Change- some additional notes

In a CIPD survey in 2005 it was noted that: On average a major reorganisation every 3 years, minor restructure every year; In less than 25% were employee related goals important 85% lead to redundancies and 66% some hiring 50% fail to achieve intended improvements and 66% fail to improve employee related factors 82% of cases employees informed about reorganisation, but prior participation in only 33% Reorganisations are mainly based on prior experiences of senior management rather than systematic benchmarking and learning

Chapter 18 in the set text outlines a number of models (approaches) to change see for example Lewin, Kotter, Dawson pp576 583)

This factsheet gives introductory guidance. It:

looks at why organisations change introduces change strategies comments on organisational and individual issues considers HR's role and how change can be managed more effectively includes the CIPD viewpoint.

Why organisations need to change

Many things cause organisational change. These include:

challenges of growth, especially global markets challenge of economic downturns and tougher trading conditions changes in strategy technological changes competitive pressures, including mergers and acquisitions customer pressure, particularly shifting markets to learn new organisation behaviour and skills government legislation/initiatives.
Research indicates that organisations are undergoing major change approximately once every three years, whilst smaller changes are occurring almost continually. There are no signs that this pace of change will slow down. In this context managers have to be able to introduce and manage change to ensure the organisational objectives of change are met, and they have to ensure that they gain the commitment of their people, both during and after implementation. Often, at the same time, they also have to ensure that business continues as usual. For these reasons, it is important that the way change is managed is carefully considered by organisations. Whilst each change situation will be unique, there are still a number of common themes that will help ensure that the change process stands the greatest chance of success.

Why is change management relevant?

Change management is relevant as, though the research finds that change is taking place at an ever-increasing pace, the evidence suggests that most change initiatives fail. For example, recent CIPD research suggested that less than 60% of re-organisations met their stated objectives which are usually bottom line improvement. This is consistent with other published research. The impact of failures to introduce effective change can also be high: loss of market position, removal of senior management, loss of stakeholder credibility, loss of key employees. Finally, one organisational response to change is that organisational forms are themselves evolving. Therefore, the change management response will have to be adaptive. For example, the increased competitive challenges and the need to be responsive to the changing environment are resulting in emerging organisational models. Traditional organisational models following functional or matrix lines are being supplemented by new models. These might rely on project teams, on networks and on virtual structures. In theory, certain of these newer models, for example virtual and project-based structures, allow increased flexibility to respond to change. However such models are not always introduced uniformly, and in practice often introduce other issues that also impact upon change management, for example ability to share knowledge and to operate efficiently. These may also impact effectiveness of communication or employee commitment, which themselves have implications for change effectiveness. CIPD research1 highlights how the move towards network-based organisations means that HR managers must now consider issues that exist across and outside the boundaries of the firm: they need to address the concerns of cross-boundary human resource management. This requires the development of a series of boundary-spanning HRM practices which involve the extension of practices which are traditionally used only for employees (that is, individuals contracted to the organisation) to these important people who are outside the boundaries of the organisation (that is, individuals contracted to a different organisation or self-employed but who deliver services within the organisation).

What issues have been identified in the change management process?

A large number of issues have been identified as having negative impact on effective change management. Some of the key themes are identified below, covering organisational issues and individual resistance to change.

Organisational issues
Individual change initiatives are not always undertaken as part of a wider coherent change plan, for example through considering linkages between strategy, structure and systems issues. Therefore a change that considers a new structure but fails to establish the need to introduce new systems to support such a structure is less likely to succeed. Lack of effective project management and programme management disciplines can lead to slippages in timings, in achievement of desired outcomes and in ensuring that the projects do deliver as planned. Insufficient relevant training, for example in project management, change management skills and leadership skills can impact negatively on the effectiveness of any change initiative. Poor communication has been linked to issues surrounding the effectiveness of change management in achieving effective change in various ways. For example, imposed change can lead to greater employee resistance (see section below also). Finally, lack of effective leadership has been identified as an inhibitor of effective change.

Individual/group resistance to change

Resistance to change can be defined as an individual or group engaging in acts to block or disrupt an attempt to introduce change. Resistance itself can take many different forms from subtle undermining of change initiatives or withholding of information to active resistance, for instance through strikes. Resistance to change can be considered along various dimensions:

individual versus collective passive versus active direct versus indirect behavioural versus verbal or attitudinal minor versus major.
Similarly two broad types of resistance can be considered:

Resistance to the content of change - for example to a specific change in

technology or to the introduction of a particular reward system. Resistance to the process of change. This concerns the way a change is introduced rather than the object of change per se, for example, management restructure jobs without prior consultation of affected employees. Management need to be aware of these different criteria to ensure they respond appropriately. Suggested reasons for resistance include: loss of control, shock of the new, uncertainty, inconvenience, threat to status and competence fears. It is important to try to diagnose the cause of employee resistance as this will help determine the focus of effort in trying to reduce/remove the issue.

What can be done to make change management more effective?

From the issues raised in the section above it can be seen that change is complex and there is no single solution. However, a number of key areas of focus emerge. Effective leadership is a key enabler as it provides the vision and the rationale for change. Different styles of leadership have been identified, for example coercive, directive, consultative and collaborative. These different styles may each be appropriate depending on the type and scale of change being undertaken. For example, when there is a large-scale organisation-wide change a directive style has been identified as most effective. Appropriate and timely training is frequently identified as key to effective change. Examples of training requirements might include:

project and programme management skills to ensure change initiatives are

completed both on time and to budget change management skills, including communication and facilitation leadership coaching.

Organisational development is one approach or intervention used when trying to bring about change orientated to improving organisational effectiveness - see our separate factsheet on organisation development for more information.

Go to our factsheet on Organisation development Two-way communication with employees and their active involvement in implementation has also been identified as a key enabler of change. Active participation is one suggested means of overcoming resistance to change. However, research has indicated that part of the communication/participation issue might arise from a potential mismatch between what the employer and employee opinions are regarding levels of communication. For example, in a recent study of both employers and employees, employers believed they were involving and

communicating with employees at a considerably higher level than was reported by employees. See our factsheets on the psychological contract and employee communication for more information on these topics.

Finally, linking all the change agendas within an organisation coherently, rather than completing changes in isolation, is vital to ensure that change effectiveness is maximised. CIPD research has identified seven areas of activity that make successful change happen - 'the seven c's of change':

Go to our factsheet on The psychological contract Go to our factsheet on Employee communication

Choosing a team. Crafting the vision and the path. Connecting organisation-wide change. Consulting stakeholders. Communicating. Coping with change. Capturing learning.

HRs role in change management

People management and development professionals have a significant role to play in any change management process. HR professionals themselves have recognised this. They considered that effective management of change is the top HR skill for survival in a recent CIPD online poll. Earlier CIPD research has also identified that HRs involvement in various aspects of change can make the difference between successful and less successful projects by, for example, their:

involvement at the initial stage in the project team. advising project leaders in skills available within the organisation identifying any
skills gaps, training needs, new posts, new working practices etc. balancing out the narrow/short-term goals with broader strategic needs. assessing the impact of change in one area/department/site on another part of the organisation. being used to negotiating and engaging across various stakeholders. understanding stakeholder concerns to anticipate problems. understanding the appropriate medium of communication to reach various groups. helping people cope with change, performance management and motivation.

CIPD viewpoint
Organisational change is increasing, yet the high levels of failure indicate that effective management of these changes is still lacking. Such a gap indicates that there is much to learn about how to manage change more effectively. There is no single model of change and no single solution to effective management, but, as HR professionals are recognising, they need to ensure managing change is a core part of their role. At present, HR professionals are not always seen as having the appropriate skills to lead on change management initiatives, and are therefore not actively included within the change process. However, many of the issues that are identified concern the 'people aspects' of change. HR would therefore appear to be ideally placed to ensure such issues are appropriately and effectively addressed. To achieve this aim HR will need to ensure it has the skills and credibility within the organisation to act as the champion of change in the future.

References

1.

SWART, J., KINNIE, N. and RABINOWITZ, J. (2007) Managing across boundaries: human resource management beyond the firm. London: Chartered Institute of Personnel and Development.

Further reading
CIPD members can use our Advanced Search to find additional library resources on this topic. They can also use our online journals collection to view selected journal articles online. People Management articles are available to subscribers and CIPD members on the People Management website. CIPD books in print can be ordered from our online Bookstore.

Go to Advanced Search Go to our online journals collection Go to People Management online Go to our online Bookstore

Books and reports

DONKIN, R. (2004) HR and reorganisation: managing the challenge of change. Change agenda. London: Chartered Institute of Personnel and Development. CANNON, J. A. and MCGEE, R. (2008) Organisational development and change. CIPD toolkit. London: Chartered Institute of Personnel and Development. MILLS, J.H., DYE, K. and MILLS, A.J. (2009) Understanding organizational change. Abingdon: Routledge. MOLLOY, E. and WHITTINGTON, R. (2005) HR: making change happen. Executive briefing. London: Chartered Institute of Personnel and Development.

Journal articles
Back issues of The Journal of Change Management and Strategic Change are both available to CIPD members in our online journals collection (see link above). GILL, A. (2009) Employee engagement in a change environment. Strategic HR Review. Vol 8, No 2. pp19-24. HENNESSY, J. and MCCARTNEY, C. (2008) The value of HR in times of change. Strategic HR Review. Vol 7, No 6. pp16-22. KOTTER, J. P.and SCHLESINGER, L.A. (2008) Choosing strategies for change. Harvard Business Review. Vol 86, No.7/8. July/August. pp130,132-139. MEANEY, M. and WILSON, S. (2009) Change in recession People Management. 7 May. p.62. WIGGINS, L. (2008/2009) Managing the ups and downs of change communication. Strategic Communication Management. Vol 13, No 1, December/January. pp20-23 This factsheet was written and updated by CIPD staff.