Summary Process Improvement and Change Master Supply Chain Management

Period of course: 1.3

Chapter 1. Changing organizations in our complex world Organizational change planned alterations of the organizational components (mission vision) to improve the effectiveness (generate value) of the organization drivers of change can be both internal and external, therefore managers should know what is happening inside and outside the organization, and adapt to those changes in the environment

Sustained behavioural change when people in the organization understand, accept and act. Through their actions, the new vision or strategic becomes real.

Managers most often choose the easiest way, and strive for change needs which are concrete and tangible, since there are more easy to consider. However, often these do not result to solve the root-cause of the problem.

Change capability has become a core managerial competence. Without change management skills, individuals cannot operate effectively in today’s fluctuating, shifting organizations.

PESTE-Factors political/economic/social/technological/environmental. These describe the external environment or context of an organization. environmental scanning and early warning systems allow for action before customers are lost or provide path to new customers and/or services

The changing demographic: Social and Cultural Environment The social, cultural and economic environment is influenced by demography:

Aging populations Diversity, immigrants of different nationalities difficulties in integration, but also an

opportunity for a new, relatively young workforce Race and gender

all issues which should be addressed proactively by many organizations.

Related the environment and social responsibility, more and more focus on the TBL, aligning these polices with strategies and actions will result to organizational advantages.

Regarding technology, Data Mining becoming an increasingly acknowledged function in organizations, seeking to transform data into information

Concerning political changes external political landscape of an organization is a reality that change leaders need to pay attention to, and figure out how to engage. If organizations become global, they have to clarify their own ethical standards. not everyday concern of all managers, however, change leaders need to understand politics’ influence on market development and competitiveness.

The economy financial crisis in 2007 (credits for companies for example) In a world where everything is interconnected, organizations need to be able to respond quickly. In order to do so, organizations need the capacity to weather such challenges.

The implications of Worldwide Trends for Change ManagementBarkema et al. describe three macro changes facing us today:

1. Digitization of information 2. Integration of nation states and opening of international markets 3. Geographic dispersion of the value chain

resulting to globalization of markets, which in turn drives significant shifts in organizational forms and worldwide competitive dynamics (see Table 1 and figures below).

Barkema et al. argues that much change today deals with mid-level change—change that is more than incremental but not truly revolutionary. more important role for mid-managers, making the change effective in their organization in both evolutionary and revolutionary scenarios.

Four types of change Literature divides change into two types1 1. Episodic change change is dramatic and sudden (introduction of a new technology, making

older technologies obsolete. change is infrequent and discontinuous; injecting significant change (re-engineering)

2. Discontinuous change and continuous change more gradual change, such as the alternation of core competencies of an organization through training and adding key individuals change is constantly evolving (Kaizen programs).

1. Programmatic or planned change occurs when managers anticipate events and shift their organizations as a result (e.g. Intel anticipates and appears to encourage a cycle of computer chip obsolescence).

2. On the other hand, shifts in an organization’s external world lead to a reaction on the part of the organization (e.g. the emergence of low-cost airlines has led to traditional carriers employing reactive strategies, such as cutting routes, costs in their attempt to adapt)

Above is combined by Nader and Tushman into a useful model illustrating different types of change.

1. Tuning small, relatively minor changes made on an ongoing basis in deliberate attempt to improve the efficiency or effectiveness of the organization improvement initiatives from quality-improvement programs

2. Adapting relatively minor changes made in response to external stimuli. competitor’s moves or customer shifts

3. Redirecting or Reorienting involves major, strategic change resulting from planned programs shift in the firm to develop customer orientated culture

4. Overhauling or re-creation dramatic shift that occurs in reaction to major external events crisis situation which forces change of the organization.

Incremental change team members that are energized, goal directed, cohesive, and increasingly competent because of the new things they are learning.

Planned changes don’t always produce the intended results Recipients must understand that things will often get worse before they get better, but must also believe that benefits are well worth the effort, change initiatives are most likely to be sustained.

Organizations must understand that investing in infrastructure alone is insufficient. True productivity increases come only when the forms are reorganized, business practices reformulated, and employees retrained.

implies that focussing solely on technology, without considering human aspects is not enough to make the change effort a success.

Roles Role DescriptionChange leader or change agent

The person who leads the change. He/she may play any or all of the roles. Often, this person is the formal change leader. However, informal change leaders will emerge and lead change as well.

Change initiator The person who identifies the need and vision for change and champions the change

Change implementer The person who has responsibility for making certain the change happens, charting the path forward, nurturing support, and alleviating resistance.

Change facilitator The person who assists initiators, implementers, and recipients with the change-management process. Identifies process and content change issues and helps resolve these.

Change recipient The person who is affected by the change (active support/resistance). Often the person who has to change his or her behaviour to ensure the change is effective.

One person might play multiple roles: that is, a person might have a good idea and talk it up in the organization (change initiator); take action to make the change occur (change implementer). Talk to others to help them manage the change (change facilitator); and ultimate be affected by the change (change recipient).

The requirements for becoming a successful change leaderSuccessful change leaders balance keen insight with a driving passion for action. They have the sensitivity to the external world and will be skilled anticipators of that world. They have a rich understanding of the organizational systems and the degree to which change is required.

The five paradoxes of change leaders in organizational change: 1. They are involved in both driving change and enabling change 2. They recognize that resistance to change is both a problem and an opportunity 3. Good change leadership focuses on outcomes but is careful about the process 4. Change leaders recognize the tension between getting on with it and changing directions 5. Change leaders understand the need to balance patience and impatience (impatience is a tool to

overcome inertia, however, patience provides people time to learn, understand and adjust to what has been proposed)

Change management based in a broad set of underlying disciplines, tends to be strategy drive, with attention directed to whatever factors are assessed as necessary to the successful design and implementation of change.

Red Queen Phenomenon running fast but for all purposes standing still

The change process consist out of 2 factors (also included in the 4 improvement approaches) 1. What needs to change (content)

The change process generally consist out of three steps: Becoming aware of the need for change Diagnosing the change conditions The change process itself and the sub-changes

note: these change are not (entirely) consecutive stages2. How to bring about that change

Who does what in the change process? see the different roles one can apply in a change context

Chapter 2. Frameworks for leading the process of organizational change

Differentiating `How to change from What to change The complexity of change can be somewhat simplified by recognizing that there are two distinct aspects of organization change, which need to be addressed: 1. Managers must decide both HOW (process) to lead organizational change 2. WHAT (content) to change in an organization

The process of organizational change (HOW to change) many leaders know what they should achiever, however, they just don’t know how to get to the desired state

Why is change so difficult to accomplish?: commonly acknowledged cause: failure of success = practices that have proven to be effective in the past and that are no longer appropriate

The sigmoid curve describes where one should begin changing and where it becomes obvious that one needs to change.

This curve depicts the outcomes of a system as a curve that increases during early-stage development and growth phases, flattens at maturity, and shifts into decline over time.

Based on the curve, the time to introduce change is at point B, when the system is growing. The problem is that It seems that the costs at the beginning are greater than the benefits. Once the change is adopted and the system is working, the outcomes will increase. however, when waiting too long with the change, an organization may find it impossible to change (see point A).

Note: The costs of change appear certain and tangible, while the benefits are uncertain and often vaguely defined.

The chapter describes six models of organizational change. Similarities: Each is a process model (they all depict HOW the change should happen) Two are descriptive (Lewin and Duck); three are prescriptive (Kotter, Gentile, and

Beckhard and Harris) and the authors change path model combines both Lewin: system level. Kotter, Beckhard and harris and Cawsey eta al.: organizational- level.

Gentile and Duck: individual-level The models describe many of the same processes, but with different levels of detail and

with different lenses (Duck: emotions, Kotter: managerial tasks)

Note: Organizational change most often requires changing at three levels: Individual, team or unit, and the organization. Therefore, learning and applying more than one model is important.

The proposed models further vary on general dimensions of: Scale: network or chain of organizations, single organization, department(s), team(s),

individual(s) Scope/pace: Note: the magnitude of a change lies in the eye of the beholder Incremental /continuous– Radical/discontinuous Source: Anticipatory (pro-active, internal stimuli) – Reactive (response to external stimuli) How: Planned – Emergent Organizational development – Change Management

1. Stage Theory of Change: Lewin Lewin described a three-stage model of change: Unfreeze Change Refreeze

Unfreezing focuses on the need to dislodge the beliefs and assumptions of those who need to engage in the systematic alterations to the status quo. might occur due to a crisis this unfreezing must take place on many levels, rather than only on top management’s level

Change once unfreezing occurs, the people who are embedded in the systems become susceptible to change

Once these the change has been completed, the system can refreeze again in its new form. when the system has turned to a certain stability and when the new practices become “normal” for the employees.

The advantages of the model Simplicity Creating awareness that before a change needs to occur, first unfreezing the current state is

required

Disadvantages of the model: The model oversimplifies the process of change and suggest that change is linear The creation of the need for change deserves more attention The model implies that refreezing is acceptable as a frame of mind (change is continuous

rather than discrete); there instead of refreeze re-gelling

2. Stage Model of Organizational Change: Kotter highly structured step-by-step process, overcoming the simplicity of Lewin’s model

Kotter describes an eight-phase model, through which an organization must go in a sequence. 1. Establish a sense of urgency managers should illustrate the threats of the current

system to move enough organizational members to a new state 2. Create a guiding coalition select a team covering multiple organizational levels and

maintaining sufficient knowledge 3. Develop a vision and strategy develop an overarching dream of an inspiring future,

resulting in the implementation plans and steps 4. Communicate capture the willingness to cooperate of all employees by

communicating through multiple channels 5. Empower employees provide them with a certain level of power and freedom to act 6. Generate short-term wins generate short-term wins in order to let the employees see

evidence of successful change, highlight these short-term wins to motivate them 7. Consolidate gains and produce more change don’t stop too soon, keep pressing

forward until the change seeps into the deepest recesses of the organization 8. Anchor new approaches in the culture make sure that change is embedded in the

organization’s cultural norms and values

3. Giving voice to values: Gentile focus on ethical implications of organizational change The first step is recognizing that something is wrong (identify the need to change), and often that requires someone to speak up the purpose and power of Giving Voice to Values.

The GGV focuses on the practical application of skills needed to push back and respond effectively to people and situations that contradict a person’s values. This model consists of three parts, representing the process individuals need to work through to advocate the need to change:

1. Clarification and articulation of one’s values Articulation of one’s own values and the impact of acting on those values, making implicit principles explicit.

2. Post-decision-making analysis and implementation plan Understanding how to voice opinions in difficult situations.

3. The practice of speaking one’s values and receiving feedback pre-scripting situations in order to practice voicing values.

Assumption: People will speak up and in their speaking up people will change the course of events in units, organizations or even societies. prepare people to expect conflicts in values and then to take effective action for individual and organizational change

4. Emotional transition through change: Duck captures people and its emotional responses to change. Duck’s five-stage model (simplification of the complex, often volatile, human emotion that accompanies change), consists out of 5 stages:

1. Stagnation occurs when people have their heads in the sand and have an insufficient sense of threat or change from the external world. This can only end with a forceful demand of the external environment

2. Preparation beings with a dramatic announcement of change from an internal people (CEO), or from an external force (company which is taking over the company). organizational leaders must be aligned in order for the change to become a success

3. Implementation includes designing new organizational structures, job descriptions and lots of other detailed plans as well as changing people’s mind-sets and work practices

4. Determination motivation to continue the long path of transformation 5. Fruition is the time when the hard work pays off and the organization seems new

5. Managing the change process: Beckhard and HarrisStrong focus on the process

1. Why change is needed forces for and against change are analysed and understood, including an understanding of the different stakeholders included

2. Gap analysis stakeholders need to define a desired future state in contract to an organization’s present reality. determining the needs for change and determining a powerful change vision.

3. Manage the transition Discussing of how to get from the present to a desired future state Note: What is not so clear is how to bring the various stages of the model to life, in order to see change through to a successful outcome Change Path Model

6. The change path model: Cawsey et al. (2015) this model combines both process and prescriptions

1. Step 1: Awakening (chapter 4) create a critical organizational analysis. Keeping track of external as well as the internal environment of the organization

the stage of the process in which the need for change is determined and the nature of the change of vision is characterized in terms others can understand

Significant actions included in this stage: Identify a need for change and confirm the problems or opportunities that incite

the need for change through collection of data Articulate the gap in performance between present and future state and spread

awareness Develop a powerful vision for change Disseminate the vision for the change, and why it’s needed through multiple

communication channels

2. Step 2: Mobilization (chapter 5-8) the identification of the distance between the desired future state and the present state at which the system operates. Significant actions included in this stage:

Make sense of the desired change through formal systems and structures and use them to reach the change vision

Assess power and cultural dynamics at play, and put them to work to better understand them

Communicate the need for change organization-wide and make sure that recipients move forward

Leverage change agent personality, knowledge, skills and abilities for the benefit of the change vision and its implementation

3. Step 3: Acceleration (chapter 9) involves action planning and implementation the stage of the process in which plans are developed for bridging the gap between the current mode of operation and the desired future state and the means by which the transition will be managed. Significant actions included in this stage:

Continue to systematically reach out to engage and empower others in support, planning and implementation of the change

Use appropriate tools and techniques to build momentum, accelerate and consolidate the progress

Manage the transition (e.g. celebrate small wins and achievements of milestones)

4. Step 4: Institutionalization (chapter 10) the process of making the change inherent to the organizational processes. Also determining how to measure change and which measures to use Significant actions included in this stage:

Track the change periodically and through multiple balanced measures to help assess what is needed and mitigate risks

Develop and deploy new structures, systems, processes and knowledge, skills and abilities, to create a new stability of change

Lecture 1In general we can distinguish between four perspectives on change: 1. Structural-functional perspective (chapter 5)

Changing structures and functions Planned change Related organizational theories: system theory, structural theory no focus on culture or power (inputstransformationoutputs)

2. Multiple constituencies perspective (chapter 6)

Change by negotiation Planned change Related organizational theories: stakeholder interest change is still initiated top-down, avoid conflict by participative management

3. Organizational development perspective (e.g. chapter 7) Humanistic approach to change Planned change Interventions on several levels structural-functional perspective + HR, organizational learning

4. Creativity and Volition A critical theory of change Change cannot be planned Conflict, flux and change change does not emerge from consensus but from conflicts, people main element of analysis, rather than systems.

Note: the book focuses on planned change!

Similarities and differences between organizational development (OD) and change management (CM)

Chapter 4. Building and Energizing the Need for Change (AWAKENING) Many change-management programs fail because there is sustained confusion and disagreement over:

1. Why there is need for change 2. What needs changing

Responsibility diffusion happens when multiple people are involved and everyone stands by, assuming that someone else will act.

Recognizing the need and mobilizing interest are not sufficient a change leader also needs to communicate a clear sense of desired result of the change.

The change process wont energize people until they begin to understand the need for change. Change leaders must create awareness when this is lacking in the organization. Therefore, the following important points need to be considered.

Change leaders should scan the organization’s external environment to gain knowledge about and assess the need for change this avoids blind spots by closed-loop learning

It is important to collect the right data concrete data sources (trade papers), and focus less on intangible sources (e.g. comments from suppliers collected informally)

Working without awareness of the external environment is equivalent of driving blind but it happens often

Seek out and make sense of the perspectives of stakeholders Change leaders need to be aware of the perspectives of key internal and external stakeholders and work to understand their perspectives, predispositions, and reactions for supporting or resisting change.

external stakeholders: suppliers, bankers, governmental officials, customers internal stakeholders: those who are directly and indirectly affected by the change

Important that all relevant stakeholders are considered upfront, in order to minimize the chance of blind spots. This may increase the change leader’s awareness and sensitivity to the context, and strengthen the analysis

Key points: engage stakeholders in dialogue

Seek out and make sense of internal dataChange agents who command internal respect and credibility understand the fundamentals of what is going on within a firm.

What can be inferred from internal information and measures How are these currently being interpreted How they may be leading the firm down the wrong path

In general we can distinguish between two types of data: 1. Hard data can be found in formal information systems, often numeric in nature 2. Soft data intuitive information gathered from walking through the halls and discussing

Seek out and assess your personal concerns and perspectivesChange agents need a good understanding of their strengths and weaknesses, attitudes, values, beliefs and motivations. being self-aware to identify blind spots

The organization’s readiness for changeThe question “Why change?” is a necessary precondition to being able to define the desired future state or the vision. If the question of “Why change?” is never meaningfully addressed, no one should expect the emergence of any sense of a shared vision. The answer to “Why?” is a prerequisite to the “What?” and the “How?” of change.

Two reasons for failure to recognize change: Management failed to attend to the warning clouds or the opportunities that were clearly

visible Management took actions, but they did too little too late

Organizational readiness for change is determined by the pervious change experiences of its members: the flexibility and adaptability of the organizational culture; openness; commitment; involvement of leadership in preparing the organization for change.

An organization’s readiness for change will influence its ability to both attend to environmental signals for change and listen to internal voices saying that change is needed.

Previous experiences affect individual readiness for change more gain than pain from last change, they will be more predisposed to try something new.

If the culture supports environmental scanning and encourages a focus on identifying and resolving problems rather than “turf protection”, organizations will be more open to change

Definitions of both terms: Individual readiness for change the degree to which the individual perceives the need for

change and accepts it. Organizational readiness for change the degree to which the organization as a whole

perceives the need for change and accepts it.

Eight dimensions related to readiness:1. Trustworthy leadership the ability of senior leaders to earn the trust of others and show

them how to meet collective goals 2. Trusting followers the ability of nonexecutives to constructively follow the new path 3. Capable champions ability of the organization to attract and retain capable champions 4. Involved middle management ability of middle managers to effectively link senior

managers with the rest of the organization 5. Innovative culture ability of the organization to establish norms of innovation and

encourage innovative activity

6. Accountable culture ability of the organization to carefully steward resources and meet deadlines

7. Effective communications ability of the organization to effectively communicate vertically, horizontally, and with customers

8. Systems thinking ability of the organization to focus on root causes and recognize interdependencies within and outside the organization

carefully consider incentives, since excessive rewards for success or excess punishment for failure are likely to produce unethical behaviour

Heightening awareness of the need for change It is important that individuals are aware of the need for change. In some cases they might recognize the need, but stay remain reluctant, since it comes closer to their homes.

Change leaders to do the following thigs to heighten the awareness of the need throughout the organization: 1. Create awareness that the organization is in or near a crisis or create one

shock-treatment: sometimes a crisis must be generated in order for change to occur 2. Identify a transformational vision based on higher-order values

tap into the need of individuals to go beyond themselves 3. Find a transformational leader to champion the change

enhance the need for change by transformational leadership (Nelson Mandela, A. Hitler) Identify common or shared goals look for common areas or ways to avoid resistance

4. Use information and education to raise awareness of the need look for awareness in informal sources

Factors that block people from recognizing the need for change Often the focus on the cultural artefacts is ignored stories, rituals, and symbols that influences employees’ attitudes and beliefs; they are important because they help to define and five life to the culture.

Culture can get in the way of recognizing the need for change in poorly performing firms Even when organizations recognize that they need to change, they fail to take appropriate actions, because: 1. Strategic frame mental models or sets of assumptions of how the world works, blind to the

changes occurring in the environment 2. Process harden into the routines and habits, ends rather than means-to-an-end 3. Relationships with employees, customers, suppliers, etc. become boundaries that limit the degree

of freedom to respond to environmental changes 4. Value that determine the corporate culture

Strategies to avoid group-think: 1. Have the leader play an impartial role 2. Activity look for dissenting views (people playing the devil’s advocate, which is the opinion of the

majority) 3. Discuss and analyse the costs, benefits and risks of alternatives 4. Create a methodological decision-making process at the beginning 5. Allow time for reflection and do not mistake silence for consent

One of the ways to enhance the perceived need for change and begin to create focused momentum for action is to develop a clear and compelling change vision.

Creating a powerful vision for change Vision of change the idealized view of the short-term future after a specific change has been enacted. Change visions are more specific than organizational visions and have some element of a time constraint

There are three ways on how to develop a vision (by change leaders): 1. Leader-developed vision developed directly by the change leader. Once created it is

announced and shared with the organization 2. Leader-senior team-developed vision developed by the senior management group in

conjunction with the change leader 3. Bottom-up visioning engages organizational members in the vision framing process (very

time-consuming, but valuable) The change vision is developed through the active participation of those responsible for implementing the change, including those on the front line.

Organizational vision idealized view of the future, which should have the following characteristics: Easily understood, clear and concise Memorable Exciting and inspiring Challenging Stable but flexible Implementable and tangible

The difference between organizational vision and change vision All departments visions should be aligned with the overarching vision, but should differentiate to generate meaning and energy for those involved with that part of the enterprise. Difference: The corporate vision is about the longer-term future, where the change vision is about the short-term perspective and more about: targets for change; tangible outcomes, anticipated impact they are designed to contribute to the vision of the organization Change leaders are challenged with the question of where to set the boundaries of the change:

1. where do common interest among stakeholders lie, 2. can the vision for change be framed in terms of common interest without resulting to the point

where it no longer delivers a vision that will excite, inspire, and challenge

A broadly stated vision will appeal to a broader range of people, however, each of these groups may have different ideas about the strategy

Lecture 2In planned change: Problem characteristics:

Clear, definable problem Certainty about what exactly the problem is Not much ambiguity in defining the problem Interrelatedness of problems is low

These are situations where it is more easy to develop a well – structured and clear solution

In emergent change: ›Problem characteristics:

Hard to define the problem clearly Many perspectives on how to frame the problem, much ambiguity in defining the problem Many problems that are interrelated Many solutions that could have an effect on the problem

These are situations where it is very hard to develop a well –structured and clear solution Solution/new situation becomes gradually more clear and takes shape

Different approaches in finding a problem and solution:

1. Start with analysing the problem 2. Start with depicting the desired state 3. If both problem and solution cannot be clearly defined: start with developing a way to come to

a solution during a process of exploration, investigation, trial and error, learning, reflection

Barriers in recognizing the need for change:

Mental models about the world become blinders Past successes reinforce existing practices Existing values and corporate culture Leadership practices may impede recognition of need for change Embedded systems and processes can harden into unquestioned routines and habits Existing relationships can become shackles that impede the ability to respond to a changing

environment

Many change management programs fail due to confusion and disagreement on: What needs changing (problem-solution discussion) Is there a need for change? Can we make the change happen?

In diagnosing the change context, the outcome affects how to make a change happen.

The change context consists of the external and internal change context: 1. External, broader context

Define the unit of analysis focus on a specific system (individual, organization, process, group, etc.).

Define its external context Consists out of two perspectives:

broad perspective (in general PESTE (L)) narrow perspective, e.g.:

Relevant targets of an organization Organizational vision for change Culture/habits in how to change Experienced time pressure

Analyse change conditions of external context

2. Internal context: analyse change conditions of the UoA

Scope Solving the ‘right’ problem make sure to set the right scope, and solve the intended problem

Capability The degree to which relevant capabilities are available to bring about the change Who has the capabilities and the amount of specific capabilities:

Individual level Managerial level Organizational level

There are different kind of capabilities, we can distinguish between: Technical knowledge and skills (related to the what to change) Project management knowledge and skills Problem solving skills (creativity, analysing skills, method skills, ..) Communication skills (convince, negotiate, inspire and open to dialogue)

Readiness for change

The readiness for change can be distinguished in two groups1. Individual readiness for change consists out of two components:

Cognitive component of readiness for change (beliefs and thoughts) belief that change is needed proposed change is appropriate belief that perceived capability to implement is available belief that the organization will provide tangible support evaluation of the benefits or costs of a change for job and role

Affective component of readiness for change (feelings, emotions) currently experienced positive feelings regarding the change imagining (emotions in the future) (hope, joy, excitement)

2. Group readiness for change emerges from individual’s readiness for change

Emotional contagion: individuals compare and tune their emotions (depending on task and social interdependencies, the frequency and intensity of contact, identification with the work group, work group climate, commitment to the group)

resistance for change does not necessarily need to be bad, might also be helpful, since it contains information that is useful (people have reasons to resist change)

Ambivalence can stem from conflicting beliefs (cognitive) Self-interest Misunderstanding Different assessments of the consequences

Ambivalence can stem from emotions (harder to give voice to) Turn to habits Selective perception , Selective recall Deny counterarguments

Power understanding the power dynamics in an organization is crucial in successful change processes (chapter 6)

Capacity time available, money (trainings meetings) information processing

Preservation what does the company wants to maintain, protect or keep the same? E.g.: ways of working; cultural aspects, employees with particular skills and characteristics, mix of employees, etc.

Chapter 5. Navigating change through formal structures and systems The organizational systems and structures represent what needs to change in the organization

Formal structures how tasks are formally divided, grouped and coordinated. They are designed to support the strategic direction of the firm by enhancing order, efficiency, effectiveness and accountability.

Formal systems include planned routines and processes such as strategic planning, accounting and control systems, performance management, pay and reward systems, and the information system. (setting out how things are supposed to be done)

Change leaders need to develop a deep understanding of how existing structures and systems are currently influencing outcomes, and how they are likely to facilitate or impede the proposed changes. once understanding is there, they need to use these to promote and enact change

Making sense of formal structures and systems To make sense of structures, it is useful for change leader to understand and be able to work with core concepts in this area. Some common elements: 1. Differentiation the degree to which tasks are subdivided into separate jobs or tasks.

deals with who does what, and asks about the degree to which jobs are specialized and distinctive from one another . Therefore, large organizations are often characterized by highly specialized jobs, leading to silos of similar and separate tasks and job categories

2. Integration the coordination of the various tasks or jobs into a department or group extent to which activities are combined into processes and systems

3. Chain of command reporting architecture in a hierarchical organization defines how individuals/units within an organization report to one another up and down the organizational ladder

4. Span of control the number of individuals who report to a manager questions the ratio of workers to managers in an organization

5. Centralization vs. decentralization how and where decision making is distributed in an organizational structure the more centralized, the more the decision making is done at top management level the more decentralized, the more decision making is delegated to lower levels of employees

6. Formal vs. Informal the degree to which organizational charts exist, are codified and are followed

Impact of Uncertainty and Complexity on Formal Structures and SystemsIn general, a distinction has been made between two types of organizations.

1. Mechanistic organizations rely on formal hierarchies with centralized decision making and a clear division of labour. Rules and procedures are clearly defined, and employees are expected to follow them. Work is specialized and routine Some characteristics of this type of organization:

Tasks are broken down into separate parts and rigidly defined and assignment High degree of formalization, strict hierarchy of authority and control, many rules Narrow span of control Communication is vertical

2. Organic organizations Few rules and procedures, and there is less reliance on the hierarchy of authority for centralized decision making. The structure is more flexible and not as well defined. Jobs are less specialized and communication is more informal Some characteristics of this type of organization:

Flexible tasks that are adjusted and redefined through teamwork and participation Relatively little formalization, less reliance on hierarchy , few rules Wide span of control Communication is horizontal and free flowing, with many integrating roles

both can be effective, depending on their fit with the environment the organization is in.

Formal structures and systems from an information perspectiveA third option is to look at how organizations formally manage information.

Information-Processing View of Organizations considers organizations as information-processing mechanisms. It argues that the better the fit between the information-processing capabilities of the organization and its environment, the more effective the organization. as uncertainty increases, the amount of information that needs to processed during the transformation process also increases.

Organizations can reduce their information-processing challenges by adding slack resources to act as buffers (e.g., extra people and inventory) and/or by creating self-contained tasks (e.g., divisions organized around product categories, geography, or customers).

Vertical information strategies when the subordinate knows more about the situation than the boss, they can agree on a set of objectives or goals which allows the subordinate to act independently and handle the uncertainty1. Hierarchical referral (ask the boss0 2. Rules, policies and plans (including vision and goals) 3. Increase the vertical communication capacity of information systems

Horizontal information strategies 1. Increasing their horizontal communication capacity of the information system (e.g.: e-mail

systems, intranet, texting) 2. Create lateral relationships (direct contact, task force, formal teams etc.).

Aligning Systems and Structures With the Environment When cost strategies in a traditional manufacturing context are critical, a more mechanistic approach is often appropriate (different departments could have different structures) When innovation is key, organic approaches provide a better fit with an organization’s strategy

Structural Changes to Handle Increased UncertaintyFrom a structural perspective, the quest for enhanced organizational effectiveness starts by determining what needs to change, and then deciding how to change. division of labourdepartmentalization

Making Formal Structure and System ChoicesOrganization’s design impacts the behaviour of its members. every formal structure and system design has strengths and weaknesses. Several trade-offs which need to be made:

1. Differentiation vs. integration the more different people doing many different things, the harder it is to sustain a focused, tightly coupled enterprise.

2. Gaps versus overlaps if tasks are not clearly assigned, they can fall through the organizational cracks. On the other hand, if tasks have overlaps that create conflicts and wasted efforts.

Mechanistic organizations can create structures and processes, allowing them to suspend hierarchal practices under certain conditions and constraints to advance creativity and innovation. continuous-improvement teams event-debriefing processes innovation task forces

Using formal structures and systems to advance change Approaches that leverage formal structures and systems to advance change do not have to result in a war with the employees. Rather, the application of this can be undertaken in a manner that facilitates understanding and builds support (lesser resistance). layoffs should be undertaken as a last resort, should be treated with respect and dignity

Using Systems and structures to obtain formal approval of a change project Formal approval process the traditional approach in which a person develops a proposal and bring it forward for assessment and formal approval by the appropriate organizational members.

Incremental changes will require fewer resources and lower levels of organizational approvals. As changes increase in magnitude and strategic importance, change leaders find that they need to pay more attentional to formal approval processes. safety regulations are often delegated to frontline staff, due to the risk of not responding quickly enough (creating urgency)

No organizations are the same. Organizations with significant negative consequences of failure (pharmaceutical/power plants) will require more senior levels of approval than other companies.

Using systems to enhance the prospect for approval Approval and acceptance are generally enhanced when:

1. People are involved in the discussion and feel that they have been heard2. There is the perception that the analysis and discussion around the alignment systems have

been discussed thoroughly 3. There is a believe among the uncommitted and more resistant that there has been a rigorous

review process in place for the assessment of a change (= the procedures are thorough and complete)

4. There is active involvement of those individuals/representatives in the planning and approval processes (= co-option strategy)

Acceptance the degree to which change participants accept the change that has been implemented

There are three ways of approaching the formal approval process: 1. Master the formal approval process

rational approach: proposals are developed for consideration and they are reviewed for inclusion on the agenda. Once presented it is: approved, rejected, sent back for improvements. The likelihood of gaining approval is increased when: (1) having a well-paced sponsors, (2) know their audience members and preferences)

While the exact approval process varies by firm, the level of rigorousness and formality used to assess proposed changes varies with:

1. The magnitude of change2. The levels of perceived risk and uncertainty3. The preferences of those involved with the decision4. The culture and power dynamics at work in the organization

When organizations mature, they adopt a:

- Staged approval process for changes that are viewed as strategically significant, expensive, wide-reaching and potentially disruptive. This approach creates steps that do not prematurely dismiss ideas worthy of further explanation.

The goal of such staged approval is to provide focus through vision and strategic alignment, initiatives are explored rationally, which avoids unpleasant surprises.

A well working approval process, should: 1. Stimulate innovation thinking and initiatives2. Enhance the quality of assessment3. Reduce the cycle time from ideation to implementation4. Reduce the likelihood of dysfunctional political behaviour

2. Creeping Commitment (foot-in-the-door-approach) reduces energy that may be spent on other options and directions

3. Coalition building the forming of partnerships to increase pressures for or against change

Risks: (1) time consuming, (2) adds complexity, (3) become political and divisive

Sometimes the need to seek formal approval can be bypassed entirely. When the scope of the change is manageable, defensible and arguably within their scope of authority, change leaders should go on without seeking formal approval.

supervisors must be kept in the loop, such that they are not unpleasantly surprised When the ‘just do it strategy’ is effectively applied, the dynamics can be powerful (= renegade approach) change is initiated without formal approval. (done with creeping commitment and coalition building tactics)

Be careful in not creating enemies or engage in tactics that create long-term damage to your reputation and credibility of the firm. Therefore: 1. Careful assessment of organizational and environmental factors2. Ask change leaders to launch the initiative on their own and, when the situation is appropriate, to

“just do it”

Morphing slow and steady transformation of the organization over time Moreover: smaller change elements are eventually added together over time and the cumulative changes

Structures and systems can also have a significant impact on the success of the implementation process. Sometimes there are existing systems and structures that change agents have to work with, while at other times they may represent aspects of the actual change.

Diagnosis of the nature and impact of structures and systems during implementation puts change leaders in a strong position to identify where and when these may present challenges that will need to be managed and where they can be used to facilitate change. In sum, change agents need to understand the approval processes for their particular projects.

The assumption that approval will automatically lead to acceptance is a dangerous one:1. Lack of awareness for and acceptance of the change within the organization2. Lingering doubts and half-hearted commitments at senior levels3. Confusion as to who is supposed to do what4. Issues of skills/ability5. Lack of time/resources

Commonly cited mistakes of top management in change initiatives:1. Inappropriate delegation of sponsorship2. Structures that fail to provide sufficient access to needed resources3. Misapplication of systems

Means in gaining acceptance and commitment:1) Formal communication2) Performance management 3) Reward systems

Systems and structures, can play an important role in the speed and rate of acceptance of change. People tend to respond positively to change initiatives that they understand and believe are worth the effort and risk. The way that systems and processes are deployed will influence the perception of change.

The ability of organizations to change is aided by their ability to learn. Learning is facilitated when organizational members do the following (among others):

1) Systematically and deliberately scan their external environment and learn from it 2) Demonstrate their desire to question existing approaches and always improve3) Develop an experimental mind-set where they try new things 4) Engage in continuous education at all organizational levels5) Have an involved, engaged leadership

many of these are influenced by structures and systems. For example: the presence of formal, early-warning systems advance the scanning capacity of the organization. Systems that rewards innovation and information-sharing will increase the prospects for openness and exploration. Systems that fund and reinforce development will open people to continuous education

Flexible and adaptive organizations have an easier time adjusting to incremental changes than bureaucratic ones. as the complexity and turbulence of organizational environments increase, more flexible, adaptive systems and structures will be required.

The need for greater flexibility and adaptiveness is moving organizations away from command and control structures, and giving rise to the increased use of collaborative structures and processes to promote: 1) trust, 2) communication, 3) information sharing and 4) shared ownership.

- Micro level: self-managed work teams, cross-functional teams, task forces - Organizational level: flattened structures, systems processes and technologies that promote

collaboration and leadership styles and the promotion of cultural norms that foster greater collaboration, transparency and sense of purpose

Chapter 8: Becoming a master change agentThere is a shift in organizations in which change management becomes an essential part of a good manager’s skill set. change agency shifted from notions of “lone-ranger”, top-down leadership to one involving leaders, enabling change teams and empower workers to make changes happen.

Change agent effectiveness is determined by:1) The situation 2) The vision of the person3) The actions of the that same person

Being a change agent = Person x Vision x Situation

Exothermic change situations describes a change situation when energy is liberated by actions

Endothermic change situations Change program consumes energy and arouses opposition which in turn requires more energy from the change agent Exothermic change situations are required, however in practice change agents experience both types of situations. Initial excitement is followed by snail-paced progress.

Change leaders pull people to change through the use of powerful change vision Some characteristics:

Inspiring vision Risk taking Creativity Using power

situational leadership, different styles depending on what is required they may play any are all organizational roles proposed in chapter 1.

Change managers create change by working with others, overcoming resistance and problem solving situations Some characteristics:

Empowering others Managing resistance Networking Problem solving

Three categories of change behaviours to group change agents in their actions:1. Framing behaviours oriented towards changing the sense of the situation, establishing starting

points for change, designing the change journey and communicating principles2. Capacity-creating behaviour focused on creating the capacity for change by increasing

individual and organizational capabilities and creating and communicating connections in the organization

3. Shaping behaviours actions that attempt to shape what people do by acting as a role model, holding others accountable, thinking about change, and focusing on individuals in the change process

the first two are considered to be more successful than the last one. Change leaders should shift from a leader-centric, directive approach to a more facilitating, enabling style.

Many change leadership skills can be learned, which means that they can be taught. A number of trends that future leaders need to be aware of (Criswell & Martin):

1) More complex challenges2) Focus on innovation3) Increase in virtual communication and leadership4) Importance of authenticity 5) Leading for long-term survival

Change leaders also need to understand and embrace the notion of experiential learning. It is rare that someone is a change agent only once. Change leadership capacities are a sought-out skill.

Fundamental message: take responsibility for your own learning and development as a change leader reflection on the role of experience

Communication is perceived as being key, as it is through conversation and open dialogue that a change occurs. Important: openness and reflection. Appropriate inquiry (AI) the engagement of individuals in an organizational system in its renewal. Through AI, people seek to find and understand the best in people and organizations by reflecting on past positive experiences and performance.

Episodic change change that is infrequent, discontinuous and intentionalContinuous change change that is ongoing, evolving and cumulative It is suggested that the role of change agents shifts depending on the type of change

- Episodic change: prime mover change agent one who creates change- Continuous change: sense maker change agent one who is able to refine and redirect the

organization’s actions

Freeze Rebalance Unfreeze: change agents need to capture the underlying patterns and dynamics (freeze the conceptual understanding), reinterpret, relabel (reframe and rebalance those understandings) and resume improvisations and learning (unfreeze).

Change agents and their agendas can act in “pull” or “push” ways:- Pull actions create goals that draw willing organizational members to change and are

characterized by organizational visions of higher-order purposes and strategies - Push actions data based and factual and are communicated in ways that advance analytical

thinking and reasoning and that push recipients’ thinking in new directions

Four different types of change agents: 1. Emotional Champion clear and powerful vision of what the organization needs and uses

that vision to capture the hearts and motivations of the organization’s members. needed when a dramatic shift in the environment takes place, implying that the organizations structure, system and sense of direction need to be changed.

Characteristics of an emotional leader:a) Is comfortable with ambiguity and riskb) Thinks tangentially and challenges accepted ways of doing thingsc) Has strong intuitive abilitiesd) Relies on feelings and emotions to influence others

2. Developmental strategist applies rational analysis to understanding the competitive logic of the organization and how it no longer fits with the organization’s existing strategy eliminate the major gap between the organization and its environment

Characteristics of a developmental strategist:a) Big-picture thinking about strategic change, to fit the organization with its

environmentb) Organizations are perceived as systems and structures which fit (or don’t) with the

environmental demands c) Comfortable with assessing risks and taking chances based on a good assessment

3. Intuitive adapter clear vision for the organization and uses the vision to reinforce a culture of learning and adaptation. developing a culture of learning and continuous improvement where employees constantly test their actions against the vision.

Characteristics of an intuitive adapter:a) Embraces moderate risksb) Engages in a limited search for solutionsc) Is comfortable with the current direction that the vision offersd) Relies on intuition and emotions to move the organization forward through

incremental changes

4. Continuous improver analyses micro environments and seeks changes such as re-engineering systems and processes.

Characteristics of a continuous improver:a) Thinks logically and carefully about detailed processes and how they can be

improvedb) Aims for possible gains and small wins rather than great leaps c) Is systematic in his or her thinking while making careful gains

Hunsaker identified four different internal roles a change agent can play:1) Catalyst needed to overcome inertia and focus the organization on the problems faced2) Solution giver knows how to respond and can solve problems 3) Process helper facilitates the ‘how to’ of change, often playing the role of third-party

intervener4) Resource linker brings people and resources together in ways that aid in the solution of

issues

Internal change agents an employee of the organization who knows the organization intimately and is attempting to create change. They now the organization very well. Limitations of internal change agents:

1. They may not possess the specialized knowledge or skills required 2. Lack of objectivity and independency 3. Difficulty in reframing existing relationships 4. Lacking adequate power base

External change agents a person from outside the organization trying to make changes. Often this person is an outside expert and consultant. in general used when the internals lack the specific technical skills. They use their technical expertise and credibility they bring to an internal change program.

Internals are too often tied to their experiences, where external consultants can have to get rid of their normal way of thinking.

Benefits of external consultants: 1. Bring subject-matter expertise 2. Bring fresh perspectives 3. Provide independent, trustworthy support 4. Provide third party expertise to help facilitate discussion and manage the process

Limitations of external consultants:1) Lack deep knowledge of the political environment and culture of the organizations2) Due to their different backgrounds, expertise, price tags and ambitions, some are insensitive to

the organization’s culture and needs3) Consultants may receive signals that they are expected to unquestioningly support the position

of the leader of the organization that brought them in

Organizational leaders are moving towards using change teams

Change team the group of employees, usually from cross-functional, that is charged with a change task. A good change-management team member(Prosci):

1) Being knowledgeable about the business and enthusiastic about the change2) Possessing oral and written communication skills, and a willingness to listen and share 3) Having total commitment to the project, the process and the results4) Being able to remain open minded and visionary5) Being respected within the organization as an apolitical catalyst for strategic change

Some of these seem contradictory, however skilled change leaders exhibit paradoxical characteristics.

Many examples point of the need for a change champion.Change champion a person within the change team who will fight for the change under trying circumstances and preserve when others give up.

They should consider two further organizing roles:1) Steering team plays an advisory and guidance role to change leaders and design and

implementation teams

2) Design and implementation teams responsible for the actual design and implementation of the change initiatives. contains a change project manager; coordinate planning, manage logistics, track the team’s progress towards the targets and manage potential adjustments.

Sponsors senior executives who foster commitment to the change and assist those charged with making the change happen

Sponsors have three potential activities: - Visible sponsorship the senior manager advocates the change and shows support through

actions as well as words - Information sharing and knowledge development sponsor providing useful information

about change and working with the team to ensure that plans are sound. - Provide protection cover those to whom the change has been delegated.

Developing the team is an important task for the change leaders because the ability to build teams, motivate and communicate are all predictors of successful change implementation. Seven factors that are critical to team success with self-managed teams:

1) Clear, engaging direction2) A real team task3) Rewards for team excellence4) The availability of basic material resources to do the job5) Authority vested in the team to manage the work6) Team goals7) The development of team norms that promote strategic thinking

A change team demand a paradoxical set of skills and functional and technical competencies.

Middle powerlessness the feeling of a lack of power and influence that those in the middle-level organizational roles often experience when organizational changes are being implemented. Pressure comes from above and below and they see themselves as ill-equipped to respond. (influence up and influence down. Linking pin within an organization)

New responsibilities for today’s managers:1) Scan the environment2) Figure out what will make things better3) Create initiatives

Lecture 4In structuring the change project, some things should be considered: 1. What to take into consideration when choosing a structure (also related to mechanistic or organic

organization) : Complexity of the problem and the solution Scope of the problem and framing the solution Diversity in views and powerful stakeholders Cultural context (break through existing structures and cultures) Performance—change (speed, effectiveness, commitment, efficiency Context characteristics (uncertainty level, stability, complexity, etc.). (see picture)

Change leader/agent should have 7 different competencies or skills: 1. Know yourself (egos and existing leadership practices can get in the way). Commitment to

improvement: a trial and error approach 2. Be always open to learn and determination ( change leaders need a dogged

determination to succeed and resilience to respond to setbacks in a reasoned and appropriate manner. Persist when everything looks like a failure, and keep going)

3. Sense making and visionary skills (commitment to improvement) determination change leaders need a dogged determination to succeed and resilience to respond to setbacks in a reasoned and appropriate manner. Persist when everything looks like a failure, and keep going.

4. Communication skills (e.g. that advance the conversation, stimulate feedback) 5. Interpersonal skills (to build trust, to be present and authentic) 6. Implementation skills to close the knowing-doing gap (project/team management skills) 7. (Emotional) Intelligence e.g. empathy (to analyse problems and create confidence)

Behaviours of change agents/leaders: 1. Framing behaviours changing the sense of the situation, establish starting points for change,

design the change journey2. Capacity creating behaviours creating the capacities for change, create connections in the

organization 3. Shaping behaviours attempts to shape what people do (role model, holding others

accountable, encourage those who are involved in the change)

Iterative process of improvement Kotter simple, standardized eight step process improvement model. However, if more uncertainty about problem definition and solution:

Non-linear approach with feedback cycles A structured step-wise approach ] Problem definition uncertainty: an open approach is more effective Make sure to formalize (in between) outcomes

Chapter 10. Measuring Change this chapter is about the institutionalization of the Change Path. However, they are used throughout the entire process, since they help to determine the need for change, quantify what is expected from the change initiative, etc.

Measurement matters, what gets measured affects the direction, content and outcome achieved by a change initiative. The motivational impact can increase due to measurement by three reasons:

1) See particular quantifications as legitimate2) Believe their actions will affect the outcomes achieved 3) Think those actions will positively affect them personally

When the legitimacy or impact of the measurements is questioned or when people believe they cannot affect the outcome, this can result in cynicism and alienation.

Measurement and control systems developed to focus, monitor and manage what is going on in the organization. It helps in clarifying expected outcomes and enhance accountability.

Information from measurement and control systems enables change managers to:1) Frame the need for change and the implications of the vision in terms of expected outcomes2) Monitor the environment 3) Guide the change, gauge progress and make midcourse corrections4) Bring the change to a successful conclusion

A list of criteria to help change leaders to determine which measures to adopt1. Focus on key factors which factors are key and what levers will move people in the

direction of the desired change. Measures influence what people pay attention to and how they act. Therefore, know the critical measures at different stages.

2. Use measures that lead to challenging but achievable goals 3. Use measures and controls that are perceived as fair and appropriate

the process of developing these must be reasonable and fair, even when they lead to negative outcomes for those being measured

4. Sending aligned signals 5. Ensure accurate data

increased support when employees know that the data will not be used to harm them 6. Match the precision of the measure with the ability to measure

match the measures to the environments. Therefore, they need to make their choices regarding the measurements on:

a) How quickly they need the informationb) How accurate the information needs to bec) How much it will cost

Rather vague goals require imprecise measures and the other way around.

Four control levers:1) Interactive controls (focus externally, opportunities and threats) uncertainties in

assumptions about the wider environment. Used for: sense what change should be about, continuous learning, change initiative; modify and adapt change. For example: expectations on customer demands, competitor actions, technological breakthroughs strategic uncertainties

2) Boundary systems (focus internally, limits to actions) to do it right, actions to be avoided: “where not to go”. Used for: providing focus and clarity; spur creativity (where (not) to go)For example: limits to spending authority; disapproved behaviour risks to be avoided

3) Belief systems (focus internally, what the organization stands for) the fundamental values and beliefs of organizational employees that underpin the culture and influence organizational decisions. Used for: framing change in alignment with core beliefs, to guide solutions, create commitment and motivation For example: organization values and the vision and mission core values

4) Diagnostic control system (focus internally: setting and achieving goals) traditional focus: “what performance to achieve?”. Used for: understanding critical performance variables and milestones, what change should lead to Limitation when using of DCS: lack of aligned measures within the chain E.G.: sales data; production costs… critical performance variables

Diagnostic and steering controls play an increasingly important role in the middle of the change project. At the end of the process they are replaced by concrete outcome measures.

Indicators should be:Controllable: Action and outcome should be related, (ii) Teams / employees should have the authority to affect outcomes through changed actions Actionable: Ability to produce feedback that elicits willingness to learn and appropriate action rather than defensiveness

Four tools that can assist in planning, deploying and managing change:1) Strategy maps a visual representation of the end state and the action paths that will get

them thereTakes on four perspectives:

o Financial perspective identifies the financial outcomes that the change will give rise to and define the paths that will produce those outcomes

o Customer perspective focuses on service and customer-oriented goals to achieve financial objectives.

o Internal perspective o Learning and growth perspective embodies people, information and

organizational capital. for non-profit organizations, the customer perspective is typically on top. the overall aim remains the same: develop a coherent picture that aligns your change strategy with the organization’s purpose so it generates the desired outcomes

Underlying assumption: financial outcomes are the end goals that organizations strive for and other objectives within the change program should be aligned to produce and support those desired outcomes

2) Balanced scorecard integrates measures into a relatively simple way of tracking the CSFs. a. Financial perspective see strategy mapb. Customer relationship management see strategy mapc. Internal business process perspective focuses on operational and process efficiencies

that help accomplish financial goals and objectives

d. Learning and growth details the internal training and development needed to allow staff to reach objectives across the map some of these measures might be conflicting: increased service level vs. profitability

3) Risk exposure calculator an assessment tool that considers the impact that specific factors may have on the risk levels faced by the firm The first three risk drivers are grouped under change pressure:a. Under significant pressure to produceb. There is a great deal of ambiguityc. Employees are inexperienced in change

Change culture identifies the second set of risk drivers:a. The culture pushes risk takingb. Executives resist hearing bad newsc. There is internal competitions

- The final set of risk drivers is grouped under information management:

a. The change situation is complex and fast changingb. There are gaps in diagnostic change measuresc. Decision making regarding change is decentralized

4) DICE model a process-oriented approach to assessing and managing the risks associated with change project a. Duration how frequently the change project is formally reviewed as duration

increases, risks increases b. Integrity the team leader’s skills and credibility and the skills, motivation and focus

of members of the change team as skills, motivation and credibility decrease, risk increase

c. Commitment i. Commitment of senior management ii. The employee or ‘local level’ commitment is evaluated as commitment decreases, risks will increase

d. Effort the level of increased effort that employees must make to implement the change as the amount of incremental effort increases beyond 10%, risk level increase

Overall dice score = duration + (2 x integrity of performance) + (2 x senior management commitment) + local level commitment + effort

Lecture 5 Perceived limitations of current existing measures:

Financially oriented: lag indicators Ignore value of intangible assets Analyse past actions (historic performance) rather than focussing on future alertness May lead to pursuing short term results, rather than long-term goals In chains: ignore alignment between measures used at different parties to be able to change

to positively impact corporations, measures within the chain should be aligned e.g. public prosecution: how much attention paid to priority themes e.g. court: how much cases dealt within the court

Different purposes in how to use data and measurement for change: 1. Diagnosing the need for change (WHAT)

measuring the gap between present and desired state. In diagnosing the need for change, there are two types of measurement

Ex-post measurement feedback (e.g. customer satisfaction, throughput times) o Information provider discrepancy between actual and desired performance o Change as reaction to what already happened o Trigger effect on WHAT to change

mainly relates to diagnostic control system Ex-ante measurement feedforward (e.g. economic forecasts, demographic trend analysis)

o Guide for learning, anticipate threats and opportunities o Lead change proactively o Guidance effect on what to change

mainly relates to the interactive control system

2. Monitoring of change (HOW) Match data with the state of change

Early stage of change measure conditions under which change takes place (environment, structure)

Middle stage measure progress in implementation process (milestones, make corrections) Later stage measure (sustainable) outcomes of change (Customer, financial, etc.) set further

changes

For monitoring change, data should be: (data-oriented data collection and use) Enable for comparison (external and over time): standardized and systematic Focus on evidence-based concepts Be analysed and presented in a way that does not allow for multiple interpretations

3. Motivating for change (HOW)

For motivating change, data should be (change-oriented data collection and use): Minimize frustration and resistance Reflect the perceived unique situation Focus on concepts that are perceived relevant Analysed and presented such that they enhance participation and discussion

The use of monitoring and motivating measures is not necessarily contradictive. Although they have different requirements, they can be aligned. start from a monitoring point of view

Simple measureable models, continuous data collection, scorecards

to adapt and adjust for motivational measures Focus on own BU measures, rather than company-wide measures, communicate about

these, act on the measure when needed.

Note: the use of data is only one of the tools to make a change happen

Chapter 6. Navigating organizational politics and culture second part mobilization phase of the Change Path.

Informal organization represented by those structures, systems and processes that emerge spontaneously from the interaction of people with the formal systems and structured that define the organizational context.

In many companies, there is the assumption that organizational politics is an inherently dirty word, people do not want anything to do with politics. the act of brokering power to meet one’s own goals. (realistic process of making decisions and allocating resources in a context of scarcity and divergent issues).

Power, however, can be used strategically to influence organizations towards healthier ends. Power is essential to make things happen. Power the capacity to influence others to accept one’s ideas or plans.

The knowledgeable change agent asks multiple-power related questions:1. What power do I have and what are the sources of my power?2. What am I authorized to do by virtue of my title and position?3. What signatory authority and what dollar limits of expenditure does my position have?

diagnose their formal authority and power

Influence people:1. With knowledge2. Persuade them by strength of personality and integrity3. Use rewards and punishments to direct people’s behaviours

However, perception of power is very important. If others do not believe that a person is influential, then the facts will have little impact.

Types of individual power1. Positional power resides in the legitimate authority of the title and position (the formal

right to make decisions) 2. Network power connection power results from the informal network of connections of

people that permits them to access and pass on information3. Knowledge power can be expert and/or information power

o Expert power the possession of a body of knowledge essential to the organizationo Information power clout gained through the flow of facts and data

4. Personality power the ability to inspire trust and enthusiasm from others (charisma) provides many leaders with significant individual power

o Reputation stems from people’s experiences with the person (reports of success)

In addition to personal influence, departments within an organization have also different levels of power. This depends on the centrality of the work the department does, the availability of people to accomplish tasks, and the ability of the department to handle the organization’s environment. There are three departmental power sources:

1. Ability to cope with environmental uncertainty departments and individuals gain power if they are seen to make the environment appear certain e.g. marketing and sales bring in future orders, finance to navigate the firm, etc.

2. Low substitutability whenever a function is essential and no one else can do it, the department has power e.g. the data processing department when no one else is able to the advent of the PC.

3. Centrality power flows to those departments whose activities are central to the survival and strategy of the organization or when other departments depend on the department for the completion of work. e.g. system people due to the dependence on PC’s.

Three dimensions of power (Hardy):1. Resource power the access to valued resources in an organization (very similar to

individual power, e.g. rewards; sanctions; expertise). 2. Process power the control over formal decision-making arenas and agendas (e.g.

nominating committees, power to in- or exclude an item on a discussion agenda)3. Meaning power the ability to define the meaning of things (e.g. symbols, rituals,

language)

The most often used power tactic is: “using and giving reasons”, where “referring to a higher authority” and “applying sanctions” are least popular.

Change agents need to think of themselves as “politicians”. Defining oneself as an organizational politician will suggest the need to negotiate, develop coalitions, build and use alliances, deal with the personality of the decision maker, etc.

The culture of a group can be defined as (Schein):1. A pattern of shared basic assumptions2. That was learned by a group3. As it solved its problems of external adaptation and internal integration4. That has worked well enough to be considered valid5. Therefore, to be taught to new members6. As the correct way to perceive, think and feel in relation to those problems

Schein, analyses culture by means of three levels:1. Artifacts visible aspect of the organization that are easy to see but their meaning can be

difficult to grasp (organization’s buildings; how people dress) 2. Espoused (=aangehangen) beliefs and values an organization’s articulated mission,

values and strategy. This level is most often used as a start by many change agents. 3. Basic underlying assumptions have become so ingrained and so much part of a group’s

thinking and perspective on the world that they are not questioned o Non-debatable extremely difficult to change

A change agent, then, needs to assess a culture at three levels. Such an analysis may lead to innovative ways to change a culture:

1. Observe the artefacts 2. Read documents and talk to people to learn espoused beliefs and values 3. Observe and ask people about underlying assumptions Since these are often unarticulated, it may be difficult for people to express them

Resistance demonstrates that the point that individuals will choose to cooperate or not, depending on their personal circumstances and their assessment of how the change will impact them personally. these individuals are willing to cooperate when: perceived benefits of change > perceived cost of change.

This formula highlights:1. Change agents have to deal with both the reality of change and its perceptions2. In many situations, the costs of changing are more evident than the benefits of change

expressed in the change equation: Dissatisfaction x Benefits x Success > Cost, where

Dissatisfaction = perception of dissatisfaction with the status quo Benefits = perception of the benefits of change Success = perception of the probability of success Cost = perceived cost of change

Therefore, change agents need to increase dissatisfaction by providing data demonstrating that other options are better, and would benefit the person, and showing that the change effort is likely to succeed.

Organizational change, individual consequences and the support for change Encourage change leaders to avoid the trap of assuming that positive organizational outcomes will automatically be supported by individuals. Positive outcomes for the organizational might result in negative outcomes for the individuals, which will therefore result in resistance.

In organizational change, the key is to understand the forces and how they respond to shifts in pressure. Homeostasis: a system has a tendency towards a relatively stable equilibrium among its interdependent factors. Organizations are as they are because the forces involved are in balance. Therefore, if one force is changed, it could imply many things, resulting in imbalance

Two tools are particularly relevant in helping change leaders to understand forces and why organizations changes (or doesn’t):

1. Force field analysis a process of identifying and analysing the driving and restraining forced impacting an organization’s objectives.

In stable situations (equilibrium), forces for change (driving forces) and forces opposing change (restraining forces) are in balance. Therefore, to implement change, the balance must be upset.

External sources initial triggers that give rise to internal pressures (e.g. benchmark data) Internal pressures vision of a champion, work group attitudes and norms Driving/restraining forces work group norms, informed leadership patterns, workplace

culturee.g. when innovation is part of the desired change, control systems focussing on efficiency and minimizing variance from standards will act as a restraining force.

To do a force field analysis:1. Identify the forces acting in the situation and estimate their strength (identify immediate and long-

term forces) 2. Understand how to alter the forces, and develop a strategy to leverage on the driving and

restraining forces, with minimum effort 3. Look beyond immediate impact, identify ways to increase support and reduce resistance

Strebel identified the change arena. This includes: 1. Continuous change change occurs continuously because the forces for change are strong

and the resistance forces are weak2. Break-point change change occurs in a context defined by strong forces for change and

strong sources for resistance 3. Flip-flop change (or sporadic-change) change that occurs within a context of weak change

forces and resistance forces. Change occurs because it is easily reversed. 4. No change resistance is strong and the forces for change are weak.

2. Stakeholders analysis identification of those who can affect the change or who are affected by the change (e.g. analysis of the positions, motives, and power of those stakeholders).

Purpose: developing a clear understanding of the key individuals who can influence the outcomes of a change.

Examples of questions which can be asked to identify these stakeholders: a. Who has the authority to say “yes” or “no” to the change?b. Which areas or department or people will be impacted by the change? How will they likely react,

and who leads and has influence in those areas and departments?

Stakeholder analysis (Savage), whereby stakeholders are plot on two dimensions: potential for threat vs. their potential for collaboration:1. Collaborative approach (high, high) stakeholder is brought onside and his/her support is

obtained2. Supportive approach (low, high) strategy of involvement where the change agent maximizes

support from the stakeholder3. Non-supportive approach (high, low) should be defended against4. Marginal stakeholder (low, low) monitored to ensure the assessment is correct

Stakeholder map tool to visually picture the key participants and their interrelationships to understand the dynamics of the situation. Some factors useful to depict in this map:

1. Their wants and needs2. Their likely responses to change3. How they are linked

Cross and Prusak classify organizational members as: 1) Central connectors people who link with one another2) Boundary spanners people who connect the formal and/or informal networks to other

parts of the organization3) Information brokers people who link various subgroups4) Peripheral specialists people who have specialized expertise in the network

Change continuum described the four stages stakeholders may progress through during a change project:

1. Awareness described stakeholders who are only aware of the change initiative 2. Interest describes stakeholders moves from general awareness to active interest in the

initiative 3. Desire for action describes stakeholders moves from an interest to a desire to take action

(make action steps clear for them)

4. Taking action describes stakeholders who are fully committed to the change(taking action)

Rule of thumb: change leaders should shift from low-intensity forms of communication to higher-intensity forms as individuals shift from awareness to interest and action

Stakeholders not only vary in readiness to change, but also in their individual predispositions to change. Five different categories: 1. Innovators/Early adopters individuals who seek change and want variety2. Early majority individuals who are receptive to change but are not first adopters3. Late majority individuals who follow others once the change has been introduced and tried4. Laggards/Late adopters individuals who are reluctant to change and do so only after many

others have adopted5. Non-adopters individuals who will not change or adapt under most circumstances

Commitment profile a person’s orientation toward the specific change in question. Is the individual: resistant, ambivalent, neutral, supportive or committed?

Chapter 7. Managing recipients of change and influencing internal stakeholders third part of the mobilization phase of the critical Change Path.

Recipients of change people who are at the receiving end of change, therefore experience a lack of power and control regarding the proposed change

Common reaction for change: 1. Support or enthusiasm2. Mixed feelings or ambivalence3. Resistance or opposition (actions intended to slow or prevent a change from happening)

recognizes that both the content (the what) of change and the process (the how) of change matter.

Myths regarding change: 1. The assumption that resistance is inevitable in change situations2. The belief that age and resistance to change go hand in hand

Mixed feelings can be magnified (uitvergroot) by concerns about the impact of change on:1. Their relationship with others2. Their ability to do what is being asked of them3. The fit with their needs and values4. Their job security and future career prospects these will increase when people lack confidence that the change will produce the intended results.

The perceptions of costs and benefits of change depend on 1) what people are concerned about, 2) what they have experienced in the past and 3) what they think they know

if recipients see themselves and the organization benefitting from the change, they are more likely to embrace the change. (see chapter 6). if they have mixed feelings: ambivalence to the change: the mixed emotions that a change initiative can trigger. It arises from uncertainty and occurs when we are asked to act in ways that are inconsistent with our existing attitudes.

Positive reactions must also be treated with doubts. People with mixed feelings, or resistant may be perceived as “the enemy”, which leads to infighting rather than thoughtful analysis and productive pursuit of organizational benefits.

When ambivalence is prevalent, change leaders should create conditions that will increase the likelihood that people will voice concerns (providing feedback). They need to create an environment that welcomes feedback. People will protect their attitudes by employing a variety of strategies:1. Turn to habits and approaches that have served them well in the past2. Engage in selective perception actively seeking out confirming information and avoiding

disconfirming data3. Selectively recall being more likely to remember attitude-consistent rather than inconsistent

data4. Deny in the form of counterarguments geared to support and strengthen one’s position

More extreme responses can include sarcasm, anger, aggression and withdrawal.

Rather than interpreting mixed feelings as resistance, change leaders are better served by:1. Focusing on helping people make sense of the proposed change2. Listening for information that may be helpful in achieving the change 3. Constructively reconciling their ambivalence4. Sorting out what actions are now needed

it is almost always in the best interest of change agents to activity engage people in meaningful discussions early in the change process and help to align their interpretations with the process.

Causes of negative reactions to change (there are more…)1. Negative consequences appear to outweigh the benefits 2. The communication process is flawed, leading to confusion and doubts3. The recipients lack experience with change and its implications 4. The recipients have had prior negative experience with similar change 5. The change process is seen to be lacking procedural justice

The organizational context plays a role in determining reactions of people to change. The psychological contract that people have with organizations can be a critical variable.Psychological contract the sum of the implicit and explicit agreements we believe we have with our organization. It defines our perceptions of the terms of our employment relationship

Most of these contracts is implicit, resulting in the fact that the change agent is unaware of these. They do not occur as a vacuum, changes in one contract, might impact changes in one’s other contract.

Stages in the reactions to change 1. Before change Anticipation and anxiety phase.

Issues: coping with uncertainty and rumours about what may or may not happen 1. Pre-change anxiety worrying about what might happen, confusion, perhaps significant denial of what change is needed or likely

2. During the change shock, denial and retreat phase Issues: coping with the change announcement and associated fallout: coping with uncertainty and rumours; reacting to the new reality. 2,3,4,5 shock, defensive retreat, negotiating to make the change go away and depression and guilt result in alienation

3. After the change acceptance phase Issues: putting the effects of change behind you, acknowledging the change adaption 6,7 Acknowledgement and adaption to the new reality created by the change.

Stages in the reaction to change, typically begins in advance of the actual change initiative, as individuals worry about what will happen and what the personal consequences will be.

Even people who retained after downsizing might experience emotional upset, which is called: Survivor syndrome term that refers to the reaction of those who survive a poorly handled, traumatic change. Results in:

Lower level of job satisfaction Lower level of motivation Lower level of organizational loyalty Greater stress, Vulnerability about one’s future position

to overcome these reasons, people need to understand the reasons for the decisions, feel that people have been treated fairly, and solid reasons for hope in future.

Factors influencing how people will adapt to change: Stakeholders’ personality influence their reactions to change The predispositions to change (innovators, early adapters, etc.…) are influenced by individual factors:

1) Susceptibility to the social influence of others2) Tolerance for risk and ambiguity3) Self-image

Thus, individuals perceptions of the change experience and the risk of change are influenced by their personality

Tolerance for turbulence and ambiguity involves our comfort level with these conditions. high level: will be more comfortable and open for change low level: prefer more stable and predictable environments

Prior experience impacts a person’s and organization’s perspective on change Previous experience with change will affect a person’s view on change and its behaviour.

Competency or complacency trap the tendency to rely on competencies and strategies that have worked in the past, even though these are no longer effective because they do not fit the organization’s environment.

If people have experienced long periods with minimal change, they will likely perceive higher risks with the proposed change. This perception of risks declines when the rate of change becomes moderate. when rate of changes increases above normal, the perception of risks will risk again.

Co-workers influence stakeholder’s views Our views of change are also influenced by the comments and actions of those around us, particularly whose opinions and relationships we value.

Co-workers and work groups are very important in how people sort out their reaction to change, since these live in similar organizational worlds and relationships among these are bound by norms, roles, and experiences.

When co-workers are ambivalent on the desirability of the change, one can expect to see scepticism in others about the matter. relates to doubts and concerns we have concerning the capacity of the change to deliver the promised results.

Feelings about change leaders make the difference If people have the feeling their perspectives and interest are recognized and they trust these leaders, they are more likely to respond positively on the change.

Scepticism can shift to cynicism (= a real loss of faith in the change) and heightened pessimism when people whose opinions we value share a similar negative belief. CEO of Blackberry, 22 million severance, while others were fired (ontslagvergoeding)

The consequences of such cynicism include: 1. reduced satisfaction2. reduced organizational commitment 3. less motivation to work hard

Steps to minimize the negative effects of change:1) Engagement people want to know, where things are going, why, and what the implications

are on the organization, their parts of the operations, and on them personally. 2) Timeliness give employees time to constructively process the things they have heard 3) Two-way communication change leaders need to be open to learning as much from

exchanges as followers. 4) Make continuous improvement the norm change will be seen as naturally 5) Encourage people to change agents and avoid the recipient trap

Strategies for coping with change Recipients LeadersAccepting feelings as natural

Self-permission to feel and mourn Taking time to work through feelings Tolerating ambiguity

Rethinking Resistance: AS natural as self-protection As a positive step towards change As energy to work with

Managing stress: Seeking for support Seeking information about change Taking regular breaks

Giving first aid Accepting emotions Listening Providing safety

Exercising responsibility: Identify options and gains Learning from losses Learning new skills

Creating capability for change: Making organizational support of risk

clear Involving people in decision making Teamwork

Chapter 9. Action Planning and Implementation (HOW) covers the acceleration phase of the critical Change Path. (getting from here to there).

“Do it” orientation a willingness to engage in organizational analysis, see what needs to be done, and take the initiative to move forward. Having the authority to act makes certain aspects of the job of change agent easier than working from the middle management

Mintzberg and Westley provides guidance by choosing which action plan to take, by setting out three generic approaches:

1. Thinking first strategy an approach used when the issue is clear, data are reliable, context is well structured, thoughts can be pinned down, and discipline can be established, as in many production processes (e.g. introducing Six Sigma)

2. Seeing first strategy an approach when many elements have to be combined into creative solutions, commitment to those solutions is key, and communication across boundaries is essential. (e.g. new product development).

3. Doing first strategy an approach where the situation is novel and confusing, complicated specifications would get in the way, and few simple relationship rules can help people move forward (e.g. a manager who is testing an approach to customer service and wants feedback about what works)

Nohria has a different assessment of the generic change strategies available. He identified: 1. Programmatic change involves the implementation of straightforward, well-structured

solutions (best suited to contexts that are clear and well-defined). Risks = potentially inflexibility, overreliance on a “one-size-fits-all approach” and lack of focus similar to the thinking first change

2. Discontinuous change involves a major break from the past. When the environment shifts and the activities are continued on their existing assumptions, there is a miss-fit. Therefore, top-down change may be fitting (e.g. downsizing). Risks = political coalitions that derail the change, loss of talented people.

3. Emergent change a change that grows out of incremental change initiatives. It evolves through the active involvement of internal participants. Risks = confusion over direction, slow progress (e.g. modify the culture in the organization). similar to the doing first change

To reduce the risks of 1 (programmatic change), consider using employee engagement and feedback to connect with those on the receiving end.

To reduce the risks of 3 (emergent change), can be managed through the use of field experiments and task forces to provide engagement and feedback on an ongoing basis.

A third approach to thinking about change strategies is found in the unilateral versus participative approaches to change;

1. Unilateral approach First change the systems and structures, forces behavioural changes that action will in turn produce changes in attitudes and beliefs overtime. (lack of sensitivity feeling of being ignored)

2. Participative approach the opposite of unilateral approach. First change attitudes and gain acceptance of an initiative before restructuring the systems and structures.

Waldersee and Griffiths argue that change can be traditionally grouped into two broad categories: 1. Techno-structural change change that is based in structures, systems and technologies

e.g. unilateral change initiatives 2. Behavioural-social change focused on altering the established social relationships

e.g. participative change initiatives

conclusion from these “do it” orientation approaches: start a change project rather than waiting until everything is documented perfectly, be willing to take risks and learn as you go.

Subsequently: Plan the Work Steps to effective change: 1. Mobilize commitment to change through joint diagnosis of business problems.2. Develop a shared vision of how to organize and manage for competitiveness.3. Foster consensus for the new vision, competence to enact it, and cohesion to move it along.4. Spread revitalization to all departments without pushing it from the top.5. Institutionalize revitalization through formal policies, systems, and structures.6. Monitor and adjust strategies in response to problems in the revitalization process.

provides valuable guidance in developing an action plan. However, using a one-size-fits-all approach to change is risky (above assumes a fundamentally cooperative orientation). Planning is a means, and not an end.

Contingent thinking an action plan should be based on the contingencies of the organization, that is: the organizational context.

Since change agents often understand what needs to be done, but don’t get the sequence of activities, there are action planning tools.

Action planning tools for change agents: 1. To-Do list sequence of steps they need to take to achieve their goal. Once the situation

becomes more complex, there is a need for further tools 2. Responsibility charting who will do what, when, where, why and how.3. Contingency planning consideration of what should be done when things do not work as

planned on critical issues. 2 tools are being proposed in this: Decision tree analysis ask change agents to consider the major choices and the possible

consequences of those alternatives (probabilities can also be assigned) Scenario planning developing a limited number of scenarios about how the future may

unfold and then assessing what the implications of these might be 4. Surveys and survey feedback capturing people’s opinions and tracking their responses to

assist in identifying what needs changing, nurturing engagement and support and in tracking progress.

5. Project Planning and Critical Path methods operations research techniques for scheduling work. Provide deadlines and insights as to which activities cannot be delayed to meet those deadlines. (introduces the notion of parallel activities)

6. Force field and stakeholder analysis examination of the forces for and against change and the positions of the major players and why they behave as they do.

Force field analysis examines the forces for and against change Stakeholder analysis position of the major players and why they behave as they do

To additional tools within this category: Commitment charts evaluation of the level of commitment of major players (against

change, let it happen, help it happen, make it happen). Adoption continuum examination of major players and their position on the awareness,

interest, desire and adoption continuum to the proposed change (AIDA) 7. Leverage analysis determination of methods of influencing major groups or players regarding

the proposed changes 8. Operation management tools: e.g. Pareto analysis, control charts, histograms etc..

Working the plan ethically and adaptively Change agents need to proceed ethically, otherwise they risk destroying credibility and the trust other have in them. a permanent sense of betrayal tends to ensue when you have been dealt with unethically.

Good communication programs are essential to minimize the effect of rumours, mobilize support for the change and to sustain enthusiasm and commitment.

The purpose of communication plans for change centres on four major goals: 1. To infuse the need for change throughout the organization 2. Informs about the change 3. Informs about the progress of change 4. Gain feedback on attitudes and issues

A communication plan has four phases: 1. Pre-change phase centring on communicating need and gaining approval for change (focuses

on the top management) 2. Developing the need for change phase focuses on communicating urgency and enthusiasm

for the change 3. The midstream phase involves disseminating details of the change and should include

obtaining feedback from employees 4. Confirming the change phase communicates and celebrates the success of the program to

reinforce commitment

Richness of the communication channel richness increases as one moves to personalized letters and e-mails, telephone conversations, video conferencing (rather than generalized reports).

Six principles that should underline a communication strategy (tips and tricks): 1. Message and media redundancy are key for message retention keep repeating the message such

that employees retain it. 2. Face-to-face communication is most effective 3. Line authority is effective in communications 4. The immediate supervisor is key level of trust between employee and supervisor 5. Opinion leaders need to be identified and used critical view6. Employees remember personally relevant information more easily than general information.

Influence strategiesSeven strategies to influence individuals and groups in the organization. Applying one of these tactics is never effective, therefore a combination is required.

1. Education and communication strategy that helps others develop an understanding of the change initiative; what is required of them and why is it important (focus on competencies)

2. Participation and involvement get others involved and bring new energy and ideas (to increase the need for change, readiness, acceptance, sustained change, etc.) see influence of co-workers opinion

3. Facilitation and support provides access to guidance and other forms of support to aid in adaption to change first three tactics in SC: supplier associations, supplier consultancy, supplier learning groups, development, etc.

4. Negotiation and agreement when change leaders can make explicit deals with individuals and groups affected by the change. Look for creative dialogues. Four different negotiation styles:

Forcing: cognitive focus: self-promotions. Emotions: anger Yielding: cognitive focus: other promotion. Emotions: fear, guilt & shame Avoiding: cognitive focus: supress. Emotions: fear, incompetent Problem solving: cognitive focus: learn, understand. Emotions: curious, optimistic

5. Manipulation and co-optation include covert ( verborgen) attempts to influence others 6. Explicit and implicit coercion rests on change leaders’ legitimate right and responsibility to

insist that change be done 7. Systematic adjustments those made to formal systems and processes that reduce resistance

while advancing the desired changes last four tactics in SC: create inter-organizational improvement teams; provide incentives for shared savings; force a discount.

Another way to think about influencing strategies is whether you push them into the desired direction, or whether you pull them into the desired directions. 1. Push tactics attempt to move people in the desired direction through rational persuasion (use

of facts and logic) or direct or indirect pressure (threats). 2. Pull tactics attempt to draw people in the desired direction through arousing interests and

enthusiasm through consultation (or inspirational appeals).

Both these approaches are designed to pull individuals in the desired direction

Four influence tactics during implementation 1. Intervention involve key executives justifying the need for change and providing new norms

to judge performance 2. Participation involves engaging stakeholders in the change process3. Persuasion involves the use of experts to sell a change 4. Edict issuing of directives.

Transition management making sure that both the change project and the continuing operations are successful. after-action-review the final phase of a transition management process. It seeks to bring closure to the experience and engage participants in a process that will allow the learning gained through the change process and document is for the future. (2nd phase: keeping people informed, 1st assign a transition manager).

Lecture 6 In the field of operations and engineering, creating a dynamic capability of continuous improvement is utmost relevant. • Small, incremental changes on a continuous basis are relevant to adapt to environmental, market,

and technical and technological changes

• Besides, organisations should have the ability to consistently improve current processes and learn new ones Red Queen Effect

Continuous Improvement a systematic effort to seek out and apply new ways of doing work, i.e. actively and repeatedly making (process) improvements. Create by A coherent infrastructure to coordinate and support CI. Two function: execute CI project,

coordinate and support these projects An organizational learning perspective

Continuous Improvement infrastructure:

Empirical findings on this framework: 1. Purpose Issues:

Strictness (keep focus and keep control) or stretch (keep culture of risk-taking) in the evaluation of project goals?

Improvement and redesign: sequential or in parallel?

2. Process focus on creating a constant- change culture Creating this is a unilateral or participative change. Issues: Idea generation, what contributes to a culture of constant change?

use of CI method experts (project leaders) direct capture of ideas from front-line employees direct capture of ideas from middle manager’s role

Does expert power of project leaders foster idea generation from front-line employees OR does perceived knowledge of these experts impinge idea generation by front-line employees?

• Garnering in-depth knowledge in temporary projects: how to bring out and integrate their knowledge?

• How to create alternating periods of stability and change in standardized work?

3. People Training and career paths and Technology support. Issues: Trade-off: Organic approach in which middle managers continually take a role as CI expert or

use specialist CI experts? How to sustain, share, and use knowledge of CI leaders when project is done?

Concluding remarks: 1. Infrastructure of CI provides organizations the agility and consistency to update 2. Implementing CI in the eight areas will steer the organization to a unified direction 3. Consistent patterns of decisions in the eight areas provides the ability to deal with changes in the

environment

4. CI infrastructure can be purposefully constructed to support vital CI efforts

LEAN LEAN is characterized by:

Continuous improvement approach Mainly focused at incremental changes in existing processes A planned change approach Can be implemented in teams, organization and the entire supply chain Can be implemented in a large variety of contexts (manufacturing and services, private and

public sectors)

What to change Objective of LEAN execute operations at minimum costs, with no waste. Eliminate non-value adding activities. Furthermore, reduce variability inconsistency by designing a process capable to deliver required results smoothly.

7 sources of waste: Delay, Duplication, Unnecessary movement, Unclear communication, Incorrect inventory, Opportunity loss (Errors Muda = waste, Mura = variation, Muri = overburden)

The focus of lean is on continuous improvement, rather than just seeking for errors within the system.

Contingencies LEAN is specifically relevant for businesses with long lead times and a stable/predictable demand.

Diagnosing change conditions of the External Environment What is external to the change depends on the UoA of the change (company; supply chain) Implementing LEAN should fit with stability of demand and production environment (long

lead time, stable demand: LEAN short lead time, unstable demand: Agility). Implementing LEAN is affected by: international competitors, employee preferences, cultural

values and pressure from trade unions Negatives: increase traffic (and pollution), and unfavourable customer reactions due to a large

number of new models in the market

Diagnosing change conditions of the Internal Environment LEAN focuses on both cultural (philosophy) as operations (tools and practices) problems Embedded culture of understanding customer’s needs (continuously reducing waste and

optimize the performance of the process) Continuous improvement culture Key: understanding the value for the customer and deliver their requirements Capabilities: problem-solving skills, improvement skills, motivational skills. Strong leader-

ship from senior management is required, change teams and employees should be empowered Capital (money and people) is important for LEAN implementation (often larger firms)

Readiness for change and commitment from all levels and departments is needed, since the focus is on the value stream ‘

The outcomes of LEAN could be negative in various ways (negative for willingness) make employees redundant less work pleasure due to standardization perceived stress loss of autonomy and freedom

How to change: structure

No explicit structure has been developed, however some change roles can be identified: 1. Top management change initiator. They define the change vision and general guidelines2. LEAN implementation teams change facilitators3. Employees and middle managers change recipients and change implementers

How to change: process; five principles of lean: 1. Specify value2. Identify the value stream3. Avoid interruptions in value flow4. Let customers pull value5. Start pursuing perfection again

Critical remarks to lean process Five principles on how to change are rather vague (discussion on the sequence; parallel

iterative?). LEAN describes a process view on improvement and delegates the rest to individual managers on how to implement it

No consensus about the implementation steps or tools Importance of human resources ready to change, able to change, empower to make a

change. Therefore, underestimating the human aspect has detrimental effects (no attention to communication; involvement; information transparency)

LEAN could negatively affect employees (see previous page).

Six Sigma Underlying assumptions Six Sigma:

Extra organizational structure required to management improvement projects Project selection is customer focus (voice of the customer), but also driven by financial and

strategic objectives of the company. Problems should be quantified and expressed (too low/high) measure performance dimensions Reduction of variation leads to performance breakthrough (it’s an incremental approach) Mix of tools required to implement it

What to change Project chosen based on customer preferences, financial and strategic impact No specific predetermined solution Meta-Routine clear, structured and highly standardized approach to improve processes Six Sigma is an approach focussing on the HOW to change WHAT refers only to the quality levels of the company in general It doesn’t provide a direction on WHAT to change, thus no clear focus

Diagnosing change conditions of the External Environment Only reflected in taking into account customer preferences and requirements

Diagnosing change conditions of the Internal Environment Scope problem and project definition is important. Various problems can be dealt with in

Six Sigma Capability training and technical knowledge are important aspects, specific expert

knowledge needs to be required Power in one of the stages of the DMAIN process, a stakeholder analysis is required

(hierarchical structures most often used) Readiness for change Leadership capabilities and finding the root-cause is relevant, to

increase the readiness for change (not clearly mentioned) Capacity it should be clear what the financial outcomes might be

Preservation no attention paid to this element

How to change: structure The champion = Master Black Belt of Six Sigma (execute the change process and often have a

facilitating role) hence: change implementer and change facilitator Project defined by the champion, also hiring others Standardized training procedure (BB train a whole week, GB train two weeks GBs are

mentored by BBs).

How to change: process DMAIC cycle Black Belts are the project leaders in all steps Involvement Champions in the DEFINE step Involvement Green Belts in MEASURE, ANALYZE and IMPROVE Involvement Process owners in CONTROL

Phases: 1. Define: problem selection and benefit analysis 2. Measure: translation of the problem intro measures and measure current situation 3. Analyse: identification of the root causes 4. Improve: design and implementation5. Control: adjustment of process management & control system

Propositions in Six Sigma 1. Organizational performance will improve by using Six Sigma to reduce variability in the

organization’s processes 2. Higher levels of structural control and exploration in Six Sigma will increase organizational

performance

Organizational ambidexterity, improvement seems to require: Stability and adaptability Control and Exploration Standardization and flexibility, creativity Parallel or sequential? highly contradictive, hence: additional research is required.

Two dimensions of Six Sigma 1. Structured control: use goals and metrics, focus on the outcome (monitoring)

DMAIC: routine, preventing to look unstructured for solutions Clear roles and responsibilities Cultural control: intensive training result in looking for “data we need” and “fact based decision making”

2. Structured exploration: Black Belts are boundary spanners: linked to internal and external environments and cut across functional domains: use multi-functional teams

Discriminating Six Sigma from TQM: Six Sigma: well-defined organizational structure, facilitating leadership engagement Focus on financial and business results Specific measures to measure processes Using full-time improvement specialists (Black Belts & Green Belts)

Total Quality Management (TQM) TQM continuous improvement approach which can be considered as anticipatory and reactive

Anticipatory continuous improvement via employee involvement Reactive response on customer demand and needs (externally driven)

Three principles characterizing TQM: customer focus, continuous improvement and teamwork

Quality is: excellence, value, conformance to specification, meeting customer’s expectations.

What to change (8 main practices, effecting quality according to TQM) 1. Management leadership 2. Employee relations3. Training 4. Quality data & Reporting 5. Supplier quality management 6. Product/service design should always be customer focussed 7. Technical practices

process management (Feedback) Quality of information usage product design (benchmarking)

8. Socio-behavioural practices top-management commitment, support, vision CRM, SRM workforce engagement (training, empowerment) employee trust

Contingencies of TQMExamples of contingencies: Process and product characteristics, industry type, uncertainty, firms size etc. these contingencies should all fit with the TQM system (all practices in an organization directed at influencing: product, service and process quality

Diagnosing the change context not apparent in TQM. Basically focuses on general and broad direction the firm wasn’t to follow for the future, rather than specifically diagnosing the change context in an individual project. Diagnosing the change context of the External Environment as said, not explicitly paid attention to. Some say that TQM depends on the external environment, which are contingencies.

Diagnosing the change context of the Internal Environment Scope no predetermined scope (quality is broad and can be interpreted in various ways).

Therefore, no clear focus is provided but also not required Capability requires management commitment and employee involvement, however, this

condition is hardly discussed Power senior management must provide a vision and what they want to achieve. Strong

leadership and employee empowerment are fundamental. Readiness for change strongly influenced by the perceived benefits of organizational

members. Lack of education and communication (influence tactic 1) results in low readiness (and capabilities), resulting in frustration

Capacity enough time and resources required to make the change happen. Mostly in practice only considered as a onetime process, however it must be considered as continuous.

Preservation TQM aims to change the culture. However, literature lacks on providing this.

How to change: structure Top-management driven, these are the initiators Middle management change facilitators Change recipients entire organization

from this we can infer a top-down change approach

How to change: process Plan-Do-Check-Act cycle Focus on standardization of change processes and use of KPIs

Plan-do-check-act dominant process approach

However, keep in mind… Started as a one-best-way-approach, but has evolved into a management approach adapting

to contingencies. Quality measurement should adapt to the main characteristics of the company.

Business Process Reengineering (BPR) radical change within the organization; can lead to big performance improvement of the

company the essence: main processes should be developed in a way to meet customer requirements and

provide them with the highest value possible ICT provides big advantages for BPR

Opportunities or objectives: Dramatically reducing costs Reduce Lead Times Improve customer services or improve employee quality of life Reinvent the basic rules for business Increase customer satisfaction or organizational learning

What to change 1. Business Process (set of activities that create value adding output for customers) 2. Transform an organization change behaviours, jobs, skills, structures, etc. 3. BPR focuses on the processes and not on tasks, jobs or people

Diagnosing the Change Context of the External Environment Depends on the UoA: the business process to be changed (company, supply chain) BPR is often initiated by strong economic- and technical factors Hammer and Champy described three forces initiating BPR:

customer expectations (high) level of competition persistent change as a pre-requisite in markets

Diagnosing the Change Context of the Internal Environment Scope the scope is very large (see UoA, often business processes) Readiness for change due to its radical nature, not really paid attention to. However, it is

assumed that this is an important factor for BPR’s success. Capability leadership capabilities since BPR is a top-down approach. Top management

has to anticipate and cope with resistance (which will be there probably due to its radical nature)

Power power lies undisputable at the top-management Capacity requires high capacity in terms of finances and time Preservation No attention in literature, also due to its radical nature, which makes this a

difficult aspect.

Risks associated with BPR: 1. Political coalitions can derail change 2. Lack of sufficient control to enforce the change 3. Lack of employee involvement, leading to loss of talented people4. Technical incompetence 5. Implementation is costly and requires a lot of time

How to change: Structure Top management = Change leader / Change Facilitator Implemented by lower level managers and workers (change implementers) Change is cross-functional All stakeholders of the business process are Change Recipients

How to change: Process

Requires an assessment of the business needs :1. Dysfunction: which processes are in the deepest trouble2. Important: which processes have the greatest impact on customer3. Flexibility: which processes are most susceptible to redesign

Come up with measurements to determine effectiveness

Four basic steps 1. Identify process to be change and prepare for the change

persuade people to embrace or at least not to fight. Make clear that the current situation of the company cannot hold anymore (e.g. by showing balance sheets and competitors balance sheet) and show where you as a company need to become

2. Analyse the current situation listen to the customers (value-added activities and eliminate non-value added activities) be ambitious, focus on a radical change of the business process

3. Design new situation (innovate and rebuild, reorganization and training, etc.) 4. Test and implement the changes

Standardized improvement process: 1). preparation, 2). process-think, 3). creation, 4). technical design, 5). social design 6). Implementation