The management of change
| by Robert Phelps 01 Jul 2000 Diploma in Financial Management Relevant to Paper D4 |
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Organisational change is a constant feature of business life today and is caused by a host of factors...
These factors include changes in:
- the individual and group
- structure and culture
- business strategy
- systems and process re- engineering
- technology and the arrival of e- commerce
- the market
- the competition
- the law and social attitudes and values.
To manage change one must firstly understand what we mean by the term. Broadly speaking, change can be either:
- a gradual/incremental process converting the organisation to a new state, or
- fundamental/revolutionary - an all encompassing process completely transforming the business.
The former should be happening frequently over the life of a business and the latter infrequently. As we shall see at the end of the article, a successful business is an organic entity, always on the move with a corporate culture that embraces change (following the Peters and Waterman model). In such businesses the need for fundamental revolutionary change is minimised. Both types of change do, however, have to be carefully managed if the business is to move successfully from its present to its desired state.
The purpose of this article is to talk through certain writings in this area, to tell you what to look out for in the exam and to trigger your own ideas with regard to change management.
Specifically we will consider:
- force field analysis
- reasons for resistance to change
- crisis and change, learning and unlearning
- change strategies generally
- the essential features of a change management strategy;
- elements of an effective change process.
Force Field Analysis
Despite initial appearances, this really does have nothing to do with Star Wars. Rather we are considering the works of Kurt Lewin with regard to tools that can be used in the change management process - much more down to earth!
In this connection it is useful to distinguish between
- the forces that make for change
and - the forces that resist change.
This distinction is often drawn by authors, indeed those whose thinking is contained within fundamentally different value systems. For example, from a psychological perspective Kurt Lewin’s Field Force Theory distinguished driving forces from restraining forces, whilst from a socio-political perspective, Marx, Engels and Lenin viewed all change as the result of continual conflict between different social classes. The Paper 4 Examiner would appear to be more at home with Lewin here!
There are therefore two interrelated strategies for change management:
- increase the pressures for change (the driving forces), and
- reduce the resistance to change (the restraining forces).
The former cannot work alone because increased pressure may well generate increased resistance. The successful change management strategy will therefore combine both in order to achieve the desired degree of change -
| DRIVING FORCES Forces making for change ê THE DEGREE OF CHANGE At the level of the: Individual Group Organisation Society é RESTRAINING FORCES Forces resisting change |
Reasons for Resistance to Change
Different individuals, groups and organisations and societies possess varying capacities to accept change. There is usually resistance to it for a number of reasons - in the exam look out for these in the case scenario:
- Changes are seen as criticism of existing methods, personnel or performance.
- Anxiety over whether the changes can be coped with or absorbed, and what it will take to come to terms with the changes.
- Uncertainty about the nature of the changes. This is especially fuelled by the absence of information - rumours and distortion will fill the vacuum left by hard facts.
- Reluctance to write off the investment (often very personal) in existing arrangements.
- The fear of losing out since typically change creates winners and losers, and the losers may be more vocal, united or powerful than the winners.
- Perceived conflict with personal goals. Our new business direction could be at variance with what the individual wishes to achieve from the workplace.
- Belief in the unworkability of the changes. Depending on the validity of the beliefs, this could be of use to the organisation as a means of modifying or even abandoning the changes.
Crisis and Change, Learning and Unlearning
As we have seen recently with M&S (mildly) and BMW/Rover (radically) corporate crisis is a powerful spur to change. Change management issues are therefore very relevant in crisis situations. Does change have to have such a painful gestation?
Charles Handy’s views as ever are worth knowing. He claims that major change in organisations often seems to follow a predictable and harrowing sequence:
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FRIGHT
The possibility of bankruptcy, takeover or collapse ê NEW FACES New people are brought in at the top ê NEW QUESTIONS Investigations into old ways and new options ê NEW STRUCTURES The existing pattern is broken up and rearranged ê NEW GOALS & STANDARDS The new organisation sets new aims and targets |
Just think for a moment about the cultural earthquakes the above can cause in an organisation and then appreciate how interrelated are the issues of culture and change management. Look also at Handy’s four cultural types and the professional culture and figure which is most likely to embrace change and which is most likely to resist it.
Handy questions whether or not we need such powerful jolts in order to start re-thinking. The answer, he believes, is that it is possible to cope with change less painfully and so advocates a learning organisation although this in turn requires organisations and their members to learn how to learn. This usually also involves unlearning what is currently accepted!
He quotes with approval the list of characteristics given by Kanter of how organisations prevent learning. To see most of these in action in an exam scenario look at the December 1997 case of Brompton and Sons.
Change Strategies Generally
Put simply, if change is managed successfully, the business will manage to change. A superbly evaluated strategy can fail to happen as a result of a poor change management strategy. Possible change strategies are:
- Education Involving communicating and explaining the nature of, and reasons for the change. This should be done as early as possible in the change process in order to minimise the opportunity for rumours and distortions to breed and so complicate the change process.
- Participation The active involvement of those affected by the changes is a must in any change strategy. The extent and the scope of this participation must be carefully considered.
- Facilitation Those affected by the change must be helped to accept and to adjust to them. Typically this will involve training, a carefully structured reward, and counselling.
- Negotiation If there are independent power groupings, then some form of bargaining will be required involving compromise and concessions. Effective participation as above should work to minimise the potential negative consequences of bargaining.
- Manipulation This could involve withholding or distorting information about the changes - not very subtle and disastrous when leaked.
- Coercion The actual or threatened use of force in order to effect changes - needless to say not usually a very good one!
Different strategies are applied to different groups and at different stages in the change process, the aim being to avoid the vicious circle of pressure generating resistance, generating more pressure and so on.
In the exam try and select from the first four of the above, but based on the facts you have gleaned from the case scenario.
The Essential Features of Any Change Management Strategy
In the exam try and highlight the importance of each of the following features and assess their relevance in the light of the facts given in the case scenario:
- Leadership. Changes must be and be seen to be led by top management being visibly involved in the change process, backing the changes, and providing an example to the whole organisation. This is an obvious no.1 in any change management strategy but closely followed by:
- Communication. Changes must be communicated at an early stage in order to give opportunities for participation from relevant groups and individuals. The benefits of the change must be clearly communicated to individuals and groups as well as to the organisation as a whole.
- Plan the change process by developing an “action plan” which identifies who is to do what, when, where, and how. The plan needs to take into account in as much detail as possible, difficulties and uncertainties, and ideally to include contingency plans. It is often the little things that can cause the big problems.
- Cultural acceptance of change and flexibility by managers and non-managers. Again HR management policies are acutely relevant here. Note that your Examiner views culture and change management as one interrelated issue.
- Introduce the changes gradually either on a side-by-side or step-by-step basis to reduce resistance. Pilot schemes are of particular value for learning and demonstration purposes.
- Integrate different levels of change Individual, group and organisational changes should be integrated.
- The HR management aspect Change needs to be encouraged and reinforced by HR management policies and systems, notably with regard to training, appraisal and reward.
- Assurances of security should be given to those who might be, or feel, threatened by the change process.
- Mix of techniques at different stages of the change process, and for different groups.
- Monitoring of the change processes to provide feedback
to those managing the changes.
Kanter’s 10 Rules for Stifling Initiative
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To conclude, an effective change process should consist of the following elements:
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