17

C H A P T E R
SEVENT E E N

Organizational
Change
McShane 5th Canadian Edition 1 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Change at Telus Corp.
Telus, the Vancouver-based
telecommunications firm, has
been forced by deregulation
and new technology to
dramatically change its
culture and practices. I do
think the employees of this
CP/Kevin Frayer
organization understand the
need for change, says CEO
Darren Entwistle (shown).

McShane 5th Canadian Edition 2 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Force Field Analysis Model

Desired Restraining
Forces
Conditions

Restraining Driving
Forces
Forces
Restraining
Forces
Current Driving
Conditions Forces
Driving
Forces

Before During After

Change Change Change
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Resistance to Change

Direct Costs

Saving Face

Fear of the Unknown

Forces for
Change Breaking Routines

Incongruent Systems

Incongruent Team Dynamics

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Creating an Urgency for Change

Inform employees about driving forces

Most difficult when organization is doing
well
Must be real, not contrived
Customer-driven change
Adverse consequences for firm
Human element energizes employees

McShane 5th Canadian Edition 5 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Reducing Restraining Forces at Unilever

Gary Calveley (right) brought in

team coaches to train
employees throughout the
process of changing Unilevers
Elida Faberge factory into
Europes best factory. A
Dean Smith/The Camera Crew
theatrical production helped to
communicate the changes that
Calveley was trying to achieve
through coaching.

McShane 5th Canadian Edition 6 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Minimizing Resistance to Change
Communication
McShane 5th Canadian Edition
Highest priority and first
strategy for change
Improves urgency to
change
Reduces uncertainty (fear
of unknown)
Problems -- time
consuming and costly
7 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Minimizing Resistance to Change
Communication Provides new knowledge
and skills
Training
Includes coaching and
action learning
Helps break old routines
and adopt new roles
Problems -- potentially
time consuming and costly

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Minimizing Resistance to Change
Communication Increases ownership of
change
Training
Helps saving face and
Employee reducing fear of unknown
Involvement
Includes task forces,
search conferences
Problems -- time-
consuming, potential
conflict

McShane 5th Canadian Edition 9 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Minimizing Resistance to Change
Communication When communication,
training, and involvement
Training do not resolve stress
Employee Potential benefits
Involvement More motivation to change
Less fear of unknown
Stress
Management Fewer direct costs
Problems -- time-
consuming, expensive,
doesnt help everyone

McShane 5th Canadian Edition 10 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Minimizing Resistance to Change
Communication

Training When people clearly lose

something and wont
Employee otherwise support change
Involvement
Influence by exchange--
Stress
Management
reduces direct costs
Problems
Negotiation Expensive
Increases compliance, not
commitment

McShane 5th Canadian Edition 11 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Minimizing Resistance to Change
Communication

Training
When all else fails
Employee
Involvement Assertive influence
Stress Firing people -- radical
Management form of unlearning
Negotiation Problems
Reduces trust
May create more subtle
Coercion
resistance

McShane 5th Canadian Edition 12 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Refreezing the Desired Conditions

Realigning organizational systems and team

dynamics with the desired changes
Alter rewards to reinforce new behaviours
Feedback systems
Help employees learn how they are doing
Provide support for the new behaviour patterns

McShane 5th Canadian Edition 13 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Vision & Change at CHC
Courtesy of CHC Helicopter Corp.
McShane 5th Canadian Edition
CHC Helicopter Corp.s four
strategic principles have helped
its employees adapt to rapid
growth at the St. Johns, Nfld.
firm. These principles include
safety first, quality service,
teamwork, and profitable
growth.
14 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Vision & Change

Need a vision of the desired

future state
Minimizes employee fear of
the unknown
Clarifies role perceptions

Courtesy of CHC Helicopter Corp.

McShane 5th Canadian Edition 15 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Change Agents

Anyone who possesses

enough knowledge and
power to guide and facilitate
the change effort
Change agents apply
transformational leadership
Help develop a vision
Communicate the vision
Act consistently with the vision
Courtesy of CHC Helicopter Corp. Build commitment to the vision

McShane 5th Canadian Edition 16 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Successfully Diffusing Change

Successful pilot project

Receives visibility
Top management support
Labour union involvement
Diffusion strategy described clearly
Pilot project people moved to other areas

McShane 5th Canadian Edition 17 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Action Research Philosophy
Change needs both action and research
focus
Action orientation
Solve problems and change the
organizational system

Research orientation
Concepts guide the change
Data needed to diagnose problem, identify
intervention, evaluate change

McShane 5th Canadian Edition 18 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Action Research Process

Establish
Client-
Consultant
Relations

Diagnose Evaluate/
Introduce
Need for Stabilize
Change
Change Change

Disengage
Consultants
Services

McShane 5th Canadian Edition 19 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Appreciative Inquiry at Hunter
Douglas
The Hunter Douglas Window
Fashions Division in Colorado
relied on appreciative inquiry
as well as a search conference
to create a collective vision, re-
instill a sense of community
among employees, and build
leadership within the company. Courtesy of Amanda Trotsen-Bloom

McShane 5th Canadian Edition 20 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Appreciative Inquiry Philosophy

Directs the groups attention

away from its own problems
and focuses participants on
the groups potential and
positive elements.

Reframes relationships
around the positive rather
Courtesy of Amanda Trotsen-Bloom

than being problem oriented

McShane 5th Canadian Edition 21 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Appreciative Inquiry Process

Discovery Dreaming Designing Delivering

Forming Engaging in Developing

Discovering
ideas about dialogue objectives
the best of
what might about what about what
what is
be should be will be

McShane 5th Canadian Edition 22 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Parallel Learning Structure Philosophy

Highly participative social structures

Members representative across the
formal hierarchy
Sufficiently free from firms constraints
Develop solutions for organizational
change which are then applied back into
the larger organization

McShane 5th Canadian Edition 23 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Parallel Learning Structures
Parallel
Organization
Structure

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Cross-Cultural and Ethical Concerns

Cross-Cultural Concerns
Linear and open conflict assumptions
different from values in some cultures

Ethical Concerns
Privacy rights of individuals
Management power
Individuals self-esteem
Consultants role

McShane 5th Canadian Edition 25 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 17
C H A P T E R
SEVENT E E N

Organizational
Change
McShane 5th Canadian Edition 26 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Discussion of Activity 17.2
Strategic Change Incidents

McShane 5th Canadian Edition 27 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Scenario #1: Greener Telco

Scenario #1 refers to Bell

Canadas Zero Waste
program, which
successfully changed
wasteful employee
behaviours by altering the
causes of those
behaviours. Courtesy of Bell Canada

McShane 5th Canadian Edition 28 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Bell Canadas Change Strategy
Relied on the MARS model to
alter behaviour:
Motivation -- employee involvement,
respected steering committee
Ability -- taught paper reduction, email,
food disposal
Role perc. -- communicated importance
of reducing waste
Situation -- Created barriers to wasteful
behaviour, eg. removed garbage bins

Courtesy of Bell Canada

McShane 5th Canadian Edition 29 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Scenario #2: Go Forward Airline

Scenario #2 refers to Continental Airlines

Go Forward change strategy, which
catapulted the company from worst to
first within a couple of years.

McShane 5th Canadian Edition 30 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Continental Airlines Change Strategy

Communicate, communicate, communicate

Introduced 15 performance measures
Established stretch goals (repainting planes in 6
months)
Replaced 50 of 61 executives
Rewarded new goals (on-time arrival, stock
price)
Customers as drivers of change

McShane 5th Canadian Edition 31 Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.