Change Management - Lecture 1

What is Change?
The passing from one place, state, form, or phase

to another
The substitution of one thing for another
A transformation or modification; alteration
What is Organizational Change?
Any alteration that occurs in the overall work
environment of an organization.
 It may relate to change in technology,
organizational structure, working processes, work
environment, organizational policy, and even the
roles people play.
 Change is inevitable
 Nothing is permanent except change
 Organizations must carefully observe the
environment and incorporate suitable changes
the situation demands.
 Change is a continuous process
 Organizations must be proactive in affecting
change
 Even in most stable organizations, change is
necessary just to keep the level of stability.
The Drivers of Change
•Organization change does not happen out of the blue
•It is catalyzed by a number of forces that trigger first
awareness and then action
• These signals for change usually originate in our
organization ’ s environment or marketplace
•Such signals can include bold moves by competitors,
new technology, or shift s in government regulations.
Failures in the performance of our own organization
can also signal the need for change
•Whatever their source, these events require the
organization to respond and change
• Understanding what drives change is critical
because the “ drivers ” establish the overall
context within which any organizational change
occurs.
• Making what is driving change clearly
understood by everyone involved is a key to
minimizing resistance
• The Drivers of Change model illustrates that the
need for change is catalyzed by dynamic shift s in
the environment, which establish new
requirements for success in our organization’s
market place.
The Drivers of Change Model
Environment
The dynamics that occur in the larger context
within which organizations and people operate.
These forces include the following:
• PESTEL (Political, Economic, Social, Technological,
Ecological and Legal)
• Porter’s Five Forces ( competition, Substitute
products, Buyers, Suppliers, New entrants)
Major shift s in any one or more of these areas can
catalyze new marketplace requirements for
success for organizations.
Marketplace Requirements for Success:
The aggregate set of customer requirements that determines what it
takes for a business to succeed in its marketplace and meet its
customers ’ needs.
• This includes not only actual product or service needs but also
requirements such as speed of delivery, customization capability,
level of quality, need for innovation, level of customer service, and
so on.
• Changes in marketplace requirements are the result of changes in
environmental forces.
• For instance, as the environment becomes infused with new
technology that makes speed and innovation commonplace,
customers demand higher quality customized products and
services and expect them faster.
• To succeed in the marketplace, you must meet these new
requirements for success, and your organization must go through
the changes required to do so.
Business Imperatives:
What the company must do strategically to be
successful, given its new marketplace (customer)
requirements.
• New business imperatives can include the
systematic rethinking and change to the company’s
mission, strategy, goals, business model, products,
services, pricing, or branding.
• Essentially, business imperatives connect to to the
organization’s strategy for succeeding in its market.
• As environmental forces catalyze new marketplace
requirements for success, you must respond with a
new business strategy.
Organizational Imperatives:
What must change in the organization ’ s structure, systems,
processes, technology, resources, skill base, or staffing to
implement and achieve its strategic business imperatives.
Cultural Imperatives:
The norms, or collective way of being, working, and relating
in the company, that must change to support and drive the
organization’s new design, operations, and strategy.
For instance, a culture of teamwork may be required to
support reengineering business processes (organizational
imperatives) to drive the strategy (business imperative) of
faster cycle time and increased customer responsiveness.
Leader and Employee Behavior:
How behavior must change in both leaders and
employee to express the organization’s desired
culture.
• Behavior speaks to more than just overt actions: It
describes the style, tone, or character that permeates
what people do.
• It speaks to how people’s way of being must change
to establish a new culture.
• Therefore, leader and employee behavior denotes the
ways in which leaders and employees must behave
differently to re - create the organization’s culture to
implement and sustain the new organizational design.
Leader and Employee Mindset:
How leader’s and employee’s worldviews, assumptions,
beliefs, or mental models must change for people to
enact the desired behavior and culture.
• Mindset is the underlying force that causes people to
behave and act as they do.
• Becoming aware that each of us has a mindset — and
that it directly impacts our behavior, decisions, actions,
and results — is often the critical first step in building a
person’s and an organization ’ s ability to transform.
• Marilyn Ferguson (1987), states, “ If you continue to
think as you have always thought, you will continue to
get what you have always gotten. ”
• Transforming mindset is a prerequisite to sustained
change in behavior and culture.
• A shift of mindset is often required for organizational
leaders to even recognize changes in the environmental
forces and marketplace requirements, thereby being
able to determine the best new strategic business
direction, structure, or operation for the organization.
• A change in employee mindset is often required for
them to understand the rationale for the changes being
asked of them.
• And almost always, if the organization is going through
significant transformation of its strategy, organizational
design, and culture, then leaders and employees must
transform their mindsets to operate in it successfully.
• Changes in employee expectations also can trigger
change in organizations. A company that hires a
group of young newcomers may be met with a set
of expectations very different from those
expressed by older workers.
• The work force is more educated than ever before.
Although this has its advantages, workers with
more education demand more of employers.
• The many sources of workforce diversity hold
potential for a host of differing expectations
among employees.
• Changes in the work climate at an organization can
also stimulate change.
Internal Forces
• Pressures for change that originate inside the
organization are generally recognizable in the form
of signals indicating that something needs to be
altered.
• Declining effectiveness is a pressure to change.
• A crisis also may stimulate change in an organization
• Strikes or walkouts may lead management to change
the wage structure.
• The resignation of a key decision-maker is one crisis
that causes the company to rethink the composition
of its management team and its role in the
organization.
Change Adept Organization
Traditionally, analysis of organizational change has
been built around the organism metaphor in
which organizations are analyzed as if they were
living organisms operating in an environment to
which they need to adapt to ensure survival.
• For an organization, its environment may be
broken down into:
* Societal factors
* Environment factors and
* Internal factors.
• This is an era of globalization and the organizations need
to cope up with the dynamic and inevitable changes which
take place very often.
• Because of this changes the competition among firms is
becoming intense and every organization should be flexible
enough to implement the changes whenever required for
its survival.
• There exist significant differences between organizations
that are successful at responding to change when
compared to those that were not successful.
• These two distinct types of organization are classed as
being either Change-Adept (able to continuously change
faster than their competitors) or Change-Inept (unable to
respond to the challenges faced).
CHARACTERISTICS OF CHANGE-ADEPT
ORGANIZATIONS
1. The core business of the organization is
understood and communicated.
2. Employees have access to the technologies that fit
the business.
3. Customer needs are at the center of all decisions.
4. Systems are in place to communicate the need for
change.
5. Leaders have and communicate beliefs and vision.
6. There is participatory leadership and employee
empowerment.
7. Processes and plans are in place that support
continuity.
8. Heavy investment is made in staff development
and support.
9. Incentives are present that encourage innovation
and alternatives.
10. The organization engages in a wide variety of
collaboration.

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What is Change?

The passing from one place, state, form, or phase

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