Leading Change & Innovation
After studying this topic, you should be able to:
- Identify reasons for resisting change.
- Describe the psychological processes involved in making major changes.
- Discuss the process of implementing a major change in an organization.
- Examine how leaders can increase learning and innovation.
Leading change is one of the most important and difficult responsibilities for managers and administrators. It involves guiding, encouraging, and facilitating the collective efforts of members to adapt and survive in an uncertain and sometimes hostile environment. For some theorists, this is the essence of leadership. The major change in an organization is usually guided by the top management team, but other members of the organization can initiate change or contribute to its success.
Types of Change in Teams and Organizations
Many types of changes can be made by leaders, and some types are more difficult than others. The focus of a change effort may involve roles, attitudes, technology, strategy, economics, or people.
1. Roles or Attitudes
One useful distinction is between efforts to change attitudes versus efforts to change roles, structures, and procedures (Beer, Eisenstat, & Spector, 1990). The attitude-centered approach involves changing attitudes and values with persuasive appeals, training programs, team-building activities, or a culture change program. In addition, technical or interpersonal skills may be increased with a training program. The underlying assumption is that new attitudes and skills will cause behaviour to change in a beneficial way. The leader seeks to convert resisters into change agents who will transmit the vision to other people in the organization
It involves changing work roles by reorganizing the workflow, redesigning jobs to include different activities and responsibilities, modifying authority relationships, changing the criteria and procedures for evaluation of work, and changing the reward system. The assumption is that when work roles require people to act in a different way, they will change their attitudes to be consistent with the new behaviour. Effective behaviour is induced by the new role requirements and reinforced by the evaluation and reward system.
2. Technology
Many organizations have attempted to improve performance by implementing new information and decision support systems. Examples include networked workstations, human resource information systems,
inventory and order processing systems, sales tracking systems, or an intranet with groupware for communication and idea-sharing among employees. Such changes often fail to yield the desired benefits, because, without consistent changes in work roles, attitudes, and skills, the new technology will not be accepted and used in an effective way.
3. Strategy
Another major type of change is in the competitive strategy for achieving the major objectives of the team or organization. Examples of strategy changes for a company include the introduction of new products or services, entering new markets, use of new forms of marketing, initiation of Internet sales in addition to direct selling, forming alliances or joint ventures with other organizations, and modifying relationships with suppliers (e.g., partnering with a few reliable suppliers). To be successful, changes in the competitive strategy may require consistent changes in people, work roles, organization structure, and technology.
4.Economies or People
Internal changes in an organization may emphasize economics or people. The first approach seeks to improve financial performance with changes such as downsizing, restructuring, and adjustments in compensation and incentives.
The second approach seeks to improve human capability, commitment, and creativity by increasing individual and organizational learning, strengthening cultural values that support flexibility and innovation, and empowering people to initiate improvements.
-------------------------------------------------------------------
Change Processes
Change process theories describe a typical pattern of events that occur from the beginning of a change to the end, and in some cases they describe how earlier changes affect subsequent changes. The theories may identify distinct phases in the process, stages in the reaction of individuals, or effects of repeated changes on people.
1. Stages in the Change Process
One of the earliest process theories was Lewin’s (1951) force-field model. He proposed that the change process can be divided into three phases: unfreezing, changing, and refreezing.
In the unfreezing phase, people come to realize that the old ways of doing things are no longer adequate. This recognition may occur as a result of an obvious crisis, or it may result from an effort to describe threats or opportunities that were not evident to most people in the organization. In the changing phase, people look for new ways of doing things and select a promising approach. In the refreezing phase, the new approach is implemented and it becomes established. All three phases are important for successful change. An attempt to move directly to the changing phase without first unfreezing attitudes is likely to meet with apathy or strong resistance. Lack of systematic diagnosis and problem solving in the changing phase will result in a weak change plan. Lack of attention to consensus building and maintenance of enthusiasm in the third stage may result in the change being reversed soon after it is implemented.
According to Lewin, change may be achieved by two types of actions. One approach is to increase the driving forces toward change (e.g., increase incentives and use position power to force change). The other approach is to reduce restraining forces that create resistance to change (e.g., reduce fear of failure or economic loss, co-opt, or remove opponents). If the restraining forces are weak, it may be sufficient merely to increase driving forces. However, when restraining forces are strong, a dual approach is advisable. Unless restraining forces can be reduced, an increase in driving forces will create an intense conflict over the change, and continuing resistance will make it more difficult to complete the refreezing phase.
2. Stages in Reaction to a Change
The reaction pattern has four stages: denial, anger, mourning, and adaptation. The initial reaction is to deny that change will be necessary (“This isn’t happening” or “It’s just a temporary setback”). The next stage is to get angry and look for someone to blame. At the same time, people stubbornly resist giving up accustomed ways of doing things. In the third stage, people stop denying that change is inevitable, acknowledge what has been lost, and mourn it. The final stage is to accept the need to change and go on with one’s life. The duration and severity of each type of reaction can vary greatly, and some people get stuck in an intermediate stage.
Understanding these stages is important for change leaders, who must learn to be patient and helpful. Many people need help to overcome denial, channel their anger constructively, mourn without becoming severely depressed, and have optimism about adjusting successfully.
3. Prior Experience and Reactions to Change
How a person reacts to change depends in part on the person’s general confidence in coping with change successfully. This confidence is affected by prior experience with change as well as by traits, such as self-confidence, risk tolerance, openness to new experiences, and internal locus of control orientation (Erwin & Garman, 2010).
One hypothesis is that experiencing traumatic change will “inoculate” people and leave them better prepared to change again without such an intense or prolonged period of adjustment. For example, having experienced and survived the loss of two jobs in five years, Sally is confident about taking more risky, less secure jobs in the future.
However, even for people with strong confidence in their ability to handle change, frequent changes in a short period of time can undermine commitment. People are likely to feel frustration and a sense of injustice if the burden of implementing change is placed on them without adequate support from the organization. Feelings of being unjustly treated are intensified when most of the benefits of the changes will accrue to others, such as owners and top management.
--------------------------------------------------------------------
Reasons for Accepting or Rejecting Change
Many efforts to implement major change in an organization are unsuccessful and resistance to change is a major reason for failure. One explanation for the outcome of a proposed change is in terms of leader power and the types of influence processes that leaders use.
Compliance with the change is likely if people believe that it is a legitimate exercise of leader authority (legitimate power), or if they fear punishment for resisting the change (coercive power). Commitment to supporting a change initiative is likely when people trust their leaders and believe that the change is necessary and effective (strong referent and expert power). However, resistance to change is common in organizations, and it can occur for several reasons that are not mutually exclusive:
- The Proposed Change Is Not Necessary
- The Proposed Change Is Not Feasible
- The Proposed Change Is Not Cost-Effective
- The Proposed Change Would Cause Personal Losses
- The Proposed Change Is Inconsistent with Values
- The Leaders Are Not Trusted
- Organizational Cynicism About Change
- Alternative Reasons for Resistance
Resistance to change is not merely the result of ignorance or inflexibility. It can occur for several reasons and is a natural reaction by people who want to protect their self-interests and sense of self-determination. Rather than viewing resistance only as an obstacle to batter down or circumvent, it can be viewed as the energy that can be redirected to improve change. Active resistance indicates the presence of strong values and emotions that could serve as a source of commitment if opponents are converted to supporters. It is essential to discuss a proposed change with the people who will be affected to learn about their concerns and their ideas about the best course of action
--------------------------------------------------------------------
Implementing Change
The outcomes for a change can be judged in different ways, including commitment of people to the change, successful implementation of the change, and the extent to which the change results in the desired benefits and avoids negative consequences.
1.Determining What to Change
Before initiating major changes, leaders need to be clear about the nature of the problem and the objectives to be achieved. Just as in the treatment of a physical illness, the first step is a careful diagnosis to determine what is wrong with the patient. The organizational diagnosis can be conducted by the top management team, by outside consultants, or by a task force composed of representatives of the various key stakeholders in the organization.
2.Understanding Systems Dynamics
Knowledge of systems dynamics is helpful both for identifying the nature of a problem and for anticipating the likely effects of changes made to resolve it. Problems have multiple causes, which may include actions taken earlier to solve other problems. If the diagnosis only identifies one of several problems, the changes may fail to achieve the desired outcome. In large systems such as organizations, actions have multiple outcomes, including unintended side effects.
A change in one part of a system will eventually affect other parts, and reactions to the change may cancel out the effects. Changes that have delayed effects tend to obscure the real nature of the relationship.
3.Responsibility for Implementing Major Change
Large-scale change in an organization is unlikely to be successful without the support of top management. However, contrary to common assumptions, major changes are not always initiated by top management, and they may not become involved until the process is well underway.
Major changes suggested by lower levels may be resisted by top managers who are strongly committed to traditional approaches and do not understand that the old ways of doing things are no longer appropriate.
The essential role of top management in implementing change is to formulate an integrating vision and general strategy, build a coalition of supporters who endorse the strategy, then guide and coordinate the process by which the strategy will be implemented. Complex changes usually involve a process of experimentation and learning, because it is impossible to anticipate all the problems or to prepare detailed plans for how to carry out all aspects of the change.
4.The Pace and Sequencing of Changes
Whenever feasible it seems beneficial to change interdependent subunits of the organization simultaneously so that the effects will be mutually supporting. However, in a large organization with semi-autonomous subunits (e.g., separate product divisions) simultaneous change is not essential, and it may not be feasible to implement change in all subunits at the same time. One way to demonstrate the success of a new strategy is to implement it on a small scale in one subunit or facility on an experimental basis.
A successful change that is carried out in one part of an organization can help to stimulate similar changes throughout the organization. Successful implementation of a major new strategy usually requires a change in the organizational structure to make it consistent with the strategy. However, when structural change is likely to be resisted, it may be easier to create an informal structure to support the new strategy and postpone changes in the formal structure until people realize that they are needed. Informal teams can be created to facilitate the transition, without any expectation that these temporary structures will become permanent.
For example, after temporary task forces were created to plan and coordinate changes in one company, they eventually evolved into permanent cross-functional committees with formal authority to plan and monitor continuing improvements in product quality and operational procedures.
--------------------------------------------------------------------
Guidelines for Implementing Change
Successful implementation of change in organizations requires a wide range of leadership behaviors. Some of the behaviors involve political and administrative aspects, and others involve motivating, supporting, and guiding people. Even the people who initially endorse a change will need support and assistance to sustain their enthusiasm and optimism as the inevitable difficulties and setbacks occur. The major change is always stressful and painful for people, especially when it involves a prolonged transition period of adjustment, disruption, and dislocation. The following guidelines describe current thinking about the best way to implement a major change in an organization:
|
---------------------------------------------------------------------
How Visions Influence Change
The success of a major change will depend to a great extent on how well leaders communicate the reasons why the proposed change is necessary and beneficial. Success is more likely if leaders articulate a vision of a better future that is attractive enough to justify the sacrifices and hardships the change will require. The vision can provide a sense of continuity for followers by linking past events and present strategies to a vivid image of a better future for the organization. The vision provides hope for a better future and the faith that it will be attained someday. In the hectic and confusing process of implementing change, a clear vision helps to guide and coordinate the decisions and actions of many people in widely dispersed locations.
1. Desirable Characteristics for a Vision
- A vision should be simple and idealistic, a picture of a desirable future, not a complex plan with quantitative objectives and detailed action steps.
- The vision should appeal to the values, hopes, and ideals of organization members and other stakeholders whose support is needed. The vision should emphasize distant ideological objectives rather than immediate tangible benefits.
- The vision should be challenging but realistic. To be meaningful and credible, it should not be a wishful fantasy, but rather an attainable future grounded in the present reality.
- The vision should address basic assumptions about what is important for the organization, how it should relate to the environment, and how people should be treated.
- The vision should be focused enough to guide decisions and actions, but general enough to allow initiative and creativity in the strategies for attaining it.
- Finally, a successful vision should be simple enough to be communicated clearly in five minutes or less.
2. Elements of a Vision
The mission statement usually describes the purpose of the organization in terms of the type of activities to be performed for constituents or customers. In contrast, an effective vision tells us what these activities mean to people. The core of the vision is the organization’s mission, but different aspects of it may be emphasized.
Value statement is a list of the key values or ideological themes considered important for an organization. The values usually pertain to the treatment of customers, treatment of organization members, core competencies, and standards of excellence. Common themes include satisfying customers, achieving excellence in products or services, providing an innovative product or service, developing and empowering employees, and making important contributions to society. A value statement provides a good beginning for developing a more complete vision. However, just listing values does not clearly explain their relative priority, how they are interrelated, or how they will be expressed and achieved. An effective vision statement provides a glimpse of a possible future in which all the key values are realized at the same time.
Slogans are statements used to summarize and communicate values in simple terms. However, a slogan is limited in how many values can be expressed. Consider the following examples: technology is our business, quality is job one, we feel good when you feel good, all the news people want to read, and partners in making dreams come true. Only the last slogan has more than one value; it describes the ideal service provided to customers and the ideal relationship among the providers. Slogans can be useful as part of a larger vision, but overemphasis on a simplistic slogan can trivialize the vision and diminish important values not included in the slogan.
Strategic objectives are tangible outcomes or results to be achieved, sometimes by a specific deadline. A performance objective may be stated in terms of the absolute level of performance (e.g., profits, sales, return on investment), or the relative level of performance (e.g., becoming number one in the industry or region, outperforming a traditional rival).
Project objectives are defined in terms of the successful completion of a complex activity (e.g., developing a new type of product, implementing a new MBA program, establishing a subsidiary in China). These objectives can emphasize economic outcomes, ideological outcomes, or both. For example, a pharmaceutical company has a project to develop a new vaccine that will prevent a disease; successful completion of the project will improve profits, provide health benefits to society, and enhance scientific knowledge. A limitation of most project objectives is their relatively short-time perspective. When the project is completed, the vision is ended.
Guidelines for Developing a Vision
It is extremely difficult to develop a vision that will elicit commitment from the many diverse stakeholders whose support is needed for major change. Such a vision cannot be generated by a mechanical formula. Judgment and analytical ability are needed to synthesize the vision, but intuition and creativity are important as well. To develop an appealing vision, it is essential to have a good understanding of the organization (its operations, products, services, markets, competitors, and social-political environment), its culture (shared beliefs and assumptions about the world and the organization’s place in it), and the underlying needs and values of employees and other stakeholders.
- Involve key stakeholders.
- Identify shared values and ideals.
- Identify strategic objectives with wide appeal.
- Identify relevant elements in the old ideology.
- Link the vision to core competencies and prior achievements.
- Continually assess and refine the vision.
--------------------------------------------------------------------
Collective Learning and Innovation
The environment of most organizations is becoming increasingly dynamic and competitive. Competition is becoming more intense, customer expectations are rising, less time is available to develop and market new products and services, and they become obsolete sooner. To succeed in this turbulent environment, organizations need to have people at every level who are oriented toward learning and continuous improvement.
Organizational learning involves acquiring and using new knowledge. The new knowledge can be created internally or acquired from outside the organization. After new knowledge is acquired, it must be conveyed to the people who need it and applied to improve the organization’s products, services, and work processes. How knowledge is acquired, disseminated, and applied will be described in more detail in the next part of the topic.
1.Internal Creation of New Knowledge
Many organizations have formal subunits with primary responsibility for research and development of new products and services, and some organizations also have sub-units with responsibility for continually assessing and improving work processes. These dedicated subunits can be an important source of innovation in organizations, but they are not the only internal source; many important innovations are developed informally by employees apart from their regular job activities. Efforts to help employees find better ways to do the work or to make improvements in products usually require only a small investment of resources in the developmental stage.
2.External Acquisition of New Knowledge
An important leadership function is to encourage and facilitate the external acquisition of relevant knowledge. New ideas and knowledge also be acquired from a variety of outside sources, including publications on results of applied research, books or articles describing practitioner experiences, and observation of best practices used elsewhere. Other sources include purchasing the right to use specific knowledge from another organization, getting advice from consultants who have relevant expertise, hiring outsiders with special expertise, entering joint ventures with another organization to increase learning opportunities, and acquiring another organization that has relevant expertise and patents.
3.Integrating Exploration and Exploitation of Learning Processes
Exploration involves finding innovative new products, services, processes, or technology, whereas exploitation involves learning how to make incremental improvements in existing products, services, or processes. Both learning processes are necessary to some extent in organizations, and their relative importance will depend on the competitive strategy and the pace of change in the external environment
4.Knowledge Diffusion and Application
New knowledge is of little value unless it is made available to people who need it and is used by them. Some organizations are successful at discovering knowledge, but fail to apply it effectively. An increasing number of companies have sophisticated information systems to facilitate easy access by employees to relevant information. An employee with a difficult task can discover how other people in the organization handled a similar task in the past, and employees can interact with each other to get advice and support about common problems.
5.Learning Organizations
All organizations learn things, but some do it much better than others. The term learning organization has been used to describe organizations that learn rapidly and use the knowledge to become more effective. In these organizations, the values of learning, innovation, experimentation, flexibility, and initiative are firmly embedded in the culture of the organization. Resources are invested in promoting learning, knowledge is made easily available to anyone who needs it, and people are encouraged to apply it to their work.
Guidelines for Enhancing Learning and Innovation
|
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.