Change Management

1. Change Management Prof. Steve Phelan Lecture 6

2. Today • Awareness of Change • Meeting the challenge of disruptive change (2000) • Motorola: The Next Generation (2000) • LMZ Chs10-12 • Schein, Intergroup problems in organizations (1980) • Schein, Organizational Culture (1990) • Fox, Sociotechnical System Principles (1995)

3. Meeting the challenge • Some points • “It’s not that managers in big companies can’t see disruptive change coming” • Nor do they lack resources to confront them • Function (and dysfunction) lies in: • Processes • Particularly back-office resource allocation processes • Values • Prioritization of customers/jobs/orders/projects • Reflect cost structure or business model • Gross margin and growth expectations make small markets unattractive

4. Meeting the challenge ctd. • Culture • Locus shifts from resources (people) to values and processes (crossing the chasm) • When processes and values become assumptions rather than conscious choice then culture is created • Disruptive technologies • Are initially inferior to mainstream offerings and inconsistent with company values • No company has a routine for handling disruptive technologies (except maybe Microsoft) • Small companies have the values for embracing disruptive change

5. Meeting the challenge ctd. • Solutions • Create new structures to develop new processes and values • Problem – overcoming existing assumptions • Spin out independent organizations • Problem – CEO might forget about it • Leads to agency problems, lack of focus, money pit • Acquire a different organization with the right processes and values • Problem – how to preserve the values/processes • OR merge resources into existing processes • Need to know reason for acquisition

6. Motorola: The Next Generation • Apply the framework to: • Yincom and Yangcom • AA/UA vs. Southwest • What is the cause of Motorola’s failures? • From Christiansen’s framework? • Generally? • What should they do to create more awareness of the need to change?

7. Debunking two myths about change (from an article about ethics) • It’s easy to change • Change decisions are complex • Awareness is required • Org context creates additional pressures and complexity • Failure to change is simply the result of a few bad apples • Most people are the product of their context. They look up and look around and they do what others around them do or expect them to do

8. Schein on Conflict • Inter-group Conflict • Focus on group level change • Discusses Sherif’s famous boys’ camp studies • Ingroup/outgroup phenomena • Solutions • Locating a common enemy (or using superordinate goals) • Bringing leaders (or subgroups) into interaction • T-groups, rotation, avoiding win-lose situations

9. Schein on Culture • Diagnosis • Can culture be measured with surveys? • What are clinical, analytical, ethnographic, historical approaches? • What are the importance of artifacts, anomalies, assumptions? • Does cultural analysis provide a “roadmap for future action”? • Dynamics • How is culture created (and changed)? • Highlight threats, articulate new assumptions, bring in new blood, reward the new/punish the old, seduce or coerce into new behaviors, visible scandals/destroy traditions, create new symbols and rituals • What is the role of socialization?

10. Socio-technical Systems • Guidelines • Dual focus and joint optimization of social and technical systems • Always a choice of how much control and coordination is left to people • Design of work system uses an action research approach – PDCA • Sharing of power is a generic feature • Gainsharing is also important • Participative or self-managing: coaching and support not direction • Simple structures, complex tasks not complex structures and simple tasks – job enrichment