1. chapter 15: Leading change

2. Agenda Forces for change Organizational development
Resistance to change
Leading change
Learning organizations
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

3. FACTORS FOR SUCCESFUL CHANGE
Table on page 387. A recent study was conducted by McKinsey consulting examined the role of OB (people and processes) and it relates to financial success from changes such as mergers and cost reduction strategies. The company studied change initiatives started by top management at 40 organizations, including banks, hospitals, and manufacturers. These change programs had specific financial targets that were expected to have a large economic impact on the organization. Some organizations (58%) failed to meet the financial goals of their organizational change initiative. The remaining 42% of these companies met their financial goals set (or exceeded them -- in some cases by as much as 200 to 300%). The companies with the lowest returns had poor change management practices and companies that gained big returns had strong ones (LaClair & Rao, 2002). These change practices are shown in the chart below for three levels of management. While senior managers play a key role in articulating the need for change and leading the change process, this study also shows that managers play an important leadership role by providing feedback, skills, tools, and motivation for their followers to succeed.
Source: LaClair, J. A., & Rao, R. P. (2002). Helping employees embrace change. The McKinsey Quarterly, 4, 17–20.
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4. Figure 15.1 on page 388. Figure 15.1 shows key cultural shifts that have taken place in the evolution of work. For example, organizational hierarchies have been replaced with flatter organizational structures. In the past, employees worked 9 to 5 in offices, but there has been a shift toward flexible working hours and working form anywhere through mobile technology. Instead of information being held by the top executive team, information is shared with employees throughout organizations. has now become the primary means of communication in organizations. Leadership styles have shifted from command and control to inspirational. These changes have changed the cultures of organizations and it is important for a leader to understand the fundamental nature of organization culture and how to change it.
Source: Retrieved on April 2, 2014 from: the-evolution-of-work/.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

5. THE EVOLUTION OF WORK (ContInued)
Figure 15.1 on page 388
Source: Retrieved on April 2, 2014 from: the-evolution-of-work/.
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6. Forces DRIVING ORGANIZATIONAL Change
See Table 15.1 for examples. There are many forces that stimulate change including the nature of the workforce, technology, economic shocks, competition, social trends and world politics. All these things can create change in a workplace.
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7. Planned Change Planned change is proactive rather than reactive.
Managers read the environment they operate in and determine the needed course of action and how to get there.
Change can be big (radical) or small (incremental)
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8. Types of PLANNED Organizational Changes
Figure 15.2 on page 389
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9. Four Subsystems of Change
Formal organization
Social factors
Technology
Physical setting
Four Subsystems Of Change
Formal Organization. This provides the coordination and control necessary for organized activity; examples are formal structures and reward systems.
Social Factors. These factors include individual differences and team interactions, and the organizational culture.
Technology. This is how raw materials and inputs transform into outputs, such as work flow design and job design.
Physical Setting. These are the characteristics of the physical space and how it is arranged (Robertson, Roberts & Porras, 1993).
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10. Organizational Development
Organizational development (OD) is a collection of social psychology methods employed to improve organizational effectiveness and employee well-being.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

11. Examples: OD Interventions
Survey feedback
Workout
Process consultation
Team building
Appreciative inquiry (AI)
Page 392.
Survey feedback one of the most commonly-employed OD techniques. Throughout this book, you have taken a number of self-assessments in the Leader’s Toolkits which are the types of surveys that employees take (refer back to Table 1.2 for an example of a measure of overall Job Satisfaction).
Workout -- was pioneered at General Electric and provided a method for employees to get new ideas head by top management without having to go through hierarchical levels of bureaucracy. Other organizations have adopted this OD intervention (Austin & Bartunek, 2006). Workout has several steps (Bunker & Alban, 1996):
1. The manager introduces a problem to a team of employees that have relevant expertise.
2. The manager leaves, and the employees work together for about two days on the problem.
3. The manager returns and the employees report their proposals to solve the problem.
4. On the spot, the manager must accept the proposals, decline them or ask for more information. If more information is requested, a process to make a final decision must be articulated.
Process consultation -- a leader needs an outside point of view on an organizational issue and hires a consultant with OD expertise who assists in a helping mode
Team building -- employs group activities that involve a great deal of interaction among team members to increase trust
Appreciative inquiry (AI) -- is a recently-developed OD intervention that is an example of action research. The basic assumption is that people and organizations move in the direction that they visualize for the future. Participants begin the AI process by reflecting on a peak experience and then engage conversation about it with others in a group setting.
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12. Reactions to Change Resistance Compliance Commitment
Resistance -- that the employees fight the change and try to undermine it
Compliance -- they simply go along with the change but secretly hope that is a program that will come to an end soon
Commitment -- the most desirable reaction in which the employees support change and help the organization implement it
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13. Why do People Resist CHANGE?
Personal reasons -- habit, security, economics, and fear of the unknown.
Organizational reasons -- structural inertia (structure is too rigid to support the change), group inertia, threats to expertise, and threats to established power relationships.
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14. How to Overcome Resistance to Change
Education and communication
Participation
Building support and commitment
Developing positive relationships
Implementing changes fairly
Selecting people who accept change
A classic Harvard Business Review article by Kotter and Schlesinger (1979) offers the following additional guidelines to help overcome resistance to change:
Education and communication reduces misinformation about the change and helps convince employees that change is needed.
Participation matters as demonstrated by the Coch and French study described above. People are more likely to accept changes that they help design.
Building Support and Commitment reduces resistance because employees have the support through counseling or sabbaticals to ease the strain. Commitment to the organization also increases commitment to change.
Developing Positive Relationships through trust in management increases commitment to organizational change. Research has shown that high quality Leader-Member Exchange (LMX) relationships reduce resistance (Furst & Cable, 2008, JAP; Tierney, 1999). Leaders provide explanations to followers that help them cope with change and commit to it (Rousseau & Tijoriwala, 1999).
Implementing Changes Fairly improves the chances that employees will accept change. As reviewed in Chapter 7, organizational justice is a major concern of most employees and it becomes more important during change.
Selecting People who Accept Change supports changes since research shows that people have personality traits that enable them to be more flexible when it comes to coping with change (Oreg, 2006).
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15. Methods of Last Resort Manipulation and cooptation Coercion
Manipulation and Cooptation tactics are sometimes used in organizational transitions because they are relatively less expensive than the tactics listed above. Manipulation occurs when change agents use underhanded techniques such as the selective sharing of information and careful staging of events. Cooptation is basically “buying” the support of those who are needed. For example, change task force members would be paid a bonus for serving on the task force.
Coercion should be used rarely, if at all, as discussed in the leadership chapter of this book (Chapter 2). Direct threats of loss of status, pay or other things that employees care about may gain short-term compliance but these tactics will rarely gain commitment to the change.
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16. Leading Change: Lewin’s 3-step model
Unfreezing, changing, refreezing
Uses force-field analysis
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

17. Lewin’s 3-STEP Model of Change
Unfreezing challenges the status quo by shaking up assumptions.
Changing represents movement toward a new desired state.
Refreezing the changes by reinforcement and restructuring is the third phase to make the changes permanent.
Source: Adapted from
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

18. Leading change: Kotter’s 8-step model
Elaborates on Lewin’s model of change and provides specific guidelines for changing organizations
Each step builds on the previous one.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

19. Kotter’s 8-step Model for Change
1. Establish a sense of urgency. Change typically begins with leaders noticing challenges the organization faces. The threat of losing ground in some way sparks these people into action, and they in turn try to communicate that sense of urgency to others. Leaders begin a frank discussion of potentially unpleasant facts such as increased competition, lower earnings or decreasing market share. Most leaders are convinced that business as usual is no longer acceptable.
2. Form a powerful guiding coalition. Change efforts may start with just one or two people, who begin to convince others that change is needed. In this step, an initial core of believers is assembled (this group should be powerful in terms of their roles, reputations and skills). This coalition for change needs to have 3-5 people.
3. Create a vision. A compelling “picture” of the future must be created. This vision motivates people and keeps the change processes aligned. This vision needs to communicated to employees clearly and effectively in five minutes or less.
4. Communicate the vision. Regardless of how much communication leaders think is needed, they should multiple that by ten. Every possible communication channel should be utilized including the CEO’s speech, meetings, newsletters, and face-to-face conversation as examples. Employees will be looking to see that the leaders in the organization are behaving consistently with the vision.
5. Empower others to act on the vision. Employees should be allowed to participate in making changes in their areas. This may require restructuring work, and allowing key people the time to focus on the change effort. Also, this involves providing the money and support needed to bring about change.
6. Plan for and create short-term wins. Change takes time and change efforts sometimes lose momentum as frustrations set in with employees. Plan and execute celebrations of short-term successes to reinforce people’s efforts and maintain their commitment and motivation. This provides proof to employees that their efforts are working.
7. Consolidate improvements and sustain the momentum for change. A change process can take five to ten years – as force field analysis shows, the forces against change such as resistance may result in regression to the prior ways of doing things. Leaders should resist the temptation to declare the change a success too soon. Leaders must enter the process believing that their efforts will take years.
8. Institutionalize the new approaches. A leader will know that the change is frozen in place when followers believe that it is "the way we do things around here.” Employees understand that their efforts have led to a different outcome for the organization. The organization’s leaders serve as role models for the new ways.
Source: Kotter, J. P. (1995). Leading change: Why transformation efforts fail. Harvard Business Review, 73(2), 59–67.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

20. Leadership Implications: Creating Learning Organizations
In a learning organization, leaders facilitate organizational change by creating a workplace that is flexible and innovative.
If employees are always learning and willing to do or try new things, change is easier to accept and implement.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

21. The Five Leadership Learning Disciplines
The five leadership learning disciplines in learning organizations are shown in Figure 15.5:
1. Personal Mastery is competence plus the discipline of continually clarifying and deepening our personal vision, of focusing our energies, of developing patience, and of seeing reality objectively.
2. Mental Models are deeply ingrained assumptions, generalizations, or even pictures and images that influence how we understand the world and how we take action.
3. Building Shared Vision is the sharing of a long-term view of the future which is uplifting, and encourages experimentation and innovation.
4. Team Learning is aligning and developing teams to generate results they want. People on the team act and learn together. They grow rapidly from team interactions.
5. Systems Thinking is learning from experience, understanding cause and effect. This component integrates all of the others and is the fifth discipline.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

22. Open-access student resources
Checklist action plan
Learning objective summaries
Mobile-friendly quizzes
Mobile-friendly eFlashcards
Video and multimedia resources
SAGE journal articles
edge.sagepub.com/scandura
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.