Recognising The Need For Change and Starting The Change Process

1. Recognising The Need For Change andStarting The Change Process Chapter 4 & 5 THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

2. Recognising the need for change • Managers may fail to recognise the need for change because • They pay insufficient attention to the wider environment or • They fail to recognise the implications of what is happening around them • Failure to recognise what is happening around may lead to strategic drift, and operational inefficiency • Strategic drift occurs when a company, that has enjoyed considerable success, responds far too slowly to changes in the external environment and continues with the strategy that once served it very well. This is despite the fact that the company is obviously increasingly out of touch with external trends. • Nadler and Shaw [1995] illustrate one of the paradoxes of organisational life– ‘Success begets failure’ • The call it the ‘Trap of Success’ THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

3. The Trap of Success • Nadler and Shaw say • Success leads to Growth • Growth leads to Complexities & Diversification • Complexities lead to a shift of attention away from how the organisation relates to the environment. • The Outcome of this Shift of Attention • Decreased Customer focus • Increased Cost • Loss of Speed • Less Innovation • Disabled Learning

4. The trap of success Prolonged period of success (Adapted from Nadler & Shaw 1995) Outcomes Decreased customer focus Increased Cost Less innovation Environmental Disturbance Poor external alignment Declining performance Success Syndrome Complacency Arrogance Codification Internal focus Learning disabled Death spiral Denial & rationalisation Do more of the same THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

5. Sensing the need for change and formulating a change agenda Sensing a need for change and formulating a change agenda begins when individuals notice and respond to what they perceive to be significant internal and external events. Pitt et al. (2002) observe the some managers with high intuition and context particular experience may be sensitive to even weaker signals of internal and external events. Top teams populated with diverse backgrounds are more likely to sense wider range of internal/external issues and are less likely to be learning disabled and caught in the trap of success. Cohen and Ebbesen’s study (1979) found evidence to supports this view. However, Chattopadhyay et al. (1999) in their study found little support for this view. They found that group thinking may undermine the top management’s ability to recognize the need for change. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

6. Top team may not always notice significant events ‘Need for Change’ Recognition may be hampered by: • Lack of diversity in functional background and experience of members of top team • Their commitment to a strong ideology (mental model) that marginalises dissenting views. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

7. A Word About Roles During Change • There are four key roles necessary for successful and sustained change efforts. These roles tend to cascade down the hierarchy of an organization. They include the roles of • Sponsor, • Implementer (or Target), • Agent and • Advocate.

8. Sponsor • The person with the authority to make a change happen. • Has direct authority over the individuals who will implement the action or change. • Has access to and/or control over the resources (money, time and people) needed to implement action or change. • Has a clear vision, identified goals and measurable outcomes for the change initiative.

9. There are two types of sponsors: • 1) Executive or Initiating Sponsors – usually the top executives in the organization and • 2) Sustaining Sponsors – usually those who are responsible for sponsoring the change in their own areas or units. The change may be initiated by an Executive Sponsor and moved forward by the Sustaining Sponsor.

10. Implementers or Targets • The people who are authorized to implement the change (and often are also expected to change something about the way they are doing their work). • Have direct line responsibilities to the Executive or Sustaining sponsor. • Most effective when they clarify their questions and concerns about what is expected with their Sponsor at the beginning of a change • Provide sponsors with information about issues that might block or impede success – thereby providing an essential feedback loop in the system • Requests necessary resources that leverage and reinforce success)

11. Change Agent • Can work with both the sponsor and the implementers but does not take on their roles (e.g. functions as a Consultant or Coach). • Can be internal or external to the organizations • Is focused on helping the sponsor and implementers stay aligned with each other • May act in a number of roles - data gatherer, educator, advisor, facilitator or coach in order to aid sponsors and Implementers in achieving success. • Must be sponsored to work with the Implementers or Targets - has no direct-line authority over the Implementers or Targets.

12. Advocates • Has a good idea and is in search of a sponsor • Can occupy any role in the organization • Most effective if they show how their idea is compatible with issues important to the Sponsors’ change projects and goals

13. Roles

14. Playmakers Playmakers are individuals who influence the organisational Agenda Top managers can encourage other organisational members to perform “playmaker” roles by seeking out relevant opinion from those close to the operating environment Pitt et al (2002) borrow the term playmaker from football where it refers to the restless, energetic, midfield role that links play, energises the team and makes things happen. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

15. Roles People Play in Influencing the Agenda for Change • Upward-Facing Advocates They promote ideas and concerns via rational arguments. • Upward-Facing Emotive Champions They use emotions and polymics rather than rational arguments to manage impressions and champion issues • Democratic Brokers They facilitate lateral communication among peers, broker ideas and canvass opinions.

16. Upward Facing Advocates • They promote ideas and concern via rational arguments. • Those who play this role are most effective when the are perceived as experts who are able to present persuasive technical evidence and well-crafted arguments. • They are able to provide clear measures of feasibility, benefits and proof on paper.

17. Upward-facing Emotive Champions • They use emotion and polymics rather than rational arguments. • Those who adopt this approach are often motivated by self interest allied to a genuine concern for the future of the organisation.

18. Democratic brokers Democratic brokers are playmakers who facilitate lateral communication among peers. They tend to be respected organisational members with perceived expertise who function as interpreters, ideas brokers, and opinion canvassers. They use their nodal position in communication networks to originate and trade concerns with peers. Because they bring together different groups and interests, brokers can help promote diverse interpretations of situations and point to opportunities and threats that might not be identified by a narrow group of senior managers acting alone. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

19. Sensing the need for change Widening the opportunity for organisational members to engage in playmaking can greatly improve an organisation’s ability to recognise the need for change Actively seeking out and debating alternative perspectives and interpretations can help ensure that the possibility of new threats or opportunities are properly considered THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

20. Failure to recognise the need for change in good time • Promotes a reactive approach to change • Limits the possibilities for planning and involving others in the change process THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

21. Performance indicators Discrepancies between actual and desired performance can signal a need for change THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

22. Effectiveness can be considered from a number of different perspectives • Purpose • Stakeholder perspective • Level of assessment • Alignment • Time perspective • External benchmark • Constraints and enabling factors THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

23. 1. Purpose • Religious orders and charities have to be financially viable but their purpose is not to make a profit. • Indicators of effectiveness need to be related to the purpose of the unit or the organization, THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

24. 2. Stakeholder perspective Different stakeholders (senior managers, other workers, customers, suppliers, shareholders, local residents, regulatory bodies) may use different indicators to assess the effectiveness of an organization. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

25. 3. Level of assessment • Different criteria may be used to assess effectiveness at different levels (individual, work group, department, strategic business unit, total organization). • Criteria might relate to linkages (e.g. at the individual level, good citizen behaviour might be as important as task performance). THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

26. 4. Alignment • Up, down, across, within and without the organization • Upward alignment [forces or pressure from the bottom of the organization moving upward to initiate change. • Downward alignment [forces or pressure from the top moving downwards to bring change. • Internal Alignment [alignment with in the organization’s internal resources. • External Alignment [alignment of the organization with its external environment THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

27. 5. Time perspective An organization that is not very profitable today may be incurring higher costs in order to invest in new plant, product development and training in order to guarantee greater profits over the long term. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

28. 6. External bench mark Performance in one unit may need to be bench marked against performance elsewhere in order to assess how effective it is. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

29. 7. Constraints and enabling factors For example, a budget airline’s decision to open a route to one location rather than another might have a positive effect on the performance of the local area unit of a car hire firm that has little to do with factors internal to that unit. This might need to be taken into account when assessing the effectiveness of that unit relative to other units. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

30. Discussion topic • How is the effectiveness of your unit/department assessed. Share views with colleagues and identify common themes and important differences. • Are the most appropriate criteria used to assess the effectiveness of your unit? If not, explain why. • Do they help to signal the need for change? THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

31. Starting the Change Process Beliefs about the Change Agency To what extent can managers intervene and make a real difference to the effectiveness of your organization? The deterministic view holds that managers are constrained by external factors. The deterministic view is that the ability of the manager to influence change is limited because the main determining forces lie outside the organization and the realms of strategic choice for managers. Example—No matter how good a CEO is he can do little during an economic downturn. The voluntaristic view emphasizes the role of human agency and asserts that managers can make an important difference.The voluntarist view rejects the assumption that managers are powerless and argues that managers are the principal decision makers who determine the fate of the organization. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

32. Beliefs about change agency Change agency refers to the ability of a manager or other agent of change to affect the way an organization responds to change. Are managers pawn that are affected by change or are they initiators of change [change agents]? Sometimes the limiting factor on change agency is not conceptual knowledge or familiarity with appropriate intervention tools. It is rooted in the beliefs about the ability to make a difference: • Confidence in their own ability to affect outcome • Locus of control • Learned helplessness • Motivation to change • Understanding of conceptual models of change • Change Management Skills THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

33. Discussion topic • To what extent can managers at your level make a difference? • What are the main factors that affect their ability to make a difference? THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

34. Translating recognition into a desire for change “Those who are most likely to want to change are those who are basically successful but who are experiencing particular problems. Next are those who are always successful The least likely to understand and accept the need for change are the unsuccessful” Pugh 1993 THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

35. Starting the change process Selecting the change agent Developing the change relationship Identifying the client/target group Clarifying the issues THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

36. Selecting the change agent: insider or outsider? Insiders may take on the role when: • They have the required competence and commitment • There are insufficient resources to buy-in an outsider • Issues of confidentiality and trust prohibit use of an outsider • It proves difficult to identify a suitable outsider THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

37. Outsiders may be invited to take on the role of change agent when: There is nobody on the inside who has the time and competence to act as the facilitator of change It is felt that all the competent insiders have a vested interest and are less acceptable to all parties than a neutral outsider. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

38. The development of a change relationship is affected by: The client’s need for sympathy versus objectivity Perceptions of the change agent’s motives and loyalties Perceptions of the change agent’s competence THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

39. Identifying the client and/or the target group for change Who owns the problem and is responsible for doing something about it? Who can have a direct impact on the change issue? THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

40. Clarifying the issues The presenting problem may only be a symptom of an underlying problem The presenting problem may be proffered in terms of solutions (we need help with team building) THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010

41. Exercise Group 1. With reference to the paper by Pitt et al: • Do managers in your organisation make appropriate assumptions about how the agenda for change should be formulated? • Is there sufficient diversity among active playmakers in your organisation? • To what extent is effective playmaking undermined by lack of networking skills, political competence, advocacy and the ability to inspire others? Group 2.Based on your experience, list any problems you have encountered in the early stages of the change process that have been associated with: • choice of change agent, • quality of the change relationship, • identification of the group to be targeted for change, • specification of the change issues. THE THEORY & PRACTICE OF CHANGE MANAGEMENT, John Hayes, Palgrave, 2010