Module 6 Organization Change Goal 1 Understand Big Picture of Organization Change Forces driving organizations to change Competitive environment Globalization Aggressive newcomers Lego Skype U of Phoenix Consolidation into bigger competitors Disney Pixar Deregulation airline telephone industries Internal pressures Eroding margins Pressures to grow Shareholder pressure Demands for accountability Proliferating and rapidly changing technologies Changing workforce Political economic changes 8 Global Mega Trends Patrick Schwerdtfeger Productivity productivity goes up means less humans are needed higher unemployment higher inequality Business vs governments multinational businesses are now stronger than governments businesses have the power of mobility to move their work from country to country middle class is being stripped out with more use of technology more and more concessions from governments to keep business within their countries to keep up employment levels The global mind the Internet borders are becoming more blurred bringing together expertise from around the world Changing demographic developed nations populations are aging less babies high above 65 people strain on their resources birth rate is dropping around the world Currencies and credit our credit system will break as governments keep printing money to keep their economy sustainable bitcoin possible future virtual currency Resource depletion commodity prices will go up food shortages and riots social unrest Global warming big record breaking storms droughts cost our governments and insurance companies enormous amounts of money Biotech one of the most exciting growth companies demand for biotech as people are aging more Forces Driving Organizations to Resist Change People resistances Habit Liability of success Difficult to learn new behaviors Security economic factors Fear of unknown Organization resistances Strong organization culture Structural inertia Organization structure Reward systems Information systems Threats to expertise power relationships resources Little slack or funding Poor leadership Traditional Change Management initiated and controlled Problem focused Experts analyze and design solutions Doers implement solutions Rolled out as packaged change program Employees treated as major source of resistance Problems with Traditional Change Methods Conflict between experts doers Lack of employee buy in Too rigid not adaptive to local conditions Limited implementation Cynicism 4 Types of Organization Change 2 Key dimensions How radical the change is determined by how far organization is form a goal or ideal state Incremental Revolutionary How constant incessant change is determined by how rapidly the organization s competitive environment is changing Discrete Incremental Discrete Adaptation Continuous Continuous Revolutionary Re creation JetBlue Mattel makes small changes on their Barbie dolls based on the country they are sold in Apple Harley Davidson both almost went out of business restructure company strategy change how they compete Fine Tuning Transformation Toyota Honda continuously make quality improvements IBM GE Build a dynamic capability this is what gives companies the competitive advantage today into the core of the company able to change and continuously transform themselves We re moving to the bottom right box Transformation Goal 2 Learn 2 Effective Methods for Changing Organizations Kurt Lewin s Organization Change Model looks at changes as process Driving forces Encourage change Push people organization in new direction Restraining forces Resist change Push people organization not to change Steady State when driving forces equal restraining forces equilibrium no change How to change steady state Increase driving forces or decrease restraining forces Best strategy is to decrease restraining forces 3 Stage Process Unfreeze change refreeze Restraining forces Unfreezing Steady State Driving forces Restraining forces Transition to New Steady State Refreezing New Steady State Driving forces Unfreezing steady state Understand organization s current steady state Force Field Analysis map the change situation to identify existing driving and restraining forces Transition to new state Need compelling story clear change vision buy in Powerful coalition of stakeholders on board Strong leadership and role modeling Implementation plan with objectives roles and responsibilities Mechanisms to communicate the change and gain wide commitment Building capability to perform new behaviors Facilitation and support Refreezing new state Integrate changes into organization culture values and norms Reinforcing mechanisms systems processes and incentives in line with the new behavior Monitor the changes and make necessary adjustments Self Design Organization Change Model When refreezing takes too long for a constantly changing environment more continuous change model Involves multiple stakeholders Innovation on site Learning by doing Continuous change improvement and learning Part of normal operations Laying the Foundation Acquiring Knowledge Designing Diagnosing Action Learning Cycle Valuing Never fully implementing your changes because you are continuously changing Laying the foundation Acquring knowledge Conceptual learning Broad organizational concepts Specific knowledge of design elements structure information and control systems work design human resource systems Self design strategy Practical Learning Company visits Cases and articles Speakers and conferences Valuing Valued performance outcomes Quantity quality time innovation efficiency Valued human outcomes Quality of work life employment security Valued organizational conditions Empowerment teamwork Diagnosing Inputs Competitive environment business strategy Design elements Task human formal informal organization Outputs Performance and human outcomes Approaches to designing Fine tuning current design limited change incremental Imitating others Zero based designing extensive change revolutionary Action learning cycle continually improved performance Incremental Revolutionary Discrete Adaptation Lewin Model Re creation Lewin Model Continuous Fine Tuning Self Design Model Transformation Self Design Model Goal 3 Explore Marshall s Center for Effective Organizations Action research with organizations Help organization learn to improve itself Create knowledge that can be applied to other organizations Research scientists and faculty members Types of projects