OB-35 MGMT5013Ch8-Managing Change in Organizations

Module 8
Managing Change in Organizations
PowerPoint Presentation by Charlie Cook

Copyright 2005 South-Western. All rights reserved.
Organizational Change
Over past two decades, most organizations

have undergone change initiatives
Success rate of change initiatives has been
startlingly low; according to European execs:
20% of change initiatives were successful
63% produced some change that was not sustained
17% had no result at all
Copyright 2005 South-

Class Note: Organizational Change
Western. All rights reserved. 82
Why Is Change So Hard?
Human nature
Organizational inertia
Unanticipated consequences:
Complexity of organizations (strategic designs,
political systems, cultures)
Interdependencies of structure and process, power
and influence, values and identity

Transparency 8.1
Why Is Change Difficult? (contd)
Meanings of organizational change:

Change in organization design
Organization chart, integration mechanisms, systems for
motivating people
Change in power structure
Changes in who makes decisions, which individuals and
groups influence decisions, what interests are served
Change in culture
Change in norms, values, mental models, shared
assumptions about the organization and its environment

Stage Models of Change Processes
Kurt Lewins model of organizational change:

Three-stage sequence: unfreezingchange
refreezing
Lewin saw organizations as social systems
highly resistant to change because of:
Human nature
Organizational inertia
Lewins work laid foundations of field of
organizational development (OD) and other
stage models
Stage Models of Organizational Change

Class Note: Organizational Change Figure 8.1
Dimensions of Change Initiatives

Figure 8.2
The Myth of the Hero-CEO
Significant change only occurs when it is driven

from the top
There is no point in going forward unless the
CEO is on board
Nothing will happen without top management
buy-in

Western. All rights reserved.
Readings: The Leadership of Profound Change
88
A Different View of Executive Leadership
Little significant change can occur if it is driven

only from the top
CEO proclamations and programs rolled out
from corporate headquarters are a great way to
foster cynicism and distract everyone from real
efforts to change
Top management buy-in is a poor substitute for
genuine commitment and learning capabilities at
all levels in an organization

Readings: The Leadership of Profound Change
89
The Integrated Learning Process
Involve and engage all your employees, as well

as customers, partners, and suppliers
Identify and transfer best practices from inside
and outside the company
Integrate these initiatives with key human
resource practices
Set stretch goals

Readings: Culture Change at General Electric
810
Lou Gerstner,
Former CEO of IBM
Nobody likes change. Whether you

are a senior executive or an entry-
level employee, change represents
uncertainty and, potentially, pain.
Who Says Elephants Cant Dance? p.
77

Transparency 8.2
Phillip Carroll,
Former CEO of Shell Oil Company
Organizations are often less resistant

to change than people expect. Most
managers and employees have the
drive and capacity to put their ideas
into action. But they get frustrated if
their freedom to act and speak out is
stifled.
The Dance of Change, p. 205

Transparency 8.3
Acme Minerals Extraction Company:
Underlying Causes of the Problems
Strategic design
What is the formal organizational structure?
Political
What is causing the conflicts among the internal
stakeholders?
Cultural
How would you describe the organizational culture?

Acme Minerals Extraction Company

Transparency 8.5
What Steps Did Karen and
Her Group Take in Wichita?
Step 1: Monthly problem chats (voluntary)
Step 2: SPITS teams (Select a Problem and
Implement a Tailored Solution), cross-functional
teams of 1215
Step 3: Baseball games between the brains
and the brawn

Transparency 8.6
Why Were the Action Steps Successful?
The presence of Bill Keller as the local project

head
The sequencing of the change initiative
Patience
Sense of crisis in Wichita facility
Sense of shared ownership of problem solving
Luck

Lubbock: Different Results
No one showed up at the monthly problem

chats, so the change team made them
mandatory
No one showed up to play baseball until they
provided food and beer, but people seem to be
coming to eat and drink with their own in-group,
rather than getting involved
They have formed cross-functional teams, but
the results are disappointing

Lubbock: Different Problems
Different performance Lack of effective

issues localization
Different expectations Goal displacement
No Keller Karen
No local stakeholders Daniels
NIH (not-invented-here)

Actions Jimenez Should Take at Lubbock
Persuade Keller to move to Lubbock

Move other veterans of the Wichita initiative to
Lubbock
Find a Keller equivalent for Lubbock
Build a local coalition
Send some of the Lubbock operators and
engineers/technicians to Wichita
Set up a Change Day either at Wichita or at
Lubbock
Actions Jimenez Should Take (contd)
Set up an advisory committee of locals to work

with the change team at Lubbock
Replace the external consultants at Lubbock
with an internal team
Karen should go to Lubbock
Daniels should go to Lubbock and support the
initiative

Fostering Long-Term Change
Recognizing what needs to be localized and

what can be generic in the change initiative at
each site
Building a shared mental model of the change
initiative among corporate management
Identifying ways to leverage learning across the
sites using a pull system to initiate information
transfers and interactions

Closing Note: The Three Lenses
Strategic design lens

Performance and measurement
Political lens
Power and influence
Cultural lens
Meaning, trust, and identity

Stages in the Change Process
at General Electric

Payoff Matrix


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Module 8

Managing Change in Organizations

PowerPoint Presentation by Charlie Cook

Over past two decades, most organizations

Copyright 2005 South-

Copyright 2005 South-

Meanings of organizational change:

Copyright 2005 South-

Kurt Lewins model of organizational change:

Copyright 2005 South-

Copyright 2005 South-

Significant change only occurs when it is driven

Copyright 2005 South-

Little significant change can occur if it is driven

Copyright 2005 South-

Involve and engage all your employees, as well

Copyright 2005 South-

Nobody likes change. Whether you

Copyright 2005 South-

Organizations are often less resistant

Copyright 2005 South-

Copyright 2005 South-

Copyright 2005 South-

Copyright 2005 South-

The presence of Bill Keller as the local project

Copyright 2005 South-

No one showed up at the monthly problem

Copyright 2005 South-

Different performance Lack of effective

Copyright 2005 South-

Persuade Keller to move to Lubbock

Set up an advisory committee of locals to work

Copyright 2005 South-

Recognizing what needs to be localized and

Copyright 2005 South-

Strategic design lens

Copyright 2005 South-

Copyright 2005 South-

Copyright 2005 South-

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