, or politically –in the way
things are, they cannot see a way to make them
better.
 Extraordinary example: Bill Harrison, the CEO of
JPMorgan Chase asked the CEO of one of its major
businesses to leave during his change process at
the bank. (explanation is given underneath this
slide) 65
 3. Get rid of resisters (cont’d)

 From a management perspective, few cases

of removing resisters are as difficult as the
one Bill Harrison faced. But even when a
situation is not nearly as political or fraught,
managers hold on to resisters because of a
specific skill set or because they have been
around for a long time.
 Resisters only get more diehard and their
followings more entrenched as time goes on.
They are change killers; cut them off early. 66
 4. Look at car wrecks
 It means to seize every single opportunity,
even those from someone else’s misfortune.
 Most companies capitalize on obvious
opportunities. When a competitor fails, they
move in on their customers. When a new
technology emerges, they invest in it and
create product line extensions.
 Example: 1997 Asian financial crisis.
(explanation is given underneath this slide) 67
 4. Look at car wrecks (cont’d)

 Bankruptcies are another calamity that

provide all kinds of opportunities.
(explanation is given underneath this slide)
 It goes without saying that no
businessperson wants disasters to occur, but
they will.
 There will be spikes in oil prices, buildings
will be destroyed in earthquakes, companies
will go bankrupt, and countries will come
close. 68
 4. Look at car wrecks (cont’d)

 In today’s world, there is the persistent threat of a

terrorist attack due to which an entirely new kind
of security industry has emerged.
 There will always be elections and revolutions that
change the course of history.
 Most companies take advantage of obvious
opportunities. But some also have the ability to
make the most of regrettable circumstances –
those “car wrecks” – and they should.
69
 Four practices to implement by
company’s leaders (Conclusion)

1. Communicate a sound rationale for every change

2. Have the right people at your side

3. Get rid of resisters, even if their performance is

satisfactory.

4. Look at car wrecks (i.e. seize every single opportunity,

even those from someone else’s misfortune)

70
Conclusion

71
 References…
 Allison, G.T. (1969) Conceptual models and the Cuban missile crisis, The
American Political Science Review, No. 3, September, pp. 689 – 718.

 Miller, D. (1990) The Icarus Paradox: How excellent companies bring

about their own downfall, Harper Business, New York

 Mintzberg, H. (1991) The effective organization: forces and forms, Sloan

Management Review, Winter, pp. 54 – 67.

 Pettigrew, A.M. (1988) The management of strategic change, Basil

Blackwell, Oxford.

 Waterman R.H., Peters, T.J., and Phillips, J.R. (1980) Structure is not
organization, Business Horizons, June, pp. 14 – 26.
72