Change Management

1. Change Management Implementing Change – Hard and Soft Models Session 5

2. Your feedback • Slow down when talking! • Write more clearly! • Discuss articles in class • Clarify expectations for assignments • Modernise your slides • More videos and cases • Ask people to stop talking over those contributing to discussions • Continue participation, humour • And finally…..

3. Start talking about your brother!

4. Objectives for Today Recognise change situations characterised by hard or soft complexity Introduce and critically analyse both hard and soft systems models of change Discuss articles Sirkin et al (DICE model) Beer and Nohria Garvin and Roberto Clarify expectations and criteria for assessment of Group presentations Analysis of Medisys Case

5. Difficulties and ‘Messes’ Difficulties: These are characterised by ‘hard complexity’. There are lots of factors and variables. But they can be meaningfully quantified. Optimal solutions can be developed. Messes: These are characterised by soft complexity. People’s description of events is ambiguous. There are multiple interpretations and reconstructions of what the problem is. Stakeholder groups will see things according to their stake in the problem. Thus there are many different ideas about what kind of solutions there might be.

6. Hard and soft problems UNBOUNDED PROBLEMS Relationship and team building Messes Organisation Development Models for Change Emotional involvement Hard Systems Models for Change Project management Difficulties Technical complexity BOUNDED PROBLEMS

7. The Challenge of Change Change in situations that are characterised by hard complexity (and widely-held unitarist assumptions about relationships) is usually easier to achieve Change in situations of soft complexity, where issues are contentious and there is a high level of emotional involvement among stakeholders is usually less easy to achieve

8. Hard Systems Model of Change - 1 The Hard Systems Model of Change (HSMC) is a method for designing and implementing change in situations that have the characteristics of ‘hard complexity’, i.e. situations: where the presenting problems are understood and agreed by most people in the situation where quantitative criteria can be used to test options for change Where relatively simple systems prevail 8

9. Hard Systems Model of Change - 2 This approach provides a rigorous and systematic way of determining objectives (or goals) for change Goal setting is followed by the generation of a range of options for action which can be tested against a set of explicit criteria 9

10. Hard Systems Model of Change - 3 The process can be thought of as falling into three overlapping phases. The descriptivephase (describing and diagnosing the situation, understanding what is involved, setting the objectives and performance measures for the change) The optionsphase (thinking about how this might be done: generating options for change, evaluating options. The implementationphase (selecting the most appropriate option, putting feasible plans into practice and monitoring the results). 10

11. Sirkin, Keenan, and Jackson’s DICE Model • Duration: Minimize time between milestones • Integrity: Project teams need to be good • Commitment: Top management support • Effort: Less work to get it done is better than more…

12. Duration • Myth: Long projects tend to fail because people lose interest, people left, opportunity gone… • Reality: Long projects with frequent review succeed more than short project w/o review • Trouble rises exponentially when review interval exceed 8 weeks • Schedule milestones – Major achievement, not day to day stuff – Several tasks that team needs to complete – Check reason for deviation,

13. Integrity • Refers to Team’s ability to make the change • Senior managers often reluctant to release star performers for project teams • Sponsor: must choose team leader and decide team composition – Right portfolio of skill, knowledge and network – Clear realistic time commitment of members – Leader: good problem solver, result oriented, methodical, tolerate ambiguity, organization savvy, motivated, doesn’t crave the limelight

14. Commitment • Two groups – Senior management (sponsor) – Change target (those who will implement) • Visible support from the top is critical – Communicate: timeliness and consistency • Beware of (subtly) different versions – Reluctance to back project is easily detected

15. Effort • Change projects compete with current operations for staff time. Increase effort of >10% is risky Manage by: – Reduce regular work of team member • Reduce discretionary work • Temporary worker (e.g. retired staff) • Temporarily outsource process

16. Using DICE framework • Calculate DICE Score example (see p.114) Duration: Project reviewed every three months: D= 2 points Integrity: Team and its leader’s capabilities and availability pretty good: I= 2 points Senior management commitment is high: C1 = 1 point Local level commitment low: C2 = 3 points Effort: Employees must make 25% more effort to complete project E= 3 DICE Formula DICE score = D+(2*I) +(2*C1) + C2 + E • 2+4+2+3+3 Total 14 • Scores between 7 and 14 Win Zone • Scores higher than 14 but lower than 17 Worry Zone • Scores over 17 Woe Zone

17. Group exercise • From the experiences of the members of your group, please identify at least one organisational change situation where application of the Hard Systems Model of Change (HSMC) would be very likely to turn out to be useful and successful. • Then identify at least one situation where you have good reason to believe that the HSMC would ‘run into difficulties’. • Justify your categorisations and record your answers in the tables provided. • You have 15 minutes

18. Soft systems (OD) models of change Change is only effective when people’s feelings, needs, perceptions, ways of doing things & hopes are addressed AND messy situations require managers to dissolve existing problems, by challenging underlying purposes and assumptions.

19. Organisational Development • ‘Organization development (OD) is a long term effort, led and supported by top management, to improve an organization’s visioning, empowerment, learning, and problem-solving processes, through an ongoing, collaborative management of the organization culture - with special emphasis on the culture of intact work teams and other team configurations - utilizing the consultant-facilitator role and the theory and technology of applied behavioural science, including action research.’ (French, W.L. and Bell, C.H, (1995). Organization Development: Behavioural Science Interventions for Organization Improvement, Fifth edition, Prentice-Hall, p.28.).

20. Basic Assumptions of OD as a Model for Change - 1 • It emphasises goals and processes with emphasis on processes • It deals with change over medium and long-term • It is about people and recognises their worth • It involves the organisation as awhole as well as its parts • It emphasises the concept of a change agent/facilitator

21. Basic Assumptions of OD as a Model for Change - 2 • It uses action research as a means of intervention • It is participative, drawing on theory and practices of the behavioural sciences • It is a process of facilitation at the individual, group and organisational level • It has top-management support and involvement

22. The OD model for change PRESENT STATE (1a) Diagnose current situation FUTURE STATE (1b) Develop a vision for change (5) Assess and reinforce change (2) Gain commitment to the vision (4) Implement change (3) Develop an action plan JOURNEY TO THE FUTURE

23. Lewin’s Three Step Process to Changing Behaviour UNFREEZING Resistance to change lessened, need for change created (Equilibrium disturbed) MOVING From old behaviour to the new (Changes) REFREEZING Change made permanent

24. Critique of The “OD Model” Three of the criticisms that have been aimed at this model for change are: 1. OD does not always face up to the harsh ‘realities’ of change (‘rather than unfreezing, people need to be shaken up’) 2. OD is limited when change situations are ‘constrained’ (direction and vision already set) 3. It must be recognised that, in times of crisis, managers may have to act very fast and... it may not be possible to put into practice the full consultation and participation that is built into the OD process.

25. Differences Between Hard & Soft Change Approaches HARD Clear goals and objectives Quantifiable data Control mechanisms are clear Power is clear, known to work Unitary view of organisation Evolved first to meet needs of modern engineering and industrial systems Aims to solve problems Analyst detached from situation SOFT Organisations as social entities Goals need negotiation Different perspectives Power diffuse and frequently unknown Consensus view/conflict view of organisation Evolved later (1960s) in response to difficulties in using hard approaches Aims to appreciate and improve problems Analyst part of the situation

26. Theory E: An Economic Approach near-term economic improvement: • Aims for a dramatic and rapid increase in shareholder value • It is driven from the top of the organization and makes heavy use of outside consultants • It relies heavily on cost cutting, downsizing, and asset sales to meet its objectives.

27. Theory O: An Organizational Capabilities Approach improvement in organizational capabilities • Aims to create higher performance by fostering a powerful culture and capable employees • It is characterized by high levels of employees participation and flatter organizational structure • It attempts to build bonds between the enterprise and its employees • This approach to change is a long-term proposition

28. The Dimensions of Change (6)Two Different Approaches to Change

29. What should we do? What is the situation? How should we do it? Overview of change management • External Opportunities/ • threats • (PEST) • Pace of Change • Internal • Strengths/ • weaknesses • (culture etc) • Force Field Analysis • Difficulty or Mess • Theory E/Theory O • Hard Vs Soft • Hard – project plan • DICE • Soft – OD • Persuasion • Tools of Cooperation and Change • Kotter’s 8 steps • Persuasion • Resistance

30. Questions for Smithers Case • Analyse the approach to change taken at Sigtek • Was Smithers effective? Why or why not? What could he have done differently? • What could other stakeholders in Sigtek have done differently that would have made a difference?