MOST IMPORTANT TOPICS

Week 1
Four types of organizational change:

- Dimensions one:
o Incremental/continuous change: a more gradual change in smaller steps
o Radical/discontinuous change: the change happens suddenly and more dramatic
- Dimensions two:
o Proactively/planned change: managers anticipate events and shift their organization as a
result.
o Reactively/unplanned change: shifts in the external world lead to a reaction on the part
of the organization as a result.
- These two dimensions lead to four types of organizational change
o Tuning (anticipate/incremental): small, relatively minor changes made on an ongoing
basis in a deliberate attempt to improve performance
o Adapting (reaction/incremental): relatively minor changes made in response to a
reaction to things observed in the environment.
o Redirecting (anticipate/radical): major, strategic change resulting from planned
programs.
o Re-creating (reaction/radical): a dramatic shift that occurs in reaction to a major external
event.

Four roles in organizational change:

1. Change implementers: employees that step up and make the change work
2. Changer initiators: the employees that pushed or encouraged the change to happen
3. Change recipients: the ones at the receiving end of the change
4. Change facilitators: those who play a role in facilitating the change
 Middle powerlessness: dilemma where the middle managers feel trapped between tops and
bottoms and become ineffective.

The Change Path Model:

1. Awakening: begins with a critical organization analysis, scanning both the external and internal
environment and understanding the forces against the change.
2. Mobilization: the determination of what specifically needs to change and the vision for change
include: formal structures, systems, processes, power & cultural dynamics, stakeholders,
recipients of change, and change agents.
3. Acceleration: involves action planning and implementation
4. Institutionalization: involves the successful conclusion of the transition to the desired new state
and measurement.
Week 2
Problem focus on “What to Change”

1. Identifying intended output and performance

2. Identify actual output and performance
3. Identify gaps between intended and actual output and performance
4. Develop solutions, a possible direction for solutions, challenges, trade-offs, etc.

Barriers to recognizing the need for change

- Values/Culture: Existing values and corporate culture may harden into dogma  Way of doing
things and beliefs become so fixed resulting in employees who are not open to innovation and
change.
o Example: “We live in Italy and these are important rights for employees”.
- Past success: Past successes reinforce existing practices.
o Example: “It always worked out fine, we could catch up later on”.
- Leadership: Leadership practices may impede recognition of the need for change
o Example: “The team leaders also do not have a problem”
- Systems/processes are too embedded: Embedded systems and processes can harden into
unquestioned routines and habits.
o Example: “We always do it like this and we never hear complaints”
- Relationships: Existing relationships can become restraints that impede the ability to respond to a
changing environment
o Example: “I might see that a change is needed, but when I would say this I have a
problem with my colleagues”.

Factors to include in the “What”-Diagnosis:

- Seek out and make sense of external data  E.g. tougher competitions.
- Seek out and make sense of internal data  Different performance levels across plants.
- Seek out and make sense of the perspective of other stakeholders  Top management,
managers.
- Seek out and make sense of personal concerns and perspectives  Cultural bias.

Creating awareness of the need for change

1. Make the organization aware of the crisis or create a crisis

2. Identify a transformation vision
3. Transformation leadership
4. Identify common/shared goals and achieve them.
5. Information and education

Diagnosing the change context

- Broad context:
o Define Unit of Analysis (UoA)
- Internal context:
o Scope: what is the scope of the problem? e.g. incremental/radical
 o Capability: relevant capabilities (individual, managerial, organizational) and what kind of
capabilities (technical, knowledge/skills, problem-solving, communication)
o Readiness to change: how ready is the individual, group, or organization?
o Power: Analyzing and understanding power dynamics.
o Capacity: Often related to time and money.
o Preservation: Ways of working, cultural aspects, etc.
- External context:
o Broader perspective  PESTEL-factors
 Political
 Economic
 Social
 Technological
 Ecological/Environmental
 Legal
o Narrow perspective
 Targets
 Experiences with previous change
 Organizational vision
 Culture/Habits
 Time pressure

Week 3
Four stages are identified for the formal structures (What to Change)

- Formal structures: are designed to support the strategic direction of the firm by enhancing order
efficiency, effectiveness, and accountability  include strategic planning, accounting, and control
systems.
1. Making sense of organizational structures and systems.
2. Diagnosis of the strengths and weaknesses of existing systems and structures.
3. Understand how structures and systems influence the approval process of change initiatives and
how they facilitate or hinder the acceptance of the change.
4. Designing adaptive structures and systems to enhance future change initiatives. Looking at:
o Differentiation: the degree to which tasks are subdivided into separate jobs or tasks.
o Integration: the coordination of the various tasks or jobs into a department or group
o Chain of command: the reporting architecture in a hierarchical organization.
o Span of control: the number of individuals who report to a manager.
o Centralization/decentralization: how and where decision-making is distributed in an
organizational structure.
o Formal/informal: the degree to which organizational charts exist and are followed:
 Mechanistic: more formal, more differentiated, more centralized, and more
standardized.
 Organic: less formal, less differentiated, more decentralized, and less
standardized.
Approval process and tactics to influence it (How to change)

- General acceptance: is enhanced when people are involved in the discussion and feel that they
have been heard
- Change leaders, therefore, need to carefully assess the motives of the opposition before deciding
how to respond.

Four different ways of approaching the formal approval process

- Straightforward rational approach: proposals are typically developed and brought forward for
consideration, and they are reviewed  No-Go/Go.
- Creeping commitment: this strategy captures commitment by reducing the energy that may be
spent on other options, which should reduce pushback and increase the prospect of support.
- Coalition building: coalitions can be extremely valuable for building support prior to the formal
approval process.
- Renegade process: when the scope of the change is manageable, defensible, and arguably within
their scope of authority, change leaders should seriously consider proceeding on their own
without seeking formal approval.

Leadership

- Leadership: the art of getting someone to do something you want to be done because they want
to do it. The transformational relationship is strongly related to improvement and change.
- Transformational leadership: to move people, to inspire with vision, to give attention, etc.

Change leader roles

- The catalyst overcomes inertia and focuses on the organization.

- The solutions solver knows how to solve the problem.
- The process helper facilities the “how to” of change playing the role of the third-party intervener.
- The resource linker brings people and resources together to solve problems.

Change agent types

- Emotional champion: a clear vision of what the organization needs, and uses this vision to
capture the hearts and motivations of organizational members
- Intuitive adapter: a clear vision for the organization, and uses this vision to reinforce a culture of
learning and adaptation.
- Development strategist: Analyzes the competitive logic of the organization and how it no longer
fits the organization’s existing strategy and environment.
- Continuous improver: analyzes micro-environments and seeks changes to systems and processes
looking for smaller gains.

Stages of change leaders:

- Stage 1 - Novice: people will change once they understand the logic of the change, otherwise
people can be told to change but clear communication is key.
- Stage 2 – Junior: People change through powerful communication and symbolism, change
planning will include group meetings.
 - Stage 3 – Experienced: people may not be as willing, able, or ready, so change leaders will enlist a
specialist to design a change plan, and the leaders will work at change but resist modifying their
own vision.
- Stage 4 – Expert: people have a limited capacity to absorb change and may not be as willing,
able, or ready for change as they wish. So, how to change people is central to the
implementation of change.

Change Leaders and Their Essential Characteristics

 Six stand out as particularly relevant for change leaders:

o Commitment to Improvement: The essential characteristic of change leaders is that they
are people who seek opportunities to take action in order to bring about improvement
 A trial-and-error approach.
o Communication and interpersonal skills: potential change agents need sophisticated
levels of interpersonal and communication skills to be effective  require emotional
resilience, and tolerance for ethical conflicts and ambiguities, and they need to be
politically savvy.
o Determination: Change agents need a dogged determination to succeed in the face of
significant odds and the resilience to respond to setbacks in a reasoned and appropriate
manner. After all, in the middle of change, everything can look like a failure. Change
agents need to be able to persist when it looks like things have gone wrong and success
appears unlikely.
o Eyes on the price and flexibility: Change agents also need to focus on the practical aspect
of “getting it done.” Change agents must keep their eyes on the prize to avoid getting
bogged down in day-to-day stresses and abandoning the change vision. At the same
time, they must be ready to take informed risks, modify their plans to pursue new
options or divert their energies to different avenues as the change landscape shifts
o Experience and networks: It is not surprising to find that experience with change is an
attribute common to many successful change agents. They make this easier for
themselves by ensuring that they are part of networks that will tell them what they need
to hear—not what they want to hear.
o Intelligence: Intelligence is needed to engage in analysis, assess possible courses of
action, and create confidence in a proposed plan. But, there is also emotional
intelligence:
 Framing behaviors: behaviors oriented toward changing the sense of the
situation, establishing starting points for change, designing the change journey,
and communicating principles
 Capacity-creating behaviors: behaviors focused on creating the capacity for
change by increasing individual and organizational capabilities and creating and
communicating connections in the organization
 Shaping behaviors: 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.
 Leadership Challenge: the authors synthesize their extensive research and argue that leaders
who are adept at getting extraordinary things done know how to do the following:
 o (1) model the way;
o (2) inspire a shared sense of vision;
o (3) challenge the status quo;
o (4) enable others to act;
o (5) encourage the heart of those involved with the change

Consultant & Change Teams:

- Internal consultants: involved with leading projects often have line responsibility for initiatives.
o Pros: critical because they know the systems, norms, and how things get done and they
have existing relationships.
o Cons: may not possess needed specialized knowledge or skills, lack of objectivity, lack of
power.
- External consultants: are often hired to promote change through the technical expertise and
credibility they bring to an internal change program.
o Pros: brings fresh perspectives, seen by employees as independent, credible, competent,
and trustfully, employees feel more comfortable sharing their thoughts and concerns.
o Cons: lack of deep knowledge of culture and how things are getting done, if the ability to
provide independent judgment, their value and credibility are seriously reduced.
- Change Teams: teams that embody both internal and external perspectives to balance access to
needed perspectives.

Week 4
Stakeholders respond variably to change initiatives

- Mixed feelings can be magnified by concerns about the impact of the change on:
o Their relationships with others
o Their ability to do what is being asked of them
o The fit with their needs and values
o Their job security and future career prospects

Responding to various feelings of stakeholders

- Positive feelings: when people are feeling positive, engaged, informed, and hopeful, these
emotions can be harnessed in support of the change
- Ambivalent/mixed feelings: when ambivalence is prevalent, change leaders should create
conditions that will increase the likelihood that people will speak up about concerns
- Negative feelings: concerns and negative reactions toward change develop for a variety of
reasons. Perception of the negative consequence of the change may be a reality.

Common causes of negative reactions

- Flawed communication process.

- Concern that the change has been ill-conceived.
- Lack of experience with change or locked into old habits .
- Prior negative experience with a similar change.
 - Prior negative experience with those advocating change.
- Fear that they lack skills they will need to perform well.
- The negative reactions of others that recipients trust &/or with whom they will have to work in
the future.
- The change process is seen to lack procedural or distributive justice and breach their “contract”.
- Negative consequences perceived to outweigh the benefits.

The psychological contract

- The psychological contract represents the sum of the implicit and explicit agreement we believe
we have with our organizations
o Perceptions of the terms of our employment relationship and include our expectations
from ourselves.
o Expectations for ourselves and for the organization including organizational norms,
rights, rewards, and obligations.

Predictable stages in the reaction to change

- Before the change: people think something is in the wind, but they do not know exactly what it is
or how it will show itself  uncertainty, rumors, confusion, anxiety, worrying
- During the change: individuals may feel overwhelmed by events to the moment of
immobilization. Individuals may hold onto the past and experience anger  insecurity, a sense of
loss, unfairness, shock
- After the change: people begin to accept the change and acknowledge what they lost. They begin
to let go of the past and start to behave in more constructure ways.

Three specific factors have an influence on how people adapt to change

- Personalities & Experiences:

o People who have a low tolerance for turbulence and ambiguity tend to be most
comfortable in stable environments
o People who have a high tolerance for turbulence and uncertainty will find stable and
unchanging environments unsatisfying after a period of time
o Regular exposure to positive change can make individuals accustomed to change and less
resistant to it.
o Sustained period of continued success with a strategy can lead to becoming trapped in
incompetence.
- Co-workers’ influence:
o Supervisors/managers have a significant influence on how the change is perceived and
reacted to by their direct reports.
o When coworkers are ambivalent about the desirability of the change, one can see
skepticism in others as they sort out their own feelings about the matter.
- Change leaders:
o If interest and perspective are recognized, they trust these leaders, then they likely to
respond positively.
o If change leaders recognize and deal with the issues, this will help.
Steps to minimize the negative effects of change

- Engagement: when coupled with the personal involvement of engaged leaders and a meaningful
degree of employee involvement in decisions that affect them, individual adaption, and
acceptance are advanced.
- Timeliness: timely communication is crucial for constructive handling of employee’s concerns and
frustrations
- Two-way communication: change communication needs to be two-way as change leaders need
to be open to learning as much from exchanges as followers.

Influence tactics

- Pull strategies are the most effective

o Inspirational appeals (shared values and ideas) and other influence tactics designed to
attract and pull people toward change
o Consultation: seeking the participation of others.
- Combination of pull and push strategies shows intermediate effectiveness
o Rational persuasion, ingratiation, personal appeals (friendship and loyalty), and
exchange/negotiation tactics.
- Push strategies are the least effective
o Use of facts, logic, and/or pressure to push people towards change.
o Legitimating tactics: framing requests as in line with policy and authority.
o Coalition building.
- See slides for an explanation of all influence tactics!

Make continuous improvement the norm

- Adopt continuous improvement approaches.

- Promote ongoing employee engagement with change.
- Create organizational agility and resiliency.
- Institutionalize change.
- Encourage experimentation and pilot programs.

Avoiding the recipient trap

- Change recipients can gain power and enhance their self-efficiency by demonstrating initiative,
presenting ideas, taking actions, and attempting to make a difference to avoid the recipient trap.

The role of data

- Clarify expectations
- Access progress and make mid-course corrections
- Assess the extent to which initiatives are being internalized and institutionalized.
- Assess what has been ultimately achieved
- Set the stage for future change initiatives
Selecting and deploying adequate measures

- When complexity and ambiguity is low, choose more precise, explicit goal-focused measures.
- When complexity and ambiguity is high, choose more approximate measures, focus on vision and
milestones and learns as you go.
- When time to completion is short, choose more precise, explicit goal-focused measures.
- When time to complexation is long, choose more approximate measures, focus on vision and
milestones and learn as you go.

Four levers of Control

- Interactive control systems: help sensitize change leaders to environmental shifts and strategic
uncertainties and the relevance of these on the framing of the change initiative.
- Boundary systems: change leaders know what sorts of actions are appropriate and which are
viewed as unappropriated or off-limits.
- Belief systems: values and beliefs that underpin the culture, so that the change agent can appeal
to higher-order values and the core values of the organization to motivate people and reduce
resistance.
- Diagnostic/steering controls: a traditional system that focuses on key performance variables, so
that change managers will understand these and can modify systems to encourage new, desired
behaviors

The Balanced Scorecard

- Integrates measures into a relatively simple way of tracking the critical success factors. Four
categories of goals and measurement data need to be highlighted:
o Financial: to succeed financially with the change, how should we appear to our
stakeholders?
o Company’s relationships with customers: to achieve our change vision, how should we
appear to customers?
o Internal business processes: to achieve our change vision in ways that satisfy our
shareholders and customers, what business processes do we need to excel at?
o Learning & growth: to achieve our change vision, how will we sustain our ability to
change and improve?

Week 5
Different perspectives

- Unitary view  Harmony Model: realizing common goals, conflicts are rare because managers
will remove conflict, and managers lead the organization to achieve shared interest.
- Pluralist view  Conflict Model: there are individual and group interests, conflict is inherent to
the organization, and power is crucial to understand how organizations work.

Sources of Power

- Power: the capacity to influence others to accept one’s ideas or plans.

o Resource power: the access to valued resources in an organization.
o Process power: the control over formal decision-making arenas and agendas.
 o Meaning power: the ability to define the meaning of things.

Stakeholder analysis

- Stakeholder: anyone who is influence or could influence the change you wish to make happen.
- Stakeholder analysis to:
o Understand the interactions between key stakeholders.
o Understand the relationships and power dynamics that underpin the web of
relationships.
o Additional information.

Culture & Three levels of analysis of culture

- A pattern of shared assumptions, that was learned by a group, as it solved its problems of
external adaption and internal integration, that has worked well enough to be considered valid,
and therefore is taught to new members, as the correct way to perceive, think, and feel in
relation to problems.
o First level – Artifacts: visible aspects that include everything from how employees dress
and the design of an organization’s building to its structures and processes.
o Second level – Beliefs & Values: include an organization’s mission, vision, and strategy.
o Third level – Underlying assumptions: assumptions that have become so integrated and
so much a part of a group’s thinking and perspective on the world that they are not
questioned.

How to plan cultural change?

1. Assess the current situation

2. Have a good idea of what the aimed-for situation looks like
3. Work out the “How” and “What” of moving the organization, or part of it, away from the current
culture to what is perceived to be a more desirable one.
4. Intervene to bring cultural change
5. Monitor outcomes and adjust as needed.
Week 6
Dominant Improvement Approaches

Lean BPR Six Sigma TQM

General description Both philosophy and a set Fundamental rethinking Meta-routine to reduce Holistic management
of tools and practices and redesign of business variation in the process practice and philosophy
processes to achieve by using an improvement with three principles:
dramatic improvements specialist, a structured customer focus,
method, and continuous
performance metrics improvement, teamwork
Kind of change Incremental change / Radical change approach Incremental change / Incremental change /
(To all: planned change) continuous improvement *More reactive continuous improvement continuous improvement
*Both anticipatory and * Hard to say whether *Both anticipatory
reactive anticipatory or reactive (employee involvement)
and reactive (customer
demand)
What to change Minimal costs, no waste (7 Reduce costs and lead Reduce variation in Quality, many practices,
(To all: the customer wastes) achieved by: times, focus on the processes. Very broad apply a contingency
perspective is relevant) *Eliminating non-value- process scope, no clear directions approach  fit between
adding activities *Redesign the strategic on what should be characteristics and the
*Reduce variability and value-added changed to reduce kind of activities
processes variation
*Deep change must occur
in the key behavior levels
of the organization
External environment Depends on the Unit of Project is often initiated Only taking into account External environment
Analysis. Lean by, strong economic- and customer requirements seems to be a
implementation should fit technical factors – 3 major contingency factor
with stable demand and forces:
production environment 1. Customer expectation
2. High level of
competition
3. Persistent change as
pre-requisite in some
 markets
Internal environment
- Scope Both cultural (lean as a Very large. Every process Problem and project No pre-determined
philosophy) and is questioned towards definition are important scope
operational (tools and meeting customer elements
practices) requirements
- Capabilities Strong leadership and The top-down leadership Training principles & Mostly strong leadership
change teams who require style has to anticipate and technical knowledge from top management
problem-solving and cope with resistance
motivational skills
- Readiness to Readiness from all levels Not much attention Leadership capability and Some readiness of
change and department finding root causes to employees is needed
increase readiness
- Power Yes Not a key focus Yes, stakeholder analysis Employee empowerment
required
- Capacity No Yes Yes Yes
- Preservation No No No No
How to change No explicit structure: Structure: DMAIC involves different Top management is
(who has which role in *Top management = *Top management = organizational members important, every
improvement projects?) change initiator change initiator at different steps in the employee in the
*Middle management = *Cross-functional teams = method: organization needs to
change change implementers *Champion in define- change
facilitators/implementers *All stakeholders = step
*Employees = change change recipients * Black belt is project
recipients/implementers leader in all steps
* Green Belt in measure,
analyze, and improve
*Process Owners in
control-step
- Process steps 5 principles of lean: 4 basis steps: DMAIC, Design for Six Plan-Do-Check-Act
General: 1. Specify value 1. Identify processes to be Sigma (PDCA)
*Collection of data 2. Identify value stream change and prepare for * Define: Problem *Plan for changes to
* Evaluation of potential 3. Avoid interruptions in change selection and benefit bring about
improvement areas value flow 2. Analyze current analysis improvement
*Creation and 4. Let customers pull value situation * Measure: translate * Do changes on a small
implementing solutions 5. Start pursuing 3. Design a new situation problem into measurable scale first to trial them
*Iterative and perfection 4. Test and implement form and current state *Check to see if changes
sequential processes changes * Analyze: identification are working and to
of root causes investigate selected
* Improve: design and processes
implementation *Act to get the greatest
* Control: adjust of benefit from changes
process management
and control systems