1. Understanding and Leading Change
Colbourne College
Summer 2017 – Week Seven
Facilitator: Dr Paul B. Thompson

2. Learning Objective
Evaluate the influences that drivers of change have on organisational behaviour.
We shall focus on ways in which organisations recognise and respond to the drivers change. Our analysis will highlight the PEST (PESTEL) Analysis, Kotter’s Eight Step Change Management Model, and the Burke-Litwin Diagnostic Model

3. PEST(EL) or PEST(LE) Analysis
Another acronym which is used in strategic management is PEST. It refers to the key external influences that the organisation needs to analyse as it contemplates its strategic direction. These influences are Political, Economic, Social, and Technological. The acronym has been extended to BPEST, with the addition of Business

4. PEST(EL) or PEST(LE) Analysis Palmer, Dunford, & Akin (2009)
The initial PEST has been extended to PESTEL, with Environmental and Legal issues being included for consideration. Thus,
Political – e.g. the threat of terrorism, tax policy, foreign trade law
Economic – e.g. unemployment levels, inflation, interest rates, exchange rates, economic growth
Social – e.g. demographic challenges, population growth, age distribution, health consciousness, career attitudes

5. PEST(EL) Analysis Palmer, Dunford, & Akin (2009)
Technological – e.g. introduction of new products that influence production, distribution, communication
Environmental – e.g. antipollution policies, ethical issues pertaining to companies, carbon footprint targets, environmental impact assessment
Legal – e.g. antitrust law (controlling monopolies), health and safety laws, equal opportunities, product safety, advertising and labelling laws, consumer rights

6. PEST(EL) Analysis Palmer, Dunford, & Akin (2009)
The use of the PESTEL analysis gives organisations indications and ideas of trends that could impact their operations. The focus on trends provides important lenses for what the future may hold for an organisation. This shifts the analysis from the present or status quo and gives indications of desirable change activities that may be undertaken.

7. Kotter’s Eight-Step Change Management Model
There are many theories about how to "do" change. Many originate with leadership and change management guru, John Kotter. A professor at Harvard Business School and world-renowned change expert, Kotter introduced his eight-step change process in his 1995 book, "Leading Change." His eight-step model follows.

8. Kotter’s Eight-Step Change Management Model
Establish the need for urgency – perform market analyses, determine problems and opportunities
Ensure there is a powerful change group to guide the change – create and empower teams, missionaries, to drive the change
Develop a vision – this should give focus to the change

9. Kotter’s Eight-Step Change Management Model
Communicate the vision – role model the behaviour implied by the vision; use multiple means constantly to convey the vision
Empower the staff – encourage risk-taking, remove obstacles that inhibit achievement of the vision, remove barriers to empowerment
Ensure there are short-term wins – wins which are rewarded provide motivation, wins help to justify change

10. Kotter’s Eight-Step Change Management Model
Consolidate gains – remove other obstacles by using winds as basis for other changes, reward those who are involved in the change
Embed the change in the culture – link change to organisational performance and leadership, establish new, related change products. (Dessler, 2001; Palmer, Dunford, & Akin, 2009, p. 225)

11. Kotter’s Eight-Step Change Management Model

12. The Burke-Litwin Model
Warner Burke and George Litwin developed the 12-factor model of organisational change.
It differentiates between the elements that are more likely to be the source of major or transformational change and those which are likely to be the source of incremental or transactional change
The four transformational factors are external environment, mission and strategy, leadership, and organisation culture

13. The Burke-Litwin Model
The premise of the model is that planned change should flow from the top (environment) to the bottom (performance)
As the model shows, feedback loops go in both directions, suggesting that internal organisational factors can impact the environment and not just be on the receiving end of a one-way series of change determined by the environment
(Palmer, Dunford, & Akin, 2009)

14. The Burke-Litwin Model
The model makes the following key points: • The external environment is the most powerful driver for organisational change • Changes in the external environment lead to significant changes within an organisation – its mission and strategy, its organisational culture and its leadership.

15. The Burke-Litwin Model
Changes in these key factors lead to other changes within an organisation – changes to structure, systems and management practices. These are more operational factors and changes in them may or may not have an organisation-wide impact
Together these changes affect motivation, which in turn impacts on individual and organisational performance

16. The Burke-Litwin Model

17. The Burke-Litwin Model – Key Questions
1. External Environment
-What are the key external drivers? How are these likely to impact on the organisation? Does the organisation recognise these?
2. Mission and Strategy
- What do top management see as the organisation’s mission and strategy? Is there a clear vision and mission statement? What are employees’ perceptions of these?

18. The Burke-Litwin Model – Key Questions
3. Leadership
- Who provides overall direction for the organisation? Who are the role models? What is the style of leadership? What are the perspectives of employees?
4. Organisational Culture
- What are the overt and covert rules, values, customs and principles that guide organisational behaviour?

19. The Burke-Litwin Model – Key Questions
5. Structure
- How are functions and people arranged in specific areas and levels of responsibility? What are the key decision-making, communication and control relationships?
6. Systems
- What are the organisation’s policies and procedures, including systems for reward and performance appraisal, management information, HR and resource planning, etc?

20. The Burke-Litwin Model – Key Questions
7. Management Practices
- How do managers use human and material resources to carry out the organisation’s strategy? What is their style of management and how do they relate to subordinates?
8. Work Unit Climate
- What are the collective impressions, expectations and feelings of staff? What is the nature of relationship with work unit colleagues and those in other work units

21. The Burke-Litwin Model – Key Questions
9. Task and Individual Skills
- What are the task requirements and individual skills/abilities/knowledge needed for task effectiveness? How appropriate is the organisation’s “job-person” match?
10. Individual Needs and Values
- What do staff value in their work? What are the psychological factors that would enrich their jobs and increase job satisfaction?

22. The Burke-Litwin Model – Key Questions
11. Motivation
- Do staff feel motivated to take the action necessary to achieve the organisation’s strategy? Of factors 1-10, which seem to be impacting most on motivation?
12. Individual and Organisational Performance
- What is the level of performance in terms of productivity, customer satisfaction, quality, etc? Which factors are critical for motivation and therefore performance?

23. The ADKAR Model https://www.prosci.com/adkar/adkar-model
The Prosci ADKAR Model is a goal-oriented change management model to guide individual and organizational change.
Created by Prosci founder Jeff Hiatt, ADKAR is an acronym that represents the five outcomes an individual must achieve for change to be successful: awareness, desire, knowledge, ability, reinforcement

24. The ADKAR Model in Organisations
When applied to organizational change, this model allows leaders and change management teams to focus their activities on what will drive individual change and therefore achieve organizational results

25. The ADKAR Model in Organisations
Awareness
Is your employee aware of the need for change?
Awareness of the business or organizational need for the change is critical. Awareness may include explaining to the employee that the old software will no longer be supported by the vendor, and that new software is necessary to meet customer needs and improve efficiency.
Organizational awareness messages are most effective when delivered from the most senior leaders in the organization

26. The ADKAR Model in Organisations
Desire
- Does your employee have the desire to participate in the change?
- Through one-on-one conversations, managers can uncover their employee’s personal reasons for resisting and can remove any barriers to the employee buying in to the change.
- The manager can also help to create desire by translating the change into meaningful terms

27. The ADKAR Model in Organisations
Knowledge
Does your employee have the knowledge to make the change?
- Knowledge-building should only be provided after the milestones of awareness and desire have been achieved
-If training is provided before this, employees will not connect the training to the change and will not engage in knowledge-building.

28. The ADKAR Model in Organisations
Ability
- Can your employee put their knowledge into practice? 
- Knowing how to perform in the future changed state and having the ability to actually perform in the future changed state are very different
- To bridge the knowledge to ability gap, employees benefit from hands-on coaching and practice in an environment where they can make mistakes and ask questions. - When ability is achieved, the change takes place, and you will see the new demonstrated behaviours.

29. The ADKAR Model in Organisations
Reinforcement
- Do you have reinforcements in place to prevent your employee from reverting to old habits?
- We must have reinforcements in place to sustain the change. Monitor whether the change is being sustained or not, and where the change has taken hold, celebrate and recognize it.
- If some employees are reverting to old processes or habits, check to see if they need more training or coaching and reinforce that they are expected to continue working in the new way.

30. Next Class
For our next class, we shall look closely at the dimensions of the Change Impact Analysis.
We shall also discuss how the various models that we have highlighted may be used by managers in the implementation and management of change in the organisation.