MBS538 Organisational Behaviour and Management MODULE 6: Working with organisational behaviour S11 – How do you manage change? S12 – How do you manage stress?

How do you Manage Change? Managing change is another key factor in organisational performance and even survival. Change is prevalent in organisations as they adjust to changing internal and external environments. Organisations that change appropriately can continue as viable businesses.  Those that do not make the right changes lose their ability to compete, cease to exist by going out of business, or get taken over by a more successful organisation. Organisational changes involve changes to an organisation’s strategy, structure, processes and people.

What did you feel about this change? Change and Feelings What did you feel about this change? Did you like to be “forced” to change?

Learning Outcomes Summarise the major external and internal forces for change in organisations and describe different types of change. Explain models and approaches for organisational change. Identify sources of resistance to change and describe tactics that organisations can use to manage resistance. Assess approaches and techniques for organisational development and change interventions.

Change

What is…# Change?

What is…# Change Management?

Change Management Theories? Why use…# Change Management Theories?

Change in Organisations Change resulting from a deliberate decision to alter the organisation Planned change Change imposed on the organisation and often unforeseen Unplanned change

Forces Driving the Need for Major Organisational Change

External Internal Forces for Change Globalisation Workforce Diversity Technological Change Ethical Behaviour Crisis Changes in Employee Expectation Changes in Work Climate

Activity Consider a change that has occurred in an organisation you are familiar with (you may have experienced it, or know about it) Share this with a small group. What were the reasons for this change? Do the environmental elements interact?

PEST Factors

PESTEL

Change Impact on Organisations

Organisational Change What changes? Structure Processes Strategy People

The Scope of Change Incremental Strategic Transformational Relatively small scope, such as making small improvements Incremental Larger scale, such as organisational restructuring Strategic Organisation moves to a radically different, and future state Transformational

The Pace of Change

Calm waters metaphor Incremental Change or Smooth – change in small steps …one equilibrium state to another …..takes time.

Choppy waters metaphor … Choppy waters metaphor Bumpy incremental change – periods of relative tranquillity punctuated by acceleration in the pace of change – periodic readjustments occur without cataclysmic effects …..takes time.

White-water rapids metaphor. Discontinuous or radical change – ‘frame-breaking’ change , new ways of doing business, dynamic.

White-Water Rapids Lack of Stability Constant Change Virtual Chaos Predictability White-Water Rapids

Discussion Identify Organisational changes that you have witnessed. What was the origin of the change: political, economic, socio-cultural, technological, environmental, legislative? Was the scope of the change incremental, strategic, transformational? Was the pace of the change smooth, bumpy or discontinuous? What were the factors that made it successful or caused it to fail?

Resistance to Change

Types of Change Type I – That which is done to us. Very few people like this type of change! It violates our sense of independence, freedom and control of our own destiny Most likely to resist within the context of organisational change Type II – That which we do to ourselves. This type of change is very different We're in control. We're deciding for ourselves that doing something different is necessary Because it's our decision, we don't "resist" our decision to change Type III – That which we do to others. Change from the other side of the fence If we're inflicting Type III Change, then it’s perceived by the receiver as Type I Change

Examples of Resistance We tried that before. It costs too much. It’s too radical a change. There’s not enough help. We’ve never done it before. There’s not enough time. Let’s get back to reality. That’s not our problem. Why change it? It’s still working OK. I don’t like that idea. You’re right, but … You’re two years ahead of your time We’re not ready for that. Sounds OK but impractical. It’s too late to start. It might not work. Not that again! We did all right without it. It’s never been tried before. Let’s shelve it for the time being. What you are really saying is … Maybe that would work in your area but not in mine. It’s impossible. You’re not here to think. Can’t teach an old dog new tricks. Let’s wait until the next generation. It’s too early to think about it. We’ve always done it this way.

Resistance to change? Why do people usually resist change?

Resistance Leaving comfortable policies, systems, processes, etc. Impact to credibility or reputation Concern about career or financial advancement Heightened / expanded performance requirements The need to “prove yourself” again in a new context Impact to job role NOTE: 20/60/20 rule 20% will get on board immediately 60% will be on the fence and look to the leaders for when and whether to follow – they will get on board eventually 20% will never get on board AMBIGUITY ANXIETY RESISTANCE

Price Waterhouse Cooper 2013 People in Change “ 75% of all change programs that don’t deliver, ignore the importance of human aspects” Price Waterhouse Cooper 2013

Dealing with Resistance to Change Communication -Details and rationale of the change should be provided to employees Participation -Establishes a feeling of ownership Empathy and support -Identify reasons behind resistance Provide counselling through employee assistance plans

How to Deal with Resistance Acknowledge: Tell the person your perception of resistance Be clear, specific, and honest Be empathetic Investigate: Identify main source of resistance Encourage person to talk about feelings Listen Isolate and work individual issues Reinforce: Reinforce the positive aspects of change Explain reasons for change Use clear arguments Gain acceptance Don’t take resistance personally…!

Change Forces

Force Field Analysis New ideal position Desired State Restraining The gap between the current and the ideal state creates the sense of urgency Restraining Forces Status Quo Driving Forces Time

Forces for Change

Lewin’s Change Model Unfreezing Moving Refreezing Unfreezing: the organisation eliminates rewards for current behaviour Moving: the organisation initiates new options and explains their rationale Refreezing: organisational culture and formal reward systems encourage the new behaviours Unfreezing Moving Refreezing

Changing Refreezing Lewin’s Change Model Unfreezing Creates the motivation to change Benchmarking Data (who do we call/ Cust Satisf?) Financial data, emerging trends . Changing Provides new information, new behavioural models, or new ways of looking at things (eg., leadership programs) Refreezing Helps employees integrate the changed behavior or attitude into their normal way of doing things (reward)

Change Management Model John Kotter´s Change Management Model

Consolidating Gains and Producing Step 1 Establishing a Sense of Urgency Step 2 Creating a Guiding Coalition Step 3 Developing the Vision and the Strategy Step 4 Communicating the Change Vision Step 5 Empowering People to Effect Change Step 6 Generating Short-Term Wins 8 Step Process for Managing Organisational Change Consolidating Gains and Producing More Change Step 7 Sustaining New Approaches in the Culture Step 8

Kotter’s Eight Steps for Leading Organisational Change Description Unfreeze the organization by creating a compelling reason for why change is needed Establish a sense of urgency Create a cross-functional, cross-level group of people with enough power to lead the change Create the guiding coalition Create a vision and strategic plan to guide the change process Develop a vision and strategy Create and implement a communication strategy that consistently communicates the new vision and strategic plan Communicate the change-vision

Kotter’s Eight Steps for Leading Organisational Change Description Eliminate barriers to change, use target elements of change to transform the organization Empower broad-based action Plan for and create short-term “wins” or improvements SMALL WINS Generate short-term wins The guiding coalition uses credibility from short-terms wins to create change. Additional people are brought into the change process as change cascades throughout the organization Consolidate gains and produce more change Reinforce the changes by highlighting connections between new behaviors and processes and organizational success Anchor new approaches in the culture

The Heart of Change https://www.youtube.com/watch?v=1NKti9MyAAw

Activity Where does the company you work for (or a firm that you know well) need improvement? Why? 1. Establish a sense of urgency 2. Create the guiding coalition 3. Develop a vision and strategy 4. Communicate the change-vision 5. Empower broad-based action 6. Generate short-term wins 7. Consolidate gains and produce more change 8. Anchor new approaches in the culture

Summary External forces for change are globalisation, workforce diversity, technological change, and managing ethical behavior Internal forces for change are crisis, changes in employee expectation, and changes in work climate Changes can be incremental, strategic, or transformational Resistance can be managed by communicating, participating, and being empathetic and supportive Lewin’s change model comprises unfreezing, moving, and refreezing Kotter’s change model comprises eight steps.