Chapter 11 (Change for success)

Change management: a process that coordinates business systems to control and manage change within an organisation.

Businesses operate in an environment that is always changing. Change in the business environment is brought about by new government policies and laws, demographic changes, developments in technology and increased competition.

What worked in the past may not work now. Management and directors may decide to respond to change through a strategic process of creating of a new vision and new goals implemented through new business structures and systems.

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There are two important aspects of change management:

  • The business: requires successful implementation of new systems, policies and technologies to respond to the business environment ad new strategic direction.
  • The people: all employees must understand the reason why the business must change and the purpose of the change process. Management must be clear about any repercussions for staff (promotions, demotions, redundancies) and the role of staff in the change process. Change will succeed if employees are supportive and motivated to change.

Examples of changes include:

  • new products and services
  • sacking people to cut costs
  • outsourcing
  • starting business online
  • entry into a strategic alliance
  • significant change in laws and regulations
  • international expansion
  • a move into franchising
  • buying and selling businesses.

To overcome resistance to change, management has to consider the following:

  1. Why the change is occurring
  2. A sound rationale for the change
  3. The most strategic time to make the change

Management must ensure that all stakeholders are included in the planning and discussion change. By consulting employees and involving them in decisions they can feel a sense of ownership and control over the direction of change. In this way, managers can gain support for the change rather than encounter resistance.

Resistance to change: when employees oppose or struggle to accept changes in the workplace.

Resistance to change may be expressed as criticism, nitpicking details, failure to adopt new policies and procedures, sarcasm, missed training and meetings, arguments with management and co-workers and, at the extreme, workplace sabotage.

  • Financial costs
  • Purchasing new materials and equipment
  • Redundancy payouts
  • Retraining
  • Inertia of managers and owners
  • Cultural incompatibility in mergers/takeovers
  • Staff attitude
  • Ripple effects
  • Loss of control
  • Poor timing

Preparing people for change

  1. Lewin’s stages of change
    • Unfreeze: Present the argument for the change and prepare employees for the process of change.
    • Changing: Implement the change plan. Introduce new systems, policies and processes.
    • Refreeze: Formalise the change. Employees get used to the change.

Change management can be unsuccessful. There may be resistance to change because employees fear they will lose their jobs or authority. The main factors of unsuccessful change are:

  • poor planning
  • lack of skills and experience of the change team
  • poor leadership by the change agents
  • lack of communication throughout the process
  • lack of coordination among managers.

2. Lewin’s Force Field Analysis

For change management to be successful employees must be convinced that the forces for change are stronger than the forces against change. Force field analysis is a method to analyse and compare the forces of change. It is a tool that can be used as part of the unfreezing stage to help employees understand the need for change.

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3. Kotter’s 8 Steps

  • Step 1: Create urgency
    • Identify threats and opportunities in the business environment.
    • Discuss the reasons for change to get people talking and thinking.
    • Ask for input and support from staff.
  • Step 2: Form a powerful coalition
    • Identify leaders in the workplace.
    • Create a change team that will work together to make it happen.
    • Have a good mix of people from different departments and different levels.
  • Step 3: Create a vision for change
    • Use the change team to develop a goal.
    • Write a clear plan for the change process to achieve the goal.
    • Ensure the vision is easy to understand and communicate to others.
  • Step 4: Communicate the vision
    • Talk often about the change vision.
    • Seek feedback and address concerns.
    • Lead by example.
  • Step 5: Remove obstacles
    • Use meetings and communication to identify barriers and find solutions.
    • Reward people for making change happen.
    • Identify people who are resisting change and try to convince them of its importance.
  • Step 6: Create short-term wins
    • Take care when choosing early targets, failure to achieve them will jeopardise future success and commitment.
    • Communicate successes to all staff.
  • Step 7: Build on the change
    • Keep reviewing and improving to make sure the change is working.
    • Ensure all policies, procedures, manuals and instructions are updated.
    • Seek feedback from staff.
    • Identify where the new methods are not being followed.
  • Step 8: Anchor the changes in corporate culture
    • Keep celebrating successes.
    • Show how success has come from change.
    • Keep workplace leaders informed so they can answer questions from their work teams.