How to Create How to Create ChangeChange

Louis Rowitz, PhDLouis Rowitz, PhD

3 Competencies of 3 Competencies of LeadershipLeadership

Hersey, Blanchard, and Johnson, 1996Hersey, Blanchard, and Johnson, 1996

►Diagnosing – Understanding the Diagnosing – Understanding the situation you are trying to influencesituation you are trying to influence

►Adapting – Altering your behavior and Adapting – Altering your behavior and other resources to meet the other resources to meet the contingencies of the situationcontingencies of the situation

►Communicating – Interacting with Communicating – Interacting with others in a way that people can others in a way that people can understand and acceptunderstand and accept

Change is the process of moving Change is the process of moving from an obsolete present into a from an obsolete present into a revitalized future.revitalized future.

(Rowitz, 1997)(Rowitz, 1997)

Significant change means the Significant change means the casting off of old rules and casting off of old rules and procedures and the putting on procedures and the putting on of new ones.of new ones.

(Hersey et al, 1996)(Hersey et al, 1996)

The greatest discovery of my The greatest discovery of my generation is that human beings generation is that human beings can alter their lives by altering can alter their lives by altering their attitudes of mind.their attitudes of mind.

(William James)(William James)

Lewin and Isabella on Lewin and Isabella on ChangeChange

►ADD TABLEADD TABLE

Psychological Safety in Psychological Safety in ChangeChange(Schein, 1961)(Schein, 1961)

As an organization unfreezes, anxiety As an organization unfreezes, anxiety increases.increases.(1)(1)Anxiety 1 – Associated with the Anxiety 1 – Associated with the inability or unwillingness to learn inability or unwillingness to learn something new because it appears something new because it appears too difficult or disruptive.too difficult or disruptive.(2)(2)Anxiety 2 – Induced anxiety of Anxiety 2 – Induced anxiety of continuing to do something that will continuing to do something that will lead to failure.lead to failure.

Goal of ChangeGoal of Change(Schien, 1961)(Schien, 1961)

►Phase 1 – Increase anxiety 1 – fear of Phase 1 – Increase anxiety 1 – fear of not changingnot changing

►Phase 2 – Decrease anxiety – fear of Phase 2 – Decrease anxiety – fear of changingchanging

Avoiding Disaster During Avoiding Disaster During ChangeChange(Bennis, 1989)(Bennis, 1989)

1.1. Recruit [team] with scrupulous honestyRecruit [team] with scrupulous honesty

2.2. Guard against the [mavericks]Guard against the [mavericks]

3.3. Build support among like-minded Build support among like-minded peoplepeople

4.4. [Beware of the hidden agendas][Beware of the hidden agendas]

5.5. Plan for change from a solid conceptual Plan for change from a solid conceptual basisbasis

6.6. Don’t settle for rhetorical changeDon’t settle for rhetorical change

Avoiding Disaster During Avoiding Disaster During Change (cont’d)Change (cont’d)

(Bennis, 1989)(Bennis, 1989)

7.7. Don’t allow those who are opposed to Don’t allow those who are opposed to change to appropriate basic issueschange to appropriate basic issues

8.8. Know the territoryKnow the territory

9.9. Appreciate environmental factorsAppreciate environmental factors

10.10. Avoid future shockAvoid future shock

11.11. Change is most successful when Change is most successful when those who are affected are involved those who are affected are involved in the planningin the planning

Kotter on changeKotter on change

Eight Errors Common to Eight Errors Common to Organizational Change Efforts Organizational Change Efforts

and Their Consequencesand Their Consequences

Common ErrorsCommon Errors► Allowing too much complacencyAllowing too much complacency► Failing to create a sufficiently powerful guiding Failing to create a sufficiently powerful guiding

coalitioncoalition► Underestimating the power of visionUnderestimating the power of vision► Undercommunicating the vision by a factor of 10 Undercommunicating the vision by a factor of 10

(or 100 or even 1,000)(or 100 or even 1,000)► Permitting obstacles to block the new visionPermitting obstacles to block the new vision► Failing to create short-term winsFailing to create short-term wins► Declaring victory to soonDeclaring victory to soon► Neglecting to anchor changes firmly in the Neglecting to anchor changes firmly in the

corporate culturecorporate culture

Eight Errors Common to Eight Errors Common to Organizational Change Efforts Organizational Change Efforts

and Their Consequences and Their Consequences (cont’d)(cont’d)

ConsequencesConsequences► New strategies aren’t implemented wellNew strategies aren’t implemented well► Acquisitions don’t achieve expected synergiesAcquisitions don’t achieve expected synergies► Reengineering takes too long and costs too Reengineering takes too long and costs too

muchmuch► Downsizing doesn’t get costs under controlDownsizing doesn’t get costs under control► Quality programs don’t deliver hoped-for Quality programs don’t deliver hoped-for

resultsresults

Economic and Social Forces Economic and Social Forces Driving the Need for Major Driving the Need for Major Change in OrganizationsChange in Organizations

►ADD TABLEADD TABLE

Establishing a Sense of Establishing a Sense of UrgencyUrgency

►Examining the market and competitive Examining the market and competitive realitiesrealities

► Identifying and discussing crises, Identifying and discussing crises, potential crises, or major opportunitiespotential crises, or major opportunities

Creating the Guiding Creating the Guiding CoalitionCoalition

►Putting together a group with enough Putting together a group with enough power to lead the changepower to lead the change

►Getting the group to work together like Getting the group to work together like a teama team

Developing a Vision and Developing a Vision and StrategyStrategy

►Creating a vision to help direct the Creating a vision to help direct the change effortchange effort

►Developing strategies for achieving Developing strategies for achieving that visionthat vision

Communicating the Change Communicating the Change VisionVision

►Using every vehicle possible to Using every vehicle possible to constantly communicate the new constantly communicate the new vision and strategiesvision and strategies

►Having the guiding coalition role Having the guiding coalition role model the behavior expected of model the behavior expected of employeesemployees

Empowering Broad-Based Empowering Broad-Based ActionAction

►Getting rid of obstaclesGetting rid of obstacles►Changing systems or structures that Changing systems or structures that

undermine the change visionundermine the change vision►Encouraging risk taking and Encouraging risk taking and

nontraditional ideas, activities, and nontraditional ideas, activities, and actionsactions

Generating Short-Term WinsGenerating Short-Term Wins

►Planning for visible improvements in Planning for visible improvements in performance, or “wins”performance, or “wins”

►Creating those winsCreating those wins►Visibly recognizing and rewarding Visibly recognizing and rewarding

people who made the wins possiblepeople who made the wins possible

Consolidating Gains and Consolidating Gains and Producing More ChangeProducing More Change

►Using increased credibility to change Using increased credibility to change all systems, structures, and policies all systems, structures, and policies that don’t fit the transformation visionthat don’t fit the transformation vision

►Hiring, promoting, and developing Hiring, promoting, and developing people who can implement the change people who can implement the change visionvision

►Reinvigorating the process with new Reinvigorating the process with new projects, themes, and change agentsprojects, themes, and change agents

Anchoring New Approaches in Anchoring New Approaches in the Culturethe Culture

►Creating better performance through Creating better performance through customer- and productivity-oriented customer- and productivity-oriented behavior, more and better leadership, behavior, more and better leadership, and more effective managementand more effective management

►Articulating the connections between new Articulating the connections between new behaviors and organizational successbehaviors and organizational success

►Developing means to ensure leadership Developing means to ensure leadership development and successiondevelopment and succession

Sources of ComplacencySources of Complacency

►ADD TABLEADD TABLE

Ways to Raise the Urgency Ways to Raise the Urgency LevelLevel

1.1. Create a crisis by allowing a financial Create a crisis by allowing a financial loss, exposing managers to major loss, exposing managers to major weaknesses vis-à-vis competitors, or weaknesses vis-à-vis competitors, or allowing errors to blow up instead of allowing errors to blow up instead of being corrected at the last minutebeing corrected at the last minute

2.2. Eliminate obvious examples of Eliminate obvious examples of excess (e.g., company-owned excess (e.g., company-owned country club facilities, a large air country club facilities, a large air force, gourmet executive dining force, gourmet executive dining rooms).rooms).

Ways to Raise the Urgency Ways to Raise the Urgency Level (cont’d)Level (cont’d)

3.3. Set revenue, income, productivity, Set revenue, income, productivity, customer satisfaction, and cycle-time customer satisfaction, and cycle-time targets so high that they can’t be targets so high that they can’t be reached by conducting business as reached by conducting business as usual.usual.

4.4. Stop measuring subunit performance Stop measuring subunit performance based only on narrow functional based only on narrow functional goals. Insist that more people be held goals. Insist that more people be held accountable for broader measures of accountable for broader measures of business performance.business performance.

Ways to Raise the Urgency Ways to Raise the Urgency Level (cont’d)Level (cont’d)

5.5. Send more data about customer Send more data about customer satisfaction and financial performance satisfaction and financial performance to more employees, especially to more employees, especially information that demonstrates information that demonstrates weaknesses vis-à-vis the competition.weaknesses vis-à-vis the competition.

6.6. Insist that people talk regularly to Insist that people talk regularly to unsatisfied customers, unhappy unsatisfied customers, unhappy suppliers, and disgruntled shareholders.suppliers, and disgruntled shareholders.

Ways to Raise the Urgency Ways to Raise the Urgency Level (cont’d)Level (cont’d)

7.7. Use consultants and other means to force Use consultants and other means to force more relevant data and honest discussion more relevant data and honest discussion into management meetings.into management meetings.

8.8. Put more honest discussions of the firm’s Put more honest discussions of the firm’s problems in company newspapers and problems in company newspapers and senior management speeches. Stop senior senior management speeches. Stop senior management “happy talk.”management “happy talk.”

9.9. Bombard people with information on future Bombard people with information on future opportunities, on the wonderful rewards opportunities, on the wonderful rewards for capitalizing on those opportunities, and for capitalizing on those opportunities, and on the organization’s current inability to on the organization’s current inability to pursue those opportunities.pursue those opportunities.

Building a Coalition That Can Building a Coalition That Can Make Change HappenMake Change Happen

► Find the right peopleFind the right people With strong position power, broad expertise, and With strong position power, broad expertise, and

high credibilityhigh credibility With leadership and management skills, With leadership and management skills,

especially the formerespecially the former► Create trustCreate trust

Through carefully planed off-site eventsThrough carefully planed off-site events With lots of talk and joint activitiesWith lots of talk and joint activities

►Develop a common goalDevelop a common goal Sensible to the headSensible to the head Appealing to the heartAppealing to the heart

Characteristics of an Effective Characteristics of an Effective VisionVision

► Imaginable: conveys a picture of what the future will Imaginable: conveys a picture of what the future will look likelook like

► Desirable: appeals to the long-term interests of Desirable: appeals to the long-term interests of employees, customers, stockholders, and others who employees, customers, stockholders, and others who have a stake in the enterprisehave a stake in the enterprise

► Feasible: comprises realistic, attainable goalsFeasible: comprises realistic, attainable goals► Focused: is clear enough to provide guidance in Focused: is clear enough to provide guidance in

decision makingdecision making► Flexible: is general enough to allow individual Flexible: is general enough to allow individual

initiative and alternative responses in light of initiative and alternative responses in light of changing conditionschanging conditions

► Communicable: is easy to communicate; can be Communicable: is easy to communicate; can be successfully explained within five minutessuccessfully explained within five minutes

Creating an Effective VisionCreating an Effective Vision

► First draft: the process often starts with an First draft: the process often starts with an initial statement from a single individual, initial statement from a single individual, reflecting both his or her dreams and real reflecting both his or her dreams and real marketplace needs.marketplace needs.

► Role of the guiding coalition: the first draft is Role of the guiding coalition: the first draft is always modeled over time by the guiding always modeled over time by the guiding coalition or an even larger group of people.coalition or an even larger group of people.

► Importance of teamwork: the group process Importance of teamwork: the group process never works well without a minimum of never works well without a minimum of effective teamwork.effective teamwork.

Creating an Effective Vision Creating an Effective Vision (cont’d)(cont’d)

► Role of the head and the heart: both analytical Role of the head and the heart: both analytical thinking and a lot of dreaming are essential thinking and a lot of dreaming are essential throughout the activity.throughout the activity.

►Messiness of the process: vision creation is Messiness of the process: vision creation is usually a process of two steps forward and one usually a process of two steps forward and one back, movement to the left and then to the right.back, movement to the left and then to the right.

► Time frame: vision is never created in a single Time frame: vision is never created in a single meeting. The activity takes months, sometimes meeting. The activity takes months, sometimes years.years.

► End product: the process results in a direction End product: the process results in a direction for the future that is desirable, feasible, focused, for the future that is desirable, feasible, focused, flexible, and is conveyable in five minutes or flexible, and is conveyable in five minutes or less.less.

Key Elements in the Effective Key Elements in the Effective Communication of VisionCommunication of Vision

► Simplicity: all jargon and technobabble must Simplicity: all jargon and technobabble must be eliminated.be eliminated.

►Metaphor, analogy, and example: A verbal Metaphor, analogy, and example: A verbal picture is worth a thousand words.picture is worth a thousand words.

►Multiple forums: big meetings and small, Multiple forums: big meetings and small, memos and newspapers, formal and memos and newspapers, formal and informal interaction-all are effective for informal interaction-all are effective for spreading the word.spreading the word.

► Repetition: Ideas sink in deeply only after Repetition: Ideas sink in deeply only after they have been heard many times.they have been heard many times.

Key Elements in the Effective Key Elements in the Effective Communication of Vision Communication of Vision

(cont’d)(cont’d)► Leadership: by example: behavior from Leadership: by example: behavior from

important people that is inconsistent with important people that is inconsistent with the vision overwhelms other forms of the vision overwhelms other forms of communication.communication.

► Explanation of seeming inconsistencies: Explanation of seeming inconsistencies: unaddressed inconsistencies undermine the unaddressed inconsistencies undermine the credibility of all communication.credibility of all communication.

►Give-and-take: Two-way communication is Give-and-take: Two-way communication is always more powerful than one-way always more powerful than one-way communication.communication.

Barriers to EmpowermentBarriers to Empowerment

►ADD TABLEADD TABLE

How Structure Can Undermine How Structure Can Undermine VisionVision

The VisionThe Vision► Focus on the customerFocus on the customer► Give more responsibility to Give more responsibility to

lower-level employeeslower-level employees► Increase productivity to Increase productivity to

become the low-cost become the low-cost producerproducer

► Speed everything upSpeed everything up

The StructureThe Structure► But the organization But the organization

fragments resources and fragments resources and responsibility for products and responsibility for products and servicesservices

► But there are layers of middle-But there are layers of middle-level managers who second-level managers who second-guess and criticize employeesguess and criticize employees

► But huge staff groups at But huge staff groups at corporate headquarters are corporate headquarters are expensive and constantly expensive and constantly initiate costly procedures and initiate costly procedures and programsprograms

► But independent silos don’t But independent silos don’t communicate and thus slow communicate and thus slow everything downeverything down

Empowering People to Effect Empowering People to Effect ChangeChange

► Communicate a sensible vision to employees: if Communicate a sensible vision to employees: if employees have a shared sense of purpose, it will employees have a shared sense of purpose, it will be easier to initiate actions to achieve that purpose.be easier to initiate actions to achieve that purpose.

► Make structures compatible with the vision: Make structures compatible with the vision: unaligned structures block needed action.unaligned structures block needed action.

► Provide the training employees need: without the Provide the training employees need: without the right skills and attitudes, people feel right skills and attitudes, people feel disempowered.disempowered.

► Align information and personnel systems to the Align information and personnel systems to the vision: unaligned systems also block needed action.vision: unaligned systems also block needed action.

► Confront supervisors who undercut needed change: Confront supervisors who undercut needed change: nothing disempowers people the way a bad boss nothing disempowers people the way a bad boss can.can.

The Role of Short-Term WinsThe Role of Short-Term Wins► Provide evidence that sacrifices are worth it: wins greatly Provide evidence that sacrifices are worth it: wins greatly

help justify the short-term costs involved.help justify the short-term costs involved.► Reward change agents with a pat on the back: after a lot Reward change agents with a pat on the back: after a lot

of hard work, positive feedback builds morale and of hard work, positive feedback builds morale and motivation.motivation.

► Help fine-tune vision and strategies: short-term wins give Help fine-tune vision and strategies: short-term wins give the guiding coalition concrete data on the viability of the guiding coalition concrete data on the viability of their ideas.their ideas.

► Undermine cynics and self-serving resisters: clear Undermine cynics and self-serving resisters: clear improvements in performance make it difficult for people improvements in performance make it difficult for people to block needed change.to block needed change.

► Keep bosses on board: provides those higher in the Keep bosses on board: provides those higher in the hierarchy with evidence that the transformation is on hierarchy with evidence that the transformation is on track.track.

► Build momentum: turns neutrals into supporters, Build momentum: turns neutrals into supporters, reluctant supporters into active helpers, etc.reluctant supporters into active helpers, etc.

What Stage 7 Looks Like in a What Stage 7 Looks Like in a Successful, Major Change EffortSuccessful, Major Change Effort►More change, not less: the guiding coalition More change, not less: the guiding coalition

uses the credibility afforded by short-term uses the credibility afforded by short-term wins to tackle additional and bigger change wins to tackle additional and bigger change projects.projects.

►More help: additional people are brought in, More help: additional people are brought in, promoted, and developed to help with all promoted, and developed to help with all the changes.the changes.

► Leadership from senior management: senior Leadership from senior management: senior people focus on maintaining clarity of people focus on maintaining clarity of shared purpose for the overall effort and shared purpose for the overall effort and keeping urgency levels up.keeping urgency levels up.

What Stage 7 Looks Like in a What Stage 7 Looks Like in a Successful, Major Change Effort Successful, Major Change Effort

(cont’d)(cont’d)►Project management and leadership Project management and leadership

from below: lower ranks in the from below: lower ranks in the hierarchy both provide leadership for hierarchy both provide leadership for specific projects and manage those specific projects and manage those projectsprojects

►Reduction of unnecessary Reduction of unnecessary interdependencies: To make change interdependencies: To make change easier in both the short and long term, easier in both the short and long term, managers identify unnecessary managers identify unnecessary interdependencies and eliminate theminterdependencies and eliminate them

Anchoring Change in a Anchoring Change in a CultureCulture

► Comes last, not fist: Most alterations in norms Comes last, not fist: Most alterations in norms and shared values come at the end of the and shared values come at the end of the transformation process.transformation process.

►Depends on results: New approaches usually Depends on results: New approaches usually sink into a culture only after it’s very clear that sink into a culture only after it’s very clear that they work and are superior to old methods.they work and are superior to old methods.

► Requires a lot of talk: Without verbal Requires a lot of talk: Without verbal instruction and support, people are often instruction and support, people are often reluctant to admit the validity of new reluctant to admit the validity of new practices.practices.

Anchoring Change in a Culture Anchoring Change in a Culture (cont’d)(cont’d)

►May involve turnover: sometimes the May involve turnover: sometimes the only way to change a culture is to only way to change a culture is to change key people.change key people.

►Makes decisions on succession crucial: Makes decisions on succession crucial: if promotion processes are not if promotion processes are not changed to be compatible with the changed to be compatible with the new practices, the old culture will new practices, the old culture will reassert itself.reassert itself.

Stages and TasksStages and Tasks

►ADD TABLEADD TABLE

The Structure of ChangeThe Structure of ChangeConnerConner

Resilience

Nature

Process

Roles

Resistance

Commitment

Culture

Synergy

The

Neutral

ZoneEnding,

Losing,

Letting Go

The New Beginning

Time

Transitions Transitions (Bridges)(Bridges)

Deming’s 14 PointsDeming’s 14 Points

1.1. Create constancy of purpose toward improvement of Create constancy of purpose toward improvement of product and service with the aim to become product and service with the aim to become competitive and to stay in business and to provide competitive and to stay in business and to provide jobs.jobs.

2.2. -adopt the new philosophy. We are in a new economic -adopt the new philosophy. We are in a new economic age. Western management must awaken to the age. Western management must awaken to the challenge, must learn their responsibilities, and take challenge, must learn their responsibilities, and take on leadership for change.on leadership for change.

3.3. Cease dependence on inspection to achieve quality. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by Eliminate the need for inspection on a mass basis by building quality into the product or service in the first building quality into the product or service in the first place.place.

4.4. End the practice of awarding business on the basis of End the practice of awarding business on the basis of price tag. Instead minimize total costs. Move toward a price tag. Instead minimize total costs. Move toward a single supplier for any one item on a long term single supplier for any one item on a long term relationship of loyalty and trust.relationship of loyalty and trust.

Deming’s 14 Points (cont’d)Deming’s 14 Points (cont’d)

5.5. Improve constantly and forever the system of Improve constantly and forever the system of production and service to improve quality and production and service to improve quality and productivity and thus decrease costs.productivity and thus decrease costs.

6.6. Institute training on the job.Institute training on the job.7.7. Institute leadership. The aim of leadership should be Institute leadership. The aim of leadership should be

to help people and machines and gadgets to do a to help people and machines and gadgets to do a better job. Leadership of management is in need of better job. Leadership of management is in need of overhaul as well as leadership of production workers.overhaul as well as leadership of production workers.

8.8. Drive out fear so that everyone may work effectively Drive out fear so that everyone may work effectively for the company.for the company.

9.9. Break down barriers between departments. People in Break down barriers between departments. People in research, design, sales, and production must work as research, design, sales, and production must work as a team to foresee problems of production and use a team to foresee problems of production and use that may be encountered with the product or service.that may be encountered with the product or service.

Deming’s 14 Points (cont’d)Deming’s 14 Points (cont’d)10.10. Eliminate slogans, exhortations, and targets for the work Eliminate slogans, exhortations, and targets for the work

force asking for zero defects and new levels of production.force asking for zero defects and new levels of production.11.11. Eliminate work standards (quotas) in the organization. Eliminate work standards (quotas) in the organization.

Eliminate management by objectives. Eliminate Eliminate management by objectives. Eliminate management by numbers, numeric goals. Substitute management by numbers, numeric goals. Substitute leadership.leadership.

12.12. Remove barriers that rob the hourly worker of rights to Remove barriers that rob the hourly worker of rights to pride of workmanship. The responsibility of supervisors pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. Remove must be changed from sheer numbers to quality. Remove barriers that rob people in management and engineering barriers that rob people in management and engineering of their right to pride of workmanship. Abolish annual or of their right to pride of workmanship. Abolish annual or merit rating and M.B.O.merit rating and M.B.O.

13.13. Institute a vigorous program of education and self-Institute a vigorous program of education and self-improvement.improvement.

14.14. Put everybody to work to accomplish the transformation.Put everybody to work to accomplish the transformation.

OverboardOverboard

►ADD CARTOONADD CARTOON

Integrated Model for Planned Integrated Model for Planned ChangeChange

Leadership ResponseHigh Resilience Low Resilience

Incremental Change

Deep Change

Kotter Stages 1-8

Change Avoidance

Incremental Change

Kotter Stages 1-6

Planned Change

Integrated Model for Change During and After a CrisisIntegrated Model for Change During and After a Crisis

Leadership ResponseHigh Resilience Low Resilience

Incremental Change

Deep Change

Kotter Stages 1-8

Change Avoidance

Incremental Change

Kotter Stages 1-6

Unanticipated Events

(Terrorism, Bioterrorism, Natural Disasters, etc.)