1. Sensemaking and Performance During Change: Some Preliminary Ideas Scott Sonenshein and Scott Baggett Rice University

2. Research Question How does an employee’s sensemaking about change affect change implementation performance? How does an employee’s sensemaking about change affect change implementation performance?

3. Starting Premises Change creates interruptions which trigger sensemaking (Weick, 1995) Change creates interruptions which trigger sensemaking (Weick, 1995) Employees have discretion to construct meaning of same “objective” event differently Employees have discretion to construct meaning of same “objective” event differently Employees matter--bias in literature that organizational adaptation is primarily (or even) solely driven by top managers Employees matter--bias in literature that organizational adaptation is primarily (or even) solely driven by top managers

4. Quick Review of Sensemaking Literature Sensemaking research strong focus on processes (e.g., Weick et al., 2005), less on content Sensemaking research strong focus on processes (e.g., Weick et al., 2005), less on content Research on link between sensemaking and performance has emphasized top managers Research on link between sensemaking and performance has emphasized top managers Thomas et al. (1993): top managers scanning and interpretation processes Thomas et al. (1993): top managers scanning and interpretation processes Theoretical models about links between cognitions and actions (e.g. Dutton and Jackson, 1987) with key focus on labeling of issues Theoretical models about links between cognitions and actions (e.g. Dutton and Jackson, 1987) with key focus on labeling of issues Threat/opportunity framing (Chattopadhyay et al, 2001; Staw et al., 1981) Threat/opportunity framing (Chattopadhyay et al, 2001; Staw et al., 1981) Little research on how employees make sense of change (Bartunek et al., 2006) Little research on how employees make sense of change (Bartunek et al., 2006) Any studies that link employee sensemaking to unit/firm performance? Any studies that link employee sensemaking to unit/firm performance? Sensemaking primarily focused on cognitions Sensemaking primarily focused on cognitions Not much work on emotions and sensemaking (Maitlis and Vogus, 2008) Not much work on emotions and sensemaking (Maitlis and Vogus, 2008)

5. Main Contribution of Research Examine how employees’ sensemaking content (cognitions and emotions) influences change implementation performance Examine how employees’ sensemaking content (cognitions and emotions) influences change implementation performance As assessed by managers (subjective performance) As assessed by managers (subjective performance) As assessed by sales data (“objective” performance) As assessed by sales data (“objective” performance)

6. Subjective Performance: “Ideal Employee” hypothesis During change, managers want employees to construct meaning of change in particular ways and this will impact how they assess performance. During change, managers want employees to construct meaning of change in particular ways and this will impact how they assess performance. Greater understanding of the strategy Greater understanding of the strategy Create cognitive reorientation of the firm (Gioia & Chittipeddi, 1991) Create cognitive reorientation of the firm (Gioia & Chittipeddi, 1991) Transfer cognitions to employees (Lewis, L. & Seibold, 1998) Transfer cognitions to employees (Lewis, L. & Seibold, 1998) More positive emotions More positive emotions Happy-productive worker hypothesis (Wright & Staw, 1999) Happy-productive worker hypothesis (Wright & Staw, 1999) Managers observe positive employees, assume things are going well. Managers observe positive employees, assume things are going well. Less negative emotions Less negative emotions Reduces resistance, something managers obsessed with (Dent & Goldberg, 1999) Reduces resistance, something managers obsessed with (Dent & Goldberg, 1999)

7. “Objective” performance: But do manager’s know best? Competing Hypotheses Competing Hypotheses Why would adopting managerial cognitions about the change  higher performance? Why would adopting managerial cognitions about the change  higher performance? Provides higher-order goals, which could increase knowledge about how to perform task objectives Provides higher-order goals, which could increase knowledge about how to perform task objectives Reduces uncertainty about change, which could limit distractions Reduces uncertainty about change, which could limit distractions Increases task significance (bigger picture of how tasks improve org) Increases task significance (bigger picture of how tasks improve org) Others? Others? But cognitions about change... But cognitions about change... Focuses on general strategy less relevant to employees’ work Focuses on general strategy less relevant to employees’ work Could inundate employees with useless information (info overload) Could inundate employees with useless information (info overload) Others? Others?

8. “Objective” performance: But do manager’s know best? Competing Hypotheses Competing Hypotheses Why would sensemaking that contains more positive emotions about the change  higher performance? Why would sensemaking that contains more positive emotions about the change  higher performance? Increases motivation (George & Brief, 1996) and persistence (Burke et al. 1993) Increases motivation (George & Brief, 1996) and persistence (Burke et al. 1993) Builds thought-action repertoire (Fredrickson, 2001) Builds thought-action repertoire (Fredrickson, 2001) Increases sense of efficacy (Forgas et al., 1990) Increases sense of efficacy (Forgas et al., 1990) Leads to more helpful behavior (George, 1991) Leads to more helpful behavior (George, 1991) Others? Others? But positive emotions could... But positive emotions could... Reduce motivation because sends signals things going well (George and Zhou, 2002) Reduce motivation because sends signals things going well (George and Zhou, 2002) Lead to too optimistic of an appraisal of situation Lead to too optimistic of an appraisal of situation Others? Others?

9. “Objective” performance: But do manager’s know best? Competing Hypotheses Competing Hypotheses Why would sensemaking that contains less negative emotions about the change  higher performance? Why would sensemaking that contains less negative emotions about the change  higher performance? Negative emotions associated with change resistance Negative emotions associated with change resistance Negative emotions could reduce commitment to change Negative emotions could reduce commitment to change But negative emotions could... But negative emotions could... Signal that greater effort is needed (George & Zhou, 2001) Signal that greater effort is needed (George & Zhou, 2001) Reflect a more realistic appraisal of the change, allowing employees to adjust behaviors Reflect a more realistic appraisal of the change, allowing employees to adjust behaviors

10. Approach Context: Fortune 500 retailer integrating two divisions Context: Fortune 500 retailer integrating two divisions Collected sensemaking of employees implementing the change (n=143) at 46 units implementing same change Collected sensemaking of employees implementing the change (n=143) at 46 units implementing same change Content analysis of sensemaking: Content analysis of sensemaking: Cognitive sensemaking: meaning constructions of what employees know about the core strategy of the change Cognitive sensemaking: meaning constructions of what employees know about the core strategy of the change Emotional sensemaking: meaning constructions of emotions about the change Emotional sensemaking: meaning constructions of emotions about the change Negative emotions: sad, worried, disappointment, frustration Negative emotions: sad, worried, disappointment, frustration Positive emotions: excitement, happy, joy Positive emotions: excitement, happy, joy

11. Dependent Variables Performance of change implementation Subjective: Supervisor ratings of unit Subjective: Supervisor ratings of unit Overall performance of implementing the change Overall performance of implementing the change Effort exerted at implementing the change Effort exerted at implementing the change “Objective”: Sales performance “Objective”: Sales performance Change in sales after change, controlling for time of change Change in sales after change, controlling for time of change

12. Aggregation Unit of analyses Unit of analyses Sensemaking data: employee level Sensemaking data: employee level Performance data: unit level Performance data: unit level Aggregation tests Aggregation tests Too much variability within units around sensemaking of change Too much variability within units around sensemaking of change Examine individuals’ sensemaking as predictive of their group score vs. average sensemaking Examine individuals’ sensemaking as predictive of their group score vs. average sensemaking Group analysis Group analysis Good apple, bad apple in the barrel approach Good apple, bad apple in the barrel approach Take the minimum and maximum values for each sensemaking variable for each unit Take the minimum and maximum values for each sensemaking variable for each unit

13. Individual Level Results Sales Performance (“Objective”) Supervisor Overall Assessment Supervisor Effort Control (square feet) -.11**2.11**2.40** Negative sensemaking emotions -.02-0.21-0.16 Positive sensemaking emotions.001.21* 0.88 0.88 Cognitive sensemaking.11*-.910.10 R 2 F Test.083.07*.226.18**0.174.50** * p<.05; **p<.01

14. Individual Level Results Sales Performance (“Objective”) Supervisor Overall Assessment (Subjective) Supervisor Effort (Subjective) Control (square feet) -.11**2.11**2.40** Negative sensemaking emotions -.02-0.21-0.16 Positive sensemaking emotions.001.21* 0.88 0.88 Cognitive sensemaking.11*-.910.10 R 2 F Test.083.07*.226.18**0.174.50** * p<.05; **p<.01

15. Aggregate Min Model Results Sales Performance Supervisor Overall Assessment Supervisor Effort Control (square feet) -.18*2.06* 2.38 t Negative sensemaking emotions -.20-6.46*-1.07 Positive sensemaking emotions -.072.38 4.41 t 4.41 t Cognitive sensemaking.42**-3.94-1.63 R 2 F Test.293.90**.464.04*0.24 1.51, ns T p<.10; * p<.05; **p<.01

16. Aggregate Min Model Results Sales Performance (“Objective”) Supervisor Overall Assessment (Subjective) Supervisor Effort (Subjective) Control (square feet) -.18*2.06* 2.38 t Negative sensemaking emotions -.20-6.46*-1.07 Positive sensemaking emotions -.072.38 4.41 t 4.41 t Cognitive sensemaking.42**-3.94-1.63 R 2 F Test.293.90**.464.04*0.24 1.51, ns T p<.10; * p<.05; **p<.01

17. Aggregate Max Model Results Sales Performance (“Objective”) Supervisor Overall Assessment (Subjective) Supervisor Effort (Subjective) Control (square feet) -.14 t 1.221.53 Negative sensemaking emotions -.02.55-.36 Positive sensemaking emotions.003.04* 3.00 t Cognitive sensemaking.09-1.53.55 R 2 F Test.09.99, ns.34 2.46 t 0.24 1.52, ns T p<.10; * p<.05; **p<.01

18. Summary of Findings Employees’ sensemaking based on emotions influences supervisor ratings of change, but has no impact on sales performance. Employees’ sensemaking based on emotions influences supervisor ratings of change, but has no impact on sales performance. Employees’ sensemaking based on cognitions predicts sales performance but has no impact on supervisor ratings. Employees’ sensemaking based on cognitions predicts sales performance but has no impact on supervisor ratings. More positive emotions and less negative emotions might get unit accolades (or store manager promoted), but does not affect “objective” unit performance. More positive emotions and less negative emotions might get unit accolades (or store manager promoted), but does not affect “objective” unit performance. Group level: one bad apple spoils barrel; but one good apple can lead to higher subjective ratings. Group level: one bad apple spoils barrel; but one good apple can lead to higher subjective ratings.

19. Theoretical Implications Linked employee-level sensemaking to unit performance Linked employee-level sensemaking to unit performance How employees make meaning of a change impacts performance How employees make meaning of a change impacts performance The way managers’ subjectively make meaning of change performance not consistent with “objective” performance The way managers’ subjectively make meaning of change performance not consistent with “objective” performance Resistance story—too much attention (Ford et al. 2008) Resistance story—too much attention (Ford et al. 2008) Danger of subjective performance indicators hat dominate change research Danger of subjective performance indicators hat dominate change research The importance (or lack thereof) of constructing positive meaning about one’s work on objective performance The importance (or lack thereof) of constructing positive meaning about one’s work on objective performance

20. Discussion What resonates most with you? What resonates most with you? How should I develop the subjective/objective story? How should I develop the subjective/objective story? Should I frame paper around this finding? Should I frame paper around this finding? Most of mechanisms theorized at individual level; ideas for unit level theorizing. Most of mechanisms theorized at individual level; ideas for unit level theorizing. Because of lack of ability to aggregate, have both individual and unit level (min and max) results. Because of lack of ability to aggregate, have both individual and unit level (min and max) results. Build a multi-level theory? Build a multi-level theory? Aggregation problems Aggregation problems

21. Other Ways I Can Use Your Help For “average model”, I use disaggregated results (ICC does not support aggregation) For “average model”, I use disaggregated results (ICC does not support aggregation) Main findings about emotions at group-level Main findings about emotions at group-level Main findings about cognitions at individual-level Main findings about cognitions at individual-level This does not seem elegant This does not seem elegant Any ideas? Any ideas?