Chapter 1: ChangingOrganizations in Our ComplexWorldChapter Overview• The goal of the book: develop your ability to initiate andmanage change• Environmental factors affecting change are outlined: social/demographic, technological, political, and economic forces• Four types of organizational change are discussed: tuning,adapting, reorienting, and recreating• Four change roles are described: initiators, implementers,facilitators, and recipients. The terms “change leader” and“change agent” are used interchangeably and could meanany of the four roles.• The difficulties in creating successful change are highlightedand characteristics of successful change leader aredescribed.Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Pub.2Your Experiences with ChangeManagementTalk with one another (in small groups)about your experiences with changemanagement.What does this suggest organizationalchange management is about?Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.3Organizational Change: Defined• The intentional and planned alteration oforganizational components to improveorganizational effectiveness.Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.4Organization Components• Organization components include the organization’s:• Mission and vision• Strategy• Goals• Structure• Processes or systems• Technology• People• When organizations enhance their effectiveness, theyincrease their ability to generate value for those theyserveDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.5The “Knowing−Doing” Gap• Change capability has become a coremanagerial competency• But managers’ abilities to deliver on changeare modest at best• There is a major “knowing−doing” gap• Knowing concepts and theories is notenough• Managers need to become effective agentsof change, possessing the will and skills tomake positive change happenDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.6Orientation of the BookThere is a story of two stone cutters:The first, when asked what he was doing,responded: “I am shaping this stone to fit intothat wall.”The second, however, said: “I am helping tobuild a cathedral.”This book is orientated towards those who want to bebuilders.Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.7Why is change a Hot Topic?• Environmental Forces Driving Changes (PESTELfactors):• Political Changes• Economic Changes• Social, Cultural and Demographic• New Technologies• Legal Changes• Ecological/Environmental Factors• Turbulence and ambiguity define the landscape forboth the public and private sectorsDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.8Toolkit Exercise 1.2Analyzing Your EnvironmentSelect an organization you are familiar with. What are the keyenvironmental issues affecting it? List these and their implicationsfor the organization.Political Factors…………… Implications?Economic Factors…………… Implications?Social Factors…………… Implications?Ecological/Environmental FactorsLegal Factors……… Implications?…………… Implications?Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.9New Organizational Forms & ManagementChallenges Due to Environmental ChangeMacro Changes and Impact• Digitization leading to:• Faster information transmission• Lower cost information storage and transmission• Integration of states and opening of markets• Geographic dispersion of the value chain• All leading to globalization of marketsDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.10New Organizational Forms & ManagementChallenges (cont.)New Organizational Forms and Competitive Dynamics• Global small and medium-sized enterprises• Global constellations of organizations (i.e., networks)• Large, focused global firms• All leading to:• Spread of autonomous, dislocated teams• Digitally enabled structures• Intense global rivalry and running faster whileseeming to stand stillDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.11New Organizational Forms & ManagementChallenges (cont.)New Management Challenges• Greater diversity• Greater synchronization requirements• Greater time-pacing requirements• Faster decision making, learning and innovation• More frequent environmental discontinuities• Faster industry life-cycles• Faster newness and obsolescence of knowledge• Risk of competency traps where old competencies nolonger produce desired effects• Greater newness and obsolescence of organizationsDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.12The Causal Model Driving ChangeMacro Changesand Impacts inthe EnvironmentNewOrganizationalForms &CompetitiveDynamicsManagementChallenges in“A New Time”Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.13Macro Changes and ImpactFaster InformationTransferDigitizationLower-costinformation storageand transmissionGeographicdispersion of thevalue chainIntegration of Statesand Opening ofMarketsNew OrgDynamicsGlobalization ofMarketsDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.14New Organizational Forms andCompetitive DynamicsRise of globalSME’sSpread of autonomous,dislocated teamsRise of globalconstellationsSpread of digitallyenabled structuresRise of large,focused globalfirmsManagementChallengesMore intensecompetitive rivalryMore intense“Red Queen”Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.15Management Challenges in“A New Time”GreaterSynchronizationRequirementsGreater DiversityFaster decisionmaking, learningand innovationGreater Time PacingRequirementsFaster newnessand obsolescenceof knowledgeMore frequentenvironmentaldiscontinuitiesGreater Risk ofcompetency trapsFaster industrylifecyclesFaster newness &obsolescence oforganizationsDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.16Common Management Responses toCompetitive Pressures• Running hard, but for all purposes standing still• Called the Red Queen phenomenon (AliceThrough the Looking Glass, by Lewis Carroll)• In global competition, what matters is not thefirm’s absolute rate of learning and innovation,but the relative pace of its developmentcompared to its rivals.Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.17Toolkit ExerciseWhat Change Challenges do You See?Pick an OrganizationWhat are the change challenges yousee it facing?How well are they doing?Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.18Four Types of Organizational ChangeAnticipatoryReactiveIncrementalStrategicTuningRe-orientationAdaptationRe-creationDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.19Types of Organizational ChangeANTICIPATORYREACTIVEIncremental/ContinuousDiscontinuous/RadicalTuning• Incremental and anticipatory• Need is for internal alignment• Focuses on individualcomponents or sub-systems• Middle management role• Implementation is the major taskRedirecting or Reorienting• Strategic proactive changes based onpredicted major changes in theenvironment• Need is for positioning the wholeorganization to a new reality• Focuses on all organizationalcomponents• Senior management create sense ofurgency and motivate the changeAdapting• Incremental changes made inresponse to environmentalchanges• Need is for internal alignment• Focuses on individualcomponents or sub-systems• Middle management role• Implementation is the major taskOverhauling or Recreating• Response to a significantperformance crisis• Need to reevaluate the wholeorganization, including its core values• Focuses on all org. components toachieve rapid, system-wide change• Senior management create visionand motivate optimismDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.20Nature of the Impact of Change• Short-term impact/consequences• Direct and indirect effects• Moderating factors• Intermediate impact/consequences• Long-term impact/consequencesTHE LESSON: Planned changes don’t alwaysproduce the intended resultsDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.21Common Causes of Difficulty withOrganizational Change• Managers don’t do their analytic homework• Managers are action oriented and assume others willsee the inherent wisdom in the proposed change• Managers under or overestimate their own powerand influence (and that of others)• Managers see transition periods as a cost, not aninvestment• They underestimate the resources & commitmentneeded to integrate the human dimensions with otheraspects of the changeDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.22Common Causes of Difficulty withChange (cont.)• Managers are unaware their actions (and those of other keymanagers) may be sending conflicting messages• Managers find human processes unsettling or threatening• Managers lack capacity (attitudes, skills, and abilities) tomanage complex changes that involve people• Managers’ critical judgment is impaired due tooverconfidence, under confidence, and/or group think• Unanticipated external factors can play a huge roleDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.23Four Organization Change Roles1. Change Initiators• Identify need and vision• Act as a champion2. Change Implementers• Chart the detailed path forward & make it happen• Nurture support and alleviate resistance3. Change Facilitators• Aids in analysis and issue management along the way• Provides advice and council• Sometimes helps smooth the way through helpingresolve issues, alleviate resistance and nurture support4. Change Recipients• Those affected by the change who have little input to theprocess or content of the organizational change• Have to alter behaviors to ensure change successDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.24Toolkit Exercise 1.3Change Roles in OrganizationsThink of a time when you have been involved in change.What roles did you play? How comfortable were you witheach of those roles?1. Change Initiator2. Change Implementer3. Change Facilitator4. Change RecipientHow did each of these roles feel? What did youaccomplish in each role?Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.25Characteristics and Skills of theChange Leader• Formal change leaders (or agents)spearhead the change, and may play any orall of the change roles.• Informal change leaders can emergeanytime throughout the change process• What are the key characteristics and skills ofthe change leader?Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.26What’s Required to be a SuccessfulChange Leader?• Keen insight into the external environment and skilledanticipator of what is evolving• Rich understanding of organizational systems andprocesses, power structures and stakeholder networks• Excellent analytic, interpersonal and communicationskills• Driving passion for action, yet patient and persistent• Well-developed sense of timing and tactics• Ability to assess and manage risk• An ability to focus on outcomes while also paying veryclose attention to processDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.27What’s Required to be a SuccessfulChange Leader? (cont.)• Tolerance for ambiguity and risk taking• Emotional maturity and courage• Self-confidence and optimism• Honest and trustworthy• Capacity to engage others and inspire confidence• Deep understanding of themselves and their impact• Curiosity and strong desire to learnDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.28Change Leaders Embrace ChangeParadoxes• Recognize that change leaders sometimes drive change from thefront, while at other times they empower others and stay out of theway• Recognize resistance to change is both a problem and anopportunity• Focus on the outcomes of change, but are very careful about themanagement of the process• Recognize the tension between “getting on with it” and reassessingand changing direction• Capacity to balance patience and impatience• Recognize the absolute rate of learning is less important than therelative rate of learning in comparison to competitorsDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.29Critical Questions when Considering Change1. What is the environment telling you prior to, at thebeginning, during and following the implementationof the change? In particular:a. What is the broader environment telling you aboutfuture economic, social and technological conditionsand trends?b. What are your customers or clients (both inside andoutside the organization) telling you?c. What are your competitors doing and how are theyresponding to you?d. What are the partners within your network doing andhow are they responding to you?e. What do the people who will potentially be the leaders,managers and recipients of change want and need?Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.30Critical Questions when Considering Change (cont.)2. Why is change needed? Who sees this need?3. What is your purpose and agenda?• How does that purpose project to aworthwhile vision that goes to the heart of thematter?Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.31Critical Questions when Considering Change (cont.)4. How will you implement and manage thechange?a.How will you resource the change initiative?b.How will you select and work with your changeteam?c. How will you work with the broaderorganization?d.How will you monitor progress so that you cansteer, alter speed and course, if necessary?Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.32Critical Questions when Considering Change (con’t.)5. How will you ensure that you act (and areseen to act) ethically and with integrity? Whathave I learned about change and how can Iremember it for the future? How can I pass onwhat I learned?6. Once the change is completed, what comesnext? The completion of one change simplyserves as the starting point for the next.Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.33Summary• Need for change often originates in theexternal environment.• Change upsets the internal equilibrium in anorganization and thus may be resisted.• People can play many different change roles.• How they play these roles makes a significantdifference!Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.34Appendix 1: Roots of OrganizationalDevelopment• Small group training:• Focused on creating change by improving self-awarenessand the group’s dynamics• Survey research and feedback:• Intervened with sophisticated surveys and analysis to createthe need for change• Action research:• Encouraged the use of action, based on research, incontinuous cycles (in essence, learning by doing, followed byobservation, doing and more learning)• Socio-technical systems:• Focused on the interaction between the sociological andtechnical subsystems of the organization and describedchange in more holistic termsDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.35Organizational Development vs. Organizational ChangeOrganizationalDevelopmentBased primarily onpsychologyUnderlyingTheory & Individual/group functioningAnalyticalframeworkFacilitator or processconsultantRole ofChangeAgentChange ManagementIncludes principles and tools fromsociology, information technology andstrategic change theoriesIndividual/group functioning ANDsystems, structures, work processes(congruence model)Content expert (organization designand human performance) AND processconsultantMember of cross-functional team,which includes strategists andtechnologistsPart of project organization, whichincludes client managers/employeesDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.36Organizational Development vs.Organizational ChangeOrganizationalDevelopmentInterventionStrategiesChange ManagementNot directly linked to strategyDriven by strategyFocus on one component ata timeSimultaneous focus on severalcomponents (strategy, humanresources, organization design,technology)Normative-re-educative(change attitudes to changebehavior)Action-oriented (change behaviorbefore attitudes)Deszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.37Positioning the CourseManagementFocused ChangeOD / HR FocusedChange• Re-Structuring• Re-Engineering• Re-Design• Surveys• QWL Programs• Hi-Perf Systems••••••••VisioningStakeholderAnalysisAction PlanningProcess SkillsTeam BuildingThird PartyInterventionThisCourseDeszca, Ingols & Cawsey, Organizational Change: An Action-Oriented Toolkit, 4th ed.. © 2020 SAGE Publishing.38
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