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Lesson#7
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The Nature of Planned Change
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The Nature of Planned Change
The pace of global, economic, and technological development
makes change an inevitable feature of
organizational life. However, change that happens to an
organization can be distinguished from change that
is planned by its members. Here, the term change will refer to
planned change. Organization development
is directed at bringing about planned change to increase an
organization's effectiveness. It is generally
initiated and implemented by managers, often with the help of an
OD practitioner either from inside or
outside of the organization. Organizations can use planned
change to solve problems, to learn from
experience, to reframe shared perceptions, to adapt to external
environmental changes, to improve performance,
and to influence future changes.
All approaches to OD rely on some theory about planned change.
The theories describe the different
stages through which planned change may be effected in
organizations and explain the process of applying
OD methods to help organization members manage change.
Theories of Planned change:
The three major theories of organization change that have
received considerable attention in the field are:
Lewin's change model, the action research model, and
contemporary adaptations of action research.
Lewin’s Change Model:
According to the open-systems view, organizations— like living
creatures—tend to be homeostatic, or
continuously working to maintain a steady state. This helps us
understand why organizations require
external impetus to initiate change and, indeed, why that change
will be resisted even when it is necessary.
Organizational change can occur at three levels— and, since the
patterns of resistance to change are
different for each, the patterns in each level require different
change strategies and techniques. These levels
involve:
1.
Changing the
individuals who work in the organization—that is, their skills, values,
attitudes, and
eventually behavior—but making sure that such
individual—ehaviora4 change is always regarded as
instrumental to organizational change.
2.
Changing various
organizational structures and systems—reward systems, reporting elationships,
work design, and so on.
3.
Directly changing
the organizational climate or interpersonal style—how open people are with
each other, how conflict is managed, how decisions are made, and
so on.
According to Lewin, a pioneer in the field of social psychology
of organizations, the first step of any
change process it to
unfreeze
the present pattern of
behavior as a way of managing resistance to change.
Depending on the organizational level of change intended, such
unfreezing might involve, on the individual
level, selectively promoting or terminating employees; on the
structural level, developing highly experiential
training programs in such new organization designs as matrix
management; or, on the climate level,
providing data-based feedback on how employees feel about
certain management practices. Whatever the
level involved, each of these interventions is intended to make
organizational members address that level’s
need for change, heighten their awareness of their own
behavioral patterns, and make them more open to
the change process.
The second step,
movement
, involves making the actual
changes that will move the organization to
another level of response. On the individual level, we would
expect to see people behaving differently,
perhaps demonstrating new skills or new supervisory practices.
On the individual level, we would expect to
see changes in actual organizational structures, reporting
relationships, and reward systems that affect the
way people do their work. Finally, on the climate or
interpersonal- style level, we would expect to see
behavior patterns that indicate greater interpersonal trust and
openness and fewer dysfunctional
interactions.
The final stage of the change process,
refreezing
,
involves stabilizing or institutionalizing these changes by
establishing systems that make these behavioral patterns
“relatively secure against change,” as Lewin put it.
The refreezing stage may involve, for example, redesigning the
organization’s recruitment process to
increase the likelihood of hiring applicants who share the
organizations new management style and value
system. During the refreezing stage, the organization may also
ensure that the new behaviors have become
the operating norms at work, that the reward system actually
reinforces those behaviors, or that a new,
more participative management style predominates.
According to Lewin, the first step to achieving lasting
organizational change is to deal with resistance to
change by unblocking the present system. This unblocking usually
requires some kind of confrontation and
a retraining process based on planned behavioral changes in the
desired direction. Finally, deliberate steps
need to be taken to cement these changes in place—this
“institutionalization of change” is designed to
make the changes semi-permanent until the next cycle of change
occurs.
Figure: 07
Whatever the level involved, each of the three interventions is
needed to make organizational members
address the level’s need for change, heighten their awareness of
their own behavioral patterns, and make
them more open to the change process.
Stage 1: Unfreezing
Three ways of unfreezing an organization are:
i. Disconfirmation
ii. Induction of guilt or anxiety
iii. Creation of psychological safety
i. Disconfirmation
or
lack of confirmation. Organizational members are not likely to embrace change
unless they experience some need for it. Embracing change
typically means that people are dissatisfied with
the way things are – quality is below standard, costs are too
high, morale is too low, or direction is unclear,
for example.
Unfreezing involves reducing those forces maintaining the
organization’s behavior at its present level.
Unfreezing is sometimes accomplished through a process of
“psychological disconfirmation.” By
introducing information that shows discrepancies between
behaviors desired by organization members and
those behaviors currently exhibited, members can be motivated to
engage in change activities.
ii. Induction of guilt or anxiety
.
This is a matter of establishing a gap between what is current but not
working well and some future goal that would make things work
better. When people recognize a gap
between what is and what would be better and more desirable,
they will be motivated via guilt or anxiety to
reduce the gap. But disconfirmation and induction are not enough
to accomplish the unfreezing stage. One
more process is necessary.
iii. Creation of psychological safety
.
To face disconfirmation, experience guilt or anxiety, and be able to
act or move, people must believe that moving will not bring them
humiliation or loss of self-esteem. People
must still feel worthy, psychologically safe. The consultant
must be concerned with people not losing face
and must take care that when people admit that something is
wrong they will not be punished or
humiliated.
Stage 2: Moving (Changing)
The second step,
movement
, involves making the actual
changes that will move the organization to
another level of response.
On the individual level, we would expect to see people behaving
differently, perhaps demonstrating new
skills or new supervisory practices.
On the structural level, we would expect to see changes in
actual organizational structures, reporting
relationships, and reward systems that affect the way people do
their work.
On the climate or interpersonal level, we would expect to see
behavior patterns that indicate greater
interpersonal trust and openness and fewer dysfunctional
interactions.
There are two main processes for accomplishing this stage:
i. Identification with a new role model
ii. Scanning the environment for new information
i. Identification with a new role model, mentor, boss, or
consultant
to “begin to see things
from that
other person’s point of view. If we see another point of view
operating in a person to whom we pay
attention and respect, we can begin to imagine that point of
view as something to consider for ourselves”.
ii. Scanning the environment for new, relevant information
.
In working with the chairman of a
company and the president or CEO, the consultant explored many
reasons for their conflict with one
another. To help with reducing some of this conflict, the
consultant worked on clarifying roles and
responsibilities. He quotes other chairman-president/CEO models
from other client organizations, some
that worked very well and some that did not. This process was an
activity of bringing to the two of them
new, relevant information that might help them move forward with
the changes needed in the relationship.
Stage 3: Refreezing
This final stage is one of helping the client integrate the
changes. This stage involves stabilizing or
institutionalizing these changes by establishing systems (such
as norms, policies, and structures) that make
these behavioral patterns “relatively secure against change”.
The refreezing stage may involve
• Redesigning the
organization’s recruitment process to increase the likelihood of hiring
applicants
who share the organization’s new management style and value
system.
• During the refreezing
stage, the organization may also ensure that the new behaviors have become
the operating norms at work, that the reward system actually
reinforces those behaviors, or that a
new, more participative management style predominates.
This stage can be seen in two parts – self and relations with
others:
i. Personal refreezing
ii. Relational refreezing
i. Personal refreezing
is the process of taking the new, changed way of
doing things and making it fit
comfortably into one’s total self-concept. This process involves
a lot of practice – trying out new roles and
behaviors, getting feedback, and making adjustments until the
new way of doing things feels reasonably
comfortable.
ii. Relational refreezing
is the process of assuring that the client’s new
behavior will fit with significant
others. In a system, when one begins to do things differently,
will this difference quickly affect others with
whom the person interacts? If you and I interact frequently and
I change to maintain the relationship you
will have to change as well, at least to some extent to maintain
the relationship. This process involves
openly engaging with others about the new way of doing things,
to help them see why the change is better
than the old way.
Case Example: British Airways
In 1982 Margaret Thatcher’s government in Great Britain decided
to convert British Airways (BA) from
government ownership to private ownership. BA had regularly
required large subsidies from the
government (almost $900 million in 1982), subsidies that the
government felt it could not provide. Even
more important, the Conservative government was ideologically
opposed to the government’s ownership
of businesses—a matter they regarded as the appropriate province
of private enterprise.
The growing deregulation of international air traffic was
another important environmental change. Air fares
were no longer fixed, and the resulting price wars placed BA at
even greater risk of financial losses.
In order to be able to “privatize”—that is, sell BA shares on
the London and New York Stock
Exchanges—it was necessary to make BA profitable. The pressures
to change thus exerted on BA by the
external environment were broad and intense. And the internal
organizational changes, driven by these
external pressures, have been massive and widespread. They have
transformed the BA culture from what
BA managers described as “bureaucratic and militaristic” to one
that is now described as “service-oriented
and market- driven.” The success of these efforts over a five-
year period (1982—1987) is clearly depicted
in the data.
This figure 8 reflects BA’s new mission in its new advertising
slogan—”The World’s Favorite Airline.” Five
years after the change effort began, BA had successfully moved
from government ownership to private
ownership, and both passenger and cargo revenues had
dramatically increased, leading to a substantial
increase in share price over the offering price, despite the
market crash of October 1987. Indeed, in late
1987 BA acquired British Caledonian Airways, its chief domestic
competitor. The steps through which this
transformation was accomplished clearly fit Lewin’s model of the
change process.
Table: 01
The British Airways Success Story: Creating the “World’s
Favorite Airline”
1982 1987
Ownership Government Private
Profit/loss $900 million $435 million
Culture Bureaucratic and
militaristic
Service-oriented and market-driven
Passenger load factor Decreasing Increasing-up 16% in Ist
quarter
1988
Cargo load Stable Increasing-up 41% in Ist quarter
1988
Share price N/A Increased 67% (2/11/87-8/11/87)
Acquisitions N/A British Caledonian
Unfreezing:
In BA’s
change effort, the first step in unfreezing involved a massive reduction in the
worldwide BA workforce (from 59,000 to 37,000). It is
interesting to note that, within a year after this staff
reduction, virtually all BA performance indices had
improved—more on-time departures and arrivals, fewer
out-of-service aircraft, less time “on hold” for telephone
reservations, fewer lost bags, and so on. The
consensus view at all levels within BA was that the downsizing
had reduced hierarchical levels, thus giving
more autonomy to operating people and allowing work to get done
more easily.
The downsizing was accomplished with compassion; no one was
actually laid off. Early retirement, with
substantial financial settlements, was the preferred solution
throughout the system. Although there is no
question that the process was painful, considerable attention
was paid to minimizing the pain in every
possible way.
A second major change occurred in BA’s top management. In 1981,
Lord John King of Wartinbee, a senior
British industrialist, was appointed chairman of the board, and
Cohn Marshall, now Sir Colin, was
appointed CEO. The appointment of Marshall represented a
significant departure from BA culture. An
outsider to BA, Marshall had a marketing background that was
quite different from that of his
predecessors, many of whom were retired senior Royal Air Force
officers. It was Marshall who decided,
shortly after his arrival, that BA’s strategy should be to
become “the World’s Favorite Airline.” Without
question, critical ingredients in the success of the overall
change effort were Marshall’s vision, the clarity of
his understanding that BA’s culture needed to be changed in
order to carry out the vision, and his strong
leadership of that change effort.
To support the unfreezing process, the first of many training
programs was introduced. “Putting People
First”—the program in which all BA personnel with direct
customer contact participated - was another
important part of the unfreezing process. Aimed at helping line
workers and managers understand the
service nature of the airline industry, it was intended to
challenge the prevailing wisdom about how things
were to be done at BA.
Movement:
Early on,
Marshall hired Nicholas Georgiades, a psychologist and former professor and
consultant, as director (vice president) of human resources. It
was Georgiades who developed the specific
tactics and programs required to bring Marshall’s vision into
reality. Thus Georgiades, along with Marshall,
must be regarded as a leader of BAS successful change effort.
One of the interventions that Georgiades
initiated—a significant activity during the movement phase—was
to establish training programs for senior
and middle managers. Among these were “Managing People First”
and “Leading the Service Business”—
experiential programs that involved heavy doses of individual
feedback to each participant about his or her
behavior regarding management practices on the job.
These training programs all had more or less the same general
purpose: to identify the organization’s
dysfunctional management style and begin the process of
developing a new management style that would
fit BA’s new, competitive environment. If the organization was
to be market- driven, service-based, and
profit-making, it would require an open, participative
management style— one that would produce
employee commitment.
On the structures and systems level during the unfreezing stage,
extensive made of diagonal task forces
composed of individuals from different functions and at
different levels of responsibility to deal with
various aspects of the change process—the need for MIS
(management information systems) support, new
staffing patterns, new uniforms, and so on. A bottom-up, less
centralized budgeting process—one sharply
different from its predecessor—was introduced.
Redefining BA’s business as service, rather than as
transportation, represented a critical shift on the level of
climate/interpersonal style. A service business needs an open
climate and good interpersonal skills, coupled
with outstanding teamwork. Off-site, team-building meetings—the
process chosen to deal with these issues
during the movement stage—has now been institutionalized.
None of these changes would have occurred without the commitment
and involvement of top
management. Marshall himself played a central role in both
initiating and supporting the change process,
even when problems arose. As one index of this commitment,
Marshall shared information at questionand-
answer sessions at most of the training programs—both “to show
the flag” and to provide his own
unique perspective on what needed to be done.
An important element of the movement phase was acceptance of the
concept of “emotional labor” that
Georgiades championed—that is, the high energy levels required
providing the quality of service needed in
a somewhat uncertain environment, such as the airline business.
Recognition that such service is
emotionally draining and often can lead to burnout and permanent
psychological damage is critical to
developing systems of emotional support for the service workers
involved.
Another important support mechanism was the retraining of
traditional personnel staff to become internal
change agents charged with helping and supporting line and staff
managers. So, too, was the development
of peer support groups for managers completing the “Managing
People First” training program?
To support this movement, a number of internal BA structures and
systems were changed. By introducing
a new bonus system, for example, Georgiades demonstrated
management’s commitment to sharing the
financial gains of BA’s success. The opening of Terminal 4 at
Heathrow Airport provided a more
functional work environment for staff. The purchase of
Chartridge House as a permanent BA training
center permitted an increase in and integration of staff
training, and the new, “user-friendly” MIS enabled
managers to get the information they needed to do their jobs in
a timely fashion.
Table: 02
Applying Lewin’s Model to the British Airways (BA) Change Effort
Levels Unfreezing Movement Refreezing
Individual Downsizing of workforce
($9,000 to 37,000); middle
management especially hard
hit.
New top management team.
“putting people first”
Acceptance of concept
of “emotional labor”.
Personnel staff as
internal consultants.
“managing people first”
peer support groups.
Continued
commitment of top
management.
Promotion of staff
with new BA values.
“Top Flight
Academies”. “Open
Learning” programs
Structures and
systems
Use of diagonal task forces to
plan change.
Reduction in levels of
hierarchy.
Modification of budgeting
process
Profit sharing (3weeks
pay in 1987).
Opening of Terminal 4.
Purchase of Chartridge
as training center.
New, “User-friendly”
MIS
New performance
appraisal system based
on both behavior and
performance.
Performance-based
compensation system.
Continued use of task
forces
Climate/interpersonal
style
Redefinition of the business:
service, not transportation.
Top-management
commitment and
involvement.
Greater emphasis on
open communications.
Data feedback on
work-unit climate.
Off-site, team-building
meeting.
New uniforms.
New coat of arms.
Development and use
of cabin-crew teams.
Continued use of databased
feedback on
climate and
management practices.
Refreezing:
During the
refreezing phase, the continued involvement and commitment of BA’s top
management ensured that the changes became “fixed” in the
system. People who clearly exemplified the
new BA values were much more likely to be promoted, especially
at higher management levels. Georgiades
introduced additional pro-grams for educating the workforce,
especially managers. “Open Learning”
programs, including orientation programs for new staff,
supervisory training for new supervisors, and so
on, were augmented by “Top Flight Academies” that included
training at the executive, senior
management, and management levels. One of the academies now
leads to an MBA degree.
A new performance appraisal system, based on both behavior and
results, was created to emphasize
customer service and subordinate development. A
performance-based compensation system is being
installed, and task forces continue to be used to solve emerging
problems, such as those resulting from the
acquisition of British Caledonian Airlines.
Attention was paid to BA’s symbols as well— new, upscale
uniforms; refurbished aircraft; and a new
corporate coat of arms with the motto “We fly to serve.” A
unique development has been the creation of
teams for consistent cabin-crew staffing, rather than the ad hoc
process typically used. Finally, there is
continued use of data feedback on management practices
throughout the system.
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