The Importance of Change Management (Group 2) Part 1

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Introduction

We gave a student lecture on the 15th of December 2012 about the importance of Change Management and how this is related to the adaptive cycle.
The lecture was given by Renzo Hoogendoorn, Karim Camara, Vincent Tseng, Gweta Markosian and Sander Zijlmans.

The sheets from our lecture can be viewed here Media:Change_Management.ppt

Change Management

Nowadays companies are growing more and more by expanding into new competitive space with the aim to meet the needs of the different customers. However this way of approach may be not always enough to survive. We think that the major challenge facing businesses are the need to manage these changes in order to achieve the desired goals. Everywhere around us, we see change management models, each with a different perspective on the changes that take place within an organization. These models all claim to be useful to carry out a change smoothly within an organization. Before proceeding to treat change management models, it is useful to first know what is exactly understood under change management and its importance. We can therefore ask ourselves the question “what is change management?

According to the World Bank change management can be defined as a process involving unfreezing, moving, and refreezing values, practices, and procedures within organizations. Unfreezing refers to the creation of a perceived discrepancy between the existing and ideal state of an organization that generates a desire for change and lowers people’s resistance to change. Moving refers to the various processes such as training, education, and restructuring that lead to the development of new behaviours, attitudes, and beliefs. Refreezing regards re-establishing a new state of equilibrium within the organization by stabilizing the new patterns through a variety of support mechanisms (The World Bank).

A second definition of change management that we found very interesting says the following: Change management is a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state, to fulfil or implement a vision and strategy. It is an organizational process aimed at empowering employees to accept and embrace changes in their current environment. There are several different streams of thought that have shaped the practice of change management (Ryerson University).

Relation between change management and the adaptive cycle

We think that all four phases of the adaptive cycle have something to do with change and that the adaptive model therefore can be seen as change management model. If you look in the crisis phase for example, before a company totally moves from the crisis situation to the new combination it first has to deal with some kind of change. An organization that is in the new combination phase and wants to implement a solution against the crisis would also face change. This means that this organisation whether they want to or not, should have to adopt a new way of approach or need to customize the existing business processes to realize the new solution. The phases of the adaptive cycle model are so clearly defined that an organization should know exactly what stage it is in at a certain moment. Determining the position of an organization through these phases ensures that changes in the organisation will only be made at the desired level without unnecessarily charging other levels of the organization. One can therefore conclude that the adaptive cycle model is a form of change management that helps organization to implement changes successfully.

Why is change management important?

Some familiar quotes that we found about the indirect importance of change management are from Charles Darwin and A. De Gues.

According to Charles Darwin “it is not the strongest species that survive, nor the most intelligent, but the ones who are most responsive to change”

A De Gues said the following: “To cope with a changing world, an entity must develop the capacity of shifting and changing – of developing new skills and attitudes; in short, the capability of learning“


Nowadays we live in a changeable world and each business leader who want to survive has to be change friendly and the organization that want to survive also has to be change friendly.

Changes are taking place in different kind of levels. This is also happening within companies, for example the redundancy of employees and the recruitment of new employees. By doing this companies try to maintain or improve the quality of their services/products.

Companies can’t just implement every change they want without some kind of structure. This is what we see today within both small and big companies. The economy will be influenced when there is no change management. There will be no innovations and this could finally cause the collapse of the economy. When companies/organizations aren’t capable to adapt themselves to their own working goals and can’t meet with the needs of their consumers, the consumer’s costs will rise and there will be a higher risk that they leave the company. This will lead to an unacceptable loss of income and other effects.

Every few years we see that companies experience major changes. However small changes are almost continuously taking place. These changes are important for companies to remain in control and stay alert. The world around us is continuously changing, people are becoming critical and increasing their demands on products and services and companies therefore can’t stay behind. For example, when we look at the use of mobile phones, consumers want even more and more better and smarter phones. Expectations are continuously adjusted, because companies keep refreshing their products. They have a correlation with each other. Companies need to adapt their products/services to the people around them if they want to be able to survive within the current society. If they refuse to change, there will be a loss of income and in this could in the worst case lead to a bankruptcy. With change management it is namely about culture, processes and people. The most difficult part of implementing a change is to maintain a trustworthy relationship with the consumer and at the same time keep the consumer satisfied with the new implementations. Companies need a guideline or framework to successfully implement a change. Change management can offer these guidelines or framework to all kind of companies.

When companies will implement changes and dare to refresh, the risks of losing incomes or consumers will be significantly reduced. That is why change management is important.

Reasons why employees are resistant to change

As we all know, people are somehow always resistant to change. The question which we can ask our self is, why are they resistant to change?

Bellow we have listed here some reasons why employees are resistant to change.

  • Not enough competence: sometimes, changes that are made in organizations necessitates changes in skills of the employees, and some people will feel that they won’t be able to make the change very well.
  • No trust: When employees don’t believe that they can manage the change they will develop resistance.
  • Unknown business need: If employees of an organization are not aware of the underlying business need for change, they will develop some resistance.
  • Afraid for Lay-offs are announced or feared as part of the change: employees can be resistant to the change in this case because they are afraid of losing their jobs.
  • Employees were unsure if they had the needed skills for success in the future state.
  • Lack of communication: If there is not enough communication about the change that will happen within an organization employees will be resistant.
  • Comfortable with the current state: When individuals are comfortable with the current state within an organization, they want to maintain their personal position.
  • Benefits of rewards: Employees felt they were being required to do more with less, or do more for the same pay.

Advantages and disadvantages of change

In this section the advantages and disadvantages of internal and external changed will be summed up.

Advantages

Internal: Internal change has many advantages for an organization, including increased morale among the employees, a sense of employee empowerment and control and a high likelihood of the change becoming permanent. Because the change originates from the group, it is more easily accepted and becomes the norm.

External: While external change is harder to accept than internal change, there are some distinct advantages for external change in an organization. This type of change can help jump start a declining organization and can change its course completely. Another advantage of external organizational change is that many organizations tend to reach a plateau level if left unchanged for too long. People become comfortable in their ways and stop seeking new and better ways to accomplish things.

Disadvantages

Internal: If a team or organization has a very domineering member, the internal change will often be a result of that single person and will therefore be too single-minded to be good for the organization at large. Additionally, when teams have been working together for too long in the same environment, the group mentality can take over and create unproductive change within the organization. 

External: When change is forced on an organization, often the organization will rebel. One of the main disadvantages of externally imposed change is that it is unsuccessful in the long term. Often, external resources can force the change for a while, but when those people move on to different roles, the organization will return to its previous behaviors. Additionally, the change process itself can cause temporary chaos within the organization and actually reduce productivity for a couple of weeks or months.  

Becoming a change leader

In order to become a change leader four trivial steps need to be taken. Although these steps are trivial, organizations have trouble to implement these steps. The models discussed in the upcoming sections will provide a means to implement these steps.

1. Policies to make the future.

2. Systematic methods to look for and to anticipate change.

3. The right way to introduce change both within and outside the organisation.

4. Policies to balance change and continuity.


Benefits of effective change management

The benefits of effective change management are worth the effort. The following benefits are gained in general.

Return on investment

  • Economies of scale as the approach to change is re-used for each initiative saving the number of days spent

defining a unique approach to each change initiative.

  • Faster implementation of change as those involved have the confidence to know where to get started, who to

involve and can estimate with greater certainty the impact on their workloads and the level of impact in their departments.

Quality of the outcome achieved

  • Increased understanding of the impact of the change which ensures that all processes, systems and people that

are impacted are consulted, and their requirements incorporated into the change plan.

  • Appropriate levels of involvement with agreed responsibilities for making the change happen reduces the

resistance to change and increases the rate of adoption, leading to greater realisation of benefits.

Efficiency of resources

  • Clarifies the roles and responsibilities of all those involved in the change effort, ensuring that those with the most relevant

skills and experience are given appropriate activities to manage.

  • Reduction in the number of ‘failed’ change initiatives and the waste of resources involved in making changes that ‘run out

of steam’ or get overtaken by other events which had not been assessed when the change was conceived.

  • Reduction in the level of activity that is duplication of effort or that is running at cross purposes to other changes

being made elsewhere in the organisation.

  • Enhanced employee morale and a reduction in recruitment and retention costs.

Read more? Click here for part 2!

References

  • Quinn, E.R. & Weick, E.K. (1999). Organizational change and development. Annual Review of Psychology, 50, 361-386.
  • Steven H. Appelbaum, Sally Habashy, Jean-Luc Malo, Hisham Shafiq, (2012),"Back to the future: revisiting Kotter's 1996 change model", Journal of Management Development, Vol. 31 Iss: 8 pp. 764 - 782
  • De Geus, A. (1997). The living company: A Recipe for Success in the New Economy. Harvard Business School Press. Boston, Massachusetts
  • Taylor, J. (2010). Business rules and decisioning for process experts. Decision Management Solutions
  • Manchester Metropolitan University (2010). Change Management an introduction
  • World bank (2012). Communication for governance and accountability towards a new agora