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by Stephen Annandale 15 Nov 2001 Diploma in Financial Management Relevant to Paper D4

Change happens all the time. It may be small-scale, involving the change of people and therefore the creation of new teams; it may be to do with the introduction of new technology, with the ‘what’ and the ‘how’ of the clinical or other working processes; or it may be to do with fundamental change in the nature of the business, market and internal workings of an organisation.

The change process is often described as logical and sequential:

Unfortunately, neither people nor change is rational or logical. And yet we all pretend we are, and that decisions are based on a well argued, objective and well-informed basis. In reality the change process means:

To quote Tony Turrill1, Change is characteristically uncertain, it is resource intensive, generates conflict and polarises opinion, it crosses organisational boundaries and presents new unforeseen alternatives:

Change is helped by:
faith, imagination, vision, leadership, patience and persistence, planned flexibility, stable working teams, release from current work, committed people, intense, focused activities, multidisciplinary work, horizontal trading, early boundary management.

Change is hindered by:
elaborate analysis/forecasting, invariant procedures, expectations of rapidity, tight targets, career moves of key people, change work not recognised, assigned staff, organisational distractions, specialisation, linear hierarchies, professional tribes.

The change process is inevitably messy and complex, because to be successful it relies on people being opportunistic, innovative and experimental.

The change process, simply described, is moving from one state to another as shown below in Figure 12.

Figure 1

The process as described by Edgar Schein3 has three main phases:

1 Unfreezing or Ice Breaking
An event or innovation causes the present state to ‘unfreeze’, to become malleable. This could be an external event or policy change, an internal innovation or an opportunity to be grasped. It can be ‘organic’ or ‘planned’ to create a motivation and readiness to change.

People will not seek change, on the whole, unless something is not working properly or satisfactorily. Distancing happens when people discount the information which is telling them that ‘things are not working properly’. The paradox is that often people would prefer to keep things as they are, with the associated organisational headache, than be faced with changing their behaviours, attitudes or beliefs. Accepting the ‘disconfirming’ information may mean some loss of face or self-esteem – even more reason to avoid it. The ‘disconfirming’ feedback doesn’t have to be negative, it can be that something better can be described and sought.

Schein’s theory states that this ‘disconfirming’ information alone will not be sufficient to bring about change. It needs to be supported by ‘the induction of guilt or anxiety’, and to affect the egos or values of those involved. Some important goal, value or personal ideal needs to be violated for people to be stimulated to act. The dilemma is that this reinforces the stress associated with the ‘disconfirming’ information.

This raises the essential element of creating psychological safety. If ‘unfreezing’ brings about personal humiliation, loss of face and/or self-esteem, people are not only damaged, but the change will fail because of the strength of the defensive mechanisms employed.

People have (at least) three levels4 of need at work:

• psychological and emotional safety – to be open about their concerns and fears, trusting that the organisation will be honest and supportive;
• feedback and recognition – positive reactions to them as individuals and what they contribute, to feel part of the process not a cog in the wheel;
• stimulation – their creativity and innovation is encouraged and fostered, events and activities with which they can engage and benefit.

Unfortunately in many change processes people get plenty of stimulation – workshops, focus groups, meetings, training – but in the absence of emotional safety. As a result they cannot openly and innovatively engage with the issues, and the outputs of the ‘stimulation’ activities may be disappointing to those who designed and ran them.

The dilemma for the organisational development practitioner, therefore, is to facilitate the ‘unfreezing’ process while enabling the client and others to feel psychologically safe, so they can hear, and respond to, the threatening issues. One of the issues for leaders is often that of creating ‘psychological safety’ just by being involved, by being reassuring and by emphasising how important it is for people to feel that safety before they can really change. Unfortunately, there is a tendency sometimes, to move too quickly into the change process itself without paying sufficient attention to the ‘unfreezing’ phase, often in a misguided attempt to soften or avoid the pain and anxiety.

2 Changing through cognitive restructuring
The second phase in Schein’s process is that of changing through cognitive restructuring or how we perceive things. He states that there are two basic ways in which we can be helped to change how we perceive things:

• through a role model;
• via the opportunity to scan the environment for new possibilities.

Leaders acting as change agents can often be seen, and respected as, role models by their organisations. This means it is very important that their behaviours and attitudes are congruent with the point of view they are expressing, and that they realise the potential power this gives them and the risks this poses.

The dilemma for the leader as change agent is that organisations are more likely to recognise and take up new ideas when they are ready to hear them, no matter how ‘good or appropriate’ the ideas may be. Being ready means having been through the ‘unfreezing’ phase.

3 Refreezing
Changing so that it can’t change back. In time-outs and workshops people often generate and agree new or different ways of doing things and yet, far too often, they go back to the workplace and revert to old ways of doing things. We all know how hard it is to change our personal behaviours. To do things differently we need to ‘unlearn old habits’ and ‘ways of relating’. It is the unlearning which is difficult, not so much the learning. The change ideas/plans need therefore to be fully accepted and integrated within the individuals concerned. They need to be able to create an identity or self concept which accommodates the new way of doing things. This will only work if those with whom people interrelate reinforce that new ‘identity’. This does not happen if left to develop ‘naturally’. The forces to retain old habits far outweigh the forces to behave in different ways. There is a need to change that for which people get good feedback and recognition. This needs to be congruent with the new ways of working. If the new way of working requires innovation and experimentation but the old way of performance management/punishing risk taking is left unchanged, innovation will not thrive.

The refreezing process will therefore involve attention to:

• the systems which support the work process;
• the rewards and what they are given for;
• the structures employed;
• the culture and relationships;
• relevant training and development.

‘Too many change programmes fail because they attempt to restructure the perceptions, thoughts, attitudes and behaviours of those concerned before adequate ‘unfreezing’ has taken place. Too many changes fail to survive because no attention is given to whether the new learning fits either into the personality or the significant relationships of the learner. Change is a complex, drawn-out process. Crisis conditions can sometimes speed it up, but the early stages cannot be skipped.’5

Knowing where you are going and adjusting course
“If you don’t know where you are going, any road will take you there.” The first step is to know where you are going. This is not to imply that the future goal will not change as the change process rolls out. It does mean, though, that there needs to be a vision for the future, clarity about direction of travel and terminal goals. There needs to be an overall direction to the change processes so that the range of activities is purposeful. Organisations which are successful at this are clear about the overall purpose of the organisation, share a vision for the future and have a set of values and beliefs which govern the way they operate. “They also have leaders” Tony Turrill.

Sharing a vision for the future is central to any change process. Visions cannot be directed, they arise from leadership and the capacity to have a helicopter vision of the context and the possibilities.

Change is an organic process. Plans need ‘in-flight adjustments’ depending on their data coming onto the radar screens. Unforeseen opportunities and other intervening variables will affect the flight course set. Responding to the inevitable intervening variables needs feedback loops in order to take corrective action: Refer to Figure 2.

Figure 2

But this often isn’t good enough. Refer to Figure 3. The future doesn’t come in straight lines: we can predict that it will be unpredictable, at least some of the time. Multiple scenario planning will show how variable the future might be. Nimbleness and flexibility will be vital. It may be that the decision will not be simply to redirect the course of action to the original target but to modify or completely change the end point aimed for.

Figure 3

Refer to Figure 4. Part of the skill of fusing feedback loops, environmental scanning and mid-flight course corrections is knowing, and encouraging/enabling others to anticipate that the target will be modified. This double loop of feedback and reflection becomes what Argyris calls triple loop learning when the users acquire the internalised ability to learn from what is happening as a normal way of working.

Figure 4

Managing the transition
Another way of structuring the change process is to break down the transitional process into ‘chunks’ of activity, as given in Figure 5 below. This illustrates the range of issues which need to be addressed and managed if the organisational change and learning is to be achieved.

Figure 5

Figure 5: The transitional process
In all change processes there are three stages: where you are (present state), where you want to be (future state), and the ‘middle bit’ (the transition state). All these states need managing and represent more work: more work than continuing in the present state alone. This means an additional load on many people. Unfortunately, change is too often under resourced as it is, with the false assumption that the additional change agenda can just be integrated. This is a delusion. Change is messy and people need to understand the process as clearly as possible so that they can allocate resources to the interventions.

Depending on the nature and extent of the change there may need to be a project manager and project/task groups involved in shaping and implementing interventions. These task groups work well if their membership represents a ‘diagonal slice’ across the organisation, especially if part of the change process is to move away from hierarchical ways of working. Diagonal slice groups are very useful in taking the ‘temperature’ of the organisation’s response to the change process. A simplified version is in Figure 6. This adds the overview point that someone has to manage the whole system including the two sets of current operations, transition and new state.

Figure 6

Figure 6: Managing the Management
As a consequence it is vital to recognise the need to invest management energy, time, talent in:

1. Managing what we need to do now.
2. The transition – change management.
3. Managing the new, different state.
4. Managing the whole of the above.

On the above rests the effectiveness of change and the success or otherwise of leaders.

References

1. Tony Turrill, Change and Innovation, IHSM publication 1985, now out of print.
2. Source: Dick Beckhart.
3. Edgar H Schein, Process Consultation Volume 2 Lessons for Managers and Consultants, publisher Addison Wesley.
4. Julie Hay, Donkey Bridges for Developmental TA, Sherwood Publishing.
5. Edgar H Schein, Process Consultation.

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