Week 10 Reading Summary

Textbook Chapter 10 Managing change

Thematic connection between other major competencies and change management are :
1. Self-improvement
2. Power + politics
3. Motivation

Q What is personal change?

Personal change can come from skills-based learning of the type provided in this text, or it
can come more dramatically, as in the following case. In either situation, people perceive
themselves to be different after the experience(s). Although this is far from being fully
understood, in terms of either the process or its outcomes, once you have been through it,
it is easier to appreciate. Personal change occurs at an intellectual and an emotional level.
That is why it is hard to define it solely in verbal or intellectual terms. We do not have a
vocabulary to communicate the emotional experiences involved.

Q Why personal change is difficult?

Personal change is difficult because it takes time and effort, yet many people tend
to think that it should be quick and effortless. If it took us 30 years to become the people we
are now, why do we think we can change in 30 minutes? You would not expect to become
physically fit after a single three-kilometre run. As part of a fitness program, you would start
off slowly and work consistently, performing a number of different exercises, routines and
distances over a long period of time. This is the best way to approach personal growth and
change, as if it were some form of intra-personal fitness program. A second thing to
remember is that personal change happens in stages. We do not change from acting,
thinking and feeling one way to being the person we would like to be without passing
through a number of intermediate forms. In other words, we will not achieve all our
personal change goals at once. Again, this process takes time and we may not always be
able to see the series of small successes as clearly as when something dramatic happens

Growth, change and skills development seem to follow cyclical patterns. There are periods
in our lives in which we are growing and changing very much, and other periods in which,
regardless of what we do, we do not seem to be making any headway. This is important to
remember so that you do not become discouraged during periods of little or no change.

The process of personal change

A four-stage model of personal change will be explored here based on the work of Kurt
Lewin.
It is important that personal change is viewed as a process of stages for several reasons.
First, it helps us to identify where we are so that we can plan to change, as well as mark
progress or periods of stagnation. It helps us to align strategy and activities and to allow the
process the time it needs. For example, if we are very early on in our personal change
process, we should not be expecting to have got it all right; we should be remining ourselves
that change takes time and effort, and we should be working hard at our exercise.

1. Unlearning: The motivation to action

Before we can change, there has to be the motivation to do so. Because personal transformation
takes
effort and time, it requires great energy. We have to feel a need to change in order to generate the
necessary activity and momentum to do so. We also have to manage our natural resistance to
change. It is during this first stage of the process that we are beginning to feel dissatisfied with what
is going on in our lives and we sometimes start to think that what we are doing, thinking and feeling
is somehow not ‘right’, as was the case with Geoff.

2. Changing: The process of transformation

The process starts as we gain self-awareness and self-knowledge. Once we know where we are, we
can begin the process of going elsewhere. We then have to begin learning new concepts and ideas,
and we need to begin practising new ways of thinking and behaving. We discuss this stage in more
detail in the next section. The process ends with our incorporating these new thoughts and
behaviours into our formulations of ‘the way we are’ so that we can complete the cycle and see a
change from ‘the way we used to be’. This last aspect is also discussed further below.
 Kolbe’s cycle in short!!!!!

3. Relearning: Practising new thought and behaviour

Once we have felt the need to change, unlearned old habits and patterns, managed the inevitable
resistance, and begun to change our thinking and behaviour, we must continue to practise and
eventually to institutionalise these new responses. At this relearning stage of the process—and at
the fourth stage, institutionalising change—the tools of personal change become critical. Two tools
for personal change are briefly discussed: journalling and the day of difference.

4. Institutionalising change: Making personal development a habit

Rather than thinking that all we have to do is make a few changes and then be done with it, personal
growth and development is best seen as a continuous process. In the same way that many firms are
involving their employees in decision making, problem solving and quality improvement groups
towards the goal of continuous improvement, so too can we as individuals. You can think of this
process of personal transformation as paralleling an organisation’s total quality management (TQM)
and continuous improvement programs. Personal transformation can be viewed as TQM for the
individual.

Requirements for personal change (important)

For any personal change to happen, three essential elements must be present. The first element is
awareness. It is often said that getting an alcoholic to admit to their problem—that is, become aware
of it—is the beginning of their road to recovery. Similarly, if we do not have a good idea of who we
are and where we are within the context of our personal journey, there is little hope of our making
significant progress.

The second major prerequisite for significant personal change is resources. There is no way to
make personal change without a significant investment of such resources as time, money, and
energy
or effort. People who expect to see major life, or organisational, changes within a few days or weeks
are bound to be disappointed. Human beings are the way they are because of a series of factors—
both environmental and genetic—that cannot be altered without significant investment.

A third prerequisite for personal growth and development is what is referred to as facilitating
structures. Going back to the analogy of alcoholics, once they admit that they have a problem, they
need a great deal of support to stay off alcohol. They attend regular meetings and have lists of
names
and phone numbers they can call to provide support during the times of inevitable crisis. These
facilitating structures are often neglected in organisational settings. The importance of rites, rituals,
processes, discussions and support people is hard to exaggerate. These facilitating structures provide
an element usually missing in unsuccessful personal and organisational change efforts.

Reaction to Change
Page 510
People naturally resist change. Generally speaking, humans are good learners. They find
something that seems to work and they stick with it. This is a generalised coping strategy.
Once we have found our ‘favourite’ way to drive to work, what benefit could there be in
trying a new route each day? Many of us find comfort in our familiar patterns and routines.
When we are confronted with the need to change, therefore, we naturally experience some
resistance. Change requires effort and a re-evaluation of our behaviour and thinking.

Organisation change
There are five key management skills and activities required to effectively lead positive change:
1. Establishing a climate of positivity
2. Creating readiness for change
3. Articulating a vision of abundance
4. Generating commitment to the vision
5. Institutionalising the positive change

This is given in detail in book!!! Page 512

Reading Why Transformation Efforts Fail (recommended) Kotter

Error #1 Not establishing a great enough sense of urgency
Without motivation, people won’t help and the effort goes nowhere. Change by definition
requires creating a new system, which in turn always demand leadership. Phase one in a
renewal process typically goes nowhere until enough real leaders are promoted or hired
into senior level jobs.

Error #2 Not creating a powerful enough guiding coalition

A high sense of urgency within the managerial ranks helps enormously in putting a guiding
coalition together. Companies that fail in phase two usually under estimate the difficulties of
producing change and thus the importance of a powerful guiding coalition. Sometimes they
have no history of team work at the top and therefore undervalue the importance of this
type of coalition. Efforts that don’t have a powerful enough guiding coalition can make
apparent progress for a while. But, sooner, or later, the opposition gathers itself together
and stops the change.

Error #3 Lacking a vision

Error #4 Under communicating the vision by a factor of ten

Error #5 Not removing obstacles to the new vision

Error #6 Not Systematically planning for and creating short term wins
Error #7 Declaring victory too soon

Error #8 not anchoring changes in the corporation culture

Reading Additional (Cracking the Code of Theory E and Theory O)

Nohria
There are two archetypes, or theories, of change. These archetypes are based on very
different and often unconscious assumption by senior executives- and the consultants and
academics who advise them – about why and how the changes should be made.

- Theory E is a change based on economic value

- Theory is change based on organizational capability.

Both are valid models; each theory of change achieves some management’s goals, either
explicitly or implicitly. But each theory has also its costs – often unexpected ones.

Theory E change strategies are the ones that make all the headlines. In this “hard” approach
to change, shareholders value is the only legitimate measure of corporate success.

Managers who subscribe to theory O believe that if they were to focus exclusively on the
price of their stock, they might harm their organizations. In this “Soft” approach to change,
the goal is to develop corporate culture and human capability through individual and
organizational learning- the process of changing, obtaining feedback, reflecting, and making
further changes.

Managers try to use both of these theories in tandem without resolving the inherent
tension between them. This impulse to combine the strategies is directionally correct, but
theories E and O are so different that’s it’s hard to manage them simultaneously- employees
distrust leaders who alternate between nurturing and cutthroat corporate behaviour.

Companies that effectively combine hard and soft approaches to change can reap big
payoffs in profitability and productivity.

Theory O change strategies are geared towards building up the corporate culture:
employee’s behaviours, attitudes, capabilities, and commitment. The organization’s ability
to learn from its experience is a legitimate yardstick of corporate success.

Leadership. Leaders who subscribe to theory E manage change the old-fashioned way: from
the top down. They set goals with little involvement from their management teams and
certainly without input from lower levels or unions.
Focus. In E-type change, leaders typically focus immediately on streamlining the “hardware”
of the organization- the structures and systems. These are the elements that can most easily
be changed form top down, yielding swift financial results.

Process. Theory E predicted on the view that no battle can be won without a clear,
comprehensive, common plan, of action that encourages internal coordination and inspires
confidence among customers, suppliers, and investors. The plan lets leaders quickly
motivate and mobilize their business; it compels them to take tough, decisive actions they
presumably haven’t taken in the past.

Reward System. The rewards for managers in E-type change programs are primarily
financial. Employee compensation, for example, is linked with financial incentives, mainly
stock options.

Use of Consultants. Theory E change strategies often rely heavily on external consultants. A
SWAT team of IVY. Theory O change programs rely far less on consultants.

In their purest forms, both change theories clearly have their limitations. CEOs who must
make difficult E-style choices understandably distance themselves from their employees to
ease their own pain and guilt. Once removed from their people, these CEOs begin to see
their employees as part of the problem. as time goes on, these leaders become less and less
inclined to adopt O-style change strategies. They fail to invest in building the company’s
human resources, which inevitably hollows out the company and saps its capacity for
sustained performance.

CEO who embraces theory O find their loyalty and commitment to their employees can
prevent them from making tough decision. The temptation is to postpone the bitter
medicine in the hopes that rising productivity will improve the business situation. But
productivity gains aren’t enough when fundamental structural change is required. the
reality is underscored by today’s global financial system, which makes corporate
performance instantly transparent to large institutional shareholders whose fund managers
are under enormous pressure to show good results.

Managing the Contradictions (how to combine E and O)

Clearly, if the objective is to build a company that can adapt, survive and prosper over the
years, Theory E strategies must somehow be combined with Theory O strategies. But unless
they’re carefully handled, melding E and O is likely to bring the worst of both theories and
the benefits of neither. Indeed, the corporate changes we have studied that arbitrarily and
haphazardly mixed E and O techniques would certainly have been better off to pick either
pure E or pure O strategies- with all their costs. At least one set of stakeholders would have
benefited.

The obvious way to combine E and O is to sequence them. Indeed, it is highly unlikely that E
would successfully follow O because of the sense of betrayal that would involve. It is hard to
imagine how a draconian program of layoffs and downsizing can leave intact the
psychological contract and culture a company has so patiently built up over the years.

So what should you do? How can you achieve rapid improvement in economic value while
simultaneously developing an open, trusting corporate culture? Paradoxical as those goals
may appear, our research shows that it is possible to apply theories E and O together. It
requires great will, skill and wisdom. But precisely because it is more difficult than mere
sequencing, the simultaneous use of O and E strategies is more likely to be a source of
sustainable competitive advantage.

Set direction from the top and engage people below.

To thrive and adapt in the new economy, companies must simultaneously build up their
corporate structures and enhance shareholders value; the O and E theories of business
change must be in perfect step

Let incentives reinforce change, not drive it. Any synthesis of E and O must recognize that
compensation is a double-edged sword. Money can focus and motivate managers, but it can
also hamper teamwork, commitment, and learning. The way to resolve this dilemma is to
apply Theory E incentives in an O way.

Use consultants as experts who empower employees. Consultants can provide specialized
knowledge and technical skills that the company doesn’t have, particularly in the early
stages of organizational change.