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Managing
Organizational
Change

A Multiple Perspectives Approach Third Edition

Ian Palmer

Richard Dunford

David A. Buchanan

MANAGING ORGANIZATIONAL CHANGE: A MULTIPLE PERSPECTIVES APPROACH, THIRD EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2017 by McGraw-Hill Education. All rights reserved. Printed

in the United States of America. Previous editions © 2009 and 2006. No part of this publication may be reproduced or distributed in any form or by any

means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network

or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

1 2 3 4 5 6 7 8 9 0 DOC/DOC 1 0 9 8 7 6

ISBN 978-0-07-353053-6

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Library of Congress Cataloging-in-Publication Data

Palmer, Ian, 1957-

Managing organizational change : a multiple perspectives approach / Ian Palmer, Richard Dunford,

David A. Buchanan. — Third Edition.

p. cm.

Revised edition of Managing organizational change, 2009.

Includes bibliographical references and index.

ISBN 978-0-07-353053-6 (alk. paper)

1. Organizational change. 2. Organizational change–Management. I. Dunford, Richard.

II. Buchanan, David A. III. Title.

HD58.8.P347 2016

658.4’06–dc23

2015033668

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the

authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

mheducation.com/highered

DEDICATIONS

From Ian To Dianne, Matthew, and Michelle

From Richard To Jill, Nick, and Ally

From David To Lesley with love—and thanks

This book is also dedicated to the memory of Gib Akin, our

co-author from 2005 to 2014.

iv

A number of people have contributed to this edition, and we owe them all a debt of grat-

itude, including Jonathan Bamber, Lesley Buchanan, Daloni Carlile, Mimi Clarke, and

Alastair McLellan. In addition, we would like to thank our McGraw-Hill Education team,

including Michael Ablassmeir, Director, Laura Hurst Spell, Senior Product Developer; Jeni

McAtee, Evan Roberts, Karen Jozefowicz, Content Project Managers; Gunjan Chandola

(Lumina), Full-Service Content Project Manager; and DeAnna Dausener, Content Licens-

ing Specialist. We would also like to thank the second edition reviewers for their helpful

feedback: Diane Bandow, Troy University; Cynthia Bean, University of South Florida–

St. Petersburg; Bradford R. Frazier, Pfeiffer University; Dominie Garcia, San Jose State

University; Selina Griswold, University of Toledo; Mark Hannan, George Washington

University; Christopher S. Howard, Pfeiffer University; Jim Kerner, Athens State Uni-

versity; Catherine Marsh, North Park University; Patricia A. Matuszek, Troy University;

Ranjna Patel, Bethune Cookman University; Mary Sass, Western Washington University;

Dennis Self, Troy University; Patricia Scescke, National Louis University.

Acknowledgements

v

Preface ix

PART 1 Groundwork: Understanding and Diagnosing Change 1

1 Managing Change: Stories and Paradoxes 3

2 Images of Change Management 31

3 Why Change? Contemporary Pressures and Drivers 61

4 What to Change? A Diagnostic Approach 101

PART 2 Implementation: The Substance and Process of Change 137

5 What Changes—and What Doesn’t? 139

6 Vision and the Direction of Change 171

7 Change Communication Strategies 205

8 Resistance to Change 249

9 Organization Development and Sense-Making Approaches 279

10 Change Management, Processual, and Contingency Approaches 315

PART 3 Running Threads: Sustainability, and the
Effective Change Manager 353

11 Sustaining Change versus Initiative Decay 355

12 The Effective Change Manager: What Does It Take? 385

Name Index 423

Subject Index 433

Brief contents

vi

Preface ix

Part 1

Groundwork: Understanding and
Diagnosing Change 1

1 Managing Change: Stories and
Paradoxes 3

Learning objectives 3

Stories About Change: What Can We

Learn? 4

The Story of Beth Israel Deaconess

Medical Center 5

The Story of Sears Holdings 8

The Story of J. C. Penney 10

Tension and Paradox: The State of the Art 14

Assessing Depth of Change 18

What’s Coming Up: A Road Map 19

Change Diagnostic: The Beth Israel Story 21

Change Diagnostic: The Sears Holdings

Story 23

Change Diagnostic: The J. C. Penney Story 24

Exercise 1.1: Writing Your Own Story of

Change 26

Additional Reading 27

Roundup 27

References 28

2 Images of Change Management 31

Learning objectives 31

What’s in a Name: Change Agents, Managers,

or Leaders? 32

Images, Mental Models, Frames,

Perspectives 33

The Six-Images Framework 34

Six Images of Change Management 37

Using the Six-Images Framework 46

Self-Assessment: What Is Your Image of

Managing Change? 49

Self-Assessment: Scoring 51

Exercise 2.1: Assessing Change Managers’

Images 52

Exercise 2.2: The Turnaround Story at

Leonard Cheshire 53

Additional Reading 55

Roundup 56

References 57

3 Why Change? Contemporary Pressures
and Drivers 61

Learning objectives 61

Environmental Pressures for Change 62

Why Do Organizations Not Change in

Response to Environmental Pressures? 79

Why Do Organizations Not Change after

Crises? 82

Internal Organizational Change Drivers 85

Exercise 3.1: Top Team Role Play 91

Exercise 3.2: Case Analysis: The Sunderland

City Story 91

Exercise 3.3: The Reputation Trap: Can You

Escape? 92

Additional Reading 93

Roundup 94

References 96

4 What to Change? A Diagnostic
Approach 101

Learning objectives 101

Organizational Models 102

Organization Strategy and Change 108

Diagnosing Readiness for Change 117

Built-to-Change 124

Exercise 4.1: The Capital One Financial

Story 125

Contents

Contents vii

Exercise 4.2: Scenario Planning 127

Exercise 4.3: Readiness for Change

Analysis 128

Additional Reading 130

Roundup 131

References 134

Part 2

Implementation: The Substance and
Process of Change 137

5 What Changes—and What
Doesn’t? 139

Learning objectives 139

What Changes? 140

Innovation 146

Organizational Culture 150

Technology 155

Exercise 5.1: The Nampak Story 161

Exercise 5.2: Organizational Culture

Assessment 162

Exercise 5.3: How Will the Digital Revolution

Affect Your Organization? 163

Additional Reading 163

Roundup 164

References 166

6 Vision and the Direction
of Change 171

Learning objectives 171

Vision: Fundamental or Fad? 172

The Characteristics of Effective Visions 174

How Context Affects Vision 180

How Visions Are Developed 181

Why Visions Fail 187

Linking Vision to Change: Three

Debates 189

Exercise 6.1: Interviewing Change

Recipients 197

Exercise 6.2: Analyze Your Own

Organization’s Vision 197

Exercise 6.3: The Role of Vision at Mentor

Graphics 197

Additional Reading 198

Roundup 199

References 201

7 Change Communication
Strategies 205

Learning objectives 205

The Change Communication Process 206

Gender, Power, and Emotion 211

Language Matters: The Power

of Conversation 215

Change Communication Strategies 222

Contingency Approaches to Change

Communication 228

Communication Channels and the Role

of Social Media 232

Exercise 7.1: Listen to Who’s Talking 238

Exercise 7.2: How Defensive Are You? 239

Exercise 7.3: Social Media at the

Museum 240

Additional Reading 241

Roundup 242

References 244

8 Resistance to Change 249

Learning objectives 249

WIIFM, WAMI, and the Dimensions

of Resistance 250

Benefits 251

Causes 253

Symptoms 260

Managers as Resisters 261

Managing Resistance 263

Exercise 8.1: Diagnosing and Acting 270

Exercise 8.2: Jack’s Dilemma 270

Exercise 8.3: Moneyball 271

Additional Reading 272

Roundup 272

References 274

viii Contents

9 Organization Development and
Sense-Making Approaches 279

Learning objectives 279

Alternative Approaches to Managing

Change 280

Organization Development (OD) 280

Appreciative Inquiry (AI) 291

Positive Organizational Scholarship (POS) 293

Dialogic Organizational Development 295

Sense-Making 298

Exercise 9.1: Reports from the Front Line 304

Exercise 9.2: Designing a Large-Scale Change

Intervention 304

Exercise 9.3: Making Sense of

Sense-Making 304

Exercise 9.4: Interpreting the Interpreter:

Change at Target 305

Exercise 9.5: Change at DuPont 306

Additional Reading 308

Roundup 308

References 310

10 Change Management, Processual, and
Contingency Approaches 315

Learning objectives 315

Alternative Approaches to Managing

Change 316

Why Change Fails 317

Change by Checklist 319

Stage Models of Change Management 325

Process Perspectives on Change 331

Contingency Approaches to Change

Management 335

Exercise 10.1: Develop Your Own Change

Model 341

Exercise 10.2: The British Airways Swipe

Card Debacle 342

Exercise 10.3: The Italian Job 344

Additional Reading 346

Roundup 346

References 349

Part 3

Running Threads: Sustainability, and
the Effective Change Manager 353

11 Sustaining Change versus
Initiative Decay 355

Learning objectives 355

Initiative Decay and Improvement

Evaporation 356

Praiseworthy and Blameworthy Failures 359

Actions to Sustain Change 362

Words of Warning 369

Exercise 11.1: A Balanced Set of

Measures 373

Exercise 11.2: Treating Initiative Decay 373

Exercise 11.3: The Challenger and Columbia

Shuttle Disasters 374

Additional Reading 379

Roundup 380

References 382

12 The Effective Change Manager:
What Does It Take? 385

Learning objectives 385

Change Managers: Who Are They? 386

Change Managers: What Kind of Role

Is This? 394

Change Management Competencies 397

Political Skill and the Change Manager 403

Developing Change Management

Expertise 410

Exercise 12.1: Networking—How Good

Are You? 412

Exercise 12.2: How Resilient Are You? 413

Exercise 12.3: How Political Is Your

Organization? 415

Additional Reading 416

Roundup 417

References 419

Name Index 423

Subject Index 433

ix

Since the previous edition of this book published in 2009, the organizational world has

changed dramatically—the global financial crisis, fresh geopolitical tensions, environ-

mental concerns, greater focus on corporate social responsibility, economic uncertainties,

emerging new markets, dramatic technological developments, demographic shifts, chang-

ing consumer tastes and expectations. Add to that mix the growing significance of social

media, where positive and critical views of organizations and their products and services

can be shared instantly and globally with large numbers of people.

From a management perspective, it feels as though the drivers for organizational change

are now more numerous, and that the pace of change has also increased; more pressure,

more change, faster change. While the pace of change may only appear to have quickened,

failure to respond to those pressures, and in some cases failure to respond quickly enough,

can have significant individual and corporate consequences. The personal and organiza-

tional stakes appear to have increased.

The management of organizational change thus remains a topic of strategic impor-

tance for most sectors, public and private. Current conditions have, if anything, increased

the importance of this area of management responsibility. This new edition, therefore,

is timely with regard to updating previous content, while introducing new and emerging

trends, developments, themes, debates, and practices.

In the light of this assessment, we believe that the multiple perspectives approach is

particularly valuable, recognizing the variety of ways in which change can be progressed,

and reinforcing the need for a tailored and creative approach to fit different contexts. Our

images of how organizational change should be managed affect the approaches that we

take to understanding and managing change. Adopting different images and perspectives

helps to open up new and more innovative ways of approaching the change management

process. We hope that this approach will help to guide and to inspire others in pursuit of

their own responsibilities for managing organizational change.

This text is aimed at two main readers. The first is an experienced practicing manager

enrolled in an MBA or a similar master’s degree program, or taking part in a management

development course that includes a module on organizational change management. The

second is a senior undergraduate, who may have less practical experience, but who will

probably have encountered organizational change through temporary work assignments,

or indirectly through family and friends. Our senior undergraduate is also likely to be

planning a management career, or to be heading for a professional role that will inevi-

tably involve management—and change management—responsibilities. Given the needs

and interests of both types of readers, we have sought to present an appropriate blend of

research and theory on the one hand, and practical management application on the other.

Instructors who have used our previous edition will find many familiar features in this

update. The chapter structure and sequence of the book remain much the same, with some

minor adjustments to accommodate new material. The overall argument is again underpinned

by the observation that the management of organizational change is in part a rational or tech-

nical task, and is also a creative activity, with the need to design novel strategies and processes

Preface

that are consistent with the needs of unique local conditions. We hope that readers will find

the writing style and presentation clear and engaging. We have also maintained the breadth of

coverage of the different traditions and perspectives that contribute to the theory and practice

of managing organizational change, with international examples where appropriate.

The development of this new edition has introduced new content and new pedagogical

features. The new content for this edition includes the following:

Depth of change: Change can be categorized and understood with regard to how deeply

it penetrates an organization. A “depth of change” model is explained, using a “shal-

low to transformational” scale, forming the basis for discussion and analysis at various

points in the text (chapters 1, 4, and 12).

New tensions and debates: A new section explores contemporary dilemmas in orga-

nizational change management. One of these concerns striking the balance between

large-scale transformational change (which can be disruptive) and “sweating the small

stuff” (which can create a platform for further changes). A second concerns pace, with

some commentators advising how to speed up change, while others warn of the dangers

of “the acceleration trap” (chapter 1).

Change managers or change leaders: Some commentators claim this is an important

distinction, while others argue that this is a words game. Can we resolve this debate

(chapter 2)?

Post-crisis change: Recommendations for change from investigations into accidents,

misconduct, and catastrophes are often not implemented. We explore why this should

be the case—in conditions where it might be presumed that change would be welcome

and straightforward (chapter 3). We also consider briefly the problems and practice of

communication during and after crises (chapter 7).

Change in a recession: Is change more challenging when economic conditions are dif-

ficult? A new section argues that change may be more straightforward during a reces-

sion (chapter 3).

Innovation: We explore how change is driven by the proactive development, adop-

tion, and diffusion of product and operational innovations, along with the distinction

between sustaining and disruptive innovations, and the nature and development of

innovative organization cultures (chapter 4).

Built to change: We explore the organizational capabilities that contribute to change,

adaptation, responsiveness, and agility, considering mechanistic and organic manage-

ment systems, segmentalist and integrative cultures, and the concept of the “built-to-

change” organization (chapter 4).

Change communication strategies: This chapter has been thoroughly updated, with the

emphasis on change communication, exploring the characteristics of effective change

communication strategies, the potential impact and applications of social media as cor-

porate communications tools, and the “communication escalator” (chapter 7).

Middle management blockers: The traditional stereotype has middle managers sub-

verting top team initiatives. Recent research suggests that this image is wrong, and

that middle management are often the source of creative strategic ideas as well as the

“engine room” for delivery (chapters 8 and 12).

x Preface

Organization development and sense-making approaches: As in the previous edition,

recent developments in organization development, appreciative inquiry, positive orga-

nizational scholarship, and dialogic organization development are explored (chapter 9).

Contingency and processual approaches: Covered in the last edition, recent develop-

ments have been incorporated to update these sections, reflecting their influence on

theory and practice (chapter 10).

Praiseworthy and blameworthy failures: The section on “recognizing productive fail-

ures” has been updated with recent commentary suggesting that some failures should

be rewarded (chapter 11).

The effective change manager: What does it take? This new chapter explores the capa-

bilities of change managers, considering competency frameworks, interpersonal com-

munication processes and skills, issue-selling tactics, and the need for the change

manager to be politically skilled (chapter 12).

The pedagogical features in the text include:

• learning outcomes identified at the beginning of each chapter;

• fewer, and shorter, “high-impact” case studies of organizational change and other diag-
nostic and self-assessment exercises for classroom use;

• movie recommendations, identifying clips that illustrate theoretical and practical
dimensions of organizational change management;

• a short “roundup” section at the end of each chapter, with reflections for the practic-
ing change manager, and summarizing the key learning points (linked to the learning

outcomes);

• a small number of suggestions for further reading at the end of each chapter.

Since this book was first published, we have continued our conversations with man-

agers who have been using it as part of their teaching, consulting, and other organiza-

tional change activities. In so many of these conversations, it was reassuring to hear how

the multiple perspectives framework that underpins this book struck the right chord with

them, opening up new, innovative, and different ways of seeing, thinking, conceptualizing,

and practicing organizational change. We hope that this new and updated third edition will

continue to inspire various change journeys, and we look forward to more conversations

along the way.

Online Resources

Instructors: If you are looking for teaching materials in this subject area, such as case stud-

ies, discussion guides, organizational diagnostics, self-assessments, company websites, or

audio-visual materials (feature films, YouTube clips) to use in lectures and tutorials, then

go to McGraw-Hill Connect: connect.mheducation.com

Continually evolving, McGraw-Hill Connect has been redesigned to provide the only

true adaptive learning experience delivered within a simple and easy-to-navigate environ-

ment, placing students at the very center.

Preface xi

• Performance Analytics – Now available for both instructors and students, easy-to-decipher
data illuminates course performance. Students always know how they are doing in class,

while instructors can view student and section performance at a glance.

• Personalized Learning – Squeezing the most out of study time, the adaptive engine
within Connect creates a highly personalized learning path for each student by identify-

ing areas of weakness and providing learning resources to assist in the moment of need.

This seamless integration of reading, practice, and assessment ensures that the focus is

on the most important content for that individual.

The Connect Management Instructor Library is your repository for additional resources

to improve student engagement in and out of class. You can select and use any asset that

enhances your lecture.

The Connect Instructor Library includes:

• Instructor Manual

• PowerPoint files

• Test Bank

Students: If you are looking for additional materials to improve your understanding of

this subject and improve your grades, go to McGraw-Hill Connect: connect.mheduca-

tion.com

Manager’s Hot Seat: Now instructors can put students in the hot seat with access to an

interactive program. Students watch real managers apply their years of experience when

confronting unscripted issues. As the scenario unfolds, questions about how the manager

is handling the situation pop up, forcing the student to make decisions along with the

manager. At the end of the scenario, students watch a post-interview with the manager and

view how their responses matched up to the manager’s decisions. The Manager’s Hot Seat

videos are now available as assignments in Connect.

LearnSmart: LearnSmart, the most widely used adaptive learning resource, is proven

to improve grades. By focusing students on the most important information each stu-

dent needs to learn, LearnSmart personalizes the learning experience so they can study

as efficiently as possible.

SmartBook: An extension of LearnSmart, SmartBook is an adaptive ebook that helps

students focus their study time more effectively. As students read, SmartBook assesses

comprehension and dynamically highlights where they need to study more.

xii Preface

1

1
Groundwork:
Understanding and
Diagnosing Change

CHAPTER 1 Managing Change: Stories and Paradoxes

CHAPTER 2 Images of Change Management

CHAPTER 3 Why Change? Contemporary Drivers and Pressures

CHAPTER 4 What to Change? A Diagnostic Approach

The central theme of the four chapters in Part 1 is groundwork. How are we to approach

an understanding of organizational change? With what approaches, perspectives, or

images of change management should we be working? What drivers and pressures

produce organizational change? What diagnostic tools can we use in order to decide

what aspects of the organization and its operations will need to change or will benefit

from change?

PART

3

Managing Change:
Stories and Paradoxes

Learning objectives

By the end of this chapter you should be able to:

LO 1.1 Understand how stories of change can contribute to our knowledge of theory

and practice.

LO 1.2 Explain why managing organizational change is both a creative and a rational

process.

LO 1.3 Identify the main tensions and paradoxes in managing organizational change.

LO 1.4 Evaluate the strengths and limitations of our current understanding of this field.

1Chapter

w
w
w
.C
a
r
to
o
n
S
to
c
k
.c
o
m

4 Chapter 1 Managing Change: Stories and Paradoxes

LO 1.1 LO 1.2 Stories About Change: What Can We Learn?

Changing organizations is as messy as it is exhilarating, as frustrating as it is satis-

fying, as muddling-through and creative a process as it is a rational one. This book

recognizes these tensions and how they affect those who are involved in managing

organizational change. Rather than pretend that these tensions do not exist, or that they

are unimportant, we confront them head on, considering how they can be addressed and

managed, recognizing the constraints that they can impose. We also want to demon-

strate how the images that we hold about the way in which change should be managed,

and of the role of change agents, affect how we approach change and the outcomes we

think are  possible.

To begin this exploration, we present three stories of recent changes. The first con-

cerns the turnaround of the Beth Israel Deaconess Medical Center in Boston. The sec-

ond concerns the new organizational model introduced at Sears Holdings in an attempt

to restore falling sales and profits. The third concerns innovative efforts to restore fall-

ing sales and a fading brand at J. C. Penney, a retailer. These stories address differ-

ent problems, but they display many common issues concerning the management of

change. Each of these accounts comes with a set of assessment questions. We would

like to ask you to think through the answers to those questions for yourself, or in a class

discussion.

Our aim is to demonstrate that stories about change can be one valuable source of

practical lessons, as well as helping to contribute to our general understanding of change.

These stories are of course distinctive, one-off. How can they contribute to knowledge

and practice in general, in other sectors and organizations? Stories are one of the main

ways of knowing, communicating, and making sense of the world (Czarniawska, 1998;

Pentland, 1999; Dawson and Andriopoulos, 2014). Our stories have actors: change lead-

ers, other managers, staff, customers. They take decisions that lead to actions that trig-

ger responses: acceptance, resistance, departure. There is a plot: a serious problem that

could be solved by organizational change. There are consequences: to what extent did the

change solve the problem, and were other problems created along the way? The sequence

of events unfolds in a typical manner: … and then … and then. This tells us why the out-

comes were reached.

Our narratives are not just descriptions of a change process, of what happened. They

also provide us with explanations. These are process narratives. Process narratives have

several advantages over more traditional (quantitative, statistical) research methods (Mohr,

1982; Poole et al., 2000; Van de Ven and Poole, 2005):

they tell us about the context, give us a sense of the whole, a broader frame of reference;

complexity can be expressed within a coherent sequence of events;

the nature and significance of the causal factors acting on events are exposed;

the narrative patterns transcend individual cases.

This approach is based on what is called narrative knowing (Langley, 2009). Because

stories can reveal the mechanisms or logics behind a sequence of events, they are process

theories. (We will explore process perspectives on change in chapter 10.) What combina-

tions of factors drive, slow down, accelerate, block the change process? The three stories

Chapter 1 Managing Change: Stories and Paradoxes 5

that follow explain the relative success of the organizational changes at Beth Israel, Sears,

and J. C. Penney. We will ask you to consider the extent to which those explanations, each

based on a single unique case narrative, can be applied to managing organizational change

in general, in other settings.

Although our three stories are quite different from each other, they have common fea-

tures, with regard to the issues and processes that shape the outcomes of organizational

change. Despite the differences, they demonstrate common tensions and the choices

that are involved in the change process. When you have made your own assessments, in

response to the questions that precede each story, you will find our suggested answers in

the Roundup section at the end of the chapter.

LO 1.1 The Story of Beth Israel Deaconess Medical Center

Issues to Consider as You Read This Story

1. Identify five factors that explain the success of this corporate turnaround.

2. How would you describe Paul Levy’s role and contributions to this turnaround?

3. What insights does this story have to offer concerning the role of the change leader?

4. What lessons about managing organizational change can we take from this experience

and apply to other organizations, in healthcare and in other sectors? Or, are the lessons

unique to Beth Israel Deaconess Medical Center?

The Setting

This is the story of a corporate turnaround, rescuing the organization from financial

disaster and restoring its reputation, competitiveness, and profitability. Based in Boston,

Massachusetts, the Beth Israel Deaconess Medical Center (BID) was created in 1996 by

the merger of two hospitals. The business case for the merger was that the larger organiza-

tion (over 600 beds) would be better able to compete with, for example, the Massachusetts

General Hospital and the Brigham Women’s Hospital. The two merged hospitals had dif-

ferent cultures. Beth Israel had a casual management style that encouraged professional

autonomy and creativity. Deaconess Hospital was known for its rules-based, top-down

management. Staff were loyal to their own organization. After the merger, the Beth

Israel culture dominated, and many Deaconess staff, especially nurses, left to join the

competition.

The Problems

By 2002, BID was losing $100 million a year and faced “financial meltdown.” There were

problems with the quality and safety of care, with low staff morale, and with poor relation-

ships between clinical staff and management. The media attention was damaging BID’s

reputation.

The Solutions

External management consultants recommended drastic measures to turn around the hos-

pital’s finances, and Paul Levy was appointed chief executive officer of BID in 2002. Levy

had no healthcare background and little knowledge of hospitals. He felt that gave him an

6 Chapter 1 Managing Change: Stories and Paradoxes

advantage, as he was a “straight talker” and could act as an “honest broker.” But staff were

skeptical at first.

Levy’s turnaround strategy was based on two themes: transparency and commitment to

quality. His first action was to share with all staff the full scale of the financial difficulties,

to create “a burning platform,” from which escape would only be possible by making radi-

cal changes. His second approach was to signal absolute commitment to the continuous

improvement of quality, in order to build trust and to establish a sense of common pur-

pose. Levy described his management style:

Perhaps I had an overly developed sense of confidence, but my management approach is that

people want to do well and want to do good and I create an appropriate environment. I trust

people. When people make mistakes it isn’t incompetence, it’s insufficient training or the

wrong environment. What I’ve learned is that my management style can work.

Phase 1: With the hospital “bleeding money,” urgent action was necessary. Levy accepted

some of the management consultants’ recommendations, and several hundred jobs were

lost, in an attempt to restore financial balance. He refused to reduce nursing levels, but

the financial crisis was resolved.

Phase 2: Medical staff were tired of poor relationships with management. In 2003, Levy

hired Michael Epstein, a doctor, as chief operating officer. Epstein met with each clini-

cal department to win their support for the hospital’s nonclinical objectives and to break

down silo working. Kathleen Murray, who had joined BID in 2002, was director of per-

formance assessment and regulatory compliance. The hospital had no annual operating

plans, and she set out to correct this, starting with two departments that had volunteered

to take part in phase 1, orthopaedics and pancreatic surgery. Other departments soon

joined in. Operating plans had four goals, addressing quality and safety, patient satis-

faction, finance, and staff and referrer satisfaction. One aim was to make staff proud of

the outcomes and create a sense of achievement. Although the performance of doctors

would now be closely monitored, the introduction of operating plans was seen as a

major turning point.

Phase 3: To help address the view that medical errors were inevitable, Levy appointed

Mark Zeidel as chief of medicine. Zeidel introduced an initiative that cut “central line

infection” rates, reducing costs as well as harm to patients and providing the motivation

for more improvements. The board of directors were not at first convinced that perfor-

mance data should be published, but Levy was persuasive, and he put the information

on his public blog, which he started in 2006, and which became popular with staff, the

public, and the media, with over 10,000 visitors a day. Levy explained:

The transparency website is the engine of our work. People like to see how they com-

pare with others, they like to see improvements. Transparency is also important for clini-

cal leaders and our external audience of patients and insurers. We receive encouraging

feedback from patients. We’ve also managed to avoid a major controversy with the media

despite our openness. Transparency’s major societal and strategic imperative is to provide

creative tension within hospitals so that they hold themselves accountable. This account-

ability is what will drive doctors, nurses and administrators to seek constant improvements

in the quality and safety of patient care.

Chapter 1 Managing Change: Stories and Paradoxes 7

Other performance data were published, for the hospital and for individual depart-

ments. This included measures to assess whether care was evidence-based, effective,

safe, patient-centered, timely, efficient, and equitable. Progress in meeting priorities for

quality and safety could be tracked on the hospital’s website, and the data were used by

staff to drive quality improvements. The board also set tough goals to eliminate prevent-

able harm and increase patient satisfaction. Every year, staff were invited to summarize

their improvement work in poster sessions, featuring the work of 95 process improvement

teams from across the hospital.

Levy hired staff with expertise in lean methods. Previously an option, training in qual-

ity and safety became mandatory for trainee doctors, who had to take part in improvement

projects. The culture was collaborative, and nurses had the respect of doctors. Patients

often chose BID for the quality of nursing care. The departmental quality improvement

directors met twice a month to share experiences. Department meetings routinely dis-

cussed adverse events. A patient care committee fulfilled a statutory requirement for

board oversight of quality and safety. The office of decision support collected data on

complication rates, infection rates, department-specific quality measures, and financial

goals. A senior nurse said: “We felt a sense of ownership with issues of quality. We have

dashboards up in the units to see how we are doing. Staff know what the annual operat-

ing goals are, as they are actively involved in setting them and integrating them into

their work.”

The Outcomes

By 2010, BID was one of the leading academic health centers in the United States, with

6,000 employees and state-of-the-art clinical care, research, and teaching. Competing

effectively with other major healthcare organizations, BID was generating annual reve-

nues of over $1.2 billion.

Postscript

Paul Levy resigned in January 2011. He explained his decision in a letter to the board of

directors, making this available to staff and the public on his blog. The letter included the

following remarks:

I have been coming to a conclusion over the last several months, perhaps prompted by

reaching my 60th birthday, which is often a time for checking in and deciding on the

next stage of life. I realized that my own place here at BID had run its course. While I

remain strongly committed to the fight for patient quality and safety, worker-led process

improvement, and transparency, our organization needs a fresh perspective to reach new

heights in these arenas. Likewise, for me personally, while it has been nine great years

working with outstanding people, that is longer than I have spent in any one job, and I need

some new challenges.

Story Sources
Abbasi, K. (2010) Improvement in Practice: Beth Israel Deaconess Case Study. London: The

Health Foundation.

http://www.bidmc.org/

http://runningahospital.blogspot.co.uk/2011/01/transitions.html

8 Chapter 1 Managing Change: Stories and Paradoxes

LO 1.1 The Story of Sears Holdings

Issues to Consider as You Read This Story

1. How would you describe Eddie Lampert’s leadership style?

2. How would you assess his approach to implementing major organizational change—in

this case, restructuring the whole company with a new organizational model?

3. On balance, would you assess his organizational model as having been a success, or not?

4. What lessons about managing organizational change can we take from this experience

and apply to other organizations, in this or other sectors?

The Setting

Sears Holdings Corporation was a specialty retailer, formed in 2005 by the merger of

Kmart and Sears Roebuck. The merger was the idea of Eddie Lampert, a billionaire hedge

fund manager who owned 55 percent of the new company and who became chairman.

Based in Illinois, the company operated in the United States and Canada, with 274,000

employees, 4,000 retail stores, and annual revenues (2013) of $40 billion. Sears and

Kmart stores sold home merchandise, clothing, and automotive products and services. The

merged company was successful at first, due to aggressive cost cutting.

The Problem

By 2007, two years after the merger, profits were down by 45 percent.

The Chairman’s Solution

Lampert decided to restructure the company. Sears was organized like a classic retailer.

Department heads ran their own product lines, but they all worked for the same merchan-

dising and marketing leaders, with the same financial goals. The new model ran Sears

like a hedge fund portfolio with autonomous businesses competing for resources. This

“internal market” would promote efficiency and improve corporate performance. At first,

the new structure had around 30 business units, including product divisions, support func-

tions, and brands, along with units focusing on e-commerce and real estate. By 2009, there

were over 40 divisions. Each division had its own president, chief marketing officer, board

of directors, profit and loss statement, and strategy that had to be approved by Lampert’s

executive committee. With all those positions to fill at the head of each unit, executives

jostled for the roles, each eager to run his or her own multibillion-dollar business. The new

model was called SOAR: Sears Holdings Organization, Actions, and Responsibilities.

When the reorganization was announced in January 2008, the company’s share price

rose 12 percent. Most retail companies prefer integrated structures, in which different

divisions can be compelled to make sacrifices, such as discounting goods, to attract more

shoppers. Lampert’s colleagues argued that his new approach would create rival factions.

Lampert disagreed. He believed that decentralized structures, although they might appear

“messy,” were more effective, and that they produced better information. This would give

him access to better data, enabling him to assess more effectively the individual compo-

nents of the company and its assets. Lampert also argued that SOAR made it easier to

divest businesses and open new ones, such as the online “Shop Your Way” division.

Chapter 1 Managing Change: Stories and Paradoxes 9

Sears was an “early adopter” of online shopping. Lampert (who allegedly did all his

own shopping online) wanted to grow this side of the business, and investment in the stores

was cut back. He had innovative ideas: smartphone apps, netbooks in stores, a multiplayer

game for employees. He set up a company social network, “Pebble,” which he joined

under the pseudonym “Eli Wexler,” so that he could engage with employees. However,

he criticized other people’s posts and argued with store associates. When staff worked out

that Wexler was Lampert, unit managers began tracking how often their employees were

“Pebbling.” One group organized Pebble conversations about random topics so that they

would appear to be active users.

The Chairman

At the time of the merger, investors were confident that Lampert could turn the two compa-

nies around. One analyst described him as “lightning fast, razor-sharp smart, very direct.”

Many of those who worked for him described him as brilliant (although he could overesti-

mate his abilities). The son of a lawyer, it was rumored that he read corporate reports and

finance textbooks in high school, before going to Yale University. He hated focus groups

and was sensitive to jargon such as “vendor.” His brands chief once used the word “con-

sumer” in a presentation. Lampert interrupted, with a lecture on why he should have used

the word “customer” instead. He often argued with experienced retailers, but he had good

relationships with managers who had finance and technology backgrounds.

From 2008, Sears’ business unit heads had an annual personal videoconference with

the chairman. They went to a conference room at the headquarters in Illinois, with some

of Lampert’s senior aides, and waited while an assistant turned on the screen on the wall

opposite the U-shaped table and Lampert appeared. Lampert ran these meetings from his

homes in Greenwich, Connecticut; Aspen, Colorado; and subsequently Florida, earning

him the nickname “The Wizard of Oz.” He visited the headquarters in person only twice a

year, because he hated flying. While the unit head worked through the PowerPoint presen-

tation, Lampert didn’t look up, but dealt with his emails, or studied a spreadsheet, until he

heard something that he didn’t like—which would then lead to lengthy questioning.

In 2012, he bought a family home in Miami Beach for $38 million and moved his

hedge fund to Florida. Some industry analysts felt that Sears’ problems were exacerbated

by Lampert’s “penny pinching” cost savings, which stifled investment in its stores. Instead

of store improvements, Sears bought back stock and increased its online presence. In

2013, Lampert became chairman and chief executive, the company having gone through

four other chief executives since the merger.

The Outcomes

Instead of improving performance, the new model encouraged the divisions to turn against

each other. Lampert evaluated the divisions, and calculated executives’ bonuses, using a

measure called “business operating profit” (BOP). The result was that individual busi-

ness units focused exclusively on their own profitability, rather than on the welfare of the

company. For example, the clothing division cut labor to save money, knowing that floor

salesmen in other units would have to pick up the slack. Nobody wanted to sacrifice busi-

ness operating profits to increase shopping traffic. The business was ravaged by infighting

as the divisions—behaving in the words of one executive like “warring tribes”—battled

10 Chapter 1 Managing Change: Stories and Paradoxes

for resources. Executives brought laptops with screen protectors to meetings so that their

colleagues couldn’t see what they were doing. There was no collaboration, no cooperation.

The Sears and Kmart brands suffered. Employees gave the new organization model a new

name: SORE.

The reorganization also meant that Sears had to hire and promote dozens of expensive

chief financial officers and chief marketing officers. Many unit heads underpaid middle

managers to compensate. As each division had its own board of directors, some presi-

dents sat on five or six boards, which each met monthly. Top executives were constantly

in meetings.

The company posted a net loss of $170 million for the first quarter in 2011. In

November, Sears discovered that rivals planned to open on Thanksgiving at midnight, and

Sears executives knew that they should also open early. However, it wasn’t possible to get

all the business unit heads to agree, and the stores opened as usual, the following morn-

ing. One vice president drove to the mall that evening and watched families flocking into

rival stores. When Sears opened the next day, cars were already leaving the parking lot.

That December, Sears announced the closure of over 100 stores. In February 2012, Sears

announced the closure of its nine “The Great Indoors” stores.

From 2005 to 2013, Sears’ sales fell from $49.1 billion to $39.9 billion, the stock value

fell by 64 percent, and cash holdings hit a 10-year low. In May 2013, at the annual share-

holders’ meeting, Lampert pointed to the growth in online sales and described a new app,

“Member Assist,” that customers could use to send messages to store associates. The aim

was “to bring online capabilities into the stores.” Three weeks later, Sears reported a first

quarter loss of $279 million, and the share price fell sharply. The online business contrib-

uted 3 percent of total sales. Online sales were growing, however, through the “Shop Your

Way” website. Lampert argued that this was the future of Sears, and he wanted to develop

“Shop Your Way” into a hybrid of Amazon and Facebook.

Story Sources
Kimes, M. 2013. At Sears, Eddie Lampert’s warring divisions model adds to the troubles.

Bloomberg Businessweek, July 11.

http://www.businessweek.com/articles/2013-07-11/

at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles.

http://en.wikipedia.org/wiki/Sears_Holdings

http://www.forbes.com/profile/edward-lampert

http://www.searsholdings.com

http://www.shopyourway.com

LO 1.1 The Story of J. C. Penney

Issues to Consider as You Read This Story

1. What aspects of Ron Johnson’s turnaround strategy were appropriate, praiseworthy?

2. What mistakes did Ron Johnson make?

3. What would you suggest he could have done differently?

Chapter 1 Managing Change: Stories and Paradoxes 11

The Setting

J. C. Penney Company, Inc. (known as JCPenney, or JCP for short) was one of America’s

largest clothing and home furnishing retailers. An iconic brand, founded by James Cash

Penney and William Henry McManus in 1913, the headquarters were in Plano, Texas. By

2014, with annual revenues of around $13 billion, and 159,000 employees, JCP operated

1,100 retail stores and a shopping website at jcp.com. JCP once had over 2,000 stores,

back in 1973, but the 1974 recession led to closures. The company’s main customers were

middle-income families, and female. JCP had a “promotional department store” pricing

strategy with a confusing system of product discounts. There were around 600 promo-

tions and coupon offers a year. Mike Ullman, chief executive since 2004, had grown sales

with a strong private label program, with brands such as Sephora, St. John’s Bay cloth-

ing, MNG by Mango, and Liz Claiborne. Another 14 stores were opened in 2004, and the

e-commerce business exceeded the $1 billion revenue mark in 2005.

The Problems

When the stock reached an all-time high of $86 in 2007, JCP was performing well. How-

ever, the recession in 2008 affected sales badly; core customers had mortgage and job

security problems. Between 2006 and 2011, sales fell from $19.9 billion to $17 billion.

JCP had one of the lowest annual sales per square foot for department stores (around

$150). Macy’s and Kohl’s, the main competition, had sales per square foot of around $230.

In 2011, the catalogue business, with nineteen outlet stores, was closed, along with seven

other stores and two call centers. The New York Times accused JCP of “gaming” Google

search results to increase the company’s ranking in searches, a practice called “spamdex-

ing.” Google’s retaliation dramatically reduced JCP’s search visibility.

In 2008, JCP struck a deal with Ralph Lauren to launch a new brand, American Living,

sold only in their stores. But JCP was not allowed to use Ralph Lauren’s name or the Polo

logo. The idea failed. Sales continued to fall. In 2011, 50 to 70 percent of all sales were

discounted, based on a “high-low” pricing strategy. An item would be priced initially at,

say, $100. Customers would see the product and like it, but not like the price. After six

weeks, the price was marked down, say, to $50, and the goods started to sell. But those

items had been sitting on a shelf doing nothing for over a month.

The Solutions

In 2010, two billionaire investors, Bill Ackman and Steven Roth, approached Ullman with

an offer to buy large amounts of JCP stock. They felt that the company had potential.

Ackman and Roth were invited to join the board, attending their first meeting in February

2011. Leaving that meeting, Ullman was involved in a serious car accident, suffered mul-

tiple injuries, and spent three months in a neck brace, making his existing health problems

worse. The board wanted a replacement, and there were no internal candidates. Ullman

suggested Ron Johnson, who was working for Steve Jobs at Apple. Johnson then met with

Ackman and Roth to explore possibilities. Johnson said that he was concerned about the

lack of innovation in department stores, and he brought a positive, “can do” approach

more typical of Silicon Valley than retailing.

In November 2011, Ron Johnson was appointed chief executive officer. JCP stock rose

17 percent on the announcement. Johnson had been responsible for setting up Apple’s

12 Chapter 1 Managing Change: Stories and Paradoxes

highly profitable retail stores, and he had also been successful at another retailer, Target.

In December, after one month in post, he presented to the board his plans to revive the

company with a fundamentally new way of doing business. The board agreed. Johnson

told a journalist, “I came in because they wanted to transform; it wasn’t just to compete or

improve.” In a board update before leaving, Ullman noted that Johnson had not asked him

any questions about how the business was currently running.

Johnson moved quickly. First, he wanted to transform the culture. In February 2012,

he installed a large transparent acrylic cube in the company headquarters. The cube was

a version of the new company logo. Johnson told staff that he did not want to see the old

logo anywhere in the building. For a week, staff threw “old Penney” items into the cube:

T-shirts, mugs, stationery, pens, tote bags.

Second, no more promotions. Why wait six weeks to mark an item down to the price at

which it would sell? Why not sell at that price from the start? Johnson simplified the pric-

ing structure with “everyday” prices, which were what used to be sale values; “monthly

value,” for selected items; and “best price,” linked to paydays—the first and third Fridays

of each month. The stores were tidier, with no messy clearance racks, and the customer

relationship became “fair and square” (another slogan).

Third, Johnson developed a “store within a store” strategy, with each store becoming a

collection of dozens of separate “boutiques.” He wanted a higher percentage of younger

and higher-priced brands such as Joe Fresh clothes, Martha Stewart home furnishings,

Michael Graves Designs, Happy Chic, and furniture from the British designer Sir Terence

Conran. These new boutiques, of course, were not interested in having their brands diluted

by discount pricing. Traditionally, JCP got 50 percent of sales from its own brands, which

were displayed by product (bath mats) rather than brand (Martha Stewart). When a direc-

tor asked him when he was going to test his new approach, Johnson replied that he had

made his decision relying, like Steve Jobs, on instinct. Hundreds of stores were to be

redesigned by the end of 2012. JCP already sold Levi’s jeans, but Johnson wanted 700

Levi’s boutiques in the stores; building these boutiques cost JCP $120 million. Southpole,

a clothing brand that appealed to black and Hispanic customers, was dropped. St. John’s

Bay, a less fashionable women’s clothing brand generating $1 billion annual revenues,

was dropped.

The speed of these changes would be motivating and unifying, Johnson thought. He

wanted to rebrand an old, stale company with a modern name and logo. Johnson was a

charismatic and passionate presenter. He said that the changes would be painful and would

take four years to complete. The board were awed by the scale of the transformation, but

they did not challenge him. Johnson talked about the “six Ps”: product, place, presenta-

tion, price, promotion, personality. One analyst noted, “One ‘P’ that seems to be missing

is people.” Employees were also excited about the developments, especially when Johnson

threw them a lavish party, costing $3 million.

Johnson wanted to make checkout simpler, with roving clerks taking payment on iPads.

Millions were spent on equipping stores with Wi-Fi. He also wanted all items to have an

RFID tag, but that proved to be too expensive. He also decided to separate the store buying

group from the JCP.com buying group, an approach used by Apple. However, this meant

that there was no coordination between what was available online and what customers

could find in the stores. Johnson was more concerned with “the look and feel” of the

physical stores, and less support went to the website.

Chapter 1 Managing Change: Stories and Paradoxes 13

Johnson hired his own new team of top executives, who distanced themselves from

the existing staff; most of them refused to move to Dallas, flying there weekly instead.

If you were not part of this new team, you were out of the loop. One director called the

“old” staff DOPES: dumb old Penney’s employees. Veterans called the new team the Bad

Apples. The new human resources director cancelled performance reviews as being too

bureaucratic. This made it easier to fire people; managers did not have to consult per-

formance data before making that decision. The new team recruited Ellen DeGeneres—a

television celebrity and lesbian—to appear in JCP advertising. A conservative group, One

Million Moms, threatened a boycott, claiming that, “DeGeneres is not a true representa-

tion of the type of families that shop at their store. The majority of J.C. Penney customers

will be offended and chose to no longer shop there.” The relationship with DeGeneres was

discontinued. Johnson introduced a new exchange policy; customers could return an item,

without a receipt, and receive cash. This policy was immediately abused, and one popular

item was returned so often that its sales turned negative. The plan to put Martha Stewart

stores into JCP stalled when Macy’s sued, claiming breach of its own agreement with the

home furnishings brand.

The Outcomes

The results published in February 2012 were poor. Revenues had fallen by $4.3 billion,

making a $1 billion loss. The stock fell to $18, and Standard & Poor’s cut JCP’s debt

rating to CCC+ (a long way from “triple A”). In April 2012, JCP laid off 13 percent of

its office staff in Texas, closed one of its call centers, and also “retired” many manag-

ers, supervisors, and long-serving employees on the grounds that new working practices

required less oversight. In May 2012, store sales were down 20 percent compared with

the previous year. Johnson had projected a short-term drop in sales, but not by that much.

He commented that, “I’m completely convinced that our transformation is on track,” lead-

ing to a 5.9 percent rise in the stock. In July 2012, a further 350 headquarters staff were

laid off. By October 2012, online sales were almost 40 percent down over the year. It

was estimated that the decision to separate the two buying groups had cost JCP around

$500 million.

During Johnson’s two-year tenure, the price of the JCP stock fell by almost 70 percent,

and sales fell in 2012 by 25 percent, resulting in a net loss of $985 million. JCP had

alienated its traditional customers, who were used to shopping for discounts, but had not

attracted new ones, and 20,000 employees had lost their jobs. In March 2013, Steven Roth,

who had backed Johnson’s appointment but who had now lost faith, sold over 40  percent of

his JCP shares at a loss of $100 million. Bill Ackman resigned from the board in August,

selling his shares at a loss of $470 million.

In April 2013, the company chairman told Johnson that the board would be accepting

his resignation; within a few weeks, all but one of the other senior staff hired by Johnson

had also left. Mike Ullman was reinstated. He immediately restored the old promotional

pricing model. In May, JCP ran an “apology ad,” with an earnest female voice admit-

ting, “We learned a very simple thing, to listen to you.” A coincidence of timing, in June,

Johnson’s renovated home departments opened in stores, selling Jonathan Adler lamps,

Conran tables, and Pantone sheets. Too expensive for core customers, these departments

failed and were withdrawn. However, traditional sales in stores started to grow slowly, and

by November, Internet sales had increased by 25 percent on the previous year (Ullman had

14 Chapter 1 Managing Change: Stories and Paradoxes

reintegrated the stores and online buyers). Sales of the private brand merchandise lines

that had been restored also began to return to previous levels.

The JCP brand had been damaged. Sales per square foot of shopping space had fallen

steadily since 2010 as shoppers turned to Macy’s and Kohl’s. Macy’s sales per square foot

had risen. With sales and profitability falling, in January 2014, JCP closed 33 underper-

forming stores (3 percent of the total), with 2,000 layoffs. This would reduce annual oper-

ating costs by $65 million, but the company had made a loss of $1.4 billion in 2013. After

100 years in business, with Mike Ullman back in charge, JCP stock continued to fall in the

first half of 2014. Commenting on Johnson’s legacy at JCP, one analyst said, “Nobody will

be attempting something similar for a very long time.”

Story Sources
Reingold, J., Jones, M., and Kramer, S. 2014. How to fail in business while really, really trying.

Fortune, July 4, 169(5):80–92.

http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-homeprofile

http://www.jcpenney.com/

http://en.wikipedia.org/wiki/J._C._Penney

http://www.forbes.com/sites/hbsworkingknowledge/2013/08/21/what-went-wrong-at-j-c-penney/

LO 1.3 LO 1.4 Tension and Paradox: The State of the Art

tension when two or more ideas are in opposition to each other

paradox when two or more apparently correct ideas contradict each other

From a management perspective, organizational change is seen as problematic. How do

we persuade people to accept new technologies that will make their skills, knowledge,

and working practices obsolete? How quickly can people who find themselves with

new roles, and new relationships, learn how to operate effectively after a major reor-

ganization? How about this new system for capturing and processing customer infor-

mation? We prefer the old system because it works just fine. Change can be difficult.

Change that is not well managed, however, can generate frustration and anger.

Most estimates put the failure rate of planned changes at around 60 to 70 percent

(Keller and Aiken, 2008; Burnes, 2011; Rafferty et al., 2013). In a global survey of 2,000

executives by the consulting company McKinsey, only 26 percent of respondents said that

their transformational changes had successfully improved performance and enabled the

organization to sustain further improvements (Jacquemont et al., 2015). There is, there-

fore, no shortage of advice. However, that advice is both extensive and fragmented. The

literature—research and other commentary—can be difficult to access, and to absorb, for

the following reasons (Iles and Sutherland, 2001):

multiple perspectives there are contributions from several different schools, academic dis-

ciplines, and theoretical perspectives—there are several literatures

conceptual spread the concepts that are used range in scale, from whole schools of

thought or perspectives, through methodologies, to single tools

fluid boundaries depending on the definitions of change and change management

in use, the boundaries of the topic vary between commentators

Chapter 1 Managing Change: Stories and Paradoxes 15

rich history interesting and useful contributions date from the 1940s, and recent

work has not necessarily made previous commentary irrelevant

varied settings as with our stories, evidence and examples come from a range of

organizational types and contexts, using different methodologies

Multiple perspectives is the most significant of these properties of the literature. That is

usually seen as a problem—“the experts can’t agree.” We disagree, and we prefer instead

to emphasize the advantages in adopting a multiple perspectives approach to the manage-

ment of organizational change. First, a perspective that works in one context may not work

well in a different setting: we will explore contingency frameworks in chapter 10. Second,

this is a way of opening up debate: “Should we define our problem in these terms, or in

some other way?” Third, multiple perspectives encourage the search for creative solutions:

“Can we combine ideas from two or more approaches and adapt them to fit our context?”

We will meet all of these characteristics again in later chapters.

The practicing manager, less interested in theoretical perspectives, wants to know

“what works?” There are difficulties in providing a clear answer to that question, too, for

the following reasons:

many variables even with simple changes, the impact is multidimensional, and

measuring “effectiveness” has to capture all of the factors to

produce a complete picture

slippery causality it is difficult to establish cause and effect clearly across complex

processes that unfold over time, usually at the same time as lots

of other changes

many stakeholders different stakeholders have different views of the nature of the

problem, the appropriate solution, and the desirable outcomes—

whose measures to use?

What works well in one setting may not work well in another. The broad outlines of a good

change strategy are widely known and accepted. What matters is the detail, concerning how

a strategy or intervention is designed for a particular organization. For example, most prac-

tical guidelines begin by suggesting that change will be more readily accepted if there is a

“sense of urgency” that underpins the business case for change. That sense of urgency can

be seen in the financial meltdown at Beth Israel and the falling profitability at both Sears

and J. C. Penney. Note, however, that there are many different ways in which a sense of

urgency can be established and communicated. Some methods may emphasize the “burning

platform” in a way that heightens anxiety and encourages escape. Other approaches might

encourage instead a “burning ambition” to confront and solve the problem.

What works depends on the context. It is rarely possible to just do what someone else

has done. Change is in part a rational process; we know what kinds of issues need to be

taken into account. Change is also a creative process; it is always necessary to design—to

create—an approach that is consistent with local circumstances. Accounts of how other

organizations have handled change can be a rich source of ideas that can be adapted cre-

atively to address similar problems in other settings.

The field of change management is also rich in tensions and paradoxes. We will explore

six of these briefly, in the form of key questions. These issues will also appear in later

LO 1.2

LO 1.3

16 Chapter 1 Managing Change: Stories and Paradoxes

chapters. You will probably encounter further tensions, in your reading across the subject

and in practice. How these tensions and paradoxes are managed has implications for the

process and outcomes of change.

Transformational Change, or Sweat the Small Stuff?
Where to start—with sweeping radical changes, or a gradual process of incremental initia-

tives? We will explore a simple model for “locating” the scale of change in the next section.

However, faced with geopolitical, economic, demographic, sociocultural, and technolog-

ical developments, most organizations seem to think in terms of deep transformational

change. The Beth Israel, Sears, and J. C. Penney stories reflect this view, implementing

whole-organizational changes to deal with survival threats. This may mean that minor

changes are seen as less valuable and important and are overlooked in favor of the “high

impact” initiatives. This could be a mistake. Moore and Buchanan (2013), for example,

demonstrate how an initiative designed to fix small problems rapidly in an acute hospital

generated major performance improvements for almost no cost. In this case, “sweating

the small stuff” was an enabling strategy, getting people involved (the small problems

were identified by staff), establishing a reputation for getting things done, and creating the

platform for further developments. Shallower changes can facilitate and complement the

deeper initiatives, and evidence suggests that these should not be underestimated.

Systematic Tools, or Messy Political Process?
If one looks below the surface of cases of managed change, one can always discern the

ever-present effect of the “other side” of organizational life. The ambiguities, uncertainties,

ambivalences, tensions, politics and intrigues are always involved, and are influential and

addressed in some manner—however half-cocked, fudged, guessed at, messed up or little

understood.

(Badham, 2013, p. 24)

Most of the practical guidance on change implementation (chapters 9 and 10) suggests a

straightforward sequence of steps, with advance support from diagnostic tools and assessments

(chapters 4 and 5). This is a systematic process, with helpful tools. We have already suggested

that change is a creative process as well as a rational one. It is also a political process. Organiza-

tions are political systems, and because there are often “winners and losers,” change is a politi-

cal process. The systematic tools-based approach, the creativity, and the politics work hand in

hand. We will explore the political skills that change managers require later (chapter 12). It is

important to recognize that, despite what the textbook or the change management consultant

says, those systematic tools are only part of the answer to “how to do it, and how to get it right.”

Organizational Capabilities, or Personal Skills?
Beth Israel, you may remember, was formed by the merger of two organizations with dif-

ferent cultures. One had a casual management style that encouraged professional auton-

omy and creativity. The other was known for its rules-based, top-down management. The

research evidence suggests that the “casual” style is likely to be more open to change, and

that this will be a more “agile” and responsive organization. Top-down management and

rules suggest that change will be slow, if it happens at all, dependent on due process and

committee cycles. In other words, we need to pay attention to organizational capabilities

to understand the change drivers and barriers (chapter 5). The skills of change leaders are

Chapter 1 Managing Change: Stories and Paradoxes 17

of course also important. However, skilled change agents struggle in rules-based organi-

zations, and agile and responsive organizations still need capable change agents. We will

explore the capabilities of effective change managers in chapter 12.

Rapid Change, or the Acceleration Trap?
The pace of change—social, political, economic, technological—appears to have accelerated.

Can organizations keep up? There is now a considerable amount of advice on how to speed up

change, to accelerate the pace. Rapid change, however, can cause problems. Can people keep

up? Change too fast, and you run the danger of destabilizing the organization and creating

staff burnout. There is also, therefore, advice on how to manage “painless change” and how to

avoid “the acceleration trap.” We will explore the dilemma of pace further in chapter 3.

Change Leader, or Distributed Leadership?
It is widely assumed that change needs a champion, a senior figure, who sets the direction,

inspires others, and drives the project. A lot of work has gone into identifying the competen-

cies of the “ideas champion,” the effective change leader. This parallels work on the capabili-

ties of effective leaders in general (although most researchers argue that leadership success is

highly contingent). However, in most organizations, change is not a solo performance but a

team effort. There is usually a “guiding coalition” of more or less senior managers, who guaran-

tee permission for change, oversee progress, and unblock problems that arise. Research has also

shown how change is driven by large numbers of organizational members, in an approach that

is also called “distributed leadership,” “leadership constellations,” or “leadership in the plural.”

Learning Lessons, or Implementing Lessons?
Change following crises, accidents, misconduct, failures, and other extreme events

often does not happen. There is always an investigation, which produces recommenda-

tions for preventing such an event from happening again (or at least reducing the prob-

ability). The evidence shows that those recommendations are often ignored. One might

assume that, in such circumstances, change would be rapid, straightforward, and wel-

come. The distinction between passive learning (identifying lessons) and active learn-

ing (implementing changes) is important here. The latter does not automatically follow.

Why is that not the case? In exploring “why organizations change” in chapter 3, we

will also consider why organizations do not change, when they perhaps should.

Change Has Never Been So Fast

That this is an age of change is an expression heard

frequently today. Never before in the history of

mankind have so many and so frequent changes

occurred. These changes that we see taking place

all about us are in that great cultural accumulation

which is man’s social heritage. It has already been

shown that these cultural changes were in earlier

times rather infrequent, but that in modern times

they have been occurring faster and faster until

today mankind is almost bewildered in his effort

to keep adjusted to these ever increasing social

changes. This rapidity of social change may be due

to the increase in inventions which in turn is made

possible by the accumulative nature of material cul-

ture (i.e., technology).

Source: Ogburn (1922), pp. 199–200.

18 Chapter 1 Managing Change: Stories and Paradoxes

The perceptive reader will have noticed that the answer to each of these six paradoxes,

these six questions, is in each case “both.” We need big change and small change. Change

is at the same time a systematic process and a political one. We need both organizational

and individual capabilities. The pace of change must, if possible, vary with circumstances.

Change is almost always driven by “a cast of characters” that includes one or more cham-

pions and many supporters. There is no point in learning lessons if we do not then imple-

ment them. As noted earlier, the way in which these tensions are confronted and managed

both drives and constrains the change process, and influences the outcomes.

LO 1.4 Assessing Depth of Change

We have noted the tension between “transformational change and the small stuff.”

Depth is one metaphor that can be used to categorize change. Figure 1.1 presents a

framework for that assessment.

Of the scale

Disruptive innovation

Frame-breaking, mold-breaking

Redraw dramatically organization and sector boundaries

Deeper

Paradigm shift, strategic change

New ways of thinking and solving problems, whole system change

New ways of doing business

Deep change
Change the mission, vision, values, the organization’s philosophy, in

order to symbolize a radical shift in thinking and behavior

Change the organization’s definition of success

Create new goals, objectives, targets

Sustaining

innovation

Improve business planning to symbolize a shift in thinking

Tighten up on documentation, reporting, controls

Reallocate resources

Grow some departments, cut others, create new units

Shallow change
Fine tuning: cut costs, improve eiciencies

Constantly “nibble away” making minor improvements

Not on the scale
“Sweat the small stuf”—quickly solve the minor annoying problems

that nobody has bothered to fix; “grease the wheels”

FIGURE 1.1
Assessing Depth of Change

Chapter 1 Managing Change: Stories and Paradoxes 19

At the bottom of this figure sits the “small stuff” that may not even be regarded as

“change.” In the middle of the scale we have “sustaining innovation,” which involves improv-

ing on current practices. At the top of the scale is “disruptive innovation,” which involves

radically new business models and working methods (Christensen, 2000). One obvious

point to make is that, in considering change in an organization, the proposed solution should

be consistent with the diagnosis of the problem. Using shallow changes to address strategic

challenges may not be appropriate, and attempting to solve minor difficulties with disruptive

innovation could consume disproportionate amounts of time and resources.

Shallow changes are usually easier to implement than frame-breaking changes. Trans-

formational “off the scale” changes are more challenging because they are costly and time-

consuming, and they affect larger numbers of people in more significant ways, potentially

generating greater resistance. In most cases, many changes are likely to be under way at

the same time, at different depths. Recognizing this, many organizations have established

corporate project or program management offices (PMOs) to support and coordinate their

initiatives (Ward and Daniel, 2013). The U.S. Project Management Institute’s white paper

(2012) gives examples of the aims and benefits of PMOs at the State Auto insurance com-

pany in Ohio and the National Cancer Institute in Maryland.

One of the tensions in this framework concerns the ambitions of the individual man-

ager. When interviewed for the next promotion, stories about the impact of the deep trans-

formations for which one has been responsible are typically more impressive than stories

about minor stuff.

LO 1.4 What’s Coming Up: A Road Map

This text is divided into three parts. Part 1, including this chapter, sets out the ground-

work, and is concerned with understanding and diagnosing change, and with different

images of change management. Part 2 focuses on implementation, exploring the sub-

stance of change, the role of vision, managing resistance, developing communication

strategies, and several approaches to the implementation process. Part 3 examines two

running threads that relate to all of the previous chapters. The first concerns managing

the sustainability of change, which we argue has to be considered from the beginning

and not managed as an afterthought. The second running thread is an assessment of

what it takes to be an effective change manager—which is, of course, the theme of the

book as a whole. Figure 1.2 sets out a road map, an overview of the content.

One of the main assumptions underpinning this road map is that our images of the roles

of change leaders affect how we approach the other issues on the map. Remember, for

example, how the different change leadership styles adopted by Paul Levy at Beth Israel,

Eddy Lampert at Sears, and Ron Johnson at J. C. Penney colored their approaches to

communicating the changes that they wanted to implement. This explains why “images,”

chapter 2, is at the center of the figure. However, by necessity, a book such as this fol-

lows a linear sequence for presentational reasons. This is not necessarily the sequence

in which change leaders will need to consider these issues, or in which instructors will

wish to introduce and explore these themes. What will work best depends on context. In

some cases, the question of “vision” may be fundamental to the change process, and it

would be unwise to proceed until that issue has been resolved. In many change models

20 Chapter 1 Managing Change: Stories and Paradoxes

to be aware of

change manager

images,
and to see the change

process through

diferent lenses:

director

coach

navigator

interpreter

caretaker

nurturer

Part 1 chapters 1 and 2

to understand the

pressures and drivers

for change, internal and external

to diagnose the

nature and depth

of the changes required and

individual and organizational readiness

Part 1 chapters 3 and 4

to determine

what is going to change

to develop a credible and compelling

vision

of the organization’s future

to design “high impact”

change communication strategies

to anticipate and respond to

resistance to change

to decide how the process will be driven:
organization development and sense-

making approaches

to decide how the process will be driven:
checklist, process, and contingency

approaches

Part 2 chapters 5 to 10

strategies to embed change and

manage sustainability

efective change managers

individuals and teams

Part 3 chapters 11 and 12

FIGURE 1.2
To Be an Effective Change Manager, This Is What You Need …

and textbooks, the question of sustainability is presented at the end, as it is here. How-

ever, if sustainability is not built into change implementation from the beginning, then this

may become an unnecessary problem. Communication is another issue that is typically

involved throughout the change process.

This road map comes with an added caution. If you follow the recipe correctly, that

cake should be perfect; enjoy. However, success is not guaranteed by following a set of

change implementation guidelines. There are two main reasons for this. First, designing

Chapter 1 Managing Change: Stories and Paradoxes 21

a change process is a task with both technical and creative components; blending these

components can in many circumstances be a challenging business involving much trial

and error. Second, what works depends on organizational context, which is not stable but

which can change suddenly and in unpredictable ways. External conditions can change,

intensifying or removing the pressures for change. Budget considerations may mean that

resources are diverted elsewhere. Key stakeholders change their minds and shift from sup-

porting to resisting. There are numerous factors that are not under the control of change

leaders, and things go wrong despite careful planning and preparation. This is one reason

why, as chapter 12 explains, resilience or “bouncebackability” is a core attribute for effec-

tive change leaders.

LO 1.1 Change Diagnostic: The Beth Israel Story

Here are the four questions that you were asked to consider while reading the Beth

Israel story, followed by our suggested answers:

1. Identify five factors that explain the success of this corporate turnaround.

2. How would you describe Paul Levy’s role and contributions to this turnaround?

3. What insights does this story have to offer concerning the role of the change leader?

4. What lessons about managing organizational change can we take from this experience

and apply to other organizations, in healthcare and in other sectors? Or, are the lessons

unique to Beth Israel Deaconess Medical Center?

The story of this turnaround has been cited as one from which other healthcare orga-

nizations can learn, in other countries. The account on which this case is based was com-

missioned by the Health Foundation in the United Kingdom. As we will see, many of the

change management issues raised here are common and can be found in other sectors and

cultures. While it is always possible to argue that healthcare is “special” in some respects,

many of the change management concerns are generic.

1. Identify five factors that explain the success of this corporate turnaround.

The sense of urgency, the “burning platform,” created deliberately by the new chief

executive, who was open with all staff about the true position concerning the hospi-

tal’s finances.

The focus that was consistently maintained on improving the quality and safety of

patient care, which appealed (perhaps more than budget layouts) to the professional

values of clinical staff.

The phased approach that involved, first and quickly, fixing the finances; second,

repairing medical-managerial relationships and getting staff involved in operational

plans; and third, focusing on safety issues and eliminating harm. Frontline staff

involvement was key.

Making hospital and department performance data available to staff, the public, and

the media, to inspire pride in achievement and to stimulate further improvements.

The creation of a “leadership constellation” through the appointment of other senior

staff who understood and who supported the chief executive’s goals and strategy

(Denis et al., 2001).

22 Chapter 1 Managing Change: Stories and Paradoxes

2. How would you describe Paul Levy’s role and contributions to this turnaround?

Did Paul Levy actually change anything directly? He described his style as “creating

the environment” that enabled other people to do good work.

One of his main contributions was to insist on transparency, about the hospital’s

financial problems and with performance data. That transparency may have been

uncomfortable for some, but it created pride in achievement and the motivation for

continuous improvement.

A second key contribution concerned his consistency of purpose, the relentless

focus on the quality and safety of patient care, which were issues that engaged and

motivated clinical staff.

His innovative use of the Internet and his personal blog about “running a hospital”

made sure that everyone—staff, patients, the wider community, the media—knew

what he was thinking and doing and why, building respect and trust.

He stayed with BID for nine years. Not many chief executives stick around for this

long. But tenure helps to build influence and reinforces the consistency of purpose.

3. What insights does this story have to offer concerning the role of the change

leader?

Levy had no healthcare background. Maybe this means that one does not need spe-

cialist sector knowledge and experience to drive a corporate turnaround. But he

made sure that he had access to those specialist resources though his other senior

appointments.

He had confidence in his management approach. That confidence may be as impor-

tant as the style—maybe a different style, applied consistently, could be just as

effective, especially when it involved laying off a number of staff soon after taking

up his new post, and standing up to the board of directors and defending a view dif-

ferent from theirs.

The role of a change leader is a demanding one, and it can be difficult to maintain

for long periods. It is necessary to recognize when it is time to leave—and also

to know when leaving would damage the project. Levy departed only after BID’s

financial, clinical, and operational performance goals had been achieved and the

future of the hospital was secure.

4. What lessons about managing organizational change can we take from this experi-

ence and apply to other organizations, in healthcare and in other sectors? Or, are

the lessons unique to Beth Israel Deaconess Medical Center?

This is controversial. A lot of the research evidence concerning organizational change

management—what works and what doesn’t—relies on case study accounts such as this.

Could an approach to rapid and radical organizational change that worked in a large hos-

pital in Boston be applied to a small software design company in Sacramento? Looking

at the details, the answer is probably “no”; the software company doesn’t have to worry

about medical engagement and patient safety metrics. Looking at the approach in general,

however, the answer is probably “yes.” If our software company was losing money and

reputation, a new “straight talking” chief executive with clear and consistent goals, an

inclusive management style, a strong management team, and a transparent approach to the

use of performance data to motivate improvement could be a highly effective combination.

Chapter 1 Managing Change: Stories and Paradoxes 23

In other words, if we look beyond the details, we can see a number of actions that

could well be applied in other settings. Also, when one gathers a number of such stories,

of successes and failures, similar patterns emerge, especially with regard to establishing a

sense of urgency and purpose, creating a strong and stable senior team, using “leadership

constellations” to drive change, a participative management style, staff engagement, open

communications, and transparency of performance information that is used for feedback,

performance management, motivation, and reward purposes. The Beth Israel story is a

compelling one, but it is neither idiosyncratic nor unique.

LO 1.1 Change Diagnostic: The Sears Holdings Story

Here are the four questions that you were asked to consider while reading the Sears

Holdings story, followed by our suggested answers:

1. How would you describe Eddie Lampert’s leadership style?

2. How would you assess his approach to implementing major organizational change—in

this case, restructuring the whole company with a new organizational model?

3. On balance, would you assess his organizational model as having been a success, or not?

4. What lessons about managing organizational change can we take from this experience

and apply to other organizations, in this or other sectors?

Is this the Sears story, or the Eddie Lampert story? One commentator concluded that,

in addition to the other difficulties facing retailers, Sears had a unique problem—Lampert

himself.

1. How would you describe Eddie Lampert’s leadership style?

Lampert could be described as a transformational leader. He was highly intelligent and

decisive. He was innovative, concerning both the company structure and its service

delivery. He had a clear and interesting vision for the online future of the business.

Check out “Shop Your Way” for yourself.

However, he also appears to have been an autocratic leader. There is little evidence

to suggest that he either sought or considered the views of others, including his senior

colleagues, before making business-critical decisions. He was something of a recluse,

preferring to meet with his division heads infrequently, and through a video link (and

he rarely allowed media interviews). His “engagement” with staff through the com-

pany’s social network was more confrontational than consultative.

2. How would you assess his approach to implementing major organizational change—

in this case, restructuring the whole company with a new organizational model?

If rapid action is necessary to rescue an organization that is experiencing extreme dif-

ficulties, then an autocratic approach may be appropriate. It takes time to pause, to ask

everyone else what they think should be done, to process that feedback, to develop

a more widely informed decision, to check that with those involved, and then to

implement the approach. By that time, the company could be bust. Lampert’s “cri-

sis management” style may thus have been appropriate immediately after the merger.

Although profitability was declining, it is debatable whether that approach was appro-

priate in 2008.

24 Chapter 1 Managing Change: Stories and Paradoxes

A more prudent approach in this case would probably have been to listen to the

views of colleagues, at all levels of the company, and to take those into account before

imposing that reorganization. There could have been many other ways in which to

achieve the required end results, including improved divisional and corporate perfor-

mance, and data transparency. Whatever restructuring was implemented, it was prob-

ably going to be more successful if those who were affected understood the decision,

had contributed significantly to it, and had agreed with it. “Behavioral flexibility” is

one of the core capabilities of managers and leaders at all levels in an organization.

This means adapting one’s overall approach and personal style to fit the circumstances.

Lampert did not do that.

3. On balance, would you assess his organizational model as having been a success,

or not?

From 2005 to 2013, the company’s sales, profits, and share value fell. Although not

mentioned in the case account, many experienced executives left the company, frustrated

by the impact of the restructuring. Divisional collaboration was stifled, and it appears

that the competition stimulated by the new organizational model was not healthy com-

petition. The model, therefore, appears to have been damaging to the company’s perfor-

mance and to its reputation. The new model, however, made it easier for Lampert to set

up the online business as a division run independently of the other units. It may thus be

too early to assess the longer-term overall success of that organization restructuring.

4. What lessons about managing organizational change can we take from this experi-

ence and apply to other organizations, in this or other sectors?

Change leaders need to adapt their style to fit the context. An autocratic style can rap-

idly resolve a crisis. In other circumstances, “decisive action” may leave others feel-

ing that they have been excluded, and they may decide to undermine decisions that

they feel were ill-advised (especially where the approach was considered to be idiosyn-

cratic) as well as imposed on them.

LO 1.1 Change Diagnostic: The J. C. Penney Story

Here are the three questions that you were asked to consider while reading the J. C.

Penney story, followed by our suggested answers:

1. What aspects of Ron Johnson’s turnaround strategy were appropriate, praiseworthy?

2. What mistakes did Ron Johnson make?

3. What would you suggest he could have done differently?

1. What aspects of Ron Johnson’s turnaround strategy were appropriate,

praiseworthy?

First, he was charismatic, passionate, energetic, and persuasive, using theatrics (the

acrylic cube) to draw attention and generate excitement. These are useful characteristics

for change leaders to possess, although in this case they contributed to the problems. It

is possible to be too charismatic, too passionate, too energetic, too persuasive, too theat-

rical. Second, he was highly innovative, bringing lots of fresh ideas to a long-established

Chapter 1 Managing Change: Stories and Paradoxes 25

and stale organization. Organizations that have been trading for a century will often

benefit by importing new thinking and practices from other sectors. Third, he was

action-oriented and wanted to move quickly, to bring about radical change rapidly.

2. What mistakes did Ron Johnson make?

Ignoring the company’s traditional core customers was probably his first and most seri-

ous mistake. There was no market research, either directly with customer groups or

indirectly through store staff and managers, to develop a better understanding of the

buying habits and preferences of JCP customers. How would customers interpret the

changes that he wanted to implement? It would have been helpful to know the answer

to that question before proceeding. This lack of customer knowledge led to some disas-

trous marketing, and to pricing and merchandising strategies that alienated core cus-

tomers without attracting new shoppers. Selling more expensive products seems like

a good way to increase sales per square foot, but only if your customers want those

items and can afford to buy them. Second, he allowed his new top team of “outsiders”

to distance themselves from the existing JCP managers and staff. This meant that the

top team had restricted access to the business knowledge stored in the corporate mem-

ory, and it also created unnecessary tensions between the DOPES and the Bad Apples.

Third, he made critical decisions based on his own judgement, dismissing the views

of other senior executives. Fourth, he acted rapidly. While speed may be necessary,

especially in a crisis, introducing so many changes at a quick pace was destabilizing.

Finally, and linked to the fourth point, he did not pilot test his big ideas before commit-

ting the investment and implementing them.

Johnson’s approach to change at JCP had two other adverse consequences. First, he

damaged the brand image, and that would take time—perhaps years—to repair. Sec-

ond, he closed the door to any future JCP chief executive who might be tempted to play

the part of charismatic innovator.

3. What would you suggest he could have done differently?

There is no correct answer to this question, but there is a wide range of possibili-

ties. The first obvious suggestion concerns better customer intelligence. Did sales fall

because middle-income families were hit by recession and customers became confused

by pricing practices? Or would customers have welcomed an expansion of the range of

JCP exclusive private brands and a modified promotions program instead? A second

suggestion concerns testing new ideas in a small number of representative outlets to

see how those would work before committing the whole organization. Third, review the

decision to fill senior management roles with friends and “outsiders”; did the organiza-

tion have internal candidates who could have filled at least some of those roles equally

well? Find ways to integrate new with existing staff: teambuilding, corporate events, job

rotations and partnerships, insisting that senior staff move to Dallas. In summary, these

suggestions concern market research, pilot testing, recruitment, and promotions policy.

However, this does not suggest that changes should have been made slowly, just a little

less rapidly. That would have allowed mistakes and wrong turns to become apparent, so

that they could be withdrawn, lessons learned, and revised plans put in place. Johnson’s

charisma, passion, and energy could have driven this alternative approach effectively.

A final suggestion for Ron Johnson would be: ask your board to probe and to chal-

lenge your decisions, and listen carefully to what they say. The why and how of change

26 Chapter 1 Managing Change: Stories and Paradoxes

in this case would probably have been more successful if these had been the result of

board decisions, and not Ron Johnson’s decisions. The board themselves, in this case,

seem to have made the mistake of not challenging their new, charismatic, persuasive,

passionate chief executive.

EXERCISE
1.1

Writing Your

Own Story

of Change

Think of a change that you have experienced, in either your work or personal life. We
would like to ask you to write a story about that experience. Here is a definition of a story
to help you:

A story expresses how and why life changes. It begins with a situation in which life
is relatively in balance: You come to work day after day, week after week, and every-
thing’s fine. You expect it will go on that way. But then there’s an event—in screen-
writing, we call it the “inciting incident”—that throws life out of balance. You get a
new job, or the boss dies of a heart attack, or a big customer threatens to leave. The
story goes on to describe how, in an effort to restore balance, the protagonist’s sub-
jective expectations crash into an uncooperative objective reality. A good storyteller
describes what it’s like to deal with these opposing forces, calling on the protagonist
to dig deeper, work with scarce resources, make difficult decisions, take action despite
risks, and ultimately discover the truth. (McKee, 2003, p. 52)

Plan A

Write down your experience of change in about one page, and then answer these
questions:

What made this experience a “story”?

What lessons for managing change can you take from your story?

Compare these with the lessons from the Beth Israel, Sears, and J. C. Penney stories.
Which are the same?

From your experience, what new lessons have you added, particularly for future
changes in which you might be involved?

In small groups, share your lessons with colleagues. Which lessons are similar, and
what are the differences among you?

What three main conclusions can you take from these stories about managing change?

Plan B

In small groups of around four to six people, ask each of the group members to tell
their story of change, taking only three or four minutes each. Record key elements of
each story on flip-chart paper. When everyone has told their story, answer the following
questions:

What are the common themes and issues across these stories?

What are the differences between these stories?

Of the change lessons from Beth Israel, Sears, and J. C. Penney, which are revealed in
the groups’ stories, and which are absent? What are the implications of this?

Are there any further lessons embedded in these stories that could apply to future
changes in which group members may be involved?

What three main conclusions can you take from these stories about managing change?

LO 1.1

Chapter 1 Managing Change: Stories and Paradoxes 27

Christensen, C. M., and Carlile, P. R. 2009. Course research: Using the case method to

build and teach management theory. Academy of Management Learning and Education

8(2):240–51. Explains how to use stories and case studies in management teaching, to

develop, test, and improve theory.

Denning, S. 2004. Telling tales. Harvard Business Review 82(5):122–29. Explains the

power of organizational storytelling and demonstrates how leaders can use stories to tell

people about themselves, trigger action, transmit values, encourage collaboration, “tame

the grapevine,” share knowledge, and “lead people into the future.”

Hughes, M. 2011. Do 70 per cent of all organizational change initiatives really fail? Jour-

nal of Change Management 11(4):451–64. The author challenges the evidence behind the

argument that so many change initiatives fail.

Metz, I., and Culik, C. T. 2008. Making public organizations more inclusive: A case study

of the Victoria Police Force. Human Resource Management 47(2):369–87. A case study of

rapid and successful culture change, led by a woman, Christine Nixon, recruited from out-

side the male-dominated police force. Note the lessons that the authors draw from this case.

Reisner, R. A. F. 2002. When a turnaround stalls. Harvard Business Review 80(2):45–52.

This case study concerns the U.S. Postal Service and is written by Robert Reisner, vice

president for strategic planning. Note the lessons that he draws from his experience.

Successful change is not guaranteed, despite the care and attention given to implementation

planning. If there is one firm prediction that we can make about change, it is that it will go

wrong, however meticulously designed. Why? By definition, we are always doing it for the

first time—in this organization, facing these problems, with these resources, given the past

history—and so on. One cannot confidently predict what will happen. The change leader

is always building the plane as it flies. This is not an argument against planning; it is an

argument for recognizing when things are going wrong, learning from that, and adapting

accordingly. So this text does not set out to tell change leaders “what to do.” Such perspec-

tives perpetuate the problem by creating the illusion that the outcomes can be kept under

control if carefully planned steps are followed. Most people’s experience of organizations

suggests that they are complex and untidy—and political—arenas. Acknowledging these

characteristics is the first step to taking a more realistic view of what change leaders can

expect to achieve. As discussed in the next chapter, it is more appropriate to think in terms of

shaping the change process rather than controlling it. We hope that reflective change leaders

will accept that choices must be made for change to proceed, and that these are informed

choices, not adopted on the grounds that there is “one best way” to approach the process.

Here is a short summary of the key points that we would like you to take from this

chapter, in relation to each of the learning outcomes:

* Recognize how stories of change can contribute to our knowledge of theory and

practice.

Stories can be read as process narratives, which explain what happened in a given con-

text. These explanations are therefore theories of change, pointing to the combination

Roundup

LO 1.1

Additional
Reading

28 Chapter 1 Managing Change: Stories and Paradoxes

of factors interacting over time, leading to more or less successful change. While those

theories cannot be copied simply to other organizations and contexts, they are still

a rich source of general lessons, and aspects of one organization’s approach can be

adapted to fit other organizational contexts, if appropriate.

* Understand why managing organizational change is both a creative and a rational

process.

As with management practice in many other areas, what is going to work well when it

comes to implementing change depends on the organizational context. While general

guidelines help to identify the factors to take into consideration, the details have to

be determined by local, informed management and staff judgement. That is a creative

process.

* Identify the main tensions and paradoxes in managing organizational change.

Should we focus on transformational changes, or do we need to “sweat the small stuff”

as well? Should change be a rational, systematic process, or do we need to recognize

the political dimension? What is more important, organizational capabilities or indi-

vidual skills in implementing change? Should we accelerate the changes or adopt a

more measured pace? Do we rely on one change champion or recognize the distributed

contributions of many change agents? Once we have “learned the lessons” from a crisis

or other extreme event, how do we ensure that these are put into practice?

* Assess the strengths and limitations of our current understanding of this field.

There is a significant amount of commentary, but little consensus. Most of the advice

says much the same thing, but the failure rate of change is still high. The commentary is

highly fragmented and includes multiple perspectives and conceptualizations. Evidence

comes from a range of different settings and approaches, and contributions from last

century are still relevant today. Establishing cause and effect with regard to change and

outcomes is made difficult by the many variables, and the many stakeholders typically

involved.

LO 1.2

LO 1.3

LO 1.4

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31

2Chapter
Images of Change
Management

Learning objectives

By the end of this chapter you should be able to:

LO 2.1 Evaluate the use that different authors make of the terms change agent, change

manager, and change leader

LO 2.2 Understand the importance of organizational images and mental models

LO 2.3 Compare and contrast six different images of managing change and change

managers

LO 2.4 Explain the theoretical underpinning of different change management images

LO 2.5 Apply these six images of managing change to your personal preferences and

approach, and to different organizational contexts

w
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.C
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to
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32 Chapter 2 Images of Change Management

LO 2.1 What’s in a Name: Change Agents, Managers, or Leaders?

This chapter focuses on those who drive and implement change. We first consider how

those individuals are described, and then explore different ways in which their roles

can be understood. This is not just a theoretical discussion. An understanding of orga-

nizational change roles has profound practical implications for the way in which those

roles are conducted. And if you are in a change management role, now or in future, the

way in which you understand your position will affect how you fulfill those responsi-

bilities and whether you are more or less successful.

The use of terms in this field has become confused, and we first need to address this

problem. Do the terms change agent, change manager, and change leader refer to differ-

ent roles in relation to organizational change? Or are these labels interchangeable?

For most of the twentieth century, the term change agent typically referred to an exter-

nal expert management consultant who was paid to work out what was going wrong in an

organization and to implement change to put things right. This model is still in use. In the

United Kingdom, if your hospital is in financial difficulties, the national regulator, Moni-

tor, will appoint a “turnaround director” (external expert change agent with a fancy job

title) to sit on your board of directors and tell you how to cut costs and restore financial

balance. External change agents do not all work like that. Many adopt the “process consul-

tation” approach popularized by Edgar Schein (1999). Here, the role of the “expert” is to

help members of the organization to understand and solve their own problems.

Today, a change agent is just as likely to be a member of the organization as an external

consultant. The term is now often used more loosely, to refer to anyone who has a role

in change implementation, regardless of job title or seniority. Given the scale and scope

of changes that many organizations face, a significant number of internal change agents

may be a valuable—perhaps necessary—resource. Internal change agents usually have a

better understanding than outsiders of the changes that would lead to improvements. In

short, when you see the term “change agent,” it is important to check the meaning that is

intended, unless that is obvious from the context. When we use the term change agent in

this book, we will always indicate clearly to whom this applies.

Conventional wisdom says that, with regard to the other terms in our section head-

ing, management and leadership are different roles, and that this is an important distinc-

tion. One of the main advocates of this distinction is John Kotter (2012). For him, change

management refers to the basic tools and structures with which smaller-scale changes are

controlled. Change leadership, in contrast, marshals the driving forces and visions that

produce large-scale transformations. His main point, of course, is that we need more

change leadership.

This argument has two flaws. The first concerns the assumption that large-scale

transformations are more meaningful and potent, and are therefore more valuable than

small-scale change. They are not, as the discussion of “depth of change” (figure 1.1) in

chapter 1 suggested.

For example, Cíara Moore and David Buchanan (2013) report a change initiative called

“Sweat the Small Stuff.” Staff in one clinical service in an acute hospital were asked to

identify small, annoying problems that had not been fixed for some time. These included

broken equipment and faulty administrative processes. The five problems were addressed

Chapter 2 Images of Change Management 33

by a three-person team including an “animateur” who set up and coordinated the project, a

clinical champion who engaged medical colleagues, and a “who knows who knows what”

person whose administrative background and networks helped the team to identify short-

cuts, “workarounds,” and “the right people” to solve these problems quickly. All five prob-

lems were solved within five days. The total costs came to £89 for a piece of equipment,

and the 40 minutes that the animateur spent in conversations. The benefits were “financial

(US$35,000 income generation), processual (safer patient allocation), temporal (tasks per-

formed more quickly, less waiting time), emotional (less annoyance, boredom, frustration),

and relational (improved inter-professional relations)” (Moore and Buchanan, 2013, p. 13).

One of the overarching benefits of “sweating the small stuff” was better management-

medical relationships, laying the foundation for further improvements, in this area and

in others. Fixing the small stuff was beneficial in its own right and was the precursor

for future major changes. The animateur’s job title was “operations manager”; was she a

change manager, or a change leader?

The second flaw in the argument concerns the belief that the contrasting definitions of

these management and leadership concepts will survive contact with practice. They do

not. While it may be possible to define clear categories in theory, in practice these roles are

overlapping and indistinguishable. The general distinction between management and lead-

ership is challenged by Henry Mintzberg (2009, pp. 8–9), who argues, “I don’t understand

what this distinction means in the everyday life of organizations. Sure, we can separate

leading and managing conceptually. But can we separate them in practice? Or, more to the

point, should we even try?” He asks, how would you like to be managed by someone who

doesn’t lead, or led by someone who doesn’t manage? “We should be seeing managers as

leaders, and leadership as management practiced well.”

In short, management versus leadership is not a distinction worth arguing over, and

may be more simply resolved by a combination of personal and contextual preference. In

this book, we will use the terms change management (or manager) and change leadership

(or leader) synonymously—unless there is a reason for making a distinction, which will

then be explained.

LO 2.2 Images, Mental Models, Frames, Perspectives

More important than the terminology, the internal mental images that we have of our

organizations influence our expectations and our interpretations of what is happening, and

of what we think needs to change, and how (Morgan, 2006; Hatch and Cunliffe, 2012;

Bolman and Deal, 2013). We typically hold these images, metaphors, frames of reference,

or perspectives without being conscious of how they color our thinking, perceptions, and

actions. These images, which can also be described as mental models, help us to make

sense of the world around us, by focusing our attention in particular directions. The key

point is that, while an image or mental model is a way of seeing things, a standpoint draw-

ing our attention to particular issues and features, it is also a way of not seeing things,

shifting our attention away from other factors, which may or may not be significant.

For example, if we have a mental image of organizations as machines, then we will be

more aware of potential component “breakdowns” and see our role in terms of mainte-

nance and repair. In contrast, if we think of organizations as political arenas, we are more

34 Chapter 2 Images of Change Management

likely to be aware of the hidden agendas behind decisions and try to identify the winners

and losers. We are also likely to see our role, not as maintaining parts of a smooth-running

machine, but as building coalitions, gathering support for our causes, and stimulating con-

flict to generate innovation. Shifting the lens again, we may see our organizations as small

societies or “microcultures.” With this image, we are more likely to focus on “the way

things get done around here,” and on how to encourage the values that are best aligned to

the type of work that we do. A microculture image highlights the importance of providing

vision and meaning so that staff identity becomes more closely associated with the work

of the organization. Each frame thus orients us to a different set of issues.

There are no “right” and “wrong” images here. These are just different lenses through

which the world in general, and organizations in particular, can be seen and understood.

The images or lenses that we each use reflect our backgrounds, education, life experi-

ences, and personal preferences. There are some problems for which a “machine” image

may be more appropriate, and other problems where a “microculture” image is relevant.

Some problems may best be understood if they are approached using two or three images

or lenses at a time.

Those who are responsible for driving and implementing change also have their own

images of organizations—and more importantly, images of their role as change manager.

Those images clearly influence the ways in which change managers approach the change

process, the issues that they believe are important, and the change management style that

they will adopt. Like the child with a hammer who treats every problem as if it were a nail,

the change manager is handicapped in drawing on only one particular image of that role. It

is therefore important, first, to understand one’s personal preferences—perhaps biases—in

this regard. It is also important, second, to be able to switch from one image of the role

to another, according to circumstances. This ability to work with multiple perspectives,

images, or frames concerning the change management role is, we will argue, central to the

personal effectiveness of the change manager and also to the effectiveness of the change

process.

We will outline six different “ideal type” images of managing change, describing the

assumptions that underpin each image and the theoretical views that support them. We will

then explore how change managers can draw from and use these multiple perspectives and

images of managing change.

LO 2.3 The Six-Images Framework

How are our images or mental models of organization and change formed? To answer

this question, Ian Palmer and Richard Dunford (2002) first identify two broad images

of the task of managing, which can be seen as either a controlling or as a shaping activ-

ity. They then identify three broad images of change outcomes, which can be seen as

intended, partially intended, or unintended. Why focus on change outcomes and not on

the change process in this approach? The outcomes of change do not always depend

entirely on the decisions and actions of those who are implementing change. Change

outcomes are often affected by events and developments outside the organization, and

which are beyond the direct control of individual change managers, whose intentions

may be swamped by those external factors. How change managers see those outcomes

Chapter 2 Images of Change Management 35

is therefore a significant component of their image of the change management role.

Combining these images of managing and of change outcomes leads to the six images

of managing organizational change summarized in table 2.1: director, coach, naviga-

tor, interpreter, caretaker, nurturer.

Management as Controlling
The image of management as a controlling function has deep historical roots, based

on the work of Henri Fayol (1916, 1949) and his contemporaries (Gulick and Urwick,

1937) who described what managers do, captured by the clumsy acronym POSDCoRB.

This stands for planning, organizing supervising, directing, coordinating, reporting, and

budgeting—activities that the change manager, as well as the general manager, may

be expected to carry out. This reflects a “top-down,” hierarchical view of managing,

associated with the image of organization as machine. The manager’s job is to drive the

machine in a particular direction. Staff are given defined roles. Resources (inputs) are

allocated to departments to produce efficiently the required products and/or services

(outputs). This image is today reflected in the work of Henry Mintzberg (2009), who

describes contemporary management roles in terms of deciding, focusing, scheduling,

communicating, controlling, leading, networking, building coalitions, and getting things

done. Harold Sirkin et al. (2005) argue that “soft” factors such as culture, leadership,

and motivation do not significantly affect the success of organizational change, and that

change managers should concentrate on the “hard” factors instead—controlling, com-

municating, scheduling, monitoring. The hard factors have three properties:

First, companies are able to measure them in direct or indirect ways. Second, companies

can easily communicate their importance, both within and outside organizations. Third, and

perhaps most important, businesses are capable of influencing those elements quickly. Some

of the hard factors that affect a transformation initiative are the time necessary to complete it,

the number of people required to execute it, and the financial results that intended actions are

expected to achieve. Our research shows that change projects fail to get off the ground when

companies neglect the hard factors. (Sirkin et al., 2005, p. 109)

Management as Shaping
This image of management as a shaping function, enhancing both individual and orga-

nizational capabilities, also has deep roots, based on the “human relations” school of

management from the 1930s (Roethlisberger and Dickson, 1939; Mayo, 1945). It has

also been influenced by the organization development movement (Bennis, 1969; Burke,

1987). This image is associated with a participative management style that encourages

TABLE 2.1
Images of

Change

Management

Images of Managing

Images of Change Outcomes
Controlling
(Roles and Activities)

Shaping
(Enhancing Capabilities)

Intended director coach

Partially intended navigator interpreter

Unintended caretaker nurturer

36 Chapter 2 Images of Change Management

involvement in decision making in general, and in deciding the content and process of

change in particular. Employee involvement in change is based on two assumptions.

First, that those who are closest to the action will have a better understanding of how

things can be improved. Second, that staff are more likely to be committed to mak-

ing changes work if they have contributed to the design of those changes. Managing

people is thus concerned with shaping (and not directly controlling) behavior in ways

that benefit the organization. The contemporary concern with “employee engagement”

is another manifestation of this image. From a global survey of over 2,500 executives

carried out by McKinsey, a management consultancy, Keller et al. (2010, p. 1) argue

that the success of transformational change depends on “engaging employees collab-

oratively throughout the company and throughout the transformation journey,” and on

“building capabilities—particularly leadership capabilities.” They also found that:

[W]hen leaders ensure that frontline staff members feel a sense of ownership, the results show

a 70 per cent success rate for transformation. When frontline employees take the initiative to

drive change, transformations have a 71 per cent success rate. When both principles are used,

the success rate rises to 79 per cent. . . . Given the importance of collaboration across the

whole organization, leaders at companies starting a transformation should put a priority on

finding efficient and scalable ways to engage employees. (Keller et al., 2010, pp. 3 and 5)

There is no argument concerning which of these images—controlling or shaping—

is “correct” and which is “wrong.” It is possible to marshal argument and evidence in

support of both frames. We may have to ask, however, which would be more appropriate

or effective in given circumstances.

Table 2.1 also identifies three dominant images of change outcomes, based on the

extent to which it is assumed that change outcomes can be wholly planned and achieved.

Intended Change Outcomes
The dominant assumption of this image is that intended change outcomes can be

achieved as planned. This assumption is at the core of much of the commentary on

organizational change and has dominated management practice for over half a century

(Burnes, 2014). Change is the realization of prior intent through the actions of change

managers. Chin and Benne (1976), whose work has been influential in this area, iden-

tify three broad strategies for producing intentional change:

Empirical-rational strategies assume that people pursue their own self-interest. Effective

change occurs when a change can be demonstrated as desirable and is aligned with the

interests of the group who are affected. Where change has those properties, then intended

outcomes will be achieved.

Normative–re-educative strategies assume that changes occur when people abandon their tra-

ditional, normative orientations and commit to new ways of thinking. Producing intentional

outcomes in this way involves changes in information and knowledge, but also in attitudes

and values.

Power-coercive strategies rely on achieving the intended outcomes through the compliant

behavior of those who have less power. Power may of course be exercised by legitimate

authority or through other, less legitimate, coercive means.

These three strategies share the view that the intended or desired outcomes of a change

program can be achieved through using different change strategies.

Chapter 2 Images of Change Management 37

Partially Intended Change Outcomes
In this image, it is assumed that some, but not all, planned change outcomes are achiev-

able. Power, processes, interests, and the different skill levels of managers affect their

ability to produce intended outcomes. As Mintzberg and Waters (1985) note, the link

between initial intent and final outcome is not necessarily a direct one. This is due to

the fact that both intended and unintended consequences may emerge from the actions

of change managers; intended outcomes may be adapted along the way, or externally

imposed forces may modify what was originally intended. For these reasons, change

initiatives do not always deliver the outcomes that were planned.

Unintended Change Outcomes
Less attention has been paid to this image in commentary on change management,

but this is a common theme in mainstream organization theory. This image recognizes

that managers often have great difficulty in achieving the change outcomes that were

intended. This difficulty stems from the variety of internal and external forces that can

push change in unplanned directions. Internal forces can include interdepartmental pol-

itics, long-established working practices that are difficult to dislodge, and deep-seated

perceptions and values that are inconsistent with desired changes. External forces can

include confrontational industrial relations (which can bring management-inspired

changes to a standstill), legislative requirements (tax demands, regulatory procedures),

or industry-wide trends affecting an entire sector (trade sanctions, run on the stock

market). These internal and external forces typically override the influence of individ-

ual change managers, whose intentions can be easily swamped. On occasion, of course,

intentions and outcomes may coincide, but this is often the result of chance rather than

the outcome of planned, intentional change management actions.

LO 2.3 LO 2.4 Six Images of Change Management

Table 2.1 identifies six different images of change management, each dependent in turn

on contrasting images of the function of managing, on the one hand, and of the delivery

of change outcomes, on the other. We can now outline each of these images and their

theoretical underpinnings.

Change Manager as Director (Controlling Intended Outcomes)
The director image views management as controlling and change outcomes as being

achievable as planned. The change manager’s role here, as the title indicates, is to steer the

organization toward the desired outcomes. This assumes that change involves a strategic

management choice upon which the well-being and survival of the organization depends.

Let us assume that an organization is “out of alignment” with its external environment,

say, with regard to the information demands of a changing regulatory system and the more

effective responses of competitors. The change management response could involve a new

corporate IT system, to capture more efficiently and to analyze larger volumes of data.

The director image assumes that this can be mandated, that the new system can be imple-

mented following that command and that it will work well, leading to a high-performing

organization that is more closely aligned to its external environment.

38 Chapter 2 Images of Change Management

What theoretical support does this image have? As chapter

10 will explain, there are a number of “n-step” models, guide-

lines, or “recipes” for change implementation that are based

on the image of the change manager as director. The change

manager is advised to follow the steps indicated (the number of

steps varies from model to model), more or less in the correct

sequence, and regardless of the nature of the change, in order

to ensure successful outcomes. These models are united by the

optimistic view that the intended outcomes of change can be

achieved, as long as change managers follow the model. One of

the best known “n-step” models was developed by John Kotter

(1995), who advocates a careful planning process, working through the eight steps in his

approach more or less in sequence, and not missing or rushing any of them. Even Kotter

acknowledges that change is usually a messy, iterative process. Nevertheless, he remains

confident that, if followed correctly, his “recipe” will increase the probability of a success-

ful outcome.

As chapter 10 will also explain, contingency theories of change argue that there is no

“one best model” for change managers to follow. These perspectives argue that the most

appropriate approach is contingent; that is, it depends on the context and on the circum-

stances (Stace and Dunphy, 2001; Huy, 2001). Contingency theorists thus part company

with n-step “best practice” guides, suggesting that a range of factors such as the scale and

urgency of the change, and the receptivity of those who will be affected, need to be consid-

ered when framing an implementation strategy. In other words, the “best way” will depend

on a combination of factors—but as long as the change manager takes those factors into

account, and follows the contingent model, then the intended outcomes should be delivered.

Change Manager as Navigator (Controlling Some
Intended Outcomes)
In the navigator image, control is still at the heart of management action, although a vari-

ety of external factors mean that, although change managers may achieve some intended

change outcomes, they may have little control over other results. Outcomes are at least

partly emergent rather than completely planned, and result from a variety of influences,

competing interests, and processes. For example, a change manager may wish to restruc-

ture a business unit by introducing cross-functional teams to assist product development.

While a change manager may be able to establish teams (an intentional outcome), getting

them to work effectively may be challenging if there is a history of distrust, information

hoarding, and boundary protection by the business units. In this situation,

functional managers may appoint to the cross-functional teams people who

they know will keep the interests of their department uppermost and block

any decisions that might decrease their organizational power (an unintended

outcome of putting the teams in place).

Exploring why change initiatives stall, Eric Beaudan (2006, p. 6) notes,

“No amount of advance thinking, planning and communication guarantees

success. That’s because change is by nature unpredictable and unwieldy.

The military have a great way to put this: ‘no plan survives contact with

the enemy.’” He also argues that “leaders need to recognize that the initial

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Chapter 2 Images of Change Management 39

change platform they create is only valid for a short time. They need to conserve their

energy to confront the problematic issues that will stem from passive resistance and from

the unpredictable side effects that change itself creates” (Beaudan, 2006, p. 6). Change

may be only partially controllable, with change managers navigating the process toward a

set of outcomes, not all of which may have been intended.

What theoretical support does this image have? Processual theories (see chapter 10)

argue that organizational changes unfold over time in a messy and iterative manner, and

thus rely on the image of change manager as navigator (Langley et al., 2013; Dawson

and Andriopoulos, 2014). In this perspective, the outcomes of change are shaped by a

combination of factors including the past, present, and future context in which the orga-

nization functions, including external and internal factors; the substance of the change,

which could be new technology, process redesign, a new payment system, or changes to

organization structure and culture; the implementation process (tasks, decisions, timing);

political behavior, inside and outside the organization; and the interactions between these

factors. The role of the change manager is not to direct, but to identify options, accumulate

resources, monitor progress, and navigate a way through the complexity.

Change managers must accept that there will be unanticipated disruptions, and that

options and resources need to be reviewed. Change navigators are also advised to encour-

age staff involvement. For senior management, rather than directing and controlling the

process, the priority is to ensure receptivity to change and that those involved have the

skills and motivation to contribute. However, given the untidy, nonlinear nature of change

processes, navigators—consistent with the metaphor—have room to maneuver; the course

of change may need to be plotted and replotted in response to new information and devel-

opments. There is no guarantee that the final destination will be that which was initially

intended. In some instances, change may be ongoing, with no clear end point.

Change Manager as Caretaker (Controlling
Unintended Outcomes)
In the caretaker image, the (ideal) management role is still one of control, although the

ability to exercise that control is severely constrained by a range of internal and external

forces that propel change relatively independent of management intentions. For example,

despite the change manager’s desire to encourage entrepreneurial and innovative behavior,

this may become a failing exercise as the organization grows, becomes more bureaucratic,

and enacts strategic planning cycles, rules, regulations, and cen-

tralized practices. In this situation, the issues linked to inexorable

growth are outside the control of an individual change manager.

In this rather pessimistic image, at best managers are caretakers,

shepherding their organizations along to the best of their ability.

Theoretical support for the caretaker image can be drawn from

three organizational theories: life-cycle, population ecology, and

institutional theory.

Life-cycle theory views organizations passing through well-

defined stages from birth to growth, maturity, and then decline or

death. These stages are part of a natural developmental cycle. There

is an underlying logic or trajectory, and the stages are sequential

(Van de Ven and Poole, 1995). There is little that managers can ©
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do to prevent this natural development; at best they are caretakers of the organization as

it passes through the various stages. Harrison and Shirom (1999) identify the caretaker

activities associated with the main stages in the organizational life cycle, and these are

summarized in table 2.2. Change managers thus have a limited role, smoothing the various

transitions rather than controlling whether or not they occur.

Population ecology theory focuses on how the environment selects organizations for

survival or extinction, drawing on biology and neo-Darwinism (White et al., 1997). Whole

populations of organizations can in this perspective change as a result of ongoing cycles of

variation, selection, and retention:

Organizational variation occurs as the result of random chance.

Organizational selection occurs when an environment selects organizations that best fit

the conditions.

Organizational retention involves forces (e.g., inertia and persistence) that sustain

organizational forms, thus counteracting variation and selection (Van de Ven and

Poole, 1995).

Some population ecology theorists suggest that there are limited actions that change man-

agers can take to influence these forces, such as:

interacting, perhaps through key stakeholders, with other organizations to lessen the

impact of environmental factors;

repositioning the organization in a new market or other environment.

In general, however, the implication of this perspective is that managers have little sway

over change where whole populations of organizations are affected by external forces.

TABLE 2.2
Life-Cycle Stages and Caretaker Activities

Developmental Stage Caretaker Activities

Entrepreneurial Stage
Founder initiates an idea

Collectivity Stage
Coordination through informal means as
group identity develops

Formalization Stage
Formalization of operations, emphasizing rules
and procedures, efficiency and stability

and control

Elaboration Stage

more complex and environment changes

Source: Adapted from Harrison and Shirom, 1999, pp. 307–14.

Chapter 2 Images of Change Management 41

For example, managers of many financial institutions struggled to deal with the wide-

spread global crisis triggered by the collapse of Lehman Brothers, an investment bank, in

September 2008. That event affected adversely the global population of finance organiza-

tions (and the governments that had to recapitalize them).

Institutional theory argues that change managers take broadly similar decisions and

actions across whole populations of organizations. The central concern of this perspec-

tive is not to explain change, but to understand “the startling homogeneity of organiza-

tional forms and practices” (DiMaggio and Powell, 1983, p. 148). These similarities can

be explained by the pressures associated with the interconnectedness of organizations that

operate in the same sector or environment. DiMaggio and Powell (1983) distinguish three

such pressures, which in practice interact:

coercive, including social and cultural expectations and government-mandated changes;

mimetic, as organizations imitate or model themselves on the structures and practices

of other organizations in their field, often those that they consider more successful and

legitimate;

normative, through the professionalization of work such that managers in differ-

ent organizations adopt similar values and working methods that are similar to each

other.

Not all organizations succumb to these pressures; there are what DiMaggio and Powell

call “deviant peers.” However, the assumption is that these external forces are inexorable

and individual managers have only limited ability to implement change outcomes that are

not consistent with these forces. At best, change managers are caretakers with little influ-

ence over the long-term direction of change.

Change Manager as Coach (Shaping Intended Outcomes)
In the coach image, the assumption is that change managers (or change consultants)

can intentionally shape the organization’s capabilities in particular ways. Like a sports

coach, the change manager shapes the organization’s or the team’s capabilities to ensure

that, in a competitive situation, it will be more likely to succeed. Rather than dictating

the state of each play as the director might do, the coach relies on establishing the right

values, skills, and “drills” so that the organization’s members can achieve the desired

outcomes.

What theoretical support does this image have? Organization development (OD) theory

reinforces the image of the change manager as coach, by stressing the importance of

values such as humanism, democracy, and individual development (see chapter 9). OD

“interventions” are designed to develop appropriate skills, reduce interpersonal and inter-

divisional conflict, and to structure activities in ways that help the organization’s members

better understand, define, and solve their own problems. As the OD movement evolved,

the emphasis shifted from team-based and other small-scale interventions to organization-

wide programs, designed to “get the whole system in the room” (Weisbord, 1987, p. 19;

Burnes and Cook, 2012). As a movement underpinned by values, OD advocates can be

evangelical about the advantages of helping organization members develop their own

skills in problem solving to achieve their intended outcomes, claiming not only that the

approach works but that it produces results with less resistance, greater speed, and higher

commitment (Axelrod, 1992).

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Change Manager as Interpreter (Shaping Some
Intended Outcomes)
The change manager as interpreter has the task of creating

meaning for others, helping them to make sense of events

and developments that, in themselves, constitute a changed

organization. It is up to change managers to represent to others

just what these changes mean. However, there are often competing

interpretations of the same issues, especially where there are

different groups who do not necessarily share common interests

and perceptions (Buchanan and Dawson, 2007). This suggests that

only some meanings—and therefore some change intentions—are

likely to be realized.

In this contested climate, managers as interpreters “need to be

able to provide legitimate arguments and reasons for why their

actions fit within the situation and should be viewed as legitimate”

(Barge and Oliver, 2003, p. 138). Downsizing, for example, is one situation where compet-

ing interpretations are inevitable. Change managers may portray this action as a way of

strengthening the organization in the face of environmental pressures and thus protecting

more effectively the jobs of those who remain. Others, however, may tell different stories, of

management incompetence and of underhand ways of “outplacing” politically troublesome

individuals or even whole departments under the cover of “efficiency.” Stephen Denning

(2004), mentioned in chapter 1, emphasizes the power of storytelling, observing, “I’ve seen

stories help galvanize an organization around a defined business goal” (p. 122), and that a

“well told story” can be more inspiring and motivating than a detailed analytical approach.

In other words, when it comes to interpreting the meaning of change for others, the effective

interpreter tells better stories than the competition.

What theoretical support does this image have? Architect of the influential processual

perspective on organizational change, Andrew Pettigrew (1985, p. 442) sees the “manage-

ment of meaning” as central. He argues, “The management of meaning refers to a process

of symbol construction and value use designed to create legitimacy for one’s own ideas,

actions, and demands, and to delegitimize the demands of one’s opponents.” The change

manager seeking to introduce significant, strategic change may thus be faced with the

prospect of trying to create a story that will dislodge a well-established ideology, culture,

and system of meaning. Change managers, of course, do not have a monopoly on storytell-

ing skills; sometimes the stories of others are better, and they “win.”

The interpreter image is central to Karl Weick’s (1995; 2000) sense-making theory

of organizational change. Sense-making, Weick explains, is what we do when we face a

problem—a surprise or a crisis, for example—and have to work out how we are going to

respond. For sense-making to work in these situations, however, four factors have to be

present. First, it has to be possible to take some action to address the problem; almost any

action will do, as long as experiment and exploration are allowed. Second, that action must

be directed toward a purpose or goal. Third, the context must allow people to be attentive

to what is happening and to update their understanding accordingly. Fourth, people need

to be allowed to share their views openly, in a climate of mutual trust and respect. Weick

calls these four components of sense-making animation, direction, attention, and respect-

ful interaction.

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Chapter 2 Images of Change Management 43

Weick (2000, p. 225) also observes that emergent, continuous, cumulative change is the

norm in most organizations. The textbook focus on planned, transformational, revolution-

ary, disruptive change is partial and misleading. Emergent change involves the develop-

ment of new ways of working that were not previously planned:

The recurring story is one of autonomous initiatives that bubble up internally; continuous

emergent change; steady learning from both failure and success; strategy implementa-

tion that is replaced by strategy making; the appearance of innovations that are unplanned,

unforeseen, and unexpected; and small actions that have surprisingly large consequences.

Emergent changes are thus driven by continuous sense-making, often by frontline staff,

and not by senior management. Indeed, top team intervention may inhibit change. Weick

(2000, p. 234) argues that, while the four sense-making activities of animation, direction,

attention, and respectful interaction are necessary for learning, adaptation, and change,

“they are also the four activities most likely to be curbed severely in a hierarchical com-

mand-and-control system.” For successful change, Weick concludes, management must

become interpreters, recognizing that “organizational change is emergent change laid

down by choices made on the front line. The job of management is to author interpreta-

tions and labels that capture the patterns in those adaptive choices. . . . Management

doesn’t create change. It certifies change” (Weick, 2000, p. 238; emphasis added).

Change Manager as Nurturer (Shaping Unintended Outcomes)
The image of change manager as nurturer assumes that even small changes can have a

large impact on organizations, and that managers may be unable to control the outcomes

of these changes (Thietart and Forgues, 1995). However, they may nurture the organiza-

tion, developing qualities that enable positive self-organizing. Like a parent’s relationship

with a child, future outcomes are nurtured or shaped, but the ability to produce intended

Interpreters at Work Four Conditions for Changing Mindsets

success of change relies on persuading individuals

to change their “mindsets”—to think differently

fundamental changes in organization culture, in

collective thinking and behavior—from reactive to

changing mindsets at level three:

Employees will alter their mindsets only if they see

the point of the change and agree with it—at least

enough to give it a try. The surrounding structures

(reward and recognition systems, for example)

must be in tune with the new behaviour. Employ-

ees must have the skills to do what it requires.

Finally, they must see people they respect model-

ling it actively. Each of these conditions is realized

independently; together they add up to a way of

changing the behaviour of people in organizations

by changing attitudes about what can and should

happen at work.

44 Chapter 2 Images of Change Management

outcomes is limited because of the impact of much wider, sometimes

chaotic forces and influences. Specific directions and outcomes of

change cannot be intentionally produced but rather emerge and are

shaped through the qualities and capabilities of the organization.

Perspectives supporting the nurturer image include chaos theory

and Confucian/Taoist theory.

Chaos theory argues that organizational change is nonlinear, is

fundamental rather than incremental, and does not necessarily entail

growth (table 2.3). Chaos theorists, drawing also on complexity the-

ory, explore how organizations “continuously regenerate themselves

through adaptive learning and interactive structural change. These

efforts periodically result in the spontaneous emergence of a whole

new dynamic order, through a process called self-organization” (Lich-

tenstein, 2000, p. 131). The phenomenon of self- organization is driven

by the chaotic nature of organizations, which in turn is a consequence

of having to grapple simultaneously with both change and stability. In

this context, the change manager has to nurture the capacity for self-

organization, with limited ability to influence the direction and nature of the spontaneous

new orders that may emerge. This may sound abstract and puzzling, but this describes

the emergent strategy—nurturing capabilities—that the successful Brazilian entrepreneur

Ricardo Semler (2000) adopted in his manufacturing company, Semco. This explains how

Semco successfully diversified into electronics.

Semco A Chaotic Business?

sions about virtually all company issues, from strat-

practices and philosophies illustrate principles of

That rather unusual management philoso-

has seemed a little too radical for mainstream

able to transform itself continuously and organi-

statements and strategies, announcing a bunch

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Confucian/Taoist theory—perhaps better regarded as a philosophy—adopts assump-

tions with regard to organizational change that are fundamentally different from Western

views (Marshak, 1993). Change is regarded as:

cyclical, involving constant ebb and flow;

processional, involving harmonious movement from one state to another;

journey-oriented, involving cyclical change with no end state;

based on maintaining equilibrium, or achieving natural harmony;

observed and followed by those who are involved, who seek harmony with their uni-

verse; and

normal rather than exceptional.

TABLE 2.3
Chaos Theory and Change Management

Change Management Actions Core Elements

Managing transitions
Get them involved in decision making and problem
solving

Building resilience

environment

Managing order and disorder, the present
and the future

Balance the needs for order and change

Creating and maintaining a learning organization Make continuous learning available to everyone

Source: Adapted from Tetenbaum (1998).

Taoist Approach to Change Leadership

are no “off the shelf” remedies or coping strategies

role of the leader, they argue, is to be a facilitator

and encouraging the “positive deviants” in the orga-

of discovery, making them the evangelists of their

Learn from the people

Of the best leaders

When the task is accomplished

The people all remark

We have done it ourselves

46 Chapter 2 Images of Change Management

Organizational change outcomes from this standpoint are not intended so much as pro-

duced through the nurturing of a harmonious Yin-Yang philosophy in which each new

order contains its own negation. Embedded in this philosophy, therefore, is an image of

the change manager as nurturer.

LO 2.5 Using the Six-Images Framework

Each of these images of managing change represents a Weberian “ideal type.” They are

“ideal” in the sense that a “pure” version of the concept may not exist, but they give

us a set of benchmarks, or templates, against which practice can be compared. (Note:

“ideal” does not in this case mean “desirable.”) These images are not separate catego-

ries; they form two continua, from controlling to shaping management roles, and from

planned to unintended outcomes. The boundaries of these six images are blurred, and

their elements may overlap in practice. The case study at the end of this chapter, “The

Turnaround Story at Leonard Cheshire,” illustrates how this happens in practice.

These six images are enduring, each having, as we have seen, differing theoretical

underpinnings that serve to legitimate them. Nevertheless, as already noted, the caretaker

and nurturer images are less frequently discussed in relation to change management—

although they are more widely accepted in other domains of organization theory,

particularly where there is less practice orientation. In contrast, the director, navigator,

coach, and interpreter images involve more active, intentional, and directional views

of the ability of change managers to produce organizational change, whether through

control or shaping actions. In this sense, they are more positive images than caretaking

and nurturing, which reflect a more reactive view of managerial effectiveness—in terms of

both why changes occur and the extent to which these changes are driven by management

intentions. Managers obviously do not like to feel that they are insignificant players in their

organizational worlds. Rather, the assumption that they are able to produce positive and

intentional change is an important component of the Western change management lexicon.

The need to be seen to be producing positive intentional change was demonstrated to

us in the following example. A well-known change consultant based in Washington, DC,

told us how he intended to use the six-images framework in a major international organi-

zation to help their staff to understand the impact of the culture of the organization and

its many competing discourses of change. The company agreed to use the framework and

even requested copyright permission. However, some senior executives argued against

using it, “because it might legitimate managers not assuming responsibility for initiating

and managing change; it might give them an out.” This was for two reasons. First, there

was the possibility of seeing change having unintended outcomes. Second, there was the

possibility that change managers would have minimal impact where the organization was

dominated by enforced change from the outside. The six-images framework was not used.

This example is instructive for the following reasons. Some commentators distinguish

between topics that are “sacred” and those that are “profane.” Some topics are not to be

questioned, and to do so is not legitimate. The experience of our Washington consultant

indicates that the idea that change can be controlled to produce intentional outcomes is

sacred. It is profane to suggest otherwise—that managers may be overwhelmed by forces

beyond their control. The view that we would like to promote in this text is that it is time

Chapter 2 Images of Change Management 47

to end this divide. It is necessary to recognize that, in the long run, such a distinction is

unhelpful. This stance hinders change managers by discouraging a reflective, self-critical

view of their actions and of what is achievable in any given context.

So, how should the six-images framework be used in practice? There are three inter-

related issues where reflection on the part of the change manager is valuable: surfacing

assumptions about change, assessing dominant images of change, and using multiple

images and perspectives of change.

Surfacing Assumptions about Change
The six-images framework guides us in reflecting on the images and assumptions we

hold about managing change. As we noted at the start of this chapter, we all have mental

models and these help us to simplify and to make sense of the complex organizational

worlds in which we operate. At the same time as they simplify and illuminate, they

turn our attention toward some things and away from others. Being aware of the mental

models with which we work helps us think more carefully about their relevance—and

the extent to which the assumptions they entail are really ones that are going to be of

assistance to us in approaching organizational change.

Being aware of these images enables change managers to assess the assumptions that

are being made by others with whom they are working or interacting or from whom they

are taking advice. Resulting from this assessment may be actions to reorient the images

others have of the particular change in which they are involved by providing new images

through which the change can be seen.

For example, a change manager working with a navigator image may get others, who

may view change through a director image, to acknowledge that unanticipated outcomes

may occur as change unfolds. The navigator may persuade others to accept that one pos-

sibility of engaging in a change is that their current view of what is desired at the end

may shift as the process unfolds and new possibilities emerge. In this sense, awareness of

differing change management images can lead to an educational process within a change

team. It requires encouragement of conversations around images and assumptions about

the anticipated change, testing these with the group, and ensuring that all members of the

team share common change image(s). This ensures that individual change managers are

not talking past one another and making assumptions that are not shared by others.

Assessing Dominant Images of Change
The six-images framework encourages change managers to reflect on whether they

are dominated by one particular image, and on the limitations of that perspective. For

example, the director image turns our attention to the outcomes we want to achieve and

the steps needed to get there; at the same time, it turns our attention away from whether

the outcomes are really achievable (or even desirable) and whether unintentional out-

comes also might occur should we pursue a particular change course.

The framework also directs attention to whether the organization in which the change

is to occur is dominated by a particular view of what is achievable and how change should

unfold. Indeed, Hamel and Prahalad (1994) point out that some organizations are domi-

nated by a particular view of how things should get done—almost to the point where the

view is part of the “genetic coding” of the organization and is therefore seen as natural and

not open for negotiation. In this case, change managers whose images are not consistent

48 Chapter 2 Images of Change Management

with the dominant organizational image may experience frustration and stress as they

work with a change that may be seen as less legitimate or irrelevant.

Using Multiple Images and Perspectives of Change
It is possible that a change manager’s “image-in-use” may depend on their personal

preferences, or it may be an unconscious decision based simply on the use of a familiar

approach. One of the advantages of exposure to the range of images is to reduce the

likelihood of a change manager using a single image because of a lack of understand-

ing of the range of options. The six-images framework directs attention to the range of

available options and to how their use may vary between contexts. A conscious choice

of image-in-use can be based on at least the following four sets of considerations.

Image-in-use depends on the type of change. Change managers may assess some types

of change as being more amenable to one image or approach rather than another. An inter-

preter approach might be seen as possible for one but not another type of change. Change

managers are thus advised to adjust their image of change, and the perception of what is

possible, depending on the situation. Anderson and Anderson (2001), for example, adopt a

coaching image, arguing that developmental and transitional change can be managed from

this perspective, but not transformational change. They draw on a navigator image in relation

to transformational change, arguing that there are too many intangibles that can inhibit the

achievement of predetermined outcomes; what is required is a mindset that accepts that orga-

nizations can be led into the unknown without the end point being predictable in advance.

Image-in-use depends on the context of the change. As chapter 10 explains, manage-

ment approach should ideally be consistent with the context. In some settings, organiza-

tional members may be unhappy with the status quo and ready for change. The appropriate

image-in-use in this context could be coach or interpreter, involving people in order to

identify desired change outcomes and how those should be achieved. Where change faces

hostility and resistance, and intended outcomes are thus in jeopardy, a caretaker or naviga-

tor image may be more appropriate. However, if change is necessary for the organization’s

survival, then a director image may necessary.

Image-in-use depends on the phase of change. Change processes pass through differ-

ent phases (see chapter 10). Change managers may thus choose to use different images

at different stages of the process, or depending on perceptions of the phase that change

has reached. For example, in initiating an externally imposed or encouraged change (such

as the Malcolm Baldrige Quality Awards) in order to continue as an accredited supplier,

change managers may feel that the caretaker image is appropriate, as change was not

generated internally. However, as change progresses, an interpreter image may become

relevant, conveying to staff new meanings associated with the implementation such as

enhanced professionalism and the possibility of diversifying into new areas.

Image-in-use depends on simultaneous involvement in multiple changes. At any given

time, in any one organization, there are often many changes unfolding, in different busi-

ness units or across the organization as a whole. Some of those changes could be exter-

nally driven, and a caretaker image may apply. Where externally generated change is not

negotiable—a change in legislation, for example, demanding compliance—then a director

image may be necessary. Other initiatives, however, may be internally generated, and a

director image may again be appropriate to achieving desired outcomes in a controlled

way. This implies that skilled and reflective change managers are able to adapt, to move

Chapter 2 Images of Change Management 49

between images depending on how conditions are developing. It may also be appropriate

to manage simultaneously with multiple images where these are related to different but

concurrent initiatives. As noted earlier, the Leonard Cheshire case below illustrates this

possibility.

SELF-
ASSESSMENT

What Is Your

Image of

Managing

Change?

1 2 3 4 5

Agree

1 2 3 4 5

Communications should emphasize the inevitability of change ❑ ❑ ❑ ❑ ❑

2 ❑ ❑ ❑ ❑ ❑

❑ ❑ ❑ ❑ ❑

The aim of communication about change is to send clear,
unambiguous messages, so organization members understand

❑ ❑ ❑ ❑ ❑

5 – ❑ ❑ ❑ ❑ ❑

6 Communication about change needs to foster supportive con-
ditions and to convey the need for members to be ready to

❑ ❑ ❑ ❑ ❑

7 ❑ ❑ ❑ ❑ ❑

8 ❑ ❑ ❑ ❑ ❑

9 Organizational change is unpredictable, and resistance may or
may not affect the outcomes, but managers should respond to

❑ ❑ ❑ ❑ ❑

An appropriate vision for change is most likely to emerge ❑ ❑ ❑ ❑ ❑

(Continued)

LO 2.5

50 Chapter 2 Images of Change Management

❑ ❑ ❑ ❑ ❑

Communicating about change involves attending to the varied
interests of stakeholders and persuading them of the benefits of
change or, if necessary, modifying changes to produce the best

❑ ❑ ❑ ❑ ❑

It is generally possible for managers to have significant control ❑ ❑ ❑ ❑ ❑

Managers should help resisters develop the capacity to cope ❑ ❑ ❑ ❑ ❑

Communication about change should ensure that organization
members are “on the same page” about the values linked to the

❑ ❑ ❑ ❑ ❑

A vision for organizational change emerges from the clash of ❑ ❑ ❑ ❑ ❑

in an organization, they can nurture staff capabilities, and thus
❑ ❑ ❑ ❑ ❑

Managers should redirect change to go around resistance, ❑ ❑ ❑ ❑ ❑

To implement change successfully, managers must interpret
the change for organizational members and help them to make

❑ ❑ ❑ ❑ ❑

Visions for organizational change are likely to have a limited ❑ ❑ ❑ ❑ ❑

account, to ensure that as many people as possible, inside and
❑ ❑ ❑ ❑ ❑

22 ❑ ❑ ❑ ❑ ❑

Leaders cannot impose a vision for change, as competing stake- ❑ ❑ ❑ ❑ ❑

❑ ❑ ❑ ❑ ❑

Source: This assessment was designed by, and is reproduced here with the permission of Jean Bartunek, Professor of Management and Organization, Boston
College, MA.

Chapter 2 Images of Change Management 51

SELF-
ASSESSMENT

Scoring

Director Coach

5

total: total:

Navigator Interpreter

7

total:

8

22
total:

Caretaker Nurturer

2

total:

6
9

total:

52 Chapter 2 Images of Change Management

2 Are change leaders more likely to be successful if they remain faithful to their domi-

TABLE 2.4
Six Images of Change Management

Image Sound Bite Approach to Change When to Use

Director
to happen”

Management choice,
command and control survival, and change manager has

Navigator
expect the unexpected

affect change plans

Caretaker
might be possible”

Accept the force of
external context factors
and adapt as necessary

When environmental forces are

sector

Coach
our capability to deal capabilities—values,

skills, drills—to respond
effectively to change

need to resolve interpersonal conflicts
and build understanding to solve their

Interpreter “We need to think
differently about this”

Managing meaning
through interpretations
that explain and convey
understanding to others

When different stakeholders have

and they do not share common
interests

Nurturer
encourage involvement,
continuous learning, and
self-organizing

constant regeneration and adaptive
learning

EXERCISE
2.1

Assessing

Change

Managers’

Images


LO 2.2

Chapter 2 Images of Change Management 53

EXERCISE
2.2

The Turn-

around Story

at Leonard

Cheshire

Issues to Consider as You Read This Story

The Context

support included care in a range of residential settings, respite services, and skills devel-

The Problem

home as a teenager, but her ambitions had taken her into a management career in other

The Solution

Phase 1:

LO 2.5

(Continued)

54 Chapter 2 Images of Change Management

If I am late or if anybody is late for anything and the reason is that it is because they

Phase 2: –

making procurement more efficient and by reducing spending on expensive agency staff

people share your commitment and passion and values and they are not doing things

campaign to stop this practice:

Chapter 2 Images of Change Management 55

The Outcomes

Story Sources
Carlisle, D. 2014. The woman who banned the f-word. Health Service Journal (February 28):

24–28.

http://www.leonardcheshire.org/

Battilana, J., and Casciaro, T. 2013. The network secrets of great change agents. Harvard

Business Review 91(7/8):62–68. Research concluding that it is the networks of change

agents that can make them more successful, especially where the nature of their networks

(“bridging” or “cohesive”) matches the type of change that they are pursuing.

Chatman, J. 2014. Culture change at Genentech: Accelerating strategic and financial accom-

plishments. California Management Review 56(2):113–29. This is a case study of success-

ful culture change in a pharmaceuticals company. The senior vice president, Jennifer Cook,

said: “My leadership philosophy is that individuals are people first and employees second.

Our best employees make a choice to come to work every day and we have to earn the right

to have them want to come back. The way I look at it is that I’m bringing a framework and

infrastructure as a way to harness the group’s thinking, but it’s their thinking” (p. 113). Con-

trast this philosophy with that of Ron Johnson at J. C. Penney (chapter 1).

McCreary, L. 2010. Kaiser Permanente’s innovation on the front lines. Harvard Business

Review 88(9):92–97. This famous healthcare organization has an internal “innovation

consultancy” that employs change agents to watch, note, sketch, and identify better ways

of working, asking staff how they feel about their work, holding “deep dive” events with

staff to generate ideas. The aim is to introduce service-oriented innovation quickly and

economically. This is a caretaker image of change managers—controlling, but looking

for unpredictable outcomes.

Pascale, R. T., and Sternin, J. 2005. Your company’s secret change agents. Harvard

Business Review 83(5):72–81. Argues that the leader’s role is not to direct change but to

identify and encourage the organization’s “positive deviants” who are creating new solu-

tions and ways of working on their own initiative. This supports the nurturer image of the

change manager, shaping conditions that again will lead to unpredicted outcomes.

Additional
Reading

56 Chapter 2 Images of Change Management

Roundup

Here is a short summary of the key points that we would like you to take from this chapter,

in relation to each of the learning outcomes:

Evaluate the use that different authors make of the terms change agent, change man-

ager, and change leader.

Some commentators argue that the distinction between change managers and change

leaders is clear and significant. We have argued, in contrast, that in practice these two

roles are closely intertwined. This is a semantic squabble that is not worth arguing

about. The term change agent traditionally refers to an external consultant or adviser,

and while that role is still common, the term today is used more loosely, to refer to

internal as well as external change agents.

Understand the importance of organizational images and mental models.

The images or mental models that we all have provide us with ways of understanding

the world around us. While these images are useful, we have to appreciate that “ways

of seeing” are also “ways of not seeing.” Focusing on specific attributes of a situation

of necessity means overlooking other attributes—which may sometimes be important.

Change managers approach their task with an image of the organization, an image of

the change process, and an image of their role in change. These mental models—our

“images-in-use”—have profound implications for change management practice.

Compare and contrast six different images of managing change and change managers.

We explored six images of the change manager: director, navigator, caretaker, coach,

interpreter, and nurturer. Each is based on different assumptions about the role of man-

agement (controlling versus shaping) and about the change outcomes being sought

(intended, partly intended, unintended).

LO 2.1

LO 2.2

LO 2.3

Reflections for the Practicing Change Manager

images described in this chapter in

What are the strengths and limitations

of the images that you have identified

What skills do you think are associated

Are there areas of personal skill devel-

opment that are needed in order for

you to feel more comfortable in using

to bring consideration of alternative

strategies could you use to assist you in

As a small group exercise: Com-

pare your responses to the above

Chapter 2 Images of Change Management 57

Explain the theoretical underpinning of different change management images.

Each image finds support in organization theory and change management theory, which

was explored briefly. Nevertheless, it is important to recognize that these images, which

have strikingly different implications for practice, are based on research evidence and

theory.

Apply these six images of managing change to your personal preferences and approach,

and to different organizational contexts.

We identified three uses of the six-images framework: surfacing assumptions, assessing

dominant images, and using multiple perspectives and images. There are no “right” and

“wrong” images of change management. It is valuable to be able to interpret problems

and solutions in general, and change processes in particular, from different standpoints.

This “multiple perspectives” approach can help generate fresh thinking and creative

solutions.

This framework has other uses, explored in later chapters. One concerns the assessment

of change as successful or not. That judgement is often related to one image rather than

another. We often ask: Was it managed well? What went right? What went wrong? Did

we achieve what we wanted? However, judging success is open to interpretation. As

Pettigrew et al. (2001, p. 701) argue, “Judgements about success are also likely to be

conditional on who is doing the assessment and when the judgments are made.” The

six-images framework highlights the need to raise conversations early about judging

the success of change, and to ensure a broadly common view of that judgement across

the organization.

LO 2.4

LO 2.5

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61

3Chapter
Why Change? Contemporary
Pressures and Drivers

Learning objectives

By the end of this chapter you should be able to:

LO 3.1 Understand the environmental pressures that can trigger organizational

change.

LO 3.2 Explain why not all organizations are affected equally by external pressures.

LO 3.3 Explain why organizations often fail to change following crises.

LO 3.4 Identify internal organizational factors that trigger change.

LO 3.5 Relate differing images of managing change to pressures for change.

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62 Chapter 3 Why Change? Contemporary Pressures and Drivers

LO 3.1 Environmental Pressures for Change

Managers are faced with a paradox. On the one hand, organizations are advised to

change rapidly, or perish (Kotter, 2012). On the other, management is advised to avoid

the risks of implementing too much change too quickly (Bruch and Menges, 2010). As

noted in chapter 1, evidence suggests that the failure rate of planned change programs

is high. One survey of senior executives found a success rate of only 30 percent (Keller

and Aiken, 2008). Another, more optimistic study found that less than 60 percent of

reorganizations are successful (CIPD, 2014).

As failures of organizational change appear to be widespread, and widely acknowl-

edged, what drives managers to embark on such risky ventures? One answer is based on an

economic perspective, and is aligned to “management as control” images and assumptions:

In competitive economies, firm survival depends on satisfying shareholders. Failure to

do this will lead investors either to move their capital to other companies, or to use their

influence to replace senior management. Managers thus introduce change to improve

organizational performance in terms of profitability and higher company share prices.

An alternative view, aligned with “management as shaping” images and assumptions, is

the organizational learning perspective:

Organizations and human systems are complex and evolving and cannot be reduced to a sin-

gle objective of maximizing shareholder value. Change is also related to the need to increase

an organization’s adaptive capacity—because how to increase shareholder value, and the

knowledge underpinning that goal, are likely to change over time. Change is explained by

the desire to build capacity to respond to, and to shape, external pressures and demands.

Whatever the explanation, organizations are clearly faced with a variety of pressures to

change, from many directions. External pressures for organizational change include, for example:

economic and trading conditions, domestic and global;

new technologies and materials;

changes in customers’ requirements and tastes;

activities and innovations of competitors, mergers and acquisitions;

legislation, regulation, and government policies;

shifts in local, national, and international politics;

changes in social and cultural values.

Internal pressures for organizational change can include, for example:

new product and service design innovations;

low performance and morale, high stress and staff turnover;

new senior managers or top management team, who want to “make their mark”;

inadequate skills and knowledge base, triggering training programs;

head office and factory relocation, closer to suppliers and markets;

recognition of problems triggering reallocation of responsibilities;

innovations in the manufacturing process;

new ideas about how to deliver services to customers.

Chapter 3 Why Change? Contemporary Pressures and Drivers 63

In what follows, we will explore a selection of these external and internal pressures. But

change is not simply a matter of reacting to events. Organizations and individuals can antici-

pate trends and opportunities and be proactive as well. Susan Mohrman and Edward Lawler

(2012, p. 42) argue that we need to focus on “next practice” as well as “best practice” because:

The major challenge for organizations today is navigating high levels of turbulence. They operate

in dynamic environments, in societies where the aspirations and purposes of various stakeholders

change over time. They have access to ever-increasing technological capabilities and information. A

key organizational capability is the ability to adapt as context, opportunities, and challenges change.

Paradoxically, one outcome of change is often supposed to be equilibrium. Managers

are expected to stabilize the unstable and destabilize the rigid; adapt to the present and

anticipate the future; improve what is and invent what is to be; lead a renaissance while

preserving tradition, the possibilities for which are grounded in the belief that progress is

possible and that management can make a difference. As table 3.1 points out, the ways in

TABLE 3.1
Images of Change and Understanding the Pressures

Image Understanding the Pressures for Change

Director Change is a result of strategic pressure, entering new markets, or correcting an internal
problem to improve efficiencies. These pressures are controllable, and the management
task is to direct the organizational response.

Navigator Change results from strategic threats and opportunities, and from the need to deal with
internal problems. However, the best response may not be obvious, given the many and
often conflicting priorities that management faces, and the range of influences and com-
peting interests that need to be considered.

Caretaker The pressures for organizational change are many and inexorable, and managers cannot
control this agenda. External pressures arise from new regulations or market conditions, for
example. Internal pressures can be triggered by growth or operational innovations. How-
ever, these pressures can be overwhelming, and they are difficult to resist. The role of man-
agement, as caretakers, is to look after the organization as it is buffeted by these pressures,
having limited choice in the actions that need to be taken in response.

Coach The pressures for change are constant. They arise from the need to coordinate teamwork, values,
and mindsets, and to generate the collaboration that leads to improved organizational outcomes.
Change pressures are therefore continuous and developmental, and they help to shape the orga-
nization’s capabilities to respond to further change and to further improve performance.

Interpreter Given the many internal and external pressures for change, staff need management to provide
meaning, to help understand “what is going on.” Those who will be affected need to under-
stand the significance of their roles, what needs to happen and why, and where the organiza-
tion is heading. Managers must help to make sense of changes. This is a sense-making role,
providing clarity and contributing to individual identity and to organizational commitment.

Nurturer Organizations change as a result of a variety of forces, some weak, some strong. The
weaker pressures, however, can have a disproportionate impact on the organization. These
pressures may not all be rational, but may instead be chaotic and difficult to coordinate.
The management role, therefore, is to nurture or to develop the organization’s adaptive
capacity to respond to those challenges.

LO 3.5

64 Chapter 3 Why Change? Contemporary Pressures and Drivers

which managers experience those triggers of change, and those to which they attend, will

be influenced by their images of managing change.

To understand why managers embark on apparently risky change ventures, this chap-

ter begins by exploring the environmental pressures—some will argue imperatives—for

organizational change. We then consider why some managers do not respond to such pres-

sures. We take that discussion into an exploration of why “remedial” change often does

not happen where it would be expected, following accidents, disasters, and other crises.

Finally, we explore the numerous internal organizational pressures for change. It is impor-

tant to recognize that there are many triggers of organizational change, and that those that

are discussed here do not represent a comprehensive list.

Environmental pressures are explanations for change. These pressures take many

forms, and include opportunities (e.g., new technologies, products, and markets) as well

as threats (e.g., falling market share, tighter regulation, bad investments). At the extreme,

change may be necessary to avoid going out of business altogether. Here, we will explore

six sets of external environmental pressures that can lead to change. Change may come

about as a response to fashion; demographic trends; external mandate; globalization and

related geopolitical developments; “hypercompetition”; and threats to corporate credibil-

ity and reputation (figure 3.1).

An organization and its management rarely have the luxury of facing only one of these

external environmental pressures at any given time. For many organizations in developed

economies, most, if not all, of these pressures are constantly active, and all may be consid-

ered to be high priority.

Fashion
In 2001 Boeing, the well-known aircraft manufacturing company, initiated a series of

changes under the direction of its chief executive, Philip M. Condit (Holmes et al.,

2001). Condit was frustrated by the slow pace of change in the company, and con-

cerned about slow growth in sales of commercial jet aircraft. His changes were similar

to those introduced by Jack Welch at General Electric (GE), a multinational conglom-

erate that was widely recognized for its successful transformational changes. Following

GE, the changes at Boeing included:

a new corporate learning and training unit in St. Louis, to create a “unified company

culture”;

changing the organization culture;

The Hype Cycle

You can often gain valuable insight from radi-

cal management innovations, even if they fiz-

zle out. And they do fizzle out. Nine-tenths of

the approximately 100 branded management

ideas I’ve studied lost their popularity within a

decade or so. These include GE’s Work-Out, W.L.

Gore’s lattice structure, Xerox’s communities of

practice, Thermo Electron’s Spinout model, and

Google’s 20% innovation time policy.

Source: Birkinshaw (2014), p. 55.

Chapter 3 Why Change? Contemporary Pressures and Drivers 65

restructuring the business into three key divisions—commercial, military, and space;

giving the chief executives of those divisions greater freedom;

making the divisions compete for access to corporate funding;

setting high performance standards.

This is an example of what neo-institutional theorists refer to as mimetic isomorphism

(DiMaggio and Powell, 1983). This occurs when organizations imitate (mimic) the struc-

tures and practices of others, but not necessarily in the same sector, and usually those that

they consider to be legitimate and successful.

Organizational change can thus be a response to the latest management fad or fash-

ion, as individual managers wish to be considered professional, progressive, and up to

FIGURE 3.1

Fashion

“The next big thing”

let’s appear progressive

Demography

the silver tsunami

Boomers, Gen Y, Gen C

legislation regulation

social responsibility

Mandate

process, product, and service failures

governance problems

Reputation

disruptive, high-velocity innovation

out-of-sector competition

Hypercompetition

interdependent global economy

global warming, climate change

Geopolitics

Environmental pressures

for change

66 Chapter 3 Why Change? Contemporary Pressures and Drivers

date. As table 3.2 illustrates (selectively), management has been subjected to a constant

stream of fads. Eric Abrahamson (1996) points out that, while appearing to be novel

and valuable, many fads lack the systemic research that would legitimate their claims

to enhance performance. The “fashion setters,” including consulting firms, management

gurus, business publications, and business school academics, do not necessarily profit

from the critical assessment of these ideas. Some fads do benefit some organizations, but

Abrahamson also argues that some fads—downsizing, for example—can have devastat-

ing implications for organizations and their employees. One reason for the failure of fads

to deliver their promise is that most new methods, approaches, and techniques have to

be tailored to the circumstances of each new setting. It is rarely possible to copy exactly

what another organization has done and expect to achieve the same benefits over the

same period of time.

It is unlikely that managers will succumb continually to pressures to implement fash-

ionable changes that have limited benefits. Market forces and customer preferences propel

organizations in some directions, and not in others. Fads go through cycles. An innovative

idea first attracts the attention of journalists, academics, and consultants, and this is valu-

able in terms of codifying and publicizing new working practices. However, one result

of this attention is to heighten expectations, which can then be dashed as further appli-

cations fail to deliver as promised. Enthusiasm can then be replaced by skepticism, and

Decade Fashions

1950s Management by objectives (MBO)
Program evaluation and review technique (PERT)
Employee assistance programs (EAPs)

1960s Organization development
Sensitivity training and T-groups
The managerial grid (concern for staff, concern for results)

1970s Quality of working life movement (QWL)
Job enrichment
Quality circles

1980s Organization culture
Total quality management (TQM)
International Standards Organization 9000 (ISO 9000)

1990s Business process reengineering (BPR)
Autonomous, self-directed work groups
High-performance organizations
Lean and 5S: sort, systematize, shine, standardize, sustain

2000s The learning organization
Employee engagement
Disruptive innovation

2010s High reliability organizations (HROs)
Built-to-change organizations
The networked enterprise
Big data, data analytics, artificial intelligence

TABLE 3.2
A Short (Selec-

tive) History of

Management

Fashions (with

Acronyms)

Chapter 3 Why Change? Contemporary Pressures and Drivers 67

organizations start hunting for “the next big thing.” Julian Birkinshaw (2014, p. 57) sug-

gests that management should follow these steps before adopting another management fad:

1. Wait: Do not rush to adopt, but do not dismiss the approach either. Give the new idea

time to succeed or fail.

2. Identify the essence of the idea: What is the underlying logic, what are the underpin-

ning assumptions, what fresh insights led to this development?

3. Look for results: Did the new approach make the improvements that were expected?

Were there any side effects? Would this work in your organization, or would your cul-

ture, systems, and structures be barriers?

4. Experiment: Set up a trial, gather the evidence, review, and continue if successful.

Birkinshaw (2014, p. 57) concludes: “It’s easy to get so swept up in the glamour of a new

idea that the prospect of implementing it seems straightforward. But remember that success-

ful management innovators typically had to work very hard, over many years, to put their new

ideas into place. Applying those ideas inside your own company is likely to take even longer.”

Demography: From the Silver Tsunami to Generation C

Veterans, born 1925 to 1942; also known as the silent generation, matures, traditionalists

Baby Boomers, born 1943 to 1960; also just called Boomers

Generation X, born 1961 to 1981, also known as baby busters, the thirteenth, the lost

generation

Generation Y, born since 1981 onward; also known as millennials, nexters, echo boomers

Generation C, born since 1990; connected, communicating, always clicking

These dates are approximate—different commentators disagree

(Parry and Urwin, 2011)

Demographic changes, affecting workforce composition and motivation, pose some

of the greatest challenges for organizational change management in the twenty-first cen-

tury. In all industrialized economies, the workforce is ageing, as we live longer and have

fewer children. In 2010, the average (median) age of Americans rose to 37.2. In 2000, it

was 35.3. The proportion of the population who have retired from employment is growing

relative to the proportion still in work. This is an accelerating global phenomenon. In the

United States, the percentage of the population aged 65 or over is expected to double, from

only 10 percent in 1970 to 20 percent in 2050.

Baby Boomers have been described as a silver tsunami sweeping across affected coun-

tries (The Economist, 2010). This ageing population has social consequences. Boomers

who were born after the Second World War (which ended in 1945) started celebrating their

60th birthdays from around 2006. In 2014, the global population of those aged 65 or more

was 600 million; it was predicted that, by 2034, that population would almost double, to

1.1 billion (The Economist, 2014, p. 11). Boomsday, by Christopher Buckley (2007), is a

fictional account of the anger of younger generations whose taxes pay for the pensions,

health, and welfare of those Boomers in their old age. Governments have tried to raise

retirement ages to reduce the drain on welfare, healthcare, and pension budgets.

The silver tsunami has change management consequences. Organizations will need to

fill the gaps as Boomers retire, taking their knowledge and experience with them, while

68 Chapter 3 Why Change? Contemporary Pressures and Drivers

the proportion of skilled youngsters in the workforce is shrinking. Some older workers—

“nevertirees”—have decided to carry on working, and organizations will have to learn how to

manage them. Will older workers adapt to new technologies and working practices, and take

management orders from youngsters? These are new problems, and there is little research or

experience on which to draw. Some approaches to managing older workers include:

exit interviews to capture their wisdom;

mentoring systems in which Boomers coach their replacements;

phased retirement rather than a sudden stop;

shorter working weeks with flexible hours;

pools of retired staff who can be called upon for special projects;

working during busy periods punctuated by “Benidorm leave.”

A recent survey of over 1,000 managers found that most organizations had not yet

developed their age management policies (Pickard, 2010). Younger managers find it dif-

ficult to manage older workers, who have different drives and need flexibility (to care for

elderly parents and grandchildren, for example). Management styles have to be consulta-

tive, drawing on the experience of older workers for whom money is probably not the

main or only motivator.

Nevertirement and Nevertirees

Barclays Wealth is a bank for “high net worth” people (http://www.barclayswealth.com). To find out more

about their customers’ future plans, they surveyed 2,000 wealthy individuals, who had at least £1 million of

assets to invest. They found that, rather than planning a conventional retirement, many planned to go on

working ( Leppard and Chittenden, 2010):

Country % Planning to Work beyond Retirement Age

Saudi Arabia 92

United Arab Emirates 91

Qatar 91

South Africa 88

Latin America 78

UK 60

Ireland 59

USA 54

Japan 46

Spain 44

Switzerland 34

In other words, “nevertirement” could become more popular, and this may not apply just to the wealthy.

Organizations will need to change their human resource policies and working practices to deal effectively

with this trend.

Chapter 3 Why Change? Contemporary Pressures and Drivers 69

Generation Y are the children of the Boomers. Do Boomers and Gen Ys want different

things from work? Sylvia Ann Hewlett and colleagues (2009) suggest that these groups

actually share a number of attitudes, behaviors, and preferences. Their findings are based

on surveys of around 4,000 college graduates, followed by focus groups and interviews.

The rewards from work that Boomers regard as important are:

1. High-quality colleagues

2. An intellectually stimulating workplace

3. Autonomy regarding work tasks

4. Flexible work arrangements

5. Access to new experiences and challenges

6. Giving back to the world through work

7. Recognition from the company or the boss

The rewards from work that Gen Ys regard as important are:

1. High-quality colleagues

2. Flexible work arrangements

3. Prospects for advancement

4. Recognition from the company or the boss

5. Steady rate of advancement and promotion

6. Access to new experiences and challenges

Both groups want to serve a wider purpose, want opportunities to explore their interests

and passions, and say that flexible working and work-life balance are important to them.

They also share a sense of obligation to the wider society and the environment. (Gen Xs

are less likely to find those obligations important.) When choosing an employer, money is

less important, as they are interested in other forms of reward: teamwork, challenge, new

experiences, recognition.

In the context of managing organizational change, and given these demographic trends,

the contributions of vision (chapter 6) and communications (chapter 7) are likely to be central

to engaging the commitment and motivation of those who are going to be involved. Human

resource management policy and practice will need to emphasize teamwork, collaboration,

flexible working, flexible retirement, project work, short-term assignments, opportunities to

support external causes, and eco-friendly work environments. Another valuable practice may

involve intergenerational mentoring; Boomers often welcome the chance to mentor and support

Gen Ys, who can share their potentially better understanding of social networking technologies.

Generation C is the label given to those born after 1990. “C” stands for “connected,

communicating, content-centric, computerized, community oriented, always clicking”

(Friedrich et al., 2011, p. 3). This is the first generation to have grown up with the Internet,

social media, and mobile handheld computing, for whom 24/7 mobile and Internet con-

nectivity are taken for granted and freedom of expression is the norm. These technologies

encourage more flexible forms of working, and less hierarchical organizations, and they

are blurring the boundaries between work and personal life.

By 2020, Gen C will make up over 40 percent of the population in America, Europe,

and the BRIC countries (Friedrich et al., 2011). Gen C will be “on the grid 24/7”: being

70 Chapter 3 Why Change? Contemporary Pressures and Drivers

connected around the clock is normal. The number of mobile phone users in the world is

expected to grow from 4.6 billion in 2012 to 6 billion in 2020. Over the same period, the

number of Internet users will increase from 1.7 billion to 4.7 billion. Gen C will thus have

a wide range of personal relationships driven by social networks, voice channels, online

groups, blogs, and electronic messaging. These facilities will create fast-moving busi-

ness and political pressures as information and ideas spread more widely, more quickly.

Most Gen C employees will bring their own computers to work rather than use corpo-

rate resources. There will probably be more work done by virtual project groups, with

fewer face-to-face meetings, and less frequent travel. Organizations will probably have

to change working conditions and practices to accommodate those preferences, and to

exploit the opportunities.

External Mandate
In 1996, ChevronTexaco (then Texaco) settled a racial discrimination lawsuit for $176

million. The suit was filed by the company’s African-American staff, who alleged that

managers and employees were involved in racist acts. They claimed that racism was insti-

tutionalized in the company’s culture and practices to such an extent that it “caused Tex-

aco to be branded the worst of corporate rogues” (Labich, 1999). The settlement followed

other companies such as Shoney’s, which in 1992 paid $133 million to settle a discrimi-

nation suit on behalf of 20,000 people, and Denny’s, which in 1994 paid $54 million to

settle two cases in which customers claimed the restaurant had not served or seated them

(Faircloth, 1998). In 2000 Coca-Cola settled a case for $192 million (Salter, 2003).

The settlement agreements for ChevronTexaco and Coca-Cola included organizational

changes, to establish external diversity task forces and to monitor company practices and

ensure fair treatment for minorities (Salter, 2003). Both companies were under court orders

to improve their record on diversity management. This led to other changes in corporate

policies and cultural practices. For example, at ChevronTexaco, staff had to attend diver-

sity training, managers attended communication courses, minorities were targeted for new

hires, and key executive appointments were made to symbolize the shift in culture. New

change programs were implemented to eliminate racism from hiring, retention, and pro-

motion decisions (Labich, 1999). In September 2002, the fifth report of ChevronTexaco’s

Equity and Fairness Task Force outlined the changes made in the 1996 settlement; there

were still some problems to be solved, but the company culture had changed for the better.

It is now widely accepted that organizations should support a range of environmental as

well as social causes. The economist Milton Friedman (1970) once argued, “The business

of business is business.” His view is now unfashionable. The corporate social responsibility

(CSR) movement expects companies to promote environmental or “green” issues as well as

social policies. This has become a major source of pressure for change. Many organizations

are addressing these issues, to strengthen their reputations as “responsible corporate

citizens.” The importance of this viewpoint has been highlighted in the twenty-first century

by the corporate scandals at Enron, WorldCom, and the Japanese company livedoor, where

executives were accused of fraudulent transactions that benefitted them personally. These

cases led to new regulations affecting corporate governance in America—the infamous

Sarbanes-Oxley Act of 2002. Expensive and cumbersome to implement, that legislation was

designed to restore public confidence by improving corporate accounting controls. Table 3.3

lists typical CSR policies (Huczynski and Buchanan, 2013, p. 68).

Chapter 3 Why Change? Contemporary Pressures and Drivers 71

Change is often forced on organizations through formally mandated legislation and

regulation. Neo-institutional theorists call this coercive isomorphism (DiMaggio and

Powell, 1983), which may be formal or informal:

Formal coercive pressures include government mandates such as new laws and poli-

cies. Organizations are thus forced to change to meet new requirements relating to,

for example, pollution, taxation, or affirmative action. Subsidiary organizations may be

forced to adopt accounting standards, performance criteria, and other practices to suit

the parent organization.

TABLE 3.3
CSR Policies and Practices

Environment

1. Pollution control
2. Product improvement
3. Repair of environment
4. Recycling waste materials
5. Energy saving

Equal Opportunities

1. Minority employment
2. Advancement of minorities
3. Advancement of women
4. Support for minority businesses
5. Support for other disadvantaged groups

Personnel

1. Employee health and safety
2. Training
3. Personal counselling
4. Subcontractor code of behavior
5. Providing medical care or insurance

Community Involvement

1. Charitable donations
2. Promoting and supporting public health initiatives
3. Support for education and the arts
4. Community involvement projects

Products

1. Safety
2. Quality
3. Sustainability, percentage of materials that can be recycled

Suppliers

1. Fair terms of trade
2. Blacklisting unethical, irresponsible suppliers
3. Subcontractor code

72 Chapter 3 Why Change? Contemporary Pressures and Drivers

Informal coercive pressures arise when interdependent organizations persuade (perhaps

force) each other to behave in particular ways, and to collude with each other in cer-

tain actions. Although not formally or legally required, resisting these pressures means

breaching strong cultural norms; conformity may not be mandatory, but is expected.

These pressures for change, therefore, can be overwhelming, and irresistible.

Globalization and Geopolitical Developments
In the twenty-first century, developed Western economies see both threats and oppor-

tunities in the economic growth of countries such as Brazil, Russia, India, and China—

the so-called BRIC economies. Those economies have lower labor costs and have

become attractive locations for manufacturing operations and for customer service call

centers. There is a widespread perception that “outsourcing” manufacturing and ser-

vice operations in this way is happening at the expense of jobs in North America and

Europe. Collectively, these trends and developments have been captured by the label

globalization—the intensification of worldwide social and business relationships that

link localities in such a way that local conditions are shaped by distant events.

Natural disasters in one part of the world can have global consequences. In March

2011, one of the strongest earthquakes ever recorded occurred off the northeast coast

of Japan. The earthquake triggered a cascading event sequence that included a tsunami

followed by containment failures at the Fukushima nuclear power plant. These events led

to considerable loss of life, damage to property, disruption to business, damage to the

Japanese economy, and censure for government ministers and power company managers

for regulatory failures contributing to the power plant problems (Kingston, 2012). The

quake and tsunami closed key ports and airports and disrupted the global supply chain for

semiconductor products (of which Japan produces 20 percent). Honda, Mitsubishi, Nissan,

Suzuki, and Toyota suspended their car manufacturing operations, and Nissan considered

moving a production line to the United States. Component supplies to Boeing and Sony

Coca-Cola Thirsty for Sustainability

Sensitive to accusations that it runs a wasteful,

unethical, and polluting business that does not

make a social contribution, Coca-Cola in Europe

responded with a series of corporate responsibility

initiatives (Wiggins, 2007):

Restricting the marketing of its products to

children

Working with the World Wildlife Fund to find

ways to cut back and to replenish the 290 billion

liters of water that the company uses annually

Working with Greenpeace to develop environ-

mentally friendly beverage coolers and vending

machines to reduce the emission of hydrocar-

bon greenhouse gasses

Monitoring the agricultural impact of the com-

pany’s tea, coffee, and juice drinks products,

which require it to purchase ingredients from

around the globe

Websites accuse the company of exaggerating

the benefits of an unhealthy product, of manage-

ment complicity in the deaths of union organizers

in bottling plants in South America, and of reducing

and polluting local water supplies in India:

www.killercoke.org

www.indiaresource.org/campaigns/coke/2004/

risingstruggles.html

Chapter 3 Why Change? Contemporary Pressures and Drivers 73

were also disrupted. The terrorist attacks on New York on September 11, 2001, and the

outbreak of severe acute respiratory syndrome (SARS) were radically different crises that

also had global implications for a range of organizations, and not just airlines and related

businesses.

In the face of such events, companies may need to review supply chains, joint ventures,

the locations of their facilities, and other investment decisions. Many types of geopolitical

event can have consequences for organizations that trade with and/or have investments in

affected regions. Examples include civil war (e.g., Syria, since 2011), political instability

(e.g., Egypt, since 2011), and other international geopolitical tensions (e.g., Russia and

Ukraine, since 2014). Organizations may simply withdraw facilities and discontinue rela-

tionships with regions and organizations perceived to represent physical or financial risks.

In 2001, faced with escalating violence from separatist Aceh rebels, Exxon suspended gas

production at its Arun facility in Indonesia and evacuated its staff.

John Kotter (1995) argued that four sets of forces were translating global trends and

developments into organizational adaptations and changes: new technologies, the expan-

sion of international trade, maturing markets, and the end of the “cold war.” While the lat-

ter set of factors may have been stalled, if not reversed, by the Russian annexation of the

Cloud Control

External pressures for organizational change can

have “knock on” effects on internal support func-

tions not directly involved in shifts in strategy. Adobe

is a global software company, known for products

such as Acrobat, Flash Player, and Photoshop. Based

in San Jose, California, Adobe has 11,000 employees

in 43 countries, with annual revenues of $4.5 bil-

lion, half of which are generated outside the United

States. New technologies, however, are opening up

opportunities for small competitors.

In 2011, Adobe decided to stop selling its

licensed products in shrink-wrapped packages

and became a cloud-based provider of digital ser-

vices. Instead of receiving a CD in a box, customers

either download the software they require or pay

a monthly subscription. For employees, this meant

new ways of working, and a new role for the human

resource (HR) function.

Adobe had a traditional office-bound administra-

tive HR function. That worked well when Adobe was

selling software products, but it was less appropri-

ate to the cloud-based approach. HR had to work

as “business partners” located in employee resource

centers. HR consulting teams worked on problems

directly with senior managers and with staff on the

ground. HR roles became more varied and, being

less office-bound, more people-oriented. Rather

than wait for calls, HR staff conducted “walk-ins,”

visiting on their own initiative parts of the company

to explore what support they could provide. Adobe

employs large numbers of “millennials” (Gen Ys)

who are motivated by innovation, change, and per-

sonal development. Keeping them engaged meant

designing varied, challenging jobs.

Adobe also stopped conducting annual perfor-

mance reviews, as they consumed a lot of manage-

ment time, demotivated staff, and contributed to

high staff turnover. With the new “check in” system,

staff review and set their own development goals

when they think this is appropriate, with immedi-

ate and ongoing feedback rather than an annual

conversation. HR runs workshops for managers on

providing effective, positive feedback. Staff turnover

has fallen to its lowest level ever.

Why did HR at Adobe change the way in which

it operated? Because the company strategy and cul-

ture had changed, and HR had to find new ways of

working to support those developments.

Sources:

http://www.adobe.com/company/fast-facts.html

Smedley, T. 2014. Send in the cloud. People Management, May: 43–44.

74 Chapter 3 Why Change? Contemporary Pressures and Drivers

Ukrainian province of Crimea in 2014, Kotter’s general argument remains valid, particu-

larly with regard to the series of organizational adaptations and changes that he identifies.

Figure 3.2 presents an updated version of his argument.

Another significant geopolitical pressure affecting all organizations, regardless of size,

sector, or location, is climate change due to global warming—an issue that has risen to

prominence since Kotter developed his argument. Climate change has the potential to

reshape dramatically the organizational landscape, in many ways. Traditionally seen as

another corporate social responsibility issue, Michael Porter and Forest Reinhardt (2007,

p. 22) argue that climate change has now become a business problem, with operational and

strategic dimensions:

A firm that has more employees than it needs in its shipping department is operationally

ineffective; its managers are wasting resources and creating a drag on performance. In the

FIGURE 3.2
Globalization

and Organiza-

tional Change

Technological

innovation

fast and easy

communication

fewer tarif

barriers

slower growth in

developed

economies

privatization and

deregulation

continuing threat

of low cost

imports

geopolitical

instability

civil and inter-state

conflicts

non-state groups

seeking territorial

control

sporadic terrorism

freer trade

free global

capital flows

global finance

system more

vulnerable to

minor shocks

global

information

networks

rapid transport

“global village”

social networking

More risks, more

competition, more

speed

reduction in number and significance of traditional “working class”

increased female participation in workforce

growth of services, decline of manufacturing

growth in number and significance of ‘knowledge workers’

increasingly sophisticated information and communication technologies

increasing cognitive skill demands

new structures, holacracies, virtual organizations, networks, alliance

mergers, acquisitions, sector consolidation

organizational culture change

“fast, flat, flexible” organization designs

More opportunities,

new markets, fewer

barriers

International

trade
Mature markets

Globalization

Organizational adaptation and change involving:

Changing “world

order”

Chapter 3 Why Change? Contemporary Pressures and Drivers 75

same way, a firm that produces excess emissions in its shipping operations is also operation-

ally ineffective—it is wasting resources and incurring unnecessary costs that are certain to

rise. Implementing best practices in managing climate-related costs is the minimum required

to remain competitive.

In addition to understanding its emission costs, every firm needs to evaluate its vulnera-

bility to climate-related effects such as regional shifts in the availability of energy and water,

the reliability of infrastructures and supply chains, and the prevalence of infectious diseases.

The firm’s leaders should systematically assess these risks and then decide which to reduce

through redesigning operations, which to transfer to others through insurance or hedging

contracts, and which to bear.

To assess the strategic implications, Porter and Reinhardt (2007) argue that organiza-

tions need to adopt an “inside out, outside in” perspective. “Inside out” means understand-

ing the impact that the organization has on its environment. “Outside in” means assessing

how climate change will affect how the organization operates. Regulations concerning

greenhouse gas emissions and emissions costs are likely to make some business models

expensive, particularly those that rely on transport-intensive supply chains. E-commerce,

with high numbers of small shipments, may be affected.

Eric Lowitt (2014) argues that, although a warmer planet is threatening to many orga-

nizations, there are also opportunities. Lowitt suggests how to reduce operational, regula-

tory, and reputational risks, and provides ideas for cutting costs, improving performance,

improving customer relationships, and increasing competitiveness and organizational

resilience. He explores a range of organizational responses to four climate change issues

concerning: threats to raw material supplies; rising costs of energy and materials; threats

to distribution from extreme weather events; and alienating customers by ignoring envi-

ronmental impacts (table 3.4 summarizes).

Table 3.4
Climate Change Impacts and Organizational Responses

Impacts Responses

Unpredictable availability of raw
materials, volatile prices

ExxonMobil includes a carbon emissions price in pro forma financial
calculations
Walmart suppliers must certify that all sourcing of materials is legal and
environmentally sound

Wasted energy and materials
drive up manufacturing costs
and threaten regulatory action

Apple has a manufacturing plant in Arizona that runs entirely on renew-
able energy
Nike has a facility that eliminates the use of water and process chemi-
cals in fabric dyeing

Extreme weather events disrupt
transport and distribution

HP and Dell have increased their use of ocean freight shipments, rather
than air, due to climate change concerns
BT (British Telecommunications) plans infrastructure investment on the
basis of flooding scenarios, 50 to 100 years ahead

Alienate customers by ignoring
environmental impacts

Patagonia has a “buy less” campaign that encourages customers to
resale used Patagonia items
Ford improved the fuel economy of its top-selling truck by making the
body from aluminum to reduce the vehicle weight

76 Chapter 3 Why Change? Contemporary Pressures and Drivers

Hypercompetition
In 1998 Gateway, the personal computer company, faced fierce competition, overshad-

owed by Dell, its direct-sales rival. Gateway founder and chief executive Ted Waitt

took the company through a major restructuring, hiring 10 new top managers and

changing the way the company went about doing business, including its name, prod-

ucts, alliances, and business strategy (Kirkpatrick, 1999). In 2008, the California-based

battery and electric powertrain maker Tesla launched its first all-electric sports car,

the Roadster. Tesla was not previously considered to be in the automotive manufactur-

ing sector. Rejecting the traditional automotive dealership model, Tesla sold its cars

directly to customers through “galleries” located in shopping malls. The first driverless

cars are likely to have been developed by Google, an Internet services company. The

Internet and smartphones have also generated innovative business models, such as the

“freemium,” where customers get the basic product free and pay a premium, usually a

subscription, for more powerful functions. Examples include LinkedIn, Dropbox, Spo-

tify, and NYTimes.com (Kumar, 2014). In 2013, the U.S. Central Intelligence Agency

awarded a $600 million contract for a data center, not to IBM or another computer

company, but to Amazon, an online retailer.

These developments represent the hypercompetitive environment that many organiza-

tions now face (D’Aveni, 1994). Terms such as “disruptive innovation,” “high velocity,”

“postbureaucratic,” and “chaotic” have been used to describe this environment, which

some commentators associate with a “postmodern organizational paradigm.” When orga-

nizations from other sectors start selling products and services that compete with yours,

you are facing hypercompetition.

Aligned with the rise of e-commerce and the Internet, organizations are faced with

global changes in consumer preferences, industry boundaries, social values, and, as

mentioned earlier, demographics. Organizations are forced to deliver goods and services

more quickly, more customized, and more flexibly. But hypercompetition means that

market leaders cannot be complacent. By 2007, Dell was facing challenging times, as

profits and share price declined. After 20 years of outstanding performance, with sales

rising from $500 million in 1991 to $32 billion in 2001, Dell was facing the combined

Pressure to Change at YouTube

It is not only established, pre-digital age organiza-

tions that are subject to pressure to change. The

“new kids on the block” are not exempt, as Nicole

LaPorte (2014) explains.

One of the key reasons that Susan Wojcicki was

appointed in 2014 as Google’s senior vice president

in charge of YouTube was that, despite YouTube

being one of Google’s most important brands, there

was a perception that the brand was “punching

below its weight” (Ynon Kreiz, CEO of Maker Stu-

dios: La Porte, 2014, p. 61). There was a widespread

view that YouTube had yet to develop a business

model that produced the volume of revenue that

its popularity should deliver. While Facebook’s mar-

ket capitalization was $170 billion, that of YouTube

was only $15–$20 billion, reflecting the fact that

Facebook had been more successful in migrating its

audience and business to phones.

Chapter 3 Why Change? Contemporary Pressures and Drivers 77

effects of the decline in the quality of after-sales service, highly efficient competitors

such as Lenovo who had substantially eroded Dell’s cost advantage, and growing

consumer sentiment that Dell was “well off the pace” (Kirkpatrick, 2006). Michael

Dell commented, “This has been a wake-up call for us. We’re using this whole period

as a time to re-examine every part of the company. If you ask, ‘Is Dell in the penalty

box?’ Yeah, Dell’s in the penalty box. Then we’ll use this opportunity to fix everything”

(Kirkpatrick, 2006, p. 36).

Such pressures have required a variety of organizational changes, as in the case of Del-

phi Corporation (previously Delphi Automotive Systems Corporation). The Delphi plant

in Oak Creek, Wisconsin, is an automotive supplier of catalytic converters. Its history dates

back some 100 years, although it was spun off as a former division of General Motors in

1999. A number of dramatic changes were made to the plant in the subsequent two years,

moving it from an old-style assembly line to one based on small cells of workers. Each

cell of around four people was organized in the form of a U or a circle, and plastic con-

veyor systems that could be dismantled quickly and reformed to meet new orders were

used to deliver the necessary parts. The workers in each cell were involved in decision

making, with responsibility for work scheduling, quality, and productivity. The modular

and portable nature of the workstations enabled greater flexibility, speed, and customiza-

tion in manufacturing converters. This was necessary to meet the demands of automakers

who wanted converters customized to meet their specific needs, and who also were reduc-

ing the numbers of their suppliers.

These business environment pressures meant that the former delivery time of 21 days

was no longer adequate, and neither was the inflexible assembly line, which was unable

to deliver product variety. The end result of the changes was a system that could complete

customized orders in five days and productivity that was 25 percent higher. However, even

changes such as these in its Oak Creek plant could not fend off the hypercompetitive pres-

sures facing the Delphi Corporation across its operations. In October 2006, the Delphi

Corporation filed for bankruptcy, having shed some 1,200 people from its Oak Creek plant

over the previous year. Their chief executive Robert Miller indicated in February 2007

that, in relation to all its U.S. plants, the company was discussing with stakeholders a

What Worries Dropbox?

Dropbox CEO Drew Houston is concerned that Drop-

box needs to keep evolving and not rest on its lau-

rels. He’s worried that his business will be attacked,

not by Google, Microsoft, or Apple, but by “the next

twenty-something who wedges her way into his user

base and peels off Dropbox’s features before he can

build more of them” (McCorvey, 2015, p. 104). He

doesn’t want to join the list of innovative companies

who, within a short space of time, go from being

“the disruptor” to “the disrupted.”

His awareness of this danger is manifest in that

one of the first things that he shows new recruits

to Dropbox is a slideshow featuring the logos of

Myspace, Netscape, Lotus, RIM, and Friendster as

cautionary tales.

“What do these companies have in common?”

Houston asks his new colleagues. “No one wears

their T-shirts anymore, except maybe as a Hallow-

een costume” (McCorvey, 2015, p. 104).

78 Chapter 3 Why Change? Contemporary Pressures and Drivers

comprehensive restructuring to restore competitiveness (Dressang and Barrett, 2006). The

pressures of hypercompetition are not always easy to anticipate.

Maintaining Corporate Credibility and Reputation
Reputational pressures can arise suddenly. In August 2007, Mattel, the world’s largest

toy manufacturer, recalled more than 10 million toys as a result of quality-control prob-

lems in the Chinese factories where they were made. Business journalists were asking

two key questions: “What is going to be the reputational damage?” and “What is Mattel

going to do to try to minimize it?”

During the 1990s, Walt Disney Company was cited by BusinessWeek as having one

of the worst corporate boards in the United States. Issues included close ties between the

chief executive and directors, lack of management experience, and minimal oversight of

the company (Lavelle, 2002). However, it was not until the corporate crises that confronted

Enron, Tyco, and WorldCom that Disney and other companies started to change their gov-

ernance structures and practices. At Disney:

only independent directors were allowed on audit and compensation committees;

limits were placed on the number of other boards of which directors can be members;

directors had to own a minimum of $100,000 in stock of the company;

board meetings were held separate to management;

ties between the company and directors were severed;

consulting firms were not used for financial auditing purposes.

Change is thus often associated with maintaining proper corporate governance mecha-

nisms to ensure a positive reputation. Some companies (such as Walmart) have a board-

level director responsible for reputation management. Corporate reputation, defined as “a

collective representation of a firm’s past actions and results that describes the firm’s ability

to deliver valued outcomes to multiple stakeholders,” is an intangible but important corpo-

rate asset, being positively correlated with organizational performance (Fombrun and van

Riel, 1997, p. 10). Maintaining and enhancing corporate reputation is therefore important

to an organization’s survival, although the pressure to change to maintain reputation may

vary from company to company.

Sometimes strategic changes can signal that an organization is taking steps to “put its

house in order.” One common sign of “a new era” is the symbolic exit of a high-profile

appointment, such as the chief executive; examples include the departures of Gerald

Levin from AOL Time Warner, Jean-Marie Messier from Vivendi Universal, and Thomas

Middelhoff from Bertelsmann. Gunther and Wheat (2002, p. 130) note, “These executives,

as it happened, had all bet too heavily on the Internet; their companies performed poorly,

and they were held accountable. That’s the way shareholder capitalism is supposed to

work.” These symbolic actions attempt to influence shareholders’ sense-making processes

with respect to the credibility and reputation of the organization. Of course, some changes

that are intended to create a positive image may be disrupted by other events. One iconic

example was the Macondo Well blowout in the Gulf of Mexico in April 2010 that killed

11 workers and seriously damaged the reputation for risk management and safety that BP

had been trying to rebuild following previous disastrous or damaging workplace incidents

(National Commission, 2011).

Chapter 3 Why Change? Contemporary Pressures and Drivers 79

LO 3.2 Why Do Organizations Not Change in Response
to Environmental Pressures?

Organizations and their managers do not all respond to external pressures for change

in the same way. Some resist, some delay their response, and some may not even

recognize the issues as important. To explain why external pressures do not always

lead to change, we will outline four debates. The first concerns the tension between

organizational learning and “threat-rigidity.” The second concerns objective versus

cognitive constructions of the environment. The third involves the balance between

forces for change and forces for stability. Finally, we consider bridging and buffering

strategies.

Organizational Learning versus Threat-Rigidity
Not all organizations adapt when faced with external pressures. In the 1990s, Walt

Disney did not rectify its corporate governance until prompted by other similar scandals.

Nike was slow to respond to criticism for having products made offshore in exploitative

working conditions. It is not clear, therefore, whether environmental pressures facilitate

or inhibit adaptation and innovative organizational change. Organizational learning

theorists argue that environmental pressures do lead to change, as managers learn from

problems and try to close the gap between performance and aspirations. Threat-rigidity

theory, however, argues that pressures inhibit change, as management decisions become

constrained when faced with threatening problems (Mone et al., 1998).

Clark Gilbert (2005, 2006) considers the case of an organization facing discontinu-

ous change, triggered by fundamental shifts in its operating environment. One example is

the development of digital media, which have affected traditional “hard copy” newspaper

(and textbook) print products. Gilbert argues that change results from performance gaps.

These gaps may be threat-based, such as a decline in sales and profit. Gaps may also be

opportunity-based, such as developing new products. Threats, however, can trigger rigid

behavioral responses, restricting information flow, constraining decisions, and empha-

sizing control over existing resources. Opportunity-based responses, on the other hand,

may suggest new, flexible ways of working, but because current capabilities and practices

remain successful, commitment to change may be lacking.

Gilbert argues that this paradox occurs because “it is not that one set of capabilities

suddenly becomes obsolete, to be replaced with another. Rather, it stems from the fact that

the path from one capability to the other is not continuous. In such settings, the previous

position may continue to evidence residual fit, even while the new position expands and

develops” (Gilbert, 2006, p. 151). IBM continued to develop its mainframe products for

20 years, despite the emergence of the minicomputer market that fundamentally changed

the industry. The paradox suggests that companies in this situation need to be able to have

coexisting frames that focus on both threats and opportunities, one frame protecting cur-

rent business and the other helping to move the company into new arenas. This can be

achieved, for example, through structural differentiation, with separate organizational

units dominated by different cognitive frames. Senior management must be able to inte-

grate these competing frames, ensuring that the company takes appropriate, timely actions

across its operations.

80 Chapter 3 Why Change? Contemporary Pressures and Drivers

“Trapped by success” is another reason why organizations can fail to respond to pres-

sures for change. Sull (1999) argues that successful companies may be trapped by their

“winning formula” when conditions change. Arrogance founded on success can lead to

the assumption that market dominance will continue unchallenged. Cognitive frames thus

become blinkered by success; operating routines become embedded as correct; relationships

with stakeholders inhibit the exploration of new ventures; shared beliefs become company

dogma. Organizations can thus become “learning disabled” and not respond appropriately

to pressures for change. Some commentators argue that Nestlé was slow to respond to the

impact of the Internet because of the long-term market success of its brands. That suc-

cess linked a risk-averse culture to a bureaucratic structure. Similarly, one interpretation of

Dell’s declining fortunes in 2006 is that it “succumbed to complacency in the belief that its

business model would always keep it far ahead of the pack” (Byrnes et al., 2007).

Environment: Objective Entity versus Cognitive Construction
It is tempting to think of the environment, “the world out there,” as a physical presence

generating pressures to which management then has to respond. That notion has been

challenged by the strategic choice perspective, which argues that organizations make or

“enact” their own environments by deciding the sectors and markets in which they will

operate. Those decisions are typically based on the personal preferences of powerful

senior managers (Child, 1972, 1997). The strategic choice perspective challenged the

view that an organization’s internal structure and processes were largely determined by

external contingencies and that managers were therefore limited to ensuring that the

organization was appropriately adapted to its context.

Treating the environment as an objective reality, the question of the accuracy of man-

agement perceptions of the key contingences and pressures arises. Boyd et al. (1993) iden-

tify two kinds of perceptual errors:

A Type 1 error occurs when the environment is (objectively) stable, but managers per-

ceive it as turbulent and take (unnecessary) actions.

A Type 2 error occurs when managers threaten the survival of their firms by failing to

act because they perceive the environment as stable when it is (objectively) turbulent.

Advocating the “enacted environment” perspective, Linda Smircich and Charles Stub-

bart (1985) also argue that “the outside world” is a construction based on individual per-

ceptions. Even within a single organization, managers are likely to interpret differently

what is happening in the external environment and to reach different conclusions with

regard to changes that may or may not be desirable. William Bogner and Pamela Barr

(2000) take this position further, arguing that managers’ sense-making contributes to

the perpetuation of hypercompetitive environments. They suggest that managers’ cogni-

tive frameworks influence what they notice, how they interpret events, and the resultant

actions. The shared beliefs that develop over time in an industry then become taken for

granted. In hypercompetitive environments, Bogner and Barr (2000, p. 221) argue:

A common cognitive framework emerges that suggests to managers that success is based on

a series of rapid and anticipatory actions that move industry to the next round of competition.

Institutional forces pressure firms to adopt the behaviors of those that are more successful,

and process-dominated recipes emerge as the new industry recipe when it becomes apparent

that the better-performing firms are those that utilize the adaptive sense-making processes.

Chapter 3 Why Change? Contemporary Pressures and Drivers 81

In other words, hypercompetitive environments and the organizational changes associ-

ated with them are perpetuated by the cognitive interpretations of managers. In this per-

spective, managers are trapped by their cognitive sense-making frames.

Forces for Change versus Forces for Stability
Mark Mone et al. (1998) argue that four sets of factors affect whether or not environ-

mental pressures will lead to innovation and change when an organization is faced with

decline:

Institutionalized mission: Where stakeholders have clear expectations of how an organiza-

tion will pursue its goals, the organization’s capacity to innovate will be constrained. In

contrast, relaxed or ill-defined stakeholder expectations can act as a catalyst for innova-

tion by giving the organization more flexibility to respond to the problems it faces.

Power structures: The capacity for innovation is constrained when power is diffuse in an

organization, but power that is concentrated acts as a catalyst by increasing the capacity

for making decisions and allocating resources to implement change.

Resource commitment: Where resources are already committed, innovation is stifled, but

where there are high levels of uncommitted resources, innovation is encouraged.

Explanations of the problem: Where organizational decline is perceived to be beyond man-

agement control, attempts to innovate are unlikely; where decline is attributed to con-

trollable factors, the necessity for and incentive to innovate are clearer.

These arguments alert us to the need to consider both the forces for stability and for

change, and how those forces compete and interact. For example, a hypercompetitive envi-

ronment could be seen as an “obvious” driver of innovation and change. But as Carrie

Leana and Bruce Barry (2000) argue, this view overlooks the forces for stability that may

also be in play along with those forces for change: “both are a necessary part of organiza-

tions’ effective functioning in the long-term.” Table 3.5 summarizes these forces.

TABLE 3.5
Forces for Change, Forces for Stability

Forces for Change Forces for Stability

Adaptability of the organization to its
environment

Cost containment, e.g., making human resources a
variable rather than a fixed cost

Impatient capital markets demanding more
immediate returns on investments

Control through managerially imposed performance
targets

Competitive advantage, being responsive to
changing market conditions

Institutionalism of current practices due to solidity of
past practices and power structures

Transaction costs, e.g., stable employment allows
investment in staff development

Sustained advantage gained through stable
organizational relationships difficult to imitate

Organizational social capital, established trust
among coworkers becomes a valued asset

Predictability and uncertainty reduction, the need for
which inhibits change

Source: Based on Leana and Barry (2000).

82 Chapter 3 Why Change? Contemporary Pressures and Drivers

Bridging (Adapting) versus Buffering (Shielding)
Responding to pressures for change arising from environmental uncertainty is a classic

theme in organization theory. James Thompson (1967, p. 159) argued, “Uncertainty

appears as the fundamental problem for complex organizations, and coping with uncer-

tainty, as the essence of the administrative process.” There are two broad strategies for

managing uncertainty: bridging and buffering.

Bridging strategies are designed to maintain organizational effectiveness by adapting to

external changes. For example, in a school, bridging strategies may be used to lift student

educational performance in deprived socioeconomic areas. Strategies might include invit-

ing parents and other family members to assist classroom teachers.

Buffering strategies are designed to maintain organizational efficiency by avoiding

change, by shielding the organization from external pressures. Thompson (1967) describes

a number of techniques for smoothing the effects of external shocks through forecasting,

planning, and stockpiling: “By the time environmental shock waves reach the stability-

sensitive technical core, they are diffused into manageable adjustments and innovations”

(Lynn, 2005, p. 39). Returning to the school example, a principal may shield teaching staff

by insisting on following formal rules that state that external groups such as parents, com-

munity agencies, and businesses must make any initial contact through the principal rather

than directly to a teacher. Martin Meznar et al. (2006) found that when organizations were

“in the public eye,” getting a lot of press coverage, buffering strategies were more likely to

increase. This involved using public relations techniques to promote their position and to

change public perceptions and expectations.

In practice, the avoidance of organizational change by buffering may also depend on

organizational networks, which are able to “share” buffering strategies across a number of

organizations. Most organizations may have to engage both buffering and bridging strate-

gies simultaneously, depending on the circumstances that they face. However, buffering

may make an organization less competitive, by insulating it against necessary innovation

and change.

LO 3.3 Why Do Organizations Not Change after Crises?

Why would organizations not implement change following accidents, crises, and disas-

ters, in order to prevent further similar events? This is a situation in which it might be

assumed that change would be welcome, automatic, straightforward. Expectations and

receptiveness should be high, resistance low. The evidence shows, however, that these

assumptions are often incorrect.

Victoria Climbié, an eight-year-old girl, was killed by her guardians in the London

borough of Haringey in 2000. The public inquiry into her death, chaired by Lord Laming

(2003), blamed systemic failures among the agencies responsible for monitoring vulner-

able children: local authority, social services, National Health Service, police. The inquiry

made 108 recommendations. In 2007, also in Haringey, 17-month-old Peter Connelly was

killed by his mother and her boyfriend, while under the supervision of the same agen-

cies that had failed Victoria (Care Quality Commission, 2009; Laming, 2009). These

cases attracted significant press and media coverage in the United Kingdom. Interviewed

in January 2008, Laming observed that many child protection agencies had ignored his

Chapter 3 Why Change? Contemporary Pressures and Drivers 83

recommendations (BBC, 2008). Asked how he felt about similar cases of child abuse since

his report in 2003, Laming replied, “I despair about the organizations that have not put in

place the recommendations which I judged to be little more than good basic practice. I

reject the notion that any of this is rocket science. I believe this is about day by day good

practice, and I am disappointed if there are organizations that took several years to put in

place recommendations that I judged could be put in place within a matter of months.”

Victoria and Peter suffered appalling abuse. Press coverage included graphic images of

their injuries. How could a similar tragedy occur in the same setting? Why were Laming’s

(2003) recommendations not all implemented if they were “good practice”?

This is a recurring narrative that applies to many different kinds of event. Another iconic

example concerns the losses of the NASA space shuttles Challenger (1986) and Colum-

bia (2003), the causes of which displayed striking similarities (Vaughan, 1996; Columbia

Accident Investigation Board, 2003; Mahler and Casamayou, 2009). The NASA shuttle

losses were complex incidents, and they have been subjected to exhaustive analysis, but two

conclusions are significant. First, although the immediate causes of these disasters were

technical (O-ring failure; foam insulation damaged a wing), the main contributory causes

were organizational: budget pressures, launch program expectations, management style,

subcontractor relationships. Second, there were failures in organizational learning (see

chapter exercise 11.3). Mahler and Casamayou (2009) offer an interesting analysis of what

NASA learned from the Challenger disaster, what was not learned from that event, and

what was learned but subsequently forgotten—leading ultimately to the Columbia disaster.

One of the main reasons for failures to change after extreme events thus concerns orga-

nizational learning difficulties. Brian Toft and Simon Reynolds (2005) distinguish between

passive learning (identifying lessons) and active learning (implementing changes). Many

organizations, it appears, focus on passive learning but overlook active learning, or find

that difficult to achieve.

In explaining why organizations do not change following crises, Amy Edmondson

(2011, p. 49) notes the effort that goes into after-action reviews, postmortems, and inves-

tigations: “Time after time I saw that these painstaking efforts led to no real change.” The

problem, Edmondson argues, is that most managers think that failures are bad (some are),

and that learning from these events is straightforward (ask people what went wrong and

tell them to avoid similar mistakes in future). Both of those views, she argues, are incor-

rect. Failure is not always bad, and learning from organizational failures is complex; it is

almost always necessary to look further than “procedures weren’t followed.” That involves

what she calls “first-order reasoning,” looking at immediate causal factors such as the

failed O-ring. She argues that it is also necessary to understand the second- and third-order

reasons. That is challenging because complex failures typically involve combinations

of many events across different parts of an organization over time. Edmondson (2011,

p. 54) advocates the use of multidisciplinary team-based analysis to explore those kinds of

issues, and offers the following example:

A team of leading physicists, engineers, aviation experts, naval leaders, and even astronauts

devoted months to an analysis of the Columbia disaster. They conclusively established

not only the first-order cause—a piece of foam had hit the shuttle’s leading edge during

launch—but also second-order causes: a rigid hierarchy and schedule-obsessed culture at

NASA made it especially difficult for engineers to speak up about anything but the most

rock-solid concerns.

84 Chapter 3 Why Change? Contemporary Pressures and Drivers

Edmondson also argues that organizational failures lie on a continuum, from praiseworthy

(innovative experiments that just didn’t work) to blameworthy (deliberate sabotage). How-

ever, speaking of this continuum (which we will consider again in chapter 11), she notes that:

When I ask executives to consider how many of the failures in their organizations are

truly blameworthy, their answers are usually in single digits—perhaps 2% to 5%. But

when I ask how many are treated as blameworthy, they say (after a pause or a laugh)

70% to 90%. The unfortunate consequence is that many failures go unreported and

their lessons are lost.

(Edmondson, 2011, p. 50)

For effective post-incident change, Edmondson argues, the organization needs a “psy-

chologically safe environment” in which failures can be discussed openly. This involves

five steps:

1. There must be a shared understanding of the kinds of failures that can occur in a par-

ticular context, and why openness is important for learning.

2. Those who report failures—the “messengers”—should be praised, rather than shot.

3. Known problems must be acknowledged, and mistakes admitted openly and honestly.

4. To defuse resistance and defensiveness, management must invite participation, seeking

ideas and creating opportunities for staff to analyze failures and explore remedies.

5. There must be clarity concerning actions that are blameworthy, so boundaries are clear,

and people are accountable.

Adopting a different perspective, David Buchanan (2011) argues that explanations for

failures in post-incident change may lie in the altered nature of the organizational con-

text. Mainstream commentary on change management focuses on change with progres-

sive, developmental agendas—restructuring, quality, process redesign, innovation, new

technology and working practices—aimed at cost reduction, quality, time to market, “agil-

ity,” customer service, growth, market share, and profitability. Changes following extreme

events, in contrast, have defensive agendas, which aim to prevent things from happening.

The contrasts between “routine” and “post-incident” contexts are summarized in table 3.6.

TABLE 3.6
Routine and Extreme Contexts

Routine Contexts Post-Incident Contexts

Business development

Progressive agenda: make things happen

Take risks

Participation of those involved

Our own communications strategy

Local ownership of the agenda

Local implementation

Local control of implementation timing

Exciting for change agents

Control of risk

Defensive agenda: stop things from happening

Minimize risks

Participation as witnesses

Overtaken by media commentary

Externally imposed agenda

All comparable sites affected

Implementation when directed

Unappealing for change agents

Chapter 3 Why Change? Contemporary Pressures and Drivers 85

The context following an extreme event may itself be nonroutine, rendering conven-

tional change guidance (participation, communication) difficult to apply. Receptiveness

may be low if the incident is seen as atypical, and recommended changes may be seen

as a costly overreaction. In cases of mistake or misconduct, controls imposed to deter

“the guilty” also apply to “the innocent,” fostering resentment. The membership of an

investigating team influences both the nature and credibility of recommendations. Differ-

ent stakeholders and advocacy groups may disagree with each other’s opinions and may

use the incident to pursue other agendas (Smith and Elliott, 2007). Externally imposed

change, by an inquiry or regulatory body, may not be seen as legitimate. Introducing

changes while emotions are running high may increase anxiety and resistance (Bowers

et al., 2006); change under “normal” conditions is often stressful, without the complica-

tion of an extreme event.

Buchanan (2011) also argues that implementing a defensive change agenda may be

less appealing for the change manager. The main indicator of the success of that agenda

is the nonoccurrence of the next event. That may be less exciting than the development of

something new (products, systems, business models), which in career terms is also likely

to be more rewarding. It may be helpful therefore, in a post-incident context, to design a

change agenda that marries progressive and developmental components with defensive,

preventive elements.

LO 3.4 Internal Organizational Change Drivers

In this section, we discuss five potential drivers from within the organization (figure 3.3),

related to:

growth;

integration and collaboration;

corporate identity;

a new chief executive;

power and politics.

Growth
Organizations often grow as they age, especially if they are successful. In 1992, Kevin

Sharer joined Amgen Inc., now a leading Fortune 500 biotechnology company, as its

president and chief operating officer. His aim was to turn it into a major pharmaceu-

tical company. To grow the business, Amgen had to move beyond its start-up days

when decisions were based on hallway conversations, scientists had little consideration

for the company’s market, and salespeople were only loosely accountable for sales.

When Sharer became chief executive in 2000, he introduced a series of organizational

changes. These included individual rather than regional-based performance targets for

sales representatives; monitoring the number of sales calls made each week; and hand-

held computers to record details of sales conversations so that poor tactics could be

identified and rectified (Hemp, 2004).

Robert Herbold faced similar issues when he left Procter & Gamble to join Microsoft.

He was astounded at the lack of discipline in Microsoft in terms of how decisions were

86 Chapter 3 Why Change? Contemporary Pressures and Drivers

made and priorities were established. The hallmark corridor decision making of start-up

companies was not appropriate for managing an organization as large and as complex

as Microsoft. Herbold established formalized decision-making processes and other proto-

cols, to balance entrepreneurial creativity with the need for greater discipline. The changes

at Amgen and Microsoft both involved the routinization of work practices. Such changes

are often the result of growth, implemented to handle the complexity of a growing busi-

ness, to bring rigor to their operations (Herbold, 2002).

Of course, not all organizations continue to grow. One study of small business owners

in Britain found that many of these managers actively resisted the growth of their busi-

nesses beyond the point at which they lost personal control of day-to-day operations.

Beyond this point, they lost job satisfaction, which, at least for some, was why they had

moved from large organizations in the first place and set up their own company (Scase

and Goffee, 1987). Other writers have observed that growth is not necessarily a linear,

sequential movement from one stage to the next. As discussed in chapter 2, chaos theory

argues that change may be nonlinear and fundamental rather than incremental and may

not involve growth. In addition, younger organizations may fail to grow because of the

inexperience of their managers and through lack of organizational slack or the resources

FIGURE 3.3
Internal Organizational Change Drivers

signal for change, fresh energy

new directions

shared purpose and goals

corporate brand

stakeholder interests

influencing/interfering in decision making

Power and politics

Corporate identity

New chief executive

increasing size and complexity

rules versus creativity

Growth

cross-divisional communication

need for information sharing

Integration and coordination

Internal organizational

change drivers

Chapter 3 Why Change? Contemporary Pressures and Drivers 87

to absorb bad business decisions. For other new organizations, the growth challenge is to

maintain the “entrepreneurial feel”:

Google has been phenomenally successful. But it has a challenge ahead if it is to

retain the culture and feel associated with its success. It’s easy to feel like an outlaw

band that’s changing the world when you have 100 employees. It’s incredibly difficult

when you have 10,000 or 100,000.

(Lachinsky, 2007, p. 57)

Integration and Coordination
Some changes are made in order to better integrate the organization or create economies

of scale across different business units. SunAmerica, a financial network of brokers, was

acquired by the giant insurance company American International Group (AIG). The resul-

tant broker-dealer network consisted of six businesses: Advantage Capital, FSC Securities,

Royal Alliance, Sentra Securities, Spelman, and SunAmerica Securities. Signalling greater

integration of these businesses, the name was changed from the SunAmerica Financial

Network to the AIG Advisory Group. At the same time, changes entailing consolidation

across the different businesses included centralization in New York, San Diego, and Phoe-

nix of recruitment, legal compliance, and advisory services. Other changes included the

creation of uniform standards across the businesses, better profiling of the AIG brand, and

leveraging buying power across the network (Cooper and Kulkowski, 2002).

When Dick Brown became chief executive of EDS in 1999, he became head of a com-

pany that had pioneered IT services, but whose market share was being eroded by faster,

newer IT companies. Brown saw that coordination and information sharing in EDS were

weak. He found that he could not even send an email to all 140,000 people who worked

for the company, as there were 16 separate email systems. In addition, the company had

48 different business units, which involved a lot of duplication and which often did not

communicate well with each other or have a consistent customer orientation. This meant

that some parts of the organization were involved in activities that other parts had tried and

rejected, but this information was not transmitted. This also meant that there was a lack

of coordination between business units in collaborating to solve customers’ problems. For

example, EDS was in danger of losing Continental, a major client for whom it handled

reservation, accounting, and payroll systems. Unfortunately, these systems kept crashing,

and projects were delivered late and with poor-quality results. Brown launched a series of

cultural and structural changes to provide a more overt customer orientation. The impetus

for these changes was better coordination and collaboration across the multiple business

units of the company. In 2003, EDS replaced Brown after a period of earnings warnings,

an SEC probe, and a contract problem. Nevertheless, Brown claimed that as a result of

changes during his four-year tenure, there were four business lines rather than 48 business

units, costs had been reduced by $5 billion, and productivity had increased (Breen, 2001).

Corporate Identity
When Antoine Cau became chief executive of the Forte Hotel Group, which included

London Hotels, UK Hotels, and International Hotels, he found that they were often in

competition with each other, and that hotel employees lacked cultural identity with

Forte and its brand. Service excellence was key to achieving customer satisfaction,

88 Chapter 3 Why Change? Contemporary Pressures and Drivers

which was linked to employee satisfaction. In order to address these issues, Cau cre-

ated four distinct market segments: Le Meridien, Posthouse, Heritage, and Travelodge.

He then introduced a cultural change program across the four hotel groups. His aim

was to enhance the commitment of staff, strengthening the identity of the Forte brand,

and to improve customer service. These aims were achieved by promoting staff devel-

opment and employee recognition schemes to increase job satisfaction (Erstad, 2001).

When Philip N. Diehl became head of the U.S. Mint, it was seen as slow, inefficient,

and lacking in commercial performance standards. Its main goal was to produce coins,

but the Mint had no idea of the magnitude of its coin inventory. It also manufactured col-

lectible and commemorative coins. However, the timing of commemorative issues was

dictated by Congress, sometimes five or six times a year. This meant that commemorative

coins were no longer rare and were of decreasing interest to collectors. The Mint faced an

identity crisis: Was it a passive organization making coins, including commemoratives,

simply following the dictates of the Federal Reserve and Congress? Or should it act more

like a market-based organization, launching its own products and promotional campaigns?

Establishing a new identity for the Mint through organizational changes such as making

commemorative coins more collectable (by issuing fewer of them), using online market-

ing, portraying its role as a purveyor of history, and marketing innovations such as the 50

State Quarters Program helped move it toward a new, more modern, customer-focused

identity (Muoio, 1999).

A New Chief Executive
The new broom phenomenon, when a new chief executive arrives, can act as a signal

that old ways are about to change. Arthur Martinez became head of the merchandising

group at Sears at a time when the company produced one of its worst sales records,

reporting a net loss of $3.9 billion, most of which came from the merchandising group.

In “new broom” tradition, in his first 100 days, Martinez started a turnaround plan, reori-

enting marketing away from being a “man’s store,” to appeal to women as well. At the

same time as moving into cosmetics and other specialty store products, he closed 113

stores, eliminated the 100-year-old Sears catalogue, reengineered store operations, and,

through training, incentives, and new staffing procedures, moved the company toward a

service culture to appeal to both male and female customers (Rucci et al., 1998).

When Kenneth D. Lewis took over as CEO of Bank of America, he instituted what has

since been called “a quiet revolution,” moving the business “from empire-building to value

creation.” Rather than follow the growth strategy of his predecessor, he sought to grow prof-

its by downscaling the bank’s operations, getting rid of underperforming businesses such as

auto leasing, and divesting unprofitable customer segments. He also brought in new man-

agers to infuse the organization with new ideas and sought to improve customer service

through enhanced training programs for tellers, moving away from organizing around prod-

uct lines in favor of customers, and encouraging cross-selling of products by tying executive

salaries to performance targets. These moves apparently had their desired effect: by March

2007, Bank of America claimed, under Lewis’s leadership, to be “one of the world’s largest

financial institutions and the fifth most profitable company in the world” (Faust, 2002).

When 35-year-old Kate Betts took over as editor-in-chief at Harper’s Bazaar, she was

charged with changing the 130-year-old company. The company had stagnated compared to

other magazines such as Vogue and Elle and was seen as stodgy and tedious—descriptions

Chapter 3 Why Change? Contemporary Pressures and Drivers 89

not best associated with fashion magazines. In “new broom” form, in her first six months,

she changed the magazine’s logos, typeface, and staff in order to create a new mindset and

a better profile for the magazine. This included replacing over half of the senior staff with

her own “dream team” in order to regain market share related to younger readers (Brooker,

2000).

However, unlike Lewis at Bank of America, not all new broom changes are neces-

sarily the right ones. Bercovici (2003) claims that Betts “threw Bazaar into a newsstand

nosedive.” In 2001 Glenda Bailey replaced Betts as editor-in-chief. Bercovici also argues

that “much of Bailey’s revamp has amounted to undoing Betts’ misbegotten innova-

tions, returning the magazine to its roots as a haven for the fashion elite,” which included

“restoring the old Harper’s Bazaar logo, which Betts had replaced with a blocky modern-

ist design.”

In Rosabeth Moss Kanter’s (2003, pp. 64–65) analysis of organizational turnarounds at

Gillette, the BBC, and Invensys, she notes that they were all led by a new chief executive.

She asks: “Does this mean that only a new broom can sweep clean?” Her answer is that

this is probably the case. New CEOs have advantages over their predecessors:

They are likely to be able to create energy for change.

They are not constrained by past practice.

They can focus on the organization’s known but unresolved “sacred cows.”

Having no association with previous customer relationship issues, they are able to han-

dle customer-related problems with credibility.

Power and Politics
Power and political pressures come in many forms. Some are associated with board-

level changes. The tussle between Philip Purcell and John Mack for the chief execu-

tive’s position at Morgan Stanley after the company had been bought by Dean Witter

and Discover Financial Services Inc. in 1997 is one example; Purcell became CEO

(Thornton and Reed, 2001). As noted above, another example concerned the ousting of

Jean-Marie Messier, CEO of Vivendi, in mid-2002. The Economist (2002) claimed that

it was the Bronfman family, a major shareholder in the company, which had lost nearly

$2 billion due to poor share performance over the previous year, who were behind the

push to get rid of Messier. Removing Messier was also aligned with the interests of the

French political right, who were concerned about ownership issues related to television

and telephone companies.

Some changes are made to alter traditional internal power relationships, to speed

up decision making, and to allow wider involvement. One example was at IBM when

Sam Palmisano took over as CEO from Lou Gerstner. In January 2003, he abolished the

92-year-old, 12-person executive management team. Described as the “inner bastion of

power and privilege” at IBM, this committee was the “inner sanctum” that made deci-

sions about IBM’s strategy and direction. In disbanding the committee, Palmisano sent a

message that power relationships were being restructured to avoid decisions being slowed

down by waiting for the monthly meetings of this committee (Ante, 2003).

Other power pressures leading to change relate to internal conflicts. For example, at

Roche, the pharmaceutical company, a range of organizational changes were made, includ-

ing teamwork, in order to assist the fast-developing field of genomics. In 1999 Lee Babiss,

90 Chapter 3 Why Change? Contemporary Pressures and Drivers

head of preclinical research at Roche’s headquarters at Nutley, noticed that there were

an increasing number of corridor conversations between researchers working on genom-

ics and those working in other areas such as oncology and cancer research. He sought to

harness these interactions by creating interdisciplinary research teams that cut across tra-

ditional power and scientific departmental boundaries. For example, the Genomics Oncol-

ogy (or GO) team brought together a diverse group of researchers united by the aim of

using genomic innovations to assist the development of anticancer drugs. However, not all

teams at Roche worked well. Previously, from the mid-1990s onward, teams of scientists

were set up to compete with each other for access to scarce resources. Over time, these

interactions became internal warfare, leading to the hoarding of technical expertise and

knowledge within teams. It also led to a reluctance to abandon team projects, especially

where the careers of research scientists were linked to their success. In 1998 this was

abandoned in favor of a collaborative approach that recognized the importance of estab-

lishing team structures that shared knowledge and information.

Using Power and Politics to Secure the City

Interorganizational politics can sometimes block

change. Christopher Dickey (2009) describes how,

following the terrorist attacks on the World Trade

Center on September 11, 2001, the New York

Police Department (NYPD) created a Counter-

Terrorism Bureau (CTB). To be successful, the CTB

had to be invisible to the public, who were paying

for this service through taxation, and the Bureau’s

intelligence gathering took place elsewhere on the

planet, which meant taking New York cops off the

city streets. The new Real Time Crime Center at

One Police Plaza in Manhattan cost $11 million. But

three years after the attacks, people had started to

forget. To counteract the apathy, the Bureau orga-

nized impressive shows of force, deliberately turn-

ing up without warning at high-profile targets like

the Empire State Building, to remind the public that

the bad guys were still out there.

The CTB also had to work with other agencies,

particularly “the three-letter guys”: FBI, CIA, ATF,

DEA. Relations between the FBI and the CTB were

managed through a Joint Terrorism Task Force. The

head of the NYPD Intelligence Division was David

Cohen:

Cohen’s years at Langley and in the New York

office of the CIA had taught him “there’s no such

thing as information sharing, there is only infor-

mation trading,” as he told his colleagues at the

NYPD. You go to the FBI and say, “Tell me what

you’re doing,” they’re going to say, “Go f***

yourself,” is the way another senior official with

the NYPD put it.

Back channels to the CIA or other parts of the

intelligence community could only take you so

far. To get the stuff you needed, you had to be

able to pull your weight. You had to be giving as

well as getting. Otherwise you were going to be

like the puny kid having sand kicked in his face

by bullies. (Dickey, 2009, p. 140)

This led to an “overseas program,” with NYPD

operatives working abroad in liaison positions with

forces that had their own counter-terrorist units, to

exchange and gather intelligence. This meant that

Cohen was able to establish a power base through

his own intelligence operation, and the three-letter

guys had to come and ask him for information.

Information sharing then became possible. The

ability to understand and to use power and orga-

nization politics effectively was fundamental to the

success of the NYPD CTB in its efforts to detect and

prevent future attacks.

Chapter 3 Why Change? Contemporary Pressures and Drivers 91

EXERCISE
3.1

Top Team

Role Play

1. In groups of three, choose an organizational change with which you are familiar,
perhaps in your current employment, or in an organization about which you have
recently been reading. If neither of those options works, then, for the purposes of this
exercise, invent an organization and a change initiative.

2. Now revisit table 3.1, “Images of Change and Understanding the Pressures.” Each person in
your group must choose one of those images of managing change and will play that role.

3. Your group is now in a senior management board meeting. You are discussing an
agenda item at the request of the chairman of your board, who wants to know why
the organization is going through the change that you have identified.

4. Debate how you will respond to the chairman’s request, with each member of your
group (board) playing their role based on the change management image that they
have selected.

5. When you have decided how you are going to respond to the chair’s request, consider
the following questions:

Did one of your images better explain the rationale for change than the others, and why?

On reflection, what criteria did you use for making this judgement with regard to the
comparative advantage of a particular image?

Is there an image with which you personally have a particular affinity or preference?
Why? What would it take for you to change that preference?

EXERCISE
3.2

Case Analy-

sis: The

Sunderland

City Story

Is change more difficult in a recession? As you read the following account of change in a
local government agency in England (based on MacLachlan, 2011), consider the follow-
ing questions:

1. What features of a downturn can make managing organizational change more difficult?

2. What features of a downturn can make managing organizational change more
straightforward?

3. Sunderland City Council introduced several changes to deal with the twin goals of
maintaining services and reducing spending. What factors explain the success of their
program?

With the recession that began in 2009, local government in England had to cut spend-
ing while maintaining the same levels of services to the local population. Could costs be
cut with a radical redesign of services and new ways of working? Sunderland City Council
employed 8,000 people in the northeast of England, receiving two-thirds of their bud-
get from central government. In 2010–11, funding fell 10 percent, by £58 million, and
more cuts were expected over the next three years. Management wondered whether,
given the sharp downturn in the economy, staff would be demotivated and concerned
about layoffs. At the start of 2010, the Council launched a transformation program; could
things be done differently, but without losing jobs?

Unwilling to force staff to retire early or accept redeployment, the Council created an
internal jobs market. This encouraged staff in areas that were shrinking to apply for jobs in
expanding services, using a web-enabled assessment and employee-job matching system.

LO 3.1

LO 3.5

(Continued)

92 Chapter 3 Why Change? Contemporary Pressures and Drivers

This was linked to a retraining program designed to transform the skills profile of the work-
force, focusing on personality, values, and potential, as well as on knowledge and past
experience. An employee portal was established to allow staff to create their own CVs.

Resistance to these moves came not from staff but from managers who felt that their
recruitment decisions were being constrained. For staff who were unable to find new
roles, a unit was established called “Switch”: Staff Working In Transition and CHange.
Over 200 people between roles, including managers, worked in this unit, reducing the
Council’s use of temporary staff on fixed-term contracts, for maternity cover, for exam-
ple. The Switch team was also used to drive change, with efficiency savings projects,
designing future job roles, and providing careers advice to other staff in transition.

The flexible working scheme was popular, allowing staff voluntarily to reduce their
paid hours (with the option to increase them again), and to “purchase” up to two
weeks’ additional annual leave by spreading the salary sacrifice over the year. A “be
your own boss” scheme offered support to employees who wanted to start their own
businesses, giving them 20 days’ paid leave and access to a small business adviser. The
50 staff who wanted to proceed continued working part time for the Council to give
them some income security while they established their businesses. Local employers
were invited to “borrow” and to pay Council staff on secondments.

EXERCISE
3.3

The Reputa-

tion Trap:

Can You

Escape?

What happens if a company cannot change how it is viewed by consumers? As you read
this case, consider the following questions:

1. What does this case reveal about the challenges faced by successful businesses? Is it
possible to be too successful?

2. How does a successful organization determine whether an environmental change is
a brief fad or fashion to be ignored, or a development that requires a fundamental
rethinking of the way in which it does business?

3. What change issues does this case raise with regard to the significance of reputation?

4. What actions would you recommend be taken by Big Food and the fast-food compa-
nies that have been caught in the reputation trap?

Try this simple test. Say the following out loud: Artificial colors and flavors. Pesticides. Preser-

vatives. High-fructose corn syrup. Growth hormones. Antibiotics. Gluten. Genetically modified

organisms. If any one of these terms raised a hair on the back of your neck, left a sour taste in

your mouth, or made your lips purse with disdain, you are part of Big Food’s multibillion-dollar

problem. In fact, you may even belong to a growing consumer class that has some of the world’s

biggest and best-known companies scrambling to change their businesses. (Kowitt, 2015, p. 61)

Fortune magazine prides itself on being able to feel and report “the pulse” of U.S. busi-
ness. In 2014 and 2015, two articles by Beth Kowitt, “Fallen Arches” and “The War on Big
Food,” explored the impact that consumer preference for healthy foods was having on
Big Food organizations such as General Mills and Kraft, and also on some fast-food outlets
like McDonald’s and Subway. A growing number of consumers are suspicious of processed
foods. Ironically, although processing (e.g., salting and curing) has traditionally been associ-
ated with reducing the risk of illness from the food we eat, food processing is now seen as
the antithesis of healthy eating.

The annual sales of processed food are declining, but these are the core products of mul-
tibillion-dollar Big Food companies. Since 2009, the top 25 food and beverage companies

LO 3.1

Chapter 3 Why Change? Contemporary Pressures and Drivers 93

Abrahamson, E. 2004. Change without pain: How managers can overcome initiative

overload, organizational chaos, and employee burnout. Boston: Harvard Business School

Press. Argues the need to manage carefully the pace of change, rather than have ongoing

dramatic transformations that destabilize the organization and burn out staff.

Beard, A., and Hornik, R. 2011. It’s hard to be good. Harvard Business Review

89(11):88–96. Profiles five organizations with exemplary approaches to responsible

business practices: Royal DSM (Netherlands), Southwest Airlines (United States), Broad

Group (China), Potash Corporation (Canada), and Unilever (United Kingdom).

Additional
Reading

in the United States have lost market share equivalent to $18 billion. Some fast-food com-
panies are also facing a similar shift in consumer preferences. For example, in 2014, in
their U.S. operations, McDonald’s reported four consecutive quarters of falling sales, and an
overall 30 percent drop in profit, while Subway’s sales dropped 3 percent, or $400 million.

Big Food has reacted by increasingly marketing their products as “natural,” review-
ing their product recipes, and acquiring many small health and natural food companies.
However, this has not resolved their reputational problem. According to Gary Hirshberg,
founder and chairman of Stonyfield Farm, “There’s enormous doubt and scepticism about
whether large companies can deliver naturality and authenticity” (Kowitt, 2015, p. 64).
According to Don Thompson, CEO of McDonald’s, “People today are questioning the
integrity and quality of the food at a much higher level” (Kowitt, 2014, p. 116). Some fast-
food brands, such as Chipotle Mexican Grill (annual growth rate 20 percent) and Firehouse
Subs, are thriving in this environment, but not McDonald’s or Subway. McDonald’s seems
to be suffering from its past success, which built its reputation as the quintessential fast-
food brand. Today, however, it is operating in an environment where a growing number
of customers are choosing “fresh and healthy” rather than “fast and convenient” (Kowitt,
2014, p. 109). The challenge for McDonald’s is to convince customers that it can be both.

Subway might seem to be a strange brand to have suffered from the “move to health,”
given that its growth has in the past been due to its positioning as a healthy alternative to
“traditional” fast food. As one indicator of Subway’s success, it is “the world’s most ubiq-
uitous restaurant chain,” with almost 44,000 outlets in 110 countries (Harwell, 2015).
However, according to Darren Tristan, executive vice president of the industry research
firm Technomic, Subway’s problem is that “fresh” no longer means what Subway offers.
For example, people want meat that has been freshly cut, not a precut slice peeled off
wax paper. Subway has also been criticized for using the food additive azodicarbonamide
(E927, a flour bleaching and dough conditioning agent) in its bread.

Summarizing the situation, IBIS World food analyst Andrew Alvarez observes, “We’re
in a new environment—the Chipotle environment—with a new type of rhetoric, quality
and marketability. Subway’s platform, its presentation, almost looks primordial” (Harwell,
2015, p. 5).

Case Sources:

Harwell, D. 2015. The rise and fall of Subway, the world’s biggest food chain. The Washington

Post, May 30:

http://www.washingtonpost.com/business/economy/the-rise-and-fall-of-subway-the-worlds-biggest-

food-chain/2015/05/29/0ca0a84a-fa7a-11e4-a13c-193b1241d51a_story.html, accessed June 20, 2015.

Kowitt, B. 2014. Fallen arches: Can McDonald’s get its mojo back? Fortune, December 1:106–16.

Kowitt, B. 2015. The war on big food. Fortune, May 21:61–70.

94 Chapter 3 Why Change? Contemporary Pressures and Drivers

Here is a short summary of the key points that we would like you to take from this

chapter, in relation to each of the learning outcomes:

Understand the environmental pressures that can trigger organizational change.

We explored external pressures that encourage organizations to change. Fashion: man-

agers want to appear to be “progressive,” looking out for “the next big thing.” Demog-

raphy: organizations need to consider how to address the changing motives of each

new generation and the approaching “silver tsunami” of an ageing workforce. Man-

date: many changes are nonnegotiable, driven by legislation and regulation, and others

are difficult to avoid, such as expectations of corporate responsibility. Geopolitics: in

LO 3.1

Roundup

Benn, S., Dunphy, D., and Griffiths, A. 2014. Organizational change for corporate sus-

tainability. 3rd ed. London: Routledge. Develops a unified view combining ecological

and human sustainability, with case studies and practical advice for change agents.

Buchanan, D. A. 2011. Good practice, not rocket science: Understanding failures to

change after extreme events. Journal of Change Management 11(3):273–88. Distin-

guishes post-incident organization contexts from “routine” contexts in order to identify

the potential barriers to change following accidents, failures, and other crises.

Bughin, J., Chui, M., and Manyika, J. 2010. Clouds, big data, and smart assets: Ten tech-

enabled business trends to watch. McKinsey Quarterly (August):1–14. Explores how

organizations are developing new business models to exploit rapidly developing tech-

nologies, such as “distributed cocreation,” “networks as organizations,” “the Internet of

things,” and “big data.”

Gratton, L. 2011. The shift: The future of work is already here. London: Collins. Explores

how the forces of globalization, society change, demography, technology, and use of

natural resources are reshaping work and organizations; offers advice on how to “future-

proof” your career.

Reflections for the Practicing Change Manager

To what extent can you identify the external

environmental pressures for change in your

organization?

To what extent can you influence whether and

how to change?

Do you relate better to one or more of the

change management images outlined in table

3.1, with regard to the organizational changes

in which you are involved? Why is this the case?

Which of the possible reasons for avoiding

change that have been discussed in this chap-

ter have you experienced? On reflection, how

might you have contributed to overcoming

those avoidance tactics? And how would you

judge your likely success in that attempt?

How easy is it to raise issues in your organization

about the rationale for specific changes? Is there

a dominant rationale? And if so, why?

What personal criteria might you adopt to

ensure that you are initiating change “for the

right reasons”? Set out some key questions that

might help to guide you in future, to ensure that

your rationale for change is clear to you and

clear to those who will be affected.

Chapter 3 Why Change? Contemporary Pressures and Drivers 95

a highly interdependent global economy, events in distant locations can have “ripple

effects” around the planet, and all organizations need to address the implications of

climate change and global warming. Reputation: an organization’s sales and credibility

can be badly affected by process, product, service, and internal governance failures,

and rapid changes to restore and build reputation may often be necessary. Hypercom-

petition: change is being driven by disruptive, high-velocity innovation, which is partly

technology-driven, and can be seen most vividly in “out-of-sector” competition, where

organizations which are not in your business sector start to steal your customers.

It is important to note two further points. First, these six sets of pressures are inter-

related, and most or all of them may be active at any one time. Second, this list of

pressures is not comprehensive but is constantly shifting with local, national, and inter-

national trends and developments.

Explain why not all organizations are affected equally by external pressures.

We explored four sets of explanations for the absence of change in the face of external

pressures. First, external threat can lead to rigidity rather than innovation, as decision

making becomes constrained and focused. Second, a pressure for change has to be per-

ceived and interpreted as such before action is triggered, and if those external events

are not understood as significant, change is unlikely to happen. Third, even in the face

of a clear need for change, forces for stability may interfere. These include stakeholder

expectations, which limit innovation; dispersed power, which impedes decision mak-

ing; and a lack of resources to support innovation. Fourth, management may decide to

use buffering strategies to shield the organization from adaptive change.

Explain why organizations often fail to change following crises.

Although it might be expected that change following accidents, failures, and other cri-

ses would be straightforward, this is not always the case. The causes of these incidents

are usually complex and systemic, requiring systemic solutions that can be difficult and

costly to implement. Many organizations are good at passive learning (identifying les-

sons) but not so good at active learning (implementing those changes). Not all failures

are blameworthy; some are praiseworthy. Most failures, however, are treated as blame-

worthy, and this is a further barrier to active learning, as it maintains a psychologi-

cally unsafe environment. The post-incident change agenda is often a defensive one,

designed to stop such incidents from happening again. This is less appealing to change

managers, who can experience more challenge and career rewards from implementing

progressive change. It may be helpful to combine defensive agendas with progressive

agendas to progress the former.

Identify internal organizational factors that trigger change.

We explored five sets of internal triggers of organizational change. Growth generates

problems of increased size and complexity, and at some point the need for formal rules

interferes with the need for creativity and innovation. Integration and coordination

are common problems in larger organizations, often requiring cultural, structural, and

process solutions to improve cross-divisional communication and information sharing.

A new chief executive is often expected to bring fresh ideas and energy and to move

the organization in new directions. Corporate identity may be an abstract concept, but

shared purpose and goals, and a strong corporate brand, can be valuable competitive

LO 3.2

LO 3.3

LO 3.4

96 Chapter 3 Why Change? Contemporary Pressures and Drivers

assets requiring appropriate changes to protect and build them. Power and politics both

drive and interfere with organizational change, depending on the interests of stakehold-

ers and their ability to influence management decision making.

Relate differing images of managing change to pressures for change.

Chapter 2 discussed three uses of the six-images framework: surfacing assumptions,

assessing dominant images, and using multiple perspectives. We argued that there are

no “right” and “wrong” images of change management and that it is valuable to be

able to interpret problems and solutions in general, and change processes in particular,

from different standpoints. This “multiple perspectives” approach can help to generate

fresh thinking and creative solutions. In this chapter, we have seen how external and

internal pressures or drivers do not necessarily lead to change; those pressures are fil-

tered through the perceptions of the need for change, and those perceptions are in turn

colored by the images that managers have of the change process. One manager’s reac-

tion to a particular external or internal pressure, therefore, may not be shared by others.

The issues discussed in this chapter suggest that more successful change managers are

likely to be those who have a clear, personal understanding about the pressures on them

to change their organizations, a well-developed rationale for what they are attempting

to achieve, and a clear view of the likely effects of their actions.

LO 3.5

Abrahamson, E. 1996. Management fashion. Academy of Management Review 21(1):254–85.

Abrahamson, E. 2004. Change without pain: How managers can overcome initiative

overload, organizational chaos, and employee burnout. Boston: Harvard Business School

Press.

Anonymous. 2002. Maître dethroned. The Economist 364(8280):58–59.

Anonymous. 2010. The silver tsunami. The Economist, February 6:72.

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Ante, S. A. 2003. The new blue. BusinessWeek Online, March 17.

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Beard, A., and Hornik, R. 2011. It’s hard to be good. Harvard Business Review

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Benn, S., Dunphy, D., and Griffiths, A. 2014. Organizational change for corporate sus-

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Bercovici, J. 2003. From Harper’s Bazaar to Bailey’s Bazaar. Media Life Magazine.com,

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Birkinshaw, J. 2014. Beware the next big thing. Harvard Business Review 92(5):50–57.

Bogner, W. C., and Barr, P. S. 2000. Making sense in hypercompetitive environments:

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101

What to Change? A
Diagnostic Approach

Learning objectives

By the end of this chapter, you should be able to:

LO 4.1 Understand the use of diagnostic models in planning organizational change

LO 4.2 Use strategic analysis tools to assess the need for organizational change

LO 4.3 Diagnose organizational receptiveness to and individual readiness for change,

and use those assessments as the basis for action to increase receptiveness and

readiness

LO 4.4 Explain the characteristics of the “built-to-change” organizational model, and

assess the applicability, strengths, and limitations of this approach

4Chapter

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102 Chapter 4 What to Change? A Diagnostic Approach

LO 4.1 Organizational Models

The theme of this chapter is diagnosis. With regard to organizational change, what is the

problem? Can we improve our understanding of the context and nature of the problem?

And can this diagnostic approach help us to solve the problem, or problems, that we find?

In short—what has to change? This chapter introduces a number of diagnostic frameworks

and tools. Some diagnostic models consider the operation of the organization as a whole,

such as the “7-S Model.” Others, such as “scenario planning,” start with strategy. Some

are designed to explore specific aspects of the change process, such as organizational and

individual readiness for change. The “built-to-change” model argues that organizations

can be designed in a way that makes “change management” diagnostic tools redundant.

The way in which these diagnostic models, frameworks, and tools are deployed depends

on the image of change management in use (chapter 2).

Director You can use these diagnostics to strengthen your knowledge base and con-

fidence with regard to what needs to change, identifying key relationships

and focusing on where change is needed and the results that you want.

Navigator You will also find these diagnostics useful to “map” the organization’s envi-

ronment and help you to assess appropriate responses.

Caretaker You will be less impressed by the capability of these diagnostics to support

change, but those which focus on the external environment (PESTLE and

scenario planning) help to identify trends and developments to which the

organization should respond.

Coach You will probably be more interested in diagnostics that focus on goals and

on the capabilities required to achieve them.

Interpreter You will find particularly useful the diagnostics that emphasize images,

framing, and cognitive maps.

Nurturer With your interest in emergent strategy, you may not be convinced about the

value of this diagnostic approach.

Who does the diagnosing? This is an important question, and answers vary. Some per-

spectives see this as a senior management prerogative, perhaps also involving external

consultants and advisers. Those consultants may use their diagnostic expertise to help their

clients to manage the change process, rather than to determine the content of the changes.

However, other perspectives emphasize the need to involve at the diagnostic stage those

who will be affected by change; involvement can strengthen commitment to the change

process, and thus increase the probability of success. Some organization development

(OD) consultants explicitly reject the role of “diagnostician,” arguing that their role is to

help the organization’s members to do this for themselves.

Our treatment of models relies on the following assumptions:

The members of an organization, managers and staff, have their own views of “how

things work,” and “what causes what.” In other words, “diagnosis” with regard to orga-

nizational change is going to happen whether or not explicit diagnostic tools are used.

Implicit causal models have the power to influence how we think about organizational

issues and problems, and what we believe are the appropriate courses of action.

Chapter 4 What to Change? A Diagnostic Approach 103

The option of not using a diagnostic model, therefore, is not available. We either use an

implicit model, or choose an explicit one, such as those described in this chapter.

Implicit models based on accumulated experience can provide valuable insights. How-

ever, implicit models have limitations. First, they may be based on the limited experi-

ence of a small number of people. Second, because they are implicit, it is difficult for

others to understand the assumptions underlying decisions based on those models.

Warner Burke (2013) identifies five ways in which explicit models are useful:

1. Simplify complexity: They use a manageable number of categories to help simplify

complex, multivariate situations

2. Highlight priorities: They help to prioritize the issues that need most attention.

3. Identify interdependencies: They identify key organizational interdependencies (e.g.,

strategy and structure).

4. Provide a common language: They provide a common language with which different

stakeholder groups can discuss organizational properties.

5. Offer a process guide: They can offer guidance with respect to the appropriate sequence

of actions in a change process.

This chapter describes several organizational models. Each adopts a different focus on

aspects of organizational functioning, and no one model, or small collection of models,

can be described as “best.” It is always important to choose, or to adapt, a model that fits

the organization’s problem by triggering discussion and analysis among those involved,

leading ultimately to action. In many cases, in terms of problem solving, the debate that a

model prompts can be more important than the model itself. Our aims here are to illustrate

the variety of models that are available, in order to give you a basis from which to choose

those that most closely fit your interests and purposes.

The Six-Box Organizational Model
Marvin Weisbord (1976, p. 431) developed one of the first organizational diagnos-

tics, which he described as “my efforts to combine bits of data, theories, research, and

hunches into a working tool that anyone can use.” In the context of our discussion of

implicit and explicit models, it is interesting to note that Weisbord subtitled his article,

“Six Places to Look for Trouble With or Without a Theory.” It is not surprising that his

model is based on sets of factors or “boxes”:

1. Purposes: What business are we in?

2. Structure: How do we divide up the work?

3. Rewards: Do all tasks have incentives?

4. Helpful mechanisms: Have we adequate coordinating technologies?

5. Relationships: How do we manage conflict among people?

6. Leadership: Does someone keep the other five boxes in balance?

Weisbord (1976, p. 431) uses a radar screen analogy: “Just as air controllers use radar

to chart the course of an aircraft—height, speed, distance apart and weather—those seek-

ing to improve an organization must observe relationships among the boxes and not focus

on any particular blip.”

104 Chapter 4 What to Change? A Diagnostic Approach

As a change diagnostic, therefore, this model has two main applications. First, in pro-

viding a small set of categories that simplify (perhaps oversimplify) the complexity of an

organization, this facilitates the process of deciding which factors or sets of factors are

generating problems, and which therefore require attention. Second, it reminds the change

manager to consider the wider systemic implications of actions that address only one or

two of those categories or boxes.

The 7-S Framework
The 7-S framework was developed by Robert Waterman, Tom Peters, and Julien Phillips

(1980) while they were working as management consultants with McKinsey & Company.

They argue that organizational effectiveness is influenced by many factors, and that suc-

cessful change depends on the relationships between those factors. In an approach similar

to that of Weisbord (1976), they identify seven sets of factors (figure 4.1):

Structure in this framework refers to the formal organization design.

Strategy concerns how the organization plans to anticipate or respond to changes in its

external environment in order to strengthen its competitive position.

Systems are the formal and informal procedures that determine how things get done—

budgeting, cost accounting, IT, and training systems, for example. Waterman et al.

(1980, p. 21) note that one way to change an organization without disruptive reorgani-

zation is to change the systems.

Style refers to patterns of management actions, how managers spend their time, what

they pay attention to, the signals that they send about priorities, and attitude to change.

Staff can refer to appraisal, training, and development processes, and also to attitude,

motivation, and morale—but more importantly in this framework, this refers to how

managers are developed.

Superordinate

goals

Structure

SystemsStrategy

Skills

Staf

Style

FIGURE 4.1
The 7-S

Framework

Source: Based on

Waterman et al.,

(1980, p.18).

Chapter 4 What to Change? A Diagnostic Approach 105

Skills concern what an organization does best, expressed in the dominant attributes and

capabilities that distinguish it from competitors.

Superordinate goals refer to the organization’s guiding concepts, values, aspirations, and future

direction—which are sometimes captured by the term “vision,” discussed here in chapter 6.

In later versions of the 7-S framework, these goals are also referred to as “shared values.”

As a change diagnostic, this framework emphasizes the interconnectedness of the seven

sets of factors, and also argues that the “soft” issues (style, staff, skills, shared values) are

just as important as structure, strategy, and systems. Waterman et al. (1980, p. 17) explain:

Our assertion is that productive organization change is not simply a matter of structure,

although structure is important. It is not so simple as the interaction between strategy and

structure, although strategy is critical too. Our claim is that effective organizational change is

really the relationship between structure, strategy, systems, style, skills, staff, and something

we call superordinate goals. (The alliteration is intentional: it serves as an aid to memory.)

The framework thus identifies the areas on which to focus, the questions to ask, and the

relationships and alignments to consider when planning organizational change. A full 7-S

analysis, exploring each of the elements of the framework in depth, can be rich and valu-

able, but is time-consuming.

Applying 7-S to Intuit

In 2000, Steve Bennett, vice president of GE Capi-

tal, became chief executive of Intuit, a financial

software and services company with three prod-

ucts, Quicken, TurboTax, and QuickBooks, which

respectively had 73 percent, 81 percent, and 84

percent of their markets. However, given this mar-

ket dominance, many analysts felt that Intuit was

less profitable than it should be. The company

also had a reputation for slow decision making,

allowing competitors to steal a number of market

opportunities. Bennett wanted to change all that.

In his first few weeks, he visited most of Intuit’s

locations, addressed most of its 5,000 employ-

ees, and spoke personally to each of the top 200

executives. He concluded that staff were passion-

ate about the firm’s products, but that not much

attention was being paid to internal processes (this

account is based on Higgins, 2005).

In terms of the 7-S framework, this is what he did:

Strategy: To expand Intuit’s portfolio, he

expanded the product range by acquisition.

Structure: He created a flatter structure and

decentralized decision making, giving business

units greater control and responsibility for the

product process from development to delivery.

Systems: The rewards system was more closely

aligned to achieving strategic objectives.

Style: He emphasized the need for a performance-

oriented focus, and he provided a vision for

change, putting effort into “selling” that vision.

Staff: He built on the commitment of staff to

Intuit’s products by emphasizing the critical

role of quality and efficiency in maintaining and

building the company’s reputation.

Skills: To enhance staff capabilities with regard to

quality and efficiency, resources were allocated to

training and development, and some select man-

agers were hired from GE in specific skill areas.

Superordinate goals: Bennett’s approach was

“vision-driven,” with his paper, “Steve’s Dream

for Intuit,” outlining strategic objectives and how

they would be achieved; to “sell” this vision, he

communicated constantly with staff.

As a result of Bennett’s changes, operating profits

increased in 2002 and 2003 by 40 to 50 percent. By

2014, Intuit had global revenues of over $5 billion,

with 8,000 employees in the United States, Canada,

United Kingdom, India, and other countries (http://

www.intuit.com).

106 Chapter 4 What to Change? A Diagnostic Approach

The Star Model
The star model of organizational design, developed by Jay Galbraith et al. (2002),

argues that, for an organization to be effective, its strategy, structure, processes,

rewards, and people practices have to be in alignment (figure 4.2). This model thus

overlaps with the McKinsey 7-S framework.

Strategy in this model plays a dominant role, because if the strategy is not clear, then

there is no basis for making other design decisions.

Structure is defined as the formal authority relationships and grouping of activities, as

shown on an organization chart.

Processes and lateral capability concern the formal and informal systems that coordi-

nate the organization’s activities.

Reward systems relate to how performance is measured and compensated, in ways that

align individual actions to organizational objectives.

People practices concern the organization’s human resource policies and practices:

selection, training and development, performance management.

As a change diagnostic, this model emphasizes how these five elements are intercon-

nected. Changes in one area are almost certain to affect others, and not always in predict-

able ways. Despite the significance of strategy, organizational performance will suffer if

one or more of the five sets of factors is out of alignment with the others. For example,

while changing the structure may be relatively straightforward and visible, this can have

little or no impact on performance without complementary changes elsewhere in the orga-

nization. Galbraith et al. (2002) explain the implications of misalignment of each of the

five “points of the star,” as summarized in table 4.1.

Strategy
Vision

Direction

Competitive advantage

Structure
Power and authority

Reporting relationships

Organizational roles

People Practices
Staing and selection

Performance feedback

Learning and development

Processes and

Lateral Capability

Networks, processes,

teams, integrative roles,

matrix structures

Reward Systems
Goals, scorecards, and metrics

Values and behaviors

Compensation/rewards

FIGURE 4.2
The Star

Model

Source: Based on
Galbraith et al. (2002).

Chapter 4 What to Change? A Diagnostic Approach 107

The Four-Frame Model
Lee Bolman and Terry Deal (2013) explain four different frames or lenses, each provid-

ing a different perspective on how an organization functions. Their aim is to promote

the value of “multiframe thinking,” which means seeing the same situation in different

ways. Problems arise, they argue, when we become locked into our one favored way

of seeing the world—and our organization—and then fail to see other critical aspects

or issues. We met frames before, in chapter 2, in our discussion of mental models;

same thing. The structural frame in this model concerns the organization of groups

and teams. The human resource frame concerns how the organization is tailored to

satisfy human needs and build effective interpersonal relationships and teamwork. The

political frame concerns how power and conflict are dealt with, and how coalitions are

formed. The symbolic frame relates to how the organization builds a culture that gives

purpose and meaning to work and builds team cohesion. The four-frame model is illus-

trated in figure 4.3 (Bolman and Deal, 2013, p. 19).

Each frame is associated with a metaphor. The structural frame sees the organization as

a machine, and the problem concerns efficient design. The human resource frame treats the

organization as a family, and the task is to meet the needs of both the organization and its

members. The political frame sees organizations as sites of collaboration and conflict, as

the interests of internal and external stakeholders sometimes overlap, and sometimes dif-

fer. For the symbolic frame, the essence of the organization lies with its culture— symbols,

beliefs, values, norms, rituals, and meanings.

As a change diagnostic, the four-frame model invites the change manager to see the

organization through several different lenses at the same time. This can deepen under-

standing of problems and helps to generate creative solutions by highlighting previously

unseen or unconsidered possibilities.

TABLE 4.1
The Impli-

cations of

Misalignment

Source: Based on Gal-
braith et al. (2002).

Design component Leads to Implications for practice

Strategy
If strategy is missing,
unclear, or not agreed

Confusion No common purpose
People pulling in different directions
No criteria for decision making

Structure
If the structure is not
aligned to strategy

Friction Inability to mobilize resources
Ineffective execution
Lost competitive advantage

Processes
If coordinating mecha-
nisms are left to chance

Gridlock Lack of collaboration across boundaries
Long decision and innovation cycle times
No sharing of information and best
practice

Rewards
If metrics and rewards do
not support the goals

Internal
competition

Diffused energy, wrong results
Low standards
Frustration and staff turnover

People
If staff are not enabled and
empowered

Low
performance

Effort without results
Low job satisfaction

108 Chapter 4 What to Change? A Diagnostic Approach

Metaphorical Diagnostics

In many situations, diagnosis of the need for and

substance of change can be enhanced by capturing

the perspectives of a wide range of the staff who

are involved—at all levels. However, getting people

to talk about the “as is” situation, and what needs

to change, can sometimes be awkward. A useful

technique for overcoming this potential blockage

builds on the concept of “frames,” asking people to

describe their organization (or part of the organiza-

tion) and how it works using a metaphor (an image,

or a simile): “My organization is like a well-oiled

machine”; “My division is a shark-infested pond.”

In our experience, most people quickly generate

such an image when asked: “My organization is like

a dinosaur—large, slow-moving, unresponsive to

change, and headed for extinction.” These images

differ from one individual to another, and become

the basis of discussion, as their originators provide

further detail about what they intended to convey

with their metaphor.

FIGURE 4.3
The Four-Frame Model

Frame

Structural Human Resource Political Symbolic

Organizational

Metaphor

Factory or

machine

Family Jungle Theatre, carnival, temple

Central

Concepts

Roles, goals, poli-

cies, technology,

environment

Needs, skills,

relationships

Power, conflict,

competition,

politics

Culture, meaning,

metaphor, ritual,

ceremony, stories, heroes

Image of

Leadership

Social

architecture

Empowerment Advocacy and

political savvy

Inspiration

Basic

Leadership

Challenge

Attune structure

to task, technol-

ogy, environment

Align

organizational and

human needs

Develop agenda

and power base

Create faith, beauty,

meaning

LO 4.2 Organization Strategy and Change

In this section, we shift the focus from organizational models to strategic analysis

tools. Strategy is a major driver of change, but it is not the only factor. Here, we explain

six tools that are in common use for exploring and shaping an organization’s strategy.

These are gap analysis, the PESTLE framework, scenario planning, elements of strat-

egy, the strategic inventory, and the cultural web.

Gap Analysis
Gap analysis is a simple, flexible, and widely used tool for reviewing the current “as is”

state of an organization, and what has to change. This involves asking three questions:

1. Where are we now?

2. Where do we want to get to?

3. What do we need to do in order to get there?

Chapter 4 What to Change? A Diagnostic Approach 109

These are general questions that almost always elicit a response—from staff at all levels

in an organization—and they are therefore a good basis for discussion. A key issue con-

cerns the degree of consensus in the responses of those who are asked. If everyone agrees,

then action may be rapid. However, if rapid action is not necessary in the circumstances,

it can be useful to deliberately orchestrate a challenge to the consensus. That challenge

could reinforce the consensus view, or it could prompt a reconsideration of “taken for

granted” assumptions. A low degree of consensus prompts further attention to the organi-

zation’s goals, on the grounds that commitment to action should have a reasonably broad

base of agreement, at least concerning the first two questions. Agreement on the third

question may be desirable but is not necessary as long as there is commitment to support

the formal decision on the course of action to be taken.

Gap analysis is flexible with regard to focus and timescale. The first question can relate

to the organization as a whole, or to one or more divisions. If appropriate, it can address a

range of other specific issues: where are we now with regard to staff engagement, updat-

ing our information systems, developing new product lines, streamlining our procurement

processes, and so on. The second question may ask, where do we want to get to in six

months, or two years, or five years, and so on. The simplicity and flexibility of this tool

make it both easy to use and powerful.

As a change diagnostic, this can be a helpful way of establishing a change agenda

(what do we need to do in order to get there?) that has been explored in depth and that is

understood by those involved. Through open discussion, the resultant agenda can gain a

high degree of consensus, but the disagreements that have been aired will also be known

and understood. One problem with gap analysis is that it often suggests a felt need for

deep, transformational change (see figure 1.1, p. 18), which immediately generates an

overwhelming and potentially resource-intensive agenda.

PESTLE Framework
PESTLE is an environmental scanning tool, which provides a structured method for organiz-

ing and understanding complex trends and developments across the political, economic, social,

technological, legal, and ecological factors that can affect an organization. Figure 4.4 shows a

typical PESTLE analysis. This is an illustration, and is not comprehensive. The tidy categories in

the figure can overlap in practice; legislative changes may be politically motivated, and ecologi-

cal concerns reflect changing social values and preferences. The point of the analysis, however,

is to identify the environmental factors that may affect the organization now and in the future.

Environmental complexity makes prediction hazardous. We can predict demographic

trends with some accuracy, with respect to mortality, and gender and age profiles. We can

normally predict economic trends with some confidence in the short to medium term—say

two to three years. Trends in social values and lifestyles, politics, technological innovation,

or the impact of new technology cannot be predicted with much confidence—although

that does not stop journalists and others from making the attempt. Predicting geopolitical

events, such as terrorist attacks and wars, is even more difficult. PESTLE analysis thus

relies heavily on informed guesswork and judgement.

As a change diagnostic, the environmental audit that PESTLE produces can be used to

guide strategic decision making and contingency planning, to exploit opportunities, and to

address potential threats and risks (Morrison and Daniels, 2010). The resultant agenda may

involve immediate change initiatives and can also include longer-term change planning.

110 Chapter 4 What to Change? A Diagnostic Approach

FIGURE 4.4
PESTLE Analysis

Political:

government policy, ideology

geopolitical events, war

civil unrest, political instability

terrorism, non-state groups

interest groups

trade union policies and activities

Economic:

economic growth patterns

competitor behavior

supplier behavior

raw material prices

currency exchange rates

tax regime

wage rates

Social:

demographic trends

lifestyle preferences

social values

attitudes to work

discrimination trends

labor mobility

skills availability

The

organization

Technological: Legal: Ecological:

computing power and costs

new products, new facilities

engineering innovations

new materials

Internet trading

new production methods and

processes

innovation in transport

specific laws

European harmonization, of

legislation and taxation

international law

international trade agreements

human rights

local regulations, by-laws

environmental concerns,

protecting countryside and

shoreline

reducing toxic emissions,

pollution, spills

regulations concerning use of

certain techniques, e.g., genetic

modification of food

hazard prevention

noise pollution

Chapter 4 What to Change? A Diagnostic Approach 111

Scenario Planning
Scenario planning involves the imaginative development of one or more likely pic-

tures of the characteristics of the possible futures for an organization sometimes, but

not necessarily, considering “best-case/worst-case” possibilities. The organization can

then plan an appropriate response to those futures (Verity, 2003). Recent concerns with

regard to geopolitical risks have made scenario planning more popular (see “Scenario

Planning in a High-Risk World, to 2018”). The results of a PESTLE analysis can of

course contribute to scenario development. The Royal Dutch/Shell Company was

responsible for developing scenario planning in the 1970s, and this tool is thus also

known as the “Shell method.”

For example, the consultancy company PricewaterhouseCoopers used scenario plan-

ning to explore the future of work (Arkin, 2007). They developed three possible scenarios

for 2020:

Orange world Big companies have been replaced by networks of small, specialized

enterprises. People work on short-term contracts, exploring job

opportunities online through portals developed by craft guilds.

Green world Demographic change, climate, and sustainability are key business

drivers. Employment law, employee relations, and corporate respon-

sibility are vital in this heavily regulated environment.

Blue world Huge corporations are like mini-states, providing staff with housing,

health, education, and other welfare benefits. Human capital metrics are

sophisticated, and people management is as powerful as finance.

As a change diagnostic, scenario planning encourages creative “blue skies” decision

making, to identify the most probable futures for the organization. This analysis then

forms the basis for prioritizing, planning, and acting to implement appropriate changes.

Chapter exercise 4.2 invites you to carry out a scenario planning exercise for an organiza-

tion with which you are familiar.

Scenario Planning in a High-Risk World, to 2018

The Economist Intelligence Unit (Mitchell, 2008)

surveyed 600 global executives in 2008 and asked

them which risks were the most threatening to their

business over the next decade, to 2018. The top 12

risks that concerned these executives were:

Increase in protectionism

Major oil price shock

Collapse in asset prices

Emergence of a disruptive business model

International terrorism

Unexpected regulatory change

Global recession

Instability in the Middle East

Increased competition from emerging-market

companies

Talent shortages

Climate change

Increased industrial pollution

Only 26 percent said that they used scenario

planning regularly, 41 percent used it on an ad hoc

basis, and 29 percent said that they would be using

it in future.

112 Chapter 4 What to Change? A Diagnostic Approach

Elements of Strategy
Strategy is often considered to be at the heart of change because it addresses the basic issues

with which an organization has to deal: what are we seeking to achieve, and how? Strategy

and change intersect because strategies can change (“change of strategy”) and change may

be necessary in order to realize a set strategy (“change for strategy”). Donald Hambrick and

James Fredrickson (2001) developed a framework that characterizes organization strategy in

terms of five mutually reinforcing elements: arenas, vehicles, differentiators, staging, and eco-

nomic logic (table 4.2). Misalignment of these elements indicates a potential need for change.

From this perspective, only when all five strategic elements have been determined is

it possible to assess the structures and systems that will be appropriate to pursuing the

strategy. However, before moving to this stage, it is important to test the quality of the pro-

posed strategy. Hambrick and Fredrickson (2001) suggest the six “key evaluation criteria”

explained in table 4.3.

As a change diagnostic, therefore, this analysis identifies the organizational changes

that are necessary in order to pursue a desired strategy. If for any reason (cost, time, exper-

tise) those changes are difficult or impossible to implement, then the strategy may have to

be reconsidered. This approach can also help to generate an integrated package of change

initiatives that are mutually self-reinforcing, and which are aligned with organization

TABLE 4.2
The Elements

of Strategy

1. Arenas: What business will we be in?
Which product categories?
Which market segments?
Which geographic areas?
Which core technologies?
Which value-creation stages?

2. Vehicles: How will we get there?
Internal development?
Joint ventures?
Licensing/franchising?
Acquisitions?

3. Differentiators: How will we win in the marketplace?
Image?
Customization?
Price?
Styling?
Product reliability?

4. Staging
Speed of expansion?
Sequence of initiatives?

5. Economic Logic
Lowest costs through scale advantage?
Lowest costs through scope and replication advantage?
Premium prices due to unmatchable service?
Premium prices due to proprietary product features?

Source: Academy of Management Executive, Hambrick and Fredrickson © 2001 by the Academy of Management (NY). Reproduced with

permission of Academy of Management (NY) in the format Textbook via Copyright Clearance Center.

Chapter 4 What to Change? A Diagnostic Approach 113

strategy. While integration and alignment may sound like straightforward advice, this can

often be difficult to achieve in practice. For example, problems can arise when changes

that are optimal for one division of the organization undermine activities and changes in

other divisions (see point 5 in table 4.3 about spreading resources too thinly).

The Strategic Inventory
Strategy is about the future, committing resources to activities based on “assumptions,

premises and beliefs about an organization’s environment (society and its structure,

the market, the customer, and the competition), its mission, and the core competencies

needed to accomplish that mission” (Picken and Dess, 1998, p. 35). These assumptions,

premises, and beliefs, often formed over time through experience, become a “men-

tal grid” through which new information is sifted and interpreted. To the extent that

this grid comprises assumptions and beliefs that accurately reflect the environment, the

quality of strategic decision making is enhanced. However, when assumptions fail to

reflect key elements of the business environment, they can lead to the adoption of inap-

propriate strategies, a phenomenon known as “strategic drift.”

As a change diagnostic, identifying and validating management’s strategic assumptions

can be useful in assessing whether or not strategy is consistent with key elements of the

TABLE 4.3
Testing the

Quality of Your

Strategy: Key

Evaluation

Criteria

Key Evaluation Criteria

1. Does your strategy fit with what’s going on in the environment?
Is there a healthy profit potential where you’re headed?
Does strategy align with the key success factors of your chosen environment?

2. Does your strategy exploit your key resources?
With your particular mix of resources, does this strategy give you a good head
start on your competitors?
Can you pursue this strategy more economically than competitors?

3. Will your envisaged differentiators be sustainable?
Will competitors have difficulty matching you?
If not, does your strategy explicitly include a ceaseless regimen of innovation and
opportunity creation?

4. Are the elements of your strategy internally consistent?
Have you made choices of arenas, vehicles, differentiators, staging, and economic logic?
Do they all fit and mutually reinforce each other?

5. Do you have enough resources to pursue this strategy?
Do you have the money, managerial time and talent, and other capabilities to do
all that you envision?
Are you sure you’re not spreading your resources too thinly, only to be left with a
collection of weak positions?

6. Is your strategy implementable?
Will your key constituencies allow you to pursue this strategy?
Can your organization make it through the transition?

Are you and your management team able and willing to lead the required changes?

Source: Academy of Management Executive, Hambrick and Fredrickson © 2001 by the Academy of Management (NY). Reproduced with

permission of Academy of Management (NY) in the format Textbook via Copyright Clearance Center.

114 Chapter 4 What to Change? A Diagnostic Approach

TABLE 4.4
The Strategic

Inventory

Defining the boundaries of the competitive environment
What are the boundaries of our industry? What is our served market? What products
or services do we provide?
Who are the customers? Who are the noncustomers? What is the difference
between them?
Who are our competitors? Who are the noncompetitors? What makes one firm a
competitor and the other not?
What key competencies are required to compete in this industry? Where is the value
added?

Defining the key assumptions
Who is our customer? What kinds of things are important to that customer? How
does he or she perceive us? What kind of relationships do we have?
Who is the ultimate end user? What kinds of things are important to this end user?
How does he or she perceive us? What kind of relationship do we have?
Who are our competitors? What are their strengths and weaknesses? How do they
perceive us? What can we learn from them?
Who are the potential competitors? New entrants? What changes in the environ-
ment or their behavior would make them competitors?

Assumptions and Strategy Strategic Drift and the Beech Starship

In the early 1980s, Raytheon Co. acquired Beech, a

light-aircraft company that had fallen on hard times.

The managers appointed by Raytheon proposed to

reinvigorate Beech by producing an advanced tur-

boprop aircraft based on the latest carbon-fiber

technology. It was expected that this technology

would enable Beech to compete at the lower end

of the business jet market, with a product that was

60 percent the price of competitors as well as being

more fuel efficient. An 85 percent scale model “Star-

ship” was built and, on the basis of good reviews,

Beech announced that it would invest in a new fac-

tory to make the plane, which would be ready for

sale in two years (Picken and Dess, 1998).

This initiative was based on several assumptions:

1. That Beech could complete the design of the

new aircraft and get Federal Aviation Administra-

tion (FAA) certification within two years.

2. That the new carbon-fiber technology would not

be a significant problem, even though it was not

covered by the existing regulations.

3. That sufficient aircraft would be built to justify

the expenditure on a new factory.

However, the FAA had never certified an all-

composite aircraft and insisted on compliance

with the standards for metal aircraft. This led to

a redesign, which increased the weight, which

required a bigger engine, which needed more

fuel, which meant more weight, which meant fur-

ther redesign, and so on. Eventually, the Starship

made it to market, but it was four years late, car-

ried only 6 passengers rather than 10, and cruised

at 335 knots instead of 400. The price advantage

over jets had also disappeared. The expected

demand failed to materialize, and the production

line was closed.

business environment. This assessment can then identify whether an organization’s strat-

egy should be a focal point for change. To establish the degree of consensus on domi-

nant strategic assumptions, Joseph Picken and Gregory Dess (1998) developed a “strategic

inventory” (table 4.4).

Chapter 4 What to Change? A Diagnostic Approach 115

What is the industry’s value chain? Where is value added? What is the cost struc-
ture? How does our firm compare? How about our competitors?
What technologies are important in our industry? Product technologies? Production
technologies? Delivery and service technologies? How does our firm compare? How
about our competitors?
What are the key factors of production? Who are the suppliers? Are we dependent
on a limited number of sources? How critical are these relationships? How solid?
What are the bases for competition in our industry? What are the key success fac-
tors? How do we measure up? How about our competitors?
What trends and factors in the external environment are important to our industry?
How are they likely to change? Over what time horizon?
Are we able, in assessing our knowledge and assumptions, to separate fact from
assumption?

Is our assumption set internally consistent?
For each pair of assumptions, can we answer “yes” to the question: “If assumption
A is true, does assumption B logically follow?”

Do we understand the relative importance of each of our assumptions?
In terms of its potential impact on performance?
In terms of our level of confidence in its validity?
In terms of the likelihood and expectation of near-term change?
In terms of its strategic impact?

Are our key assumptions broadly understood?
Have we documented and communicated our key assumptions? To our key manag-
ers? To the boundary-spanners? To other key employees?

Do we have a process for reviewing and validating our key assumptions and
premises?

Is there a process in place? Are responsibilities assigned? Are periodic reviews

planned and scheduled?

Picken and Dess (1998) suggest that, where there is consensus on strategic assump-

tions, the organization should seek an independent validation, to check for biases. Where

significant divergence exists, attention should focus on which (and whose) assump-

tions are currently embedded in strategy, and which (and whose) can again be indepen-

dently validated. The strategic inventory involves a more sophisticated analysis than

that provided by the widely used SWOT approach to understanding an organization’s

strengths, weaknesses, opportunities, and threats. The danger with SWOT analysis is

that it becomes a listing not of strengths but “perceived strengths,” not weaknesses but

“perceived weaknesses,” and so on. It may simply capture existing beliefs, the current

dominant logic, which may need to be challenged in order to improve organizational

performance.

The Cultural Web
Organization culture is often seen as a response to performance problems and is a

component of many change diagnostics. Gerry Johnson (1998; Johnson et al., 2013)

116 Chapter 4 What to Change? A Diagnostic Approach

describes organization culture in terms of a “cultural web” that has seven elements

(figure 4.5):

1. The paradigm: The set of assumptions commonly held throughout the organization

with respect to basic elements of the business such as what business we’re in, how we

compete, who our competitors are.

2. Rituals and routines: These concern how organizational members treat each other and,

perhaps more importantly, associated beliefs as to what is right and proper and valued

in this regard.

3. Stories: As told by organization members, stories are a form of oral history and com-

municate and reinforce core elements of the culture.

4. Symbols: Logos, office design, dress style, language use, and other symbols convey

aspects of the culture.

5. Control systems: What is valued in the organization is communicated through what is

measured and rewarded.

6. Power structures: These concern the most influential management groups in the

organization.

7. Organizational structure: The formal and informal differentiation and integration

of tasks.

As a change diagnostic, Johnson (1998; Johnson et al., 2013) describes the value of

“mapping” the organization’s cultural web. First, exposing issues that are rarely discussed

is a useful way of questioning traditional norms and habits. If what is taken for granted

is never questioned, then change will be difficult. Second, cultural mapping can highlight

potential barriers to change. Third, it may also be possible through this approach to iden-

tify aspects of the culture that are especially resistant to change. Fourth, a culture map

FIGURE 4.5
The Cultural

Web

Source: Based on
Johnson (1998).

Stories Symbols

Rituals and

Routines
The

Paradigm
Power

Structures

Organizational

Structures
Control

System

Chapter 4 What to Change? A Diagnostic Approach 117

can be the basis for considering the changes that will be necessary to pursue a new strat-

egy. Finally, practical ideas for managing those changes can then be developed.

The unit of analysis for the cultural web is the organization as a whole. The change

manager with a specific initiative in a particular division, therefore, may not find this

approach helpful in identifying ways to increase the probability of success of that change

project.

LO 4.3 Diagnosing Readiness for Change

The diagnostics that we have discussed so far have been designed to help decide whether

or not an organization has to change, and if so, to determine what has to change. It is

often appropriate to ask two other sets of questions before pressing ahead with imple-

mentation. First, is the organization as a whole receptive to change? We will explore

this question through the concepts of the receptive organizational context, absorptive

capacity, and the innovative organization. We will also discuss the technique of force-

field analysis to assess how receptive an organization is to a particular change. Chapter

exercise 4.3 offers another readiness diagnostic. Second, are those who will be affected

ready for these changes? In this section, therefore, we will explore both organizational

receptiveness (or readiness) and individual readiness (or receptiveness) to change. The

aim, of course, is not simply to establish levels of organizational and individual readi-

ness. Understanding why readiness may be low is a platform for remedial action, to

strengthen receptiveness and readiness where appropriate.

The Receptive Organizational Context
Organizations vary in their receptiveness to change. This variation depends on a num-

ber of conditions (Eccles, 1984):

1. Is there pressure for change?

2. Is there a shared vision of the goals, benefits, and direction?

3. Do we have effective liaison and trust between those concerned?

4. Is there the will and power to act?

5. Do we have enough capable people with sufficient resources?

6. Do we have suitable rewards and defined accountability for actions?

7. Have we identified actionable first steps?

8. Does the organization have a capacity to learn and to adapt?

Where the answers to these questions are “yes,” organizational receptiveness is high,

and resistance to change is likely to be limited. However, without pressure, clear goals,

trust, power to act, resources, and so on, receptiveness is likely to be low, and the

changes will be more difficult to implement. It is important to note that an organiza-

tion as a whole may be more or less receptive to change, regardless of the attitudes of

individual members.

This simple receptiveness diagnostic highlights two practical issues. The first is timing.

Some conditions (growing pressure, for example) may improve simply by waiting. The

118 Chapter 4 What to Change? A Diagnostic Approach

second concerns action, to strengthen the conditions when receptiveness is low. Remedial

actions could involve:

Ensuring that the rationale for change is strong and understood.

Articulating a clear vision of goals and benefits.

Confidence-building measures to develop interpersonal and interdivisional trust.

Ensuring that key positions are held by dynamic, high-performing individuals.

Developing change management capabilities across the organization.

Providing adequate resources (people, technology, training) to support the proposed

changes.

Aligning performance management and reward systems with change goals.

Clearly establishing the initial action plan.

Developing learning organization capabilities.

The key point is that organizational receptiveness to change can be managed, by

taking steps to change the conditions that lower receptiveness. Most of those steps are

cost-neutral.

Absorptive Capacity
Wesley Cohen and Daniel Levinthal (1990) developed the related concept of “absorptive

capacity,” which they defined as the ability of an organization to value, to assimilate,

and to apply new knowledge. Absorptive capacity depends on an organization’s exist-

ing stock of knowledge and skills, and a “learning organization culture” with leader-

ship and norms that support the acquisition, sharing, and application of new ideas. From

their comprehensive review of work on this abstract and complex concept, Shaker Zahra

and Gerard George (2002, p. 185) redefine absorptive capacity as “a dynamic capabil-

ity pertaining to knowledge creation and utilization that enhances a firm’s ability to

gain and sustain a competitive advantage.” They argue that absorptive capacity has four

dimensions:

1. Acquisition: The ability to find and to prioritize new knowledge and ideas quickly and

efficiently.

2. Assimilation: The ability to understand new knowledge and to link it to existing

knowledge.

3. Transformation: The ability to combine, convert, and recodify new knowledge.

4. Exploitation: The ability to use new ideas productively.

Acquisition depends on the organization’s external links and networks, which are often

available only to a small number of professional staff and senior management. Assimila-

tion, transformation, and exploitation rely more on internal capabilities, relationships, and

systems. These four dimensions can also be managed. Actions to increase an organiza-

tion’s absorptive capacity include widening the exposure of staff to external networks;

the use of job rotation and cross-functional teams to encourage the sharing of knowledge

and ideas across organizational boundaries; wider employee participation in management

decision making; and relaxing rules, procedures, and routines that stifle exploration and

experimentation (Jansen et al., 2005). Once again, many of these actions are cost-neutral.

Chapter 4 What to Change? A Diagnostic Approach 119

The Innovative Organization
A related perspective on receptiveness to change has focused on innovative organiza-

tions. Rosabeth Moss Kanter (1983; 1989) makes a distinction between integrative and

segmentalist organization structures and cultures. Integrative structures and cultures

display the following features:

Holistic problem-solving

Team orientation

Cooperative environment

Mechanisms for ideas generation and exchange

Sense of purpose and direction

Ability to overthrow history and precedent

Use of internal and external networks

Person- and creation-centered

Results-oriented

Segmentalist organizations, in contrast, are characterized by the compartmentalization

of problem-solving and a preoccupation with hierarchy, efficiency, and rules. Segmentalist

organizations, Kanter argues, are “innovation smothering,” and integrative organizations

are “innovation stimulating.” It is usually not difficult to identify innovation smoth-

ering and stimulating cultures by observing both the physical features of the organiza-

tion (layouts, color schemes) and staff behavior; see “Charlie’s Angels and the Red Star

Corporation.”

If we understand the features of an organization that respectively stimulate and smother

creativity and innovation, then we can start to change or remove those that smother and

strengthen those that stimulate. Table 4.5 illustrates the features to look for. These are not

comprehensive lists, and you will be able to identify other stimulating and smothering

features yourself, by observation.

Charlie’s Angels and the Red Star Corporation

We are going to ask you to watch part of the movie

Charlie’s Angels (Columbia Pictures, directed by

Joseph McGinty Nichol [“McG”], 2000). Charlie’s

Angels are three private investigators on a mission

to rescue a billionaire who has been kidnapped for

his sophisticated software skills. Go to DVD track

14, where Alex (played by Lucy Liu), masquerad-

ing as an “efficiency expert,” leads the Angels

into the Red Star Corporation headquarters, in an

attempt to penetrate their security systems. Watch

this sequence until the end of Alex’s presentation,

when she says, “Better yet, can anyone show me?”

As you watch this short clip, consider the following

questions:

Is this an organization that stimulates or smoth-

ers creativity and innovation?

How do you know? Identify the clues, visual

and spoken, that support your assessment of

the Red Star organization culture.

What general characteristics of innovative

organizations are illustrated here?

120 Chapter 4 What to Change? A Diagnostic Approach

TABLE 4.5
Organizational Features That Stimulate and Smother Innovation

Stimulating Innovation Smothering Innovation

No boundaries Large organization

Flat organization structure Many layers of management

Small unit size Risk aversion, negativity

Fast approval processes Closed-door policy

Empowerment of staff Bureaucracy

Cross-functional teams Controlled environment

Job rotation Cumbersome approval processes

Flexible career paths Too many procedure manuals

Supportive rewards and recognition Segregation—keeping groups apart

Management backing for innovation Avoid competition

Allocation of resources, including time Encourage mediocrity, “good enough” is OK

Sharing information Perfectionism, “not good enough” is punished

Positive culture that celebrates successes “We’ve tried that before, we know best”

Encourage creative processes, brainstorming Inadequate resources

Allowed to take risks and make mistakes Overload, stress, burnout, people leaving

Focus on results and not methods Emphasize the urgent, not the important

Exploit problems to create opportunities Culture of blame, recriminations for failure

Links to external organizations and events Inward looking

Weekend retreats, informal, out of office No resources for training and development

Rules for Stifling Innovation

Rosabeth Moss Kanter (2002) instructs manage-

ment on how to stifle innovation:

Regard a new idea from below with suspicion,

because it’s new, and because it’s from below.

Insist that people who need your approval to

act first go through several other levels of man-

agement to get their signatures.

Ask departments or individuals to chal-

lenge and criticize each others’ proposals. That

saves you the job of deciding; you just pick the

survivor.

Express criticism freely, and withhold praise.

That keeps people on their toes. Let them know

that they can be fired at any time.

Treat identification of problems as signs of fail-

ure, to discourage people from letting you know

when something in their area isn’t working.

Control everything carefully. Make sure people

count anything that can be counted, frequently.

And above all, never forget that you, the

higher-ups, already know everything important

about this business.

Chapter 4 What to Change? A Diagnostic Approach 121

Force-Field Analysis
Force-field analysis is a popular diagnostic, developed in the mid-twentieth century

by Kurt Lewin (1943; 1951). As a change diagnostic, this tool has two main purposes.

First, it can be used to assess whether or not an organization is ready for a particular

change initiative. Second, if readiness or receptiveness is low, force-field analysis can

help to identify and prioritize the preparation or “groundwork” that may be required

before implementation can begin. The analysis involves identifying the forces that are

respectively driving and restraining movement toward a given set of outcomes, called

the “target situation.” The “field” is usually drawn like this:

Target Situation: Develop Customer-Orientation

Driving Forces Restraining Forces

Static sales Difficult to recruit capable sales staff

Increasingly aggressive competition High turnover among part-time staff

Rising number of customer complaints Trained and capable staff are “poached”

Brand being criticized on social media Our competitors face similar problems

New chief executive supports this move Cost of customer relationships training

This example is artificial, to illustrate the approach. It is unusual, for example, to have

the same number of forces on the driving side as on the restraining side. Having con-

structed the field, the forces that have been identified can each be weighted or scored, say

from 1 (weak) to 10 (strong), to produce a rough calculus to the balance of forces. This

scoring procedure can give the analysis a false image of quantified rigor. More important

than the forces and their scores is the discussion that produces the analysis. Who conducts

this analysis is thus also important, often a project team or steering group. The underpin-

ning discussion can expose wide differences in perception, both of the forces in play, and

of their strength. The debate helps either to resolve those differences, or at least to allow

those involved to know how their opinions vary, and how those differences have arisen.

If the driving forces are overwhelming, then the change can go ahead without signifi-

cant problems. If the restraining forces are overwhelming, then the change may have to

be abandoned, or delayed until conditions have improved. However, if the driving and

restraining forces are more or less in balance, then the analysis can be used to plan appro-

priate action. The extent to which the force field is balanced is a matter of judgement.

Used in a group setting, this method helps to structure what can often be an untidy discus-

sion covering a wide range of factors and differing perceptions.

Managing a balanced force field to promote movement toward the target situation

involves the following considerations:

1. Increasing the driving forces can often result in an increase in the resisting forces. This

means that the current equilibrium does not change, but instead is maintained with

increased tension.

2. Reducing the resisting forces is preferable, as this allows movement toward the desired

outcomes or target situation without increasing tension.

3. Group norms are an important force in resisting and shaping organizational change.

122 Chapter 4 What to Change? A Diagnostic Approach

Individual Readiness for Change
Individual readiness for change is a predisposition, perhaps even impatience, to welcome

and embrace change. Where individual readiness is high, change may be straightforward.

But when readiness is low, as with organizational receptiveness, some “groundwork” may

be required to increase levels of change readiness among those who are going to be affected.

Rafferty et al. (2013) view change readiness as an individual attitude that has both cog-

nitive and emotional (or “affective”) dimensions. “Collective readiness” for change, of a

group or organization, is based on the shared beliefs that develop through social interac-

tion and shared experiences. Underpinning an individual’s change readiness, therefore, are

five beliefs:

1. Discrepancy: The belief that change is needed.

2. Appropriate: The belief that the proposed change is an appropriate response.

3. Efficacy: The individual’s perceived capability to implement the change.

4. Principal support: The belief that the organization (management, peers) will provide

resources and information.

5. Valence: The individual’s evaluation of the personal costs and benefits; no benefits, no

overall positive evaluation of readiness.

Individual change readiness is demonstrated through support for, openness toward, and

commitment to change. These attitudes and behaviors can be influenced by three sets of factors.

The first concerns external pressures, including industry and technology changes, new

regulations, and professional group memberships. The second set of factors concerns what

Rafferty et al. (2013) call “internal context enablers,” including change participation and

communication processes, and leadership. The third set of factors concern personal char-

acteristics and include needs, values, and traits such as self-confidence, risk tolerance,

dispositional resistance to change, and self-efficacy.

From a change management perspective, therefore, individuals’ readiness for change can

be assessed and can also be influenced. With regard to increasing readiness, research evidence

points in particular to the power of the internal enablers. Individual readiness for change can

be influenced by processes that are designed to enhance participation in decisions, by high-

quality change communications, and by perceptions of the organization’s history of change

(previous experience, support for change, congruence of values). Again, there are practical

steps that change managers can take in order to increase the probability that a change initia-

tive will be welcome and successful—and most of those steps involve little or no expenditure.

Stakeholder Analysis
Another approach to assessing individual readiness for change involves stakeholder

analysis, which focuses on the positions of key stakeholders. A stakeholder is any-

one who is likely to be affected by an organizational change or program of changes,

and who can influence the outcomes, directly or indirectly. Those stakeholders may be

members of the organization, or of external groups and agencies, including other orga-

nizations. Stakeholder analysis usually involves the following steps:

1. Identify the stakeholders for the change initiative under consideration. Stakeholders

may have a formal connection to the organization: owners, managers, suppliers, cus-

tomers, employees. However, other individuals and groups are often able to exert influ-

ence: regulatory bodies, financial institutions, local government officials.

Chapter 4 What to Change? A Diagnostic Approach 123

2. Establish what each of those stakeholders expects to gain or lose if the changes go

ahead, and their respective power to support or block the initiative.

3. Check each stakeholder’s “track record” with regard to comparable issues. Were they

supportive, or not? If possible, identify what position your stakeholders are taking with

regard to the current change. Behaviors are more significant than attitudes. Those who

say that they are supporters may quickly switch their views in the face of difficulties.

Equally, however, those who are initially hostile to the change may become supportive

if they believe that the change will happen and be of benefit to them.

4. Use the planned benefits of the change to strengthen support for the proposals. It is

often possible to find ways to address the concerns of those who feel they will lose out,

by altering the nature of the changes proposed, perhaps, or by offering to reduce their

losses in other ways.

The levels of stakeholders’ power can be plotted against their interests, as shown in

the “power-interest matrix” in figure 4.6. Action to manage the stakeholders for a given

change initiative can then be based on this matrix (Grundy, 1997):

Can new stakeholders be added to change the balance?

Can oppositional stakeholders be encouraged to leave?

Can the influence of pro-change stakeholders be increased?

Can the influence of antagonistic stakeholders be decreased?

Can the change be modified in a way that meets concerns without undermining the

change?

If stakeholder resistance is strong, should the proposal be revisited?

Stakeholder analysis informs change managers about the likely responses of key stake-

holders, and steps can then be taken to manage those stakeholders, to weaken opposition

and strengthen support.

It seems to be clear that, with regard to both organizational receptiveness to change and

individual readiness to change, the change manager does not have to accept the diagnosis.

There are practical—and often inexpensive—actions that can be taken to increase recep-

tiveness and readiness. The diagnostic approaches described in this section help to identify

what those actions could involve.

LEVEL OF INTEREST

Low

A

Minimal efort

B

Keep informed

C

Keep satisfied

D

Key players

High

Low

POWER

High

FIGURE 4.6
Power-Interest

Matrix

Source: Based on
Grundy (1997).

124 Chapter 4 What to Change? A Diagnostic Approach

LO 4.4 Built-to-Change

The observation that some organizations are simply better able to manage and implement

change than others has a long history. This notion of ability to change is different from assess-

ing whether an organization is ready to change or can absorb further change. For example,

from their study of the electronics sector in Scotland in the 1950s, Tom Burns and George

Stalker (1961) distinguished between mechanistic and organic management systems (what we

now call organization cultures). By mechanistic, they meant rigid and bureaucratic. Organic

systems, in contrast, are flexible and adaptable (or “agile”). Their main argument still holds:

mechanistic organizations perform well in stable environments, but in turbulent environments,

organic organizations perform better. As we discussed earlier, Kanter (1983) subsequently

“rediscovered” this argument in her distinction between “segmentalist” (mechanistic, bureau-

cratic) and “integrative” (organic, agile) cultures.

Echoing those previous arguments, Christopher Worley and Edward Lawler (2006)

note that many businesses are organized in ways that discourage change, and that this

is not consistent with the contemporary need for agility and adaptation. The competing

organizational need for stability and predictability leads to structures and management

practices that are designed to minimize variability and instability. The problem, they argue,

is that organizations are usually built to last. The answer is to design organizations that

are built-to-change, that are efficient in terms of today’s performance and also flexible in

responding to environmental trends and developments. The contrasts between traditional

and built-to-change organization designs are summarized in table 4.6.

TABLE 4.6
Traditional and “Built-to-Change” Organization Design Principles

Traditional Built-to-Change

Job descriptions that detail specific responsibilities Goal-setting reviews to identify what individuals
and teams should achieve in the near future

Hire people with the capabilities for the job for
which they have applied

Hire people with initiative, who like change, who
are quick learners and want development

Employment contract based on expectations set
out in job description

Employment contract stating that support for
change is an expected condition of employment

Job-related skills training Ongoing training in skills to support change

Pay and rewards based on seniority and focused on
individual job performance

Variety of rewards—bonuses, stock—for all staff,
and group and unit bonuses linked to change

Pay for the job, and what it involves Pay for the person, and what they contribute

Specialist market research and environmental scan-
ning staff/departments; most staff thus have an
internal focus

Maximize the “surface area” of staff in touch with
customers and environment; most staff thus have
an external as well as an internal focus

Hierarchical structures Process-based, cross-functional network structures

Inflexible annual budgeting Costs controlled by profit centers

Quarterly/annual performance updates Transparent real-time performance information

Senior leaders set direction, give orders Shared leadership, all levels in the organization

Leadership development for the “stars” Leadership development for most staff

Source: Based on Worley and Lawler (2006).

Chapter 4 What to Change? A Diagnostic Approach 125

The built-to-change organization uses design principles concerning talent management,

reward systems, organization structure, information and decision processes, and leader-

ship. This approach assumes that “continuous change is simply business as usual” (Worley

and Lawler, 2006, p. 23). This presents a challenge to conventional approaches to change

management, which assume the need for a planned organizational transition from one

state to another. However, if an organization can be inherently built-to-change, then the

processes and techniques of managing organizational change described in texts like this

one may only be required rarely and in extreme circumstances.

From a survey of 40 service and manufacturing sector organizations, Worley and

Lawler (2010, p. 2) conclude that any organization can develop agility, defined as “an

evolving change and design capability, a leadership challenge that is never finished, only

approached over time, but which yields consistently high levels of sustainable effective-

ness.” The organizations with consistently high performance had higher agility scores,

measured using the design principles in table 4.6.

Chapter exercise 4.1 describes one organization that has developed “built-to-change”

capabilities. Is this model effective, and is it more widely applicable?

Designed Not to Change

The reality is that today’s organizations were sim-

ply never designed to change proactively and

deeply—they were built for discipline and efficiency,

enforced through hierarchy and routinization. As

a result, there’s a mismatch between the pace of

change in the external environment and the fastest

possible pace of change at most organizations. If it

were otherwise, we wouldn’t see so many incum-

bents struggling to intercept the future.

Source: Hamel and Zanini (2014).

EXERCISE
4.1

The Capital

One Finan-

cial Story

As you read the following account, consider the following questions:

1. The “built-to-change” model has been promoted as desirable for most if not all orga-
nizations. However, from a corporate management perspective, what are potential
disadvantages of developing a built-to-change organization?

2. From the perspective of an individual employee, what are the benefits of working in a
built-to-change organization?

3. For the individual employee, what are the potential disadvantages of working in a
built-to-change organization?

4. Capital One Financial operates in a fast-moving sector. To what extent will built-to-
change design principles apply to organizations in other industries, with different
environments?

Capital One Financial was one of America’s largest financial services companies, with
annual revenues of more than $20 billion, 45 million customer accounts, and around
40,000 employees. Worley and Lawler (2009) tell the story of how Capital One became
a “built-to-change” organization by developing an “enterprise-wide change capabil-
ity.” Like all financial services organizations, Capital One had to respond, frequently and

LO 4.4

(Continued)

126 Chapter 4 What to Change? A Diagnostic Approach

rapidly, to regulatory changes and shifting market and economic conditions. To remain
competitive, change had to be routine.

In an era when environments are changing faster and faster, the rhetoric on organi-
zational effectiveness is clear: successful organizations must be more agile and adapt-
able. Redesigning work processes, integrating acquired businesses, implementing
large-scale information technology systems, and entering foreign markets are a few
of the challenging changes companies are implementing. Any one of them can prove
very difficult to accomplish—most estimates put the success rate for a large-scale
organizational change at about 25–30 percent. Successfully implementing several of
them in a short time period is virtually impossible. (Worley and Lawler, 2009, p. 245)

How did the company develop its change capability? Worley and Lawler (2009) iden-

tify four elements in Capital One’s approach, summarized in table 4.7.

TABLE 4.7
Capital One: Built-to-Change Elements

Element In Practice at Capital One

Focus on the future Analysts’ time spent on exploring future trends and implications

Momentary
advantages

“Test and learn” approach to developing new income streams

Organizational
flexibility

Hire people who like change, flat structures, vague job descrip-
tions, decentralized decision making, pay for results, flexible
performance management process, frequent reorganizations

Change capability Competencies related to change, and ability to change routinely

Recognizing the need for constant change, a small number of “high potential” staff
were given training in leadership and change management. This was successful in gen-
erating valuable change initiatives. However, this approach could not provide the enter-
prise-wide change capability that the company believed was necessary. Management did
not want to set up either a central corporate resource or a group whose members could
be assigned to help business units implement change as needed. The solution was the
“Building a Change Capability” (BCC) project, which had three components.

First, create “versatilist” line managers with the knowledge and skills to lead change;
neither generalists nor specialists, these versatilists were able to accelerate the change
process on their own initiative, without asking for help.

Second, to achieve simplicity and speed, Capital One decided to use a standard
change methodology across the organization, replacing the 17 different models that
were previously in use, along with 160 different tools. The chosen approach was the
ADKAR model, which stands for creating Awareness, having the Desire, the Knowledge,
and the Ability, and Reinforcement (Hiatt, 2006). This was easy for staff to understand
and use, and was consistent with the previous change management training.

Third, two change courses were offered by the company’s corporate university, to explain
the ADKAR model and identify change management behaviors. The model and other rel-
evant materials were also disseminated through a change management portal on the com-
pany intranet, with case studies, diagnostic tools, and templates with which to develop
change and communication plans. The BCC project also meant that there would be no staff

Chapter 4 What to Change? A Diagnostic Approach 127

EXERCISE
4.2

Scenario

Planning

Here is one structured methodology for scenario planning, for your own organization or
for one with which you are familiar:

1. “Brainstorm” the range of environmental factors that have the potential to impact on
the performance of your organization. In the spirit of brainstorming, accept all sugges-
tions at this point, and suspend judgement as to the significance of any suggested factor.

2. Ask individuals to identify which factors from this list they believe to be the “key driv-
ers” of the organization’s performance over a specified time period—say, five years.

3. Aggregating these individual responses, identify the five most commonly cited key driv-
ers; these could be, for example, exchange rates, new technologies, entry by new com-
petitors, mergers, competition for key staff, costs and/or shortages of raw materials.

4. Using these key drivers as the core elements, construct three future scenarios for the
organization: the most likely, an optimistic scenario, and a pessimistic one. The “most
likely” scenario is constructed on the basis of the “best guess” as to what will happen
to each of the five key drivers over the specified time frame. Note that “best guess”
does not imply a casual approach; best guess can be based on sophisticated market
intelligence and forecasting. The “optimistic” and “pessimistic” scenarios focus atten-
tion on how the organization might respond to each of those outcomes. The con-
struction of the scenarios requires skill, and it is not uncommon for organizations to
employ external consultants who are experienced in scenario development. Scenarios
need to be compelling and plausible narratives, even if they are unlikely to happen.
This is necessary if they are to form the basis of discussion concerning the organiza-
tion’s response to those three possible futures.

5. Finally, outline the different organizational change agendas that will be required to
deal with each of those three possible futures.

LO 4.3

in the human resource management function with full-time jobs dedicated to change man-
agement, as the aim was to distribute those capabilities throughout the company.

BCC implemented several initiatives, including a large-scale systems conversion proj-
ect, a human resources reengineering project, a system to measure and reward change
management competencies, and a workplace redesign project called “Future of Work.”
The outcome for Capital One was:

It does not “manage change” as if it were some unwanted intruder; it does not view
change management as an afterthought to improve the chances of getting some key
resistors to “buy into” a new initiative. Change is integrated into the way Capital One
formulates strategy, structures itself, and measures and rewards performance. (Worley
and Lawler, 2009, p. 245)

Success with this approach to change gave Capital One staff the confidence and desire
to take on even more initiatives. Worley and Lawler (2009) argue that Capital One had
effectively integrated change capabilities with business knowledge, creating a climate of
continuous change. They offer three key learning points for other organizations. First,
signal the commitment to developing change capability by providing training opportu-
nities, and by rewarding the acquisition of change-related skills. Second, develop sup-
portive organization structures and systems (table 4.6). Third, be prepared to learn from
experience in the process of developing the organization’s capacity for change. Change
capability, they conclude, is the “missing ingredient” in organizational effectiveness.

128 Chapter 4 What to Change? A Diagnostic Approach

EXERCISE
4.3

Readiness

for Change

Analysis

The purpose of this diagnostic is to assess whether a specific organizational change ini-
tiative, project, or program has been well planned. Before you begin this assessment
process, therefore, you must agree on a description of the proposed change or changes:

You can carry out this assessment on your own, or with colleagues in the organiza-
tion—your steering group or project team, for example. Study the following items and
circle the appropriate number on the scale. The number that you circle should reflect your
view of the quality of the work carried out on that item, with respect to this change, so
far. Keep the agreed definition of the proposed change in mind throughout this analysis.

This is a generic assessment tool, and the wording may not apply directly to your
organization. If you feel that an item is not relevant to your circumstances, either ignore
it, or think of a way in which that item should be reworded to make it more appropriate.

If you are working on this assessment with other members of your program, project, or
change management team, complete this analysis individually before sharing and discussing
your scores. You may find that different team members see things differently. Exploration
of those differences can be extremely valuable in developing a shared understanding of
the proposals, and in determining where the action priorities lie.

LO 4.3

Source: This analysis is based on Woodcock and Francis (1992).

1. The change proposal has been financially justified as giving an adequate return on investment.

no financial justification 1 2 3 4 5 6 7 full financial justification

2. The assumptions on which the financial justification is based have been fully defined.

assumptions not defined 1 2 3 4 5 6 7 assumptions clearly defined

3. The costs of the proposed change have been realistically predicted—that is, all possible costs have
been identified.

costs not identified 1 2 3 4 5 6 7 all costs identified

4. The costs of disruption to the present systems have been specifically identified.

disruption costs not identified 1 2 3 4 5 6 7 disruption costs identified

5. The leadership of the proposed change has been identified.

change leaders not identified 1 2 3 4 5 6 7 change leaders identified

6. The leaders of the proposed change are willing volunteers.

change leaders are not willing
volunteers

1 2 3 4 5 6 7 change leaders are willing
volunteers

7. A comprehensive implementation plan for the proposed change has been prepared.

no comprehensive plan 1 2 3 4 5 6 7 comprehensive plan prepared

The change proposal being considered is:

Chapter 4 What to Change? A Diagnostic Approach 129

8. All of those who could comment on the plan have had adequate time to study it.

no adequate comment 1 2 3 4 5 6 7 full comments available

9. Care has been taken to ensure that the risks inherent in the proposed change have been identified
and assessed.

risks not identified or assessed 1 2 3 4 5 6 7 risks identified and assessed

10. Outside comment from impartial specialists has been invited on the wisdom of the proposed
change.

no external comment invited 1 2 3 4 5 6 7 comprehensive external
comment invited

11. Consideration has been given to the new skills that will be required for the effective implementation
of the proposed change.

no consideration of skills
requirement

1 2 3 4 5 6 7 full consideration of skills
requirement

12. All those who could inhibit or stop the proposed change have been identified.

potential blockers not identified 1 2 3 4 5 6 7 potential blockers identified

13. A strategy has been devised for winning over all those who could inhibit or stop the proposed
change.

no “winning over” strategy
identified

1 2 3 4 5 6 7 comprehensive “winning over”
strategy identified

14. The proposed change can be linked directly with the strategic plans of the organization.

no clear links with strategic plans 1 2 3 4 5 6 7 clear links with strategic plans

15. Those responsible for the proposed change have studied the nature and outcomes of similar initia-
tives in other organizations.

no other organizations visited or
reviewed

1 2 3 4 5 6 7 several other organizations visited
and reviewed

16. Although based on similar initiatives elsewhere, the need to tailor the proposed changes to the local
context is recognized.

no allowances made for
customization

1 2 3 4 5 6 7 realistic allowances made for
customization

17. Clear success criteria and success measures have been identified.

no success criteria or measures
identified

1 2 3 4 5 6 7 comprehensive success criteria
and measures identified

18. Procedures have been established to help the organization learn from the experience of implement-
ing these changes.

no learning procedures in place 1 2 3 4 5 6 7 comprehensive learning proce-
dures in place

130 Chapter 4 What to Change? A Diagnostic Approach

Scoring

Simply add the numbers that you have circled to produce a score between 20 and 140.
If several members of your group or team have completed this analysis, then add all of
their individual scores and calculate the average. What does the resultant score suggest?

20–40 Considerable anxiety should be experienced about the proposed changes.

41–80 Much work needs to be done to develop an effective change program.

81–100 The proposal is well developed, but change management can be
improved.

101–140 This is a well-planned change proposal.

Action

Where are the main problems and blockages, and what can we do to address those?
Identify those items that you scored with five points or less, or use the average item
scores for the group or team as a whole. Select the five lowest-scoring items. Prioritize
these, then brainstorm appropriate actions to address each of them in turn to improve
readiness:

Problem Item Appropriate Actions

1.

2.

3.

4.

5.

Blenko, M. W., Mankins, M. C., and Rogers, P. 2010. The decision-driven organization.

Harvard Business Review 88(6):54–62. Argues that links between organization structure and

performance are weak and that decision-making processes and decision quality are more

important. Offers a diagnostic based on links between structure, roles, culture, and decisions.

Gardini, M., Giuliani, G., and Marricchi, M. 2011. Finding the right place to start

change. Rome and Milan: McKinsey & Company. Argues the benefits of focusing ini-

tially on those staff groups who will have the most influence over the work that is going

Additional
Reading

19. Top management is deeply committed to the success of the proposed changes.

no top management
commitment

1 2 3 4 5 6 7 full top management
commitment

20. The overall leadership of the proposed change is able and willing to exercise decisive leadership.

uncertain overall leadership 1 2 3 4 5 6 7 superior overall leadership

Chapter 4 What to Change? A Diagnostic Approach 131

to change; starting in this way can accelerate the change process and contribute to long-

term engagement.

Kanter, R. M. 2006. Innovation: The classic traps. Harvard Business Review 84(11):

73–83. Describes the steps that organizations need to take to become more flexible and

innovative; identifies the strategy, process, structural, leadership, and communications

mistakes that organizations typically make, and how to remedy these.

Miller, P., and Wedell-Wedellsborg, T. 2013. The case for stealth innovation. Harvard

Business Review 91(3):90–97. Argues that, if you have a great new idea, the advice that

you “get a mandate from the top” may be misguided. Better to innovate by stealth, “under

the radar,” until you have hard evidence and “proof of concept.”

Wilkinson, A., and Kupers, R. 2013. Living in the futures: How scenario planning changed

corporate strategy. Harvard Business Review 94(5):118–27. Describes how Shell developed

scenario planning in the 1960s and assesses the company’s use of the method. Finds that “a

sustained scenario practice can make leaders comfortable with the ambiguity of an open future.

It can counter hubris, expose assumptions that would otherwise remain implicit, contribute to

shared and systemic sensemaking, and foster quick adaptation in times of crisis” (p. 127).

This chapter has introduced a range of diagnostic tools that can contribute to the manage-

ment of change by providing a perspective on a range of organizational situations. Models

of “how organizations work” complement the implicit models that managers and others

have in their heads. No one model is “correct” or “best,” but each offers the opportunity to

view the organization from a particular perspective. Choice of approach is therefore likely

to be influenced by the image or images of change of those managers who are responsible

for making the decisions. The models, frameworks, and tools from this chapter are sum-

marized in table 4.8, which suggests when each may be useful.

Here is a short summary of the key points that we would like you to take from this

chapter, in relation to each of the learning outcomes:

Understand the use of diagnostic models in planning organizational change.

We explained a number of organizational models: the six-box model, the 7-S frame-

work, the star model, and the four-frame model. Not difficult to apply in practice,

LO 4.1

Roundup

Reflections for the Practicing Change Manager

Do you feel that you now have knowledge of a

number of diagnostic tools/models?

Do you believe that you could apply those tools

and models when necessary?

If you were to select two or three favorite tools/

models, which would they be and why?

Is there a key area of organizational activity

where you would like a diagnostic tool that is

not provided in this chapter? Where might you

go to find such a tool?

To what extent do your image(s) of change influ-

ence which diagnostic tools you are most com-

fortable using or see as most relevant?

132 Chapter 4 What to Change? A Diagnostic Approach

TABLE 4.8
Change Diagnostics and Their Uses: A Summary

Diagnostic Use When You Want To …

Six-box model Simplify the complexity, focus on key problems
Be reminded of the systemic implications of actions in one area

7-S model Recognize interconnectedness
Pay attention to the “soft” factors as well as structure and strategy

Star model Recognize interconnectedness and “knock on” effects
Align your strategy, structure, people, processes, and rewards

Four-frame model See the organization through different lenses at the same time
Generate deeper understanding to develop creative solutions

Gap analysis Develop a change agenda that addresses future conditions
Generate understanding and consensus around the agenda

PESTLE framework Understand the impact of multiple environmental pressures
Exploit future opportunities and deal with risks and threats

Scenario planning Encourage creative thinking and acceptance of uncertainty
Prioritize, plan, and implement future-oriented changes

Elements of strategy Identify changes necessary to pursue a given strategy
Develop an integrated package of self-reinforcing changes

Strategic inventory Clarify and validate strategic assumptions
Decide what changes are necessary to drive strategy

Cultural web Map and understand the components of the organization culture
Challenge the taken for granted and identify barriers to change

Receptive context Determine how receptive the organization is to change
Decide action to increase receptiveness if necessary

Absorptive capacity Assess the organization’s ability to assimilate and apply new ideas
Increase absorptive capacity with appropriate actions

Innovative organization Assess if the organization stifles or stimulates innovation
Develop or strengthen innovative organization characteristics

Force-field analysis Assess the driving and restraining forces for a given change
Manage the balance of forces to encourage the change

Readiness for change analysis Assess organizational and individual readiness for a given change
Identify the “groundwork” needed before the change goes ahead

Individual readiness Assess individual readiness for a given change
Take appropriate steps to increase individual readiness

Stakeholder analysis Identify how those affected could influence the change process
Manage stakeholders given their power and their interest

Built-to-change model Ensure that change happens more quickly and smoothly
Design an organization in which continuous change is routine

Chapter 4 What to Change? A Diagnostic Approach 133

these models serve a number of purposes. They simplify complexity, highlight priori-

ties, identify interdependencies, provide a common language, and offer a guide to the

change implementation process.

Use strategic analysis tools to assess the need for organizational change.

We explained several strategic analysis tools: gap analysis, the PESTLE framework, sce-

nario planning, the elements of strategy framework, the strategic inventory, and the cul-

tural web. Gap analysis is a simple but powerful tool for assessing the need for change.

The other tools in this section generate more detailed assessments on need for and nature

of change, based on more in-depth questioning of current strategy and future goals.

Diagnose organizational receptiveness to and individual readiness for change, and use

those assessments as the basis for action to increase receptiveness and readiness.

We explored the features of the receptive organizational context, the concept of “absorp-

tive capacity,” and properties of the innovative organization. We identified the steps that

can be taken to strengthen receptiveness, to increase absorptive capacity, and to intro-

duce organization features that stimulate (rather than smother) creativity and innovation.

Force-field analysis can often be a useful technique in this respect. Organizational recep-

tiveness may be necessary but is not sufficient, and we also explored the factors that

influence individual readiness for change and how those can be influenced to strengthen

readiness. Stakeholder analysis can often be a useful framework in this context.

Explain the characteristics of the “built-to-change” organizational model, and assess

the applicability, strengths, and limitations of this approach.

We contrasted “traditional” principles of organization design with “built-to-change”

principles, concerning talent management, reward systems, organization structure,

information and decision processes, and leadership. In an organization that is “built-

to-change,” continuous change is “business as usual” and does not have to involve a

planned transition from one state to another. In short, the built-to-change model of the

organization challenges the conventional change management models and principles

described in this chapter. Given the design principles involved, any organization could

potentially develop the agility that “built-to-change” implies.

Debrief: Charlie’s Angels and the Red Star Corporation

Does the Red Star Corporation culture stimulate or smother innovation? Here is the

evidence:

Clues Implications

Straight rows of equally spaced desks facing in the
same direction with identical tidy desktop layouts

Order, discipline, routine, standardization, regi-
mentation, don’t “step out of line”

Absence of color, everything white, flat bright
lighting

No distractions, no colors, no stimulations, focus
on the task in hand

All-male workforce No diversity; these are software engineers, forgive
them, it’s not their fault

LO 4.2

LO 4.4

LO 4.5

(Continued)

134 Chapter 4 What to Change? A Diagnostic Approach

A ditzy female administrator Even less diversity, women limited to subordinate
“backroom” positions

Identical male office wear No freedom of expression, suppression of personal
identity by “uniform”

Tiered formal lecture theatre One-way, top-down communication is the norm
using this layout

Procedures reward mediocrity Radical thinking is discouraged

Managers reject ideas from below Don’t challenge your boss, keep those great ideas
to yourself, you’ll only get into trouble

The general characteristics of organizational innovation illustrated here are:

1. We are all capable of generating creative, innovative ideas.

2. Organization culture and management style can smother creativity and innovation.

3. It sometimes takes an “external shock” (or person) to recognize the need to change the

organization culture, to become more innovative.

4. If you come up with a great idea, don’t tell me, show me.

Arkin, A. 2007. The generation game. People Management 13(24):24–27.

Blenko, M. W., Mankins, M. C., and Rogers, P. 2010. The decision-driven organization.

Harvard Business Review 88(6):54–62.

Bolman, L., and Deal, T. 2013. Reframing organizations: Artistry, choice, and leadership.

5th ed. San Francisco: Jossey-Bass.

Burke, W. W. 2013. Organizational change: Theory and practice. 4th ed. Thousand Oaks,

CA: Sage Publications.

Burns, T., and Stalker, G. M. 1961. The management of innovation. London: Tavistock

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Cohen, W. M., and Levinthal, D. A. 1990. Absorptive capacity: A new perspective on

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137

2
Implementation: The
Substance and Process
of Change

CHAPTER 5 What Changes—and What Doesn’t?

CHAPTER 6 Vision and the Direction of Change

CHAPTER 7 Change Communication Strategies

CHAPTER 8 Resistance to Change

CHAPTER 9 Organization Development and Sense-Making Approaches

CHAPTER 10 Change Management, Processual, and Contingency Approaches

The central theme of the six chapters in Part 2 is implementation. What is the substance

of the changes that are to be introduced? What is the vision for the organization’s future,

given the external environment, technology developments, regulatory changes, and other

trends? Is that vision interesting, exciting, compelling, motivating? Through what strate-

gies should the vision and substance of change proposals be communicated to the orga-

nization’s stakeholders? What is the nature of resistance and, if necessary, how should

that be managed to capture the potential benefits of competing ideas as well as to address

the concerns of the resisters? There are several approaches to change implementation,

each drawing on different theoretical perspectives, with different implications for prac-

tice. What are these approaches, what are their benefits and drawbacks, and how can the

change manager choose between them?

PART

139

What Changes—
and What Doesn’t?

Learning objectives

On completion of this chapter you should be able to:

LO 5.1 Explain several different ways of categorizing different types of change

LO 5.2 Identify practical implications of different types of change for the change

manager

LO 5.3 Understand the difference between sustaining and disruptive innovation, and

explain the practical implications of this distinction for change management

LO 5.4 Assess the significance of organizational culture with regard to organizational

performance and reputation, and the role of leaders as culture architects

LO 5.5 Assess the potential impact of new digital technologies in general, and the

potential organizational benefits of applications of social media in particular

5Chapter

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140 Chapter 5 What Changes—and What Doesn’t?

LO 5.1 What Changes?

What changes? Well, anything and everything, from an individual’s job description, to

a whole organizational system, which could involve other organizations as well. Here

are some examples:

aspirations, attitudes to risk and innovation, budgeting procedures, business model, collabo-

ration and conflict, culture of the organization, downsizing, external relationships such as

partnerships and joint ventures, information systems, leadership and management style, loca-

tion and layout of facilities, manufacturing processes, materials used in products and service

delivery, merger or acquisition, pay and reward systems, performance appraisal and manage-

ment systems, performance targets, power bases, product design, role of customers/clients,

role of middle management, service delivery models, skill mix, staff engagement, structure

of the organization, success criteria, support services in-house or outsourced, teamwork,

technology, workforce composition, working practices

The short version of this list might say that what changes can include strategy, structure,

technology, systems and procedures, human resource management practices, internal and

external relationships, leadership style, and culture. These issues are not independent. In

practice, they are closely coupled and should be mutually reinforcing. They can, however,

be contradictory, which is also potentially damaging. Common contradictions include:

expecting high-performance teamwork while basing rewards on individual performance;

encouraging middle management autonomy while withholding vital performance

information;

demanding cross-functional information exchange in a strong “organizational silo”

structure;

combining a staff engagement policy with an autocratic top-down leadership style.

It is also apparent that changes in one domain may have “knock-on” or “ripple” effects,

creating or requiring changes in other areas. New technology, for example, is likely to

change skill mix requirements, working practices, rewards, and performance appraisal and

management systems, and may also require supportive changes in leadership and manage-

ment behavior. These examples of knock-on effects are obvious, but they emphasize that

“what doesn’t change?” is also a relevant issue. In practice, the ripples from even simple

changes in an organization can be difficult to predict, and thus difficult to manage. One

example concerns the redesign of working practices in one area, which leads to perfor-

mance improvements, which lead to pay increases for those involved, which trigger jeal-

ousy and anger in the areas which were not involved in the initiative. Extending the changes

to those other areas should reduce the tension, but the anger and perceived sense of betrayal

(why were we not chosen?) can be stored in the corporate memory for some time.

In sum, “what changes?” is a deceptively simple question, with a potentially complex

series of answers. There are several ways in which the content or the substance of change

can be categorized. For example, some changes are planned, while others are emergent.

Planned changes, as the term suggests, are those that are implemented in anticipation of,

or in response to, known trends and developments. Changes in motor vehicle engine design

and manufacturing methods (technology, materials, and working practices) are likely to be

prompted by changes in legislation regulating carbon emissions. Emergent changes are

Chapter 5 What Changes—and What Doesn’t? 141

What Changed at Barclays Bank?

The subprime mortgage crisis in 2008 had a major

impact on the financial services sector. In addition

to big losses, the sector faced tighter regulation

of their investment activities, which were seen as

aggressive and risky. Under its previous chief execu-

tive, Bob Diamond, Barclays Capital aspired to be

the largest investment bank in the world, and addi-

tional staff were hired to grow that part of the busi-

ness. But in 2012, it was revealed that staff were

manipulating the London Inter-Bank Offered Rate

(LIBOR), and Barclays was fined £290 million. The

chairman, chief executive, and chief operating offi-

cer left the bank in July. An internal review criticized

the investment business for its “win at all costs” cul-

ture that was arrogant and selfish and put financial

gain before customers (Salz, 2013).

The reputational damage from the LIBOR scan-

dal, and new regulatory requirements, meant a

different approach. Antony Jenkins was appointed

chief executive in 2012. In 2014, he announced the

following changes, triggering an immediate 8 per-

cent rise in the bank’s share price:

Aspirations “Capital” was dropped from the company name, which became just Barclays
The “world leader” aim was abandoned, allowing Barclays to focus on the U.S.
and UK markets, on Africa, and on a small number of Asian clients

Business model Barclays would no longer trade in physical commodities, or in esoteric “deriva-
tive” products such as swaps and options, leveraged loans, and mortgage-
backed securities
The company would invest its own funds rather than those of its customers
Investment banking would only account for 30 percent of the bank’s profits
Focus on a narrower range of customers, rather than on high-risk lending

Culture “Customer first,” clarity, and openness became priority, with a focus on cus-
tomer relationships replacing an aggressive short-term approach to growth,
which rewarded commercial drive and winning, and created a culture of fear of
not meeting targets; pay for investment bankers was cut

Downsizing Over three years, starting in 2014, branches were closed, and 19,000 jobs were
cut, including many at the New York and London headquarters, staff in high
street businesses (cashiers, branch managers), and 7,000 investment banking
staff (some of whom were very high earners)
Costs were cut by £1.7 billion in 2014

Technology More automation of transactions to reduce costs, with more customers banking
online or on mobile devices; 30 completely automated branches were opened
by 2014, with the loss of 6,500 cashiers—retrained as “digital eagles” with
iPads, to help customers use the new computer systems

These changes were designed to create a leaner,

stronger, better balanced, and more focused busi-

ness, generating increased return on equity and bet-

ter rewards for shareholders. This was also designed

to restore customer confidence and trust, and the

bank’s reputation. Addressing the previous cultural

failings, an internal document, The Barclay’s Way:

How We Do Business, was published in 2013. This

emphasized ethics, fairness, and customer/client

relationships, and set out a values-driven code of

conduct based on respect, integrity, service, excel-

lence, and stewardship. (This account is based on

Aldrick, 2013; Arnold and Sharman, 2014; Costello

and Leroux, 2014; Goff, 2014; Treanor, 2014.)

142 Chapter 5 What Changes—and What Doesn’t?

those that just happen, or have to happen, in response to unforeseen events, such as the

sudden opening of new market opportunities, or accidents and failures, or major geopoliti-

cal developments. It is difficult to plan ahead for those events in other than very general

terms. As we discussed in chapter 2, it is possible to argue that emergent change is now

more common, given the complex, fluid, and unpredictable nature of the environment in

which most if not all of our organizations are operating (Weick, 2000). In contrast, much

of the practical advice on change implementation assumes a carefully considered and

planned approach.

We also need to distinguish between incremental change, which is gradual and small

scale, and transformational change, which is radical and groundbreaking, and can often

be rapid. There is a widespread perception today that organizational change up to the mid-

twentieth century was typically incremental and infrequent, and that from the late twenti-

eth century to the present, change has become more common and traumatic. However, as

noted in chapter 1, some commentators argue that radical, transformational change is not

new, but was also a feature of the first half of the twentieth century—if not before. But,

there is a more important question here: is too much attention now lavished on large-scale

transformational change, while the role of small-scale changes is overlooked?

Some commentators use the terms first-order change and second-order change to

describe the difference between incremental and transformational change (e.g., Coghlan

and Rashford, 2006).

First-order change involves a specific initiative that solves a problem, and/or makes

improvements, in ways that do not present a challenge to current methods and think-

ing. First-order change is adaptive and implies a degree of continuity and order. This is

captured in the expression, “change to stay the same” (Bate, 1994). The incorporation

of a growing range of safety features in motor vehicles—from seat belts to electronic

proximity sensors—is a series of first-order changes that improve the product without

making any major changes to it.

Second-order change leads to organizational transformation, by introducing new prod-

ucts, services, and ways of doing business, based on creative lateral thinking that alters

current core assumptions. Second-order change is disruptive and discontinuous, and is

captured in the expression, “move to get to a new position” (Bate, 1994). The develop-

ment of electric-powered self-driving motorcars, made by companies that are not con-

sidered to be in the automotive sector, is an example of second-order change.

David Coghlan and Nicholas Rashford (2006) also identify third-order change, based

on the habitual questioning of assumptions and points of view, contributing to what can

be a chaotic process of continual adaptation, self-renewal, and self-organization. What

will come after electric and driverless cars, and “phone app taxi services”? Walmart and

other retail supermarkets sell motorcars thus threatening established dealer networks. Given

current global trends in house prices, will property developers and real estate agents offer

discounted or free motorcars with house and apartment purchases as an inducement to cus-

tomers? Will dealers in congested cities (Beijing, London, Mumbai, New York) provide free

motorcycles with the cars that they sell, so that customers can make their own “park and

ride” arrangements to get to work? Will we continue to own cars anyway, or hire them when

we need them, ordering them by iPhone? These developments, and others more difficult to

predict, are examples of third-order change that, in some sectors, could become the norm.

Chapter 5 What Changes—and What Doesn’t? 143

The categories of change that we have discussed so far have involved simple dichoto-

mies (“either this or that type”), with third-order change offering another option. These

are helpful categories, but they may be too simplified to deal with the complex patterns of

contemporary organizational change. Depth is another metaphor that can be used to cat-

egorize different types of change, as shown in figure 5.1. At the bottom of this figure sits

the “small stuff” that may not even be regarded as “change.” Mid-scale includes “sustain-

ing innovation,” which involves improving on current practices. At the top of the scale is

“disruptive innovation,” which involves radically new business models and working meth-

ods (Christensen, 2000). It is not difficult to locate incremental and first-order change

(shallow, sustaining), second-order or transformational change (deep, strategic), or third-

order change (off the scale, disruptive) on this scale. The depth metaphor simply provides

a richer picture of the patterns of change that we are likely to see in most organizations.

What are the practical change management implications of these categories of change?

The first, and most obvious, implication concerns matching solutions with problems.

LO 5.2

FIGURE 5.1
Assessing Depth of Change

Of the scale
Disruptive innovation

Frame-breaking, mould-breaking

Redraw dramatically organization and sector boundaries

Deeper

Deep change

Deeper

Change the mission, vision, values, the organization’s philosophy,

to symbolize a radical shift in thinking and behaviour, second-

order change

Sustaining

innovation

Improve business planning to symbolize a shift in thinking

Tighten up on documentation, reporting, controls

Shallow change

Incremental, fine tuning: cut costs, find e!ciencies, first-order

change

Constantly ‘nibble away’ making minor improvements

Not on the scale

Paradigm shift, strategic change, third-order change

New ways of thinking and solving problems, whole system change

New ways of doing business

Change the organization’s definition of success

Create new goals, objectives, targets

Reallocate resources

Grow some departments, cut others, create new units

“Sweat the small stuf”-quickly solve the minor annoying

problems that nobody has bothered to fix; “grease the wheels”

144 Chapter 5 What Changes—and What Doesn’t?

Despite the current fashion for deep transformational change, simple problems that are

well understood can usually be resolved with simple, shallow, incremental changes.

Addressing fundamental strategic opportunities and threats with fine-tuning, however, will

typically lead to disappointment.

A second implication concerns the nature of the change management task. The manage-

ment of shallow change typically requires less management capability and fewer resources

than implementing frame-breaking initiatives. The former are likely to involve few depar-

tures from the familiar, may be relatively low in both cost and perceived risk, and pose little

threat to the status quo with which people are comfortable. In contrast, deep, disruptive, or

“off the scale” change is often abrupt, painful, risky, and expensive and can stimulate stron-

ger and more widespread resistance, potentially creating a major management challenge.

A third practical issue concerns management reputation. Change management experience

and capability have become “core selection factors” for candidates seeking promoted posi-

tions in many organizations (Beeson, 2009). Candidates who can answer those interview

questions with accounts of the deep changes in which they have played a role are more likely

to be preferred to those whose previous roles have involved them in only shallow, incremen-

tal initiatives. We have only anecdotal evidence to suggest that deeper changes can often be

driven as much by personal career motives as by corporate need. Figure 5.1 can therefore

be read not just as a change typology, but also as a personal positioning tool for ambitious

change managers. Assess the profile of changes in which you are currently engaged. If this

involves shallow initiatives, explore how you can become involved with, or personally gen-

erate, deep changes that you can then discuss at the next job or promotion interview.

As discussed earlier, a lot of attention has been paid to deep, disruptive, transforma-

tional change. However, in most organizations, at any given time, changes are likely to be

taking place across the range covered in figure 5.1. Small changes can contribute to and

support deeper initiatives. Some changes may start small but develop with experience into

larger-scale initiatives. Deep changes demand time and resources, diverting attention from

those necessary smaller-scale projects.

How to Choose Your Thrust and Limit Your Agenda

Most organizations come under pressure to change

from many directions: creative new ideas, internal

issues and inefficiencies, external trends and devel-

opments. These pressures can generate a long and

complex change agenda. Paying attention to all of

those issues, however, means spreading resources

thinly and a potential loss of focus. Tom Peters

(2014, pp. 8–9) argues that top management must

limit the agenda by choosing one or two “plausi-

ble important thrusts.” He identifies six criteria on

which the choice of these thrusts should be based:

1. Internal achievability: Can a “cost-oriented” com-

pany begin to turn itself into a “product innova-

tion” leader in three to five years?

2. Political feasibility: Can the top team be per-

suaded to support the thrust?

3. Soundness in competitive or regulatory terms: Is a

marketing thrust a good choice for a high-cost

producer in a shrinking market?

4. Freshness: Will it be perceived as a new direction?

5. Early wins: Will it be possible to show some

results in the first few months, even though full-

scale implementation may take years?

6. Excitement: Can most people from middle man-

agement on up eventually become enthusiastic

about it?

Chapter 5 What Changes—and What Doesn’t? 145

This pattern of shallow to deep change raises a fourth challenge, to coordinate those

initiatives to avoid duplication, overlap, and unnecessary cost. Research once suggested

that most organizations experienced periods of stability that were interrupted on occa-

sion by more profound changes. This was known as the theory of “punctuated equilib-

rium” (Romanelli and Tushman, 1994). That theory was based, however, on evidence

from computer companies in the 1960s. That may not be the case today, as the pattern

of change has become more programmatic. In response, many organizations have set up

corporate program management offices (PMOs) to support and coordinate their initia-

tives (Ward and Daniel, 2013). A study by the Philadelphia-based Project Management

Institute (2012) found that 84 percent of organizations had set up PMOs, which have the

following benefits:

reduce the number of projects that fail;

deliver projects under budget and ahead of schedule;

improve productivity;

increase cost savings.

There is no standard PMO model, and this varies between organizations in terms of

structure, location, and roles. The Project Management Institute study identified four fac-

tors contributing to the effectiveness of PMOs: First, they need a senior executive cham-

pion. Second, their role must be clearly understood. Third, the change professionals who

staff the PMO must have the respect of functional departments. Finally, PMOs need to

collaborate with functional departments in the development of initiatives, and not act as

“change police.”

For example, at State Auto Insurance Company in Ohio, change projects would

appear at random, and the company had no mechanism to ensure that projects stayed

within budget and met their objectives. A PMO was made responsible for methodology,

governance, change management, delivery, and portfolio management. Units that want

to launch change projects have to construct a business case showing their alignment

with corporate strategy. At the National Cancer Institute in Bethesda, Maryland, the

PMO head found that teams working on early-phase drug development projects started

every project plan from scratch. But there was a lot of overlap, with 80 percent of the

work activities being either identical or similar from one project to another. The PMO

designed a system to avoid this duplication. Previously, the teams held 16 four-hour

meetings to develop their project plan. This was cut to only four meetings (Project

Management Institute, 2012).

We have identified different types of change, reaching beyond a simple categorization

(first-order, second-order). We have described other ways to conceptualize change (using

a depth metaphor) and to assess the profile of change in an organization at any one time.

These categories and concepts have implications for change management practice: match-

ing solutions to problems, assessing the complexity of the change management task, link-

ing involvement in change to personal reputations and careers, and coordinating a wide

portfolio of change through a program management office.

Through the rest of this chapter, we will develop these themes, first exploring different

kinds of innovation and the distinction between sustaining and disruptive innovation. We

then turn attention to two changes that are likely to confront many organizations: culture

change and technology-driven change. These are often seen as second-order changes, but

146 Chapter 5 What Changes—and What Doesn’t?

this depends on the perspective from which they are interpreted. The kinds of changes

that can take place with regard to organizational culture and to how new technologies are

used can be profound and transformational. Throughout, the challenges for change man-

agers posed by innovation, culture change, and technology developments will be consid-

ered. The most obvious challenges, perhaps, involve maintaining the pace of change while

ensuring effective implementation and sustained gains.

Innovation

One of the key drivers of change is innovation. This term is not confined to new prod-

ucts. Other important innovations concern ways to organize, better working practices,

and new ways to provide services. The word thus tends to be used in a broad sense,

to mean the adoption of any product, system, process, program, service, or business

model new to this organization. An idea may have developed elsewhere, but it can be

seen as an innovation here.

It is helpful to identify different kinds of innovation. For example, we can distinguish

between product innovations (new gadgets) and operational innovations. Michael Hammer

(2004) describes operational innovation as finding new ways to lead, organize, work,

motivate, and manage. He describes a vehicle insurance company that introduced “imme-

diate response claims handling,” operating 24 hours a day. This involved scheduling visits

to claimants by claims adjusters who worked from mobile vans, and who turned up within

nine hours. Previously, with office-based adjusters, it took a week to inspect a damaged

vehicle. Handling 10,000 claims a day, adjusters were empowered to estimate damage and

write a check on the spot. These operational innovations led to major cost savings, with

fewer staff involved in claims handling, lower vehicle storage costs, better fraud detection,

and reduction in payout costs. Customer satisfaction and loyalty also improved.

Toyota’s Lean production system is another example of an operational innovation that

improves product quality and reduces costs by redesigning the manufacturing process

without directly affecting product design. Walmart has an innovative approach to purchas-

ing and distribution, using “cross-docking,” where goods are switched from one truck

to the next at distribution centers without going into storage. Dell Computers’ “build to

order” business model was also a disruptive innovation.

Clayton Christensen and Michael Overdorf (2000) make a distinction between sustain-

ing innovations and disruptive innovations, identified in figure 5.1. Sustaining innovations

improve existing products and processes: a more fuel-efficient motorcar, streamlining an

administrative process. Disruptive innovations introduce wholly new processes and ser-

vices, such as an all-electric motorcar or social networking. Disruptive innovations imply

deep transformational change.

Innovations that are disruptive do not necessarily involve chaos and upheaval. What is

disrupted is often traditional ways of thinking and acting. Digital photography, for exam-

ple, has not just replaced traditional “wet film” formats and the cameras that required

them. This development has changed the ways in which we capture, manipulate, display,

share, and think about images. The extra cost of taking more photographs is close to zero,

and we are more likely to share our shots on a website, or display them on a digital photo

frame or on television, than to print them for the family album. How many manufacturers

LO 5.3

Chapter 5 What Changes—and What Doesn’t? 147

of cameras predicted that one day versions of their product would be given away free by

mobile telephone companies? Digital photography has been a truly disruptive innovation.

The business model developed by the online retailer Amazon has disrupted the tradi-

tional retailing sector while changing our shopping habits. Although Amazon began by

selling books, the company has diversified into selling everything, also allowing third par-

ties to sell their goods through its website, and even selling its own consumer electron-

ics products such as Fire Phone and Kindle. Amazon is also a major provider of cloud

computer services. U.S. customers can find around 230 million different products on

Amazon’s website.

Challenges for the Change Manager (1)
Operational innovations can be more difficult to implement than product innovations.

Potential users can see and touch a new product—a smartphone, for example—and

they can try it out for themselves. An operational innovation, however, has to be imple-

mented before anyone can really see how it is going to work—a streamlined process

that will reduce time to market. This means that the benefits can take time to appear,

particularly when the initial specification has to be adjusted with experience. Convinc-

ing others of the value of an operational innovation, therefore, is not always straightfor-

ward. Hammer (2004) argues that business culture undervalues operations, which are

seen as boring and low status. Operations are not as glamorous, or as easily understood,

as deal-making or new technology and are therefore not regarded as a source of com-

petitive advantage. A further problem is that the “ownership” of an operational innova-

tion may be vague, because it crosses functional boundaries.

Hammer (2004) argues that operational innovations are often driven by “catalysts” who

are committed to finding and exploiting such opportunities, and who are relentless in their

attempts to convince senior management. Everett Rogers (1995) observed that adoption of

innovations follows a pattern. First, small numbers adopt, followed by “takeoff,” achieving

a critical mass of adopters. Finally, the pace slackens as saturation is reached, typically

short of 100 percent (you never convince everyone). Rogers argues that this pattern is

influenced by the five groups in table 5.1.

Hammer’s catalysts are Rogers’ innovators. Change is thus often dependent on innova-

tors and early adopters in particular. Hammer offers four suggestions for accelerating the

Disruptive Innovation in the Nineteenth Century The Stethoscope

That it [the stethoscope] will ever come into gen-

eral use, not withstanding its value, I am extremely

doubtful; because its beneficial application

requires much time, and it gives a good deal of

trouble both to the patient and practitioner, and

because its whole hue and character is foreign,

and opposed to all our habits and associations. It

must be confessed that there is something ludi-

crous in the picture of a grave physician formally

listening through a long tube applied to a patient’s

thorax, as if the disease within were a living being

that could communicate its condition to the sense

without. (John Forbes, in the preface to his trans-

lation of De L’Auscultation Mediate ou Traite du

Diagnostic des Maladies des Poumons et du Coeur

[A Treatise on Diseases of the Chest and on Medi-

ate Auscultation], by R. T. H. Laennec, T&G Under-

wood, London, 1821.)

148 Chapter 5 What Changes—and What Doesn’t?

Innovators Usually the first in their social grouping to adopt new approaches
and behaviors, a small category of individuals who enjoy the excite-
ment and risks of experimentation

Early adopters Opinion leaders who evaluate ideas carefully, and are more skeptical
and take more convincing, but take risks, help to adapt new ideas to
local settings, and have effective networking skills

Early majority Those who take longer to reach a decision to change, but who are
still ahead of the average

Late majority Even more skeptical and risk averse, wait for most of their colleagues
to adopt new ideas first

Laggards Viewed negatively by others, the last to adopt new ideas, even for
reasons that they believe to be rational

incidence of operational innovation. First, look for role models in other sectors. Second,

challenge constraining assumptions (“this will never work because”). Third, turn the “spe-

cial case” into the norm. And finally, rethink the core dimensions of the work—who does

it, where, when, how thoroughly, with what results; how can these dimensions be rede-

signed to make the process more effective?

Challenges for the Change Manager (2)
Disruptive innovations can be more difficult to implement than sustaining innovations,

as they are often viewed as risky. Christensen and Overdorf (2000) note that dras-

tic change involving disruptive innovation can jeopardize an organization’s business

model and core capabilities (see “Not a Good Kodak Moment”). A further challenge

is that disruptive products and services are often not as good as those in current use.

The service provided by the low-cost business model of Southwest Airlines may not be

as good as that of conventional carriers, but is simpler, more accessible, and cheaper.

The quality of images produced by the first digital cameras was much poorer than that

from film cameras. In addition, most organizations have no routine processes for deal-

ing with disruptive innovations. Disruptive innovations are thus often introduced by

smaller new entrants or start-ups in a sector, rather than by the older, larger, and domi-

nant incumbents (Hwang and Christensen, 2008).

In contrast with disruptive innovations, it is easier to convince others of the value of

sustaining innovations, which make existing processes, products, and services work bet-

ter. Rogers (1995) argued that the probability of an innovation being accepted is increased

when it has these properties:

1. Advantageous when compared with existing practice

2. Compatible with existing practices

3. Easy to understand

4. Observable in demonstration sites

5. Testable

6. Adaptable to fit local needs

TABLE 5.1
From Inno-

vators to

Laggards

Chapter 5 What Changes—and What Doesn’t? 149

It is difficult to demonstrate these properties with disruptive innovations—which can

be difficult to understand, cannot be observed and tested, and cannot be compared with

current practice until after they have been implemented. For the organization seeking to

develop the capabilities for handling disruptive innovation, Christensen and Overdorf

(2000, p. 73) make the following suggestions: consider acquiring an organization that

already has these capabilities; create an independent organization to deal with the prob-

lem; or create new structures, such as dedicated, cross-functional teams.

Change Manager as Disruptive Innovator
What advice is there for the change manager seeking to develop and implement dis-

ruptive innovations to their organization? Jeff Dyer, Hal Gregersen, and Clayton

Christensen (2011) argue that anyone can be innovative by using the right approach.

Innovators use the five habits shown in table 5.2.

These habits are not confined to a small number of special people; they can be devel-

oped. The change manager can thus become more innovative by following this advice,

and by collaborating with “delivery-driven” colleagues. Dyer and colleagues argue that

organizations also need to encourage these habits, stimulating employees to connect ideas,

to challenge accepted practices, to watch what others are doing, to take risks and try things

out, and to get out of the company to meet others.

In Defense of Sustaining Innovation
As argued in chapter 1, it would be a mistake to think that transformational, disrup-

tive innovation is the solution to most current organizational problems, for at least

Not a Good Kodak Moment

Kodak invented the first digital camera in 1975 and

the first megapixel camera in 1986. So why did the

development of digital photography drive Kodak

to bankruptcy in 2012? In 1975, the costs of this

new technology were high and the image quality

was poor. Kodak believed that it could take at least

another ten years before digital technology began

to threaten their established camera, film, chemical,

and photo printing paper businesses. That forecast

proved to be accurate, but rather than prepare,

Kodak decided to improve the quality of film, with

sustaining innovations. With hindsight, it is easy to

spot that mistake. But the market information avail-

able to management from the 1970s through the

1990s, combined with the company’s financial per-

formance, made the switch to digital appear risky.

In 1976, Kodak accounted for 90 percent of film

and 85 percent of camera sales in America. Kodak’s

annual revenues peaked in 1996, at $16 billion;

profits in 1999 were $2.5 billion. However, success

encouraged complacency and reinforced confi-

dence in the brand. Analysts noted that it might be

unwise to switch from making 70 cents on the dol-

lar with film, to 5 cents with digital. But by 2011,

Kodak’s revenues had fallen to $6.2 billion, and the

company was reporting losses.

Kodak’s competitor, Fuji, recognized the same

threat and decided to switch to digital while gen-

erating as much return as possible from film and

developing new lines of business, including cos-

metics based on chemicals used for film process-

ing. Both companies had the same information, but

they came to different assessments, and Kodak was

too slow to respond. By the time Kodak began to

develop digital cameras, mobile phones with built-

in digital cameras had become popular.

Kodak invented the technology but did not rec-

ognize just how disruptive an innovation digital

would prove to be, making their traditional business

obsolete (Barabba, 2011; The Economist, 2012).

150 Chapter 5 What Changes—and What Doesn’t?

two reasons. First, considerable business benefit can be achieved through small-scale

initiatives and sustaining innovations. Many healthcare organizations have imported

“lean” techniques from manufacturing and made significant performance improve-

ments that benefit patients, staff, and the organization as a whole (Graban, 2009).

Second, many organizations have highly profitable businesses based on traditional

products, such as Harris Tweed, Swiss watches, Samuel Adams Boston lager. Some

traditional technologies, having once been overtaken by innovative replacements,

have reemerged. In the United States, by 2014, 30 cities had reintroduced green

“environment-friendly” trams or were planning to do so; sales of vinyl LPs increased

from zero in 1993 to 6 million in 2013. New technology does not simply displace old

technology. The appeal of some old technologies is enduring (sailing boats, paper

books), and some items are bought for their aesthetic value, regardless of price (The

Economist, 2014).

These considerations further complicate our answer to this chapter’s question: what

changes? There are different kinds and degrees of innovation. The challenge for the

change manager is to determine which (or which combination) is appropriate to a particu-

lar organization at a given time. As Kodak’s experience suggests, reaching that assessment

involves judgement and intuition as well as data.

LO 5.4 Organizational Culture

Are people enthusiastic about working for this organization? Do they feel valued? Are

there development and career opportunities? Are customers and clients valued and

given good quality service? Are leaders and managers respected and trusted? Is infor-

mation shared openly? Is teamwork and collaboration between divisions the norm? Do

staff agree with the purpose of the organization? These are just some of the indicators

of an organization’s culture. When the answers to those questions turn to “no,” then

organizational effectiveness suffers.

One definition of organizational culture, therefore, is “the way we do things around

here.” A more technical definition regards organizational culture as the shared values,

beliefs, and norms that influence the way employees think, feel, and act toward others,

TABLE 5.2
The Five

Habits of

Disruptive

Innovators

Associating Innovators are good at seeing connections between things that do not
appear to be related, drawing ideas together from unrelated fields

Questioning Innovators are always challenging what others take for granted,
asking, “Why is this done this way—why don’t we do it differently?”

Observing Innovators watch the behavior of customers, suppliers,
competitors—looking for new ways of doing things

Experimenting Innovators tinker with products and business models, sometimes
accidentally, to see what happens, what insights emerge

Networking Innovators attend conferences and other social events to pick up
ideas from people with different ideas, who may face similar prob-
lems, in other fields

Chapter 5 What Changes—and What Doesn’t? 151

both inside and outside the organization. It is also argued that organizations each have

their own distinct “personality,” or style, or ideology, or climate, which gives them their

unique identity. For example, walk into a McDonald’s restaurant and note the atmosphere,

décor, lighting, attitude of staff to customers, style and variety of food and drinks, speed

of service, cost, and any other details that catch your attention. Next, walk into one of

McCormick & Schmick’s restaurants and pay attention to those same factors; you will

see a different culture. Ann Cunliffe (2008) argues that organizational culture is important

because it:

shapes the public image of an organization;

influences organizational effectiveness;

provides direction for the company;

helps to attract, retain, and motivate staff.

This issue can be the cause of many problems. Falling sales, customer complaints, staff

absenteeism and turnover, or poor public reputation, for example, can often be attributed

to organizational culture. It is therefore not surprising that culture change programs have

become popular. Some theorists argue that organizations cannot have distinct cultures in

the way that human societies do. But we can accept that criticism and still find practical

value in the concept if organizational culture is simply taken to cover the values, beliefs,

and norms that shape employee—and management—behavior. If those behaviors are inap-

propriate or dysfunctional in some way, then “culture” offers a useful lens through which

we can understand why, and what action we can take to change those behaviors.

We can also make a distinction between strong and weak organizational cultures

( Gordon and DiTomaso, 1992). A strong culture is one in which the organization’s values

are widely shared and intensely held, and which thus guide behavior. A weak culture, in

contrast, displays little agreement about core values or about expected behaviors. Strong

cultures thus suggest emotional attachment and commitment to an organization, unity in

approach, and “walking the talk.” Much of the commentary on this topic thus assumes that

companies with strong cultures perform better. The quotes that opened this section, from

Lenovo’s chief executive, support this view.

Yang Yuanqing, Chief Executive of Lenovo

Lenovo [Chinese multinational computer manufac-

turer] is often cited for sustaining a healthy corporate

culture. What’s the secret to that?

“We focus on three elements. The first is an

ownership culture: we try to empower people

to think for themselves, to make decisions for

themselves. Everyone is an engine. The second is

a commitment culture: if you commit to some-

thing, you must deliver. The third is a pioneer

culture: we encourage our people to be more

innovative.”

How do you actually promote innovative behavior?

“There are a lot of ways to do it. For example, I

hold monthly brainstorming sessions with our R&D

team. At each session we focus on one topic—it might

be a product, a service, or a technology. Another

approach is through the budget. For our R&D people,

we allow 20% of the budget to be flexible, so they

can decide which areas they want to focus on and

what they want to develop”

Source: Yuanqing (2014), pp. 107–8: interviewed by Harvard

Business Review.

152 Chapter 5 What Changes—and What Doesn’t?

We also know that organizational culture can cause serious problems. NASA and the

oil exploration company BP provide iconic examples of what can happen when culture

goes wrong.

Organizational Culture at NASA, and the Columbia
Space Shuttle Disaster
In February 2003, while the space shuttle Columbia was reentering the earth’s atmo-

sphere, a piece of insulating foam broke off and damaged the left wing. This caused

the shuttle to disintegrate, killing the seven crew members. Why did this happen, par-

ticularly after the loss of the shuttle Challenger and its crew in 1986, when an O-ring

failed at liftoff? In answering that question, the Columbia Accident Investigation Board

(CAIB, 2003) considered a combination of physical and organizational causes, argu-

ing that both had contributed to the disaster. Here is what the Board’s report had to say

about the organizational culture at NASA (emphasis added):

The organizational causes of this accident are rooted in the Space Shuttle Program’s history

and culture, including the original compromises that were required to gain approval for the

Shuttle, subsequent years of resource constraints, fluctuating priorities, schedule pressures,

mischaracterization of the Shuttle as operational rather than developmental, and lack of an

agreed national vision for human space flight. . . . Cultural traits and organizational prac-

tices detrimental to safety were allowed to develop, including: reliance on past success as a

substitute for sound engineering practices; organizational barriers that prevented effective

communication of critical safety information and stifled professional differences of opinion;

lack of integrated management across program elements; and the evolution of an informal

chain of command and decision-making processes that operated outside the organization’s

rules. (CAIB, 2003, pp. 9 and 177)

In the Board’s view, NASA’s organizational culture and structure had as much to do with

this accident as the External Tank foam. Organizational culture refers to the values, norms,

beliefs, and practices that govern how an institution functions. At the most basic level, orga-

nizational culture defines the assumptions that employees make as they carry out their work.

It is a powerful force that can persist through reorganizations and the reassignment of key

personnel. (p. 177)

Perhaps the most perplexing question the Board faced during its seven-month investiga-

tion into the Columbia accident was “How could NASA have missed the signals the foam

was sending?” Answering this question was a challenge. The investigation revealed that in

most cases, the Human Space Flight Program is extremely aggressive in reducing threats to

safety. But we also know—in hindsight—that detection of the dangers posed by foam was

impeded by blind spots in NASA’s safety culture. (p. 184)

NASA’s culture of bureaucratic accountability emphasized chain of command, procedure,

following the rules, and going by the book. While rules and procedures were essential for

coordination, they had an unintended but negative effect. Allegiance to hierarchy and proce-

dure had replaced deference to NASA engineers’ technical expertise. (p. 200)

It was therefore not surprising that the CAIB report’s first recommendation following

this investigation was:

It is the Board’s opinion that good leadership can direct a culture to adapt to new realities.

NASA’s culture must change, and the Board intends the following recommendations to be

steps toward effecting this change. (p. 225)

Chapter 5 What Changes—and What Doesn’t? 153

A comparison of the Challenger and Columbia disasters concluded that the causal fac-

tors were similar: structures for processing information, contractor relations, political and

budgetary pressures—and organizational culture. This analysis argued that organizational

learning and change were difficult for NASA—and for other public agencies—due to a

combination of external political and economic pressures, and an organizational culture

that was defensive, and characterized by a climate of fear of raising alarms (Mahler and

Casamayou, 2009). (We revisit the Challenger and Columbia disasters in the case study

exercise at the end of chapter 11.)

Organizational Culture at BP, and the Deepwater
Horizon Disaster
On April 20, 2010, when the blowout preventer failed, a mile under water, the explo-

sion and fire on the 33,000-ton Deepwater Horizon drilling rig in the Gulf of Mexico

killed 11 of the 126 crew members and seriously injured 17 others. Oil poured from the

Macondo wellhead on the seabed, drifting toward the Louisiana coast 50 miles away,

threatening wildlife and the local fishing and tourism industries. Around 5  million bar-

rels of crude oil spilled into the Gulf before the flow stopped on July 15. This was

the biggest environmental disaster in the United States since the Exxon Valdez spilled

750,000 barrels of crude oil in Prince William Sound in 1989. The investigation blamed

leadership and management for creating the conditions in which this accident was

allowed to happen. Here is what the accident investigation said about BP’s culture

(National Commission, 2011; emphasis added):

The immediate causes of the Macondo well blowout can be traced to a series of identifiable

mistakes made by BP, Halliburton, and Transocean that reveal such systematic failures in risk

management that they place in doubt the safety culture of the entire industry. (p. vii)

Investments in safety, containment, and response equipment and practices failed to keep

pace with the rapid move into deepwater drilling. Absent major crises, and given the remark-

able financial returns available from deepwater reserves, the business culture succumbed to

a false sense of security. The Deepwater Horizon disaster exhibits the costs of a culture of

complacency. (p. ix)

In the wake of the BP Deepwater Horizon disaster—a crisis that was unanticipated, on

a scale for which companies had not prepared to respond—changes in safety and environ-

mental practices, safety training, drilling technology, containment and clean-up technology,

preparedness, corporate culture, and management behavior will be required if deepwater

energy operations are to be pursued in the Gulf—or elsewhere. (p. 215)

If an organizational culture is dysfunctional, the potential outcomes, from these exam-

ples, include:

loss of life and serious injury;

widespread economic and environmental damage;

damage to the reputations and careers of senior management;

loss of public trust and confidence in the organization, if not the whole sector;

massive fines for misconduct.

In other words, failure to manage organizational culture costs lives, reputations,

careers—and money, affecting the wider community and the economy as well as causing

154 Chapter 5 What Changes—and What Doesn’t?

internal organizational damage. The other likely outcome, as in these cases (and Barclays,

discussed earlier), is that the organization is faced with a transformational change agenda.

The investigation into the Columbia disaster concluded that the organizational culture at

NASA had to change. The Deepwater investigation advised that BP’s culture of compla-

cency had to change to prevent further incidents and to regain public trust. (The crisis

management aspects of the BP incident are explored in chapter 7.)

The Salz (2013) review criticized strong subcultures at Barclays, rather than praise

them. An organization may have a strong culture and shared values, but it is important to

know what those values are. Organizational cultures at Barclays, NASA, and BP appear

to have been strong, but they were also wrong. Strong cultures can lead to inappropri-

ate behaviors, encourage conformity, complacency, and inertia, and take time to develop

and change. A survey in 2013 of over 1,000 financial services sector staff in the United

Kingdom found that culture change was indeed slow. Only half the respondents agreed

that there had been a culture change initiative led by senior management, and less than a

fifth of those agreed that there had been any real change. A fifth of all respondents said that

culture change initiatives had been superficial and ineffective. This survey concluded that:

[W]hile some senior leaders in parts of the banking sector are having at least partial success

in changing culture to become more customer focused, some parts of the industry are largely

operating as before. This is reinforced by the survey findings that a third of respondents still

identify shareholders as their organization’s most important stakeholder, with only about

50% identifying customers as their most important stakeholder. (CIPD, 2013, p. 26)

Changing an organizational culture is in many respects similar to managing any other

form of change. However, culture is usually defined in terms of shared values, beliefs, and

norms. Those are attributes of individuals and groups that are difficult to change directly.

Most approaches to culture change thus advocate action to change behavior, through new

working practices, systems, and human resource policies. This approach assumes that,

once the benefits of those new behaviors become clear, the values, beliefs, and norms that

reinforce those behaviors will adjust naturally.

For example, Emily Lawson and Colin Price (2010) argue that the success of change

relies on persuading individuals to change their “mindsets”—to think differently about

their jobs and how they work. This first involves changing behavior. They identify three

levels of change. First, some outcomes (increasing revenue) can be achieved without

Risky Culture

Inside Job (2010, director Charles Ferguson, nar-

rated by Matt Damon) examines the global financial

crisis of 2008. Over the previous decade, deregu-

lation allowed the finance sector to take risks that

older rules would have discouraged. As you watch

this film, identify the various stakeholders (includ-

ing academics), their competing interests, their

relationships, and their efforts to conceal sensitive

information. How did those competing interests,

relationships, and “information games” contribute

to the crisis? The film concludes that, despite this

crisis, the underlying culture has remained much

the same. How has the sector been able to avoid

fundamental changes to financial regulation? What

does this account reveal about the nature of organi-

zational culture?

Chapter 5 What Changes—and What Doesn’t? 155

changing working practices (selling noncore assets). Second, staff can be asked to change

working practices in line with current thinking (finding ways to reduce waste). The third

level involves fundamental changes in organizational culture, in collective thinking and

behavior—from reactive to proactive, hierarchical to collegial, inward-looking to exter-

nally focused. They identify three conditions for changing mindsets at level three:

The surrounding structures (reward and recognition systems) must be in tune with the new

behaviour. Employees must have the skills to do what it requires. Finally, they must see

people they respect modelling it actively. Each of these conditions is realized independently;

together they add up to a way of changing the behaviour of people in organizations by chang-

ing attitudes about what can and should happen at work. (Lawson and Price, 2010, p. 32)

In other words, “mindsets” may not be altered directly, but they can be changed by a

careful rethinking of structures, skills, and role models. The effectiveness of Barclays’

“truthfulness training” may thus depend not just on the training content but on the extent

to which wider organizational conditions encourage the desired “mindset” or not.

Many organizations today, therefore, are concerned that their culture is appropriate,

in the context of corporate strategy, performance, external scrutiny and regulation, and

reputation. Culture change programs often target staff engagement, teamwork and collab-

oration, and information sharing and creativity, as well as costs, revenues, and customer

service. For the change manager, it is important to remember that the role of the board,

and of senior leadership in general, is key in this context.

Culture Change Starts with You

Yum Brands, the parent company of KFC, Pizza Hut,

and Taco Bell, has returned 16.5 percent annually

since 1997 (the year it was spun off from PepsiCo),

compared with the 3.9 percent average achieved by

the Standard & Poor’s 500 large companies during

this time. According to business journalist Geoff Col-

vin (2013, p. 62), “No one who follows Yum doubts

that [CEO David] Novak’s team building framework

is at the heart of the company’s success.”

Novak inherited an organization where perfor-

mance and morale were low, where headquarters

blamed the franchisees and the franchisees blamed

headquarters. He decided that the organizational

culture had to change. Novak introduced a leader-

ship development program, “Taking People With

You,” which focused on managers developing

self-awareness with regard to their own truthful-

ness, reliability, openness, and self-centeredness, as

well as how they treated other team members and

responded to others’ mistakes. “In Novak’s program

you’re not fit to build a team until you’ve worked

hard on yourself [and] only then does the program

get into forming strategy, communicating it, and

gaining alignment, plus the nuts and bolts of orga-

nization and process” (Colvin, 2013, p. 63).

LO 5.5 Technology

Developments in technology in general, and in information and computing technology

in particular, have long-running and ongoing implications for organizational change

management. Some developments have created disruptive innovation (online business

models), while others have improved the productivity of individuals (word processing).

156 Chapter 5 What Changes—and What Doesn’t?

Early social science studies of technology in the 1950s focused on textile manufactur-

ing (in India) and coal mining (in the United Kingdom). The Tavistock Institute of

Human Relations, whose researchers conducted those studies, developed the sociotech-

nical systems perspective. This argues that the social organization of work is not wholly

determined by technology, but can be—and therefore should be—designed taking into

consideration the individual and social needs of employees. The aim of sociotechnical

system design is thus to find the best fit between the social and technical dimensions.

A system designed to meet social needs ignoring the technical system will run into

difficulties. On the other hand, a system designed only to meet the demands of technol-

ogy will raise social and organizational problems. Sociotechnical design thus aims for

“joint optimization” of social and technical needs. The resultant sociotechnical system

design is thus a matter of creative management choice (Emery and Trist, 1960).

These arguments are perhaps even more important today. Technological change appears

to be rapid and relentless. In the rush to implement new technology and to gain benefits

ahead of competitors, there may be little time to consider the social system design before

the next development appears. This presents a challenge for the change manager. On the

one hand, it may be necessary to maintain the pace of technology change. On the other

hand, it will be helpful to ensure that the organization of the work of those who will oper-

ate new systems strengthens the staff capabilities, motives, and commitment that contrib-

ute to effective operation. Good sociotechnical design is still at a premium.

We will explore in this section the implication of two technology trends. The first con-

cerns the impact of digitization. The second relates to corporate applications of social media.

Most organizations, in most sectors, are likely to be affected by these developments, whether

they wish to be or not. We do not have space to explore the extraordinary range of special-

ized new technologies that will affect specific sectors, such as 3-D printing (depositional

manufacturing), or nanotechnology applications in medicine, for example. However, regard-

less of sector, new technologies tend to generate broadly similar organizational and change

management issues, so the implications of our discussion will be widely applicable.

The Impact of Digitization
In a report from McKinsey, the consulting company, Martin Hirt and Paul Willmott

(2014, p. 1) argue that digital technologies are “profoundly changing the strategic con-

text: altering the structure of competition, the conduct of business, and, ultimately, per-

formance across industries.” Emphasizing that digitization is a “moving target,” they

identify three strategic opportunities:

enhancing interaction, between customers, suppliers, employees, and other stakehold-

ers, as consumers come to prefer tailored, mixed-media, digital online communication

channels;

improving management decisions, by processing “big data” and information from “the

Internet of Things,” and thus being able to refine (personalize) marketing allocations

and reduce operational risks by sensing equipment breakdowns;

creating new business models, such as crowdsourcing product development and peer-

to-peer customer service.

These developments can drive down prices, as customers can instantly compare prices

and rapidly switch to other sellers and brands. As we noted earlier, digitization lowers the

Chapter 5 What Changes—and What Doesn’t? 157

entry barriers to start-ups in many areas, and established organizations will face competi-

tion from unexpected areas (such as food retailers offering financial services that com-

pete with banks). Those employees who are displaced by digitization, as more processes

(administrative and manufacturing) become automated, may not have the capabilities that

will enable them to find employment in the more highly skilled jobs that remain. Hirt

and Willmott (2014, p. 8) also point to the “relentlessly evolving business models—at

higher velocity,” which digitization is encouraging. Banks, taxi drivers, travel companies,

camera makers, and universities—among others—are seeing traditional business models

undermined by faster-moving and cheaper competitors whose offerings are more appeal-

ing to Internet-savvy consumers. The crowdsourcing website WhoCanFixMyCar.com may

disrupt the motorcar repair business by connecting drivers needing repairs with mechanics

looking for work (Foy, 2014).

Even Lego, the highly profitable (and privately owned) Danish toy manufacturer,

famous worldwide for its colored bricks, is not immune from digital developments. The

company’s traditional business model is simple, transforming plastic that costs $1 a kilo

into Lego box sets that sell for $75 a kilo. However, children increasingly play games on

iPads and smartphones, and Lego’s sales growth slowed after 2010. How can Lego com-

pete in the evolving digital world?

Lego’s first experiment with an online game, Lego Universe, was not successful.

They then developed a partnership with a Swedish company, Mojang, which designed

Minecraft, a popular computer game based on virtual landscapes resembling Lego build-

ing blocks (https://minecraft.net). Lego now sells sets based on the game. Another part-

nership involved TT Games, to develop video games based on Lego ranges such as Star

Wars and Legends of Chima. The Lego Movie, made in collaboration with Warner Bros,

generated $500 million when it was released in 2014. In partnership with Google, The

Lego Movie was accompanied by a video game, new construction sets (the giant Sea

Cow pirate ship and the hero Emmett), and a website (http://www.buildwithchrome

.com). The movie sequel is scheduled for 2017. Another innovation was Lego Fusion.

Items built with Lego bricks are captured using a smartphone or tablet, which imports

them into a 3-D digital online world where users can play using their own designs. Lego

was one of the most-watched brands on YouTube. Emphasizing the continuing impor-

tance of the physical brick, and physical play, Lego’s chief executive, Jørgen Vig Knud-

storp, explained, “I see digital as an extra experience layer” (Milne, 2014). With record

sales and earnings, Lego became the world’s most popular and most profitable toymaker

in 2015; the company estimates that, on average, every person on earth owns 102 Lego

bricks (Milne, 2015).

A global survey by McKinsey of 850 senior executives found that most companies

were planning to increase spending on digital initiatives, either to strengthen competitive

advantage in an existing business, or to create new business models and revenue streams

(Gottlieb and Willmott, 2014). Growth was expected to come mainly from digital cus-

tomer engagement and digital innovation, including new products, operating models, and

business models. In terms of digital priorities, automation ranked lowest. However, orga-

nizational hurdles were preventing faster development:

problems finding staff with digital skills;

organization structures unsuitable for developing digital businesses;

158 Chapter 5 What Changes—and What Doesn’t?

inflexible business processes, designed to handle conventional initiatives;

lack of good quality information to inform decisions;

“inability to adopt an experimentation mindset” (Gottlieb and Willmott, 2014, p. 6).

The most pressing needs for skilled staff were in areas such as analytics, online devel-

opment, project management, cloud computing, joint business enterprise, and cybersecu-

rity. To remain competitive, therefore, many organizations may be compelled to adopt a

version of Lego’s pattern of rapid experimentation and innovation. The change manage-

ment challenge will be to develop that approach, implementing appropriate changes to

structures, processes, and information systems, and developing “experimentation” organi-

zational cultures. Investment in training and development may be required to fill the skills

gap. Further change management challenges will involve identifying opportunities, mov-

ing quickly to explore benefits, and dropping unsuccessful experiments. It may be difficult

to maintain this pace without generating the stress and burnout of “initiative fatigue.”

Applications of Social Media
With the development of “Web 2.0,” or “the social web,” the Internet moved into a

new phase in the twenty-first century. Web 2.0 technologies include Internet-based

information systems such as social networking (or social media), blogs, collabora-

tive databases, and YouTube and other file-sharing sites. These applications allow a

much higher degree of participation and interaction, between systems and users, and

between users, than conventional Web 1.0 “flat” websites. More people now use tab-

lets and smartphones, which are mobile devices, as well as personal computers and

smart televisions, to access social networking sites. Social media are thus radically

changing the ways in which we interact with each other, develop our relationships,

share experiences, and form opinions. These networking tools have also changed the

ways in which organizations interact with and gather information about their custom-

ers. The amount of time that we devote to the Internet is increasing. In the United

States, time spent on personal computers and smartphones rose by over 20 percent

between 2011 and 2012, and the use of apps doubled over that period as smartphone

ownership grew and more apps became available (Bannon, 2012). Social media have

three valuable properties:

1. They provide “multidirectional” flows of information between friends, colleagues,

organizations, and management, compared with the static “one-way” communication

from conventional web pages.

2. They allow users to develop new connections, encouraging collaboration across bound-

aries such as organizational silos.

3. These are “low friction” tools; they are attractive, pervasive, easy to use, and no spe-

cialized equipment is required (Gifford, 2014, p. 11).

The number of social media websites is growing. Facebook and Twitter are joined by

LinkedIn and Pinterest, Blogger and WordPress—among others. Marketing and customer

services have already been affected. Social media allow consumers to share opinions of

brands to a wider audience than word of mouth can reach. Facebook claims over 1 billion

users; LinkedIn has 300 million; over 250 million people use Twitter; Pinterest has over

Chapter 5 What Changes—and What Doesn’t? 159

70 million users. This list of social media outlets and their user numbers will be out of

date before this book is printed. Consumers are therefore “hyper-informed” when mak-

ing purchasing decisions. Customer service is also being transformed, with half of U.S.

customers using social media to raise complaints or ask questions; a third of social media

users say that they prefer this channel to the phone when dealing with customer ser-

vice issues (Bannon, 2012). Organizations must be sensitive to these trends and respond

accordingly.

Employees may be more enthusiastic about using social media than employers. Most

corporate applications have an external focus and appear to have had limited impact on

employee relations. A survey of the Fortune Global 100 organizations in 2012 by the pub-

lic relations company Burson-Marsteller found that 70 percent had YouTube channels and

75 percent had Facebook accounts. Some had several accounts on each platform, so that

they could target specific audiences and locations with regard to particular issues. The

survey also found that each of those Global 100 organizations had an average of almost

56,000 mentions a month on Twitter (Stanford, 2013, p. 214).

A UK survey of 2,000 employees and 600 human resource managers in 2013 also

found that while the personal use of social media was widespread, few used these tools

for work. The main reasons for using social media included keeping up to date with news,

building one’s professional network, keeping in touch with others, sharing knowledge,

learning more about areas of interest, and building reputation. Over half of senior leaders,

and 40 percent of 18- to 24-year-olds, said that they used social media for work. Only

one quarter of organizations surveyed had an internal social media platform, and those

were used mainly for staff, human resource, and operational updates. And only one quarter

allowed staff to connect personal smartphones and tablets to the organization’s IT network.

Internal organizational uses are not inhibited by lack of access but more by perceived lack

of relevance and loss of control over information (Gifford, 2013). Many organizations do

not support bring-your-own-device (BYOD) practices. A survey of 1,765 UK employers

found that 80 percent had disciplined staff for using social networking sites at work, and

many had banned their use (Martin et al., 2008).

There appear to be many organizational uses for social media, which promise to trans-

form internal communications and staff engagement, recruitment, and learning. Social

media could be central in encouraging more open, communicative, egalitarian, collabora-

tive, and responsive organizational cultures. However, ease of communications can also

generate information overload.

Oscar de la Renta and Instagram

As a leading fashion brand, it was normal prac-

tice for Oscar de la Renta to debut its new designs

on the pages of Vogue or Elle. However, in summer

2013, it released its fall advertising campaign on Ins-

tagram. Erika Bearman, Oscar de la Renta’s senior

vice president of communications, had 345,000

Instagram followers, and in the caption of each image

placed on Instagram, Bearman invited her followers

to preorder the collection on Oscardelarenta.com.

Source: Hempel (2014).

160 Chapter 5 What Changes—and What Doesn’t?

We will explore in chapter 7 how organizations are using these Web 2.0 applications,

particularly to improve internal and external communications and to strengthen employee

engagement.

Birkinshaw and Pass (2008, p. 15) argue that Web 2.0 could radically alter the nature

of work, tapping knowledge from across the organization, encouraging informal coor-

dination, and making the workplace more engaging. A study of corporate applications

in the United Kingdom in 2013–2014 found that many organizations were advanced in

using social media externally but that few had developed effective internal uses (Gifford,

2014). One exception was Adnams, an independent brewer and distiller, which encour-

ages staff to use social media to engage with customers and develop their own online

“personas” at the company through social media platforms and blogs. Another was Santa

Fe Group, a global relocation service, which has developed an enterprise social learn-

ing network called “The Academy Online” to help build a common corporate culture

across the group. One explanation for the slow progress with internal corporate uses of

social media concerns the lack of clear return on the investment. Another factor is job

and organization design not suited to the good use of social networking tools. That study

concluded that social media would not alone transform organizational culture, but should

be seen as a tool or a platform for change.

There appear to be three major change management challenges in these technology

developments.

The first challenge concerns finding ways to exploit digitization and social media

applications effectively to achieve organizational goals. Those goals may include exter-

nal relationships and reputation, and internal culture change to improve engagement,

information sharing, collaboration, and the organization’s ability to respond rapidly to

trends and new ideas. Some applications may be sustaining, and some may be disrup-

tive. As we have seen, these technologies can be a useful platform for organizational

culture change.

The second challenge concerns finding the best “fit” between new digital technologies

and online tools, and the social system of the organization, including the needs, inter-

ests, and preferences of employees. Sociotechnical system design has become more

important in this context, and given the pace of technology development, perhaps more

difficult.

A third challenge will thus be to design and redesign effective sociotechnical systems

when, as noted earlier, the technologies involved are moving targets. The number and

nature of digital tools and social networking sites are constantly changing and evolving.

Individuals and organizations are still developing an understanding of how they can be

used effectively for personal and corporate benefit.

Addressing these challenges in a context of rapid development involves experimenta-

tion, and some experiments will be unsuccessful. From a change management perspective,

therefore, organizations need to be more fault tolerant. This involves welcoming the les-

sons from unsuccessful experiments, rather than blaming and punishing the guilty when

things go wrong (Edmondson, 2011).

Chapter 5 What Changes—and What Doesn’t? 161

EXERCISE
5.1

The Nampak

Story

This is a story of successful organizational culture change. How can we explain this suc-
cess? As you read this story, consider the following questions:

1. Which dimensions of the 7-S framework, described in chapter 4, did Eric Collins and
his senior management colleagues focus on in order to change Nampak’s culture?
Reminder: The “hard” dimensions are strategy, structure, and systems. The “soft”
dimensions include staff, skills, style, and shared values, or superordinate goals.

2. Which dimensions of the 7-S framework were not affected?

3. Where does this culture change initiative belong on the “depth” scale in figure 5.1,
between shallow and deep change? In your judgement, would a different emphasis
across the seven factors of that framework have produced deeper change, with better
results, and how?

Context

Nampak was a South African–owned bottle and plastics manufacturer with 600 factory
workers and 80 managers in the United Kingdom. A typical manufacturing company, it
focused on costs, investing in machinery and processes rather than people. Labor costs
were low, and the company had been very successful. In 2007, the newly appointed
managing director Eric Collins realized that the company had driven efficiencies as far as
it could using traditional approaches. He decided to add value through people.

Problem

Although the company was successful, the organizational culture was poor. People were
treated badly and morale was low. The blame culture spread to customers. Complaints
at one site reached 25 a month, which was damaging for a company that relied on
three key customers. Apart from hiring, firing, and discipline, Nampak had no estab-
lished human resource management policies and practices. In a staff satisfaction survey
in 2007, 80 percent said that they would not recommend Nampak to friends and family
as a place to work. Looking at the survey results, the new HR director, Cathie Wright-
Smith, concluded, “There was everything wrong with this business that you can think
of.” There were also problems with the executive board, who were status-conscious and
accustomed to having a high degree of control, with only a dozen people making all the
key decisions.

Solution

Collins met customers to get their critical feedback on the company. But when he met
his own employees in “Challenge Collins” sessions, to hear their grievances in person, he
was shocked. The level of dissatisfaction was high, and the anger was directed at him.
However, Collins wanted to give staff the opportunity to vent their frustrations, and to
show that they had a leader who was listening.

Wright-Smith ran focus groups, asking staff what would make Nampak a better place
to work. Three themes emerged. The first was communication; people did not know
what was going on, and they were not involved. Second, staff did not feel that they had
training and development opportunities, or a career with the company. Third, line man-
agers rarely provided feedback on their performance. This led to the design of a new

LO 5.4

(Continued)

162 Chapter 5 What Changes—and What Doesn’t?

performance management system, based on what employees said that they wanted:
personal development, and not objectives with tick boxes. Some line managers had
never had conversations like this with their staff before, and they now did this monthly.
Line managers were seen as “dogsbodies,” although they were key to shaping the
company’s culture. To emphasize their importance, they were offered the first training
and development opportunities, a “leadership excellence” course, exploring influence,
motivation, and team development methods. This was so successful that it generated
demand from other managers for similar training.

New initiatives developed rapidly. Half the workforce were trained in a range of
subjects, assessment centers replaced the traditional selection process, and induction
and buddy schemes were introduced. The company launched a senior leaders pro-
gram, a fast-track route for high-potential staff, undergraduate and graduate place-
ment schemes, and a suggestions scheme offering financial rewards. A corporate
social responsibility program linked with local schools, inviting pupils into the factory
and sending staff to schools to talk about recycling. Shop floor staff worked with the
schools attended by their children, and some staff came back on their days off to show
people around the factory, with pride. Wright-Smith ran sessions for directors on lead-
ership and emotional intelligence.

Outcomes

Collins said, “We’ve had a paradigm shift in culture.” In the 2010 staff survey, 80 per-
cent said that they would recommend Nampak to friends and family as a place to work,
reversing the 2007 position. In addition, 90 percent said that they were satisfied with
their jobs, and 98 percent said that their managers listened to them. Overhead costs per
million bottles made improved by 7 percent. No closures or layoffs were needed to make
savings. Customer complaints fell to zero. Collins said, “We’re just a more collaborative,
committed organization with pride in our work.” The main costs, according to Collins,
concerned the commitment of time and focus (Smedley, 2011).

EXERCISE
5.2

Organi-

zational

Culture

Assessment

1. What words would you use to describe the positive and negative dimensions of your
organization’s culture, or an organization with which you are familiar?

2. How can you explain the negative aspects of that organizational culture? Why have
those dimensions developed in that way? What factors are causing, supporting, or
reinforcing those dimensions?

3. What are the consequences of the negative dimensions of this organizational cul-
ture? In what ways are they harmful to the organization, its employees, suppliers, and
customers?

4. What actions can you take to change the dysfunctional aspects of the culture? The 7-S
framework (chapter 4) is a good place to start. What changes need to be made to the
“hard” factors: strategy, structure, systems? What changes need to be made to the
“soft” factors: style, staff, skills, shared values? How does senior leadership behavior
have to change?

5. What would those actions cost?

LO 5.4

Chapter 5 What Changes—and What Doesn’t? 163

EXERCISE
5.3

How Will

the Digital

Revolution

Affect Your

Organiza-

tion?

Briefing (1)

You have decided to leave your organization tomorrow, to set up your own business
in competition with your large, out-of-date, slow-moving, bureaucratic former
employer.

You have identified your organization’s main weaknesses and vulnerabilities. Critically,
you have worked out how a combination of digitization technologies and social net-
working tools could be used to undermine your organization’s traditional business
model. Or, customers may have “after-market” needs that your organization is not
fulfilling.

Describe your new business model. What digital tools and social media technologies
will you use to attract customers or clients from your previous employer to your busi-
ness—and perhaps from other organizations in the sector? How quickly can you set up
this business? What will it cost you to set up this business?

Briefing (2)

OK, you are not leaving the organization after all. That briefing was designed to make
you think about potential threats to your organization from agile and innovative “out
of sector” competitors. Let us assume that the new business model that you have
just described is real, and that somebody else has already thought about it—and may
already be setting it up. How can your organization respond to that threat? Better still,
how can your organization counter that threat before it emerges?

Draw up an internal action plan for transforming the organization’s current business
model, or for creating a separate unit or division to develop your new business model
alongside the existing one.

LO 5.5

Brynjolfsson, E., and McAfee, A. 2014. The second machine age: Work, progress, and

prosperity in a time of brilliant technologies. New York and London: W. W. Norton &

Company. An optimistic analysis of the pervasiveness of digital technologies and their

dramatic impact on individuals, organizations, society, and the economy.

Gratton, L. 2011. The shift: The future of work is already here. London: Collins. Explores

how trends in globalization, society, demography, technology, and use of natural

resources are reshaping work, and offers advice on how to “future-proof” your career.

Perlow, L. A. 2012. Sleeping with your smartphone: How to break the 24/7 habit and

change the way you work. Boston: Harvard Business Review Press. Explores individual

and organizational benefits and problems of “hyperconnectivity” and how to retain work-

life balance and improve performance by collectively “disconnecting.”

Schein, E. H. 2010. Organizational culture and leadership. 4th ed. San Francisco: Jossey-

Bass. Classic and recently revised text exploring the nature and significance of organizational

culture and the crucial role of leaders as “architects” of culture.

Additional
Reading

164 Chapter 5 What Changes—and What Doesn’t?

Roundup

Reflections for the Practicing Change Manager

In what kinds of change initiatives are you cur-

rently involved—shallow, deep, mixed? If your

current involvement concerns mostly shallow

initiatives, how will that affect your ability to

answer questions about your change manage-

ment experience at the next job/promotion

interview? Do you need to “reposition” your

profile to include deeper changes?

Does your personal comfort zone favor involve-

ment in major, transformational, deep changes?

Why? Or are you more comfortable implement-

ing lower-risk, shallow changes—which can of

course still be highly effective? In your judge-

ment, what are the personal and organizational

implications of your preferences?

In your judgement, does your organization

need disruptive innovation, in which areas,

and why? Or would those changes be too

“disruptive” and less effective than continuing

to implement sustaining innovations?

You are a social media user, accessing your

favorite websites from at least one mobile

device—your smartphone or tablet. You also

use those sites through your smart Internet-

connected television. How do you feel about

your organization using social media to com-

municate with you? Does this open up new

sources of information and fresh communica-

tion channels with management and staff?

Or will this open you to 24/7 availability

and give you information overload? How do

employees in general in your organization

feel about this?

In answer to the question “what changes?” this chapter has introduced terms for describing

different types of change, based on the metaphor of depth; some changes are shallow, oth-

ers are deep. We then focused on three areas of organizational change: innovation, culture,

and technology. These are not the only dimensions of organizational change, of course,

but they are issues that most if not all organizations will continue to face for some time.

Why have these particular themes acquired such a high priority? A failure to innovate can

lead to organizational decline. Dysfunctional organizational cultures can have disastrous

consequences. Digitization and social media have the potential to create new and poten-

tially disruptive business models, making many established business models obsolete. The

“controlling” images of change management—director, navigator, caretaker—may be less

useful in this context. Dealing with a rapidly developing, uncertain, and unpredictable

climate, the “shaping” images of change management may be more appropriate—coach,

interpreter, navigator.

Here is a short summary of the key points that we would like you to take from this

chapter, in relation to each of the learning outcomes:

Explain several different ways of categorizing different types of change.

Organizational changes are typically varied and multifaceted. Change one aspect of

an organization and the interdependencies lead to “knock-on” or “ripple” effects that

lead to further change elsewhere. We introduced a number of different ways of describ-

ing and classifying change, and these are summarized in table 5.3. The concepts of

transformational change and disruptive innovation have become fashionable. Given the

rapid pace of technology development, and of change driven by other socioeconomic,

cultural, and legislative pressures, transformation and disruption appear to be attractive

LO 5.1

Chapter 5 What Changes—and What Doesn’t? 165

options. However, we have to recognize that less profound, shallow, simple changes

can often be valuable in context. Small changes can also underpin and trigger major

initiatives. The potential organizational value of shallow change should therefore not be

underestimated.

Type of Change Description

Planned Implemented in anticipation of, or in response to, known
developments

Emergent Just happens, or has to happen, in response to unforeseen events

Incremental Gradual, small scale

Transformational Radical, groundbreaking, disruptive

First-order Solves a problem using methods based on current assumptions

Second-order Transforms the organization with creative thinking and new busi-
ness models

Third-order Habitual overturning of assumptions, continual adaptation and
self-renewal

Shallow Another label for incremental, small-scale change, fine-tuning

Deep Another label for transformational, disruptive change,
mold-breaking

TABLE 5.3
Different Types

of Change

Identify practical implications of different types of change for the change manager.

One practical implication of our change classification system concerns, as just men-

tioned, the potential of small changes to deliver benefit in their own right and to contrib-

ute to deeper initiatives. A second implication for the change manager is that shallow

changes are likely to be more straightforward to implement: less cost, less risk, less

disruption, less resistance. Organizational transformations present a different order of

change management challenge. A third implication, however, is that a change manag-

er’s involvement in deep change is more likely to contribute to experience, reputation,

and career than managing small initiatives. This leads to the suspicion that some deep

changes could be designed to address personal interests rather than corporate needs.

At any given time, especially in larger organizations, there are likely to be many

change initiatives under way, across the spectrum of figure 5.1, from shallow, to mid-

range, to deep. The problem of coordinating such a pattern of change has led to the

establishment of program management offices (PMOs) in many organizations. PMOs

can thus support change and help to avoid the duplication of effort and cost. Where they

are seen as “change police,” their contributions may be curtailed.

Understand the difference between sustaining and disruptive innovation, and explain

the practical implications of this distinction for change management.

Sustaining innovations improve current practice, while disruptive innovations intro-

duce wholly new ways of doing things. From a change management perspective,

LO 5.2

LO 5.3

166 Chapter 5 What Changes—and What Doesn’t?

it is usually easier to persuade others of the value of sustaining innovations; dis-

ruptive innovations are more difficult to explain, and because they make current

practice obsolete, they may be seen as more risky. Most organizations do not have

established procedures or routines for handling disruptive innovations—which are

thus often implemented by small start-up companies rather than large established

organizations.

The change manager can become a “disruptive innovator” by adopting five habits:

associating, questioning, observing, experimenting, and networking. These are habits

that anyone can develop, with practice.

Assess the significance of organizational culture with regard to organizational perfor-

mance and reputation, and the role of leaders as culture architects.

Organization culture is regarded by some commentators as an abstract concept with

limited organizational use. Defining culture as “the way we do things,” however, it

seems that some organizations have dysfunctional cultures, which can lead to highly

undesirable consequences. We saw how dysfunctional cultures at Barclays bank,

NASA, and BP contributed to financial crisis, loss of life and serious injury, wide-

spread economic and environmental damage, damage to the reputations and careers

of senior management, loss of public trust and confidence in the organization, and

massive fines for misconduct. Culture change, where necessary, becomes a priority

in the face of such evidence, and culture change programs have consequently become

popular.

Assess the potential impact of new digital technologies in general, and the potential

organizational benefits of applications of social media in particular.

A “moving target,” digitization offers three sets of strategic opportunities: enhanced

interaction with stakeholders, improved management decisions, and new business

models. Many organizations have seen their successful business models undermined

by digital start-ups. Social media also seem to have many applications with regard to

communications, staff engagement, recruitment, and learning. These tools could thus

offer platforms for developing more open, communicative, egalitarian, collaborative,

and responsive cultures. However, organizations have been slow to respond to these

opportunities, and we may be in an “experiment and learn” phase. As mentioned earlier,

this context puts a premium on the coach, interpreter, and navigator images of change

management.

LO 5.4

LO 5.5

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171

Vision and the
Direction of Change

Learning objectives

By the end of this chapter you should be able to:

LO 6.1 Explain the arguments for and against the concept of vision, and how approaches

to this issue depend on the image held of managing organizational change.

LO 6.2 Identify the characteristics of effective visions.

LO 6.3 Assess how the context in which a vision is developed affects its meaning.

LO 6.4 Apply different methods and processes for developing vision.

LO 6.5 Explain why some visions fail.

LO 6.6 Explain the arguments concerning the relationship of vision to organizational

change.

6Chapter

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172 Chapter 6 Vision and the Direction of Change

LO 6.1 Vision: Fundamental or Fad?

Mission: This relates to goals, and refers to the overriding purpose of the organization. It is
sometimes described in terms of the apparently simple but challenging question: “what busi-

ness are we in?” The mission statement helps keep managers focused on what is central to

their strategy.

Vision: This too relates to goals, and refers to the desired future state of the organization.

It is an aspiration which can help mobilize the energy and passion of organizational

members. The vision statement, therefore, should answer the question: “what do we want to

achieve?”

(Johnson et al., 2011, p. 8)

There is understandable confusion between the terms “mission” and “vision.”

Mission emphasizes purpose and outcomes. Vision, in contrast, focuses on future

aspirations and can thus be a key driver of organizational change. This helps to

explain why most of the change management perspectives explained in chapter 10

emphasize the importance of a clear and meaningful vision, without which direction

and motivation will be weak or absent. There is, however, debate over whether vision

is truly fundamental to change and effectiveness, or whether this is just a manage-

ment consultancy fad.

Highlighting the importance of vision and direction, Paul Victor and Anton Franckeiss

(2002, p. 41) argue, “It is imperative that change is aligned with a clear vision and busi-

ness strategy and that subsequent activities and interventions are coordinated and consis-

tent.” Hans Hinterhuber and Wolfgang Popp (1992, p. 106) argue that vision underpins

successful entrepreneurial activities and corporate change programs, defining vision as

“an orientation point that guides a company’s movement in a specific direction. If the

vision is realistic and appeals both to the emotions and the intelligence of employees,

The Coca-Cola Company Vision

Our vision serves as the framework for our Roadmap

and guides every aspect of our business by describ-

ing what we need to accomplish in order to con-

tinue achieving sustainable, quality growth.

People: Be a great place to work where people are

inspired to be the best they can be.

Portfolio: Bring to the world a portfolio of quality

beverage brands that anticipate and satisfy people’s

desires and needs.

Partners: Nurture a winning network of customers

and suppliers, together we create mutual, enduring

value.

Planet: Be a responsible citizen that makes a dif-

ference by helping build and support sustainable

communities.

Profit: Maximize long-term return to shareowners

while being mindful of our overall responsibilities.

Productivity: Be a highly effective, lean and fast-

moving organization.

Source: From http://www.coca-colacompany.com/

our-company/mission-vision-values (accessed

November 3, 2014).

Chapter 6 Vision and the Direction of Change 173

it can integrate and direct a company.” Effective visions, they add, can be expressed

clearly—and are thus easily communicated—in just a few words (e.g., “Our vision is to

achieve price leadership and good design at the same time”).

Visions are thus linked to strategy and competitive advantage, enhancing organizational

performance and sustaining growth. Clear visions enable boards to determine how well

organizational leaders are performing and to identify gaps in current practices. Visions

help staff identify with the organization, and inspire the motivation to achieve personal and

corporate objectives. Organizations preparing for transformational change often undertake

“revisioning” exercises to guide them into the future. The visioning process itself can

enhance the self-esteem of those who are involved, because they can see the outcomes of

their efforts. Jeffrey Pfeffer (2010, p. 92) argues that vision is a source of influence: “Make

the vision compelling. It’s easier to exercise power when you are aligned with a compel-

ling, socially valuable objective.” Opponents will struggle to challenge such an agenda.

A lack of vision, on the other hand, is associated with organizational decline and fail-

ure. Graham Beaver (2000, p. 205) argues, “Unless companies have clear vision about

how they are going to be distinctly different and unique in adding and satisfying their

customers, then they are likely to be the corporate failure statistics of tomorrow.” The

absence of a clear and compelling vision may explain why some companies fail to exploit

their core competencies despite having access to adequate resources. Business strategies

lacking in visionary substance may fail to identify when organizational change is required.

Lack of an adequate process for translating shared vision into collective action may be

associated with the failure to produce transformational organizational change.

The concept of vision is powerful. However, it remains controversial, and invites cyni-

cism when every organization expresses a bland vision that includes “excellence,” “corpo-

rate responsibility,” “empowered employees,” and “delighted customers.” However, there

has been little research in this area, and there is disagreement on how to define and mea-

sure the term. As with change management in general, there is a lot of advice on how to

develop a vision, with little or no consensus on effective approaches. Some commentators

have argued that the preoccupation with vision has meant that the term has been overused

and trivialized (Beaver, 2000) and is thus in danger of losing any value.

Debates around appropriate definition and substance do not necessarily invalidate the

value of vision in clarifying an organization’s purpose and direction. The challenge for

the organization in general, and the change manager in particular, is to avoid an abstract

statement of vision accompanied with platitudes and grandiose statements that provide

little detail about what the future should look like. On the other hand, a vision that is

too specific, focusing on short-term targets and goals, and encouraging only incremen-

tal improvement is also of limited value. Visions become useful when they are midway

between these two extremes, setting out an engaging picture of the future, with sufficient

meaningful detail to which those involved can relate (Belgard and Rayner, 2004).

These arguments reflect a deeper question. The link between vision and organizational

change depends on the image of change management in use. Table 6.1 illustrates how each

of the six different images expresses a different understanding of this link. We invite the

reader to use this table to identify how different images focus attention on some issues and

approaches, and not others.

We begin by showing that the development of a meaningful vision depends on three

features. The first concerns the content or attributes of the vision: what it is and says. The

174 Chapter 6 Vision and the Direction of Change

second concerns the context in which the vision is used: where it is used and by whom.

The third concerns the process by which the vision is developed: how it emerges and who

has contributed.

Following this we identify why visions can fail to produce their intended effects.

Finally, we focus on three contentious issues relating to the role of vision in organizational

change: whether vision initiates and drives change, or rather emerges as change unfolds;

whether vision helps or hinders change; and whether vision is best understood as an attri-

bute of heroic leaders, or of heroic organizations.

LO 6.2 The Characteristics of Effective Visions

John Kotter (2006) argues that visions must be focused yet flexible. While this may

sound relatively straightforward, the attributes that make visions “visionary” and useful

have provoked debate. Some commentators focus on the content of vision statements,

while others explore the context in which visions are used. The roles of leaders in

articulating visions and the process by which visions are developed have also attracted

attention. Here, we will consider the content of visions, including their style and other

TABLE 6.1
Change Management Image and Vision: Links and Focus

Image Vision-Change Link Focusing Attention On

Director Vision is essential to successful
change, and must be articulated
at an early stage by leaders

Need for clear vision to drive change linked to strategy
and goals

Analytical and benchmarking processes used
How context affects the impact of the vision
Top-down responsibility to tell/sell the vision

Navigator Vision is important, but can be
compromised by competing
visions of different stakeholders

Vision is the product of debate
The change manager has to handle “vision collision”

when competing groups disagree

Caretaker External forces shape the change
process, and vision rarely has a
major influence

Visionary or charismatic leaders have limited impact
when vision is not related to the events driven by
those external forces

Coach Vision emerges through the
leader’s facilitation skills, shaping
agendas and desired futures

Vision emerges through consultation and co-creation
Vision will fail without participation

Interpreter Vision articulates the core values
and ideology that underpin the
organization’s identity

Visions are developed intuitively through imagery and
imagination, using framing, scripting, and staging
techniques

Vision is the “inner voice,” the “system core”
Vision emerges through change

Nurturer Visions are always temporary,
emerging from the clash of shift-
ing and unpredictable forces for
change

Visionary change leaders cannot predict accurately the
outcome of systemic forces

Vision is an organizational property, not an individual
product, and can survive chaos

Chapter 6 Vision and the Direction of Change 175

attributes, and also explain how the concept of vision is distinguished from the related

concepts of organizational mission and values.

Vision Attributes
Table 6.2 shows several definitions of organizational vision. Most refer to a future

or to an ideal to which organizational change should be directed. The vision itself is

presented as a picture or image that serves as a guide to that future ideal. Visions can

thus be inspiring, motivational, emotional, or analytical, depending on whose defini-

tion we are using.

Definitions do not necessarily help to determine the actual content of visions. Observ-

ing that “little is known about what the essential properties of a vision are,” Kimberly Boal

and Robert Hooijberg (2001, p. 527) argue that visions have two components:

a cognitive (intellectual) component, which is based on information and expresses out-

comes and how these will be achieved;

an affective (emotional) component that appeals to values and beliefs, and thus under-

pins the motivation and commitment that are key to implementation.

Table 6.3 summarizes the views of a number of commentators on the components of

a good vision. As this table shows, most commentators point to similar attributes: they

mostly suggest that visions should be aspirational, clear, desirable, distinctive, easy to

communicate, feasible, flexible, future-focused, inspiring, meaningful, memorable, moti-

vating, and should recognize the problems facing the organization. This sounds like a long

list of attributes to incorporate in a brief statement that can be quickly communicated and

easily remembered. Some commentators, therefore, have sought to distill the essence of

these guidelines. For example, Paul Nutt and Robert Backoff (1997) identify four generic

attributes of visions that are likely to enhance organizational performance:

1. Possibility: Points to innovative possibilities for dramatic improvements

2. Desirability: Based on shared values and norms about the way things should be done

3. Actionability: Indicates the roles and contributions of those who will make the vision a

reality

4. Articulation: Communicates the future clearly through powerful imagery

What Makes an Effective Vision?

How do you build a vision? Many people assume

that vision-building should resemble long-term

planning: design, organize, implement. But defin-

ing a vision of the future does not happen accord-

ing to a timetable or flowchart. It is more emotional

than rational. It demands a tolerance for messiness,

ambiguity, and setbacks. The half-step back usu-

ally accompanies every step forward. Day-to-day

demands pull people in different directions. Having

a shared vision does not eliminate tension, but it

does help people make trade-offs. The alternative

is to bog down in I-win, you-lose fights. Leaders

must convey a vision of the future that is clear,

appealing to stakeholders, ambitious yet attain-

able. Effective visions are focused enough to guide

decision- making yet are flexible enough to accom-

modate individual initiative and changing circum-

stances. (Kotter, 2006, p. 14)

176 Chapter 6 Vision and the Direction of Change

John Pendlebury et al. (1998) specify three components of visions key to change

management:

1. Why the change is needed: The problem that validates the need for change

2. The aim of the change: The solution, which must be credible, meaningful, and feasible

3. The change actions that will be taken: The means, how actions will be mobilized and

delivered

We can thus identify the desirable features of vision statements. However, this does

not reveal the criteria on which those features should be assessed. This suggests that the

affective or “feel good” content of vision is important; we know it when we see it, but this

is difficult to define or to measure. Consider the sample of vision statements taken from

leading (Fortune 100) global companies. Which of these vision statements have the char-

acteristics that we have identified so far? Which do not have these characteristics? Based

on these vision statements, for which of these companies would you find it attractive to

work? Whose vision statements would turn you away? Why? How do you explain your

preferences and dislikes with regard to these visions?

Ira Levin (2000, p. 92) argues that some vision statements have a “bumper sticker”

style, based on jargon and fashionable terms. Their similarities thus mean that they could

be used by several different companies, and they are not inspirational. Hugh Davidson

(2004) calls these “me-too” statements that lack distinctiveness, such as Ericsson’s vision

in the 1990s, “to be the leading company in tomorrow’s converged data and telecommuni-

cations market.” Levin (2000) advocates instead the development of “vision stories” that

Definitions Sources

A statement of purpose determined by management based
on the organization’s core values and beliefs that defines
the organization’s identity and combines an ideal manifes-
tation of its direction together with a tangible prescription
for realizing its goals

Landau et al., 2006a,
p. 147

Image of an “ideal future.” It is aspirational and idealistic, a
guiding star with dreamlike qualities

Haines et al., 2005,
p. 139

A picture of the future of our organization Auster et al., 2005, p. 50

A detailed description of a desired future that provides
clarity as to how the organization will need to operate dif-
ferently in order to meet the changing conditions of its
markets, customers, and overall business environment

Belgard and Rayner,
2004, p. 116

An ideal that represents or reflects the shared values to
which the organization should aspire

Kirkpatrick et al., 2002,
p. 139

An ambition about the future, articulated today; it is a pro-
cess of managing the present from a stretching view of the
future

Stace and Dunphy,
2001, p. 78

Articulates where the organization is headed and what it is
trying to accomplish

Deetz et al., 2000, p. 54

TABLE 6.2
Vision

Definitions

Chapter 6 Vision and the Direction of Change 177

portray the future in a manner to which people can relate. Table 6.4 outlines the process

for producing vision stories. Levin cites Arthur Martinez, chief executive of Sears, as

someone adept at using vision stories. Martinez required his senior managers to write sto-

ries about the businesses that they managed and how customers related to those businesses

(Domm, 2001).

Characteristics Advocates

imaginable: conveys a picture of the future
desirable: appeals to stakeholder interests
feasible: embodies realistic, attainable goals
focused: guides decision making
flexible: enables initiative and response to changing
environments
communicable: can be explained in five minutes

Kotter (2012a)

provides a sense of direction
sets the context for making decisions
reflects the organization’s values and culture
recognizes and responds to pressing needs
identifies current actions to create a strong future

Deetz et al. (2000)

aspiration: how the new organization will look
inspiration: getting people excited about where they
are headed
perspiration: highlights the work required to achieve
the vision

Scott-Morgan et al. (2001)

clear direction
conveys ambition and excitement
memorable
motivating
relevant, to staff and customers
can be translated into measurable strategies

Davidson (2004)

future focused: what will our business look like in 5 to 10
years’ time
directional: describes where the organization is going
clear and easily understood: guides decisions and inde-
pendent action
relevant: reflects the past as well as current challenges
purpose-driven: connecting to a meaningful sense of
purpose
values-based: shared beliefs that influence behavior and
attitudes
challenging: stretch goals that set a high standard
unique: reflects what makes the organization different
vivid: provides a striking mental image of the future
inspiring: captures the heart, and engages people to
commit to a cause

Ambler (2013)

TABLE 6.3
The

Characteristics

of Effective

Visions

178 Chapter 6 Vision and the Direction of Change

Offering a subtly different answer to the question, “What are the characteristics of

effective visions?” Levin (2000, pp. 105–6) concludes: “A well-conceived and articulated

vision offers the promise of serving as both a springboard and a frame of reference for

fuelling such aligned action. Yet, the traditional vision statement with its abstract, lofty,

and generic language fails to fulfil this promise. The vision story, on the other hand, with

its rich imagery and vivid description, is more effective in fulfilling this promise. The

Vision Statements from Fortune 100 Companies

Exxon Mobil: Exxon Mobil is committed to being

the world’s premier petroleum and petrochemi-

cal company. To that end, we must continuously

achieve superior financial and operating results

while adhering to the highest standard of busi-

ness conduct. These unwavering expectations

provide the foundation for our commitments to

those with whom we interact.

Wal-Mart Stores: To become the worldwide

leader in retailing.

Chevron: To be the global energy company

most admired for its people, partnership, and

performance.

Sinopec: To become the largest chemical fertil-

izer manufacturer and most effective resources

processing enterprise in the chemical industry in

China, which is also geared up for competing in

the international market.

Toyota Motor: Toyota aims to achieve long-term,

stable growth in harmony with the environ-

ment, the local communities it serves, and its

stakeholders.

HSBC Holdings: We aspire to be one of the world’s

great specialist banking groups, driven by our

commitment to our core philosophies and values.

Gazprom: To establish itself as a leader among

global energy companies by entering new mar-

kets, diversifying its activities, and ensuring reli-

able supplies.

Carrefour: The Carrefour Group has one simple

ambition: making Carrefour the preferred retailer

wherever it operates.

AT&T: To design and create in this decade the

new global network, processes, and service plat-

forms that maximize automation, allowing for a

reallocation of human resources to more com-

plex and productive work.

Nestlé: To bring consumers foods that are safe,

of high quality, and provide optimal nutrition to

meet physiological needs. In addition to nutri-

tion, health, and wellness, Nestlé products bring

consumers the vital ingredients of taste and

pleasure.

Industrial and Commercial Bank of China: ICBC

adheres to the concept of scientific devel-

opment for obtaining new driving force for

growth, striving to ameliorate its opera-

tional structure, and strengthening the inter-

nal management and promoting innovative

development.

Home Depot: To create a company that would

keep alive the values that were important to us.

Values like respect among all people, excellent

customer service, and giving back to communi-

ties and society.

U.S. Postal Service: The U.S. Postal Service is com-

mitted to actions that promote sustainability—

meeting the needs of the present without

compromising the future. We are working to

create a culture of conservation among our

663,000 employees in our more than 34,000

facilities.

BMW: To be the most successful premium manu-

facturer in the industry.

Source: From Kolk (2010). Organizations update their vision statements from time to time, and this list may not be current. The aim is to offer typical illustrations for

the purposes of assessment.

Chapter 6 Vision and the Direction of Change 179

Step Actions for the Senior Team

1. Become informed Leadership team articulate their vision for the future—five to fif-
teen years ahead—of the organization, taking into account:

External impacts and future business challenges?
Economic, social, political, and technological trends and
developments?
What are other organizations doing to prepare for the future?
Core values and beliefs?

2. Visit the future Imagine it is five years into the future, and the organization has
been so successful that business magazines want to report the
story, covering:

What is the organization’s reputation and what do competitors
envy?
What is the customers’ experience?
What contributions have been made to the community?
What do employees tell friends and family about working
here?
What new business ventures have been developed?

3. Create the story Write the vision story as a narrative (1,500 to 2,000 words):

Describe the actors, events, actions, and consequences
What are the key messages and themes?
What’s happening in the marketplace?
How are staff providing services and interacting with
customers?
What is the mood—what are people experiencing and feeling?

4. Deploy the vision Develop the story for further discussion across the organization:

Explain the business case for change and the desired outcomes
Explain what is not negotiable—values, operating principles
Collect responses—what needs clarification, elaboration,
explanation?
Finalize the vision story—translate into strategies, targets, goals

TABLE 6.4
Vision as

Storytelling—

How to

Develop the

Narrative

Source: Based on

Levin (2000),

pp. 99–105.

vision story provides people with a lifelike glimpse into the future of possibilities and

directly answers the fundamental question: What will this future mean for me?”

Vision, Mission, and Goals
Visions are often confused with other terms such as mission statements, goals, and

organizational values. Visions and missions can be particularly difficult to disentan-

gle. Most commentators adopt the position set out at the beginning of this chapter,

from Johnson et al. (2011). Mission concerns what an organization is and does. Vision

describes a future scenario, where the mission is advanced, and where goals and strat-

egy are being effectively achieved. Nutt and Backoff (1997) treat visions as being simi-

lar to missions and goals, in providing direction and identifying necessary changes.

However, although goals may identify desired results, such as improved morale, lower

180 Chapter 6 Vision and the Direction of Change

costs, or bigger market share, they do not necessarily articulate the actions necessary to

produce those outcomes. Nor do they usually address the role of organizational values

in achieving the result. Visions, in contrast, usually paint a picture of the future and are

inspirational. Mission statements tend to be more purposive and instrumental in outlin-

ing what needs to be done.

Vision and Market Strategy
Some commentators argue that, to create competitive advantage, an organization’s

vision and strategy must be unconventional, perhaps even counterintuitive, and must

also be distinct from those of other companies. Michael Hay and Peter Williamson

(1997), for example, note that visions have an external and an internal dimension. The

external dimension concerns a shared view of the outside world: how markets work,

what drives customers, competitors, industry dynamics, macroeconomic trends, the

impact of geopolitical events. Most car tire manufacturers, they note, such as Good-

year, Michelin, and Bridgestone/Firestone, have a market vision that sees the large car

manufacturing companies as their main customers, where large market share and high

volumes are the way to drive down costs. In contrast, the comparatively unknown Coo-

per Tire and Rubber Company had a different market vision. They decided that, as

Americans were holding onto their cars for longer, the independent replacement tire

outlets were their main market.

Hay and Williamson (1997) argue that having a well-specified external vision helps

to identify how the company will grow and compete. Only then can an internal vision be

developed, pointing to the capabilities that need to be acquired to compete, and also to

what the organization seeks to become. External and internal dimensions of the vision thus

have to be aligned.

LO 6.3 How Context Affects Vision

What is the relationship between vision and the organizational context in which it is

articulated and used? Context, for the purposes of this discussion, includes organiza-

tion culture.

Nutt and Backoff (1997, pp. 316–17) assess four organizational contexts in terms of

their abilities to produce visionary strategic change. These abilities are assessed in relation

to the degree of acceptance of the need for change (change susceptibility) and the extent to

which resources for strategic change are available (resource availability).

Rigid organizations have limited available resources and lack acceptance of the need

for change. Such organizations tend to be hierarchical and inflexible (such as Eastern

and Pan Am before their collapse).

Bold organizations have limited resources, but acceptance of the need for change is

high. They tend to be more organic and less rule-bound. Visionary leadership is more

likely to emerge in this context, although this entails freeing up resources and ensuring

that key stakeholders are carefully cultivated in the process of developing the vision.

Overmanaged organizations have high resource availability but little acceptance of the

need for change. They tend to be limited in their ability to accept the need for a new

Chapter 6 Vision and the Direction of Change 181

vision, due to a comparatively stable environment dominated by past practices that are

seen to have worked well and which remain relevant.

Liberated organizations have a context in which visionary processes are likely to be

most successful. Hewlett-Packard and Intel, for example, have been regarded as having

high acceptance of the need for change and high availability of resources that can be

allocated to the strategic change process.

When does a vision “take”? This context analysis suggests the need for a “trigger” that

alerts organization members to the need for a new vision, thus strengthening acceptance of

change. The power of the vision, remember, lies with the way in which it can give mean-

ing to the current situation and promise to solve the organization’s problems. Triggers can

include external turbulence and uncertainty, crises demanding new strategies or ways of

working, poor organizational performance, or transitions such as entrepreneurial start-up

to growth. In addition, change leaders can use their influence and storytelling capabilities

to frame interpretations of the current situation so as to heighten dissatisfaction with the

status quo (Lewin, 1951), thus enhancing the desire for change. In other words, change

leaders can generate a crisis situation through their visionary and rhetorical skills, rather

than waiting for one to appear (Denning, 2004 and 2005).

The national and cultural contexts in which an organization is embedded are also fac-

tors contributing to whether or not visions “take.” For example, Jerry Wind and Jeremy

Main (1999) note that Donald Burr’s vision for the airline People Express was “to become

the leading institution for constructive change in the world.” That, they observe, was vague

and preposterous. In Japan, on the other hand, a past chairman of Canon, Ryuzaburo

Kaku, referred to himself as an evangelist, saying that the organization was guided by “liv-

ing and working together for the common good.” While similar in intent to Burr’s vision,

Wind and Main argue that Kaku’s vision “worked” in Japan, where organizations are more

closely aligned with national and social interests than they are in the United States. Con-

sider again the vision statements in table 6.4, and in particular those that you assessed as

less attractive. Did those come from companies based in another country and culture?

LO 6.4 How Visions Are Developed

How are visions developed? We will consider three answers to this question, explor-

ing approaches to “crafting” a vision, the kinds of questions that can help to develop a

vision, and connecting the vision to the organization’s “inner voice.”

Crafting the Vision
Lawrence Holpp and Michael Kelly (1988, p. 48) argue that crafting a vision is “a little

like dancing with a 500-pound gorilla. It takes a little while to get the steps down, but

once the dance is over, you know you’ve really accomplished something.” There are

different approaches (or dances) to crafting or creating a vision, and some of these are

outlined in table 6.5 (based on a concept similar to the “leadership styles continuum,”

discussed in chapter 10, table 10.7).

For some commentators, crafting a vision is a senior management responsibility, typ-

ically discharged by having a small team analyze needs, identify choices, and develop

182 Chapter 6 Vision and the Direction of Change

recommendations (Pendlebury et al., 1998). But some see this as a collaborative effort,

involving both the top team and those who will be affected by the vision. Lynda Gratton

(1996), for example, describes how seven European companies engaged in a democratic

vision process, drawing on a range of cross-functional groups instead of imposing a top-

down approach. Allowing the vision to emerge from debates among those multifunctional

groups, she argues, can potentially lead to more creative visions and subsequent actions.

This democratic approach also ensures that the need for change (which may be urgent) is

transmitted across the organization, and it provides executives with a better understanding

of the risks and trade-offs involved in implementing the vision.

Adopting a similar approach, Nutt and Backoff (1997) suggest three vision-crafting

processes.

1. Leader-dominated approach. The CEO provides the strategic vision for the organiza-

tion. This is similar to the “tell” and “sell” approaches in table 6.5. This approach is

not consistent with the concept of empowerment, which argues that people across an

organization should be involved in the processes and decisions that affect them.

2. Pump-priming approach. The CEO provides visionary ideas and gets selected individu-

als and groups to further develop these ideas within some broad parameters. This adapt-

ing and shaping process is similar to the “test” and “consult” approaches in table 6.5.

3. Facilitation approach. Similar to the “co-create” approach in table 6.5, this draws

directly on a participative management perspective by involving a significant number

of people in the process of developing and articulating the vision. The CEO acts as

facilitator, orchestrating the crafting process. Nutt and Backoff (1997) argue that this

approach is likely to produce better visions and more successful organizational change

because those who have contributed will be more committed to making the vision

work.

Three sets of structured guidelines or “routines” for producing a vision are summarized

in table 6.6. While similar in style, they provide different levels of detail with regard to the

nature of the process and the steps that should be involved. There is no “one best way” to

do this.

TABLE 6.5
Approaches to

Vision-Crafting

Approach What It Means Used When

Tell Chief executive creates the vision
and gives it to staff

Involvement is not seen as
important

Sell Chief executive has a vision that he
or she wants staff to accept

Chief executive is attracted to the
vision and wants others to adopt it

Test Chief executive seeks feedback on
ideas about a vision

Chief executive wants to see which
aspects of the vision find support

Consult Chief executive seeks the creative
input of staff, within set parameters

Chief executive needs help to
develop the vision

Co-create Shared vision is created by chief
executive and staff

Chief executive wants to identify
shared visions throughout the
organization

Chapter 6 Vision and the Direction of Change 183

Questions That Help to Develop a Vision
The approaches that we have discussed so far distinguish between different degrees

of involvement in the development of an organization’s vision. However, they do not

directly address the question of how to develop the substance of the vision itself.

Holpp and Kelly (1988) identify three different approaches and sets of questions

through which vision may be developed. They label these approaches intuitive, analytical,

and benchmarking.

Core Steps in Creating a New Vision

1 Use a qualified facilitator Develop trial vision
statements

Leadership team defines
the timeline

2 Assess where you have
been and where you are

Discuss these with staff
and customers

Conduct an environmen-
tal scan of threats and
opportunities

3 Think about a new
direction

Revise the vision Develop appropriate
interview questions

4 Co-construct a statement
about the organization’s
future direction

Rediscuss the vision Use questions to interview
leadership team to obtain
their ideal vision of the
future

5 Identify roadblocks Repeat the process
until an agreed vision is
produced

Draft a vision of the future

6 Take action quickly to
capitalize on enthusiasm;
develop a strategic plan to
integrate vision throughout
organizational practices

Get feedback from across
the organization

7 Develop a system for
monitoring and adjusting
the vision, such as perfor-
mance review workshops

Develop a second draft

8 Share vision with lead-
ership team to gain
commitment: develop
a catch-phrase that cap-
tures its essence, and a
communication plan

9 Assess implications and
develop specific action
plans

Deetz et al. (2000) Davidson (2004) Belgard and Rayner (2004)

TABLE 6.6
Guidelines for

Structuring the

Vision Process

184 Chapter 6 Vision and the Direction of Change

The intuitive approach relies on the use of imagination and imagery to encourage staff

to participate in vision development. Managers are asked to imagine doing their jobs in

such a way that they really achieve what they want from themselves and from the other

people with whom they work:

First, they are asked to list up to ten things that they want to achieve personally and

professionally, and then to prioritize these, focusing on the top two or three.

Second, they focus on their current situation as a way to identify the tension between

their current lived experiences and their desired image.

Third, they are provided with support to help identify and implement structured action

plans to work toward achieving their vision.

The analytical approach sees visions as defined in relation to organizational or depart-

mental missions and roles. Vision is thus related to purpose and focuses on the following

questions:

Who is served by the organization?

What does the organization do?

Where does the organization place most of its efforts?

Why does the organization focus on particular work and goals?

How does the organization operationalize these efforts?

The aim of these questions is to guide the organization as a whole, and individual

departments, from the current situation to a desired future state.

The benchmarking approach bases the vision on the actions and standards of the orga-

nization’s toughest competitors. This involves asking:

What do our competitors do well?

How can we surpass this?

What quantitative and qualitative measures would indicate that we had achieved this?

What will it be like, and how will it feel, when those standards have been achieved?

The benchmarking approach is more externally focused, compared with the intuitive

and analytical approaches, which have an internal focus. Here are some of the problems

with these approaches:

The intuitive approach, which follows an organization development perspective, may

produce personal visions that are not connected to the core business of the organization

and to current or anticipated industry trends.

The analytical approach serves more to align the vision to the mission of the organiza-

tion, but pays less attention to the values and guiding logics of the organization. By

aligning too tightly with mission, the analytical approach may neglect the inspirational

element of visions.

The benchmarking approach assumes that the organization’s future will be linked to

current competitors. However, it may be more valuable to identify who will be the new

competitors in the future, especially where an organization and sector are facing trans-

formational change.

Chapter 6 Vision and the Direction of Change 185

Connecting to the Organization’s “Inner Voice”
Robert Quinn (1996, p. 197) makes an interesting contribution to the process of iden-

tifying change visions. He points out that, in many organizations, people want to know

what the vision is and look to the chief executive to provide it. Paradoxically, however,

where vision statements are available, such as on corporate business cards, these are

likely to be rejected as being in name only; they are not what people are “willing to

die for.” He argues that developing a vision to guide organizational actions has to go

beyond superficial statements and “confront the lack of integrity that exists in the sys-

tem,” an exercise for which few managers are well equipped.

To illustrate this view, he tells the story of a speech given by Mahatma Gandhi at a

political convention in India. When he rose to speak, many in the audience also rose, left

their seats, and paid little attention to him. However, as he spoke about what Indians really

cared about—not politics, but bread and salt—the audience sat down again and listened.

His message was unusual: “This small, unassuming man had journeyed through their heart-

land and captured the essence of India. He was vocalizing it in a way they could feel and

understand. Such articulation is often at the heart of radical, deep change” (Quinn, 1996,

p. 199). For Quinn, it is this ability to find the organization’s “bread and salt” that makes a

vision appealing, passionate, and beyond the superficial. This search for the “inner voice”

of the organization is necessary in order to develop visions that resonate and narrow the gap

between “talk and walk.” Such “bread-and-salt” visions are achieved in a circular manner

involving a bottom-up and top-down dialogue to reach the “inner voice” of the organization.

Adopting a similar position, Chris Rogers (2007, p. 229) maintains that “vision is as

much about insight as far sight.” Visions need to connect with people’s desires, feelings,

and ambitions, as well as with the organization’s intentions. Resonating with the inter-

preter image of change management, this implies that visions are important in encourag-

ing the members of an organization to develop and explore “new ways of seeing,” to gain

fresh insights, make new connections, and to be better prepared to work with the chal-

lenges that a new vision is likely to bring.

Purpose beyond Profit

A focus on purpose goes beyond asking questions

about whether a business is operating profitably

or whether an action is legal—it engages a soul-

searching focus on questions at a core level, such

as: What is a business’s sense of purpose (shared

identity and goals)? How and why did a particular

business begin (imprinting effects of founding phi-

losophies)? Who founded the enterprise and what

did they want to achieve (entrepreneurial values,

mission, and vision)? How does a sense of purpose

relate to all the stakeholders in the organization and

to the context in which it operates (stewardship and

governance)? How does a business understand itself

relative to society, and what is it doing to create a

shared sense of purpose (institutional norms and

logics)?

Source: From Hollensbe et al. (2014), p. 1228.

Table 6.7 provides examples of “bad” and “good” purpose statements (Craig and

Snook, 2014, p. 109). Many organizations express their vision in vague and general terms:

“Help others excel,” “Ensure success,” “Empower my people.” These statements do not

include a plan for translating purpose into action. Some organizations try to cover every

186 Chapter 6 Vision and the Direction of Change

possibility with jargon: “Empower my team to achieve exceptional business results while

delighting customers” (p. 108). Now consider these two visions:

Google: “To organize the world’s information and make it universally accessible and useful”

Charles Schwab: “A relentless ally for the individual investor”

In order to develop a sense of purpose that has an impact, leaders must clarify their

own purpose based on experience, preferences, and ambitions. Craig and Snook also argue

that leaders have to imagine the impact that “living the purpose” will have on their world.

While actions matter more than words, the language in which purpose statements are

expressed is important, as table 6.8 suggests.

Leaders must therefore clarify their own unique sense of purpose, and put that to

work.

Purpose-Driven Leadership

Nick Craig and Scott Snook (2014) explore the con-

cept of “purpose-driven leadership,” arguing that

the leader’s sense of purpose contributes to a clear

statement of the organization’s vision and mission:

Doctors have even found that people with

purpose in their lives are less prone to disease.

Purpose is increasingly being touted as the key

to navigating the complex, volatile, ambigu-

ous world we face today, where strategy is ever

changing and few decisions are obviously right

or wrong. (p. 106)

TABLE 6.7
From Bad to

Good Purpose

Statements

From Bad … To Good …

Be a driver in the infrastructure business that allows each
person to achieve their needed outcomes while also master-
ing the new drivers of our business as I balance my family
and work demands

Bring water and power
to the 2 billion people
who do not have it

Continually and consistently develop and facilitate the
growth and development of myself and others, leading to
great performance

With tenacity, create
brilliance

TABLE 6.8
The Language

of Purpose-

to-Impact

Planning

Traditional Development Planning Purpose-to-Impact Planning

Uses standard business language
Focuses on weaknesses to address

performance
States a business- or career-driven

goal
Measures success with metrics tied to

the firm’s mission and goals
Focuses on the present, working forward
Generic; addresses the job or role
Ignores responsibilities outside the office

Uses meaningful, purpose-infused language
Focuses on strengths to realize career

aspirations
A statement of purpose explaining how

you lead
Sets incremental goals related to living your

leadership purpose
Focuses on the future, working backward
Unique to you, addresses who you are as a leader
Takes a holistic view of work and family

Chapter 6 Vision and the Direction of Change 187

LO 6.5 Why Visions Fail

Visions can fail for a number of reasons. For example, this can happen when a vision is:

too specific; fails to appreciate the inability to control change, and the degree of uncer-

tainty often associated with outcomes

too complex; difficult to understand

too vague; fails to act as a landmark toward which change actions are directed

inadequate; only partially addresses the presenting problem

irrelevant; clear picture, not firmly attached to the business

blurred; no clear picture of the future

unrealistic; perceived as not achievable

a rearview mirror; pictures the past, extrapolated into the future

Be Specific Alan Lafley at P&G

The chief executive of Procter & Gamble (P&G),

Alan Lafley, is reflecting on his five years of leading

change inside the company. One of his key com-

ments is that he found it important to provide more

than just a briefly stated vision, because people

responded better to specifics:

So if I’d stopped at “We’re going to refocus on

the company’s core businesses,” that wouldn’t

have been good enough. The core businesses

are one, two, three, four. Fabric care, baby

care, feminine care, and hair care. And then

you get questions: “Well, I’m in home care.

Is that a core business?” “No.” “What does it

have to do to become a core business?” “It has

to be a global leader in its industry. It has to

have the best structural economics in its indus-

try. It has to be able to grow consistently at a

certain rate. It has to be able to deliver a cer-

tain cash flow return on investment.” So then

business leaders understand what it takes to

become a core business.

Why did this extra level of detail help? According

to Lafley, there were two factors. One was the size

and diversity of the P&G workforce—100,000 peo-

ple from over 100 cultures. The second was that,

for managers with so much going on in their busi-

nesses, the provision of more detail on the implica-

tions of the vision helped them to focus on what

was needed to implement it (Rajat Gupta and Jim

Wendler, 2005, p. 3).

Todd Jick (2001, p. 36) adds that a vision is likely to fail when leaders spend 90 percent

of their time articulating it (but not necessarily in clearly understood terms), and only 10

percent of their time implementing it. Table 6.9 suggests other reasons why visions fail.

The sidebar “A Lack of Shared Vision?” tells a short story about the absence of a shared

vision. We will now consider two further reasons for vision failure; inability to adapt over

time, and the presence of competing visions.

188 Chapter 6 Vision and the Direction of Change

Failure to Adapt
Some visions stand the test of time and remain applicable and adaptable to new situations

and environments. Others, however, need to be overhauled in order to remain relevant.

This situation is illustrated by the investigation by Lloyd Harris and Emmanuel Ogbonna

(1999) into two medium-sized UK retail companies and the impact of the founders’ visions

on strategic change. In both cases, the vision was established well over 100 years ago by

the company founder and there was evidence of an escalation of commitment to the vision

by subsequent management. In one company, the vision was paternalistic (commitment

toward staff) and focused on prudent growth. This led to a strong focus on sales and prof-

itability in each new store location. These characteristics were still present in the current

management of the company. The vision itself was seen as flexible and responsive to the

prevailing environmental conditions facing the company. The researchers label the found-

er’s vision in this case as providing a “strategic dividend” for subsequent management.

TABLE 6.9
Visions Fail

When …

Source: Based on

Lipton (1996),

pp. 89–91.

Visions Fail When … Because …

The walk is different
from the talk

When managers do not match their words with actions, the
vision is treated by staff as an empty slogan

They are treated as the
“holy grail”

The expectations will be unrealistic, and visions are not
magic solutions

They are not connected
to the present

Visions need to recognize current obstacles if they are to be
believable and seen as achievable

They are too abstract, or
too concrete

Visions must be idealistic, realistic, and tangible

Development does not
involve a creative process

It is often the process as well as the final vision that helps to
secure the organization’s future

Participation is limited Consensus must be built around the vision, which has to be
diffused throughout the organization

People are complacent Visions that are projected too far into the future are not seen
as urgent

A Lack of Shared Vision?

John Symons (2006) tells the following humorous

story:

The man in the hot air balloon was lost. Descend-
ing sufficiently he shouted to a walker on the ground
asking where he was. “You are 30 feet up in the air,”
was her immediate response before she walked away.

Asked subsequently by a companion to explain this
unhelpful behavior she said: “He was a typical man-
ager. He didn’t know where he was, or how to get
to where he wanted to go without the help of those

underneath him.” Somewhat mischievously she
added, “Why should I do more than necessary to
help someone who got to where he was by hot air
and did not tell me where he was planning to go?”

As John Symons comments:

She obviously did not know or share the balloon-
ist’s vision. The lesson for managers is clear. As well
as enthusing those underneath, the leader needs
to communicate where he or she is in relation to
achieving the vision.

Chapter 6 Vision and the Direction of Change 189

By contrast, in the other company, the founder’s vision was to have a store in every

town in a particular region. A second aspect of this vision concerned family control of the

company. The researchers argue that this original vision continued to drive senior manage-

ment. However, in contrast to the first company, this vision served as a “strategic hangover.”

The closed nature of the vision led successive management teams to make decisions that

were out of step with changes in the environmental conditions facing the sector, such as the

movement of large retail stores into the region, and a shift in focus of such stores from price

to quality and service. As a result, the company almost faced financial ruin on two separate

occasions. In relation to subsequent strategic change actions taken by management in these

two companies, the authors argue that “whether the original vision of the founder results in

a legacy or a hangover is clearly dependent on the original flexibility of the strategy and the

later environmental appropriateness” (Harris and Ogbonna, 1999, p. 340).

Presence of Competing Visions
Visions may also fail due to what Rosabeth Moss Kanter et al. (1992) call “vision col-

lisions,” involving the presence of multiple and conflicting visions. This can happen,

for example, when the vision is crafted by organization strategists who are convinced

of the need for change, but where this sense of urgency is not shared by those who

will implement or be affected by the change (who may still be trying to embed previ-

ous changes). Vision collisions can also occur where there is a gap between the visions

of management and stakeholders. In the mid-1980s, the vision of Nike, the sportswear

company, was to make athletic footwear. However, the company found that a different

market segment was buying their shoes: not athletes, but people who were wearing Nike

trainers instead of casual shoes. Nike responded by introducing its own brand of casual

shoes. This strategy failed because Nike had not understood that customers were buy-

ing expensive “overengineered sneakers” because they appealed to their image. In other

words, the company’s vision was out of step with its customers’ vision of Nike. Multiple

and conflicting visions can also arise with company mergers. Colin Mitchell (2002), for

example, cites the failure in 2000 of the merger between Deutsche Bank and Dresdner

Bank. In this merger, there was a “failure of management to persuade Deutsche’s invest-

ment bankers of the vision for how the newly merged company would compete. Many

key employees left, and the threat of mass walkout forced Deutsche to abandon the deal

after considerable damage to the share price of both companies” (p. 104).

We need to close this discussion with a note of caution. There is limited research into

the concept and process of vision failure. As Davidson (2004) argues, while there are

many tales of failed visions, there are also many corporate insiders who have a vested

interest in declaring success.

LO 6.6 Linking Vision to Change: Three Debates

In this section, we explore three debates concerning the links between vision and orga-

nizational change. First, we ask if vision is a driver of change, or if vision emerges

through the change process. Second, we ask whether vision helps or hinders change.

Third, we assess whether vision is better attributed to heroic, charismatic leaders, or is

better understood as an organizational attribute.

190 Chapter 6 Vision and the Direction of Change

Debate One—Vision: Driving Change, or Emerging
During Change?
Vision drives change: The change management approaches and frameworks
described in chapter 10 give vision a prominent role in underpinning and implementing

organizational change.

For Kanter et al. (1992), establishing a vision is the first step toward change. Without a

vision, changes may seem arbitrary and unnecessary. Vision provides clarity about the

goals of change, avoiding the perception that this is just another cost-cutting exercise.

The vision can motivate staff to embrace change, engaging in what may seem to be

daunting or risky actions.

For Pendlebury et al. (1998), vision determines the scope, depth, and time frame of

change, and the areas that will be affected. Having a vision at the start of change is

needed for both transformational change (outlining the broader strategic intent to which

all actions are directed) as well as incremental or adaptive change (where the vision can

be more specific in terms of specifying change objectives and procedures).

The need for vision at the start of change is also embedded in the strategy literature,

where the term strategic intent is often used to represent vision. It is most usually asso-

ciated with the work of Gary Hamel and C. K. Prahalad (1989, p. 4), who argue that

“strategic intent envisions a desired leadership position and establishes the criterion the

organization will use to chart its progress.” They point to Komatsu’s “Encircle Caterpil-

lar,” and Canon’s “Beat Xerox” as visionary statements that capture strategic intent. The

strategic intent behind such statements was long term and encompassed a number of dif-

ferent change programs and actions over the short and medium term that were designed to

work toward the longer-term vision. The strategic intent expressed the desired end result

without specifying or prescribing the necessary steps for achieving it.

Vision emerges during change: Although important, it may not be possible to
articulate a clear vision at an early stage during transformational or discontinuous

change. Robert Shaw (1995) argues that organization structures and management

processes may require fundamental change. It may not be possible to develop a

vision until after the process has begun to unfold, because the relevant information

may not be available in the current configuration (customer expectations, competi-

tion). In other words, discontinuous change has to be under way in order to make that

information available to inform the development of vision. Those who are leading

the change are surrounded by the presenting problems and are able to make real-time

adjustments in the context of the results of their ongoing efforts. Robert Quinn (1996,

p. 83) describes this as “building the bridge as you walk it.”

Other commentators have adopted an even stronger position, arguing that “the

vision thing” is overrated in terms of driving change. For Frederick Hilmer and Lex

Donaldson (1996), business planning, not vision or visionary leaders, produces suc-

cessful change. Analyzing corporate change at GE, they observe that “there was no

clear vision to guide the transformation” (p. 126) and that the actions of Jack Welch

were pragmatic and “based on the application of conventional business ideas about the

Chapter 6 Vision and the Direction of Change 191

need for productivity improvement and high market share” (p. 127). Many visions were

produced over the period of Welch’s tenure, and a clear vision did not emerge until

most of the transformational changes had been implemented. Hilmer and Donaldson

(1996) argue that “vision rhetoric” was used simply to make management decisions

appear to be more acceptable.

Debate Two—Vision: Help Change or Hinder Change?
Vision helps change: Lipton (1996) identifies five tangible benefits that skillful
visions can bring to an organization:

Enhance performance: The studies by James Collins and Jerry Porras (1991, 1996,

2005) found that companies labelled as visionary were likely, over time, to deliver a

greater dividend to shareholders compared to others.

Facilitate change: Visions provide road maps that assist the transition process.

Enable sound strategic planning: Plans that have embedded within them imagery of the

future are more likely to inspire people to action.

Recruit talent: This applies particularly to the Generation Xers who want to maximize

their incomes while feeling that they are engaging in challenges greater than simply

making a profit.

Focus on decision making: Vision helps to develop the distinctive competencies that

characterize an organization.

Emmanuel Metais (2000) supports this position, arguing that “strategic vision” helps to

produce stretch in an organization by creating a sense of incompetence resulting from the

gap between the future and the current reality. This perceived incompetence encourages

creativity and the search for new ways of acquiring and using resources. At the same time,

vision can also help to leverage these resources by stimulating innovative ways of using

them. Stretch and leverage combined, Metais argues, can be used to identify new strate-

gies for achieving the vision, including actions such as:

flanking: exploiting a weakness in a dominant competitor

encircling competitors: gaining greater control of the market

destabilizing the market: changing the competitive rules

Paul Schoemaker (1992) also links strategic vision with helping to decide the prod-

ucts that an organization should make and the markets in which it should operate. Per-

formance appraisals and incentive systems can then be managed so that they align with

the vision.

Vision hinders change: Vision can impede the process of organizational change
when visionary or charismatic leaders use emotional appeal as the basis for engagement

and neglect the operational details needed to make change work. A related problem is

that vision focuses on the future, diverting attention from current problems (see “Lou

Gerstner on Vision,” below). One example is the failure of the UK Internet company

Boo.com, which raised $135 million to deliver its vision, which was to have a global

presence in online clothes shopping (Lissack and Roos, 2001). It launched operations

192 Chapter 6 Vision and the Direction of Change

in 17 different countries but had problems with slow software, which frustrated poten-

tial buyers:

Boo’s vision called for a broadband world of cool kids with large budgets. Boo’s reality con-

sisted of 56k modems, fussy buyers, and tight budgets. Boo was consistent with its vision but

out of sync with its present landscape. (Lissack and Roos, 2001, p. 61)

Vision can thus be a drawback when the wrong vision drives the change, when leaders

exaggerate perceptions of crisis, and when the vision fails to deliver its promise and fol-

lowers become disillusioned and lose confidence in both the leader and the organization.

Further problems will arise when there is a significant gap between the vision and the

organizational capabilities that would be required to realize it.

Vision development approaches that do not involve the people who will be affected are

thought to have negative consequences for producing successful organizational change.

For example, Harvey Robbins and Michael Finley (1997, p. 175) point out that:

Where organizations go wrong is in assuming that the vision is some precious grail-like

object that only the organizational priests are privy to—that it appears in a dream to the

executive team, who then hold it up high for the rank and file to ooh and ahh over. The prob-

lem with the priestly approach to vision-and-mission is that the resulting vision is often a lot

of garbage. The outcome, instead of being a useful reminder to keep to the change track, is a

paragraph held to be so sacred that no one dares change it.

Vision can further hinder change where, once developed, senior management become

so committed to it that they are unwilling to reevaluate and test its ongoing utility and

relevance. To do this could challenge the assumptions that the top team is truly in control,

that they have better foresight than anyone else, and that they do indeed have a clear and

compelling vision of the organization’s future. Senior management may feel uncomfort-

able questioning those issues.

Visions can hinder organizations when they have been developed using sense-making

processes that are linked to current or past practices. Lissack and Roos (2001) argue that

this approach is flawed, because predicting the future on this basis reifies the desired out-

come without enabling future changes to be built into it. Vision is based on the world in

Lou Gerstner on Vision

Louis V. Gerstner Jr., chief executive of IBM, argued in a

press conference in the mid-1990s that “the last thing

IBM needs right now is a vision.” He later wrote that

this was “the most quotable statement I ever made.”

This statement has often been cited as evidence that

he downplayed or even dismissed the role of vision in

organizational change. For example, Michael Raynor

(1998, p. 368) argues that “for a good many critics

Gerstner’s comment was greeted with a heartfelt ‘it’s

about time’—that is, it is about time that a senior

executive had the courage to speak up and put all that

rhetoric about visions and missions in its place.”

Gerstner argues, however, that those who have

portrayed this view of him have misinterpreted (or

even misquoted) him, often failing to pay attention

to the “right now” part of the statement. He main-

tains that IBM had a number of vision statements:

it was now time to implement these, rather than

engage in further visioning exercises, because by

that time, “fixing IBM was all about execution.”

Source: Based on Gerstner (2003).

Chapter 6 Vision and the Direction of Change 193

the future being stable and predictable. Outcomes are locked in and goals are set. The

problem is that the vision may prevent the organization from pursuing new, unanticipated

opportunities that may emerge.

For Lissack and Roos (2001), the concept of vision is limited by other assumptions. One

assumption is that organizational boundaries are well defined: staff, customers, suppliers. In

a world of fuzzy organizational networks, this assumption is questionable. A second assump-

tion is that the identity of the organization is fixed, with the vision built around that iden-

tity. We think of Lego, for example, as a toy company. However, corporate identity—what

the organization does—is constantly changing; as we saw in chapter 5, Lego is also now

an online games company. Lissack and Roos (2001, p. 61) prefer the term “coherence” to

vision. Coherence involves, “acting in a manner consistent with who you are given your

present spot in the business landscape.” An interesting argument, but it is unlikely that the

term “coherence,” emphasizing debates around boundaries and organizational identity, will

replace the concept of vision, which is deeply embedded in change management thinking.

How does vision impact individual rather than organizational identity, and can this

propel or impede change? This issue has generated debate. Landau et al. (2006a and b)

note that staff may identify strongly with an organization’s original vision, and with the

underlying beliefs and assumptions. However, when an attempt is made to inject a new

vision, this is likely to be resisted if it disrupts individual images and self-definitions. The

new vision will therefore hinder change. This problem can be addressed if it is possible

to ensure that new objectives and goals remain consistent with the values and beliefs that

underpinned the original vision.

Jeffrey Ford and William Pasmore (2006) question this position for two reasons. First,

it is not clear that vision does directly affect individual identity-forming processes. This is

an empirical question that needs to be examined, and is likely to vary across organizations.

Second, even if we accept that there is a direct relationship between individual identity and

vision, the problem lies with staff who are deeply committed to an existing identity, which

they are reluctant to change, despite the need for a new vision (and perhaps, therefore, a

new identity)—even if the new vision is necessary to secure the organization’s survival.

They note, “People should be entitled to their identities, but at the same time, organizations

do need people who are committed to a viable, sustainable vision to survive” (p. 176). This

argument reminds us that changes in vision may challenge individual identities, thereby

producing resistance to change. When developing a new vision, therefore, it is important

to assess, first, whether this will enable or disable identity-forming processes, and second,

whether this will encourage or discourage those affected to become involved in the change.

Debate Three—Vision: An Attribute of Heroic Leaders,
or Heroic Organizations?
Vision is an attribute of heroic leaders: Some commentators argue that success-
ful organizational change depends on effective leadership. For David Nadler and Robert

Shaw (1995, p. 219), “heroic leaders” energize and support their followers and provide

them with a vision that “provides a vehicle for people to develop commitment, a com-

mon goal around which people can rally, and a way for people to feel successful.” As we

have already noted, the vision has to be clear, compelling, challenging, and credible, but

it must also be reflected in the expressions and actions of the leader who is articulating

194 Chapter 6 Vision and the Direction of Change

it. Nadler (1998, p. 276) points to visionary leaders such as Jamie Houghton at Corning,

who painted “an engrossing picture of a culture in which Corning would be one of the

most competent, profitable, and respected corporations in the entire world.” He also iden-

tifies Scott McNealy of Sun Microsystems as envisioning “an information world where

people would be free to choose from a range of vendors rather than held captive by a

single, all-powerful mega-corporation.”

Ironically, some of those who are cited as visionary leaders do not see themselves as

visionary or heroic, and have challenged the significance of vision:

Robert Eaton, who managed Chrysler after Lee Iacocca, downplayed vision in favor of

measurable short-term results.

Bill Gates, one of the founders of Microsoft, once declared that “being visionary is

trivial” (Lipton, 1996, p. 86).

Nevertheless, those leaders are often praised for articulating clear, appealing, challeng-

ing images of the future of their organizations—the hallmarks of effective visions.

William Gardner and Bruce Avolio (1998) argue that effective charismatic, visionary

leaders create “identity images” that are valued and desired by others, incorporating trust-

worthiness, credibility, morality, innovativeness, esteem, and power. Drawing on a drama-

turgical perspective, they argue that charismatic leaders enact (or perform) their visions

through four processes:

1. Framing: The art of managing meaning, influencing others to accept the leader’s inter-

pretation of the vision by stressing its importance and aligning it with their values;

2. Scripting: The process of coordinating and integrating more specific sets of ideas and

actions including:

casting of the appropriate key roles

dialogue, using various rhetorical devices, such as metaphors and stories, to increase

the appeal of the message

providing direction, using verbal and nonverbal behavior and emotional displays

3. Staging: The selection of symbols, artifacts, props, and settings to reinforce the vision

4. Performing: Enacting the vision by personally demonstrating the behaviors required to

achieve the vision

It is important to note that, although having a vision is considered by many commenta-

tors to be a prerequisite for successful change leadership, others disagree. Vision may be a

necessary component of inspirational leadership, but may not be sufficient. Robert Goffee

and Gareth Jones (2000) argue that, to complement energy and vision, other qualities are

necessary, including:

revealing personal weaknesses to followers in order to gain their trust

sensing how things are in the organization and the wider environment, picking up and

interpreting subtle cues and signals

showing “tough empathy,” being passionate, caring, but realistic, focusing on what oth-

ers need rather than what they want

daring to be different, signalling and maintaining their uniqueness, while maintaining

social distance

Chapter 6 Vision and the Direction of Change 195

It has also been argued that visionary leaders are needed at an everyday level through-

out the organization, and not just at the top. Such individuals provide what Chris Rogers

(2007) calls “supervision,” using interactions, conversations, and role modelling to

demonstrate:

perspective, concerning the challenges facing the organization

purpose, both personal and organizational

processes, to respond more effectively to customers

possibilities, by challenging current constraints

potential, concerning personal contributions

passion, to channel energies in meaningful ways

In this perspective, therefore, to maintain engagement and motivation, providing vision

must be a day-to-day activity involving many leaders across the organization, and not an

occasional process led by a single senior figure or a small top team.

Vision is an attribute of heroic organizations: Collins and Porras (2005) argue
that visionary leaders are not necessary in order to create visionary companies, claim-

ing that the role of charisma in setting vision has been exaggerated. A charismatic

leader may even be an impediment to the creation of a visionary organization; sus-

tained organizational effectiveness depends on embedded visions, values, and ideolo-

gies, rather than on pronouncements from one senior figure. The leader’s role is to act

as a catalyst, facilitating the development of, and commitment to, the vision. This is a

process that can be achieved through a variety of leadership and management styles.

It is more important to create an organization with a vision than to have a charismatic

chief executive with a personal vision.

In this perspective, vision incorporates core ideology, which is unchanging, and defines

what the organization stands for and why it exists. An envisioned future is what the orga-

nization aspires to and changes toward over time. Ideology comprises core values and core

purpose. Core values are durable guiding principles: “the HP Way,” Walt Disney Compa-

ny’s “imagination and wholesomeness,” Procter & Gamble’s “product excellence,” Nord-

strom’s “customer service.” Collins and Porras (2005) note that most companies have only

three to five shared core values. Core purpose, on the other hand, defines the reason for the

organization’s existence:

3M: “solve unsolved problems innovatively”

Mary Kay Cosmetics: “give unlimited opportunity to women”

McKinsey & Company: “help leading corporations and governments be more

successful”

Walmart: “give ordinary folk the chance to buy the same things as rich people”

Core purpose should be durable (designed to last a century, perhaps), and differs from

goals and business strategies, which change constantly over time. The purpose may not

change, but it should inspire change, development, and progress. The envisioned future,

in contrast, consists of “BHAGs”—Big, Hairy, Audacious Goals, or daunting challenges

with specified timelines, which can involve:

196 Chapter 6 Vision and the Direction of Change

Common enemy logic: Philip Morris in the 1950s wanted to “knock off RJR as the

number one tobacco company in the world”; Nike in the 1960s aimed to “crush Adidas”

Role model logic: Stanford University in the 1940s wanted to become “the Harvard of

the West”; in 1996, Watkins-Johnson’s goal was to “become as respected in 20 years as

Hewlett-Packard”

Internal transformation logic: The goal for GE in the 1980s was to “become number

one or number two in every market we serve, and revolutionize this company to have

the strengths of a big company combined with the leanness and agility of a small com-

pany”; Rockwell in 1995 wanted to “transform this company from a defense contractor

into the best diversified high-technology company in the world.”

A further component of envisioned future, vivid descriptions, consists of vibrant,

passionate, and engaging descriptions of what it will be like in the future when goals

are achieved. Envisioning the future is a creative process, engaging staff across the

organization.

The Complete Vision at Merck

Collins and Porras (2005) argue that complete

visions have three components: a core ideology

(values and purpose); an envisioned future (big,

hairy, audacious goals); and vivid descriptions. They

offer the following example from the pharmaceuti-

cal company Merck in the 1930s:

Core Ideology Envisioned Future

core values: social responsibility, excellence, and
science-based innovation

BHAG: to transform from a chemical manufac-
turer to a world drug company with research
capacity rivalling major universities

Purpose Vivid Description

to preserve and improve human life with the tools we have supplied, science will be
advanced, knowledge increased, and human
life win ever greater freedom from suffering and
disease

The work of Collins and Porras offers a sensitive

treatment of the relationship between vision and

change. Vision (which they also call “industry fore-

sight”) is broken down into component parts, some

of which remain stable and some of which change

over time. Many change models that refer to the

need for vision to guide organizational change lack

this degree of sophistication. Vision is often pre-

sented as something that guides change, handed

down to the organization by the chief executive

and the top management team. However, for Col-

lins and Porras, vision (as core ideology) serves as

an enduring background component, not so much

guiding change as reflecting how change will be

achieved (by following core values, for example).

It is the envisioned future of vision that offers con-

crete change direction, concerning what should be

changed, and how.

Chapter 6 Vision and the Direction of Change 197

EXERCISE
6.1

Interview-

ing Change

Recipients

Your task is to interview three employees; they can be in the same or different organiza-
tions. Ask them to think back to an organizational change that they experienced, and to
answer the following questions:

1. Were they presented with an organizational vision for this change, and if so:
What was the vision?
What effect did this have on them?
Were they involved in developing the vision?
To what extent did the vision motivate them to engage in the change?
How central was the vision to implementing the change?

2. If your interviewees were not given an organizational vision for this change, ask them:
Would a vision have helped them to understand and become involved in the change?
How important is vision to achieving organizational change?

When you have completed your interviews, consider the responses that you have doc-
umented. What general conclusions emerge regarding the relationship between vision
and organizational change? What have you learned from this exercise?

LO 6.1

EXERCISE
6.2

Analyze

Your Own

Organiza-

tion’s Vision

Consider your own current organization, or another with which you are familiar, which
could be the institution where you are studying.

Refer back to the description, from Collins and Porras (2005), of “The Complete Vision
at Merck.” Identify your chosen organization’s vision in those terms: core ideology (and
values), envisioned future, BHAGs, and vivid descriptions.

Does your organization’s vision help to drive change, or not? Why?
Is the vision just a “public relations” exercise, or is it used in practice? How can you

tell?
LO 6.2

EXERCISE
6.3

The Role

of Vision

at Mentor

Graphics

As you read this case, consider the following questions:

1. How would you describe the way vision was used at Mentor Graphics?

2. Did it strengthen or weaken the company? How? Why?

3. Of the reasons discussed in this chapter concerning why visions fail, which are appli-
cable to Mentor Graphics?

4. What is your assessment of the vision content and the process through which it was intro-
duced in the Mentor Graphics context? What lessons emerge from your assessment?

5. Based on what happened at Mentor Graphics, what are the implications for the three
debates discussed in this chapter: whether vision drives change or emerges during
change; whether vision helps or hinders change; and whether vision is an attribute of
heroic leaders or heroic organizations?

6. Of the six change images outlined in table 6.1, which images of vision can be applied
to this case study? What lessons emerge from this?

LO 6.5

198 Chapter 6 Vision and the Direction of Change

Gerard Langeler (1992), president of Mentor Graphics Corporation, described the role
of vision in his company over a decade. Formed in the early 1980s, Mentor Graphics
started with an unarticulated vision to “Build Something That People Will Buy.” On this
basis, they spent a number of months interviewing potential customers and designing a
computer-aided engineering workstation product.

At the same time, a competitor, Daisy Systems, was engaged in the same task and, in
the early years, outcompeted Mentor Graphics. Eventually, “Beat Daisy” became the new
vision, driven by the need to survive as a business.

By 1985 Mentor’s revenues were higher than Daisy’s; their vision had been real-
ized. The company continued to grow despite the recession, but it suffered from typical
growth problems, including decline in product quality and problems of internal company
coordination. Stock value also suffered, and a number of staff approached Langeler seek-
ing a new vision for the company.

The new vision was developed based on “Six Boxes,” which represented the six differ-
ent businesses in which the company sought market leadership. The “Six Boxes” became
a company mantra, but in the late 1980s, one of the businesses, computer-aided pub-
lishing, was not paying dividends. However, the fact that it constituted one of the “Six
Boxes” meant that they could not shut it down, and be left with a “Five Boxes” vision. In
this case, the existence of the vision disrupted the ability to make sound financial judge-
ments. It also stopped them from moving more quickly to using Sun platforms, some-
thing they thought was too conventional for them.

A new vision was developed—the “10X Imperative”—that mirrored the push other
companies were making toward quality through Six Sigma and other similar quality pro-
grams. However, customers did not really understand the new vision: it was too abstract
and elusive.

In 1989 yet another vision emerged: “Changing the Way the World Designs Together.”
In retrospect, Langeler depicts this vision as “the final extension of vision creep that
began with Six Boxes.” It was very grand and had little to do with the actual businesses in
which Mentor Graphics operated, including the development of its new 8.0 generation
of software.

The realization, by the early 1990s, that the company’s vision detracted from what the
company was actually trying to achieve led to the dumping of the vision and its replace-
ment with one that echoed the early beginning of the company: “Our current short-,
medium-, and long-term vision is to build things people will buy.” This was seen as a
more pragmatic vision for a company that had lost its way, caught up in a cycle of visions
that were increasingly irrelevant to the core business and which inhibited their ability to
make sound business decisions.

Hollensbe, E., Wookey, C., Hickey, L., and George, G. 2014. Organizations with purpose.

Academy of Management Journal 57(5):1227– 34. Discusses vision and purpose in terms

of the “greater good” and the organization’s contribution to society. Argues that an orga-

nization’s sense of purpose must recognize the interdependence of business and society.

Ibarra, H. 2015. Act like a leader, think like a leader. Boston: Harvard Business Review

Press. Offers advice on thinking strategically and avoiding the distractions of short-term

priorities. Citing George W. Bush and his dismissive comment about “the vision thing,”

Additional
Reading

Chapter 6 Vision and the Direction of Change 199

Here is a short summary of the key points that we would like you to take from this chapter,

in relation to each of the learning outcomes:

Explain the arguments for and against the concept of vision, and how approaches to this

issue depend on the image held of managing organizational change.

Some commentators argue that vision is indispensable, providing direction, purpose,

and inspiration, and also strengthening the motivation to accept and become involved

in change. Others, however, argue that the concept of vision is abstract and vague,

becoming meaningless—and attracting cynicism—when most organizations articu-

late similarly bland visions that typically incorporate excellence, social responsibility,

empowered employees, and delighted customers.

The concept of vision varies with the image of change management that is in use.

For example, the director image assumes that responsibility for framing vision lies with

senior leaders. The caretaker assumes that an organization’s vision is shaped primarily

by external forces. The coach facilitates the consultation and co-creation process through

which vision is developed by staff across the organization. The nurturer sees visions

emerging from the clash of unpredictable forces, and therefore as temporary constructs.

LO 6.1

Herminia Ibarra argues that “the ability to envision possibilities for the future and to share

that vision with others distinguishes leaders from nonleaders” (p. 40).

Kotter, J. P. 2012b. Accelerate! Harvard Business Review 90(11):44–52. (Also available in a

book with the same title.) Develops his work on transformational change, first published in

1995, and echoes the arguments in his 2012 book Leading Change. This article puts vision

at the heart of designing, implementing, and accelerating the pace of change: formulate a

strategic vision, communicate the vision, and accelerate movement toward the vision. Kotter

describes this as a “head and heart, not just head” approach (p. 49).

Roundup

Reflections for the Practicing Change Manager

What criteria do you use in order to decide whether

a particular vision or vision statement is likely to

be useful in your organization? What other criteria

might you wish to take into account?

What is your preference: a short vision statement

or a longer vision story? Why? How do you use

vision statements or stories?

How do you distinguish vision from mission, plan-

ning, and goals? Are these important distinctions? In

your organization, how aligned is vision with these

other factors? Are there competing visions in your

organization? How are these resolved?

What is your experience: are visions more likely

to “take” in some organizations or cultural contexts

compared with others? Why is this the case? What

criteria can you develop to help assess when you

should use vision to assist in organizational change?

What process have you used, or seen in use, to

craft an effective vision? Do you have a personal

preference toward an intuitive or an analytical

approach to vision development? Why?

Is there an “inner voice” in your organization?

What are the “bread-and-butter” issues? Are there

“undiscussable” issues in your organization?

What is your judgement: When do visions fail,

and when does their effectiveness fade? Can visions

be revitalized? How?

What is your position: Does vision drive change?

Does vision help change? Does vision need vision-

ary leaders?

200 Chapter 6 Vision and the Direction of Change

Identify the characteristics of effective visions.

Evidence and experience suggest that, to be effective, visions should be clear, appeal-

ing, vivid, ambitious, and attainable, providing a sense of direction and guiding deci-

sion making, but also flexible enough to accommodate initiative and change. Effective

visions also describe a desirable—perhaps ideal—future for the organization. A further

emotional property of the effective vision, although difficult to define, is that it “feels

good.” Some commentators argue a vision should be expressed in a brief, memorable

statement. Others, however, claim that lengthier and more detailed “vision stories” can

provide a better frame of reference for change and answer the question that all those

who are involved will ask: what will this future mean for me?

Assess how the context in which a vision is developed affects its meaning.

For the purposes of this discussion, “context” includes the organization’s culture as well

as the external environment. We identified four stereotypical organizational contexts:

rigid, bold, overmanaged, and liberated. These contexts vary in terms of degree of accep-

tance of the need for change, and resource availability. Rigid organizations are character-

ized by low acceptance and resources. Bold organizations have limited resources but high

acceptance. Overmanaged organizations have high resource availability but little accep-

tance of the need to change. The context in which vision processes are most likely to be

effective is the liberated organization, with high acceptance and high resource availability.

National cultures can also be influential. A corporate vision that would be accept-

able and effective in Japan, where organizations are more closely linked to national and

social interests, would be less acceptable in the United States, where organizations are

more preoccupied with financial performance.

Apply different methods and processes for developing vision.

There are many approaches to developing vision, ranging on the familiar continuum

from “tell” (the chief executive determines the vision) to “co-create” (everyone partici-

pates in the development). There is no “one best way,” and choice is influenced by the

change management image in use. Leader-dominated methods can be rapid, and may

be inspirational, but are not consistent with the concepts of employee empowerment

and engagement. Most commentators suggest that co-creation methods, where the role

of senior leaders is to “orchestrate” the vision-crafting process, are more likely to pro-

duce better visions and more successful change.

Other approaches to crafting vision have been described as intuitive, analytical, and

benchmarking. Intuitive approaches rely on imagination and creative imagery: what are

our personal and organizational priorities, and what do we need to do to work toward

our desired future? An analytical approach links vision to purpose and goals, using

questions such as: Who do we serve? What do we do? Where do we place most of our

efforts? How do we operationalize those efforts? A benchmarking approach is more

externally focused and develops vision in relation to key competitors: What do our

competitors do well? How can we do better than them? How should we measure our

achievement? What will it be like when those standards have been met?

Explain why some visions fail.

Visions can fail for many reasons: too specific, too vague, too complex, fails to address

known problems, detached from the business, unrealistic, or does not offer a clear view

of the future. Lack of adaptation to changing circumstances can make a vision obsolete,

LO 6.2

LO 6.3

LO 6.4

LO 6.5

Chapter 6 Vision and the Direction of Change 201

contributing to decisions that are not consistent with new environmental conditions and

constraints. Visions also fail because of “vision collisions”—the presence of too many

competing visions for an organization.

Explain the arguments concerning the relationship of vision to organizational change.

We explored three key debates. First, does vision drive change, or does vision emerge

from the organizational change process? Second, does vision contribute to or hinder

the organizational change process? Third, are visions attributes of heroic leaders, or of

heroic organizations? With compelling arguments on both sides of these debates, the

answers are not clear.

The traditional view sees the vision of the heroic, charismatic leader driving and

contributing positively to the organizational change process. There is evidence and

argument to challenge that perspective. The importance of charisma and vision may

have been exaggerated. Charismatic senior figures perhaps contribute less to sustained

organizational effectiveness than embedded visions, core values, and enduring ide-

ologies. Visions are emergent because it is difficult to articulate a clear image of the

future at the start of a disruptive transformational change process. Visions can impede

change by making strong emotional appeals to the future instead of focusing on cur-

rent operational problems, and where organizational capabilities are inadequate to

achieving the vision.

The change manager must be aware of these debates and tensions and take these

considerations into account before embarking on a vision development process at a par-

ticular time in a specific context. The weight of commentary, from academic research

and management consultants, appears to endorse the value of articulating clear and

compelling visions. However, this perspective should not be taken for granted, and a

more cautious, skeptical, critical approach is perhaps advisable. The role of and need

for vision should be assessed in relation to each specific organizational change situa-

tion. What has been effective for one organization, given its history, current challenges,

and future aspirations, may not be wholly appropriate for another organization with a

different background, a different set of problems, and a different desired future.

LO 6.6

Ambler, G. 2013. 10 characteristics of an effective vision. Online blog accessed October

14, 2014: http://www.georgeambler.com/10-characteristics-of-an-effective-vision/.

Auster, E. R., Wylie, K. K., and Valente, M. S. 2005. Strategic organizational change:

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Beaver, G. 2000. The significance of strategic vision, mission and values. Strategic

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Belgard, W. P., and Rayner, S. R. 2004. Shaping the future: A dynamic process for creat-

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Boal, K. B., and Hooijberg, R. 2001. Strategic leadership research: Moving on. Leader-

ship Quarterly 11(4):515–49.

Collins, J. C., and Porras, J. I. 1991. Organizational vision and visionary organizations.

California Management Review 34(1):30–52.

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205

7Chapter
Change Communication
Strategies

Learning objectives

By the end of this chapter you should be able to:

LO 7.1 Identify key elements in the change communication process.

LO 7.2 Understand how gender, power, and emotion affect change communication

processes.

LO 7.3 Understand the power of language in influencing responses to change.

LO 7.4 Explain and assess appropriate strategies for communicating change.

LO 7.5 Understand how successful communication processes vary with the type and

stage of organizational change.

LO 7.6 Assess the utility of a range of different change communication channels, including

applications of social media.

1
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206 Chapter 7 Change Communication Strategies

LO 7.1 The Change Communication Process

The ways in which changes are presented and discussed are critical to success. All of

the approaches to change management explored in chapters 9 and 10 give communica-

tion a central role in the process. Understanding and commitment depend largely on

how change proposals are communicated. From their review of the literature on change

processes, Karen Whelan-Berry and Karen Somerville (2010) note that communica-

tion is one of the most frequently identified change drivers, by explaining the need for

change and how change will be achieved. Poor communication is a leading explana-

tion for change failure. The evidence also suggests that change communication should

be two-way—telling and listening. Communication is thus important throughout the

change process, and not just at the beginning—and it should be resourced accordingly,

addressing resistance, encouraging individual adoption and support, highlighting key

issues, and sustaining momentum.

Whelan-Berry and Somerville (2010, p. 181) define change-related communication

as “Regular two-way communication specifically about the change initiative, its

implementation, related successes, challenges and their resolution.” With regard to taking

the corporate vision to groups and individuals, communication “facilitates employee

understanding and engagement” and “addresses employees’ questions and concerns

through two-way communication, which allows individuals to remain committed to the

change. It also ensures that any obstacles are properly identified and removed” (p. 181). To

sustain momentum, communication “signals the organization’s commitment to the change

initiative, communicates successes and challenges, and ongoing change implementation”

(p. 181).

Lars Christensen and Joep Cornelissen (2011) offer a novel, counterintuitive perspec-

tive on the significance of change communication. They first note that communication

has attracted increasing attention due to a number of factors: the nature and consequences

of stakeholder communications; the emergence of ideas such as corporate social respon-

sibility, sustainability, and corporate citizenship; and the growing numbers of corporate

communication professionals, procedures, and systems. They see communication as

“an important force of organizing” and as “the building block of organizations” (p. 398)

because the act of communicating constructs or defines the change in the understanding of

those who are going to be involved. In other words, change communication is a key part of

the process of collective sense-making (see chapter 9).

Change communication, they note, aims to influence the opinions of many different

audiences, inside and external to the organization. This suggests that clarity and consis-

tency are important. However, Christensen and Cornelissen (2011, pp. 402–3) argue that

organizations have to work with many voices, with different views and ideas (technical

term, “polyphony”). In other words, it may often be desirable for change communications

to be ambiguous and inconsistent, for the following reason:

[V]ague and equivocal language allows organizations to talk about themselves in ways

that integrate a variety of members and stakeholders without alienating anyone. Too much

clarity and consistency in the formulation of “shared values” may actually prevent managers

from establishing accord with some corporate audiences. Although writings in corporate

communication and branding call for organizations to eliminate ambiguity, ambiguity is

Chapter 7 Change Communication Strategies 207

essential in promoting “unified diversity,” the ability for differences to coexist within the

unity of the organization. Ambiguity and polyphony may even be a conscious management

strategy designed to foster identification and reduce tension by allowing different audiences

to apply different interpretations to what is seen as one corporate message.

The process of communicating change—what is going to happen and why—can there-

fore be more complex than it first appears. In this chapter, we explore the communication

process and then discuss different communication strategies, before considering the evolv-

ing role of social media in corporate communication. First, however, we will consider how

images of change management influence communication strategies, and the implications

for change managers.

Communication Is Not a “Soft” Function

The American consulting company Towers Watson

(2013) argues that communication is key to organi-

zational performance. From a global survey of 650

organizations, they found that those with effective

communication practices were three times more

likely to show superior financial performance, com-

pared with those that did not use those practices.

The best practices were:

1. Helping employees to understand the business

2. Educating employees about organization culture

and values

3. Providing information on financial objectives and

organizational performance

4. Integrating new employees

5. Communicating how employee actions affect

customers

6. Providing information about the value of individ-

uals’ total compensation package

7. Asking for rapid feedback from employees about

their opinions of the company

Borrowing from consumer marketing, Towers

Watson also argue that effective organizations cat-

egorize employees into groups based on the value

of their skills and on personal characteristics. This

approach to employee “segmentation” means that

communication strategy can be tailored to focus

on behaviors that are critical to performance. The

most effective companies pay close attention to

employees when they are planning change, evalu-

ating culture, and assessing employee readiness and

the impact that change will have. Middle and front-

line managers need to be good at articulating what

employees need to do differently to be successful,

communicating what change means to individ-

ual employees, and creating a sense of ownership

about change initiatives.

Three factors in particular now put a premium

on “communication effectiveness”:

• Workforce: Increasingly diverse workforce, with
rising expectations of the employment deal

• The stakes: The competitive advantage to be
gained from “discretionary effort”—the will-

ingness of employees to “go the extra mile” to

improve company performance

• Shorter timelines: The need to communicate
rapidly, driven by developments in technol-

ogy and globalization, tighter resources, and

increased concerns for security

They conclude:

Today, top-performing organizations are build-

ing community—fostering the sense that

employees at all levels are in it together. These

organizations create the opportunity for social

interaction using the latest new media tech-

nologies, display the appetite and courage to

hear from employees, and establish ongoing

forums conducive to collaboration rather than

top-down communication. Those that do this

well typically see better financial performance.

( Towers Watson, 2013, p. 9)

208 Chapter 7 Change Communication Strategies

Dianne Gayeski and Jennifer Majka (1996) argue that one of the challenges for com-

municators concerns the expectation of what can be achieved. They argue that an outdated

“director” image has dominated our understanding, linking corporate communication with

control and manageability. They claim that communication is better understood in terms of

chaos and complexity (a “nurturer” image). The nurturer image may decrease the frustra-

tion of not being able to control events in the way that a director image assumes. Change

managers may be able to shape but not always control the communication of change.

More generally, each of the six images of change outlined in chapter 2 is associated with a

different strategy for communicating change; see table 7.1.

We will first outline a classic model of the communication process, indicating how lan-

guage, power, gender, and emotions are central to an understanding of how this operates.

We will then consider how this model applies to change communication, and explore the

dilemmas facing the manager designing a change communication strategy. Is it possible

TABLE 7.1
Change Images and Communication Purpose

Image Purpose of Communication

Director Ensure that people understand what is going to happen and what is required of them.
Answer the why, what, who, how, and when questions. Present the “value proposition”
of the change. Modify leadership style and information to “fit” the type of change and
organizational levels affected. Avoid “spray and pray” methods, which lead to message
overload. Do not distort the message.

Navigator Outline the nature of the change, paying attention to the range of interests affected,
power relationships, and actions that could disrupt the change. Problems identified
can thus be addressed, and the change “replotted” if necessary to generate the best
outcomes in the situation. To win staff over, “tell and sell” communication methods are
appropriate.

Caretaker Let people know the “why” of the changes, their inevitability, and how best to cope
and survive. This involves the use of reactive communication methods, recognizing
employee concerns and responding accordingly (“identify and reply”).

Coach Ensure that people share similar values, and understand what actions are appropriate
to those values. Model consistency in actions and words. The director “gets the word
out”; the coach “gets buy-in” to change by drawing on values and positive emotions.
Team-based communications are effective (not top-down led by chief executive). Key
messages are emphasized to check understanding and encourage two-way dialogue
(“underscore and explore”).

Interpreter Give employees a sense of “what is going on” through storytelling and metaphors.
Recognize the multiple sense-making that occurs in different groups with regard to
change. Present a persuasive account of the change to ensure that as many people as
possible will have a common understanding. Recognize that not everyone will accept
the change story. Aim to provide the dominant account using “rich” personal and inter-
active communications (media richness is discussed below).

Nurturer Reinforce the view that change processes cannot always be predicted, and that creative
and innovative outcomes can be achieved, even though few in the organization could
have anticipated these.

Chapter 7 Change Communication Strategies 209

to communicate too much? How can communication strategy be tailored to the type of

change, and to the phases of the change process? Should the aim be to “get the word

out” or the “get buy-in,” or both? Where should responsibility for communicating change

lie? The different images in table 7.1 are likely to offer different answers to these ques-

tions. Finally, as explained earlier, we will then assess the use of different media for com-

municating change, including the evolving use of different forms of social networking

technologies.

Modelling the Communication Process
Interpersonal communication typically involves much more than the simple transmis-

sion of information. Pay close attention to the next person who asks you what time

it is. You will often be able to tell how they are feeling, and about why they need to

know—if they are in a hurry, perhaps, or if they are anxious or nervous, or bored with

waiting. In other words, their question has a purpose or a meaning. Although it is not

always stated directly, we can often infer that meaning from the context and from their

behavior. The same considerations apply to your response. Your reply suggests, at least,

a willingness to be helpful, may imply friendship, and may also indicate that you share

the same concern as the person asking the question (“We are going to be late”; “When

does the film start?”). However, your reply can also indicate frustration and annoyance:

“Five minutes since the last time you asked me!” Communication thus involves the

transmission of both information and meaning.

This process of exchange is illustrated in figure 7.1, which illustrates the main compo-

nents of interpersonal communication. This model is based on the work of Claude Shan-

non and Warren Weaver (1949), who were concerned with signal processing in electronic

systems, rather than with organizational communication.

At the heart of this model, we have a transmitter sending a message through an

appropriate channel to a receiver. We will consider the range of change communication

channels later. It is helpful to think of the way in which the transmitter phrases and

expresses the message as a coding process. The success of communication depends on

FIGURE 7.1
Exchanging

Meaning: A

Model of the

Communica-

tion Process
coding channel

message

decoding

receiver

feedback

context

context

transmitter

noise noise

perceptual filters perceptual filters

210 Chapter 7 Change Communication Strategies

the accuracy of the receiver’s decoding; did the receiver understand the language used,

and also tone and implications of the message. Feedback is therefore critical, to check

understanding. Communication often fails where transmitters and receivers have different

frames of reference and do not share experience and understanding, even if they share a

common language. We make judgements—which may or may not be accurate—about the

honesty, integrity, trustworthiness, and credibility of others, and decode their messages

and act on them accordingly. When communicating details of a major change initiative,

therefore, it cannot be assumed that all of the recipients of the message will have the same

understanding as each other, and as the transmitter.

Perceptual filters also play a role here, particularly affecting our decoding. This can

involve, for example, a readiness or predisposition to hear, or not to hear, particular kinds

of information. Preoccupations that are diverting our attention can also filter information.

Past experience affects the way in which we see things today, and can influence what we

transmit and how, and what we receive. In an organizational setting, people may have time

to reflect, or they may be under time pressure, or experience “communication overload,”

which again means that some content may be filtered out.

The physical, social, and cultural context in which change communication takes place

is also significant. In organizations where staff are widely dispersed across a number of

locations, the ability to share and compare views is more difficult than when everyone

is in the one place. The logistics of communicating with a large number of dispersed

staff can be complex and costly. The casual remark by a colleague across a café table

(“We could all be laid off by the end of the year”) could be dismissed with a laugh.

The same remark made by a manager in a formal planning meeting could be a source

of alarm. If an organization’s culture emphasizes openness and transparency, staff may

become suspicious if communication is less informative than expected. However, staff

may also become suspicious if management (without a good explanation) suddenly start

to share large amounts of information openly in a culture that has in the past been less

transparent.

Context is particularly important when considering change communication, as this can

influence how receivers will decode a message. One aspect of an organization’s context

that is critical in this respect is past history. Change communication is more likely to be

welcome in an organization with a track record of successful changes than in one where

past changes have been seen as ineffective or damaging. Current circumstances are also

a key feature of the communication context. Is change a positive response to business

growth and development, or a defensive approach to problems that will lead to budget and

staffing cuts? If staff feel that they have been misled by management in the past concern-

ing the goals and consequences of change, that perception is likely to have an influence on

the decoding of further communication concerning change proposals.

When designing a communication strategy, it is therefore important to assess how

aspects of the context could affect the coding and decoding of the message, and to

design the message content and channels accordingly. Terry Nelson and Helene Cox-

head (1997) highlight three particular problems to consider when designing change

communications:

Chapter 7 Change Communication Strategies 211

Message overload: More new information is provided more quickly than recipients can

process.

Message distortion: Intentional or unintentional misinterpretation when transmitting or

receiving the message.

Message ambiguity: As noted earlier, ambiguity allows different interpretations, but this

should not exceed recipients’ ability to tolerate ambiguity (which can be reduced by anxiety).

These problems can be avoided by adopting a common language with regard to the

change, and where top management consistently model the desired behaviors. Enhancing

employee involvement and self-esteem, and using specialist staff to monitor the change

process, can also help to reduce communication errors.

Anything that interferes with a communication signal is called noise by electronics

experts, and this applies to interpersonal and organizational communication, too. This

does not just refer to the sound of equipment, or other people talking. Noise includes cod-

ing and decoding problems and errors, perceptual filters, and any other distractions that

damage the integrity of the communication channel, including issues arising from the con-

text. Relationships can introduce noise, affecting the style and content of conversation

(formal or informal) and what we are prepared to share. Status differences can introduce

noise; we do not reveal to the boss what we discuss with colleagues. Motives, emotions,

and health can also constitute noise; coding and decoding are affected by anxiety, pres-

sure, stress, and also by levels of enthusiasm and excitement. This last point is particularly

significant, as change communication itself can, of course, generate anxiety and stress, or

stimulate excitement.

LO 7.2 Gender, Power, and Emotion

The basic communication model that we have discussed can help to explain why com-

munication sometimes breaks down. However, we also need to understand the impact

of gender, power, and emotion on communication in general, and on change communi-

cation in particular.

Gender
Gender differences also affect the communication process. Here are two examples:

Confidence and boasting. Women tend to emphasize their doubts and uncertainty, but

men tend to express greater confidence and play down their doubts.

Asking questions. Women are more likely to ask questions than men; the downside is that

male managers may interpret women as knowing less than their male peers.

An assessment by a male manager of how well a woman is coping with change, com-

pared with male colleagues, may thus conclude: “She seems very uncertain since she is

212 Chapter 7 Change Communication Strategies

always asking questions.” However, this assessment may have more to do with gender

differences related to a willingness to question (about the change) than to real differences

in attitude toward the change itself.

Deborah Tannen (1995, p. 141) also observes that even the apparently simple choice of

which pronoun to use can influence who gets the credit:

In my research in the workplace, I heard men say “I” in situations where I heard women say

“We.” For example, one publishing company executive said, “I’m hiring a new manager.

I’m going to put him in charge of my marketing division,” as if he owned the corporation.

In stark contrast, I recorded women saying “we” when referring to work that they alone had

done. One woman explained that it would sound too self-promoting to claim credit in an

obvious way by saying, “I did this.” Yet she expected—sometimes vainly—that others would

know it was her work and would give her the credit she did not claim for herself.

Other gender differences relate to how feedback is given and received, how compli-

ments are exchanged, and whether the communication is direct or indirect. Kate Lude-

man and Eddie Erlandson (2004) argue that many senior managers are “alpha” males: fast

thinkers who have opinions on every topic, who are analytical, data-driven, impatient, and

think that they are smarter than most other people. As a result, their communication style

can intimidate those around them. Alpha males are not good listeners, they miss subtleties,

and they put others under extreme pressure to perform.

The alpha male communication style can be softened with coaching (see exercise 7.2),

but this is not an easy transformation. When a male manager changes to a communication

style that is not direct, competitive, confrontational, and authoritative, they can be seen

as “going soft,” becoming “touchy-feely,” and “losing their grip” (Linstead et al., 2005,

p. 543). The change manager may therefore need to find a balance between maintaining

credibility with colleagues while adopting a communication style that is appropriate to the

change context and to those who are involved.

Power
The use of language can also reflect underlying power and gender relationships—

factors that can also interfere with the change communication process (as with com-

munications in general). For example, the manner in which change managers seek staff

comments on proposals can reinforce power differentials. Telling staff to provide input

may result in responses different from those obtained when the request conveys respect

for their opinions. Power differences are normally a barrier to communication. Those

who are more powerful may not wish to disclose information that could make them

appear to be less powerful or that could weaken their power base. Those who are less

powerful may not wish to disclose information that could potentially be used against

them.

The term “power tells” describes the various signs and clues that indicate how powerful

someone is—or how powerful they want to be (Collett, 2004). The power tells of domi-

nant individuals include:

• sitting and standing with legs far apart (men);

• appropriating the territory around them by placing their hands on their hips;

• using open postures;

Chapter 7 Change Communication Strategies 213

• using invasive hand gestures;

• smiling less, because a smile is an appeasement gesture;

• establishing visual dominance by looking away from the other person while speaking,

implying that they do not need to be attentive;

• speaking first, and dominating the conversation thereafter;

• using a lower vocal register, and speaking more slowly;

• being more likely to interrupt others, more likely to resist interruption by others.

The power tells of submissive individuals include:

• modifying speech style to sound more like the person they are talking to;

• more frequently hesitating, using lots of “ums” and “ers”;

• adopting closed postures;

• clasping hands, touching face and hair (self-comfort gestures);

• blushing, coughing, dry mouth, heavy breathing, heavy swallowing, increased heart

rate, lip biting, rapid blinking, and sweating are “leakage tells” which reveal stress and

anxiety.

We can thus “read” the power signals of others. More importantly, however, change

managers may need to control their own “tells” in order to appear less dominant and less

powerful, particularly when communicating change in a manner that will encourage staff

feedback, engagement, and support.

Emotion
Communication models have been criticized for ignoring the role of emotions in

organizational change, focusing instead on the rational and cognitive dimensions of

communication. Nevertheless, change managers need to be aware of, to understand,

and where appropriate to respond to emotional responses to change. Emotions can

interfere with the communication process, but emotions can also be a positive resource,

contributing to staff willingness, commitment, and support for change.

Shaul Fox and Yair Amichai-Hamburger (2001) emphasize the need for congruence

between cognitive understanding of change and emotional perceptions. Emotional appeals

communicate vision and urgency and can aid the formation of powerful change coalitions.

Table 7.2 summarizes the range of practical steps that can help establish the “positive

emotions” that generate “excitement and anticipation” around a change program. Michele

Williams (2007) suggests that the anticipation that change will be personally threatening

or harmful can generate negative emotions and a loss of trust in management, thus making

cooperation and engagement difficult to achieve. Change managers can avoid this situation

by:

Perspective taking: Thinking about how others are likely to think and feel about a

change.

Threat-reducing behavior: Engaging in intentional, interpersonal interactions with staff to

minimize their perceptions that changes are likely to lead to harm for them.

Reflection: Self-evaluation to reduce the emergence of negative emotions and to identify cor-

rective actions where necessary.

214 Chapter 7 Change Communication Strategies

TABLE 7.2
How to Get Emotional Commitment to Change

Address These Issues How This Is Done

The Core Message

Emotional arguments Positive words signal future success; negative terms indicate what will
happen if change fails

Metaphors The use of familiar metaphors can help staff to picture the future and
make it appear less strange or unusual

Packaging the Message

Emotional mode Capture attention with music, color, slogans, pictures—but avoid
excessive use of any one mode

Humor Humor can reduce the gap, and tension, between manager and staff
Display emotion Use feelings, tone of voice, body language, and facial expressions to

generate warmth and confidence
Change leader characteristics Messages are perceived as more credible and attractive when they are

consistent with leader behavior

Change Manager Behavior

Fairness and justice Decisions should be seen to be fair and follow legitimate, recognized
procedures, with opportunities to raise issues

Setting

Group dynamics Use groups and teams to strengthen commitment to change
Ceremonies Stimulate emotions and reinforce the benefits of change with

celebrations that also signal departure from the past
Atmosphere Speak in warm, informal terms, to produce positive feelings toward the

change (not formal and cold)

Source: Based on Fox and Amichai-Hamburger (2001, pp. 87–92).

Understanding the emotional side of change is important. However, whether change

managers can produce positive emotional responses to change is open to question for four

reasons. First, there is an underlying assumption that emotions are produced and contained

within the organization. The impact of external factors (how friends and family talk about

a change, how change is presented in the media) can be overlooked. Second, an underly-

ing assumption is that all people respond in the same way to the same emotional appeals.

This view overlooks differences in work motivation, and how these influence perceptions

of change. With increasing workforce diversity, we also have to be aware of cultural dif-

ferences in modes of emotional expression and response. Third, not all change managers

have the skills or the credibility to manage the emotional responses of staff to change, and

to achieve positive emotional responses. Finally, it may be easier to achieve positive emo-

tional responses to some (exciting, developmental, progressive) changes and not others

(routine, tedious, defensive).

Table 7.3 summarizes the main barriers to successful organizational change

communication.

Chapter 7 Change Communication Strategies 215

TABLE 7.3
Barriers to Effective Organizational Change Communication

Language Choice of words and tone of message can lead to misunderstandings and
misinterpretations

Gender differences Men and women use different communication styles, which can lead to
misunderstanding; men tend to talk more; women tend to listen, and ask more
questions

Power differences Research shows that employees distort upward communication, and
that superiors often have a limited understanding of subordinates’ roles,
experiences, and problems

Context Organization culture and history, as well as physical setting, can color the way
in which change communications are transmitted and interpreted

Cultural diversity Different cultures have different expectations concerning formal and
informal communication; lack of awareness of those norms creates
misunderstanding

Emotion Emotional arousal interferes with message transmission and receipt, and
emotional responses to change communication can be negative (anxiety,
anger) or positive (exciting, stimulating)

The communication process appears to be simple, but it is prone to errors arising on

both sides of the exchange. We cannot confidently assume that receivers will always

decode our messages in a way that gives them the meaning that we intended to transmit.

Communication is central to organizational change, but this claim has practical implica-

tions. It seems that organizations function better where:

• communications are open,

• relationships are based on mutual understanding and trust,

• interactions are based on cooperation rather than competition,

• people work together in teams, and

• decisions are reached in a participative way.

These features are not universal, and are not present in all countries, cultures—or

organizations.

LO 7.3 Language Matters: The Power of Conversation

As we discussed at the beginning of this chapter, communication does not just involve

a transfer of information or ideas. The language that we use to describe reality also

helps to create—or to constitute—that reality for others; communication thus involves

the creation and exchange of meaning. For example, Deborah Tannen (1995) points

out that language reflects and reinforces underlying social relationships. She offers

216 Chapter 7 Change Communication Strategies

the following illustrative statements, which each require the same response but signal

different information about the relationship between those involved:

“Sit down!” This signals higher status of the person uttering the statement, perhaps

indicating anger, and informal conversation is not appropriate.

“I would be pleased if you would sit down.” This signals respect, or possibly sarcasm,

depending on the tone of voice and the situation.

“You must be so tired. Why don’t you sit down?” This signals either a concern and closeness

for the person, or condescension.

Language is particularly important in organizational change contexts due to the

sensitivity of the issues (“Will I lose my job?”) and the possibility for confusion (“That is

not what management said last week”). The choice of language that the change manager

uses can therefore affect whether proposals will be seen as exciting or routine, as clear or

muddled, as progressive or mundane, as threatening or developmental. These meanings

can be shared in documentation and through formal meetings. However, for the change

manager, the understanding of change is typically shared in a range of formal and informal

meetings and conversations. Even brief, unplanned, casual conversations can be powerful

channels for exchanges of ideas and understanding between the change manager and those

who are involved in the proposals. Silence during a conversation also sends signals.

Managing change also involves different conversations at different stages of the change

process. Conversations across those stages, however, must have “linguistic coherence,”

and managers should try to align their use of language with the type of change that is

being implemented. It is also important to create a shared language of change among the

stakeholders who are involved.

Talking in Stages
Jeffrey and Laurie Ford (1995) do not see communication simply as a tool for produc-

ing intentional change; rather, it is through communication that change happens. In

There’s Nothing Like a Good Story

As chief executive at Hewlett-Packard (HP), Mark

Hurd wanted the company to develop a more

sales-oriented culture. To reinforce this message,

he told the story about how, in his first week as

a newcomer at NCR, he made a successful sale

to a San Antonio tractor maker for some printing

equipment. However, he failed to fill in the order

form correctly and the person in the NCR billing

department refused to process the order because

of a minor mistake that he had made in the

paperwork. When Hurd informed his manager

about the situation, his manager phoned the guy

in billing:

“Hey, did my man just come down here with

an order?” asked the manager as Hurd listened.

“The next time he does, I want you to get your

ass out from behind your desk, and I want you to

shake his hand. And I want you to thank him for

keeping your ass employed. If there’s anything

wrong with the order, I want you to fix it so that

he can get about the job of continuing to keep

you employed.” (Lachinsky, 2006, p. 93)

Chapter 7 Change Communication Strategies 217

other words, “the management of change can be understood to be the management of

conversations” (p. 566). Drawing on “speech act theory,” they argue that change takes

place through four types of conversation.

Initiative conversations draw attention to the need for change, whether reactive or

proactive, and can take the form of:

assertion “We have to bring the finances under control.”

request “Can you restructure your division to achieve greater operating efficiencies?”

declaration “We are going to increase market share.”

Conversations for understanding help others to appreciate the change issues and the

problems that need to be addressed, through three main elements:

specifying the “conditions of satisfaction” that will make the change successful: “We need to

make sure that there are no more than two customer complaints per thousand units produced”

enabling the involvement of those affected by the change

confirming interpretations and enabling shared meaning and understanding

Conversations for performance focus on producing the change, and involve the action

stage when:

promises are made

obligations are entered into

accountabilities are established

deadlines are set

Conversations for closure signal the completion of the change, and facilitate the move-

ment of people into new projects and initiatives. These conversations involve:

acknowledgements

celebrations

rewards

Breakdowns in change and conversations occur when:

• Initiative conversations are held with people who are not in a position to proceed with

the change.

• There is a lack of shared understandings about the intended changes and the expecta-

tions for the “conditions of satisfaction.”

• There is shared understanding, but performance conversations do not take place, so

people do not know who is accountable for specific actions.

• Requests for action and performance are not rigorous and fail to specify intentions

regarding results and deadlines.

• Closure conversations do not take place, and people feel that they are still involved with

the change, while being asked to move on to new initiatives.

Ford and Ford (1995) emphasize that change managers need skills in handling change

conversations, while recognizing that not all change conversations take place in a linear

218 Chapter 7 Change Communication Strategies

manner; some stages may be skipped during the process. The practicing change manager

thus needs to consider the following:

• Where managers are engaged in multiple change processes, there will be issues

relating to how smoothly they are able to transition themselves among the different

conversations.

• The stages of the conversations may be open to multiple interpretations among par-

ticipants. Where managers assume that some conversations are complete and that it is

appropriate to move on to another stage in the change conversations, others may have

differing views.

• It is not clear that all managers are able to be trained or are able to exhibit all of these

conversation skills successfully. For example, some managers may have more affinity

with initiative conversations rather than performance conversations, and so on.

• Change managers need to confront the notion of power. The willingness of participants

to be involved meaningfully in each of the four change conversations may be affected

by significant power imbalances. Some understandings may thus need to be enforced

rather than shared.

Talking Coherently
John Sillince (1999) also emphasizes the role of language in change conversations,

focusing on the coherence of change conversations. Drawing on linguistic and political

science theories, he outlines four dominant language forms that are found in organiza-

tional change conversations:

ideals which express preferences

appeals which seek support

rules which seek to direct the behavior of others

deals which serve as a form of bargaining and exchange

An overreliance on one of these language forms can lead to problems. For example, a

focus on deals rather than ideals may encourage an individualist culture. Sillince (1999,

p. 492) argues that “motivating change during the early stage of organizational change

requires the communication of appeals for support and statements of goals or ideals, and

that the later stage requires the communication of rules and the negotiation of deals.” He

illustrates this with the restructuring at AT&T in the 1970s and 1980s. Sillince (1999, p.

499) concludes that, despite the absence of a planned communication process, a logical

sequence of language forms can be detected:

moving from attacking current ideals in 1973 (corresponding to the “unfreezing” stage in

Lewin, 1951), to supporting new ideals in 1973–1978, to attacking current rules or the lack

of rules in 1979–1980, and increasingly supporting new ideals and new rules after 1981 (the

“change” stage in Lewin, 1951). The few deals referred to occur after 1981. Appeals tend to

be promises and warning before change takes place and requests for support and exhortations

to action during and after change.

In comparing successful changes at AT&T with less successful changes at Chrysler,

Sillince notes that the former had a linguistic coherence that was lacking at Chrysler. He

Chapter 7 Change Communication Strategies 219

concludes that linguistic coherence in the use of different forms of language at different

stages is a hallmark of successful change. (See box, “IBM’s Script for Offshoring Jobs.”)

Sillince gives us a macro-level analysis, in which different change phases unfold over

lengthy periods of time. It is therefore interesting that he sees these phases as underpinned

by Lewin’s (1951) model of unfreezing, moving, and refreezing. As we have discussed

in previous chapters, however, change is rarely a tidy, orderly, sequential process, and it

may be difficult to maintain coherence across different chaotic and nonsequential stages.

Nevertheless, this perspective alerts the change manager to the different linguistic modes

that are available when communicating change, and highlights the option of switching

from one linguistic mode to another if appropriate when, for example, one approach is not

having the desired effect.

Aligning Language with the Change
Robert Marshak (1993) argues that change fails when the imagery and metaphors

used by managers are not aligned with the type of change being implemented. This

lack of alignment confuses those who are involved in the change. He describes a sit-

uation where a large corporation had to reposition fundamentally its business due

to a decline in the government contracts that had been a mainstay of the company.

Unfortunately, when communicating the need for this change to middle management,

the chief executive’s explanation was based on the need to build on the company’s

past success, as a way of developing into the future. Instead of shifting the company

in radically new directions, middle managers continued to develop past practices. The

imagery of “developing” was not aligned with the “transformational” change that was

necessary.

IBM’s Script for Offshoring Jobs

Internal IBM documents reported in The Wall Street

Journal in January 2004 suggested that IBM was

planning to move high-cost programming jobs

offshore to countries such as Brazil, India, and

China, where labor costs were lower (Bulkeley,

2004). Rather than pay $56 per hour in the United

States, the documents indicated that a comparable

programming job would cost only $12.50 per hour

in China. The documents also revealed that IBM was

aware that this “offshoring” process was a sensitive

issue and provided managers with a draft “script”

for presenting information to affected staff.

One memo instructed managers to ensure that

any written communication to employees should

first be “sanitized” by communications and human

resource staff (“Do not be transparent regarding

the purpose/intent”), and also directed that

managers should not use terms such as “onshore”

and “offshore.” Part of the “suggested script” for

informing staff that their jobs were being moved

offshore was to say, “This is not a resource action”

(an IBM euphemism for being laid off), and that the

company would try to find them jobs elsewhere.

This script also proposed that the news should

be conveyed to staff by saying, “This action is a

statement about the rate and pace of change in this

demanding industry. It is in no way a comment on

the excellent work you have done over the years.”

And, “For people whose jobs are affected by this

consolidation, I understand this is difficult news.”

220 Chapter 7 Change Communication Strategies

To avoid such problems, Marshak advises managers to align their language closely

with the planned change. He identifies four different images of change and the language

appropriate to each:

Machine

imagery

Based on a “fix and maintain” view, portraying the organization as “bro-

ken,” and the change as a “fix.” The change manager is the repairperson;

terms such as repair, adjust, and correct are aligned to this type of change.

Developmental

imagery

Based on a “build and develop” view, in which the organization has to

improve performance by building on past and current practices. The

change manager is trainer or coach; terms such as nurturing, growing,

and getting better are aligned to this type of change.

Transitional

imagery

Based on a “move and relocate” view, in which change is designed to alter

how the organization operates, for example by introducing online sales

and services. The change manager is guide or planner; terms such as mov-

ing forward and leaving the past behind are aligned to this type of change.

Transforma-

tional imagery

Based on a “liberate and re-create” view, where change involves rein-

vention, or radical change to the nature of the business or market in

which the organization trades. The change manager is visionary, helping

to discover new possibilities; terms such as reinvention, re-creation, and

adopting a new paradigm are aligned to this change.

These insights concerning the need to align language and change highlight how change

managers can easily communicate mixed signals with regard to what is required. Change

managers are thus advised to reflect on how their metaphors for describing and communi-

cating about their organizations and changes may be trapped and influenced by dominant

or root metaphors. New insights, actions, and unanticipated directions can be generated by

adopting new language and new metaphors (see “The NASCAR Model”). We must also rec-

ognize that managers may not always be able to introduce metaphors that will necessarily

resonate with staff throughout an organization. New metaphors often compete with dominant

The NASCAR Model

Apparelizm (pseudonym) is a Fortune 500 retailer,

with over 1,000 stores nationwide, which began a

major organizational change effort resulting from

a review of its strategy. As part of the effort to build

support, the change team drew from a NASCAR anal-

ogy, NASCAR being a sport well understood and liked

by many of the staff. The change team argued that

store staff were like a NASCAR race crew. Past store

practice was likened to a race crew member driving

the car, pumping the gas, and changing the tires

during the race. A “pit crew” would do the ordering

and receiving of goods and put them on the shelves

after they arrived. The “drivers” would be responsi-

ble for helping customers as they moved around the

store. The “racetrack manager” would monitor the

traffic flow in the store, removing the “multicar pile-

ups” that happened when sales associates/“drivers”

congregated together (rather than servicing custom-

ers). The metaphor was further extended to a parallel

between the need for NASCAR racing teams “to be

fast, responsive, and knowledgeable” if they were to

be successful. A similar point was made with regard

to the need for excellent communication between

the “drivers,” “pit crew,” and so on.

The metaphor worked well. Staff understood and

accepted the analogy and saw how the changes

would help them to work more like an effective rac-

ing team (based on Roberto and Levesque, 2005).

Chapter 7 Change Communication Strategies 221

logics, embedded ways of operating, ingrained ways of perceiving the organizational world,

and formal policies and procedures. Change managers need to focus on redesigning policies,

systems, and processes that conflict with the language of the change. For example, if change

concerns “leaving the past behind,” then transformational metaphors may be weakened if, say,

compensation and performance appraisal systems remain based on past practice.

Creating a Common Change Language
Managers are not alone in using—or misusing—terms and phrases in ways that cause

amusement and confusion. It is important to check the assumption that different indi-

viduals and groups involved in change have a shared view of the terms—the language—

being used. (See “Misused Terminology?”)

Choice of terms has a significant impact on the way in which an issue such as organiza-

tional change is understood by others. Problems will thus arise when those who are responsible

for managing a change cannot among themselves adopt a “common language.” Checking the

shared meanings of concepts in use is thus important in order to avoid confusion and conflict.

For example, Loizos Heracleous and Michael Barrett (2001) attribute the failed implemen-

tation of an electronic risk management system in the London insurance market to the lack

of shared language and meaning among the parties that were involved. Over a period of five

years, they studied the language of the main stakeholders, including market leaders, brokers,

and underwriters, and also observed how the language of those stakeholders changed over time.

Misused Terminology?

Term Meaning?

Emergent strategy Justifies a lack of strategic thinking; if a strategy does emerge, we do
not have to do anything

Learning organization We were right to neglect training; all we have to do is tell employees
that we like them to learn for themselves

Empowerment A magic word which, if we repeat it often enough, will make a down-
sized and delayered structure work without any further effort from us

Culture Culture is what we say we will change when we cannot think of any-
thing else to do

Source: Based on Hussey (1998).

Heracleous and Barrett distinguish between “surface-level” communication and the

underpinning “deep discursive structures.” Deep structures include interpretive schemes,

central themes, root metaphors, and rhetorical strategies. A focus on the different discur-

sive structures explains the resistance of brokers and underwriters to the new system, and

the failure of the project:

[W]e saw stakeholder groups talking past each other, rather than to each other, because of

their almost diametrically opposed discourses, at both the deeper structure levels and com-

municative action levels, and their lack of common ground on which to base a dialogue.

(Heracleous and Barrett, 2001, p. 774)

222 Chapter 7 Change Communication Strategies

Change managers thus need to understand the deep discursive structures that underpin

the surface communication of different stakeholders, in order to support major organiza-

tional and technology changes. Surface agreement may be artificial and tenuous where

there is a lack of understanding of those deeper structures that may explain inertia or resis-

tance. Although they acknowledge that understanding the interpretive schemes of different

stakeholders will not guarantee success, Heracleous and Barrett (2001, p. 774) conclude

that “Uncovering and appreciating other stakeholders’ deep structures, however, can be of

help in avoiding dead ends and self-defeating compromises in change implementation.”

LO 7.4 Change Communication Strategies

Culture, Language, and Change in General Motors Poland

General Motors (GM) began to develop its Opel

Polska car plant on a greenfield site in Poland in

1996. One of the key tasks for management was

to develop working practices consistent with a car

plant that could be competitive in the twenty-first

century. Although part of the challenge was due to

the lack of exposure to competition during decades

as part of the Soviet bloc, there seemed to be a more

fundamental issue rooted in hundreds of years of

Polish culture. A high value was placed on fantazja

(imaginativeness), which was directly opposed to

the idea of being systematic or well organized—the

latter being equated with boring and unnecessary.

Fantazja was also associated with independence

and freedom from subjugation—the opposite to fol-

lowing standard operating procedures.

The practices designed for the new plant clearly

required a high level of discipline and coordination.

Managers were concerned that while fantazja could

contribute to the continuous improvement pro-

cesses that were to be part of the plant’s operating

model, the cultural tolerance for disorder could be

damaging. There was no shortage of Polish workers:

46,000 applied for 1,800 positions in the new plant,

which meant that the company was in a very pow-

erful position (but threats of job loss for noncompli-

ance were not to be used). The European managers

met with their new employees (along with trans-

lators). Although cultural values and linguistics

appeared to lie at the heart of employee resistance

to GM’s working practices, the solution was also

found in the same roots. As in English, the term

“development” in Polish can mean “to start some-

thing” and also “to progress.” In turn, “to progress”

is the opposite of stagnation. For the Poles, stagna-

tion is something that lacks fantazja. Through dis-

cussion, “disciplined organization” was positively

reframed using concepts and values that were

already part of Polish culture. By 2000, the plant

had the best quality and performance figures of all

GM plants worldwide (based on Dobosz-Bourne

and Jankowicz, 2006).

The Importance of High-Quality Communication

Researchers have focused on the importance

of effective communication with employees

during change. Empirical research has demon-

strated that high-quality change communi-

cation increases acceptance, openness, and

commitment to change. Furthermore, the failure

to provide sufficient information or providing

poor-quality information can result in a number

of problems, including cynicism about change

and widespread rumors, which often exaggerate

the negative aspects of change (Rafferty et al.,

2013, p. 122).

Chapter 7 Change Communication Strategies 223

In this section, we will focus on the communication strategy questions facing the

change manager: Can you communicate too much, how to get “buy-in,” when to use

communication strategies other than “spray and pray,” and who will take responsibility

for communicating the change? We will also explore two contingency approaches to

communication strategy, one based on the type of change and the other related to dif-

ferent phases of the change process.

In spite of its importance, change communication is an issue that many organizations

overlook. A survey of 100 UK employers (Wolff, 2010) found that only 40 percent had

formal communication strategies. However, companies with formal strategies were four

times more likely to agree that this contributed to their success. The main goals of internal

communications were keeping staff informed of changes and strategies, staff engagement,

and providing information about policies and procedures. The most popular communi-

cation methods were department meetings, one-on-one meetings with line managers,

team meetings, letters and memos, and email. Social media were unpopular: online video,

instant messaging, internal blogging, wikis, Skype, and podcasts were used by very few

organizations. There was no one best communication method. Face-to-face was seen as

more effective than print or computer-based methods. Intranet sites were only used for

information on policies, procedures, and legal requirements. Top management briefings

were considered best in terms of employee engagement, opinion surveys the best way to

encourage feedback, and meetings with line managers the best way to improve individual

performance. What are the best ways to communicate change?

Can You Communicate Too Much?
The claim that “we need more communication around here” is common. Many com-

mentators argue that it is not possible to overcommunicate, but this view is not shared

by all change managers and researchers. Geigle and Bailey (2001) describe a reengi-

neering project that affected 400 employees in a federal agency. The change team

was committed to open, organization-wide communication regarding the project, to a

degree that was unprecedented in the organization’s history. The outcome of this strat-

egy was change recipient anxiety and cynicism about the change, for two reasons.

First, staff suffered information overload, one saying, “It’s almost like they know

with all this information, we won’t read it.” Information overload can be problematic in

organizations where employees are already in receipt of a high volume of other infor-

mation. Second, the agency’s communication strategy did not involve real participation.

The change team had no strategy for incorporating feedback into the change program: “I

feel like they may be informing me of everything that’s going on, but I have absolutely

zero say in what goes on.” Geigle and Bailey (2001) conclude that there may be symbolic

importance in pursuing an open communication strategy, but that this is not sufficient for

success. They argue that a change team is at its best when acting not as reporters, but as

sense-makers, facilitating understanding for change recipients and helping them to iden-

tify (filter and distill) what is important. This distinction is instructive: from her research,

Laurie Lewis (1999) argues that change managers act more often as reporters, disseminat-

ing information, than as sense-makers, seeking and processing feedback during planned

change processes. For a more detailed exploration of the perspective that sense-making

brings to organizational change, see chapter 9.

224 Chapter 7 Change Communication Strategies

Getting the Word Out, or Getting Buy-In?
The federal agency example illustrates the difference between “getting the word out”

(providing information about a change) as opposed to “getting staff buy-in” (support

and involvement). Both are important (Guaspari, 1996). We cannot always assume

that management alone has all the good ideas concerning what is required to make a

change successful. We do know, however, that those who are going to be affected by

change need to be informed about what is happening, and that when frontline staff

are allowed to take the initiative to drive change, the success rate is higher (Keller

et al., 2010).

Communication designed to generate “buy-in” involves capturing from staff informa-

tion that will be useful in delivering the change, identifying what is important to them, and

discovering what they see as the costs and benefits. It is therefore important to identify

a clear “value proposition” that addresses the interests and motives of individual staff.

Examples include (Guaspari, 1996, p. 35):

“As a result of the new skills you’ll learn in order to perform your job in the newly reengi-

neered organization, you will have significantly increased your value internally and your

marketability externally.”

“The work will be backbreaking. The pace will be relentless. You stand to make a ton of

money.”

“We are making these changes to enable us to rewrite the rules in our industry, to improve by

orders of magnitude the value we can create for our customers.”

Getting “buy-in” depends on what people are being asked to purchase. Do they see

this as having personal value? Have the changes been adequately justified? The evidence

indicates that explaining and justifying the need for change relates positively to perceived

fairness with regard to both the change process and the outcomes. From his study of

183 employees in companies that had relocated to Chicago, Joseph Daly (1995) found

that management’s justification was particularly important when the move was viewed

unfavorably by staff. However, that justification was not as important where the move

was welcomed. Daly (1995, p. 426) concludes that some managers may thus be tempted

to avoid explaining change decisions to employees if they think that the change outcomes

will be welcome anyway. However, that may not apply to staff judgements about the

change process.

[E]mployees are likely to expect an explanation for a change decision regardless of whether

the outcomes are positive or negative. If those employees are not given an explanation, they

are likely to feel that the procedures used to make and implement the decision were unfair,

leading in many cases to resentment against the decision process and the decision makers.

Daly’s (1995) findings are consistent with other research, which has found that manag-

ers are more likely to be trusted by staff when they:

• provide accurate information and feedback;

• adequately explain the basis for their decisions;

• use open communication, enabling an exchange of ideas.

Chapter 7 Change Communication Strategies 225

Beyond “Spray and Pray”
Phillip Clampitt and colleagues (2000) locate communication strategies on the

continuum shown in figure 7.2. At one end of this continuum is “spray and pray,”

transmitting lots of information, to little effect. At the other extreme, “withhold and

uphold” offers little information, and is also ineffective. All five strategies on this

continuum are summarized in table 7.4. The authors argue that “underscore and

explore,” which involves dialogue, is more likely to succeed, by allowing staff concerns

to be combined with management initiatives. They note that some organizations mix

these strategies. For example, in one organization, “spray and pray” (also known as

the “communication clutter” approach) was used to “bombard” staff with information

on organizational performance. However, when faced with downsizing and operational

Thirteen Points for an Effective Communication Strategy

1. Convince top management that communica-

tion is important.

2. Build alliances across the organization to sup-

port initiatives.

3. Recognize that no one method will be effective.

4. Use a mix of approaches and use all available

channels where relevant.

5. Target communication to the audience; differ-

ent methods for shop floor and managers.

6. Respect cultural diversity and vary approaches

accordingly.

7. Make sure that messages are consistent, over

time and between audiences.

8. Ensure clarity of message and keep things

simple.

9. Train managers in communication skills.

10. Develop and sustain two-way communication,

dialogue, and feedback.

11. Ensure that employees feel that they can say

what they think without discomfort.

12. Ensure that communication is built into the

planning stages of all activities.

13. Review communication initiatives to check what

has worked, what hasn’t, and why

Source: Cannell (2010), pp. 2–3.

High

Efectiveness

level

Low

Spray &

pray

Tell &

sell

Underscore

& explore

Identify &

reply

Withhold

& uphold

Little

Amount of information

Great

FIGURE 7.2
The Communi-

cation Strategy

Continuum

Source: Clampett,

The Communication

Strategy Continuum,

Academy of

Management Journal,

p. 48, 2000.

226 Chapter 7 Change Communication Strategies

changes, a “withhold and uphold” strategy was used, in order to avoid exposing staff

to promises about the future that they were not able to meet. This dual approach led

to discontent and mistrust, as staff saw management providing them with significant

amounts of information, but avoiding the issues about which they cared the most.

This argument supports the use of “underscore and explore” change communication

strategies, the benefits of which arise from dialogue and engagement. This approach,

TABLE 7.4
Communication Strategies

Strategy Actions

Spray and pray Shower employees with a range of information; more is better. Managers pray that
staff will see what needs to be done. Benefit: Staff are exposed to company informa-
tion. Downside: Staff overloaded with information, may not be able to identify what
is more important, and may be able to understand what is happening, but not why.

Tell and sell Limit the information provided to core issues. Management tells staff about the
changes and “sells” them on why these are necessary. Benefit: Can be done rapidly.
Downside: Staff are passive recipients, and lack of dialogue opens potential for staff
skepticism and cynicism.

Underscore and
explore

Focus on fundamentals, but engage employees in dialogue to identify obstacles
and misunderstandings that need to be addressed. Benefit: Staff engagement solves
problems, strengthens support for change and can generate useful ideas. Downside:
Takes time.

Identify and reply Defensive approach to identifying and responding to rumors and innuendo, and
to reduce staff confusion about changes. Benefit: Can resolve problems at an early
stage. Downside: Reactive approach that assumes (sometimes incorrectly) that staff
understand the organizational problems that the changes need to address.

Withhold and
uphold

Withhold information until it is absolutely necessary to communicate. Management
publicly defend the change strategy. Information is not disclosed openly. Benefit: Man-
agement retain a high degree of control. Downside: Staff bitterness and resentment.

Source: Based on Clampitt et al. (2000).

A Dozen Tips from the Experts

Rebecca Saunders (1999) has collected the follow-

ing suggestions for communicating change:

1. Specify the nature of the change.

2. Explain why.

3. Let staff know the scope of the change, includ-

ing the good and the bad news.

4. Continually repeat the purpose of the change

and how it will occur.

5. Use graphics.

6. Make the communication two-way.

7. Target supervisors.

8. Support change with new learning.

9. Point to progress emanating from the change.

10. Don’t limit communications to meetings and

print.

11. Institutionalize information flow about the

change.

12. Model the changes yourself.

Chapter 7 Change Communication Strategies 227

however, takes time to organize. This may not be appropriate—and could cause damaging

delays—if rapid organizational change action is necessary. The best strategy may thus

depend on the situation.

Who Should Be Responsible for Communicating the Change?
A common view is that chief executives should be personally involved in the communica-

tion of change in order to demonstrate their commitment. It could be damaging to delegate

this responsibility to others, signalling a lack of top management support. However, other

commentators argue that first-line supervisors are more appropriate change communica-

tors, because they are opinion leaders, who are more likely to be known to and trusted by

staff. This is the view adopted by T. J. and Sandar Larkin (1996). First-line supervisors are

in regular personal contact with staff, in small groups (rather than in large formal assem-

blies), and are thus better able to communicate about change. They propose the two-stage

supervisory briefing strategy summarized in table 7.5.

Jeanie Duck (1993, p. 110) argues that the key to change communication lies with “man-

aging the conversation between the people leading the change effort and those who are

expected to implement the strategies.” This does not necessarily give priority to the role of

either the chief executive or supervisors. She maintains that managers often fail to realize that

they are sending out messages even when they are not formally communicating. For exam-

ple, a change task force may meet to discuss how to accomplish a change, feeling that there

is no need to communicate more widely at that time. Duck (1993, p. 110) points out that this

TABLE 7.5
Two-Stage Supervisory Briefing Strategy

Round One: Seek Opinions and
Recommendations

Round Two: Report Back
to Supervisors

What to Do Why What to Do Why

One senior manager
meets with 8 to 10
supervisors for a
maximum of 90 minutes

Makes clear that all
ideas and opinions are
welcome; relatively short
meeting maintains focus

The same manager
meets with the same
group of supervisors

Makes clear that
they are dealing
with a management
representative

Single sheet of paper
with two columns: “not
willing to change” (what
management want to
retain) and “willing to
change” (for supervisors’
recommendations)

Clarifies the ground
rules—what is not
going to change—and
gives an opportunity
for supervisors to make
suggestions to take back
to the senior change
management team

Single sheet of paper
with supervisors’
recommendations and
senior management
responses; answer
questions without
argument and
defensiveness

Convey what has
happened with regard to
their recommendations,
not attempting to
convince supervisors of
the merits of what has
happened

Ensure that supervisors
understand that final
decisions rest with
the senior change
management team

Clarifies that opinions
are being sought, and
not their permission

Distribute a booklet
outlining the change
and draw attention to
major features

Help supervisors
in the face-to-face
conversations that they
will have with their staff

Source: Based on Larkin and Larkin (1996, pp. 102–3).

228 Chapter 7 Change Communication Strategies

LO 7.5 Contingency Approaches to Change Communication

We explore contingency approaches to change implementation in chapter 8. Contingency

perspectives have also been applied to the design of change communication strategies.

Two main contingencies—or dependencies—concern the type of change and the stage of

change.

Communication Strategy and Type of Change
Doug Stace and Dexter Dunphy (2001) argue that a communication strategy must

reflect the type of organizational change that is being proposed:

• Developmental or incremental transitions aim for widespread involvement, emphasiz-

ing face-to-face communication and the use of change teams to identify initiatives and

broaden commitment.

• Task-focused transitions seek to align employee behavior with management initiatives,

so these are primarily top-down in nature, using formal communication channels such

as email broadcasts and memos.

• Charismatic transformations need to stimulate emotional commitment to new ways of

working, and thus require more personalized top-down forms of communication, ide-

ally combined with at least symbolic two-way communication.

• Turnarounds tend to follow from organizational crises, and draw on formal, top-down

modes of communication that attempt to force compliance with the new direction.

Stace and Dunphy outline how these approaches vary in terms of communicating

goals, who is to be involved, the kinds of issues that will be addressed, the communication

Communicating Change through Tag Teams

USAA is a financial services company that employs

25,800 people, has over 10 million members, and is

based in San Antonio, Texas. In moving through an

organizational change, USAA used “tag teams” to

ensure that change occurred in different units at the

same time, minimizing disruption to existing oper-

ations. A core team worked on a particular change

but was joined by “tag teams” comprised of volun-

teers from different parts of the organization who

attended core team meetings. They were charged

with asking questions about how change initiatives

would affect customer services and with conveying

the concerns and fears of their colleagues in relation

to the change. After the core team meetings, they

returned to their jobs and acted as informal con-

duits, taking information back to their colleagues

and work groups (based on Olofson, 1999).

“virtually guarantees that the change effort will fail,” because people will be aware that the

task force is meeting, rumors will circulate, and people will avoid buy-in to the final outcome.

Instead, she suggests setting up a “transition management team,” which is a group of senior

staff who work full time on the change initiative and who report to the chief executive. The

role of the transition management team is to stimulate conversation and allow information

to be shared across (potentially obsolete) internal organizational boundaries. The concept of

managing conversations is also reflected in the use of “tag teams” (see box).

Chapter 7 Change Communication Strategies 229

Bill Quirke (2008, p. 236) also argues that communication strategy should be deter-

mined by the degree of change that is going to be implemented. The more significant the

change, the more employees need to be involved. He uses “the communication escalator”

(figure 7.3) as a guide to designing communications strategy. Degrees of involvement thus

range from awareness, understanding, support, and involvement, to commitment.

Open the Files

Think back to a recent change in your organization,

and consider the following questions:

1. Did your organization have a strategy for initially

announcing the change?

2. What strategy was used to communicate infor-

mation during the change process? Was one or

more of the strategies from figure 7.2 used? Was

this strategy adopted consistently, and for all

members across the organization?

3. On a scale from 1 (ineffective) to 5 (very effec-

tive), how would you rate the communication

strategy overall?

4. With hindsight, what changes would you have

made to improve the effectiveness of the change

communication strategy?

5. To what extent will those recommendations

apply to future changes in this organization?

To what extent will that depend on the further

changes that are proposed?

Newsletter

Video

Electronic Mail

Roadshows

Video

conferencing

Customer forums

Seminars

Training

courses

Business forums

Multimedia

Degree of Involvement

D
e

g
re

e
o

f
C

h
a

n
g

e

Team meetings

Feedback

forums

Speak up

programs

Interactive

conferencing

Updates

Team problem-

solving

Talkback

Awareness
Understanding

Support

Involvement

Commitment

FIGURE 7.3
The Com-

munication

Escalator

channels and directions (top-down, lateral, one-way/two-way) that will be used, and the

balance of power that will need to be managed among relevant parties.

Each of these change communication strategies makes different demands on the capa-

bilities of the change manager. Developmental transitions demand sophisticated social and

interpersonal skills. Task-focused transformations rely on carefully crafted formal mes-

sages. Charismatic transformations need to be underpinned by visionary and inspiring

messages. In the interests of speed and effectiveness, post-crisis turnarounds may require

a directive, autocratic style, with which many experienced change managers may be

uncomfortable, especially if they are accustomed to more participative, engaging modes of

change communication and implementation.

230 Chapter 7 Change Communication Strategies

The escalator indicates the communications methods appropriate to each degree of

involvement (suggestions—these are not comprehensive). For commitment, the organiza-

tion should consider using all of those types of communication methods, and any others

Communication in a Crisis What Can We Learn from BP’s Mistakes?

Communication in a crisis is critical, affecting

the organization’s reputation and performance.

Aikaterini Valvi and Konstantinos Fragkos (2013)

assess BP’s communication after the explosion on

the Deepwater Horizon oil drilling rig in the Gulf

of Mexico in April 2010. The incident killed 11 of

the 126 crew members, and injured 17 others. Oil

poured from the wellhead on the seabed and drifted

toward the Louisiana coast, threatening wildlife and

the local fishing and tourism industries. Spilling 5

million barrels of crude oil into the Gulf, this was

the biggest environmental disaster in the United

States since the Exxon Valdez spilled 750,000 barrels

in Prince William Sound in 1989. With financial

penalties and reputational damage, BP struggled to

restore profitability.

Crises are expected to trigger significant

organizational change to prevent a recurrence.

Many stakeholders are involved—employees,

shareholders, local businesses, the public, regulatory

agencies, government. Tony Hayward, BP’s chief

executive, took personal responsibility for providing

information following the Deepwater incident.

He was slow to respond to the crisis, and made

five other mistakes in his communication with the

media, government, and public:

1 The fake images: Fake photographs were given

to the press, with the claim that these related to

blank spots on the video; original images were

quickly supplied, but this damaged BP’s credibility.

2 “I want my life back”: Under pressure from various

sources, Hayward in a television interview in May

said, “I want my life back.” As the Deepwater

incident had caused 11 deaths, this damaged his

credibility and reputation.

3 The incident with the yacht: With oil still spilling

into the Gulf, Hayward took time off to watch

his yacht, Bob, compete in the UK Isle of Wight

island race.

4 We were not prepared: Speaking to the Financial

Times in Texas, Hayward said, “We did not have

the tools you would want in your toolkit”—not a

reassuring statement.

5 Self-interest: During a hearing with the U.S.

C a b i n e t , H a y w a r d a p p e a r e d t o s h o w a n

overriding concern with his own position, which

he believed was not under threat, saying that he

was ignoring press and television accounts of the

disaster so as not to “cloud his judgement.”

U.S. president Barack Obama criticized BP for

spending $50 million on radio, television, and

online advertising during the crisis, suggesting

that it would have been better to spend that

money on dealing with the oil spill. The company

made this worse by issuing a statement claiming

that “not a cent” had been diverted from their

response to the oil spill to pay for advertising.

BP’s communication with its own employees was

ineffective. When staff involved in the oil cleanup

operation were hospitalized with dizziness,

headaches, and respiratory problems, Hayward

blamed food poisoning, showing lack of concern

for their well-being. Strategies for communicating

with shareholders were more effective, reminding

them of BP’s past record, blaming other companies

for the disaster, and promising to meet long-term

dividend obligations. Nevertheless, Hayward was

replaced in October 2010.

What advice can other organizations take from

this experience? Develop a crisis communication

plan. Appoint experienced staff to work from a

designated public relations office. Communications

with the media must be direct and sincere. Use

press conferences, a crisis web page, and social

network accounts. Monitor media reports closely,

and respond immediately to clarify issues when

appropriate. Do not run advertising campaigns to

promote your image during a crisis. Concentrate on

restoring trust. Finally, make it clear from the start

that “things will change.”

(Other aspects of this incident are discussed in

chapter 5.)

Chapter 7 Change Communication Strategies 231

that are available. At the awareness level, the focus is simply on providing information.

However, for involvement and commitment, communication also needs to concentrate on

improving the quality of interactions and relationships.

Communication Strategy and Stage of Change
Adopting a differing contingency focus, Kathleen and Kevin Reardon (1999) suggest

that the most appropriate communication strategy depends on the stage of the change

process. First, they identify four leadership styles, each of which uses different com-

munication processes and strategies:

Commanding style: Leaders are performance- and results-oriented, and their communication

style is directive.

Logical style: Leaders explore the available strategic options through analysis and reasoning,

and their communication style involves explaining their intentions and their plans.

Inspirational style: Leaders develop a vision of the future around which they seek to encour-

age cohesion, and their communication style involves creating trust and mobilizing people

around the change program.

Supportive style: Leaders are concerned with creating an open and consensual environment,

and their communication style is based on involvement.

Reardon and Reardon (1999) argue that different modes of communicating should be

used at different stages of the change process. Using a five-stage process, their argument is

summarized in table 7.6.

Stage Leadership Style

Planning Focus on identifying what needs to change requires a combination
of logical and inspirational leadership styles

Enabling As people are selected and trained in relation to the change process,
a combination of logical, inspirational, and supportive styles are
needed

Launching As change unfolds, combine logical and commanding styles

Catalyzing Use inspirational and supportive leadership styles to motivate and
engage

Maintaining To encourage staff to continue with a change effort, perhaps in the
face of obstacles, inspirational and supportive leadership styles are
helpful

TABLE 7.6
Stages of

Change and

Leadership

Style

This framework recognizes that no one individual is likely to have all the change man-

agement skills required at different stages of a change process. More than one style—or

more than one image of change management—may be necessary. As discussed in the fol-

lowing chapter, however, change management can often be more of a team effort than a

solo performance. Team members may thus have different strengths—or styles—which

they can use to compensate for each other.

232 Chapter 7 Change Communication Strategies

This framework has some drawbacks. First, change rarely unfolds in the logical manner

shown in table 7.6 (see chapter 10). Second, there may be several changes unfolding at

once, but each at a different pace in an organization, raising questions about the manage-

ment styles of those involved in more than one initiative. Third, it can be difficult to iden-

tify when one stage has ended and another has begun, as these can overlap significantly.

Fourth, the model offers clear advice, but without supporting evidence. Finally, to apply

this framework, change managers are required to have a good self-understanding of their

leadership and communication preferences and styles. As with many such frameworks,

this is useful as long as it is treated as a guide and not as a rigid set of rules.

LO 7.6 Communication Channels and the Role of Social Media

Getting the (Change) News What Works Best for You?

You are an employee of a large organization about

to go through a major restructuring.

1. What do you think you need to know about the

restructuring?

2. From whom would you like to get this informa-

tion? Why?

3. Would you prefer to receive this information in

person or in a group setting?

4. What for you would be the best channel (e.g.,

management briefing, email, video) for receiving

this information? Why?

5. As a change manager, how will you use your

answers to these questions to help design a

communication strategy?

At the heart of our model of communication (figure 7.1) sits a key issue that we have

not directly discussed: the channel, or the medium through which the message will be

transmitted. This is not a mere technical issue. As Marshall McLuhan (1964) argued,

“the medium is the message,” suggesting that the properties of a chosen medium can

influence the meaning of a message and its interpretation. The change manager select-

ing an inappropriate medium with which to transmit important information to key

groups affected by a change proposal may not be taken seriously, may be seen as insen-

sitive, or may strengthen disaffection. In the final section of this chapter, therefore, we

will consider the characteristics of different media, and how these can affect change

communication. We then explore the impact on change communication of develop-

ments in social media and mobile technology.

Media Richness
One of the main characteristics on which communication media vary is “information

richness,” a concept developed by Robert Lengel and Richard Daft (1988). Richness

concerns the amount and the kind of information that can be transmitted. The three

characteristics of a communication medium that affect richness are (1) the ability to

handle many items of information at the same time, (2) the availability of rapid feed-

back, and (3) the ability to establish a personal focus. Based on these characteristics,

they classify media on the “hierarchy of richness” shown in figure 7.4.

Chapter 7 Change Communication Strategies 233

Face-to-face communication is the richest because it meets all three criteria: multiple

information cues, immediate feedback, and personal focus. Moving down the hierarchy,

telephone allows quick feedback, but the information cues that are available from nonver-

bal behavior in face-to-face communication are absent; body language such as eye contact,

posture, gesture, and head movements. Written communications can be directed at indi-

viduals, but carry limited information, and feedback is likely to be delayed. At the bottom

of the hierarchy, impersonal bulletins and computer reports are limited on all three criteria

and are therefore “information poor” or “lean.”

This is not an argument in favor of rich communications. On the contrary, the degree

of richness that is appropriate depends on the nature and content of what is being com-

municated, and in particular on where the issue lies on a continuum from routine to

nonroutine. Routine issues are commonplace, simple, rational, straightforward, and con-

tain no surprises. Nonroutine issues, in contrast, concern novel, complex, unexpected

events and are often characterized by time pressure, ambiguity, and surprise. The poten-

tial for misunderstanding is thus greater with nonroutine issues, and a richer exchange

of information is therefore necessary in order to establish a common frame of reference.

Lengel and Daft (1988, pp. 229–31) suggest six rules for “matching” media richness to

the message:

Rule 1: Send nonroutine, difficult communications through a rich medium—preferably

face-to-face.

Rule 2: Send routine, simple communications through a lean medium.

Rule 3: Use rich media to extend your personal presence throughout the organization.

Rule 4: Use rich media for implementing company strategy.

Rule 5: Don’t let the media in use “censor” information about critical issues; formal

written reports simplify multidimensional issues and mask the nonroutine.

Rule 6: Evaluate new communication technology as a single channel in the media

spectrum.

Physical presence (face-to-face)

Media

richness

Highest

Lowest

Interactive media (telephone,

electronic media)

Personal static media (memos,

letters, tailored computer reports)

Impersonal static media (flyers,

bulletins, generalized computer

reports)

FIGURE 7.4
Media

Richness

Hierarchy

Source: Lengel and

Daft, Media Richness

Heirarchy, Academy of

Management Execu-

tive, p. 226, 1988.

234 Chapter 7 Change Communication Strategies

For the change manager, these rules indicate that incremental changes that simply build

on current practice may be comparatively routine, and they should be communicated as

such, using lean media. This is more suited, for example, to the transmission of factual

or technical information. On the other hand, information-rich media should be used when

changes are novel, more complex, and widespread in their implications. Information rich-

ness may be more difficult to achieve in a large organization, and the change manager may

need to consider a wider range of options, including the use of the social technologies

discussed shortly. In most instances of nonroutine change, it is likely that a portfolio of

communication strategies will be desirable, tailored to the particular circumstances.

Adopting a different contingency approach, Bill Quirke (2008) suggests that different

change communication media are better suited to some audiences than to others. With

regard to change communication he suggests that there are four types of target audience,

whose needs differ:

Waking up They will be affected by the change, but have not noticed, yet

Engaging They know that they will be affected, and are interested and concerned

Educating They will affected marginally, and only need to be told about what is

happening

Reassuring They will also be marginally affected, but are concerned nevertheless

Media-rich face-to-face communication needs to be directed toward those who will be

most impacted by change—those who need waking up, and those who need to be engaged.

Leaner forms of communication can be used with those who only need education or

reassurance.

A New Range of Communication Tools—the Potential Uses
of Social Media
The social networking service Facebook was launched in 2004. This is now one of many

Internet-mediated tools that allow people to create, share, and exchange information, ideas,

pictures, and videos. Unlike previous “flat” Internet applications, these social media tools

allow two-way, real-time communication, interaction, collaboration, and co-creation. To

use social media, one needs some form of Internet access, which used to mean a computer.

The development of mobile technology has made social media independent of traditional

computing; we are now more likely to access the Internet with a laptop, smart television,

tablet, ebook reader, or smartphone. Social media and mobile technologies are also “low

friction” tools: they are ubiquitous, easy to use, flexible, and do not require specialized

equipment. Another feature is their rapid development; this section of this chapter will be

out of date before this book is published.

A study by McKinsey Global Institute concluded that social media could increase the

productivity of knowledge workers by 20 to 25 percent, as people would spend much less

time looking for information (Chui et al., 2012). In January 2015 Facebook launched a

corporate version of its social networking platform, called Facebook at Work. A number of

corporate “partners” were asked to experiment with its possibilities, to discover if this could

increase employee productivity by sharing ideas through posts, groups, and messages. This

development was triggered by the observation that Facebook’s own staff were using the

network instead of email for internal communication. This new platform sought to address

Chapter 7 Change Communication Strategies 235

organizational concerns over data security, intellectual property, and privacy. Unlike “per-

sonal” Facebook, information shared on Facebook at Work belonged to the employer, and

employees who leave will not have access to their corporate account (Kuchler, 2015).

Social media are therefore “information rich,” close to the top of the hierarchy in

figure 7.4, and they are in widespread use, especially by younger employees. In 2015,

Facebook, with a market value of $209 billion, had over 1.35 billion monthly active users;

Twitter had 250 million. These technologies could thus make significant contributions

to organizational communication in general, and to change communication in particular.

Jonny Gifford (2013) argues that the main applications include:

Efficient communication: Increase efficiency of communication and knowledge

transfer, getting the right information to the right people.

Employee voice: Seek employee views, giving employees a platform.

Networking and collaboration: Create meaningful connections with people we would

otherwise not know, and facilitating collaboration.

Learning and development: Use social media to support e-learning and development

and to encourage self-directed learning.

Recruitment and job hunting: Social networking sites are now widely used for recruit-

ment; employers and job seekers use social media to

check each other to inform their choices.

Can social media help organizations to become more innovative and responsive to

change? Applications in marketing and recruitment are straightforward. The use of social

media in relation to employee engagement, productivity, innovation, and communication,

however, is more diffuse. The applications listed above have the potential to transform

change communication by tailoring information to individuals and groups, with the ability

to communicate simultaneously with large numbers regardless of location, creating dia-

logue concerning change proposals, encouraging networks and collaboration, and provid-

ing flexible change-specific training. Social networking sites can also reveal (to potential

employers) information concerning candidates’ openness to change, and also reveal (to

potential employees) an organization’s receptiveness to change and innovation.

Social Media Drivers

A survey of executives found that the main drivers

of social media adoption were (Matthews, 2015):

1. Responding faster to changing needs

2. Optimizing business processes

3. Increasing revenue and profits

4. Attracting the best talent in a competitive market

5. Better-engaged employees

Change managers thus have a set of new and

powerful tools to help with two-way communica-

tion, staff participation, and change implementation.

How are these media being applied in practice? In 2011, the consulting company

McKinsey held a contest to find companies using social media tools and technologies

in innovative ways, to improve management methods and engage frontline employees

236 Chapter 7 Change Communication Strategies

( McKinsey & Company, 2011). Demonstrating the uses and benefits of these tools, here

are some of the winners:

The Dutch Civil Service

Dutch government employees faced bureaucratic hurdles, such as having to book meeting

rooms in their own buildings through an external agency, which was time-consuming and

costly. Following a frustrated tweet from one staff member, a group formed, and they used

open-source software to develop their own reservation system. This now covers over 50

offices and over 550 workplaces in government buildings across the country.

Essilor International

Essilor is a global manufacturer of ophthalmic lenses and has a training program that uses

personal and social media methods to share best practices across 102 sites in 40 countries.

It now takes one year to reach the level of skill that once took three years, and social net-

working allows coaching across different locations. A lens-processing center in Thailand

developed a game to teach new employees how to understand the shape of a particular

type of lens, and this game is now also used in Brazil.

Best Buy

Best Buy is a consumer electronics retailer with 1,500 locations and 100,000 employees.

To ensure that top management understood what frontline staff learned from customers,

the company created an online feedback system that allowed everyone to see the customer

information gathered in all the stores. This influenced a range of company practices, from

improving shop signs to complex decisions about implementing a national promotion. This

was a fast, flexible, and inexpensive way of responding to “the voice of the customer.”

Cemex

Cemex is a large Mexico-based cement company, which developed an approach to

employee collaboration called Shift. This helped to reduce the time taken to introduce

new products and process improvements. Shift uses wikis, blogs, discussion boards, and

web-conferencing to help employees around the world collaborate with each other. For

example, 400 employees working on ready-mix products helped to identify which worked

well, and which were obsolete, slimming the product line and updating the global cata-

logue. Now, with over 500 active communities, Shift is used to solve local problems, using

global resources, as well as storing and sharing the knowledge that is generated.

These organizations may be relatively rare examples. A survey of 2,100 UK employees

and 590 human resource management staff suggests that development of novel uses of social

media has been slow (Gifford, 2013). Applications have been mainly driven by personal

access, rather than by organization strategy; employees are probably more sophisticated in

the use of social media tools in their private lives than are employers with regard to organi-

zational applications. Where organizations were using these technologies, they were more

likely to be targeting external (customers, other stakeholders) rather than internal audiences.

Applications of “employee voice” were superficial, with management seeking employee

views, but not necessarily being more responsive or open to influence as a result. The tech-

nology is in place, but most employees tend to use their laptops, smartphones, and tablets

for personal purposes. There seems to be limited corporate support for BYOD (bring-your-

own-device) practices, and some organizations ban the use of social media at work.

Chapter 7 Change Communication Strategies 237

A study in 2013 examined how chief executives in American organizations used four

social networks: Twitter, LinkedIn, Facebook, and Google Plus. Around 30 percent were

LinkedIn members, but participation in other networks was “dismal.” Faced with those

findings, Linda Pophal (2014, p. 23) asks, “Is it any wonder that so many of us are stymied

in our ability to sell the C-suite on the value of social media? It appears that few CEOs and

other senior executives are familiar with, or convinced of, the benefits of communicating

via social media.” Access to social networking and mobile technology is not a barrier; a

perceived lack of organizational relevance is.

The development of enterprise-specific social networks may help to realize the poten-

tial of these technologies. Employees can be involved in two-way discussions using a

secure “gated” corporate networking platform for incubating ideas and feeding these to

senior management. This can also be used to facilitate ad hoc communication and collabo-

ration. Social networking can be a more engaging medium than traditional communication

tools, to send corporate messages, quickly capture employee reactions, check that mes-

sages have been understood, and for information-sharing in general. A corporate social

network could strengthen the sense of shared purpose by celebrating achievements, rein-

forcing mission and values, and strengthening identification with the organization.

Antisocial Media

Lloyds Bank has a company intranet, which provides

opportunities for staff to give feedback to senior man-

agement. In January 2015, during a major reorgani-

zation that involved cutting costs and the closure of

150 branches with job losses, the human resources

director Rupert McNeill decided to assess staff morale.

He posted an intranet article that praised employees,

describing them as “a fantastic team” and an “agile

workforce.” Staff were asked to leave comments, and

hundreds responded. Most of the feedback expressed

resentment and complaints (Donellan, 2015):

“If you want promotion do every extracurricular

task that you can. Don’t worry about the quality

of the work as it is irrelevant.”

“Either execs are lying, or somewhere down

the line people are misrepresenting what is

being communicated from above.”

“Why should we trust you after what you did

on pensions?”

Most complaints concerned the decision to close

the generous final salary pension scheme. This hap-

pened at the same time as the chief executive was

awarded a £586,000 pension contribution as part of

his £7.8 million annual package, and was seen as “a

disgraceful display of double standards.” Staff were

also critical of excessive bureaucracy and a lack of

top management support. The corporate intranet

makes it easy for management to capture staff feed-

back. That feedback, however, may be unfavorable,

particularly when management actions are seen as

being inconsistent or unfair.

From a study of seven organizations with internal networks, Gifford (2014) offers this advice:

• Enterprise networks need a clear rationale or purpose if they are to be used and become

embedded. They need to support day-to-day activities.

• The process of identifying uses is better developed bottom-up, coming from staff them-

selves. But effective uses need to be identified and replicated if they are to spread and

be sustained.

238 Chapter 7 Change Communication Strategies

• It helps if there is a key individual, or a team of “community champions,” guiding and

encouraging the use of social media until this reaches critical mass.

• Enterprise social networks are time-efficient ways for senior leaders to engage with

large numbers of staff and to increase their visibility. However, the effects will be neg-

ative if senior management challenge or criticize comments with which they disagree.

• Social networks should be self-managed and not censored; policies should be “light

touch” (with an expectation that posts will be “respectful”); negative comments should

be dealt with frankly and openly; employees should be informed if comments have

caused offense.

Social media offer the change manager a novel range of powerful, flexible, “informa-

tion-rich” communication channels, which appear to have valuable uses. Organizations

that have experimented with these technologies have achieved significant benefits. Most

of the tools are public and require little skill to use. In order to develop beneficial appli-

cations, it also seems that creativity, innovation, and experimentation will be necessary in

order to tailor these new methods to local conditions and organizational goals.

When they were developing their theory of media richness, Robert Lengel and Richard

Daft (1988) may not have foreseen the development of social media and mobile technol-

ogies in the twenty-first century. However, their conclusions with regard to computing

technology in general speak to the change manager today. They observed that “electronic

media” were just one potential channel in the media spectrum. All the other channels have

their uses and advantages. They also concluded that “there is no electronic substitute for

face-to-face discussions when issues are nonroutine” (Lengel and Daft, 1988, p. 231).

Social media can therefore be misused. They should not, for example, be used to provide

an excuse to avoid difficult interpersonal conversations—about forthcoming organiza-

tional changes, perhaps, or other controversial or sensitive issues.

EXERCISE
7.1

Deborah Tannen (1995) argues that the way we communicate reinforces power and
gender differences. This can affect our interpretations of what we think is happening in a
particular situation.

1. Observe a work meeting, preferably with up to 10 people.

2. Listen to the language being used. What different types of languages in use can you
observe, such as commanding, respectful, demonstrating concern, displaying conde-
scension?

3. Do individuals tend to use one type of language in their interactions?

4. Who does most of the talking? Who asks most of the questions?

5. To what extent does the talk convey information about power and gender differences?
For example, who takes credit, who exudes confidence, who asks more questions?

6. What conclusions can you draw from your analysis about the way language constructs
and reinforces differences within the organization?

7. As a change manager, how will your awareness of these differences influence your
future interactions with staff?

Listen to

Who’s

Talking

LO 7.2

LO 7.3

Chapter 7 Change Communication Strategies 239

EXERCISE

7.2

Many alphas think that looking interested when someone speaks to them demonstrates
a high degree of openness when, in fact, that’s just the bare minimum one must do not
to be labeled defensive. Alphas can use this tool to chart their progress toward a more
constructive state of mind and to see how their behavior appears to others.

Are you open, or defensive? What are your normal behaviors? Where are your prefer-
ences? What do you need to change? How would this improve your relationships and
personal effectiveness?

How Defen-

sive Are

You?

LO 7.2

Highly Open

+10

+9

+8

+7

+6

+5

+4

+3

+2

–1

–2

–3

–4

–5

–6

–7

–8

–9

–10

+1

Plan the change, engage others, set milestones, and implement.

Communicate genuine enthusiasm about making a change.

Think out loud, making new associations about the problem.

Take full responsibility for the problem and its ramifications.

Request information and examples about the problem.

Openly wonder about your role in creating the problem.

Express genuine curiosity about the issue and how to resolve it.

Express appreciation for the messenger, regardless of delivery.

Summarize key points without interjecting your own thoughts.

Look interested, breathe, demonstrate an open posture.

Show polite interest while inwardly preparing your rebuttal.

Provide a detailed explanation of your point of view.

Justify actions with compelling logic and an interpretation of events.

Interrupt to give your perspective.

Interpret comments as attacks and feel misunderstood.

Convince them that you’re right and they’re wrong.

Make snippy replies and show your irritation nonverbally.

Blame or complain about someone who’s not present.

Intimidate or attack the messenger.

Appear to comply, with no intention of doing what you say you’ll do.

Highly Defensive

Breakthrough: choosing curiosity over being right

Source: Ludeman, K. and Erlandson, E., “Highly Open/Highly Defensive”, Harvard Business Review, No. 5, 2004. Copyright © 2004

Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

240 Chapter 7 Change Communication Strategies

EXERCISE
7.3

“In the past, institutional mission and strategic vision were reviewed every four years;
now, they are reviewed every time someone posts to Facebook, comments on a blog, or
opens a new Twitter account.”

—Dana Allen-Greil and colleagues

Social media could themselves trigger dramatic organizational changes, as well as cre-
ating new channels of communication with regard to other changes. For example, social
media are changing the ways in which museums interact with the public, and also how
museum staff communicate and work with each other. Dana Allen-Greil and colleagues
(2011) argue that, used effectively, social media can further the mission of the organiza-
tion and foster more agile and collaborative organization cultures. There are many wider
cultural, political, and social pressures encouraging openness and collaboration. Social
media offer a new set of tools with which organizations can respond to those pressures.

Allen-Greil and colleagues studied three museums: the Smithsonian’s National Museum
of American History (NMAH); Monticello, a historic house and research institution; and
the J. Paul Getty Trust (the Getty). These museums have adopted different approaches to
the use of social media.

At NMAH, social media contribute to public programming, focusing on education and
visitor services, complementing the existing email newsletter, website, and other online
communications. At Monticello, the focus lies with relationships building, and in particular
on increasing the organization’s “social media outreach.” This means using social media
to increase the number of “online visitors.” In contrast, the Getty is using social media to
“get off the hill.” The Getty has a reputation for being inaccessible, as it is located on a hill
above the 405 freeway, and visitors have to take a quarter-mile tram ride to get up there.
Social media thus allow the Getty to “take the collections and programs into the commu-
nity” and to promote their educational and research work.

Sometimes the Best Thing Managers Can Do Is Get Out of the Way

Staff who have collaborated on social media projects in these museums have created
new channels of communication and new ways of thinking and working with each other.
The leadership of these initiatives was mainly “bottom-up,” and did not rely on senior
management experts. Allen-Greil and colleagues note that “effective collaboration means
staff members need to cross lines traditionally drawn between different working groups,
and probably across lines drawn between hierarchical levels within the institution.” Social
media may thus lead to flatter hierarchies and “horizontal working.” The study also
found that an increased level of online engagement with the public led to an increase
in face-to-face conversations among staff. Why? Social media project staff had to meet
with colleagues across the organization: human resources, legal department, registrars,
publishers, educators. The authors argue: “Social media are pushing us together in a very
personal way. New conversations between staff members who have never had any reason

to talk before are establishing new relationships and new lines of engagement.”

A Perpetually Beta State of Mind

Senior managers need to encourage staff to experiment with social media to develop
more efficient and effective processes. However, at the Getty, the use of different social
media platforms by different groups of staff meant that initiatives were often uncoordi-
nated, and some even competed with each other: “In a large, hierarchical institution, this

Social

Media at the

Museum

LO 7.3

Chapter 7 Change Communication Strategies 241

Chui, M., Manyika, J., Bughin, J., Dobbs, R., Roxburgh, C., Sarrazin, H., Sands, G., and

Westergren, M. 2012. The social economy: Unlocking value and productivity through social

technologies. New York and London: McKinsey & Company/McKinsey Global Institute.

Analyzes the economic impact and business potential of social technologies, considering

current applications and future possibilities. Argues that the use of social technologies to

improve collaboration within and across organizations has reached only a fraction of its

potential. Improvements in value creation and productivity will depend on finding innova-

tive ways to exploit these technologies, while protecting individual and corporate rights.

Keller, S., Meaney, M., and Pung, C. 2010. What successful transformations share. Chi-

cago and London: McKinsey & Company. Identifies the tactics that lead to successful

change. Emphasizes the power of widespread employee engagement, collaboration,

co-creation, sense of ownership, and in particular the importance of ongoing communica-

tion and involvement.

Rafferty, A. E., Jimmieson, N. L., and Armenakis, A. A. 2013. Change readiness: A mul-

tilevel review. Journal of Management 39(1):110–35. Stresses the role of communication

to influence cognitive and emotional responses to increase change readiness. Argues that,

to influence emotions, the use of pictures (see following recommendation), color, music,

and atmosphere are helpful. Concludes that high-quality change communication can

increase readiness, and that poor communication can damage the change process.

Additional
Reading

kind of testing, rapid prototyping, and risk-taking is pushing the boundaries of the usual,
highly-controlled content development processes.” Although exciting for staff, sponta-
neous experimentation may not be sustainable. However, Allen-Greil and colleagues ask
us to consider: “What would it really be like if we could work in a perpetually beta state of
mind? If we could try, fail, and try again? We are closer than you think because it’s already
happening at every museum that uses social media.”

Now that you have read this case, consider the following questions:

1. In what ways could social media applications contribute to the mission of your
organization?

2. How could social media change or strengthen the culture of your organization, with
regard to widening collaboration and becoming more agile and responsive?

3. To what extent will your current organization silos and hierarchies inhibit the com-
munication and collaboration opportunities opened up by social media? Or, will
social media help you to break down those silos and hierarchies, and encourage more
“horizontal working”?

4. How should your organization balance the need for management control with the
desire to open up conversations more widely across the organization in order to
encourage experimentation with social media?

5. In your assessment, would your organization benefit or suffer from working in a “per-
petually beta” state of mind, constantly experimenting, learning—and improving—
from the mistakes?

242 Chapter 7 Change Communication Strategies

Sibbet, D. 2013. Visual leaders: New tools for visioning, management, and organizational

change. Hoboken, NJ: John Wiley & Sons Inc. Introduces an innovative range of visual

tools for improving corporate communications and visual IQ. Demonstrates how visual-

ization can engage, inspire, and contribute to thinking. Argues that these tools are particu-

larly useful in driving organizational change. Describes with case studies (the GM Saturn

project; the quality improvement program at HealthEast) a “storymapping” approach for

anticipating, managing, and communicating the stages of the change process.

Identify key elements in the change communication process.

We emphasized the argument that communication is not a “soft” topic, but one that has a

direct impact on organizational effectiveness and financial performance. We introduced

a well-known model of the change communication process—a process for exchanging

meaning as well as transmitting information. A transmitter codes a message, which is

transmitted through a chosen channel to a receiver, who then decodes that message and,

depending on the channel, provides feedback. A number of factors can interfere with

this apparently simple process: perceptual filters, noise, and the wider organizational

context in which communication takes place. The organization’s past history of change

is important, as this can influence responses to current change proposals.

LO 7.1

Roundup

Reflections for the Practicing Change Manager

1. In what ways does your personal use of language

reinforce power and gender differences in your

organization? What effect do you think this

has in terms of how your change messages are

received? What modifications to your approach

would help you to communicate change more

effectively?

2. Do you see yourself as a reporter of change

information? Or are you a sense-maker, helping

staff to understand change actions, and seeking

input from them?

3. To what extent do you focus on getting the word

out, rather than seeking staff buy-in? Do you

tend to use the same communication methods,

or do you adopt different approaches depend-

ing upon the type of change? Do you “spray and

pray” information or “underscore and explore”?

4. Are you more comfortable using “rich” commu-

nication media (face-to-face), or “leaner” media

(email)? Do you adopt different forms of com-

munication depending on the type or stage of

change? With which communication media have

you had the most success, and why?

5. Does your organization have a strategy for using

social media? If so, how would you assess the

effectiveness of this approach, and what rec-

ommendations would you make in order to

strengthen the benefits of using social media

tools? If not, how would you advise your orga-

nization in developing a social media strategy,

balancing the benefits and risks?

Here is a short summary of the key points that we would like you to take from this chapter,

in relation to each of the learning outcomes:

Chapter 7 Change Communication Strategies 243

Understand how language, gender, power, and emotion can affect the change commu-

nication process.

The use of language, gender and power differences, and emotional responses can all

have an effect on the success of the communication process. Men and women can

communicate in different ways. Women emphasize doubts and uncertainties, and men

display confidence and minimize concerns. Women ask more questions, which men

can mistakenly interpret as a comparative lack of knowledge. Power differences are

also a barrier to effective communication, as the powerful may not wish to disclose

information that could weaken their power, and the less powerful may not disclose

information that could be damaging to them. Change managers must be alert to the

significance of emotional responses to change proposals, and we identified a number of

strategies for strengthening emotional commitment to change.

Understand the power of language in influencing responses to change proposals.

We explored the proposition that the management of change involves the management

of conversations. For the change manager, even informal conversations are powerful

tools for exchanging meaning and influencing perceptions of change proposals, as

well as ways of assessing responses. Choice of language in such conversations is

therefore critical. That language may need to reflect the stage of the change process;

we discussed different conversations for initiating, understanding, performing, and

finally closing change initiatives. There is clearly a need for coherence and for shared

understanding in order to avoid confusion. It is also appropriate, we argued, to align

choice of language and imagery with the type of change that is proposed, once again in

the interests of avoiding “mixed signals.”

Explain and assess appropriate strategies for communicating change.

We addressed a number of key practical questions.

Is it possible to communicate too much? Probably not, as long as information over-

load is avoided, and the communication process is two-way, capturing and exploring

concerns and ideas as well as transmitting information.

Is it more important to get the word out, or to get buy-in? Both are important; but

without buy-in, the chances of change failure are increased.

Which strategies are more effective than others? A communication strategy of

“underscore and explore,” which involves a genuine dialogue with those involved,

is the most effective approach. Two strategies in particular, “spray and pray” and

“withhold and uphold,” are likely to be less effective because the communication is

one-way, and the staff who are going to be affected have no opportunity to comment

or discuss.

Who should be responsible for communicating the change? The “obvious” answer,

the chief executive, may not always be the correct answer. This indeed may not be the

right question, which is concerned with how to manage the conversation between those

who lead the change and those who will have to implement it. The role of opinion lead-

ers in the organization may be key, whether these are senior staff or first-line supervi-

sors, or dedicated transition teams.

LO 7.2

LO 7.3

LO 7.4

244 Chapter 7 Change Communication Strategies

Understand how successful communication processes vary with the type and stage of

organizational change.

Communication should be tailored to the type of change. Widespread face-to-face com-

munication is effective with developmental changes. However, task-focused transitions

and post-crisis turnarounds may need to be driven with formal top-down communi-

cation. Charismatic transformations also require top-down communication, but with a

more personalized approach, allowing dialogue. The “communication escalator” also

suggests that the degree of employee involvement, and the range of communication

media used, should reflect the degree of change: significant change calls for a wider

range of communication and a high degree of staff involvement.

Communication and leadership style should also be tailored to the stage of the change

process: at the planning stage, a combination of logical and inspirational styles; at the

enabling stage, a combination of logical, inspirational, and supportive styles; at the

launch stage, a combination of logical and commanding styles; at the catalyzing stage,

inspirational and supportive styles; at the maintenance stage, inspirational and support-

ive styles. One change manager may not have all of the skills and the behavioral flexi-

bility required, reinforcing the importance of building a capable change team.

Assess the utility of a range of different change communication channels, including

applications of social media.

Communication media vary in terms of “information richness,” which involves han-

dling many items of information simultaneously, rapid feedback, and personal focus.

Face-to-face communications are information rich; reports and flyers are lean. Infor-

mation-rich media are more appropriate when dealing with complex nonroutine issues.

Lean media are more appropriate for simple routine matters. Social media based on

mobile technologies are information rich, allowing two-way communication and

encouraging information sharing, networking, and collaboration. Social media thus

have the potential to transform organizational change communication. However, most

organizations have been slow to exploit these technologies for internal communication;

most applications address external audiences. Employees may be more sophisticated in

their use of these new technologies in their private lives than employers with regard to

organizational applications. The development of enterprise-specific networks may help

to realize the potential of these technologies.

LO 7.5

LO 7.6

Allen-Greil, D., Edwards, S., Ludden, J., and Johnson, E. 2011. Social media and

organizational change. Paper presented at Museums and the Web 2011 Conference,

Philadelphia, April 6–9, http://museumsandtheweb.com/mw2011/papers/social_media_

and_organizational_change, accessed February 5, 2015.

Bulkeley, W. M. 2004. IBM documents give rare look at sensitive plans on

“offshoring.” The Wall Street Journal, January 19. http://www.wsj.com/articles/

SB107438649533319800 (accessed March 9, 2015).

Cannell, M. 2010. Employee communication factsheet. London: Chartered Institute of

Personnel and Development.

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Christensen, L. T., and Cornelissen, J. 2011. Bridging corporate and organizational

communication: Review, development, and a look to the future. Management

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Chui, M., Manyika, J., Bughin, J., Dobbs, R., Roxburgh, C., Sarrazin, H., Sands, G., and

Westergren, M. 2012. The social economy: Unlocking value and productivity through

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249

8Chapter
Resistance to Change

Learning objectives

On completion of this chapter you should be able to:

LO 8.1 Explain the benefits of resistance to change, as well as the disadvantages.

LO 8.2 Understand the causes of resistance to change.

LO 8.3 Identify the symptoms of resistance to change.

LO 8.4 Recognize and diagnose middle management resistance to change, which

could be a blockage, or could be highly beneficial.

LO 8.5 Understand and apply different approaches to managing resistance.

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250 Chapter 8 Resistance to Change

WIIFM, WAMI, and the Dimensions of Resistance

WIIFM stands for “What’s In It For Me?” (sometimes WIIFT: “What’s In It For Them?”).

WAMI stands for “What’s Against My Interests?” If “it” is an organizational change, and

if there is nothing in it for me but frustration and grief, then I will resist. If it is not in my

interests, then I will resist. Convince me of the benefits, and persuade me that it is in my

interests, and then you have my support. Managing resistance to change can be seen as no

more complex than that. Is it really so simple?

Resistance offers a plausible explanation for the apparently high failure rate of organi-

zational change. Many commentators see resistance to change as a problem to be solved, a

barrier to overcome, an enemy to defeat. Resistance stimulates strong emotions and strong

language. Foote (2001) describes resistance as “one of the nastiest, most debilitating work-

place cancers,” claiming that “there isn’t a more potent, paradoxical or equal- opportunity

killer of progress and good intentions.” Geisler (2001) refers to “bottom-feeders” who

complain about and resist change because of its potential to remove the “waste” that

they need to survive: infighting, bureaucracy, autocratic posturing. Maurer (2010, p. 23)

observes, “The mere mention of the word unleashes a torrent of negative thoughts—fear,

opposition, conflict, hassles, pain, annoyance, anger, suspicion.” This kind of language

encourages an adversarial approach to resistance, which can make the problem worse.

However, research and experience show that resistance takes many forms, and it can be

constructive as well as damaging.

Change can fail for many other reasons, even when widely supported. Attributing prob-

lems to resistance can obscure the ways in which management practices contribute to

change implementation problems. We thus have to explore the various dimensions of what

is commonly termed resistance, and ask whether this term, with its negative connotations,

is still a helpful one.

Following this introduction, the chapter has five sections. First, we explore the argu-

ment that resistance to change, when seen and managed as a resource rather than as a

problem, can often be helpful and beneficial. Second, we will explore the causes of resis-

tance. Causes can include resistance to the substance or content of change, and resis-

tance to the way in which changes are implemented, or the change process. Third, we

then consider the signs or symptoms of resistance, some of which are public and easily

recognizable, and some of which are covert and harder to detect. Fourth, we examine

the stereotype of middle managers as “change blockers.” The evidence suggests that

this popular view is often wrong. Middle managers can subvert changes proposed by

senior executives when they believe that those proposals are ill advised, and will not be

effective.

Finally, as resistance can be a difficulty in some circumstances, we consider strategies

for avoiding and if necessary managing resistance to change. The concepts of individual

readiness for change and stakeholder management are relevant to this discussion, but as

those topics were covered in chapter 4, they will not be revisited in detail in this chapter.

Table 8.1 provides a brief reminder.

Chapter 8 Resistance to Change 251

Five Components of Individual
Readiness

Five Components of Stakeholder
Management

Belief that change is necessary

Belief that change is an appropriate response

Perceived individual capability to implement

Belief that resources will be provided

Personal evaluation of costs and benefits

Identify all stakeholders

Establish what they expect to gain or lose

Check their “track record” on response to
change

Use planned benefits to strengthen support

Address concerns by reducing losses

LO 8.1 Benefits

We come now to a most important point. Resistance to change is not only normal but in some

ways even desirable. An organization totally devoid of resistance to change would fly apart at

the seams. It must be ambivalent about radical technical innovation. It must both seek it out and

resist it. Because of commitments to existing technology and to forms of social organization asso-

ciated with it, management must act against the eager acceptance of new technical ideas, even

good ones. Otherwise, the organization would be perpetually and fruitlessly shifting gears.

(Schön, 1963, p. 82)

Is resistance to change a “natural” human response? If that were true, then we would

never become bored with our jobs or look for promotion and more challenging work. If

that were true, then manufacturers, from Apple to Ford, would have problems bringing

new products to market. Does resistance to change strengthen with age? If that were

true, then we would not see retirees set up new businesses, build “portfolio” or “encore”

careers, and develop other new skills and interests. Florian Kunze et al. (2013) present

evidence showing that resistance to change decreases with age. Resistance is a topic

shrouded in myths. Another of these myths is that resistance is a problem.

Resistance is not inevitable. As noted earlier, change is unlikely to be challenged if

those who are going to be affected believe that they will benefit in some way—if “WIIFT”

is clear and positive. Outcomes that can encourage support for change thus include

( Kirkpatrick, 2001):

Security Increased demand for particular skills; stronger organizational

competitive position and improved job security

Money Higher remuneration

Authority Promotion, power, more discretion in decision making

Status Prestige assignments with matching job titles, a bigger office

Responsibility Increased job scope, visibility

Better conditions Improved physical environment, new equipment

Self-satisfaction Greater sense of challenge and achievement

Personal contacts More chances to meet and work with influential people

Less time and effort Operational efficiencies

TABLE 8.1
Individual

Readiness and

Stakeholder

Analysis—a

Reminder

252 Chapter 8 Resistance to Change

Resistance, when it does occur, is not necessarily damaging. Donald Schön (1963)

argued that resistance was not just desirable, but necessary, in order to prevent the imple-

mentation of weak ideas and ineffective proposals. Unity and consensus are often viewed

as desirable, while conflict and disagreement are bad. However, in some settings, a diver-

gence of opinions can be constructive if this exposes the dimensions of an argument or the

full range of consequences—positive and negative—of a change proposal. Several other

commentators have thus argued for the need to recognize the utility of resistance (Waddell

and Sohal, 1998; Mabin, 2001; Atkinson, 2005). Maurer (2010, p. 23) says, “Sometimes

we need to hear the resistance in order to know that our plans are doomed to failure.”

Jeffrey and Laurie Ford (2009) argue that resistance to change provides valuable feed-

back on what is being proposed. Resistance is a resource, even if it sounds like complaints

and arguments. They suggest that there is no point in blaming resisters. Treated as a threat,

they become defensive and uncommunicative, and the resource is no longer available. On

the contrary, it is important to understand resistance, which can often be well founded.

Resistance is not always irrational or self-serving. Ford and Ford (2009, p. 100) argue,

“Even difficult people can provide valuable input when you treat their communication

with respect and are willing to reconsider some aspects of the change you’re initiating.”

What to you as the change manager is an annoying complaint may be a genuine expres-

sion of concern from the person who raised it. Resisters believe that they are being helpful

and constructive, while you believe that they are being negative and disruptive.

Furthermore, different people interpret change, and therefore respond to change, in dif-

ferent ways, at different times, depending on their current role and past experience (Ford

et al., 2002). We may resist your current proposals because your previous initiative did not

work. We may find some parts of your proposals exciting and welcome, while being horri-

fied by some of your other change ideas.

Ford and Ford (2009) identify five ways in which resistance can be used productively:

1. Encourage dialogue Keep the conversation alive—even with complaints—to

increase awareness of the change ideas and allow those

affected to think through the implications.

2. Clarify the purpose Those affected need to understand why their roles have

to change.

3. Consider new possibilities Assess and if appropriate accept the ideas of those who

are resisting; the most outspoken are often closest to the

operations affected and care about getting it right.

4. Listen to the voices Encourage participation and engagement; people want

to be heard, and noting concerns can generate novel and

valuable options.

5. Deal with the past Current responses to change can be based on previous

failures in which today’s managers were not involved; it

may be necessary to resolve any “leftover” issues before

going ahead with new plans.

For some change managers, adopting a “welcoming” approach to resistance to change

may sound unrealistic, and personally challenging. However, Todd Jick and Maury Peiperl

(2010) suggest that change managers should “rethink” the concept of resistance, recogniz-

ing this as a natural part of the process of adapting to change and thus as a potential source

Chapter 8 Resistance to Change 253

of energy and feedback. Rick Maurer (2010) also argues that the power of resistance can

be used to build support for change. Treating resisters with respect strengthens relation-

ships and improves the chances of success. He also advises the change manager to relax,

to resist the temptation to “push back” when attacked, to learn from the resistance, to look

for common ground. Although advocating this perspective, Maurer (2010) also accepts

that there are situations where focusing attention on dissent can be counterproductive. This

can occur, for example, where challenges to the change proposals are not well informed,

or where change is necessary for organizational survival.

For the benefits to be gained, resistance must be active. But resistance can sometimes be

passive, and involve silence, and withholding cooperation and information. Encouraging

complaints and challenges may sound perverse, but by encouraging the dialogue, active

resistance can be stimulated, and the feedback and ideas can then be used constructively.

This section has focused on the positive dimensions of resistance. We also have to rec-

ognize the damage that resistance can cause, to an organization, its members, and some-

times even to those who are resisting. Job security, for example, may be jeopardized by

a failure to introduce new systems, procedures, practices, and technology. It is important,

therefore, to adopt a balanced perspective on this topic, recognizing the negative as well as

the positive implications.

LO 8.2 Causes

The American composer, John Cage, once said: “I can’t understand why people are frightened

of new ideas. I’m frightened of the old ones”

(http://www.quotationspage.com)

Resistance can have seriously damaging organizational and individual consequences,

leading to reduced performance and competitiveness, failure to acquire new capabilities,

and job loss. Why then do people resist change? There are probably as many answers

to that question as there are members of organizations faced with change. Broadly, the

reasons fall into three categories concerning the content or substance of the change, the

process through which change is implemented, and the uncertainty that change can gen-

erate (Hughes, 2010). We will explore in this section the common causes of resistance.

Be aware that this is not an exhaustive list. It is important, however, for the change man-

ager to diagnose the cause—or causes—of resistance before taking action.

Innate Dislike of Change
Some of us just do not like change. It is common to hear the complaint that the main imped-

iment that managers face in introducing change is that people dislike change and will resist

it. We have already argued, however, that this view is oversimplified and does not explain

why people sometimes welcome and even seek change. It is not wise to assume that a dis-

like of change is necessarily an innate human characteristic that we all share. As individu-

als, we vary in our approach or “disposition” to change. Some of us prefer routine, become

tense and anxious when confronted with change, do not like to change our plans, and are

more rigid in our thinking. Those who have high dispositional resistance toward change are

therefore less likely to accept change in general and are more likely to resist when change

is imposed. But some of us dislike routine, are animated by new ideas and plans, and are

comfortable with changing our minds when presented with fresh information.

254 Chapter 8 Resistance to Change

While our individual disposition toward change may be a relatively stable personality

trait, context is also important. Shaul Oreg (2003; 2006), for example, argues that trust

in management and having the right amount of information can positively influence

dispositions toward change. Information overload, however, can reinforce negative

perceptions and strengthen resistance. Another significant feature of the context

concerns the substance or content of the changes. You may find some ideas attractive

even if you have high dispositional resistance to change in general. We therefore cannot

automatically predict your reaction to the next change based on your response to current

proposals.

For most of us, therefore, our responses are more likely to depend on the organizational

context and the characteristics of the proposed changes than on our personality. If correct,

this conclusion has profound practical implications for the change manager. We cannot

manage your personality. We can, however, change our proposals, and we can manage or

adjust aspects of the organizational context. The change manager has to accept, however,

that some individuals, in some contexts, may have extremely high dispositional resistance

to change that cannot easily be altered.

Low Tolerance of Uncertainty
Do you enjoy being taken by surprise? You look forward to the “mystery tour,” destina-

tion unknown. Or do you need to know precisely what will happen next? You want to

know all the journey details in advance. There are individual differences in our toler-

ance of uncertainty and ambiguity. If you are not confident that you have the skills and

capabilities that the proposed changes will demand, then the uncertainty will be magni-

fied. Uncertainty can of course be reduced, and support strengthened, by making clear

the strategic intent of the change, and the actions that are expected of those involved.

The key point here is that lack of support for change may not be due to overt resistance,

or apathy, but to uncertainty and ambiguity, based on lack of information—a lack that

can be remedied.

This Is Not in My Interests
We noted earlier that resistance can be based on the perception that change will work

against the interests of those who will be affected. The term “interests” can cover a

range of factors: authority, status, rewards (including remuneration), opportunities to

apply expertise, membership of friendship networks, autonomy, security. People find

it easier to support changes when their interests are not threatened, and they may resist

when they perceive that their interests will be damaged.

The key term here is “perception.” Seen from a different standpoint (long-term job

security, for example), proposed changes may support the interests of those involved,

whose focus on short-term implications (loss of currently valued skills, for example) may

take priority. It is the perceptions of those who are involved that determine their responses

to change, and not the perceptions of others. Perceptions are difficult to manage and to

change, but the quality and volume of available information, and the roles of opinion lead-

ers and networks, can be significant in this regard.

Chapter 8 Resistance to Change 255

Fear That YouTube Will Change

Managers need to consider the way in which a pro-

posed change—or even just the belief that a change

is about to be made—can produce a reaction from

stakeholders outside the organization. Managing

the expectations of the external constituency, such

as customers, can be as important as handling the

concerns of those inside the organization.

In 2014, when Google appointed Susan Wojcicki

as its senior vice president in charge of YouTube,

she received a lot of correspondence from pas-

sionate fans who were worried that she would

make changes that would weaken the YouTube

experience that they currently enjoyed. One user

expressed her concern very succinctly: “So please,

I’m begging you, please, please, please, don’t f*** it

up” (La Porte, 2014, p. 60).

Attachment to Organization Culture and Identity
The “image” of the organization as a cultural system is a popular one. A cultural sys-

tem includes values, artifacts, and beliefs concerning “the way we do things around

here.” Resistance to change can thus be influenced by the degree of attachment to the

existing culture. Rhonda Reger and colleagues (1994, p. 33–34) argue that members of

an organization interpret change proposals through their existing mental models:

A particularly powerful mental model is the set of beliefs members hold about the organi-

zation’s identity. Identity beliefs are critical to consider when implementing fundamental

change because organizational identity is what individuals believe is central, distinctive, and

enduring about their organization. These beliefs are especially resistant to change because

they are embedded within members’ most basic assumptions about the organization’s

character.

Reger et al. (1994) also argue that two mental barriers can undermine the acceptance

of change initiatives that are seen as inconsistent with the current organizational identity.

First, passive resistance (apathy, anxiety) can occur when the meaning and purpose of the

change have not been made clear. Second, active resistance can be triggered when change

is seen to be in direct conflict with key aspects of the organization’s identity. Change man-

agers cannot assume that other members of the organization share their mental models

concerning the need for change. Strong resistance may therefore be triggered by change

proposals that are perceived as threatening basic assumptions. One strategy for the change

manager, therefore, is to avoid changes that carry such threats. A second approach con-

cerns presenting proposals in a way that minimizes challenges to the current order. Third,

it may be necessary to develop an overwhelmingly compelling case for fundamental cul-

ture change, if threats to current assumptions cannot be minimized or avoided.

Perceived Breach of Psychological Contract
Our understanding of the nature of the reciprocal relationship that we have with an

employer has been called the “psychological contract” (Rousseau, 1995; Coyle- Shapiro

and Shore, 2007). A breach or violation of this contract occurs when employees believe

that the employer is no longer honoring their side of the deal. As the label suggests, the

256 Chapter 8 Resistance to Change

psychological contract is in part defined by a formal written agreement (job descrip-

tion, terms and conditions, performance appraisal), and also in part by informal social

and psychological dimensions. The informal aspects are not expressed in writing.

These concern expectations regarding organizational values, trust, loyalty, and recog-

nition—features that can have just as significant an effect on employee perceptions as

formal written terms. Perceived breaches of the psychological contract can thus lower

performance and reduce adaptability to change (McDermott, Conway, et al., 2013).

Research has explored relationships between psychological contract and responses to

change. From their study in a textiles company in Scotland, Judy Pate and colleagues

(2000) found a link between perceived breaches of psychological contracts and resis-

tance to strategic and organizational change. They conclude, “When organizations fail

to respect employee interests, the low-trust relationships and levels of cynicism that

invariably result severely constrain the potential for effective strategic change” (p. 481).

Sjoerd van den Heuvel and René Schalk (2009, p. 283), in a study of Dutch organiza-

tions, conclude, “The more the organization had fulfilled its promises in the employ-

ee’s perception, the less the employee resisted organizational change. By maintaining

good psychological contracts with employees, organizations can build trust, which could

prevent resistance to change.”

Lack of Conviction That Change Is Necessary
The work of the change manager is more straightforward if there is widespread belief

across the organization that change is needed. However, what seems obvious to some

(“We have to change”) is not necessarily viewed in the same way by others (“What’s

the problem?”). There are many reasons for complacency: a past track record of suc-

cess, the absence of a visible crisis, inconsistent top management comments. We react

negatively to change when we feel that there is no need for it.

Lack of Clarity as to What Is Expected
Sometimes proposed changes, and particularly strategic changes, are not accompanied

by clear information about the implications for those who will be affected. How will

my role change? What new knowledge, skills, and behaviors will be required? Where

questions such as those are not answered, there is a heightened probability of resistance

and lack of support from those who feel that they have not been adequately informed.

In other words, “A brilliant business strategy is of little use unless people understand it

well enough to apply it” (Gadiesh and Gilbert, 2001, p. 74). For the change manager,

the key point is that resistance may not be due to opposition to the changes that have

been proposed. The absence of support may instead be due to a lack of clear under-

standing of what will be involved for those who are going to be affected.

Belief That the Proposed Changes Are Inappropriate
Those affected by a proposed change are likely to form a view that it is either an appro-

priate response to current issues (“We need to do this”) or a bad idea (“Whose crazy

plan is this?”; “It’s a fad”). This view is likely to influence readiness for change. As

change advocate and manager, it is easy to see those who support the change as astute

and to criticize those who do not as blinkered. The latter are then categorized as “resis-

tant to change.” However, this is not necessarily an accurate label, because resistance

Chapter 8 Resistance to Change 257

to this change does not necessarily mean resistance to all change. We should also con-

sider that, in some cases, the resisters may be right; the changes may have been poorly

thought through and inadequately planned. Here is another situation where resistance

is valuable.

Change can also be seen as inappropriate due to fundamental differences in “vision,”

which is achieved through the organization’s strategy. Change, as a key component in

the enactment of strategy, can thus expose widely divergent views of how to achieve that

vision.

Perception That the Timing Is Wrong
The change may be welcome, but the timing may be seen as wrong; “yes, but not now.”

This may be due to change fatigue (see next heading). Or it may be that, if the change

were to be implemented now, it would have a negative impact on, say, customers or

suppliers or employees or joint venture partners. Change the timing, and those undesir-

able outcomes would be avoided.

Excessive Change: The Consequences

In their study of “excessive change,” Inger Stensa-

ker et al. (2002) identified three common conse-

quences: “musical chairs,” “orchestrating without a

conductor,” and “shaky foundations.”

Musical chairs (a reference to the children’s

game) occurs when managers move frequently

between a declining number of positions in a regu-

larly changing structure. Unless carefully managed,

this can have detrimental effects. For example, the

most capable managers are the most likely to leave

because they will be seen as attractive to other

organizations. In addition, the “churn” in positions

leaves fewer managers with a strategic grasp of the

purpose behind all those change initiatives.

Orchestrating without a conductor refers to the

related situation where lower-level employees feel

that they have been abandoned, as middle man-

agers seem incapable of handling the change pro-

cess. Middle managers may be unable to translate

change proposals in a way that makes sense to the

staff who will be affected. Why? Because due to the

constant management restructuring, those middle

managers are not sufficiently familiar with the work

of those employees.

Shaky foundations refers to the resulting sense

of chaos. Staff find themselves in an uncomfortable

limbo between partly abandoned past practices and

partly introduced new practices. Where waves of

change are involved, the new practices are in vari-

ous stages of implementation, from just introduced

to nearly complete.

Too Much Change
Too much change can of course induce “initiative fatigue,” “initiative overload,” and

burnout, especially when new initiatives are launched before the last changes have been

fully embedded. Those suffering from initiative fatigue are likely to feel overworked

and under pressure and are unlikely to welcome further change, regardless of how

desirable it may seem.

Heike Bruch and Joche Menges (2010) argue that intense market pressures have

increased the number and pace of change initiatives, which becomes “the new normal.”

This can lead an organization, they claim, into “the acceleration trap”; the pressure is

258 Chapter 8 Resistance to Change

unrelenting, staff are demotivated, focus is scattered, and customers become confused.

They identify three damaging patterns. Overloading: Staff are asked to do too much and

have neither the time nor the resources to do it. Multiloading: Staff are asked to cover too

many different kinds of activities, reducing the focus on what they do best. Perpetual load-

ing: The organization is operating close to capacity, denying staff any chance to escape or

to “recharge”; “When is the economizing going to come to an end?” Organizations caught

in this acceleration trap are thus likely to encounter more resistance to further change than

organizations that have avoided or escaped from this trap. Escape strategies include halting

the less important work, clarifying strategy, and having a system for prioritizing projects.

At one company, the chief executive cut the number of top-priority goals that managers set

from 10 down to a maximum of 3 “must-win battles,” to focus attention and energy.

Yong-Yeon Ji et al. (2014) support this argument. From their study of 4,900 U.S. orga-

nizations in 18 industries, they conclude that the disruption of employment instability

reduces organizational performance. However, they also found that very low instability

could damage competitiveness; stable organizations are rigid and inflexible. They advise

a “slow and steady” response to external conditions, rather than acting too quickly and

aggressively.

The Cumulative Effects of Other Life Changes
Readiness for change at work is affected by what else is going on in an individual’s life.

Measures of stress, for example, typically include elements from a range of aspects

of one’s life, and not just those associated with employment. As a result, people may

Does Your Organization Have an Acceleration Culture?

Answer “yes” to five or more of these questions and

you may be caught in the acceleration trap:

Are activities started too quickly?

Is it hard to get the most important things done

because too many other activities diffuse focus?

Is ending activities considered a sign of

weakness?

Are projects carried out pro forma because peo-

ple fear ending them publicly?

Is there a tendency to continually drive the orga-

nization to the limits of its capacity?

Is it impossible for employees to see the light at

the end of the tunnel?

Does the company value attendance at work

and meetings more than goal achievement?

Does it value visibly hard effort over tangible

results?

Are employees made to feel guilty if they leave

work early?

Do employees talk a lot about how big their

workload is?

Is “busyness” valued?

Are mangers expected to act as role models by

being involved in multiple projects?

Is “no” a taboo word, even for people who have

already taken on too many projects?

Is there an expectation in the organization that

people must respond to emails within minutes?

Do countless people routinely get copied on

emails because employees are trying to protect

themselves?

In their free time, do employees keep their cell

phones or messaging devices on because they

feel they always need to be reachable?

Source: Bruch, H. and Menges, J.I., “Does your organization have
an acceleration culture?”, Harvard Business Review, No 4, 2010.
Copyright © 2010 Harvard Business School Publishing. All rights
reserved. Harvard Business Publishing is an affiliate of Harvard
Business School.

Chapter 8 Resistance to Change 259

resist organizational change in the belief that the change will add to the burden of pres-

sures that they are already experiencing.

Perceived Ethical Conflict
Sandy Piderit (2000) argues that resistance is multidimensional and can often be moti-

vated by a desire to act ethically. Resistance to change may thus be based on positive

intentions, designed to protect the interests of the organization and its employees. The

belief that some individual or groups will be disadvantaged or unreasonably pressured

by proposed changes could lead to resistance. Piderit (2000) also notes, however, that

resistance in these situations is likely to be covert, if perceived threats to job security

and promotion discourage open expressions of concern.

The Legacy of Past Changes
Past experience is one predictor of responses to current change proposals. As our

experiences shape expectations of the future, resistance may be grounded in previous

bad experiences of change, while support may be strengthened by past successes.

From a sense-making perspective (see chapter 9), we learn “how change works in

this organization,” and use that understanding as a lens through which further change

initiatives are assessed (Gioia and Chitipeddi, 1991). The change manager can thus be

the fortunate beneficiary, or the unfortunate victim, of sense-making experiences in

which they played no part, and of which they may be unaware. The impact on responses

to current change proposals may be more intense where the same organization,

managers, and staff are involved. Sense-making based on personal past experience

is more credible, and more powerful, than the reassurances of today’s change

managers.

Where past experience of change has been bad, cynicism and resistance may be default

responses to fresh initiatives. Stensaker et al. (2002, p. 304) note that BOHICA (Bend

Over, Here It Comes Again) is a response based on learning from experience. Cynicism

can be particularly difficult to deal with because it is usually accompanied by strong emo-

tions such as anger, resentment, and disillusionment.

Managing Change, Managing Memories

1. Begin change initiatives with a systematic inquiry

into organizational members’ memories of past

changes.

2. Do not tell people to leave their past behind.

That is not going to happen. The power and

credibility of past experiences cannot be erased

to order. Attempts to suppress those experiences

may mean that they “go underground,” but

they will remain influential.

3. If past experiences are impediments to change,

their influence will only be challenged if those

involved are directly and fully engaged with

current proposals, in ways that enable them to

learn that the change experience this time can

be different—and positive.

Source: Based on Geigle, 1998.

260 Chapter 8 Resistance to Change

Disagreement with How the Change Is Managed
The idea that resistance to change—that is, to the substance of change—is a natural human

response, diverts attention away from the quality of the change management process. “Over-

coming natural resistance to change,” in some situations, may actually involve “overcoming

natural resistance to poor management,” or “highlighting change management mistakes”

(Dent and Goldberg, 1999a and b). Kahn (1982, p. 416) thus advised:

In considering obstacles to change, we must keep in mind the deceptive nature of our con-

cepts. When we want change, we speak of those who do not as presenting obstacles and

resistance. When we want stability, we speak of perseverance and commitment among those

who share our views. Behavior of people in the two situations might be identical; it is their

stance relative to our own that dictates the choice of language.

In other words, labelling behavior as “resistance to change” may be an example of the

fundamental attribution error—blaming individuals while overlooking the context (Ross,

1977). If those who are managing change can attribute unsatisfactory outcomes to the

behavior (resistance) of others, the spotlight may not then fall on inadequate change man-

agement practices. This “blame game” can also work in the opposite direction, with orga-

nization members attributing change failures to management faults, rather than to their

own behavior (Piderit, 2000).

It is therefore easy to understand how a change manager can be attracted to the propo-

sition that the lack of success of a change program was due to resistance to change. This

explanation shifts attention away from management capabilities and practices and onto

the change recipients. The popular notion that people have a natural resistance to change

also makes this a plausible explanation. As we argued earlier, resistance may be a natural

response to change that has not been adequately considered and planned. If such resis-

tance prompts a review, then it will have been valuable. Mark Hughes (2010) argues that

the term resistance has negative connotations, and is thus misleading and inappropriate.

He suggests that it should now be “retired” in favor of “employee responses” to change,

recognizing the broad spectrum of potential reactions—positive, neutral, and negative—to

organizational change initiatives.

LO 8.3 Symptoms

Despite assertions to the contrary, people aren’t against change—they are against

royal edicts.
(Hamel and Zanini, 2014, p. 2)

How can resistance to change be detected? The answer to this question is not as

straightforward as it might seem, because the symptoms—the signs and clues—can be

difficult to detect, and to interpret. For example, resistance can be overt and visible, but

it can also be covert and hidden. Open criticism and heated debate are of course easier to

detect than whispered private conversations. Given the potential benefits of challenges to

change proposals, overt resistance may be of more value to the organization, to the change

manager, and ultimately to the change process. Resistance is also three-dimensional,

with emotional, cognitive, and behavioral components (Oreg, 2003). In short, the change

manager has to be sensitive to how people feel about change, how they think about it, and

what they intend to do about it (see the sidebar “Merger in Adland”).

Chapter 8 Resistance to Change 261

Kenneth Hultman (1995) draws a useful distinction between active and passive

resistance. Table 8.2 identifies typical active and passive resistance behaviors. This

illustrates the distinction, but these lists are not comprehensive, and the various symptoms

are not necessarily mutually exclusive (ridiculing, and being critical, for example).

Nevertheless, the change manager must be alert to the various ways in which resistance

to change can be demonstrated. Hultman also reminds us that identifying the symptoms

does not explain why people are resisting change, and that it is important to be clear about

symptoms and causes (as in this chapter) and not to confuse one with the other.

TABLE 8.2
Active and Passive Resistance

Symptoms of Active Resistance Symptoms of Passive Resistance

Being critical, finding fault, ridiculing, arguing

Appealing to fear, starting rumors

Using facts selectively, distorting facts

Blaming, accusing, intimidating, threatening

Manipulating, sabotaging

Blocking, undermining

Agreeing in person but not following through

Failing to implement change

Procrastinating, dragging one’s feet

Feigning ignorance

Withholding information, suggestions, support

Standing by and allowing change to fail

Source: Based on Hultman, 1995.

Merger in Adland: Symptoms of Resistance?

When the Australian advertising agencies Mojo and

MDA merged, they decided to locate all staff in the

same building. However, as an interim step, all the

creative staff (copywriters, art directors, produc-

tion) moved into the Mojo offices and management

(“the suits”) went to the MDA offices.

One of the Mojo people required to move was

the finance director, Mike Thorley. Mike was one

of the original Mojo employees and had come to

think of himself more as a partner in the business

than as an employee. However, he was quickly dis-

abused of this notion when, with all the other Mojo

employees, he was given no warning of the merger.

He reacted with shock and anger. To add insult to

injury, he had to move to the MDA offices—which

felt like banishment—where he would report to

MDA’s finance director, who was now in charge of

finance for the merged organization.

The Mojo culture was much less formal than that

of MDA. Mojo staff would often have a few drinks

together after work, sitting around an old white

bench in the office. In an attempt to make Thor-

ley and his Mojo colleagues feel at home, a modern

black laminate bar was installed in the MDA offices.

One morning, Mike Thorley arrived at work with a

chainsaw and cut the bar in two.

Source: Based on Coombs, 1990.

LO 8.4 Managers as Resisters

Most discussions of resistance present managers as advocates of change and cast

employees in the role of resisters. However, resistance is not monopolized by “the man-

aged.” Managers can also resist change, for all the reasons identified earlier, and are

therefore not always passionate advocates. Managers can be considered collectively,

262 Chapter 8 Resistance to Change

as a group, but sometimes differences within management can be significant. Changes

proposed by one department or division may be opposed by another. Changes directed

by top management may not be welcomed by middle managers. In other words manag-

ers, at least as much as any other category of employee, are likely to have within their

ranks a range of opinions concerning proposed changes. Even where there is no ques-

tion as to the dedication of managers to the long-term interests of the organization, it is

normal to find different views as to which initiatives or changes are most appropriate.

The stance of middle managers in particular can have a critical effect on the outcome of

change initiatives because they are often responsible for implementation. It is not unusual

for this role to involve tensions for middle managers, who are likely to be both recipients

of change initiatives from senior management, as well as implementers.

Middle managers have long been stereotyped as change blockers. However, research

has consistently painted a different picture. The positive contributions of middle manage-

ment to innovation and change are now widely recognized, partly due to the work of Bill

Wooldridge and Steven Floyd (1990; Wooldridge et al., 2008). They argue that middle

management involvement in shaping strategy leads to better decisions, higher degrees of

consensus, improved implementation, and better organizational performance. They also

emphasize the coordinating, mediating, interpreting, and negotiating roles of middle

managers, arguing that it is the pattern of influence of middle managers that affects per-

formance. The mediating role, combining access to top management with knowledge of

frontline operational capabilities, gives middle management a valuable perspective, where

appropriate acting as a counter to the strategic view of the top executive team.

With regard to blocking change, Inger Boyett and Graeme Currie (2004) report how

middle managers in an Irish telecommunications firm subverted the intent of senior

management by designing an alternative strategy that was more profitable. Julia Balo-

gun (2008) argues that, even when middle managers are “change recipients,” the way

in which directives are interpreted and implemented may differ from—and significantly

Resistance to Change at Bloomberg

Earlier in this chapter, a range of beliefs, percep-

tions, and attitudes were identified as having the

potential to be the underlying causes of resistance

to change. Even the most senior of managers in

an organization are not exempt from holding such

beliefs, which may manifest as resistance.

By 2012, Bloomberg had become the world’s

largest financial data provider. However, after three

decades of growth, it was now facing a flattening

growth rate, leading to what business journalists

Peter Elkind and Marty Jones (2013, p. 130) called

“a traumatic identity crisis.”

Bloomberg’s success had been built so much on

one product—the service that provided customers

with financial data and which generated 85 per-

cent of its revenue—that significant resistance arose

within the ranks of senior management whenever

a new direction was suggested. One such instance

occurred when CEO Dan Doctoroff attempted to

“diversify the business and impose professional

order on a chaotic enterprise where screaming

and infighting have long passed for management”

(Elkind and Jones, 2013, p. 131). Founder Michael

Bloomberg, due to return in January 2014 after

being mayor of New York City from 2002 to 2013,

would be returning to a situation of “an internal war

raging between old and new factions” (Elkind and

Jones, 2013, p. 130).

Chapter 8 Resistance to Change 263

improve upon—senior management intentions. From their study of change in the Irish

health service, Edel Conway and Kathy Monks (2011) describe how ambivalent middle

managers who resisted top-down directives played a vital role by championing and imple-

menting their own initiatives. Those initiatives assisted in dismantling outdated structures

and processes, and provided solutions to the problems that those directives had identified

in the first place. Aoife McDermott et al. (2013) show how middle managers and other

change recipients often tailor, add to, and adapt top-down change directives so that they

will work in particular local contexts.

The negative middle management stereotype thus has to be adjusted in two respects.

First, middle managers are likely to attempt to block or undermine senior management

directives if they believe that those proposals will not work well. This is a reasonable

“self-defense” position because, were those senior management plans to be put in place

and then fail, middle management would probably be blamed for mishandling the imple-

mentation. Second, where middle managers have better ideas and plans of their own,

they are likely to attempt to implement those instead of senior management proposals.

Employee resistance is more likely to arise at the point of implementation, by which stage

it may be too late. Management resistance, however, is more likely to occur at the concep-

tualization and planning stage, when options still remain open. We are thus faced with yet

more examples of “positive resistance,” where middle management “change blocking” is

not as disruptive as the label implies, but can lead to improved organizational outcomes.

LO 8.5 Managing Resistance

How widespread is the problem of resistance to change? In 2010, the consulting com-

pany McKinsey surveyed 1,890 executives who had recent experience of organiza-

tional redesign. One third of those who replied said that “employees actively resisted

change or became demoralized,” and a quarter said that “leaders resisted, undermined,

or changed the plans for reorganization” (Ghislanzoni et al., 2010, p. 6). The problem

most frequently cited as harmful in those organizations where redesign had been suc-

cessful concerned senior managers undermining the change. One explanation is that

“redesign that fundamentally changes the way the organization works frequently upsets

those who rose to the top in the old system” (Ghislanzoni et al., 2010, p. 7).

Does it matter if some people resist a particular change? Not necessarily. Peter Senge

(1990) argues that dispositions toward change vary on a continuum from commitment,

through varying degrees of compliance, to noncompliance, and apathy (table 8.3). From a

change management perspective, it is useful to understand the dispositions of those who

are going to be affected. It is also important to be aware that dispositions can change, as

understanding of the implications develops.

It may be reassuring to have everyone fully committed to an organizational change.

Senge argues, however, that this is not necessary. Rather than attempt to persuade every-

one to “commit,” it can be more useful to analyze the level of support required from each

of those individuals and groups who are involved, and to direct change management atten-

tion and energies to winning that support. With a critical mass of support in place, the

noncompliance or apathy of others may have little or no impact.

264 Chapter 8 Resistance to Change

Despite what we have said regarding the benefits, and the misleading nature of the label,

resistance to change can be self-interested, deliberately disruptive, badly informed—and a

problem for the change manager. How can such resistance be managed effectively? Given

what we know about the many possible causes of resistance, there is no “one best way” to

handle this situation. We will therefore explore three approaches to this task, suggesting

that these should be seen as complementary rather than as competing. The first concerns

allowing those who will be affected by change to recognize and to adjust to the implica-

tions in their own time; in short, “let nature take its course.” The second concerns develop-

ing “attraction strategies,” which seek to overcome or avoid resistance before it develops.

The third involves a “contingency approach” to managing resistance, choosing and using

methods that are appropriate to the context.

Let Nature Take Its Course
Individual reactions to change typically involve working through a series of natural

psychological stages. This progression is known as the coping cycle, and models of

this process are often based on the work of Elizabeth Kübler-Ross (1969), who studied

human responses to traumatic events such as the death of a close relative. The appli-

cation of her work to change management is based on the assumption that, for at least

some people, major organizational and career changes can also be very traumatic.

Under those conditions, resistance to change is predictable. Cynthia Scott and Dennis

Jaffe (2006), for example, describe a coping cycle with four stages:

TABLE 8.3
The

Commitment-

Compliance

Continuum

Disposition Response to Change

Commitment Want change to happen and will work to make it happen
Willing to create whatever structures, systems, and frameworks
are necessary for it to work

Enrollment Want the change to happen and will devote time and energy
to making it happen within given frameworks
Act within the spirit of the framework

Genuine compliance See the virtue in what is proposed, do what is asked of them,
and think proactively about what is needed
Act within the letter of the framework

Formal compliance Can describe the benefits of what is proposed and are not hos-
tile to them—they do what they are asked and no more
Stick to the letter of the framework

Grudging compliance Do not accept that there are benefits to what is proposed and
do not go along with it, but do enough of what is asked of
them not to jeopardize their position
Interpret the letter of the framework

Noncompliance Do not accept that there are benefits and have nothing to lose by
opposing the proposition, so will not do what is asked of them
Work outside the framework

Apathy Neither support nor oppose the proposal, just serving time
Don’t care about the framework

Source: Based on Senge, 1990, pp. 204–5.

Chapter 8 Resistance to Change 265

Denial This involves a refusal to recognize the situation; “this can’t be happen-

ing,” “it will all blow over.” The person is not receptive to new informa-

tion and refuses to believe that he or she needs to behave differently, or

is prepared to make only minor adjustments.

Resistance This stage begins with the recognition that the situation is real; the

past is mourned, and stress may increase; active and passive forms of

resistance may be demonstrated. This can be seen as a positive stage,

as the individual lets go of the past and becomes more confident in his

or her ability to deal with the future.

Exploration This involves reenergizing and a preparedness to explore the possibili-

ties of the new situation.

Commitment The individual finally focuses attention on new courses of action.

This is an “ideal” picture of the coping cycle. There are individual differences in how

this cycle is experienced. Different people work through these stages at different paces,

with some moving more quickly while others become “stuck.” The organizational context

may also affect progress, through sharing experience with others (or not) and encountering

fresh information.

If individual responses conform broadly to this pattern, then one approach to managing

resistance is to step back, to monitor what is happening, and to let nature take its natural

and necessary course. However, if key individuals do become “stuck,” say at the resistance

stage, then doing nothing may be unwise, and some form of intervention may be helpful.

Table 8.4, “Individual Resistance and Management Responses,” offers a guide to dealing

with different expressions of resistance.

TABLE 8.4
Individual Resistance and Management Responses

The Person Says … Comment Your Response …

I don’t want to
(“the block”)

An authentic response, unambig-
uous, and easy to handle

Why? What’s your concern?

Tell me exactly what you want
me to do
(“the rollover”)

Ambiguous—may be a genuine
request for information, or a form
of passive resistance (if you don’t
tell me, I won’t be responsible for
the outcomes)

Tell me what you need to know.

I’ll get on it first thing next week
(“the stall”)

May reflect lack of awareness of
urgency, or indicate a desire to
avoid complying

Is there anything serious that
would prevent you from starting
tomorrow?

Wow, what a great deal!
(“the reverse”)

May be genuine, but resisters will
say this to keep you happy with
no intention of supporting

I am pleased that you feel this
way. What exactly can I count on
you to deliver, and when?

I think it would be better if this
were implemented first in X division
(“the sidestep”)

Could be correct, but resisters
use this to shift the pressure to
change onto somebody else

I understand your concern, but
we have other plans for X. What I
specifically want you to do is this.

(Continues)

266 Chapter 8 Resistance to Change

X isn’t going to like this
(“the projected threat”)

Implies the threat that someone
important will not be happy
(could be true)

X has been part of this process
and is fully supportive.
OR
I’ll be speaking to X about this,
but at the moment I’m more
interested in your views.

You owe me one
(“the press”)

Involves asking to be exempt as
reciprocity for a past favor

I haven’t forgotten that, but I
need your support right now.

See what you’re making me do
(“the guilt trip”)

An attempt to deflect attention
by focusing on the change man-
ager’s actions

I am sorry that you have a prob-
lem, and we can discuss how to
help, but it is important for this
change to go ahead.

But we’ve always done it the
other way
(“the tradition”)

Traditions should only be main-
tained if they still work; but
old ways often feel safer, less
threatening

The other way has served us well
for a long time, but things have
changed. What could we do to
incorporate the best of our tradi-
tional approach?

Source: Based on Karp (1996).

Attraction Strategies
From their work with healthcare professionals in U.S. hospitals, Paul Plsek and Charles

Kilo (1999, p. 40) conclude, “Change is not so much about resistance, as it is about

creating attraction.” What is often described as “resistance,” they note, is actually

“attraction” to aspects of the current system. The change manager’s task is to find new

attractors or to use effectively those that already exist.

Find the Attractor

Physician leader Roger Resar, MD, tells of an office

assistant who was resistant to a proposed change

that would offer same-day appointments to patients

and dramatically reduce the booking of future

appointments. The assistant was attracted to the

comfort of the existing scheduling system, chaotic

though it was, because she understood it so well.

“Rather than simply labelling her a ‘resister,’

Resar engaged her in a friendly conversation about

the most appealing and unappealing aspects of her

job. One prominent dislike was having to call 30 or

more patients to reschedule appointments when the

doctor needed to be away. When Resar pointed out

that the open access system would virtually elimi-

nate the need for this activity, the assistant became

actively attracted to the new idea—the same idea

that she was seen as resisting just moments before.

The proposed change was now associated with

the comfort attractor and the resistance vanished”

(Plsek and Kilo, 1999, p. 41). Martin Lippert, chief

executive of the Danish telecommunications com-

pany TDC, describes how middle management

resistance to the introduction of “lean manage-

ment” was addressed:

“It was a big change for them. Before, middle

managers spent only about 10 or 15 percent of their

time on real leadership—performance management,

coaching, finding out what’s going on in their organi-

zation. Instead, almost all of their time was consumed

by projects, mostly to fix problems. That’s a very inef-

ficient way of working. We needed to reverse those

numbers so that managers could spend 80 percent

TABLE 8.4 (Continued)

Chapter 8 Resistance to Change 267

To identify appropriate attractors, change managers must have a good understanding of

the issues and concerns that are important to those whose behavior they want to change—

and those issues may differ from those of the change manager. Close relationships are

therefore important: “Attractors are easier to create when working together in cooperative,

positive relationships of trust” (Plsek and Kilo, 1999, p. 42). The focus should lie with

system changes and improvements, rather than with changing the behavior of individuals

in an existing system (see sidebar, “Find the Attractor”). Questions that can be helpful in

identifying the attractors in a particular situation include:

• How will this change benefit individual staff, the team, customers/clients?

• How will current problems and frustrations be addressed?

• How does this relate to the interests and priorities of staff?

• How will those involved gain recognition for their efforts?

• How will performance be improved?

• How could efficiency gains be used to make further improvements?

W. Chan Kim and Renée Mauborgne (2003, p. 62) also claim that “once the beliefs

and energies of a critical mass of people are engaged, conversion to a new idea will spread

like an epidemic, bringing about fundamental change very quickly.” In other words, that

critical mass forms a “tipping point,” beyond which change can be straightforward and

rapid. They further note that:

The theory suggests that such a movement can be unleashed only by agents who make unfor-

gettable and unarguable calls for change, who concentrate their resources on what really

matters, who mobilize the commitment of the organization’s key players, and who succeed in

silencing the most vocal naysayers.

Kim and Mauborgne (2003) illustrate their theory using the experience of Bill Bratton, an

American police chief well known for his achievements in “turning around” failing or prob-

lem forces, such as in Boston and New York. One of the main hurdles to overcome, they

argue, is motivational. This concerns establishing the desire to implement change, as well

as making clear the need. One of the most powerful strategies that Bratton used to motivate

change involved targeting the small number of key influencers in the organization. In the

New York Police Department, that meant the city’s 76 precinct commanders, who were each

responsible for up to 400 staff. The key influencers are people with power, based on extensive

networks inside and outside the organization, and on their influencing skills. Once the key

influencers become attracted to the change program, they complete the task of persuading and

motivating others, freeing the change manager to focus on other issues.

Attraction strategies suggest, therefore, that resistance can be avoided if the change

manager is able to design and present proposals in ways that are appealing and compelling

of their time being managers and leaders. Some of

the managers were truly unable or unwilling to make

the change. But eventually most of them saw that

what we were providing was a set of techniques that

they could adapt as they needed. In working together

with the front line and senior leadership to design the

transformation in their teams, the managers gradu-

ally came to recognize how the whole system of lean

management could help them accomplish more. It

took time, of course, but once they did, we saw more

involvement from them than ever before” (McKinsey

& Company, 2014, p. 157).

268 Chapter 8 Resistance to Change

to those who will be involved. We will meet this argument again, in a different form, in

chapter 10. One way in which to ensure that change is attractive is to involve those who

will be directly affected in deciding what and how to change in the first place.

Contingency Approaches
There is no “one best way” to manage resistance. As suggested in the last section,

action to deal with resistance should be based on a diagnosis of the cause or causes;

people may resist change for more than one reason. Those resisting a particular change

may do so for different reasons; different stakeholders thus have to be managed differ-

ently. Allies and supporters need to be kept on your side. Opponents need to be con-

verted or neutralized. These observations point to the need for a contingency approach,

with actions tailored to the circumstances and the context.

One of the most widely cited contingency approaches to managing resistance was

developed by John Kotter and Leo Schlesinger (2008). Their approach has two dimen-

sions, concerning pace and management strategies. With regard to pace, they advise the

change manager to decide the optimal speed of the change; how quickly or how slowly

should this happen? They suggest moving quickly if there is a crisis affecting performance

or survival. They suggest moving slowly where:

• information and commitment from others will be needed to design and implement;

• the change manager has less organizational power than those who will resist;

• resistance will be intense and extensive.

They then identify the six strategies for managing resistance summarized in

table 8.5: education, participation, facilitation, negotiation, manipulation, and coercion.

Those strategies each have advantages and drawbacks. Education is time-consuming—a

disadvantage. Coercion can be quick—a key advantage in some contexts. Personal

values and social norms suggest that the first three of those strategies will be more

common. But in practice, there are times when negotiation, manipulation, and coercion

should be considered. The conditions in which each strategy is appropriate are also iden-

tified in table 8.5 (“Use When …”), and these strategies can be used in combination, if

appropriate.

Building Commitment to Change Make the Process Attractive

Attraction strategies to overcome resistance can

focus on the change process as well as the substance

of the changes. Rosabeth Moss Kanter (1985, p. 55)

suggests how to do this:

• Allow room for participation in the planning of
the change.

• Leave choices within the overall decision to
change.

• Provide a clear picture of the change, a “vision”
with details about the new state.

• Share information about change plans to the
fullest extent possible.

• Divide a big change into manageable and familiar
steps; let people take a small step first.

• Minimize surprises; give people advance warning
about new requirements.

• Allow for digestion of change requests—a chance
to become accustomed to the idea of change

before making a commitment.

Chapter 8 Resistance to Change 269

Clayton Christensen et al. (2006) also advocate a contingency approach to manag-

ing resistance. They argue that the organizational context of change varies on two main

dimensions. The first concerns the extent to which people agree on the outcomes or goals

of change. The second concerns agreement on the means, on how to get there. Low agree-

ment and high agreement contexts need to be managed in different ways. Where there

is low agreement concerning both goals and means, they argue—along with Kotter and

Schlesinger—that coercion, threats, fiat, and negotiation become necessary.

When dealing with resistance, the change manager thus has a range of tools and

approaches. Give those affected time to come to terms with what is required and the impli-

cations. Find ways to avoid resistance by identifying the features that will make change

attractive to those who will be involved. Select an appropriate strategy or strategies

depending on the cause or causes of the resistance. These three broad sets of approaches

are not mutually exclusive, and it may be appropriate to deploy a number of approaches, at

the same time, with the same or different individuals and groups.

• Repeatedly demonstrate your own commitment
to the change.

• Make standards and requirements clear—tell
exactly what is expected of people in the change.

• Offer positive reinforcement for competence; let
people know they can do it.

• Look for and reward pioneers, innovators, and
early successes to serve as models.

• Help people find or feel compensated for the
extra time and energy change requires.

• Avoid creating obvious “losers” from the change.
(But if there are some, be honest with them—

early on.)

• Allow expressions of nostalgia and grief for the
past—then create excitement about the future.

TABLE 8.5
Strategies for Dealing with Resistance to Change

Strategies Advantages Disadvantages Use When Resistance Is
Caused By

Education and
communication

increases commitment,
reconciles opposing views

takes time misunderstanding and
lack of information

Participation and
involvement

reduces fear, uses individ-
ual skills

takes time fear of the unknown

Facilitation and
support

increases awareness and
understanding

takes time and can be
expensive

anxiety over personal
impact

Negotiation and
agreement

helps to reduce strong
resistance

can be expensive and
encourage others to strike
deals

powerful stakehold-
ers whose interests are
threatened

Manipulation and
co-optation

quick and inexpensive future problems from
those who feel they were
manipulated

powerful stakehold-
ers who are difficult to
manage

Explicit and
implicit coercion

quick and overpowers
resistance

change agent must have
power; risky if people are
angered

deep disagreements and
little chance of consensus

270 Chapter 8 Resistance to Change

EXERCISE
8.1

Diagnosing

and Acting

Consider a change in which you were involved and that was seriously affected by
resistance.

1. When did you first become aware of resistance?

2. What form did the resistance take?

3. What were your first thoughts (anger, betrayal, confusion, relief)?

4. What made you decide that you had to do something?

5. What actions did you take?

6. What was the impact in (a) the short term and (b) the long term?

7. If you could “rewind the tape,” what would you do differently?

EXERCISE
8.2

Jack’s

Dilemma

Jack White is the newly appointed general manager of the pet food division of Strick-
land Corporation. He has completed a strategic review that has convinced him that the
division needs to undergo rapid and substantial change in a number of areas, given the
recent strategic moves of key competitors.

Although Jack is new, he is familiar enough with the company to know that there will
be significant resistance to the changes from a number of quarters. He also suspects that
some of this resistance will come from people with the capacity to act in ways that could
seriously impede successful change.

Jack reflects on the situation. He believes that it is important to introduce the proposed
changes soon, but he also recognizes that if he acts too quickly, he’ll have virtually no
time to have a dialogue with staff about the proposed changes, much less involve them
in any significant way.

One option is to act speedily and to make it clear that “consequences” will follow
for anyone not cooperating. He certainly has the power to act on such a threat. The
risk, Jack knows, is that even if no one shows outright resistance, there’s a big difference
between not cooperating and acting in a manner that reflects commitment. He knows
that he needs the cooperation of key groups of staff, and that sometimes “minimum-level
compliance” can be as unhelpful as resistance when it comes to implementing change.
“But maybe I’m exaggerating this problem,” he thinks to himself. “Maybe I should just
go ahead with the change. If people don’t like it, they can leave. If they stay, they’ll come
around.”

But Jack is not sure. He considers another option. Maybe he should spend more time
on building up support at least among key groups of managers and staff, if not more
broadly across the organization. “Maybe,” he reflects, “the need to change is not quite as
immediate as I think. I just know that I’d feel a whole lot better if this consultation could
happen quickly.”

Your Task

Jack respects your opinion on business matters and has asked you for your views on his
situation. What would be your recommendation? What factors should Jack take into
account in deciding what course of action to take?

LO 8.2

LO 8.5

Chapter 8 Resistance to Change 271

EXERCISE
8.3

Moneyball

The New York Times best seller Moneyball (Lewis, 2003) is a book about baseball. It
describes how Billy Beane, the general manager of the Oakland Athletics, revolutionized
Major League Baseball (MLB) by introducing a new approach (sabermetrics) to assessing
the value of a player to a team (see Wolfe et al., 2006). The established approach to
assessing player talent favored future potential, but sabermetrics focused on past perfor-
mance. Also, the established approach focused on the statistics of batting average (BA)
and earned run average (ERA). The new approach was based on the argument that dif-
ferent statistics such as on-base percentage and slugging percentage (OSP) were better
predictors of a player’s performance. Beane introduced sabermetrics, but the underly-
ing concept was not his. The writer Bill James had argued (and been ignored) for three
decades that research attested to its superiority as a basis for determining a player’s true
value to a team.

Beane’s application of the new approach was successful, and the Oakland Athletics
moved close to the top of the league despite being outspent by most of their competi-
tors. As a result, the team had approaches from many interested businesses and sporting
bodies, including teams from the NFL and MLB, Fortune 500 companies, and Wall Street
firms.

However, other MLB teams continued to show a lack of interest in the new approach,
and some were openly hostile to it. Why? The MLB was bound in tradition and char-
acterized by deep respect for convention and precedent. Sabermetrics challenged trea-
sured orthodoxies for two reasons. First, it questioned the value of established predictors
of performance. Second, sabermetrics based decisions on statistics, and thus reduced
the importance of professional judgement. In other words, sabermetrics sidelined the
field managers who had previously enjoyed significant control over talent selection and
in-game tactics. Sabermetrics thus threatened the job security of many who had been
appointed on the strength of their knowledge of individual characteristics and aspects of
the game that were no longer considered to be important.

We can explore how the introduction of sabermetrics affected team management and
players in the movie Moneyball (2011, director Bennett Miller). Brad Pitt plays Oakland’s
manager, Billy Beane, who is losing his star players to wealthier clubs. The Athletics’
owner Stephen Schott (Bobby Kotick) will not provide more money. How can he build
a competitive team with a limited budget? Beane hires an economics graduate, Peter
Brand (Jonah Hill). Brand introduces him to James’ statistics-based approach to picking
talent, looking at the complementary skills of the players in the team as well as focusing
on individual capabilities. Using this method, Beane puts together a team of previously
unknown players. However, Beane’s senior manager Art Howe (Philip Seymour Hoffman)
will not allow Beane to use these recruits, and refuses to discuss the matter. The team’s
talent scouts do not like the new method either. As you watch this movie, consider the
following questions:

1. Who is resisting this change and why?

2. What behaviors are used to demonstrate that resistance?

3. What role do emotions play, on both sides of this argument?

4. What tactics and behaviors do Billy Beane and Peter Brand use to overcome resistance
to their new approach?

5. What lessons can you take from this experience concerning the nature of resistance
and methods for overcoming resistance to change?

LO 8.2, 8.3, 8.5

272 Chapter 8 Resistance to Change

Battilana, J., and Casciaro, T. 2013. The network secrets of great change agents. Harvard

Business Review 91(7/8):62–68. Explores the importance of the change agent’s networks

in dealing with resisters and fence-sitters, as well as with those who support the change.

Ford, J. D., and Ford, L. W. 2009. Decoding resistance to change. Harvard Business

Review 87(4):99–103. Argues that vigorous resistance can be valuable and suggests prac-

tical ways to use resistance productively.

Harvey, T. R., and Broyles, E. A. 2010. Resistance to change: A guide to harnessing

its positive power. Lanham, MD: R&L Education. Develops the view that resistance is

natural, positive, and necessary, rather than destructive, offering practical guidance with

illustrations.

Maurer, R. 2010. Beyond the walls of resistance. 2nd ed. Austin, TX: Bard Books. An

easy-to-read, “no nonsense” practical guide to resistance, its benefits, its causes, and its

management.

Additional
Reading

Reflections for the Practicing Change Manager

• What symptoms of resistance to change have

you observed? Have you observed both active

and passive forms? Have you as a recipient

resisted change? Have you experienced resis-

tance while responsible for initiating and manag-

ing a change?

• Which of the various causes of resistance to

change do you believe to be the most com-

mon? What are the “top three” causes in your

experience?

• As a change manager, which of the various rea-

sons for resisting change do you believe to be

the most difficult to deal with? What are your

“top three” in this regard?

• When senior managers resist change at the stra-

tegic level, they are in a position to cause more

damage than employees resisting changes at an

operational level. Have you worked in an orga-

nization where you believe that there was man-

agement resistance to change? As a manager,

what action would you take to prevent this?

• Which particular approaches to the management

of resistance attract you? Why do you make this

choice? Do you think those approaches are more

effective, or do your choices relate to your views

about how people should be managed?

• From your experience as a change manager,

what are the three main pieces of advice that

you would give to someone new in this role con-

cerning diagnosing and managing resistance?

Resistance is a multifaceted topic. The negative label suggests damage, but we have seen

how resistance can be constructive, and we have argued that the term itself is thus poten-

tially misleading. Resistance can have a number of different causes, takes several different

forms, and reveals itself in a range of symptoms. However, there are several approaches or

strategies available for managing resistance effectively, where that becomes necessary, and

depending on a diagnosis of the situation. In sum, resistance is not the change manager’s

worst nightmare, as some commentary has suggested.

Roundup

Chapter 8 Resistance to Change 273

Here is a short summary of the key points that we would like you to take from this

chapter, in relation to each of the learning outcomes:

Explain the benefits and disadvantages of resistance to change.

Resistance can threaten organizational performance, competitiveness, and survival, and

lead to job loss in some cases. Resistance can also mean a failure to learn new skills and

abilities, with long-term implications for individual employability. However, those who

resist are those who are going to be affected directly by change, and who therefore have

a good understanding of how it might work. Their feedback can be particularly valu-

able in identifying whether or not change has been adequately considered and planned.

Resistance can therefore be seen not as damaging, but as constructive feedback. This

may not happen in every instance; there can be many reasons behind displays of resis-

tance. However, the change manager who views resistance positively, and who listens

with genuine interest to the concerns and challenges that are raised, is more likely to

implement an effective change, while improving relationships with those involved.

Understand the causes of resistance to change.

There are many potential causes for resistance, and we have only explored a number

of the most common in this chapter. Diagnosing cause in a given situation is a key

task for the change manager. In making that diagnosis, the change manager must be

aware of two issues. First, resistance may be underpinned by several causes, not just

one (although there may be one main concern). The management response thus has to

take this into consideration. Second, the cause or causes of resistance can change over

time, as an initiative develops, as other parallel initiatives are introduced, and as new

information is uncovered. The task of diagnosing resistance is thus an ongoing one.

Identify the symptoms of resistance to change.

Once again, there are many potential symptoms of resistance, which can be active or

passive. The passive resistance may be more difficult to detect. Paradoxically, active

resisters—those who shout and complain the loudest—may be more valuable. At least

the change manager knows what they are thinking and can address that, and they may

have genuine concerns that could inform and improve change design, planning, and

implementation.

Recognize and diagnose middle management resistance to change, which could be a

blockage, or could be highly beneficial.

We know that managers at all levels can sometimes resist change and that such behav-

ior is not restricted to frontline or operational staff. However, the stereotype of the mid-

dle manager as change blocker is not consistent with the evidence. Middle managers

often subvert or block top leadership directives, but only to put in place something

more effective.

Understand and apply different approaches to managing resistance.

We explored a range of resistance management strategies: allow people naturally

to adjust, develop “attractors” to avoid or minimize resistance in the first place, and

develop a contingency approach depending on the cause or causes of the resistance. As

in most management contexts, there is no “one best way,” and action has to be based on

a diagnosis of the problem.

LO 8.1

LO 8.2

LO 8.3

LO 8.4

LO 8.5

274 Chapter 8 Resistance to Change

TABLE 8.6
Images of Change Management and Perspectives on Resistance

Image Perspective on Resistance

Director Resistance is a sign that not everybody is on board in terms of making the change.
Resistance can and must be overcome in order to move change forward. Change man-
agers need specific skills to ensure that they can deal with resistance.

Navigator Resistance is expected. It is not necessarily a sign of people being outside their comfort
zone but that there are different interests in the organization and some of these may be
undermined by the change. We cannot always overcome resistance, but this should be
achieved where possible.

Caretaker Resistance is possible but likely to be short-lived and ultimately futile. This is because
changes will occur in spite of attempts to halt them. At best, resistance might temporar-
ily delay change rather than halt its inevitable impact.

Coach Resistance needs to be recognized and expected as change takes people out of their
comfort zones. Change managers need to work with resistance to show how these
actions are not consistent with good teamwork.

Interpreter Resistance is likely where people do not fully understand what is happening, where the
change is taking the organization, and the impact it will have on those involved. Making
sense of the change, helping to clarify what it means, and linking individual identity
with the process and the expected outcomes of the change will help to address the
underlying problems that led to the resistance.

Nurturer Resistance is irrelevant to whether or not change happens. Changes will occur but not
always in predictable ways. Therefore, resisting change will be a matter of guesswork by
the resister, as change often emerges from a clash of chaotic forces and it is usually not
possible to identify, predict, or control the direction of change.

Atkinson, P. 2005. Managing resistance to change. Management Services, Spring:14–19.

Balogun, J. 2008. When organizations change: A middle management perspective on

getting it right. London: Advanced Institute of Management Research.

Battilana, J., and Casciaro, T. 2013. The network secrets of great change agents. Harvard

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Boyett, I., and Currie, G. 2004. Middle managers moulding international strategy: An

Irish start-up in Jamaican telecoms. Long Range Planning 37(1):51–66.

Bruch, H., and Menges, J. I. 2010. The acceleration trap. Harvard Business Review

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279

9Chapter
Organization Development
and Sense-Making
Approaches

Learning objectives

By the end of this chapter you should be able to:

LO 9.1 Appreciate more clearly the organizational change approaches underpinning

the coach and interpreter images of managing change.

LO 9.2 Understand the organization development (OD) approach to change.

LO 9.3 Be aware of extensions of the OD approach such as appreciative inquiry, posi-

tive organizational scholarship, and dialogic OD.

LO 9.4 Understand the sense-making approach to change.

C
a
rt

o
o
n
b

y
R

o
b
C

o
tt

in
g
h
a
m


w

w
w

.R
o
b
C

o
tt

in
g
h
a
m

.c
o
m

280 Chapter 9 Organization Development and Sense-Making Approaches

LO 9.1 Alternative Approaches to Managing Change

Of the six images of managing change, the caretaker and nurturer images have their founda-

tions in the field of organization theory; the other four images—director, coach, navigator,

and interpreter—have stronger foundations in the organizational change field. This chapter

and the next delve further into the foundations of the four images that are rooted in the organi-

zational change field and explore their implications for how to manage organizational change.

They are also the four images that, in various ways, assume that the change manager has

an important influence on the way change occurs in organizations. In contrast, the first two

images, caretaker and nurturer, have in common an assumption that change managers receive

rather than initiate change. This chapter, and the one that follows, therefore explore the four

images that assume that change managers have an active role in the initiation, support, and

outcomes of organizational change. This chapter considers the foundational approaches asso-

ciated with the coach and interpreter images; the following chapter considers the founda-

tional approaches associated with the director and navigator images.

Underpinned by the coach image, the organization development (OD) approach is one

where its adherents present their developmental prescriptions for achieving change as

being based, at least traditionally, upon a core set of values, values that emphasize that

change should benefit not just organizations but the people who staff them.

OD has played a central role in the organizational change field for over half a century. In

their 2012 review of OD, Burnes and Cooke (p. 1396) argue that it “has been, and arguably,

still is, the major approach to organizational change across the Western world, and increasingly

globally.” However, as this chapter and the next illustrate, different images of change manage-

ment are associated with different ideas about what sort of approaches (and techniques) should

be used to try to bring about change within organizations. It is not surprising, therefore, that

OD’s long history has been accompanied, from time to time, by expressions of concern as to its

continuing relevance, leading some writers to raise the question of whether OD is “in crisis”;

both the Journal of Applied Behavioral Science (vol. 40, no. 4, 2004) and OD Practitioner (vol.

46, no. 4, 2014) have had special issues focused on the question of OD’s ongoing relevance. A

long-standing criticism of OD has been the claim that it has been sidelined from the concerns

of the business community because of its preoccupation with humanistic values rather than

with other issues such as business strategy (Hornstein, 2001; Beer, 2014).

Approaches to managing change other than OD have emerged. For example,

underpinned by the interpreter image, the sense-making approach maintains that change

emerges over time and consists of a series of interpretive activities that help to create in

people new meanings about their organizations and about the ways in which they can

operate differently in the future.

We begin by considering the approaches underpinned by the coach image and then move on

to the interpreter image. Further approaches to managing change are addressed in chapter 10.

LO 9.2 Organization Development (OD)

In this section, we consider the underlying tenets of the OD approach to managing

change, along with the role of the OD practitioner. We then review a number of chal-

lenges that have been directed at OD, including the continuing relevance of the values

Chapter 9 Organization Development and Sense-Making Approaches 281

underlying the OD approach, the universal applicability of these values, and the rele-

vance of OD to large-scale change.

Traditional OD Approach: Fundamental Values
As set out in table 9.1, OD as a change intervention technique has developed over

time, being influenced by a number of different trajectories. As such there is no single,

underlying theory that unifies the field as a whole. Rather, it is informed by a variety

of differing perspectives, including theorists such as Herzberg, Maslow, Argyris, and

Lewin (Bazigos and Burke, 1997). In drawing together the common threads of these

perspectives, Beckhard (1969) depicts the classic OD approach as one that has the

following characteristics:

• It is planned and involves a systematic diagnosis of the whole organizational system, a

plan for its improvement, and provision of adequate resources.

• The top of the organization is committed to the change process.

• It aims at improving the effectiveness of the organization in order to help it achieve its

mission.

TABLE 9.1
The Evolution of Organization Development (1940s–1980s)

Period Background Developers Focus

1940s/1950s+ National Training Lab-
oratories (NTL) and
T-groups

Kurt Lewin, Douglas
McGregor, Robert Blake,
Richard Beckhard

Interpersonal relations, leadership
and group dynamics; use of team
building to facilitate personal and
task achievement

1940s/1950s+ Action research and sur-
vey feedback

Kurt Lewin, John Collier,
William Whyte, Rensis
Likert

Involvement of organizational
members in researching them-
selves to help create new knowl-
edge and guide change actions

1950s/1960s+ Participative
management

Likert Assumption that a human rela-
tions approach, with its emphasis
on participation, is the best way
to manage an organization

1950s/1960s+ Productivity and quality
of work-life

Eric Trist and Tavistock
Institute, W. Edward
Deming, and Joseph
Juran

Better integration of people
and technology through joint
participation of unions and
management, quality circles, self-
managing workgroups; creation
of more challenging jobs; total
quality management

1970s/1980s+ Strategic change Richard Beckhard, Chris-
topher Worley

Need for change to be strategic,
aligning organization with tech-
nical, political, cultural, and envi-
ronmental influences

Source: Developed from Cummings and Worley (2015).

282 Chapter 9 Organization Development and Sense-Making Approaches

• It is long term, typically taking two or three years to achieve effective change.

• It is action-oriented.

• Changing attitudes and behavior is a focus of the change effort.

• Experiential-based learning is important as it helps to identify current behaviors and

modifications that are needed.

• Groups and teams form the key focus for change.

Though it is commonly presented as being aimed at incremental, developmental,

first-order change, other writers claim that what unifies the OD field, at least traditionally,

is an emphasis on a core set of values. These values build upon humanistic psychology and

emphasize the importance of developing people in work organizations and helping them to

achieve satisfaction (Nicholl, 1998a). Three value sets are involved:

• Humanistic values relate to openness, honesty, and integrity.

• Democratic values relate to social justice, freedom of choice, and involvement.

• Developmental values relate to authenticity, growth, and self-realization (Nicholl, 1998c).

Human development, fairness, openness, choice, and the balance between autonomy

and constraint are fundamental to these values (Burke, 1997). It is said that these val-

ues were radical and “a gutsy set of beliefs” in relation to the time in which they were

developed; that is, in the 1940s and 1950s when organizational hierarchy was dominant,

emphasizing authority, rationality, and efficiency rather than humanism and individuality

(Nicholl, 1998b). In this sense, the traditional practice of OD has as its focus people and

is not necessarily meant to be solely focused on the interests of management or the profit-

ability of the firm (Nicholl, 1998a).

The OD Practitioner
Central to the traditional OD approach is the role of the “OD practitioner,” who may be

either internal or external to the organization. A typical OD practitioner helps to “struc-

ture activities to help the organization members solve their own problems and learn to

do that better” (French and Bell, 1995, p. 4). Where this is based upon action research,

it involves a variety of steps, such as (Cummings and Worley, 2015):

1. Problem identification. Someone in the organization becomes aware of what that per-

son thinks is a problem that needs to be addressed.

2. Consultation with an OD practitioner. The client and the practitioner come together,

with the latter endeavoring to create a collaborative dialogue.

3. Data gathering and problem diagnosis. Interviews, observations, surveys, and analysis

of performance data occur to assist in problem diagnosis. Each of these techniques is rec-

ognized as an intervention in itself in the sense that it involves an interaction with people.

4. Feedback. The consultant provides the client with relevant data, at the same time pro-

tecting the identity of people from whom information was obtained.

5. Joint problem diagnosis. As part of the action research process, people are involved in

consideration of information and discuss what it means in terms of required changes.

6. Joint action planning. The specific actions that need to be taken are identified.

7. Change actions. The introduction of and transition to new techniques and behaviors occur.

Chapter 9 Organization Development and Sense-Making Approaches 283

8. Further data gathering. Outcomes of change are determined and further actions

identified.

In coaching people through such change processes, Cummings and Worley (2015) argue

that OD practitioners need a variety of skills, including:

1. Intrapersonal skills: having a well-developed set of values and personal integrity

including the ability to retain their own health in high-stress organizational situations.

2. Interpersonal skills: which are needed in order to work with groups, gain their trust,

and “provide them with counseling and coaching.”

3. General consultation skills: including knowledge about intervention techniques (such

as those discussed in chapter 4) to assist them in diagnosing problems and designing

change interventions.

4. Organization development theory: to ensure that they have a current understanding of

the specialist field of which they are a part.

Underpinning these OD practitioner interventions is the classic change process model

developed by Kurt Lewin (1947). He developed a three-stage model of how change occurs:

unfreezing how the organization operates, changing the organization in specific ways, and

then refreezing the changes into the operations of the organization. How Lewin’s model of

change relates to the actions of the OD practitioner is set out in table 9.2.

TABLE 9.2
Classic OD Change Intervention Processes

Lewin’s Change Process OD Action Research Change Process

Unfreezing: establishing the need for change • Identification of problems

• Consultation with OD practitioner

• Gathering of data and initial diagnosis

Movement: to new behavior through cognitive
restructuring

• Client group feedback

• Joint problem diagnosis

• Joint planning of change actions

• Engagement in change actions

Refreezing: integration of new behaviors into social
and organizational relationships

• Post-action data gathering and evaluation

Sources: Adapted from French and Bell (1995), Cummings and Worley (2015).

Criticisms of OD
As application of OD as an approach to managing change became more widespread, so

did attention to its limitations. Even advocates of the OD approach began to acknowl-

edge that there are problems in the field. For example, French and Bell (1995) identi-

fied six of these:

1. OD definitions and concepts. OD may consist of single or multiple interventions over

different periods of time, so establishing the relationship between “OD” and its ability

to enhance “organizational effectiveness” is difficult, especially given that the latter

term itself also lacks precise definitions.

284 Chapter 9 Organization Development and Sense-Making Approaches

2. Internal validity problems. This relates to whether the change that occurred was caused

by the change intervention or a range of other factors.

3. External validity problems. This is the generalizability question and relates to whether

OD and its techniques are appropriate to all organizational settings.

4. Lack of theory. There is no comprehensive theory of change to assist researchers in

knowing what to look for in what they study.

5. Problems with measuring attitude changes. Using pre-change and then post-change

surveys to measure attitudinal changes is problematic, as people may view the scale

differently when they answer it a second time.

6. Problems with normal science approaches to research. The ability to use these tech-

niques (hypothesis testing, assessing cause–effect relationships, etc.) is questioned in

relation to OD being a process based on action research.

French and Bell (1995, p. 334) adopted an optimistic view of this situation, arguing

that “these do not appear to be insurmountable problems at this time, although they con-

tinue to plague research efforts.” However, other writers were critical of such optimism,

pointing out that the approach is largely descriptive and prescriptive, often failing to ade-

quately consider the inherent limitations and underlying assumptions of its own tech-

niques (Oswick and Grant, 1996). OD has been presented with a range of other criticisms

relating to the extent to which it deals adequately with issues such as leadership, strategic

change, power, and reward systems (Cummings and Worley, 2015). Three further criti-

cisms relate to the current relevance of OD’s traditional values, the universality of those

values, and the ability of OD to engage in large-scale change. Each of these issues is

addressed next.

OD and the Challenge of Managing Covert Processes

Bob Marshak is a very experienced and highly

regarded OD consultant. For Marshak, one of the

great OD challenges is dealing with what he describes

as “covert processes,” those “powerful processes that

impact organizations but remain unseen, unspoken,

or unacknowledged [and which] include hidden agen-

das, blind spots, organizational politics, the elephant in

the room, secret hopes and wishes, tacit assumptions,

and unconscious dynamics” (Marshak, 2006, p. xi).

To reduce the likelihood that covert processes

thwart an attempt to bring about organizational

change, Marshak (2006) identifies five “keys” to

dealing with covert processes in the context of an

OD intervention:

1. Create a (psychologically) safe environment

Do whatever you can to create a climate of trust

and respect where people feel safe to reveal their

thoughts and beliefs

2. Seek movement, not exposure

Focus on moving the situation forward, not

being judgmental about matter revealed (i.e.,

progress, not punishment).

3. Assume that people are trying their best

Put the focus on inquiry rather than judgement.

4. Look in the mirror

Be self-aware so that your behavior as the con-

sultant is driven by the situaion of the people

you are working with and not your own covert

norms and beliefs.

5. Act consistently with expectations

Stay within the scope of your brief as explained

to participants at the outset unless you explicitly

renegotiate expectations with them.

Chapter 9 Organization Development and Sense-Making Approaches 285

Current Relevance of OD’s Traditional Values
Despite its longevity, or perhaps because of it, the issue of the ongoing relevance of the

values underlying OD continues to be a matter of debate, the topic still featuring heavily

in 2014 in the pages of the journal OD Practitioner (vol. 46, no. 1). Going back 20 years,

prominent OD thought leader Warner Burke (1997, p. 7) argued that, for many experi-

enced OD practitioners, “the profession has lost its way—that its values are no longer

sufficiently honored, much less practiced, and that the unrelenting emphasis on the bottom

line has taken over.” This sentiment was a reaction to the growing role of some OD prac-

titioners as advisers on corporate restructurings, mergers and takeovers, and so on, despite

the lack of evidence of the values core to OD being central to such changes.

As a result, a view formed that “OD has lost some of its power, its presence, and per-

haps its perspective” (Burke, 1997, p. 7). An editor of OD Practitioner at the time, Dave

Nicholl, agreed with Burke’s general assessment, pointing to how many of the values of

OD are confrontational to many of the values held in our organizations, leading to “stark

contrasts” between being relevant and value-neutral or being value-laden and marginal

(Nicholl, 1998c). Nicholl argued that OD practitioners need to remind themselves of the

dilemma they face, of assisting both individual development and organizational perfor-

mance—which he characterizes as “contradictory elements.” By delving back into OD’s

heritage, Nicholl (1999) suggested that they regain their humility and present to clients

not certainty but educated conjecture. Finally, he proposed the need for a paradigm shift

in how the corporation is viewed and rebuilt, allowing space to recognize that corporations

are not necessarily just institutions for profit but social institutions.

Other OD writers have challenged managers to make their organizations more inclu-

sive (multiple levels of involvement in decision making), to create mutual accountability

OD Values An Anachronism or Something Worth Preserving?

The valuing of inclusion, open communication,

collaboration, and empowerment has caused OD

to struggle in recent decades in the face of a per-

ception that these are values from a “gentler” time

and inconsistent with fiercely competitive markets

where only rapid change, driven by top-down

edict, can give hope of survival. However, Burnes

and Cooke (2012) query this characterization of

OD. Instead they ask, are we in a time when the

issue of values has never been more important?

They suggest that many countries are struggling

with the impact of organizations exhibiting uneth-

ical, and financially or environmentally unsustain-

able, practices. If this is so, they (2012, p. 1417)

argue, OD “with its humanist, democratic and

ethical values, wide range of participative tools and

techniques, and experience in promoting behavior

changes, is ideally placed … to play a leading role

in the movement to a more ethical and sustainable

future.”

Similarly, a widely experienced professor and

consultant, Harvard Business School’s Mike Beer

(2014, p. 61), argues:

With the corporate scandals of the past decade,

clear evidence that we are doing damage to our

planet, and the great recession of 2008, higher

ambition CEOs are reframing the purpose of

their firm from increasing shareholder value to

contributing to all stakeholders. This trend is

opening up new opportunities for the field of

OD to help these higher ambition leaders to cre-

ate a better world. Higher ambition companies

integrate head, heart, and hands.

286 Chapter 9 Organization Development and Sense-Making Approaches

(linking performance remuneration to adherence to core values, stakeholders, and corpo-

rate sustainability), to reinforce interdependence (between individuals, organizations, and

the wider society), to expand notions of time and space (such as considering the impact of

decisions for future generations), to ensure the wise use of natural resources (such as con-

sideration of renewable and nonrenewable resources), and to redefine the purpose of the

organization in terms of multiple stakeholders (including customers, stockholders, com-

munity, planet, descendants, organizational leaders, employees, and directors) (Gelinas

and James, 1999).

Are OD Values Universal?
One challenge leveled at OD is whether the approach and the values underpinning it

are relevant outside of the United States, where it was predominantly developed. As

with the issue of the continuing relevance of OD values over time (as discussed above),

debate over the global appropriateness of OD values continues (see, e.g., Sorenson and

Yaeger, 2014).

Some advocates portray OD change values as being universal, with cultural differences

serving as “a veneer which covers common fundamental human existence” (Blake et al.,

2000, p. 60). For example, Blake et al. (2000) claim that the classic Managerial (or Lead-

ership) Grid framework developed by Robert Blake and Jane Mouton in the 1960s has

been applied successfully in many different countries. For Blake et al. (2000, p. 54), this

framework was “probably the first systematic, comprehensive approach to organizational

change” and had played a central role in the development of OD. They argue that the grid

sustains and extends core OD values in seeking greater candor, openness, and trust in

organizations. The grid maps seven leadership styles that vary in terms of their emphasis

on people versus results: controlling, accommodating, status quo, indifferent, paternalist,

opportunist, and sound—the latter style being preferred insofar as it portrays a leadership

style that is concerned for both results and people (Blake et al., 2000).

The grid has been used as the basis for change leadership seminars, helping to establish

both individual awareness and skills. In response to the question of the grid’s applicabil-

ity outside of the United States, they claim that it has been used extensively in a variety

of countries (including within Asia), in part because of “its ability to effectively employ a

universal model of effective management and organizational development within diverse

cultures” (Blake et al., 2000, p. 59).

Similarly, for Sorenson and Yaeger (2014, p. 58) the evidence from years of application

of OD in diverse countries is that national cultural values are more akin to “a veneer that

covers more fundamental and universal needs, needs which are reflected in the fundamen-

tal values of OD.”

However, other OD advocates are more circumspect about how far the OD approach

is relevant across cultural boundaries. For example, Marshak (1993) contends that there

are fundamentally different assumptions underlying Eastern (Confucian/Taoist) and

Western (Lewinian/OD) views of organizational change. These differences are outlined

in table 9.3. Marshak’s (1993) view is that OD practitioners need to view with care any

assumptions they may hold that OD practices have universal applicability, while Mirvis

(2006) recommends that OD become more open to a pluralism of ideas by drawing from

both Eastern and Western styles of thought. Similarly, Fagenson-Eland et al. (2004,

Chapter 9 Organization Development and Sense-Making Approaches 287

p. 461), based on the findings of a seven-nation study, conclude that “OD practitioners

should carefully consider dimensions of national culture when recommending specific OD

interventions.”

Engaging in Large-Scale Change
One of the biggest challenges to the traditional OD field was the criticism that it was ill

suited to handle large-scale organizational change. Traditional OD techniques focused

on working with individuals and group dynamics through processes such as survey

feedback and team building. Such methods came under attack as being insufficient to

deal with the large-scale changes needed by organizations to cope with the hypercom-

petitive business world that confronts them (Manning and Binzagr, 1996, p. 269). OD

was seen as “too slow, too incremental and too participative” to be the way to manage

change at a time when organizations often faced the need to make major change and to

do so with speed (Burnes and Cooke, 2012, p. 1397).

As a result of such criticisms, many OD practitioners began to move their focus from

micro-organizational issues to macro, large-system issues, including aligning change to

the strategic needs of the organization (Worley et al., 1996). This has led to the devel-

opment of a range of techniques designed to get the whole organizational system, or at

least representatives of different stakeholders of the whole system, into a room at the

same time.

Whole system techniques take a variety of forms and names, including search confer-

ence (see table 9.4), future search, real-time strategic change, World Café (see box), town

hall meetings, simu-real, whole-system design, open-space technology, ICA strategic

planning process, participative design, fast-cycle full participation, large-scale interactive

process, and appreciative future search (Axelrod, 1992; Bunker and Alban, 1992, 1997;

Dannemiller and Jacobs, 1992; Emery and Purser, 1996; Fuller et al., 2000; Holman et al.,

2007; Klein, 1992; Levine and Mohr, 1998; Manning and Binzagr, 1996). Such techniques

are typically designed to work with up to thousands of people at a time.

TABLE 9.3
Is OD Change

Culture-

Bound?

Lewinian/OD Assumptions Confucian/Taoist Assumptions

• Linear (movement from past to present
to future)

• Progressive (new state more desirable)
• Goal oriented (specific end state in

mind)
• Based on creating disequilibrium (by

altering current field of forces)
• Planned and managed by people

separate from change itself (application
of techniques to achieve desired ends)

• Unusual (assumption of static or semi-
static state outside of a change process)

• Cyclical (constant ebb and flow)
• Processional (harmonious movement

from one state to another)
• Journey oriented (cyclical change,

therefore no end state)
• Based on maintaining equilibrium

(achieve natural harmony)
• Observed and followed by involved

people (who constantly seek harmony
with their universe)

• Usual (assumption of constant change,
as in the yin-yang philosophy, each new
order contains its own negation)

Source: Adapted from Marshak (1993).

288 Chapter 9 Organization Development and Sense-Making Approaches

The various techniques do entail differences. Some techniques assume that organiza-

tional participants can shape and enact both their organization and its surrounding envi-

ronment; others are based on the assumption that the environment is given (although its

defining characteristics may need to be actively agreed upon) and that organizations and

their participants join together democratically to identify appropriate adaptation processes.

Other differences relate to the extent to which the technique includes a majority of orga-

nizational members and stakeholders. Some techniques are highly structured and use a

consultant who manages the process, whereas others utilize a more flexible self-design

approach (Manning and Binzagr, 1996).

TABLE 9.4
An Example of

a Search Con-

ference Format

Phase 1 Identifying relevant world trends = shared understanding of global
environment

Phase 2 Identifying how trends affect specific issue, organization, institution = how
global trends impact on operations of the system

Phase 3 Evolution of issue, organization, institution = creation of its history
including its chronology (timeline)

Phase 4 Future design of issue, organization, institution = use of small-group
creativity and innovation to design a consensus scenario for the way
forward

Phase 5 Strategy formulation = generation of agreed action plans

Source: Adapted from Baburoglu and Garr (1992).

World Café

World Café is a large-scale OD intervention tech-

nique developed by Juanita Brown and David Isaacs

(2005). It has been described by Jorgenson and

Steier (2013, p. 393) as “one of a new generation of

methods that attempt to achieve collective change

by bringing all members or stakeholders of a system

together in one place, using a highly structured pro-

cess of movement to create flexible and coevolving

networks of conversations.”

Typically, the event is held away from the nor-

mal workplace and uses small face-to-face group-

ings seated at a collection of small café-like tables

as the basis for rounds of conversations. Convened

by one or more facilitators, the World Café involves

a series of issues/questions being addressed by

participants. Table membership changes between

various rounds (of questions), although one person

usually remains as the “table host.” Each table usu-

ally “reports back” (orally) to the group as a whole

between rounds, and the meeting ends with the

whole group discussing what has occurred.

Jorgenson and Steier (2013, p. 393) note:

The event is densely symbolic. Tables are often

covered with red and white checked tablecloths

reminiscent of an Italian restaurant as well as bud

vases with flowers. Sheets of butcher block paper

laid on each table along with colored markers or

crayons are intended to evoke an atmosphere of

play and allow participants, if they desire, to cap-

ture emerging ideas with sketches or notes.

Source: Adapted from Jorgenson and Steier (2013).

Chapter 9 Organization Development and Sense-Making Approaches 289

What unites these techniques is an underlying assumption that “the few are no longer

left in the position of deciding for the many” as a result of the inclusion of “new and dif-

ferent voices” in the change process (Axelrod, 2001, p. 22). These techniques are designed

to assist organizations in being responsive to their current business conditions by provid-

ing the means “for getting the message to the total system by enhancing everyone’s under-

standing of the organization’s situation and its context. This reframing leads to a common

recognition of the changes required and becomes the impetus for concerted actions”

(Bunker and Alban, 1992). An example of this technique in a large setting, involving over

4,000 people who came together to identify how the World Trade Center 9/11 site should

be developed, is outlined below.

Large-Scale Interventions “Listening to the City”: Town Hall Meeting on Rebuilding
the World Trade Center after 9/11

In New York City on July 20, 2002, over 4,300 New

York citizens came together for what has been

billed as the largest town hall meeting ever held.

The meeting was organized by AmericaSpeaks, a

nonprofit organization headed by Carolyn Lukens-

meyer that uses twenty-first-century town meet-

ings to design and facilitate large-scale dialogues

on public issues. Up to 5,000 people are grouped

into one room and profiled in such a way that

they represent the various interests and stakehold-

ers associated with the issues for discussion and

debate. They are arranged into small groups of

around a dozen people, each having a facilitator.

Each group has a networked computer that records

the ideas of participants and a wireless network

within the room transfers these data to a central

computer. This enables a “theme team” to read the

data from each group, identify key themes in real

time, distill them, and present them back to the

whole room via large overhead video screens. Each

participant in the room has a wireless keypad that

he or she can then use to vote in relation to the dis-

tilled themes. This provides instant feedback to the

entire group, which, at the conclusion of the day,

receives a summary of the major issues and out-

comes. Involving key decision makers in the meet-

ing is an important way of trying to ensure that the

outcomes of the day have a meaningful input into

public policy.

In the case of the World Trade Center, the town

hall meeting was held after five months of orga-

nizing, sponsored in part by the Lower Manhattan

Development Corporation (LMDC) and the Port

Authorities of New York and New Jersey. During

this period, a representative sample of New York-

ers was identified and invited to the July 20 meet-

ing, which was titled “Listening to the City.” The

room contained 500 tables, each with a facilitator.

Theme team members provided feedback through-

out the day, and issue experts were on hand to

answer specific questions from participants. Rep-

resentatives from various federal, state, and city

agencies also were present. A key outcome of the

meeting was an expression of dissatisfaction with

the six memorial site options being considered and

a demand for one having more open space; the

meeting also made recommendations regarding

expansion of the transit service and more afford-

able housing. The outcome was that the LMDC

began a new planning process for the World Trade

Center and the Port Authority agreed to reduce

the amount of commercial development planned

for the site in order to enable more space for hotel

and retail. As reported by the New York Daily News

(July 21, 2002), “the process was an exercise in

democracy.”

Sources: Lukensmeyer and Brigham, 2002; New York Daily News,

http://www.nydailynews.com, July 21, 2002.

290 Chapter 9 Organization Development and Sense-Making Approaches

Although designed, as the name suggests, for application in large-scale system-wide

situations such as that represented in the World Trade Center example, these methods have

also been applied in smaller-scale situations such as that described below involving the

Museum of Science and Technology.

Proponents of large-scale intervention approaches are glowing, sometimes almost evan-

gelical, in expounding their benefits. Weisbord (1992, pp. 9–10) claims that future search

conference outcomes “can be quite startling” and produce restructured bureaucratic hierar-

chies in which “people previously in opposition often act together across historic barriers

in less than 48 hours.” Results emerge “with greater speed and increased commitment

and greatly reduced resistance by the rest of the organization” (Axelrod, 1992, p. 507),

enhancing “innovation, adaptation, and learning” (Axelrod, 2001, p. 22).

However, alongside testaments to the success of these techniques are disagreements

regarding both the origin of large-scale, whole-system change techniques and their likely

effectiveness in highly volatile environments. Some writers disagree with the version of

“OD history” that depicts the field as having moved over time from a micro to a macro

focus. They maintain that large-scale techniques have always been part of the OD approach

and that “ODers have a strong tendency to neglect their past” (Golembiewski, 1999, p. 5).

Others, such as Herman (2000), maintain that because of the need for more rapid responses,

system-wide culture change programs are less relevant today than more specific, situa-

tional interventions such as virtual team building and management of merger processes.

World Café on a Small Scale—the Museum of Science
and Industry

The Museum of Science and Industry (MOSI) is in

Tampa, Florida, and has used a World Café format for

various purposes, including meetings that involved

staff and members of the local community in the

discussion of planning and design matters. Having

had World Café experience, a decision was made to

try this format for a meeting of its 30-member exec-

utive board that was scheduled to explore possible

futures—and identify “actionable ideas”—for MOSI.

World Café was seen as an approach that would sig-

nal to members that this was intended to be a very

different sort of meeting from the highly structured

ones which were the executive board norm in its

usual setting (a traditional boardroom with members

seated around the one large elliptical table).

Participants sat at small round tables (seating

four). The purpose of the event and the World Café

process was explained, and the first round began

with them being asked to discuss their own experi-

ences of really good conversations and what it was

about those conversations that made them “really

good.” Future rounds included asking respondents to

discuss questions such as “What could MOSI be like

in five years?” and “We’re now five years in the future

and MOSI has attained these goals. What did we do

to get here?” (Jorgenson and Steier, 2013, p. 396).

Postscript: Reactions to this use of World Café

differed between participants. While several of the

board members agree with one colleague’s enthusi-

astic response that “this was the first time in a long

time that we really talked to each other” and that

“maybe this is what a board meeting could be like,”

another responded rather ambiguously, “Yes, this

has been great but now let’s get down to business”

(Jorgenson and Steier, 2013, p. 396). For some peo-

ple, an experience like World Café opens up a new

set of possibilities as to how they could work with

each other in the future; for others, it is dismissed as

a (possibly interesting) diversion before they return

to “business as usual.”

Source: Jorgenson and Steier (2013).

Chapter 9 Organization Development and Sense-Making Approaches 291

Aligned with this critique is the issue of the feasibility of system-wide changes in an

era when “[t]he old model of the organization as the center of its universe, with its custom-

ers, share-owners, suppliers, etc. rotating around it, is no longer applicable in ‘new-era’

organizations” (Herman, 2000, p. 110). As one OD practitioner argues, “I’m not sure that

‘system wide’ change is really possible, since the real system often include[s] a number of

strategic partners who may never buy into changes that fit one company but not another”

(cited in Herman, 2000, p. 109).

However, others disagree. For OD consultant Susan Hoberecht and her colleagues

(2011), the increasing centrality of interorganizational alliances and networks in the busi-

ness world provides an opportunity for change methods with a system-wide focus, because

in such an environment a greater than ever premium is placed on the effective operating

of interdependencies. In such an environment, Hoberecht et al. (2011) argue, large-scale

interventions have particular relevance.

For an empirically based assessment of various aspects of the effectiveness of large-

scale interventions, see Worley, Mohrman, and Nevitt (2011).

LO 9.3 Appreciative Inquiry (AI)

Techniques of “inclusion” appropriate to large-scale or large-group interventions led to

them being labelled as part of a new “engagement paradigm” (Axelrod, 2001, p. 25), a

“new type of social innovation” (Bunker and Alban, 1992, p. 473), a “paradigm shift”

(Dannemiller and Jacobs, 1992, p. 497), and “an evolution in human thought, vision

and values uniquely suited to our awesome 21st Century technical, economic, and

social dilemmas” (Weisbord, 1992, p. 6). They represented a shift from the emphasis

on problem-solving and conflict management, common to earlier OD programs, to a

focus on joint envisioning of the future. For example, Fuller and colleagues (2000,

p. 31) maintain that with a problem-solving approach comes the assumption that “orga-

nizing is a problem to be solved,” one that entails steps such as problem identification,

analysis of causes and solutions, and the development of action plans.

Contrary to this logic, Fuller et al. (2000) point to the assumptions underlying the

appreciative inquiry approach to change, which seeks to identify what is currently work-

ing best and to build on this knowledge to help develop and design what might be achieved

in the future. They outline the technique as involving four steps:

• Discovery or appreciating the best of what is currently practiced.

• Building on this knowledge to help envision (or dream) about what the future could be.

• Designing or co-constructing (through collective dialogue) what should be.

• Sustaining the organization’s destiny or future.

The technique is also depicted diagrammatically in figure 9.1. An illustrative sample of

questions for this four-step process is provided in table 9.5.

In these techniques the act of participation or inclusion of a wide variety of voices itself

constitutes a change in the organization: the “what” to change and the “how” to change

cannot be easily separated.

292 Chapter 9 Organization Development and Sense-Making Approaches

Discovery
What gives life

(The best of what it is)
Appreciating

Destiny
How to empower, learn, and

adjust/improvise?
Sustaining

Affirmative topic

choice

Design
What should be the ideal?

Co-constructing

Dream
What might be

(What the world is calling
for)

FIGURE 9.1
Appreciative

Inquiry 4-D

Cycle

TABLE 9.5
An Illustrative Sample of Appreciative Inquiry Questions

The following questions were part of an AI-based OD engagement that consultant Meghana Rao (2014,
p. 81) carried out in a U.S. social services agency.

Stage Questions

Discovery “Describe a time when you were most proud to be a member of your organization. What
was the situation? Who was involved? What made it a proud moment?”

Dream “Imagine yourself and your organization have been fast-forwarded by five years. What do
you see around you? What does the structure look like? How have clients been created,
retained, and expanded?”

Design “What will your ideal organizational structure look like?—people, systems? . . . What struc-
tures need to be in place for the organization to sustain and for employees to flourish?”

Destiny “What are the action items that we need to cover to create the organization of the future?
What additional resources will be needed?”

In their outline of the benefits of appreciative inquiry, Fuller et al. (2000, p. 31) claim

that it “releases an outpouring of new constructive conversations,” “unleashes a self-

sustaining learning capacity within the organization,” “creates the conditions neces-

sary for self-organizing to flourish,” and “provides a reservoir of strength for positive

change.” These are not minor claims. Certainly, the techniques have been reportedly

used successfully in a variety of organizational settings (Weisbord, 1992). However,

whether these approaches are successful in achieving their outcomes is difficult to estab-

lish, being based most often on the assertions of their proponents rather than on rigorous

research evidence.

Source: Reprinted with permission of the publisher. From Appreciative Inquiry, copyright 2007 by Cooperrider/Whitney,

Berrett-Koehler Publishers, Inc., San Francisco, CA. All rights reserved. www.bkconnection.com

Chapter 9 Organization Development and Sense-Making Approaches 293

LO 9.3 Positive Organizational Scholarship (POS)

Dubbed as a “new movement in organizational science,” positive organizational

scholarship (POS) is an umbrella term that emerged in the early 2000s to encompass

approaches such as appreciative inquiry and others, including positive psychology and

community psychology (Cameron and Caza, 2004, p. 731). POS developed out of a

view that for most of the history of OD, attention had mainly been paid to identifying

instances of “negatively motivated change” (or problems) in organizations and design-

ing change programs to eliminate them (Cameron and McNaughtan, 2014). Following

this line of argument, thinking about the positive aspects of organizational life—and

building change programs to spread these aspects elsewhere in organizations—has

been relatively neglected.

To take a POS perspective involves what one of its founders, Kim Cameron, describes

as “four connotations” (Cameron and McNaughtan, 2014, p. 447):

(i) “adopting a positive lens,” which means that whether one is dealing with celebra-

tions/successes or adversity/problems, the focus is on “life-giving elements”;

(ii) “focusing on positively deviant performance,” which means investigating outcomes

that are well in excess of any normally expected performance, that is, outcomes that

are spectacular, surprising, or extraordinary;

(iii) “assuming an affirmative bias” involves holding the view that positivity generates in

individuals, groups, and organizations the capacity for greater achievements; and

(iv) “examining virtuousness” involves assuming that all “human systems” are inclined

toward “the highest aspirations of mankind.”

Appreciative Inquiry at Roadway Express

Roadway Express, a North American industrial and

commercial transportation company, adopted an

appreciative inquiry approach in order to change

its culture and management. Working with Case

Western Reserve University, the company embarked

on a major leadership training program in order

to develop skills and capabilities for sustained eco-

nomic performance. In what was called the Break-

through Leadership Program, 150 Roadway Express

leaders went through personal discovery exercises

involving developing personal vision statements,

identifying personal strengths and weaknesses,

developing personal learning plans, and experi-

menting with these back in the work setting. Execu-

tive coaches served to facilitate these processes.

In the next phase, David Cooperrider, who

co-founded appreciative inquiry, worked with them

in convening summits (large group meetings), each

held over two days and consisting of a cross section

of stakeholders (customers, staff, suppliers, dock

workers, and others). The aim of these summits was

to identify what the “ideal” was for the organiza-

tion in relation to a variety of business issues. Each

summit went through the four AI stages (discovery,

dream, design, and destiny) in order to facilitate

cooperation and collaboration throughout the orga-

nization. From 2000 to 2004, 8,000 Roadway peo-

ple experienced this process, with over 70 summits

being held in this time. At the end of each summit,

in what was referred to as the “open microphone”

segment, participants “publicly pledged their com-

mitment to each other to see the changes embod-

ied in the action plans through to completion” (Van

Oosten, 2006, p. 712).

Source: Van Oosten (2006).

294 Chapter 9 Organization Development and Sense-Making Approaches

In line with the coaching metaphor, POS can be depicted as coaching organizations to

identify their “best plays,” to understand the behaviors and dynamics underlying them, and

then to work out how to spread them to other parts of their “game” (the organization).

POS has had its critics. Fineman (2006, pp. 270–73) raises four issues that question

whether POS can really live up to its “positive” aims. First, he questions whether we can

really agree on which behaviors are “positive.” What passes for being positive will vary in

different environments. For example, in reviewing a number of research studies, he points

out how “‘courageous,’ ‘principled’ corporate whistle-blowers are also readily regarded

as traitors, renegading on the unspoken corporate code (‘virtue’) to never wash one’s dirty

linen in public.”

Second, he (2006, pp. 274–75) questions whether the positive can be separated from the

negative or whether they are really “two sides of the same coin, inextricably welded and

mutually reinforcing.” For example: “Happiness may trigger anxiety (‘will my happiness

last?’). Love can be mixed with bitterness and jealousy. Anger can feel energizing and

exciting.” By focusing on positive experiences, he maintains, approaches such as apprecia-

tive inquiry fail “to value the opportunities for positive change that are possible from neg-

ative experiences, such as embarrassing events, periods of anger, anxiety, fear, or shame.”

Third, he (2006, p. 276) points to how what are regarded as positive behaviors and

emotions differ, not just in different organizational environments but across different cul-

tural environments. Drawing on the work of writers on culture, he points out how “[e]

ffusive hope, an energizing emotion in the West, is not a sentiment or term prevalent in

cultures and sub-cultures influenced by Confucianism and Buddhism.”

Fourth, he (2006, p. 281) suggests that there is “an unarticulated dark side to positive-

ness.” This occurs where there is a lack of recognition that there are different interests

in organizations and that not all people respond well to so-called positive programs like

empowerment and emotional intelligence or practices that impose a “culture of fun” in the

workplace. These programs “have a mixed or uncertain record, and some can produce the

very opposite of the self-actualization and liberation they seek” (Fineman, 2006, p. 281).

In response to these criticisms, defenders of POS argue that their perspective comple-

ments and expands rather than replaces the perspective of those who “only wrestle with the

question of what’s wrong in organizations” (Roberts, 2006, p. 294). Indeed, those whose

focus is on the latter question “may inadvertently ignore the areas of human flourishing

that enliven and contribute value to organizations, even in the face of significant human and

structural challenges” (Roberts, 2006, p. 295). POS is presented as “concerned with under-

standing the integration of positive and negative conditions, not merely with an absence

of the negative” (Cameron and Caza, 2004, p. 732). Rather than assume that there are no

universally positive virtues, the task of POS is to “discover the extent to which virtues and

goodness are culturally influenced” (Roberts, 2006, p. 298). Roberts (2006) suggests that

criticism of POS may be due to a combination of the critics not wanting to step outside

of their comfort zone—an approach to managing change that is focused on identifying

problems—and lack of consideration for the relative infancy of POS as an area of practice.

Where does this leave the manager of change? On the one side, proponents of POS

wish to change organizations with “an implicit desire to enhance the quality of life for

individuals who work within and are affected by organizations” (Roberts, 2006, p. 294).

On the other side are critical scholars who do not lay out an alternative call to action for

agents of change so much as caution them if they assume that they will be successful

Chapter 9 Organization Development and Sense-Making Approaches 295

in their “positive” ventures. Instead, the critics of POS urge POS advocates to recognize

how underlying power relationships and interests in organizations (and beyond) will limit

their actions; they also are urged to recognize that what passes as being positive will vary

in different contexts and may not be shared by all. However, such critical reflections do

not seem to have dented, in any significant way, the increasing momentum that the POS

movement has gained, at least in North America. Whether it achieves the same momentum

outside of the United States remains to be seen.

Cameron and McNaughtan (2014, p. 456) revisit the findings of a decade of applica-

tion of POS ideas to organizational change covering such variables as virtuous practices

(e.g., compassion), humanistic values, the meaningfulness of work, high-quality inter-

personal communication, hope, energy, and self-efficacy. They summarize the results as

“provid[ing] support for the benefits of positive change practices in real-world work set-

tings.” However, adding a note of caution, they (2014, p. 456) state that the relative new-

ness of the approach means that not enough is yet known to be able to be sure of “what,

how or when” it is most successful.

LO 9.3 Dialogic Organizational Development

As OD developed through its various manifestations such as large group interventions

and appreciative inquiry, it was moving more and more away from the classic, diagno-

sis-driven approach to OD (as described in the initial sections of this chapter). Gervase

Bushe and Bob Marshak (2009) characterized this change by contrasting the traditional

“diagnostic OD” with what they described as “dialogic OD.”

Bushe and Marshak (2009) contrast the characteristics of diagnostic and dialogic OD.

Whereas traditional/diagnostic OD emphasizes that any problem requiring change could

be addressed by first applying an objective diagnosis of the circumstances of the situation,

From the Originators of Dialogic OD Gervase Bushe and Bob Marshak

By 2005 each of us had separately concluded that

various OD change methods were being practiced

that didn’t follow the basic orthodoxies found in

OD textbooks. Although we didn’t really know

each other at that time, we decided to collaborate

on defining the premises and practices we believed

underlay approaches as disparate as Open Space

Technology, Appreciative Inquiry, and the Art of

Hosting, to name a few. In a 2009 article we orig-

inated the name and concept of “Dialogic OD,”

based on the principle that change comes from

changing everyday conversations, and contrasted it

with the foundational form of OD we named “Diag-

nostic OD.”

Later we articulated key ideas derived from the

interpretive and complexity sciences that lead to a

Dialogic OD Mindset and the “secret sauce” of ingre-

dients that in combination produce transformational

change. Those ingredients, occurring in no specific

order, include: disruption of ongoing patterns of

social agreement such that the emergence of new

patterns of organizing become possible; introduc-

tion of a “generative image,” for example sustainable

development, that stimulates new thinking and possi-

bilities not previously considered; and development

of new narratives that become part of the day-to-day

conversations that guide how organizational actors

think about and respond to situations.
(Continued)

296 Chapter 9 Organization Development and Sense-Making Approaches

dialogic OD treats reality as subjective so that the priority in intervening in an organiza-

tion was to identify and acknowledge different stakeholders’ interpretations of what for

them was “reality.” In parallel with this, the role of the OD consultant moved from being

the provider of data for fact-driven decision making to being the facilitator of processes

that encouraged “conversations” around change issues (Marshak, 2013).

Central to the dialogic OD approach is the view that “real change” only occurs when

mindsets are altered and that this is more likely to occur through “generative conversa-

tions” than persuasion by “facts.” Altered mindsets are represented by changes at the level

of language and associated changes at the level of actions taken by organization members.

This changed approach is also associated with moves away from (i) seeing change as a

relatively manageable, plannable, linear process to one that could be unpredictable, with

far from predictable moves from diagnosis to outcomes, and (ii) “the shift from fixing a

problem to cultivating a system capable of addressing its own challenges” (Holman, 2013,

p. 20) (see table 9.6).

For more detail on dialogic OD, see Gervase Bushe and Robert Marshak, Dialogic

Organization Development: The Theory and Practice of Transformational Change

( Oakland, CA: Berrett-Koehler, 2015), or the earlier OD Practitioner (vol. 45, no. 1, 2013)

special issue on this topic.

We believe Dialogic OD is especially effective in

a VUCA [volatility, uncertainty, complexity, ambi-

guity] world of continual change. Given those

conditions, instead of trying to control the uncon-

trollable, Dialogic OD asks leaders to enrich stake-

holder networks, promote open-ended inquiry, and

support groups that self-generate small experiments

that challenge conventional wisdom and may

lead to new outcomes not previously considered.

Leaders stay involved by amplifying and embedding

new ideas and practices that work. In brief, leaders

become sponsors and framers of dialogic processes

that stimulate innovation and invention, rather than

trying to maintain illusory control as directors or

managers of planned change.

Source: Private correspondence from Bob Marshak to the authors,

March 11, 2015.

TABLE 9.6
How Dialogic OD and Diagnostic OD Are Different—Base Assumptions

Dialogic OD Diagnostic OD

How the OD prac-
titioner influences
the organization

Working with people in a way that
creates new awareness, knowledge, and
possibilities

Carrying out diagnosis of the
organizational situation before
intervening

What makes
change happen?

Engaging with stakeholders in ways that
disrupt and shift existing patterns of
norms, beliefs, and behaviors, leading to
the emergence of new possibilities and
associated commitments

Applying known expertise to identify,
plan, and manage the change in a
systematic unfreeze-change-refreeze
sequence

The consultant’s
orientation

As an involved facilitator who becomes
part of the situation being changed

As a neutral facilitator who retains
a separateness/distance from those
being affected

Source: Adapted from Marshak (2015), table 1, p. 48.

Chapter 9 Organization Development and Sense-Making Approaches 297

Michael Beer on What OD Must Do to Be Influential

Michael Beer is Professor Emeritus at Harvard Business

School, and cofounder and Chairman of management

consulting firm TruePoint Partners. Reflecting on 50

years of involvement in the field of OD (Beer, 2014,

pp. 60–61), he argues that OD is “at a crossroads”

in terms of its capacity to be influential. According to

Beer, even if the specific nature of their engagement

directly involves just one of the following processes,

the OD practitioner must consider how what they are

doing will enhance all three of:

(i) Performance alignment – high performance that

flows from the organization’s design, processes,

and capabilities being aligned with its strategy.

(ii) Psychological alignment – the commitment of

people that follows from alignment between the

organization’s culture and humanistic values.

(iii) Capacity for learning and change – the organi-

zation supporting, on an ongoing basis, hon-

est conversations on any matters that inhibit (i)

and (ii).

OD in Different Settings

1. The United States Army

Kohnke, A., and Gonda, T. 2013. Creating a

collaborative virtual command center among

four separate organizations in the United States

Army: An exploratory case study. Organization

Development Journal, Winter:75–92.

2. Nonprofit organization

Fox, H. L. 2013. The promise of organizational

development in nonprofit human services

organizations. Organization Development Journal,

Summer: 72–80.

3. Military hospital

Regan, A.-M. C., and Hobbs, L. M. 2012. Walter

Reed Bethesda—much more than changing

names. OD Practitioner 44(3):31–36.

4. Private company

Blesoff, D. E. 2011. Making sustainability

sustainable: Lessons from Radio Flyer. OD

Practitioner 43(4):17–22.

5. Media organization

Birmingham, C. 2012. How OD principles of

change still matter in an impossible situation. OD

Practitioner 44(4):61–64.

6. Mergers and acquisitions

Marks, M. L., and Mirvis, P. H. 2012. Applying

OD to make mergers and acquisitions work. OD

Practitioner 44(3):5–12.

7. Big data

Church, A. H., and Dutta, S. 2013. The promise

of big data for OD. OD Practitioner 45(4):23–31.

As OD continues to evolve, it remains a major “school of thought” as to how

organizational change should be managed. However, not all OD practitioners are sure that

a move from [diagnostic] OD to dialogic OD is sufficient to position OD optimally for

being able to have an influence on how change in organizations is managed. For example,

both Worley (2014) and Bartunek and Woodman (2015) argue that the diagnostic-dialogic

dichotomy is unhelpful and that “we should be talking about whether a comprehensive

and systematic diagnostic OD can be integrated with a really good dialogic OD to create

a powerful change process” (Worley, 2014, p. 70). For Worley (2014, p. 70), the dialogic-

diagnostic focus places too much attention on “OD as process”; he argues that for OD “to

capture its full potential,” practitioners must complement their process skills with skills and

knowledge “related to the principles and frameworks of strategy and organization design.”

298 Chapter 9 Organization Development and Sense-Making Approaches

LO 9.4 Sense-Making

As discussed in chapter 2, the interpreter image emphasizes the role of the change

manager as a “manager of meaning,” that is, it emphasizes that a core skill of a change

manager is the capacity to frame meaning for those involved. Times of change can be

confusing to those affected, and a key element of what change managers do through their

various actions and communications is convey a sense of “what’s going on.” Organiza-

tional change is a process which is “problematic” in terms of its outcomes “because it

undermines and challenges [people’s] existing schemata, which serve as the interpretive

frames of reference through which to make sense of the world” (Lockett et al., 2014).

Change often means that the leaders of an organization are seeking to take it in a sig-

nificantly new direction and/or to have the organization function in a significantly differ-

ent manner. In order to do so, the sense-making process is likely to involve a sequence

that Mantere and colleagues (2012) describe as beginning with “sense-breaking” (as the

leaders challenge the appropriateness of the status quo), followed by “sense-giving” (their

attempts to reshape people’s understandings of the direction they should be heading).

Managers lacking self-awareness will often convey a message that is other than they

would intend. People in organizations interpret managers’ actions symbolically and, par-

ticularly where formal communications leave ambiguity, such interpretations will fill the

“meaning gap.” Good change managers are likely to have a high level of self-awareness

and recognize that their capacity to provide a narrative along the lines of “what’s going on

and why?”—that is, acting as an interpreter—can meet a need.

Drawing on the interpreter image of managing organizational change, Karl Weick’s (2000;

Weick et al., 2005) sense-making model provides an alternative approach to the OD school.

Weick’s (2000) point of departure is to argue against three common change assumptions.

The first is the assumption of inertia. Under this assumption, planned, intended change

is necessary in order to disrupt the forces that contribute to a lack of change in an organi-

zation so that there is a lag between environmental change and organizational adaptation.

He suggests that the central role given to inertia is misplaced and results from a focus on

structure rather than a focus on the structuring flows and processes through which orga-

nizational work occurs. Adopting the latter perspective leads one to see organizations as

being in an ongoing state of accomplishment and re-accomplishment, with organizational

routines constantly undergoing adjustments to better fit changing circumstances.

The second assumption is that a standardized change program is needed. However, Weick

(2000) says that this assumption is of limited value since it fails to activate what he regards as

the four drivers of organizational change. As outlined in chapter 2, these drivers are:

• Animation (whereby people remain in motion and may experiment, e.g., with job descriptions).

• Direction (including being able to implement, in novel ways, directed strategies).

• Paying attention and updating (such as updating knowledge of the environment and

reviewing and rewriting organizational requirements).

• Respectful, candid interaction (which occurs when people are encouraged to speak out

and engage in dialogue, particularly when things are not working well).

These drivers emerge from a sense-making perspective that assumes “that change

engages efforts to make sense of events that don’t fit together” (Weick, 2000, p. 232).

Chapter 9 Organization Development and Sense-Making Approaches 299

For Weick, most programmed or intentional changes fail to activate one or more of these

sense-making forces that assist individuals in managing ambiguity.

The third assumption is that of unfreezing, most often associated with Kurt Lewin’s

unfreezing–changing–refreezing change formula. Unfreezing is based on the view that

organizations suffer from inertia and need to be “unfrozen.” However, “if change is con-

tinuous and emergent, then the system is already unfrozen. Further efforts at unfreezing

could disrupt what is essentially a complex adaptive system that is already working”

(Weick, 2000, p. 235). If there is deemed to be ineffectiveness in the system, then his posi-

tion is that the best change sequence is as follows:

• Freeze (to show what is occurring in the way things are currently adapting).

• Rebalance (to remove blockages in the adaptive processes).

• Unfreeze (in order to enable further emergent and improvisational changes to occur).

In this view of organizational change, change agents are those who are best able to

identify how adaptive emergent changes are currently occurring, many of which often are

dismissed as noise in the system.

As noted in chapter 2, from a sense-making perspective, it is up to managers of change

“to author interpretations and labels that capture the patterns in those adaptive choices

[and] within the framework of sense-making, management sees what the front line says

and tells the world what it means” (Weick, 2000, p. 238). Sense-making is “a social pro-

cess of meaning construction and reconstruction through which managers understand,

interpret, and create sense for themselves and others of their changing organizational con-

text and surroundings” (Rouleau and Balogun, 2010, p. 955).

More Than Noise in the System? Change as Ongoing Patching

An alternative to large-scale structural change is

what Eisenhardt and Brown (1999) term “patching.”

They argue that this is a strategic process of small-

scale changes that enable constant realignment of

organizational processes to external changes. Patch-

ers have distinct mindsets that involve making many

small organizational changes in relation to target

markets, including additions, splits, exits, transfers,

and combinations. Change managers with patching

mindsets create organizational routines to support

the process:

For instance, Cisco’s pattern for adding busi-

nesses includes routines for selecting acquisition

targets (the preference is for new companies

about to launch their first product), for mobiliz-

ing special integration teams, for handling stock

options, and for tracking employee retention

rates. The routines also cover mundane details

like when and how to change the contents of

the vending machines at the acquired company.

(Eisenhardt and Brown, 1999, p. 76)

Similar patching processes are also found, Eisen-

hardt and Brown argue, in high-performance com-

panies such as Hewlett-Packard, 3M, and Johnson

& Johnson. They suggest that patching decisions

should be made quickly, the direction of the patching

should emerge from consideration of three or four

alternative ways of proceeding, in some cases part of

the organization should experiment with it to reduce

major errors and problems, and scripts need to be

developed to help with the ongoing coordination of

tasks, work, and people as the new patch is applied.

The authors argue that patching helps organizations

“to stay poised on the edge of chaos” and under-

pins shareholder value by helping to drive business

growth (Eisenhardt and Brown, 1999, pp. 77–80).

Source: Eisenhardt and Brown (1999). Selections reproduced with

permission of Harvard Business School Publishing.

300 Chapter 9 Organization Development and Sense-Making Approaches

In a landmark study in using and extending the sense-making framework to the man-

agement of organizational change, Jean Helms Mills (2003) investigated organizational

change within Nova Scotia Power, a large electrical utility company based on the eastern

shore of Canada. From 1982 to 2002, Nova Scotia Power went through a variety of major

organizational changes, including:

• The introduction of a cultural change program.

• Privatization.

• Downsizing.

• Business process reengineering.

• Strategic business units.

• Balanced scorecard accounting.

Helms Mills (2003) found that there were a variety of interpretations within the

organization about these change programs. Drawing on the work of Weick (2000), she

argues that these differing sense-making activities across the organization are indicative

of the importance of understanding change as the accomplishment of ongoing processes

for making sense of organizational events. She uses Weick’s (2000) eight features of a

sense-making framework to show how they impacted on understandings of organizational

changes in the company. She draws out from each feature its implications for change

managers (see table 9.7).

TABLE 9.7
Eight Features of a Sense-Making Framework

Sense-Making
Framework
Feature

Definition

Implications for
Change Managers

Sense-making
and identity
construction

The different ways in which people make
sense of the same organizational change
events and how it is related to their
understanding of the way their identities
are constructed within organizations
(Helms Mills, 2003, p. 126).

The “top-down initiatives requiring
dramatic changes of self (i.e., from
humanist to efficiency focused) are highly
problematic and need either to be avoided
or handled with great skill” (Helms Mills,
2003, p. 145).

Social
sense-making

The need that people have to make sense
of their situations not just as individuals
but as social individuals is connected to
a variety of influences on them such as
supervisors, management, trade unions,
and so forth.

An understanding of social sense-making
highlights the need for managers to
identify the social factors that influence
sense-making in their organizational
contexts.

Extracted cues of
sense-making

The need for managers of change to be
aware of the way people draw on a variety
of “cues” or ideas and actions, perhaps
taken from the external environment, in
order to make sense of various decisions.

Change managers need to identify
appropriate cues and match them to
intended change programs. The way in
which these cues are interpreted, however,
may inadvertently create problems for staff
in accepting the legitimacy of the change
program and its intended purposes.

Chapter 9 Organization Development and Sense-Making Approaches 301

Ongoing
sense-making

Sense-making changes over time as
new cues are experienced and events
addressed.

Change managers need to understand
“that on-going sense-making stabilizes a
situation and how change acts as a shock,
generating emotional response and new
acts of sense-making” (Helms Mills, 2003,
p. 164).

Retrospection Reference to Karl Weick’s argument
that people make sense of their actions
retrospectively.

Change managers need to understand
that different groups will apply their own
retrospective sense-making in order to
understand emerging organizational
events.

Plausibility The way that change management
programs need to be sold so that the
“story” about the change is plausible
rather than necessarily accurate.

Change managers need to understand
the way the context and power relations
impact on their ability to provide plausible
stories that gain widespread acceptance of
the need for change.

Enactment Whereas the above aspects of sense-
making act as influences on sense-making,
“enactment is about imposing that
sense on action” (Helms Mills, 2003, pp.
173–74).

Enactment alerts change managers to the
need to connect sense-making to actions.

Projective
sense-making

The ability of a powerful actor to project
sense-making onto a situation, shaping the
interpretations of others.

The implication of this is that using
legitimate power to impose sense-making
on parts of the organization may be an
important aspect of understanding the
implementation of change.

Source: Based on Helms Mills (2003).

Similarly, in a study of downsizing in Telenor, Norway’s main telecom organiza-

tion, Bean and Hamilton (2006) point to the way its corporate leaders used sense-mak-

ing to frame changes to the company in terms of making it an innovative, flexible,

learning organization. After the downsizing, while some staff accepted the corporate

“alignment” frame, others adopted an “alienated” frame, feeling marginalized and fear-

ing for their job security. The researchers suggest that framing of change is fragile,

with employees’ interpretations of senior management pronouncements varying from

frame-validating (accepting) to frame-breaking (challenging). That is, when the change

manager acts as interpreter, there is no guarantee that the manager’s interpretations will

not be contested.

As noted in chapter 8 on the topic of resistance to change, people in organizations can

hold very strong views about an organization including what it “stands for” and how it

should operate, and these views (“mental models”) can make people resistant to change

that they see as inconsistent with these views. Another way of expressing this same point

is that people in organizations can be disinclined to accept the change manager’s construc-

tion of events (i.e., his/her interpretation). As noted in chapter 7 on change communication

strategies, the communicated message is not necessarily the message as understood by the

302 Chapter 9 Organization Development and Sense-Making Approaches

receiver. In regard to the construction of events as provided by the change manager, it is

not just that there may be some misunderstanding of the “story” the manager is seeking to

communicate; the story may be well and truly understood, but not accepted as “the facts

of the situation.”

The sense-making approach alerts change managers to the different facets that influ-

ence interpretations of events. At the same time, it is clear that these influences are often

deeply embedded and less tangible than a clear set of steps that can be followed. Intangi-

ble does not mean less important or helpful, but they do require change managers to be

what Bolman and Deal (2003, p. 19) call more “artistic” than “rational.” Managing change

as artistry “is neither exact not precise. Artists interpret experience and express it in forms

that can be felt, understood, and appreciated by others.”

Change managers who are comfortable with these concepts are likely to find the

sense-making framework of assistance to them in exploring the “tangled underbrush” of

organizational change (Bolman and Deal, 2003, p. 13). At the same time, they need to be

mindful of organizational limitations on their sense-making abilities. This point is made

by Balogun and Johnson (2004, p. 545) in their study of sense-making by middle man-

agers when they “question the extent to which leaders can manage the development of

change recipients’ schemata, particularly in the larger, geographically dispersed, modular-

ized organizations we are increasingly seeing.”

In reviewing the sense-making framework, it is clear that it provides less a set of

prescriptions for managers of change and more a set of understandings about how to

proceed. It acknowledges the messiness of change and accepts that competing voices

mean that not all intended outcomes are likely to be achieved. However, critical to engag-

ing these competing voices is the ability to shape and influence how they make sense of

organizational events.

Contested Interpretations in Metropolitan Police Department

Metropolitan (a pseudonym) Police Department

began a change process that involved an organiza-

tional restructuring in which an increased share of

resources was allocated to proactive policing (intelli-

gence gathering) and to a mode of organizing that

prioritized having the capacity to rapidly deploy

police when and where they were needed. The

change managers’ narrative emphasized the impor-

tance of the need to make these specific changes so

that the police could be more “flexible” and by so

doing deal more effectively with organized crime,

which was demonstrating a capacity to speedily

form and/or disband criminal teams to meet current

needs.

However, the framing of the need for change as

a matter of needed “flexibility” was not viewed that

way by many of the police because the change was

experienced by them as involving regular turnover

in squad membership. The significance of this expe-

rience was that consistency and longevity of squad

membership were seen by many police as vital ele-

ments in producing both deep knowledge about

specific areas of crime (e.g., armed robbery) and

deep relations of trust (between squad members),

which they saw as central to effective policing.

Source: Based on Dunford et al. (2013).

Chapter 9 Organization Development and Sense-Making Approaches 303

Can Sense-Making Success Become a Problem?

“The Office” is a Nordic organization that began a

change process as a result of an announced forth-

coming merger with another organization. As part

of the change process, the top management of the

Office put a lot of effort into convincing staff that

the current organization was substantially under-

performing due to being overly bureaucratic and as

a result failing to be the innovative organization that

it was intended to be. The strategy of the Office was

presented by top management to staff as outdated

and inappropriate.

The discrediting of the current arrangements

at the Office—as described above—provided the

basis for “sense-breaking.” “Sense-giving” occurred

through top management framing the merger as a

way in which the staff of the Office would become

part of a new and much higher-performing entity,

capable of operating with a quality, flexibility, and

level of customer service that the Office could not

deliver in its present form. This “sense-giving”

succeeded, and the staff of the Office bought into

the message being “sold.”

Unfortunately, complications then arose in the

interorganizational negotiations, and the merger

was abruptly cancelled less than a week before the

planned merger date. The Office’s top management

presented the failed merger as a good outcome and

announced the reintroduction of a strategy almost

identical to the one they had been following for 10

years. The reaction from the Office staff: “a sullen

lack of enthusiasm” (Mantere et al., 2012, p. 186),

even a sense of betrayal.

The top management had done such a good

job of sense-breaking and sense-giving that the pre-

merger version of the Office had been reframed by

staff as no longer appropriate or acceptable, and

this situation/interpretation was not changed just

because the merger had not proceeded.

Source: Based on Mantere et al. (2012).

Managing Change from a Sense-Making Perspective Some Basic Advice

1. Change managers should try to provide a clear

narrative that articulates the what, why, and how

of a proposed change.

2. Humans are creatures who abhor a “meaning

vacuum”; in the absence of clear communica-

tion they will draw conclusions, that is, attribute

meaning to fill the void. This is something that

an organization should try to avoid at a time of

change, as all sorts of misconstructions might

take hold and make change more difficult to

achieve.

3. There is no guarantee that change managers’

attempts at sense-giving will be successful, as

organizational members live in a world of multi-

ple narratives and, regardless of authority struc-

tures, the interpretation being presented by a

change manager need not have greater credi-

bility than other narratives. For example, some

organizations are characterized by a very strong

sense of identity, which can give the “what we

stand for, how we do things, what we value” an

almost moral quality that can make organiza-

tional members very disinclined to “switch nar-

ratives.”

4. Managers (including those in change manage-

ment roles) are “creators of meaning” whether

they like it or not. They cannot choose to opt

out of this role. Their only choice is how con-

sciously/explicitly to play it. Managers’ actions

have symbolic meaning and will be interpreted

(by other organizational members) in this way.

In this regard, see exercise 9.4.

While (as noted earlier in this chapter) OD has been subject to critique as it has evolved,

this is much less the case for sense-making. For an exception, see Sandberg and Tsoukas

(2015).

304 Chapter 9 Organization Development and Sense-Making Approaches

EXERCISE
9.1

Reports

from the

Front Line

This exercise requires you to interview two organization development practitioners about
how they go about doing their work. Compare and contrast them in terms of the follow-
ing issues:

• Their background.

• The values they espouse.

• The steps that they say they use in approaching a consulting assignment.

• The tensions they identify in working as an OD practitioner.

• Their perceptions of the way the OD field has changed and likely will change into the
future.

What general conclusions do you draw about the practice of OD?

EXERCISE
9.3

Making

Sense of

Sense-

Making

Identify a current change in an organization with which you are familiar. Alternatively,
identify a current public issue about which “something must be done.” Consider what
sense-making changes might need to be enacted and how you would go about doing
this. Assess this in terms of the eight elements of the sense-making framework suggested
by Helms Mills as set out in table 9.7:

identity construction

social sense-making

extracted cues

ongoing sense-making

rospection

plausibility

enactment

projection

Which did you feel you might have the most/least control over? Why? What implications
does this have for adopting a sense-making approach to organizational change?

EXERCISE
9.2

Designing a

Large-Scale

Change

Intervention

Choose a current issue in your local neighborhood. The aim of this exercise is to design a
large-scale change intervention program in relation to this issue. Consider the following:

• How many people would it make sense to involve?

• Where and when would you hold it?

• How would you ensure that you have a representative cross sample of relevant people
in the room at the same time? What data sources would you need to achieve this?

• Who are the key decision makers in relation to this issue? What arguments will you use
to get them to attend the meeting?

• How will you structure the agenda of the meeting? What would be the best way of
doing this so that people who attend on that day have appropriate buy-in to it?

• How would you run the actual meeting?

• What technology would you need to make it work well?

• What would people take away from the meeting?

• What follow-up actions would you plan to ensure that actions and decisions flowed
from it?

• What possible funding sources might you draw on to finance the meeting?

• As a result of considering such questions, what new issues emerge for you, as a large-
scale change intervention agent, to consider? What specific skills would you need to
make such an event work well? Which of these skills would you need to develop more?

LO 9.2

LO 9.4

LO 9.2

Chapter 9 Organization Development and Sense-Making Approaches 305

EXERCISE
9.4

Interpret-

ing the

Interpreter:

Change at

Target

Target is the U.S. third-largest retailer after Walmart and Costco, but in the last decade it
has seen its earnings drop from $3.2 billion to $1.5 billion (in 2014) with net income as
a percentage of sales similarly dropping from 4.6 percent to 2 percent during this period.
These were key elements of the context into which Brian Cornell arrived in August 2014
as Target’s new CEO. Since arriving, some of the actions that Brian has taken include:

1. He made an impromptu and incognito visit to a Target store in Dallas to talk to cus-
tomers. Unrecognized by store employees or customers, he sought candid opinions
from shoppers. This was a surprise to Target executives because it was a significant
departure from normal practice. Prior to Cornell’s arrival, store visits did occur—
supposedly as intelligence-gathering exercises—but they were “meticulously planned
affairs, only less formal than, say, a presidential visit,” with the store managers notified
in advance and “the ‘regular shoppers’ handpicked and vetted” (Wahba, 2015, p. 86).

2. When he first arrived at Target’s headquarters (in Minneapolis) he was allocated the
newly refurbished CEO’s suite, but he insisted that he be moved to a smaller office
close to Target’s global data nerve center. The 10 staff in this center monitor live feeds
from social media—including Pinterest, Facebook, and Twitter—and TV stations for
stories/information on product launches, cust