Managing Organisational Change

Lecture ThreeCh. 5 Organizational Diagnosis Frameworks (cont.)

Chapter 5 Diagnosis for Change: How to Change?

McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Need for Change

Change = D x M x P > C
D = dissatisfaction with status quo M = new management model P = process for managing change C = cost of change

The Formula for Change was created by Richard Beckhard and David Gleicher, refined by Kathie Dannemiller and is sometimes called Gleicher's Formula. This formula provides a model to assess the relative strengths affecting the likely success or otherwise of organisational change programs.

DxVxF>R
Three factors must be present for meaningful organizational change to take place. These factors are: D = Dissatisfaction with how things are now; V = Vision of what is possible; F = First, concrete steps that can be taken towards the vision;
If the product of these three factors is greater than R = Resistance then change is possible. Because D, V, and F are multiplied, if any one is absent or low, then the product will be low and therefore not capable of overcoming the resistance. To ensure a successful change it is necessary to use influence and strategic thinking in order to create vision and identify those crucial, early steps towards it. In addition, the organization must recognize and accept the dissatisfaction that exists by communicating industry trends, leadership ideas, best practice and competitive analysis to identify the necessity for change.

Quiz 5
Change = D x M x P > C Give live Example from Your own or from Business History 2 pages max with seperate analysis for each Keyword

Pre- Requisite before Change

Learning vs. Unlearning

as a major leap in Organisational Change Organisational Change Sustain by: Learning Earning - Returning

Quiz 6
Give Example of UL vs. L in relevance to change

Learning vs. Unlearning

as a major leap in Organisational Change Organisational Change Sustain by: Learning Earning - Returning

Type of Organisation Challenge & Lean Thinking

Ref: http://artsfwd.org/4-types-org-culture/

Quiz 7

Ref: http://artsfwd.org/4-types-org-culture/

Diagnostic Tools
Diagnostic Tools Images of Managing Change Advantages of diagnostic tools

Diagnostic Models: -Organization -Components

The image of the change manager has an impact on the types of tools that may be used. The different images highlight the range of reasons why tools like these may be utilized they illustrate the numerous ways change can be interpreted.
5-10

Readiness for Change

Images of Managing Change

Diagnostic Tools Images of Managing Change
Images Diagnostic Tools Using diagnostic tools to build up your own knowledge base and confidence about what needs to change by using models that specify relationships among variables and pinpoint where change is needed when things are not going well.

Director

Navigator
Advantages of diagnostic tools Caretaker

You will find the diagnostic tools attractive; models are ways of mapping the environment they describe.
You will be less convinced of the capacity of the diagnostic tools to support radical change, but several of the tools (see, e.g., PESTEL and scenario analysis) provide insights into the trends in the external environment that you will have to take into account.

Diagnostic Models: -Organization -Components

Coach
Interpreter

You will focus on the diagnostic tools that highlight the goals being sought and the competencies needed to attain them
You will be attracted to the diagnostic tools that emphasize images, framing, and cognitive maps Having an interest in emergent strategy, you may remain unconvinced as to the value of such diagnostic tools.
5-11

Readiness for Change

Nurturer

Advantages of Diagnostic Tools

Diagnostic Tools Images of Managing Change Advantages of diagnostic tools

Diagnostic Models: -Organization -Components

Readiness for Change

Simplify a complex situation. Identify priorities for attention. Highlight interconnectedness of various organizational properties (e.g., strategy and structure). Provide a common language with which to discuss organizational characteristics. Provide a guide to the sequence of actions to take in a change situation.
5-12

Diagnostic Models: Organization

Diagnostic Tools Images of Managing Change Advantages of diagnostic tools

Six-box organizational model:

The key focus here is on six variables purpose, structure, rewards, helpful mechanisms, relationship and leadership. This model is useful to maintain awareness of all areas for consideration even though one variable may be identified as the main area for attention.

7-S framework:
The 7-S framework: this focuses on seven key components that affect organizational effectiveness structure, systems, style, staff, skills, strategy and superordinate goals. The interconnectedness of these variables is vital to the success of change.

Diagnostic Models: -Organization -Components

Star model:
An organization is effective when the five components of organizational design strategy, structure, processes and later capability, reward systems and people practices are in alignment.

Readiness for Change

5-13

Diagnostic Models: Organization

Diagnostic Tools Images of Managing Change Advantages of diagnostic tools

Congruence model:
The organization is broken down into four components task, individuals, formal organizational arrangements and informal organisation. This is influenced by the context where the strategy is formulated and the output is then the performance of the organization.

Burke-Litwin model:
This model identifies the transformational external environment, mission and strategy, leadership and organizational culture - and transactional sources of change.

Diagnostic Models: -Organization -Components

Four frame model:

This offers four frames for the managers to conceptualize how the organization operates. These frames are structural, human resource, political and symbolic frames.

Readiness for Change

Diagnosis by image:
This technique allows organizational members to use images to describe the organizations and this can be used as a basis for discussion.
5-14

Diagnostic Models: Components

Diagnostic Tools Images of Managing Change Advantages of diagnostic tools

PESTEL Framework:
This analyses the external environment in terms of six factors political, economic, social, technological, environmental and legal.

Scenario analysis:
Creating stories of possible future scenarios that are considered to be vital to the future of the organization

Gap analysis
This is a tool used for reviewing the organizations position based on where they are and where they want to get to.

Elements of strategy
These are five elements of strategy that are considered mutually reinforcing arenas, vehicles, differentiators, staging and lowest costs through scale advantage. Any misalignment of these signifies the need for change.

Diagnostic Models: -Organization -Components

Strategic inventory
This aims to identify the strategic assumptions of managers and determine their consistency with the business environment. This determines whether the strategy should be a focal point for change.
5-15

Readiness for Change

Diagnostic Models: Components

Diagnostic Tools Images of Managing Change Advantages of diagnostic tools

Newsflash exercise:
This is an exercise that encourages managers to be very specific and succinct about change and clearer about the intended outcomes.

Cultural web:
This provides a way of mapping the organizational culture through seven elements paradigm, rituals and routines, stories, symbols, control systems, power structures and organizational structure

Structural dilemmas:
Six possible structural dilemmas that can be encountered during change are diagnosed so areas that have been traded-off during the change process can be identified

Diagnostic Models: -Organization -Components

The Boundaryless Organization:

Success is arguably achieved only if four types of organizational boundaries are diagnosed and reduced. These are vertical, horizontal, external and geographical boundaries.
5-16

Readiness for Change

Readiness for Change

Diagnostic Tools Images of Managing Change Advantages of diagnostic tools

Assessing the organization's readiness to change can be a mediating variable between change management strategies and the outcomes of desired strategies. A perchance audit of the readiness of an organization for change can provide an indication of the likely outcome of a change initiative at a particular point in time. Some ways of doing this include:
Questionnaires Stakeholder analysis: This focuses on the position of stakeholders in the change process and allows the manager to be better informed of how to confront potential issues. Force-field analysis: This identifies factors that are driving forces for change as well as restraining forces.
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Diagnostic Models: -Organization -Components

Readiness for Change

Quiz 8-In Group

EXERCISE 5.1 p.132

Scenario Construction
Purpose Understanding diagnostic models, and developing the skill and confidence to use them increases the available tools that a change manager has available in a change situation. Often models are left for the academics to worry about, or at the other extreme, managers choose one model and wont use anything else whether it is appropriate or not! Different types of change managers (referring to the change images) discussed in earlier chapters will have a preference for certain diagnostics, and will tend not to use others. The student should be encouraged to at least understand the available options (even if they dont intend to use them), and be aware of their reasons for the ones they do use, as well as the strengths and limitations of each model. Options/Techniques/Requirements Format: Individual or small groups of two to three students.

Materials: Table 5.4 Scenario Methodology. Select an organization.

Potential Problems and Helpful Hints

Identification of key drivers may take some time for the students with less business experience.

The writing of a scenario could be modified to point form to place the importance on the information, rather than a good story, although students with the skill to capture the information in a story will be developing their communication skills. Students may find 100 words or less to be restricting for the writing of each scenario. Developing the skill to capture information and restrict the story to this size is a valuable skill to learn. The equivalent in business is the elevator pitch that entrepreneurs or skilled networkers use to promote their ideas or business.

Lecture Handout MGT634 30SEP13

K.B.F( Key Business Factors) What you try to sell, inspire or contribute to the society, life and world 4 Ms Manpower Material Method Machines Example of K.B.F Quality of life Energy sustainability Knowledge Economy National Economy Education Shaping of change is different than managing of change Shaping of change is more difficult but it has more effects The secret behind change is setting the common sense

Lecture Handout MGT634 30SEP13

Lean thinking Lean thinking is about pull and its against push For example, you have to select where to work, how to live and what to know In lean thinking, whole values should be seen and considered In lean thinking, take one, work on it then finish it before starting other tasks Impacts of push style Moda ( Waste, ie extra information) Mory ( If Moda increase, it will causes mental and physical strain) Mora ( no sustainability) Pull style and lean thinking will reduce the above Agility is important concept of change In paradigm shifts, Agility will contribute in changing the following Mind Heart

Lecture Handout MGT634 30SEP13

Case of PUSH/PULL styles Increasing number of beds in wards in Salmaniya hospital will not solve problem Where end-customer-end method ( empathetic thinking) , you shouldnt allow people to become patients Equation of change D M P > C Implications of the equation Total change benefit should be greater than total costs D & M can be started in parallel but to start P , D &M has to be completed Model can be started from best point or worst point Example, We have to increase M, D and P as much as we

Lecture Handout MGT634 30SEP13

Learning VS Unlearning Nobody can change before unlearning Unlearning assume that you will keep your perceptions and thoughts aside to open the door for new learning process Learning steps Observation Absorbing Reflection Learning can be achieved only by doing The main obstacle for change is people are not willing to unlearn To sustain the change, three things has to happen Learning Earning Returning Diagnostics Tools example KBC factors Formula of change

Lecture Handout MGT634 30SEP13

Quizzes & Exercises Quiz 5 ( Situation analysis) Quiz 6 ( You can give examples about your organization or about yourself) Quiz 7 , two ways can be done, either choose your organization or organization you know and explain why it is belong to certain type. Explain in details your answer Give example for companies for every type. For example Hierarchy organizations tend to be Push style Stability Control Clan organizations tend to be Customer delight Exercise 5.1 ( p132) , 2 students at least