Change Management 101: A Primer
By Fred Nickols
Section I: Introduction
Background
The first version of this primer was written several years ago and
has gone through several iterations. It serves as an exercise in
change management. The current version is organized into these sections:
Section I: Introduction
Section II: Change Management Defined
Section III: The Change Process
Section IV: The Change Problem
Section V: Change Management Skills
Section VI: Change Strategies
Section VII: How Do You Manage Change?
Section VIII: Sources & Contact Information
Purpose and Audience
The purpose of this is to provide a broad overview of the concept
of "change management." It was written primarily for people
who are coming to grips with change management problems for the
first time but also for more experienced people who wish to reflect
upon their experience in a structured way.
Section II: Change Management Defined
Three Basic Definitions
In thinking about what is meant by "change management,"
at least three basic definitions come to mind:
1. The task of managing change.
2. An area of professional practice.
3. A body of knowledge.
The Task of Managing Change
The first and most obvious definition of "change management"
is that the term refers to the task of managing change. The obvious
is not necessarily unambiguous. Managing change is itself a term
that has at least two meanings.
One meaning of "managing change" refers to the making
of changes in a planned and managed/systematic fashion. The
aim is to more effectively implement new methods and systems in
an ongoing organization. The changes to be managed lie within and
are controlled by the organization. However, these internal changes
might have been triggered by events originating outside the organization,
in what is usually termed "the environment." Hence, the
second meaning of managing change, namely, the response to changes
over which the organization exercises little or no control (e.g.,
legislation, social and political upheaval, the actions of competitors,
shifting economic tides and currents, and so on). Researchers and
practitioners alike typically distinguish between a knee-jerk or
reactive response and a proactive response.
An Area of Professional Practice
The second definition of change management is "an area of professional
practice."
There are dozens, if not hundreds, of independent consultants who
will quickly and proudly proclaim that they are engaged in planned
change, that they are change agents, that they manage change for
their clients and that their practices are change management practices.
There are numerous small consulting firms whose principals would
make these same statements about their firms. And, of course, most
of the major management consulting firms have a change management
practice area.
Some of these change management experts claim to help clients manage
the changes they face - the changes happening to them. Others claim
to help clients make changes. Still others offer to help by taking
on the task of managing changes that must be made. In almost all
cases, the process of change is treated separately from the specifics
of the situation. It is expertise in this task of managing the general
process of change that is laid claim to by professional change agents.
A Body of Knowledge
Stemming from the view of change management as an area of professional
practice, there arises yet a third definition of change management:
the content or subject matter of change management. This consists
chiefly of the models, methods, tools, skills and other forms of
knowledge that go into making up any practice.
The content of change management is drawn from psychology, sociology,
business administration, economics, industrial engineering, systems
engineering and the study of human and organizational behavior.
For many practitioners, these bodies of knowledge are linked and
integrated by a set of concepts and principles known as General
Systems Theory (GST). It is not clear whether this area of professional
practice should be termed a profession, a discipline, an art, a
set of techniques or a technology. For now there is a large, reasonably
cohesive, albeit somewhat eclectic, body of knowledge underlying
the practice and on which most practitioners would agree. Even if
their application of it does exhibit a high degree of variation.
To recapitulate, there are at least three basic definitions of change
management:
1. The task of managing change (from a reactive or proactive
posture)
2. An area of professional practice (with considerable variation
in competence and skill levels among practitioners)
3. A body of knowledge (consisting of models, methods, techniques
and other tools)
A Few Words About Content and Process
Organizations are highly specialized systems, and there are many
different schemes for grouping and classifying them. Some are said
to be in the retail business, others are in manufacturing and still
others confine their activities to distribution. Some are profit-oriented
and some are not-for-profit. Some are in the public sector and some
are in the private sector. Some are members of the financial services
industry, which encompasses banking insurance, and brokerage houses.
Others belong to the automobile industry where they can be classified
as original equipment manufacturers (OEM) or after-market providers.
Some belong to the health care industry, as providers, as insureds,
or as insurers. Many are regulated, some are not. Some face stiff
competition, some do not. Some are foreign-owned and some are foreign-based.
Some are corporations, are partnerships and are sole proprietorships.
Some are publicly held and some are privately held. Some have been
around a long time and some are newcomers. Some have been built
up over the years while others have been pieced together through
mergers and acquisitions. No two are exactly alike.
It is one thing, for instance, to introduce a new claims processing
system in a functionally organized health insurer. It is quite another
to introduce a similar system in a health insurer that is organized
along product lines and market segments. It is yet a different thing
altogether to introduce a system of equal size and significance
in an educational establishment that relies on a matrix structure.
The languages, values and culture differ. And, at a detailed level,
the problems differ. However, the overall processes of change and
change management remain pretty much the same, and it is this fundamental
similarity of change processes across organizations, industries
and structures that makes change management a task, a process and
an area of professional practice.
Section III: The Change Process
The Change Process as "Unfreezing, Changing and Refreezing"
The process of change has been characterized as having three basic
stages: unfreezing, changing and re-freezing. This view draws heavily
on Kurt Lewin's adoption of the systems concept of homeostasis,
or dynamic stability.
What is useful about this framework is that it gives rise to thinking
about a staged approach to changing things. Looking before you leap
is usually sound practice.
What is not useful about this framework is that it does not allow
for change efforts that begin with the organization in extremis
(i.e., already "unfrozen"), nor does it allow for organizations
faced with the prospect of having to "hang loose" for
extended periods of time (i.e., staying "unfrozen").
In other words, the beginning and ending point of the unfreeze-change-refreeze
model is stability - which, for some people and some organizations,
is a luxury. For others, internal stability spells disaster. A tortoise
on the move can overtake even the fastest hare if that hare stands
still.
The Change Process as Problem Solving and Problem Finding
A very useful framework for thinking about the change process is
problem solving. Managing change is seen as a matter of moving from
one state to another, specifically, from the problem state to the
solution state. Diagnosis or problem analysis is generally acknowledged
as essential. Goals are set and achieved at various levels and in
various areas. Ends and means are discussed and related to one another.
Careful planning is accompanied by efforts to obtain buy-in, support
and commitment. The net effect is a transition from one state to
another in a planned, orderly fashion. This is the planned change
model.
The word "problem" carries with it connotations that some
people prefer to avoid. They choose instead to use the word "opportunity."
For such people, a problem is seen as a bad situation, one that
shouldn't have been allowed to happen in the first place, and for
which someone is likely to be held responsible. For the purposes
of this paper, we will set aside any cultural or personal preferences
regarding the use of "problem" or "opportunity."
From an analytical perspective, a problem is nothing more than a
situation requiring action but in which the required action is not
known. Hence, there is a requirement to search for a solution, a
course of action that will lead to the solved state. This search
activity is known as "problem solving."
From the preceding discussion, it follows that "problem finding"
is the search for situations requiring action. Whether we choose
to call these situations "problems" or "opportunities"
is immaterial. In both cases, the practical matter is one of arriving
at a course of action that will bring about desired and predetermined
change in the situation.
Section IV: The Change Problem
At the heart of change management lies the change problem, that
is, some future state to be realized, some current state to be left
behind, and some structured, organized process for getting from
the one to the other. The change problem might be large or small
in scope and scale, and it might focus on individuals, groups, divisions
or departments etc.
At a conceptual level, the change problem is a matter of moving
from one state (A) to another state (A'). Moving from A to A' is
typically accomplished as a result of setting up and achieving three
types of goals: transform, reduce and apply. "Transform"
goals are about identifying differences between the two states.
"Reduce" goals relate to determining ways of eliminating
these differences. "Apply" goals are concerned with putting
into play operators that actually effect the elimination of these
differences (see Newell & Simon).
As the goal types suggest, the analysis of a change problem will
at various times focus on defining the outcomes of the change effort,
on identifying the changes necessary to produce these outcomes,
and on finding and implementing ways and means of making the required
changes. In simpler terms, the change problem can be treated as
smaller problems having to do with the how, what and why of change.
Change as a "How" Problem
The change problem is often expressed, at least initially, in the
form of a "how" question. How do we get people to be more
open, to assume more responsibility, to be more creative? How do
we introduce self-managed teams in Department W? How do we change
over from System X to System Y in Division Z? How do we move from
a mainframe-centered computing environment to one that accommodates
and integrates PCs? How do we get this organization to be more innovative,
competitive, or productive? How do we raise more effective barriers
to market entry by our competitors? How might we more tightly bind
our suppliers to us? How do we reduce cycle times? In short, the
initial formulation of a change problem is means-centered, with
the goal state more or less implied. There is a reason why the initial
statement of a problem is so often means-centered (we will touch
on it later). For now, let's examine the other two ways in which
the problem might be formulated - as "what" or as "why"
questions.
Change as a "What" Problem
As was pointed out, to frame the change effort in the form of "how"
questions is to focus the effort on means. Diagnosis is assumed
or performed at all. Consequently, the ends sought are not discussed.
This might or might not be problematic. To focus on ends requires
the posing of "what" questions. What are we trying to
accomplish? What changes are necessary? What indicators will signal
success? What standards apply? What measures of performance are
we trying to affect?
Change as a "Why" Problem
Ends and means are relative notions, not absolutes; that is, something
is an end or a means only in relation to something else. Thus, chains
and networks of ends-means relationships often have to be traced
out before one finds the "true" ends of a change effort.
In this regard, "why" questions prove extremely useful.
Consider the following hypothetical dialogue with yourself as an
illustration of tracing out ends-means relationships.
Why do people need to be more creative?
I'll tell you why! Because we have to change the way we do things
and we need ideas about how to do that.
Why do we have to change the way we do things?
Because they cost too much and take too long.
Why do they cost too much?
Because we pay higher wages than any of our competitors.
Why do we pay higher wages than our competitors?
Because our productivity used to be higher, too, but now it's not.
Eureka! The true aim is to improve productivity!
No it isn't; keep going.
Why does productivity need to be improved?
To increase profits.
Why do profits need to be increased?
To improve earnings per share.
Why do earnings per share need to be improved?
To attract additional capital.
Why is additional capital needed?
We need to fund research aimed at developing the next generation
of products.
Why do we need a new generation of products?
Because our competitors are rolling them out faster than we are
and gobbling up market share.
Oh, so that's why we need to reduce cycle times.
Hmm. Why do things take so long?
To ask "why" questions is to get at the ultimate purposes
of functions and to open the door to finding new and better ways
of performing them. Why do we do what we do? Why do we do it the
way we do it?
The Approach Taken to Change Management Mirrors Management's
Mindset
The emphasis placed on the three types of questions just mentioned
reflects the management mindset, that is, the tendency to think
along certain lines depending on where one is situated in the organization.
A person's placement in the organization typically defines the scope
and scale of the kinds of changes with which he or she will become
involved, and the nature of the changes with which he or she will
be concerned. Thus, the systems people tend to be concerned with
technology, the marketing people with customer needs and competitive
activity, the legal people with legislative and other regulatory
actions and so on. Also, the higher up a person is in the hierarchy,
the longer the time perspective and the wider the range of issues
with which he or she must be concerned.
For the most part, changes and the change problems they present
are problems of adaptation, that is, they require the organization
adjust to an ever-changing set of circumstances. But, either as
a result of continued, cumulative compounding of adaptive maneuvers
that were nothing more than band-aids, or as the result of sudden
changes so significant as to call for a redefinition of the organization,
there are times when the changes that must be made are deep and
far-reaching. At such times, the design of the organization itself
is called into question.
Organizations frequently survive the people who establish them.
AT&T and IBM are two ready examples. At some point it becomes
the case that such organizations have been designed by one group
of people but are being operated or run by another. Successful organizations
resolve early on the issue of structure, placement and coordination
of functions and people. Other people then have to live with this
design and, because the ends have already been established, these
other people are chiefly concerned with means. This is why so many
problem-solving efforts start out focused on means.
Some organizations are designed to buffer their core operations
from turbulence in the environment. In such organizations all units
fit into one of three categories: core, buffer and perimeter.
In core units (e.g., systems and operations), coordination is achieved
through standardization, that is, adherence to routine. In buffer
units (e.g., upper management and staff or support functions), coordination
is achieved through planning. In perimeter units (e.g., sales, marketing
and customer service), coordination is achieved through mutual adjustment
(see Thompson).
People in core units, buffered as they are from environmental turbulence
and with a history of relying on adherence to standardized procedures,
typically focus on "how" questions. People in buffer units,
responsible for performance through planning, often ask "what"
questions. People in the perimeter units are as accountable as anyone
else for performance and frequently for performance of a financial
nature. They can be heard asking "what" and "how"
questions. "Why" questions are generally asked by people
with no direct responsibility for day-to-day operations or results.
The group most able to take this long-term or strategic view is
that cadre of senior executives responsible for the continued well
being of the firm: top management. If the design of the firm is
to be called into question or, more significantly, if it is actually
to be altered, these are the people who must make the decision to
do so.
Finally, when organizational redefinition and redesign prove necessary,
people in all units must concern themselves with all three sets
of questions, or the changes made will not stand the test of time.
To summarize: Problems may be formulated in terms of "how,"
"what" and "why" questions. Which formulation
is used depends on where in the organization the person posing the
question or formulating the problem is situated, and where the organization
is situated in its own life cycle.
· "How" questions tend to cluster in core units.
· "What" questions tend to cluster in buffer units.
· People in perimeter units tend to ask "what"
and "how" questions.
· "Why" questions are typically the responsibility
of top management.
In turbulent times, everyone must be concerned with everything.
Section V: Change Management Skills
Managing the kinds of changes encountered by and instituted within
organizations requires an unusually broad and finely honed set of
skills, chief among which are the following.
Political Skills
Organizations are first and foremost social systems. Without people
there can be no organization. Lose sight of this fact and any would-be
change agent will likely lose his or her head. Organizations are
hotly and intensely political. And, as one wag pointed out, the
lower the stakes, the more intense the politics. Change agents dare
not join in this game, but they had better understand it. This is
one area where you must make your own judgments and keep your own
counsel; no one can do it for you.
Analytical Skills
Make no mistake about it, those change agents need to be very good
at analysis. Guessing won't do. Insight is nice, even useful, and
sometimes shines with brilliance, but it is difficult to sell and
almost impossible to defend. A lucid, rational, well-argued analysis
can be ignored and even suppressed, but not successfully contested.
If not, then the political issues haven't been adequately addressed.
Two particular sets of skills are very important here: (1) workflow
operations or systems analysis, and (2) financial analysis. Change
agents must learn to take apart and reassemble operations and systems
in novel ways and then determine the financial and political impacts
of what they have done. Conversely, they must be able to start with
some financial goal, and make their way quickly to those operations
and systems that, if reconfigured a certain way, would have the
desired financial impact. Those who master these two techniques
have learned a trade that will be in demand for the foreseeable
future. (This trade is called "Solution Engineering.")
People Skills
As stated earlier, people are the sine qua non of organization.
Moreover, they come characterized by all manner of sizes, shapes,
colors, intelligence and ability levels, gender, sexual preferences,
national origins, first and second languages, religious beliefs,
attitudes toward life and work, personalities and priorities - and
these are just a few of the dimensions along which people vary.
The skills most needed in this area are those that typically fall
under the heading of communication or interpersonal skills. To be
effective, we must be able to listen and listen actively, to restate,
to reflect, to clarify without interrogating, draw out the speaker,
lead or channel a discussion, plant ideas, and to develop them.
All these and more are needed. Not all of us will have to learn
Russian, French or Spanish, but most of us will have to learn to
speak Systems, Marketing, Manufacturing, Finance, Personnel, Legal
and a host of other organizational dialects. More importantly, we
have to learn to see things through the eyes of these other inhabitants
of the organizational world. A situation viewed from a marketing
frame of reference is an entirely different situation when seen
through the eyes of a systems person. Part of the job of a change
agent is to reconcile and resolve the conflict between and among
disparate (and sometimes desperate) points of view. Charm is great
if you have it. Courtesy is even better. A well-paid compliment
can buy gratitude. A sincere "Thank you" can earn respect.
System Skills
There's much more to this than learning about computers, although
most enlightened people need to learn about computer-based information
systems. For now, let's just say that a system is an arrangement
of resources and routines intended to produce specified results.
To organize is to arrange. A system reflects organization and, by
the same token, an organization is a system.
A word processing operator and the word processing equipment operated
form a system. So do computers and the larger, information processing
systems in which computers are so often embedded. These are generally
known as "hard" systems. There are "soft" systems
as well: compensation systems, appraisal systems, promotion systems
and reward and incentive systems.
There are two sets of systems skills to be mastered. Many people
associate the first set with computers and it is exemplified by
"systems analysis." This set of skills, by the way, actually
predates the digital computer and is known elsewhere (particularly
in the United States Air Force and the aerospace industry) as "systems
engineering." For the most part, the kind of system with which
this skill set concerns itself is a "closed" system which,
for now, we can say it cannot learn and it cannot change of its
own volition. The second set of system skills associated with a
body of knowledge generally referred to as General Systems Theory
(GST) and it deals with people, organizations, industries, economies
and even nations as socio-technical systems - as "open,"
purposive systems, carrying out transactions with other systems
and bent on survival, continuance, prosperity, dominance, plus a
host of other goals and objectives.
Business Skills
Simply put, you'd better understand how a business works. This
entails an understanding of money - where it comes from, where it
goes, how to get it, and how to keep it. It also calls into play
knowledge of markets and marketing, products and product development,
customers, sales, selling, buying, hiring, firing, EEO, AAP and
just about anything else you might think of.
Section VI: Change Management Strategies
(See Bennis, Benne and Chin)
Strategy and Description
Empirical-Rational people are rational and will follow their
self-interest - once it is revealed to them. Change is based on
the communication of information and the proffering of incentives.
Normative-Reeducative people are social beings and will adhere
to cultural norms and values. Change is based on redefining and
reinterpreting existing norms and values, and developing commitments
to new ones.
Power-Coercive people are basically compliant and will generally
do what they are told or can be made to do. Change is based on the
exercise of authority and the imposition of sanctions.
Environmental-Adaptive people oppose loss and disruption
but they adapt readily to new circumstances. Change is based on
building a new organization and gradually transferring people from
the old one to the new one.
Note:
The fourth and last strategy in the table above is not one of
those presented by Bennis, Benne and Chin. It is instead the product
of the author's own experiences during some 30 years of making and
adapting to changes in, to, and on behalf of organizations. An excellent
example of this strategy in action, albeit on an accelerated basis,
is provided by the way in which Rupert Murdoch handled the printers
of Fleet Street. He quietly set about building an entirely new operation
in Wapping, some distance away. When it was ready to be occupied
and made operational, he informed the employees in the old operation
that he had some bad news and some good news. The bad news was that
the existing operation was being shut down. Everyone was being fired.
The good news was that the new operation had jobs for all of them-but
on very different terms That there are also elements of the Empirical-Rational
and Power-Coercive strategies at play here serves to make the point
that successful change efforts inevitably involve some mix of these
basic change strategies.
Factors in Selecting A Change Strategy
Generally speaking, there is no single change strategy. You can
adopt a general or "grand strategy" but, for any given
initiative, you are best served by some mix of strategies.
Which of the preceding strategies to use is a decision affected
by a number of factors. Some of the more important ones follow.
· Degree of Resistance. Strong resistance argues for
a coupling of power-coercive and environmental-adaptive strategies.
Weak resistance or concurrence argues for a combination of Empircal-Rational
and normative-reeducative strategies.
· Target Population. Large populations argue for
a mix of all four strategies, something for everyone, so to speak.
· The Stakes. High stakes argue for a mix of all
four strategies. When the stakes are high, nothing can be left to
chance.
· The Time Frame. Short time frames argue for a power-coercive
strategy. Longer time frames argue for a mix of Empircal-Rational,
normative-reeducative and environmental-adaptive strategies.
· Expertise. Having available adequate expertise
at making change argues for some mix of the strategies outlined
above. Not having it available argues for reliance on the power-coercive
strategy.
· Dependency. This is a classic double-edged sword.
If the organization is dependent on its people, management's ability
to command or demand is limited. Conversely, if people are dependent
upon the organization, their ability to oppose or resist is limited.
(Mutual dependency almost always requires some level of negotiation.)
Section VII: How do you manage change?
The honest answer is that you manage it pretty much the same way
you'd manage anything else of a turbulent, messy, chaotic nature.
That is, you don't really manage it, you grapple with it. It's more
a matter of leadership ability than management skill.
1. The first thing to do is jump in. You can't do anything about
it from the outside.
2. A clear sense of mission or purpose is essential. The simpler
the mission statement the better. "Kick ass in the marketplace"
is a whole lot more meaningful than "Respond to market needs
with a range of products and services that have been carefully designed
and developed to compare so favorably in our customers' eyes with
the products and services offered by our competitors, that the majority
of buying decisions will be made in our favor."
3. Build a team. "Lone wolves" have their uses, but managing
change isn't one of them. On the other hand, the right kind of lone
wolf makes an excellent temporary team leader.
4. Maintain a flat organizational team structure and rely on minimal
and informal reporting requirements.
5. Pick people with relevant skills and high energy levels. You'll
need both.
6. Toss out the rulebook. Change, by definition, calls for a configured
response, not adherence to prefigured routines.
7. Shift to an action-feedback model. Plan and act in short intervals.
Do your analysis on the fly. No lengthy up-front studies, please.
Remember the hare and the tortoise.
8. Set flexible priorities. You must have the ability to drop what
you're doing and tend to something more important.
9. Treat everything as a temporary measure. Don't "lock in"
until the last minute, and then insist on the right to change your
mind.
10. Ask for volunteers. You'll be surprised at who shows up. You'll
be pleasantly surprised by what they can do.
11. Find a good "straw boss" or team leader and stay out
of his or her way.
12. Give the team members whatever they ask for - except authority.
They'll generally ask only for what they really need in the way
of resources. If they start asking for authority, that's a signal
they're headed toward some kind of power-based confrontation and
that spells trouble. Nip it in the bud!
13. Concentrate dispersed knowledge. Start and maintain an issues
logbook. Let anyone go anywhere and talk to anyone about anything.
Keep the communications barriers low, widely spaced and easily hurdled.
Initially, if things look chaotic, relax - they are.
Remember, the task of change management is to bring order to a
messy situation, not pretend that it's already well organized and
disciplined.
Section VIII: Sources & Contact Information
Selected Sources
1. The Planning of Change (2nd Edition). Warren G. Bennis,
Kenneth D. Benne, and Robert Chin (Eds.). Holt, Rinehart and Winston,
New York: 1969.
2. Human Problem Solving. Allen Newell and Herbert A. Simon.
Prentice-Hall, Englewood Cliffs: 1972.
3. Organizations in Action. James D. Thompson. McGraw-Hill,
New York: 1967.
Fred Nickols can be reached by e-mail at nickols@att.net.
Other articles of his can be found on his web site at: http://home.att.net/~nickols/articles.htm.
Discuss this topic with other IABC members at: www.iabc.com/memberspeak.
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