MANAGING IN AN ENVIRONMENT OF CONTINUOUS CHANGE 1.

Introduction
An organization, like a living organism, lives under constantly changing environment. New business realities in the form of unexpected technologies, emerging markets, and radical innovations that rewrite the rules of competition continually present new challenges. To survive and stay ahead in the race an organization needs to adapt to the new realities quickly. Think of the changes that you had been through, from the school days to the present, from net surfing to attributes of quality to conveniences of life. Living with change is not easy, in particular when a comfort zone has been defined. An established comfort zone is a road block to change. So is an earlier success that has served you so well. Changes are mostly forced by external environmental dictates against which one has little choice. The only option is adapting to the changes. This is made easier if the element of surprise in change can be removed. The objective of the session today is to give you a broad framework of how changes happen and how to deal with them.

2. Keywords
Change Management is a structured approach to transitioning: Individuals Teams Organizations

from a current state to a desired future state. It includes both organizational change management processes and individual change management models, which together are used to manage the people side of change. Conflict arises because change disrupts the existing balance of resource and power, thereby straining relations between the people involved. Conflict is not a tangible phenomenon; rather it exists in the minds of people who are party to it. Only its manifestations, such as brooding, arguing or fighting are objectively real. To manage conflict, one needs to empathize, that is, to understand the situation as it is seen by the key actors involved. An important element of conflict management is persuasion, which may involve getting participants to rethink their current views so that their perspectives on the situation will facilitate reconciliation rather than divisiveness. 1

3. Change Management
The first thing in Change Management is the detection of trends in the environment, macro as well as micro, in order to identify possible changes and initiate programs. It is important to estimate what impact a change will likely have on employee behaviour patterns, work processes, technological requirements, and motivation. Management must assess what employee reactions will be and craft a change program that will provide support as workers go through the process of accepting change. The program must then be implemented, disseminated throughout the organization, monitored for effectiveness, and adjusted where necessary. Organizations exist within a dynamic environment that is subject to change due to the impact of various change "triggers", such as evolving technologies. To continue to operate effectively within this environmental turbulence, organizations must be able to change themselves in response to internally and externally initiated change. However, change will also impact upon the individuals within the organization. Effective change management requires an understanding of the possible effects of change upon people, and how to manage potential sources of resistance to that change. Change can be said to occur where there is an imbalance between the current state and the environment. Organizational 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 can be used to effectively transition groups or organizations through change. When combined with an understanding of individual change management, these tools provide a framework for managing the people side of change. People who are confronted by change will experience a form of culture-shock as established patterns of corporate life are altered, or viewed by people as being threatened. Employees will typically experience a form of "grief" or loss. 4. Change Management Models A number of models are available for understanding the transitioning of individuals through the phases of change. Here are two such models; 4.1 Unfreeze-Change-Refreeze

This is a three-stage model of change. The first stage is called "unfreezing". It involves overcoming inertia and dismantling the existing "mindset". Defense mechanisms have to be bypassed. In the second stage the change occurs. This is typically a period of confusion and transition. We are aware that the old ways are being challenged but we do not have a clear picture to replace them with yet. The third and final stage he called

"refreezing". The new mindset is crystallizing and one's comfort level is returning to previous levels. Rosch (2002) argues that this often quoted three-stage version of Lewins approach is an oversimplification and that his theory was actually more complex and owed more to physics than behavioural science. Later theorists have however remained resolute in their interpretation of the force field model. This three-stage approach to change is also adopted by Hughes (1991) who makes reference to: "exit" (departing from an existing state), "transit" (crossing unknown territory), and "entry" (attaining a new equilibrium). Tannenbaum & Hanna (1985) suggest a change process where movement is from "homeostasis and holding on", through "dying and letting go" to "rebirth and moving on". Although elaborating the process to five stages, Judson (1991) still proposes a linear, staged model of implementing a change: (a) analysing and planning the change; (b) communicating the change; (c) gaining acceptance of new behaviours; (d) changing from the status quo to a desired state, and (e) consolidating and institutionalizing the new state. 4.2 ADKAR

The ADKAR model for individual change management was developed by Prosci with input from more than 1000 organizations from 59 countries. This model describes five required building blocks for change to be realized successfully on an individual level. The building blocks of the ADKAR Model include: 1. 2. 3. 4. 5. Awareness of why the change is needed Desire to support and participate in the change Knowledge of how to change Ability to implement new skills and behaviors Reinforcement to sustain the change

6. Change Framework The main impediment to change is the Organizational Inertia, which is caused by the conflict and power struggles between managers as they strive to influence decision making to protect and enhance their own positions. Three common approaches to organizational changes are as follows: Reengineering Restructuring Innovation. Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvement in critical measures of performance such as cost, quality, service and speed. Instead of concentrating on a companys functions the strategic managers focus on business processes. A business process cuts across functional areas of an organization in bring in efficiency and effectiveness. Reengineering does not negate 3

existing best practices such as the TQM. In fact the two are interrelated and complementary as each try to strive for the best way to provide customers with goods and services they require. Restructuring redefines the relationship between the functional components of an organization. An essential accompaniment of restructuring is downsizing where the number of employees decrease. This becomes necessary as companies fail to monitor their operations of basic business processes regularly resulting in accumulated inefficiencies such as tall and bureaucratic structure with high operating costs. Even companies that hold a strong position may need to restructure to make them leaner and perform better. Most famous example is Jack Welchs style at the GE. Innovation is the process by which organizations use their skills and resources to create new processes or goods and services to respond better to the needs of their customers. Innovation is risky, expensive and difficult to manage. 6.1 Change Hurdles The hurdles to these changes are many. Corporate Level: Suppose to reduce costs a company decides to centralize all divisional purchasing and sales activities at the corporate level. Such consolidation could severely damage each divisions autonomy. Divisional Level: A change may affect each division in a different manner and some may feel that they are unfavourably treated. Individual Level: Redundancy or job redefinition could make someone feel slighted. Organizational Conflict is the struggle that arises when the goal-directed behaviour of one group blocks the goad-directed behaviour of another. An organizational change favouring one division over another can ensue such conflict. Another visible form of conflict is managers fighting for one top position the adore business publications when a CEO is being chosen. Unless such conflict is deftly handled this sours the relationship between the groups within an organization affecting organizational culture and competitiveness. Organizational Politics are tactics that strategic managers engage in to obtain and use power to influence organizational goals and change strategy and structure to further their own interests. Means of addressing organizational politics are compromise, bargaining, and negotiation between managers, coalitions of managers and outright use of power. Managers may fight because they feel threatened. For example, if it is decided to invest in resources to promote and develop one product, other products may feel slighted. Some managers will win, some lose. 4

Managers, within the organizational pyramid, fight for personal reasons. There is always the struggle for the climb. But as some managers become more powerful there is the risk that they will try to suppress the views of lesser managers who oppose their interests and major problems can arise. Nevertheless Organizational Politics is healthy to a certain extent that it encourages different views, an essential element for future changes. But too much dissonance can stand in the way to progress and a harmonious resolve. Power is the ability of one individual, function or division to cause another individual, function or division to do something that it would not otherwise have done. Legitimate Power is the authority a manager possesses by virtue of holding a formal position in the hierarchy. This is why CEOs are so powerful. Delegated Power is the informal power. Power and Politics strongly influence a companys choice of strategy and structure. But a company needs to maintain the organization context that is responsive both to the aspirations of the various groups within and also the changes in the external environment. A company must devise organizational arrangements to create a power balance among the various groups so that no single one dominates the whole enterprise. Much depends on the deft handling by the CEO else there is a crisis.

7. Change Leadership
Getting people on board with a change agenda means giving them a destination they would want to go to and then spending a lot of time painting picture of what it will be like when they arrive. I have a dream, said Martin Luther King that dream was his vision with imagination, emotion, passion and inspiration combined. Willingness to change comes from the feeling that there is no other option. Put a frog in a pan of water and gently boil it and the frog failing to notice any difference in temperature will apparently sit still until it is boiled alive. Many people in organization are the same, fail to understand the needed change in them and in the organization. Most people resist change. Rather than counter-attacking with the arguments why this change is good for you it may be better to adopt a judo-like stance of going with the flow, absorbing and reflecting. It is amazing how the process of merely allowing people to express their fears and resentments helps them convert themselves into believers. Change is something the top asks the middle to do to the bottom Ross Kantar Essence of making change is the courage to change what has to be changed, the tolerance to accept what cannot be changed and the wisdom to know one from the other.

It is paradoxical but true that the person over whom you have most control is yourself but the hardest person to change is yourself. In any business organization the behaviour of the manager who initiates a change will be closely watched to see if it is consistent with what he or she is saying walk the talk. When the best leaders work is done the people say we did it ourselves (Lao Tzu)

8. Managers Guide to Change

Resistance to Change (Why : 10 reasons) fear of the unknown lack of information threats to status threats to established skills fear of failure lack of perceived benefits threats to powerbase feeling vulnerable and exposed threat to self-esteem loss of team relationships, stress, anxiety

Pitfalls in making a Change (Avoid: 10 things) criticize your predecessor do not tell anyone anything until you have spelt out the last detail tell lies impose a communication blackout announce a change and then try to get it to work time major changes on Thursday afternoon or before eid holidays 6

 be autocratic (Genghis Khan did not consult) discourage people from criticizing rely on memos as talking is a waste of time consider it your change agenda, not theirs Implementing Changes (8 steps)

Establish a sense of urgency Form a powerful guiding coalition Create a vision Communicate the vision Empower others to act on the vision Plan for and create short-term wins Consolidate improvements and product still more changes Institutionalize new approaches
9. Conflict Diagnosis

Viewpoint Continuum Dimension Issue in question Size of stakes Interdependence of parties Continuity of interaction Difficult to Resolve Matter of principle Large Zero-sum Single transaction Easy to Resolve Divisible issue Small Positive-sum Long-term relationship

Structure of the parties

Amorphous/Fractionalize d with weak leadership No neutral third party available Unbalanced, one party feeling the more harmed

Cohesive, with strong leadership Trusted, powerful, prestigious and neutral Parties having done equal harm to each other

Involvement of third parties Perceived progress of conflict