Organizational Change Management Theories

Organizational Change Management Theories

Let’s talk about something inevitable. Something that is dreaded by some because it’s disruptive, and widely accepted by others because it sparks growth. It pops up in both your personal and professional life. Much like when your landlord broke the news they’d be selling the property and that you’d have to move. Or, at work when you found out the Manager you worked with so well left the company without notice. It even chimed in when you got the email notification from IT announcing that your team would be the first to test new software that was just implemented. As you can tell by the title of this video, we’re talking about change. Within an organization, even one on the smallest scale, change can cause commotion. Because of that, it must be managed very carefully. As changes occur in a business, employees’ behavior and reactions to those changes must be closely regarded in order to achieve desired outcomes. Today, we will be looking at Organizational Change Management Theories, examining how the process of changing key aspects of a business, such as culture, strategy, and processes can directly affect employees and how the business performs, based on the reactions to those changes. There are several theories associated with organizational change management, all of which have been developed by psychologists and business consultants who have applied various approaches to effective management over the years.

Let’s start by looking at Kurt Lewin’s Change Management Model.

Kurt Lewin’s change management model includes three stages: Unfreezing, Changing, and Refreezing. His three-stage theory recognizes the need for change in the first unfreezing stage, rejects old behavior in order to introduce the change in the changing stage, then sustains newly changed behavior in the refreezing stage. Let’s take a closer look at these stages individually:

Unfreezing

This stage represents and recognizes that a change needs to take place. When we talk about freezing and unfreezing, anything that is “frozen” is a situation that is in a resistant, unmoving state. Therefore, only change can alter that state. Think of a company that decides to remove all its traditional time stamp machines and replace them with digital scanners to track employees’ work times. All employee data is programmed onto a card, so that when the employee waves the card in front of the scanner, their time is recorded. People who are used to the traditional time stamp machines may resist this new process, probably because it is simply unfamiliar and, to them, may seem unnecessary. Their negative or unmoving perceptions of this change is preventing them from seeing its value. Therefore, their resistance could be considered as being “frozen.” Once their perceptions of this process become more fluid, the necessary changes can take form.

Changing

In this stage, the transition of change takes place. New processes are implemented, and people start to react to the new setting. Some may embrace the newness of the machines and the process because it’s far easier, while others may struggle with having their personal information on a card or trusting that the card is truly recording their time. Either way, this is the period of disruption, so it is crucial in this stage to try to convince employees of the benefits that these changes will bring.

Refreezing

This stage represents reinforcement. This is now the time to ensure that everyone has accepted the change and adapted to all the new practices associated with it. It is probably the most important stage, since it focuses on making sure the change lasts. This stage also requires a considerable amount of acknowledgement and positive reinforcement. If the manufacturing company announced how employees spent less time at the time scanners and that there were no issues with any paychecks, more employees would be confident in the new system. This would also encourage new behaviors and perceptions to be incorporated, thereby leaving old habits and processes behind.

Now let’s look at another theory: Gene Dalton’s theory of lasting change.

This theory places more emphasis on the behaviors and motivating factors of those who are undergoing change. He believed that people had to have a felt need for change. Without it, they would continue in the same practices. He’d presumed that unless there is some form of pain and tension to motivate it, change would not occur. He also speculated that anyone faced with change would be much more receptive to it if there were support from someone they respected. The entire concept of Dalton’s model is to move away from the old behavior that requires change and start to focus on new behaviors. Let’s look at those more in-depth.

1. Instead of setting general goals, set specific expectations to go along with objectives.
Let’s say an individual contributor wishes to move into a manager’s role. Instead of saying they would eventually like to become a manager, they would set a specific goal to develop their skills so that in two years’ time they can become a manager. They will have turned a generalized goal into a more specific one that included a plan and a timeline.

2. Remove old social ties and develop new relationships.
This step in the theory says that when people move from their existing circle of acquaintances and pursue new relationships with those who share the same interests, the effects of lasting change can be better achieved.

3. Eliminate self-doubt and increase self-esteem.
This step relates to the felt need and tension required to motivate change that we mentioned earlier. Tension can bring about uncertainty and self-doubt. The individual contributor wanting to become a manager will certainly feel the tension of trying to move to the next level once they see all the responsibility that comes with it. That feeling of being overwhelmed will lead to self-doubt and probably discourage them from further pursuing the opportunity. However, if they remain intentional in achieving their goal while reassuring themselves that they can meet it, they will be able to move closer to their goal with far more confidence.

4. As a replacement for seeking external motives for change, seek internal motives for change.
Let’s say the individual contributor was content in their position and only decided to pursue management after their mentor suggested it. If the individual contributor is only seeking to become a manager to impress or please the mentor, the goal to become a manager really isn’t their own. Therefore, the goal is not true to what they desire and may be short-lived. And, although we pointed out earlier how a person who is well respected can help to support change, the point is for the respected party to encourage the change and the goal, not set it.

Now let’s turn our attention to organizational change. The McKinsey 7S model is an organizational effectiveness tool that helps to assess changes of higher impact within a company, such as new leadership or mergers. This model includes 7 S’s, representing the 7 elements of an organization. These elements must be properly aligned with business goals in order for effective change to take place, so if there are areas that are lacking, adjustments must be made. The 7-S’s are:

  1. Strategy
  2. Structure
  3. Systems
  4. Shared Values
  5. Style
  6. Staff
  7. Skills

These seven elements are broken down into two categories: Hard Elements and Soft Elements. The hard elements, which are the first three S’s, are usually easier to measure.

Strategy

Strategy involves several things, including marketing to translate the company’s competitive edge, and planning resources to achieve a goal. For example, a company’s mission and values are usually tied to its strategy.

Structure

When thinking of organizational structure, an organizational chart may come to mind; something that illustrates who is responsible for what and to whom they report.

Systems

Systems in the 7S model are associated with people and practices that are carried out in important routines, such as finances, pay, communication, or human resources.

Now, let’s review the soft elements: Shared Values, Style, Staff, and Skills.

Shared Values

Shared values include the company’s core values and should coincide with the company’s strategy. If so, these values can be detected through the organization’s culture.

Style

This refers to the organization’s leadership style. Are employees empowered with laissez-faire leaders who seldom interfere with processes and encourage employees to be cross-functional? Or is the leadership team made up of autocratic leaders who dominate all actions and decisions? Also, as a result of working with these types of leaders, how efficient are the employees?

Staff

This step addresses sufficient headcount, recruitment, retention, rewards, and training of staff.

Skills

Competencies and skills enable staff to be well equipped to perform well in their positions.

  • When using the 7S tool, you must identify:
  • Which areas are not in alignment?
  • Identify those areas needing improvement and decide where the changes should be made.
  • Make the changes.
  • Review and adjust in other areas as necessary.

Let’s say a company with core values to “Recognize, Reward, and Retain” its employees is found to be out of sync with its staff. Employees leaving the company report in their exit interviews that they do not feel valued and are underpaid. This is a case where the Staff, Style and the Shared Values in the 7S model would have to be further inspected, and possibly overhauled. As changes are made in those areas, additional elements such as Systems, may call for a closer look into communication and pay so they too can be corrected. The process would be continually reviewed and repeated as necessary until all 7 elements are aligned with the design and effectiveness of the business.

John Kotter pulled from his observations of leaders and organizations as they managed change and created an 8-step model as a roadmap to identify, implement, and sustain change. The 8 steps are as follows:

1. Create a sense of urgency.
What is needing to be changed and why? What will happen if this change doesn’t occur?

2. Build a guiding team.
Incite and identify change leaders to help to share the urgency and needs of the change with the organization. These are people who are influential, possess respectable leadership skills, and have access to resources to drive the message.

3. Develop the vision for change.
In this stage, a plan and strategy is being created for proper communication and execution of the change.

4. Communicate.
This is probably one of the most important steps since the vision is now being shared with others. Explaining the strategy and the expectation, while answering questions with honesty and patience goes a long way to help to ease the minds of the doubtful, the anxious, or the resistant.

5. Empower action by removing obstacles.
This is the stage where you can identify those who are resistant as well as any additional obstacles standing in the way of the change. Address the concerns of the resistant head on, while taking a closer look at any procedural barriers that could complicate execution. Encourage those who are doubtful and resistant to identify and help remove those barriers and you may get lucky and kill two birds with one stone.

6. Create short-term wins.
This allows you to show that there really is value in the change. Regardless of how small, any success should be shared so that all are aware that the actions resulting from the proposed change were successful. Those who have helped—both resistant and proactive—should be recognized to share in the achievement.

7. Sustain the acceleration.
Keep the momentum going. Continue to share successes with positive reinforcement. As one victory is achieved, continue to work toward the next until all goals are accomplished. This is a critical stage to remain persistent to the change so that old habits do not resurface.

8. Make it stick.
Share all of the success stories from the change. Encourage new actions and behaviors at every turn. As this continues, people will gradually replace their old routines with the new concepts.

With each of the 4 theories and models we’ve touched upon, all offer different views and approaches to managing organizational change. But rather interestingly, they also shared several core similarities as take-aways when dealing with change: Recognize the need for it, properly communicate those needs, remove barriers, implement, and sustain. And although there is no practical way to avoid change, you can adjust your organization’s perception of it by managing it with the urgency and sensitivity it deserves.

I hope this overview was helpful! Thanks for watching, and happy studying!

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by Mometrix Test Preparation | Last Updated: April 17, 2020