Basic Change Concepts In Change Management Business Essay

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Change management is a structured approach to transitioning individuals, teams, and organizations from a current state to a desired state.

The aim of change management in the organizational context is the effectively implementation of new methods and systems, necessitated through changes in the external environment such as competition, legislation, shifting economic conditions and the like. However, change management is not a knee-jerk reaction to such changes, but rather a planned and structured long term approach.

The scope of change management in the organizations includes both organizational level change of management processes and individual change management exercises that ensure individuals adapt successfully to organizational changes.

The Need for Change Management

In the past, most organizations were rigid entities that followed a structured bureaucratic pattern of work culture, with the management and shareholders valuing stability that would ensure predictable earnings over anything else.

However, the changes in the economy over the past two decades have changed this mindset. Market transparency, labor mobility, global capital flows, and instantaneous communications have heightened global competition, and made the external environment of an enterprise as highly fluid, marked with fast-paced changes. In such a scenario, only those enterprises that could successful adapt to the changed conditions and change themselves in response to the changes in the external environment could remain competitive. In the words of Professor Rosabeth Moss Kanter of the Harvard Business School, successful companies develop "a culture that just keeps moving all the time." As a result, of these developments, planning, implementing, and managing change has become one of the most critical strategic management function of an organization.

Organizations change in response to developments in their sales market, emergence of new markets, changes in product technology, developments in process technology pertaining to tools, equipment, plants, logistics and supply-chain management, and changes in the business processes like the emergence of outsourcing, e-business, and the likes. Change could also stem from acquisitions and disposals, enhancement of the skills of the human resources, improved communication facilities and a host of similar factors. Through a change management exercise, most organizations attempt to unlock the knowledge that exists within and beyond the organization and empower employees with tools that enable them to take quick decisions. Such change management interventions at the individual level enable employees to develop the power and focus to capitalize on opportunities that help them survive and thrive in the highly competitive and fast paced world of commerce today.

However, the causative factors of change depend largely on the feelings and wishes of the business owners or the Chief Executive. There are many ways to develop a business, attain growth and respond to changes in external environments and the selected method would invariably be only one of the several possible methods.

The Process

The process of change management entails a shift from one state to another, and this shift process takes the form of one or more of three goals: transform, reduce, and apply.

"Transform" goals identify differences between the two states and strives for a shift from the existing state to a desired state. "Reduce" goals determine ways to eliminate some of the processes or factors of an existing state, and "Apply" goals put into play operators that actually effect the elimination of the differences .

The first step towards change is identifying "what" to change. This entails identifying the results or objectives of the change process and identifying the state or process that requires modification or elimination to achieve such an end-result.

Side by side with identifying "What" to change comes the important question of "who" should change. Human resources being the most important driver of competitive advantage in many firms, very often change management entails changing the work pattern, attitude, or behavior of the employee. Even if the change entails a shift in a process or strategy, such a shift would fail to make an impact unless the employees who operates the process or implements the strategy commit themselves for the change.

The final step in change management is redressing the "how" or preparing a blueprint on "How to change." For instance, if the objective of change were to enhance productivity, some of the pertinent questions would include "How do we get people to assume more responsibility," "How to introduce self-managed teams," "How to change over from System X to System Y," "How to reduce cycle times?" and so on. Several experts have formulated various approaches that deal with the "How" part of change management. Such approaches broadly divide itself into change at the individual level and change at organizational level.

Individual Level Approaches

Unfreeze-Change-Refreeze

One of the earliest models of Individual change management, developed by Kurt Lewin, the German psychologist, is the three-stage "Unfreeze-Change-Refreeze" process.

The first stage of the process is "unfreezing" that entails overcoming inertia to change and dismantling the existing "mindset" by bypassing internalized defense mechanisms inherent in individuals.

The second stage is the actual "change" process. Chaos and confusion are commonplace in this stage as the new paradigms and processes have not yet taken root whereas the old ways and paradigms already dismantle.

The third and final stage is "freezing" or "refreezing", where the new mindsets and concepts crystallize and entrenches in the individual mindset, and individuals establish their new comfort levels.

Critics find Lewin's three-stage approach an oversimplification and provide certain modifications by incorporating behavioral science theories to this base model.

One such modification done by G. Hughes in 1991 refers to the three stages as "exit" or departing from an existing state, "transit" or crossing unknown territory, and "entry" or attaining a new equilibrium.

Juddson in 1991 elaborates this process from three to five stages: analyzing and planning the change, communicating the change, gaining acceptance of new behaviors, changing from the status quo to the desired state, and consolidating and institutionalizing the new state.

These models assume that the diagnosis or problem analysis has already taken place and managing change becomes a matter of moving from one state to another, specifically from the problem state to the solved state, in a planned orderly manner.

Kubler-Ross Model

The Kubler-Ross model derives from Elizabeth Kubler-Ross's book, "On Death and Dying." The stages of Kubler-Ross's model describe the personal and emotional states that a person typically encounters when dealing with loss of a loved one. This model bases itself on the premise that individuals encounter similar personal and emotional states in the workplace, when confronted with change and consequently loss of accustomed habits, customs, and privileges.

The five stages in the model are denial, anger, bargaining, depression, and acceptance.

People Centered Implementation (PCI)

Change first Management Consultants have developed a People Centered Implementation change management methodology, based on their expertise spread over 35 countries. This methodology has undergone continuous improvements since its first launch in 1991.

The People Centered Implementation approach describes six critical success factors that required management for the people involved to build commitment to change initiatives and create behavior change.

These six critical success factors are:

1. Shared Change Purpose: Organizations need to create and share a powerful case for change.

2. Effective Change Leadership: The initiative for change should come from a strong change leadership.

3. Powerful Engagement Processes: The drivers of change should build and deliver plans to engage people in the change process.

4. Committed Local Sponsors: The change process should build itself around the understanding and commitment of middle and front line managers.

5. Strong Personal Connection: The change process should create commitment by incorporating behavior-changing actions for front-line people.

6. Sustained Personal Performance: The process should support people as they learn to adapt, and manage their resistance sensitively and empathetically.

ADKAR

Prosci, who collected input from more than 1000 organizations spread across 59 countries, developed the "ADKAR" model for individual change management.

The ADKAR model describes five required building blocks for successfully realizing change on an individual level. These five building blocks are Awareness of the need for change, Desire to support and participate in the change, Knowledge on how to change, Ability to change or implement new skills and behaviors, and Reinforcement necessary to sustain the new skills and behaviors.

Gleicher's Formula for Change

Richard Beckhard and David Gleicher developed a "Formula for Change," sometimes referred to as "Gleicher's Formula." This formula postulates that the combination of organizational dissatisfaction, vision for the future and the possibility of immediate, tactical action must be stronger than the resistance within the organization in order for meaningful changes to occur.

Organizational Level Approach

Organizational level change management includes processes and tools for managing the people side of the change at an organizational level. These tools include a structured approach that finds use in effectively transitioning groups or teams.

The process of organizational change entail creating a change management strategy, building awareness of the need for change through communications, developing skills and knowledge to support the change through education and training, and devising methods to sustain the change through measurement systems, rewards and reinforcement.

Strategies

The organizational level approaches bases itself on one or more of the following strategies: Empirical-Rational, Normative-Reeducative, Power-Coercive, and Environmental-Adaptive.

The empirical-rational strategy bases itself on the premise that people are rational and follow their self-interest. This strategy entails communicating the change to the employees together with proffering incentives to adapt to the changes.

The Normative-Reeducative strategy holds that people, being social beings adhere to cultural norms and values, and base change upon redefining and reinterpreting existing norms and values, and developing commitments to new ones.

The Power-Coercive strategy assumes people being compliant and generally doing what the people in authority tells them to do or make them do. Change happen based on authority and the imposition of sanctions.

The Environmental-Adaptive strategy holds that people oppose loss and disruption but adapt readily to new circumstances. Change thus bases itself on building a new organization and gradually transferring people from the old one to the new one.

The selection of the appropriate strategy depends on various factors depending upon the nature of people on whom the change takes place. Widespread change involving a large number of people, or a change where the stakes or costs run high would often necessitate deploying all the four strategies. If the organization highly depends on the workforce, the management's ability to command or demand becomes, and conversely if the workforce on whom the change descents do not have a very critical role in the organization, their ability to oppose or resist becomes limited. Mutual dependency, which is the case in most organizations usually signal a requirement for some level of negotiation.

A strong resistance to change requires deployment of a mix of Power-Coercive and Environmental-Adaptive strategies. On the other hand, weak resistance or concurrence calls for a combination of Empirical-Rational and Normative-Reeducative strategies.

Changes required over a short time-frame might necessitate the Power-Coercive strategy whereas, for changes over a longer period a mix of Empirical-Rational, Normative-Reeducative, and Environmental-Adaptive strategies would be more appropriate.

Theories

Several management experts have, over recent years formulated some theories about managing change at the organizational level.

Dynamic conservatism.

Donald Schon introduces the "Dynamic Conservatism" model that postulates that organizations are inherently conservative, and strive to protect themselves from constant change. Schon was among the first to recognize the need for a "learning organization" for he held that learning as the way through which organizations should shed this conservatism and adapt to changes quickly.

Schon devises a framework of 'reflection-in-action,' the mapping of a process to cope with constant change. The responsibility of the management lies in detecting trends in the macro and microenvironment, identifying changes and initiating programs to effect the required changes. Estimating the likely impact of such changes on employee behavior patterns, work processes, technological requirements, and motivation form an important aspect of this model. The job of the management is to assess the likely employee reactions and design a change program that will provide support as workers go through the process of accepting change. The management, after implementing and disseminating the program of change throughout the organization, need to monitor the same for effectiveness, and make adjustments wherever necessary.

Organize with Chaos.

Rowley and Roevens describe change as a process where certain events need managing whereas others need to be 'under' managed, or left alone to self-organize and improve the business naturally.

Theory U.

Otto Scharmer published his Theory U in 2007 that describes a process in which change strategies base on the emerging future rather than on lesson from the past.

Closework theory of intervention.

The Closework Theory of intervention first expounded in 2001 by Joe Klein and developed by Celerant Consulting focus on the leadership aspect of change management. This theory states that that champions, be they internal project team leaders or external consultants, drive change. Such champion-leaders do not confine themselves to giving instructions but rather involve themselves in the work alongside the delivery team, individuals, and management at the actual workplace. The involvement of champions enables them to see through practical and implemental ideas.

The constructionist principle.

Chris Argyris formulated the constructionist principle of change management, also known as the "Ladder of Influence." The Ladder of Influence theory base itself on neuroscience to prove that individual people do not have access to absolute knowledge of reality, and rather have access only to a set of beliefs they have built up over time about reality. As such, communication in change processes needs to make sure that information about change and its consequences present themselves in such a way that people with different belief systems can access and accept this information.

Two major methodological frameworks based on this principle are the Neuro-linguistic programming (NLP), and the Gestalt psychology. Neuro-Linguistic Programming is an eclectic school of modern psychotherapy developed by Richard Bandler, John Grinder, Robert Dilts, and others, that base on a Map-Territory relation to help people become more aware of their own thinking and reasoning, and make the same visible to others. Gestalt psychology is a theory of mind and brain that proposes that the operational principle of the brain is holistic, parallel, and analog, with self-organizing tendencies.

How to Implement Change

John Kotter in his book "Leading Change" has recommended eight steps to implement change in organizations. They are:

1. Increase urgency by inspiring people to move, and making objectives real and relevant.

2. Build a team to guide the change process. This team should consist of people with the right emotional commitment, and the right mix of skills and levels.

3. The guiding team should establish a simple vision and strategy, and focus on emotional and creative aspects necessary to drive service and efficiency.

4. Involve as many people as possible, communicate the essentials, simply, and appeal and respond to people's needs. De-clutter communications and harness the power of technology.

5. Remove obstacles, enable constructive feedback, and provide rewards and recognition for progress and achievements.

6. Create short-term wins, by setting aims that are easy to achieve, and manageable numbers of initiatives. Finish current stages before starting new ones.

7. Foster and encourage determination and persistence - ongoing change - encourage ongoing progress reporting - highlight achieved and future milestones.

8. Make change stick by reinforcing the value of successful change via recruitment, promotion, new change leaders. Weave change into culture.

Role of Leadership

The success of a change management program depend a great extent on the leadership given to the process. For the change management program to become a success, it is imperative that the leader takes up ownership of the program by involvement rather than directing in problem solving and creating solutions along with other team members, and accepting responsibility for the same.

Individuals, being inherently rational would invariably question the need for change. They would also question whether the progress of the company is in the right direction, and ponder whether they want to commit personally to making change happen. The onus is on the leader, who drives the change to provide clear and convincing answers. The articulation of a formal case for change and the creation of a written vision statement are invaluable opportunities to create or compel leadership-team alignment.

The leader should confront reality and articulate a convincing need for change, demonstrate faith that the company has a viable future and the leadership to get there, and provide a road map to guide behavior and decision-making. Leaders must then customize this message for various internal audiences, describing the pending change in terms that matter to the individuals.

Importance of Effective Communications

The best change management programs reinforce core messages through regular, timely advice that is both inspirational and practicable. Communications flow in from the bottom and out from the top, and are targeted to provide employees the right information at the right time and to solicit their input and feedback. Often this will require over communication through multiple, redundant channels.

Research indicates that providing clear and precise information that incorporates what the decision is, how the decision was made, why it was made, what alternatives were considered, how it fits in with the organizational mission, how it affects the organization, and how it affects employees helps gain the employees acceptance and support for the required change.

While emails and written notices help transmit information effectively, establishing interactive forums would help bring down the barriers of communication and generate involvement of the members in the change management process.

Role of HR in Implementation of Change

HR plays a critical role in change management. The role of HR in change management divides into three broad areas: behavioral interventions, facilitating training and devising rewards and reinforcement programs.

Behavioral interventions

The human side of change management involves the alignment of the company's culture, values, people, and behaviors to encourage the desired results. Plans themselves do not capture value. Value realizes only through the sustained, collective actions of the employees who design, execute, and live with the changed environment. Long-term structural transformation has four characteristics: changes in scale that affects all or most of the organization, changes in magnitude that involves significant alterations of the status quo, duration that could be anything from days to years, and strategic importance. However, companies will reap the rewards of change only when change occurs at the level of the individual employee.

The employee does not have a responsibility to manage change. The employee's responsibility is no other than to do their best, which is different for every person and depends on a wide variety of factors such as health, maturity, stability, experience, personality, and motivation. The responsibility for managing change is with management and especially the Human Resource Department of the organization. The role of HR is to manage the change in a way that employees can cope with it, and help people understand the reasons, aims, and ways of responding positively according to employees' own situations and capabilities.

Any significant transformation creates "people issues." New skills and capabilities would come in demand while old skills become redundant, new leaders would step up while old leaders would have to go. Confronting or trying to cope with such changes would invariably make the employees uncertain, resistant, and even emotional. HR plays a critical role during such turbulent times. HR needs to diffuse feelings and encourage objectivity. HR also needs to play a facilitating role in the development of a leadership team and then identifying and engaging leaders very early in the change process.

An important role for HR is in the area of culture. A diagnosis of the prevailing organizational culture indicates the readiness to change, bring major problems to the surface, identify conflicts, and define factors that can recognize and influence sources of leadership and resistance. Such a cultural diagnosis identifies the core values, beliefs, behaviors, and perceptions that need consideration while devising a successful change management program.

A culture of resistance to change is often rooted in deeply conditioned or historically reinforced feelings, and many people often find the process of change very unsettling. People who welcome change are not generally the best at being able to work reliably, dependably and follow processes. This reliability-dependability matrix stands directly opposite mobility-adaptability capabilities. Helping people in these situations to see things differently is a major challenge for HR.

A common mistake many HR professionals make is dealing with such issues on a reactive, case-by-case basis. This puts the speed of the change process, morale of the employee and the very success of the endeavor at risk.

Facilitating Training and Development Programs

Training occupies a critical role in change management. Change involves establishing of new systems and procedures, or even the deployment of new techniques. The successful establishment of such new paradigms requires that the people involved in engaging such paradigms need adequate training and familiarization. Training also need to look into developing the new skill sets or competencies required in the new scheme of things.

The development side of training programs includes devising programs that would lead to a change in culture, attitude, and values required to adopt to change, as well and upgrading the general skills ands competencies of the participants.

Devising Rewards and Reinforcements

The process of change management is not complete without ensuing that the changed systems, procedures, and techniques become the new norm. The most effective way to achieve this is by promoting highly visible rewards such as promotion, recognition, and bonuses as reinforcements for embracing change. Side by side, sanctions or removal of people standing in the way of change will reinforce the institution's commitment to the change.

Factors that Hinder Change Management

Many factors hinder the successful implementation of change management in organizations.

A common mistake many organizations make is changing for the sake of change. Some organizations decide to change as an automatic reaction to some changes in the external or internal environment, without making a realistic assessment of the organizations history, readiness, and capacity to change. They also do not devote sufficient time or resources to find out when, why, and what measures require change to achieve the desired result, or what would constitute "desired results" in the first place.

The problems that require change have both content and process dimensions. Although the broad general processes of change management remains same across organizations, the approach towards change management or the content part require customization for the organization. Organizations are dynamic entities and no two organizations are exactly alike. The business type processes, customer mix, markets, values, culture, all differ. For instance, a new claims processing system introduced successfully in a functionally organized health insurance firm would fail in a health insurance firm organized along product lines and market segments. Many organizations, however fail to grasp this fact and apply generic chance management policies that may have worked elsewhere.

Many organizations make the mistake of making a detailed specific plan for change, and insisting to the adherence of predefined routines and the rulebook during the process of change. Change, by definition, calls for a configured response to the peculiar situations that arise on the spot, and not adherence to prefigured routines. The successful implementation of change requires an action-feedback model, combined with flexible priorities, with the leader driving the change empowered to tweak with the rules and processes of the new system within the ambit of a sound strategic plan, until such new systems fine-tune and establish.

For this reason, change management is more a leadership skill than a management skill. Regardless of the amount of planning or preparation that goes behind implementation of a change, the actual changeover to a new system or process would invariably be turbulent, messy, and chaotic, and the person overseeing the change requires strong leadership skills to see through the situation until the new norms settle. It is also necessary that this leader involves in the process of change from within, rather than provide instructions from outside as many managers tend to do.

Some organizations make the mistake of imposing new skills and change on people, which are bound to fail. Such an approach assumes that people's personal aims, wishes, and needs completely align with those of the organization, or that there is no need for such alignment.

Successful implementation of change requires the support of the people involved in the system. No amount of theoretical formulations would work unless the people involved in the process are willing to implement the change, and no amount of threats or directives would work unless the people involved co-operate and sustain the new paradigms.

The key to achieve co-operation and support is two: effective communications and involvement. Very often, executives at the senior echelons of the organization decide on change without input from others. For example, mergers, layoffs, and company acquisitions rarely involve input from employees at any level but the most senior. As such, decisions permeate down to the workforce, the chances of misunderstandings, angst, and anger run high. Again, while written notices, emails, and public forums are important communication channels, certain sensitive aspects of organizational change require face-to-face communication.

Involving the employees in the change management exercise gives them a chance to understand the implications and feasibility of the proposed changes, and offer their suggestions, which sometimes throws up good ideas, and if nothing else secures their commitment and support for the change.

A mistake many organizations make is trying to "sell" change to people as a way of accelerating agreement and implementation. "Selling" change is not a sustainable strategy for success, and it is only a matter of time before the effects of the "sale" fade out and the inherent resistance to change resurfaces.

Another mistake many organizations make is rushing through the process of change. In most cases, the effects of agreeing a more sensible time frame would be far better than presiding over a rushed through change that would end in a disaster. Organizations commonly say they do not have time to re-assess and re-align their aims and values or do not have time to consult with people properly, because the organization is on the edge of a crisis. Organizations get into crisis because they ignore such basic facts in the first place, and ignoring these facts again will only deepen the crisis.

Conclusion

Change management is a program mainly concerned with the "means" towards achieving an end, rather than the end in itself. Organizations frequently survive the people who establish them, and at some point a new group with a different set of values, culture, and vision compared to the founding group would take over the organization. Successful organizations resolve the issue of structure, that is, the definition, placement and coordination of functions and people, and people who enter at a later stage then have to live with this design, for the ends have already been established, these other people are chiefly concerned with means. This is why so many problem-solving efforts start out focused on means.

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