Understanding And Managing Resistance To Organizational Change Management Essay

Understanding And Managing Resistance To Organizational Change Management Essay Most businesses have to undergo change as a result of any of a number of causes: a changing competitive landscape; a new business strategy; changing of customer or workforce demographics and expectations; new laws; new technology or a changing economic environment. Rumelt, as cited by Boyer and Robert (2006, p.325), claims that organizational change is the most vital issue in front of executive management teams, even above product and market strategies. Therefore, as businesses approach change, an important issue for many is effecting the needed change in the face of resistance. This paper will examine resistance to change and approaches to managing organizational change. Resistance to change can occur at both the individual and the organizational level. Robbins (2011, p.627) summarizes major factors in such resistance. On the individual level, these factors develop from habit as well as insecurity about ones well-being, career, or general fear of the unknown. On the organizational level, the factors are even more complex: structural inertia; insufficiently comprehensive focus of change; group inertia; and threats to expertise and the existing hierarchy. Habits are useful, and even vital to our daily lives. They take away the need for us to willfully focus attention on every action and thought, turning into non-events such things as tying our shoes, driving a car, and interacting with others. However, habits can also be non-optimal, non-productive, or even destructive. Woods et al. (2002) conclude that habits are associated with lower stress and sense of being in control, and the greatest benefits of habits are that they allow for reflection on the past and planning for the future. On the disadvantages of habits, they note that judgments that have become automatic because of previous experiences may cause people to be less aware of small but potentially important changes in the current situation, and that behaviors may continue even when the situation changes to make those behaviors no longer appropriate. In an organization, structural inertia is the product of embedded mechanisms that perpetuate existing behaviors. These can be embodied in formal procedures and regulations as well as in unwritten rules and social norms, including hiring selection criteria. Structural inertia is not in itself, however, a bad thing, and it should not be challenged without good reason. At the same time, when good reason exists, change must not be avoided. As cited in Mellahi and Wilkinson (2004, p.11), Hannan and Freeman note that structural inertia causes organizations to react slowly to threats and opportunities, instead of adapting they are more likely to dissolve. However, they report this risk decreases as the organization grows and suggesting that in larger organizations there is greater capacity to absorb the shock of adjusting to organizational change. Another factor against change in an organization is when the effort is applied to an area that is not large enough, or where the focus is too limited. Surrounded by and interacting with a larger environment still doing things the old way, changes tend to be temporary only. Even where individuals want to change, group inertia, or the expectations and attitudes of their group or team, can hold them back. For others, though, change represents a direct threat to their authority or prestige, leading not only to resistance, but possibly direct opposition. Robbins (2011, p.628) lists eight tactics to help moderate resistance to change: education; participation; building support; developing trust; making the change fair; covert manipulation; selecting people who are able to accept change; and coercion. Education, employees are more willing to accept change when they understand its rationale. This is most effective when the rationale is not solely based on maximizing value to the shareholder, but takes into account the interests of all stakeholders, including employees. Participation, allowing those who are impacted by the change to have meaningful input in the process and this may result in a suboptimal result. The benefits tend to reduce resistance among participants. Building support, when workers are fearful of change, counseling and training can help boost confidence, and perks can help make the adjustment easier. Developing trust, change is better tolerated when implemented by trust-worthy managers. Making the change fair, workers will view a change negatively if it is not seen to be applied fairly and consistently. Covert manipulation, lying about the need for change, or starting false rumors, can be an effective form of manipulation, as can give influential resistors inducements to support the change. However, these deceptions, if discovered, put at risk the credibility of management and those effecting the change. Selecting people able to accept change, some people are predisposed to prefer stability, while others are more open to change. An organization can shape its hiring policies to prefer candidates that are tolerant of change, thus reducing one form of resistance when organizational change occurs. However, there are potential risks in this approach. First, this bias might skew hiring in a way that exposes the organization to discrimination lawsuits. Second, it might create a monoculture that puts the organization at a competitive disadvantage. An alternative to changing hiring practices is to identify those within a group that are more accepting of change and use them as examples and advocates for applying change throughout the organization or area where change is needed. Coercion, when all else fails, threats and force can push through a change. It can often be done quickly, although it carries the risk of loss of morale and trust in management. Robbins (2011, pp.630-636) describes four major approaches used in managing organizational change: Lewins Three-Step Model; Kotters Eight-Step Plan for Implementing Change; Action Research; and Organizational Development. Another notable approach is Wilfried Krugers Change Management Iceberg. Krugers Change Management Iceberg Kruger(1996) likens the factors involved in organizational change to an iceberg. He contends that managers of change consider only the tip of the iceberg, which relates to issues of cost, quality, and time. However, perceptions, beliefs, power and politics are below the surface, which must also be managed in order for change to succeed. Managing issues from these areas involves understanding that people at every level of an organization are affected by change. These people can generally be grouped into four categories: promoters, who support the change; potential promoters, who are disposed to accepting the change but have not yet been convinced; opponents, who are against the change; and hidden opponents, who appear to be supportive, but are actually against the change. People in each of these categories must be managed appropriately to avoid failure. Lewins Three-Step Change Model Robbins (2011, p.630) describes the three steps of Kurt Lewins Change Model as unfreezing, movement, and refreezing. Using the hypothetical example of a large oil company that wanted to consolidate its three marketing offices located in different cities into a single office, two forces are considered during the step of unfreezing acceptance of the way things currently are. The first, a driving force, moves behavior away from the status quo. The second, a restraining force, suppresses behaviors that move away from the status quo. Unfreezing can be accomplished by increasing the driving force, weakening the restraining force, or executing both actions. In the hypothetical example, restraining forces could take the form of objection to the inconvenience involved in moving to a different city, especially for those with children, houses or roots in the community. Management might accomplish the first step of unfreezing acceptance of the status quo by increasing the driving force by, for e xample, helping with moving costs or with securing low-rate mortgages in the new location. Similarly, restraining forces could be weakened by listening to and helping clarify worker concerns. Figure . Source: http://www.sqaki.com/9/KrugerChangeIceberg/screenshot.gif When the second of Lewins three steps movement is underway, completing the transition quickly, as opposed to deliberate, plodding change, is associated with greater chance of overall success, and the reasons are not hard to deduce. The two stable states the original one, before change began, and the one after the transition has been completed are fully engaged in the business of the organization. However, during the transition, the organization might be unstable, lines of communication are in flux, and the business of the organization might conduct inefficiently. An organization in the middle of organizational change is like a boxer changing boxing gloves that the transition should be as quick as possible. When the tolerance for error is extremely limited, for example, such as when transitioning from a manual system of order processing to an automated one. It would be foolhardy to flip a switch that stops the first and begins the second. Prudence dictates that there should be a t ransition period when both systems are operating in parallel. Although such a transition is costly, it allows time for errors to be worked out of the new system. Lewins final step refreezing is needed in order to stop reversion to the previous stable state or continued movement to some unintended stable state. Refreezing is accomplished by balancing the driving force against the restraining force. In the hypothetical oil company example, this might be done by making permanent a salary increase. It is assumed that as time progresses workers will get used to the new way of doing things, adopting it as a new normal. Kotters Eight-Step Change Model Kotter (1995) builds on Lewins approach, breaking the steps into greater detail. Expressed as a list of errors that contribute to the failure of organizational transformation, Kotter presents an eight-step model of change: Error #1: Not Establishing a Great Enough Sense of Urgency (Kotter 1995, p.61). Kotter considers this step essential, declaring that half of the companies he has observed fail here. Executives either pay this step only cursory attention or worry that showing the urgency of the situation will precipitate plunging morale and lower share prices, for all of which they will be held to account. For this reason, outsiders may be brought in to give the unwelcome message. The intent of this stage is to make the status quo threatening and change the only relief. According to Kotter, bad business results may be used as a pretext and in some successful cases a businesses crisis has been engineered for the purpose of creating the sense of urgency needed for organization change to succeed. Kotter argues that success requires at least 75% of management to believe that the status quo is no longer tolerable. Error #2: Not Creating a Powerful Enough Guiding Coalition (Kotter 1995, p.62). Advocates for change must include a sufficient number of senior, influential stakeholders in order for anything more than token movement to occur. Kotter allows that only a few such people three to five may be adequate at the beginning, in a large corporation this number needs to increase to as many as 20 or 50 powerful members to create substantial progress. This coalition of stakeholders may well go beyond senior management and include board members, representatives from important customers, as well as senior labor leaders. Failure at this point, according to Kotter, comes from underestimating the effort required to create change and undervaluing the guiding coalition. As a result, the coalition might be put under the leadership of someone from human resources or a lower level manager. Without active top-level backing, more senior managers can insulate themselves and their departments from change, eff ectively blocking progress and stopping change. Error #3: Lacking a Vision (Kotter 1995, p.63). Kotter remarks that every case he has witnessed of successful organizational change has involved the guiding coalition being able to develop and communicate an image of the future. Without such a unifying vision, the effort can lose its focus and devolve into contradictory and ineffective projects that either produce no organizational change at all, or, worse, change for the worse. Kotter describes one instance: [A] company gave out four-inch-thick notebooks describing its change effort. In mind-numbing detail, the books spelled out procedures, goals, methods, and deadlines. But nowhere was there a clear and compelling statement where all this was leading. Not surprisingly, most of the employees with whom I talked were either confused or alienated. The big, thick books did not rally them together or inspire change. In fact, they probably had just the opposite effect.(1995, p.63) Error #4: Undercommunicating the Vision by a Factor of Ten (Kotter 1995, pp.63-64). Transformational vision in communicating should be wide, frequent, inclusive, clear and credible. Kotter sees this step mishandled in three ways: first, the message is delivered only once or only to a small group; second, the vision is poorly expressed perhaps because it has been poorly conceived; and third, the message may be effectively conveyed in speeches and emails, but their content is belied by the behavior of senior executives, who expose the vision as being merely empty posturing. For Kotter, the communicating the vision also means expressing the message through actions that are consistent with the vision. Error #5: Not Removing Obstacles to the New Vision (Kotter 1995, pp.64-65). Barriers that hinder individuals and groups from engaging in the new way of doing things should be moved aside where possible. Although these barriers can be self-imposed there may also be obstacles that arise from the organizational structure or are imposed by ones job description or performance-appraisal metrics. Allowing these blockers to remain can bring the entire transformational effort to a halt. Error #6: Not Systematically Planning For and Creating Short-Term Wins (Kotter 1995, pp.65-66). When organizational change takes place over an extended period of time, people need positive feedback to know that they are on the right track and that the change is worth the effort. Rather than looking for and publicizing such positive news as might occur during the transformation period, Kotter advises that the guiding coalition should plan for projects that will produce short-term wins. This serves the purpose of keeping up morale, while also providing a real indication that overarching progress is being made. These mini projects can also serve as test cases to help tweak the transformation vision. Error #7: Declaring Victory Too Soon (Kotter 1995, pp.66-67). Kotter found that over a seven year period monitoring a successful transformation, the first gains were seen in year two but the maximum gain did not occur until year five. He contends that abandoning transformation efforts after the first gain misses the opportunity to achieve even greater success by confronting the structures that are still inconsistent with the transformation vision, but which had earlier been avoided because they had seemed simply too big to tackle at the time. Rather than declare victory at the first sign of performance improvement, the momentum can be used to achieve even greater performance gains. Error #8: Not Anchoring Changes in the Corporations Culture (Kotter 1995, p.67). New behaviors must take root, becoming a part of shared values, or they may degrade or revert when no longer subject to scrutiny and pressure of transformational change. Kotter argues that two factors have major importance in sealing change into a corporate culture. The first factor is to clearly show people the link between improved performance and the new behaviors and approaches. If people are left to make the link themselves, there is a risk that they may mistakenly link improved performance with something else. The second factor is to make sure that succession decisions are in place so that those who will follow into top management continue to be champions of change. According to Robbins (2011, pp.631-631), the Action Research change process uses a five-step method of systematically collecting and analyzing data in order to arrive at a change action. The five steps are: diagnosis, analysis, feedback, action, and evaluation. During diagnosis, the change agent gathers information by asking questions, looking at records, and finding out what concerns employees and what changes they say are need. Analysis involves looking for patterns and commonalities; these discoveries are turned into three parts: main concerns, secondary concerns, and possible actions. The third step, feedback, is comprised of sharing the findings with employees who, aided by the change agent, create an action plan to achieve changes. Next, the plan is put into action, with the employees and change agent performing the specific tasks in the plan. Finally, evaluation is done, using the data captured during the diagnosis step to assess the effectiveness of the action plan. This chan ge process has two obvious benefits: the first is that problems are sought, and then solutions are determined based on the problem. This is in contrast to many improvement activities where a solution goes in search of a problem. The second benefit is that resistance to change is reduced by the deep engagement of employees into the improvement process. As a point of criticism, this approach seems very useful in operational areas of which employees have direct knowledge. However, it seems of limited benefit when change involves larger parts of an organization. For example, in the hypothetical oil company case mentioned earlier, from the perspective of employees, the need for change would not be obvious, and it would be all too easy for squabbles to arise between the marketing offices over which office would remain for the other to merge into. Organizational Development (OD) is a collection of change methods that combines organizational growth with respect for human growth. Robbins (2011, p.633) summarizes the values that these methods generally support: Respect for people, individuals deserve dignity, are responsible and caring. Trust and support, a healthy organization is open, trusting, genuine and supportive. Power equalization, effective organizations place less importance on hierarchic control. Confrontation, problems should not be avoided, but addressed openly. Participation, people affected by a change will tend to commit to their implementation in proportion to the extent that they are involved in the decisions. Robbins lists six OD change-related interventions, but there are far more. Holman et al. (2007, pp.17-18) describe sixty-one, classifying them into five types: adaptive methods, which use practices that can be adjusted to varying needs; planning methods, which are used for setting strategic direction and determining core identify; structuring methods, which are used to redefine and organize; improving methods, which increase operational efficiencies and effectiveness without challenging the basic assumptions of the organization; and supportive methods, which can be used to make the other change methods more effective. In conclusion, this paper reviewed the concept of organizational change, why it happens, and its risks and benefits. Resistance to change, its motivations, and methods of managing change were also considered. Based on the great variety of approaches to managing resistance and promoting change, it is reasonable to conclude that no single method will work best in every situation. However, the abundance of approaches also suggests that with careful deliberation and application successful organizational transformation can be achieved.