An Overview of Change Management

Models

ZINNOV

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 An Overview of Change Management Models

Table of contents

1.0 INTRODUCTION .................................................................................................................................. 3

2.0 ORGANIZATION OF THIS PAPER................................................................................................... 3

3.0 DEFINITION OF CHANGE MANAGEMENT .................................................................................. 4

4.0 UNIQUE CHANGE MANAGEMENT CHALLENGES IN GLOBAL SOURCING ...................... 5

5.0 OVERVIEW OF CHANGE MANAGEMENT MODELS ................................................................. 6

5.1 THEORIES OF CHANGE BY MICHAEL BEER AND NITIN NOHRIA ............................................................. 6
5.2 SPEED OF CHANGE MODEL BY DARYL R. CONNER ............................................................................... 6
5.3 THE BURKE-LITWIN MODEL OF ORGANIZATIONAL PERFORMANCE AND CHANGE ................................ 8
6.0 CONCLUSION ....................................................................................................................................... 9

7.0 REFERENCES ....................................................................................................................................... 9

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 An Overview of Change Management Models

1.0 Introduction
Change is one of the most important business issues of our day. The post-World War II period
was characterized by steady and predictable economic growth that has since given way to a
tumultuous phase characterized by a sharp increase in competition and technical innovation. In
order to stay ahead of the game, it is now important and inevitable, for organizations to Change.
It is safe to say that Change is the only constant in today’s business world. In today’s World of
Global Sourcing, managers are faced with an ever increasing resistance to Change. Despite
employees understanding the importance of Global Sourcing, fear of layoffs instill a lot of
resistance to the process.

70 % of all Change It is fair to say that a good number of change initiatives fail. An article
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initiatives fail. by Micheal Beer and Nitin Nohria in Harvard Business Review cites
Source: Harvard Business a 70% failure rate for all change initiative programs. In a study of one
Review
hundred top management-driven corporate transformations, John
Kotter found that more than half did not survive the initial phases with only a few being “very
successful”. A majority of unsuccessful initiatives are a result of organization’s failure to address
the human component of change.

Managing Change takes place at two different levels. - The Strategic Approach designed to deal
with the technical issues, planning, budgeting, staffing of the anticipated change and the Tactical
or Soft Approach designed to deal with the human perspective, the psychological impact of
change.

Organizations that have strong commitment-based psychological contracts with their employees
have been found to be successful in dealing with the human component of Change. This is of
great importance for organizations going through this process in order to have sustainable
competitive advantage. The anxiety of employees undergoing corporate restructuring has a
deleterious effect on the success of the program. The focus of the paper is to enable
organizations understand the human aspects of change management and illustrate models
around human aspects of change management.

2.0 Organization of this Paper

This paper is organized in the following sections to enable the readers of the paper
navigate easily through the components of Change Management.

• Definition of Change Management

• Unique Change Management Challenges in Global Sourcing
• Overview of Change Management models

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 An Overview of Change Management Models

3.0 Definition of Change Management

In a broad sense, Change Management means “the continuous process of aligning an

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The emotional States organization with Change Triggers responsively and effectively” .
and psychological Change Management has many elements such as organization
thought process that redesign, business plan development, leadership planning,
people go through managing the human side etc. The authors of this paper would like
when exposed to to define Change Management from the human aspect of change as
change is the Human that is the focus of this paper.
side of change
Change Management from a human aspect is simply an
efficient and effective process of managing the human Side of Change. The next challenge
is to define what the human side of change is. When expose to change, people go through
varying degrees of emotion. In his book After Shock, Harry Woodward and Steve Buchholz
explain the mind state of the people :

“When Change occurs, something ends. Immediately then, people want something else to begin.
They want something to fill the void that the ending has created. Unfortunately, this magic
solution seldom occurs. Thus a transition is needed, a way to bridge the gap from the ending to
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the new beginning”

This transition will create varying degrees of emotion such as fear, denial, shock, resentment,
stress etc. These emotions and the psychological thought process constitute the human side of
change

An efficient change management technique should then help people pass through this transition
phase and slowly convert these emotions into positive emotions such as hope, motivation
and enthusiasm. A successful beginning depends on successful Ending and Transition. For this
A dialogue from simple reason some authors refer to the Human Side of Change
Hope for the Flowers Management is referred to as Transition Management.
“How Does one
become a Butterfly”
“You Must want to fly The next section of this paper deals with some of the unique
so much that you are Change Management challenges in Global Sourcing
willing to give up
being a caterpillar”

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 An Overview of Change Management Models

4.0 Unique Change Management Challenges in Global Sourcing

Global Sourcing provides unique challenges to the company that makes Change Management a
very complicated task. Some of the factors that complicate Change Management in Global
Global Sourcing Sourcing are:
Change is just not any
other Change; it has A. Emotional Challenges
broader, deeper o Global Sourcing triggers varying degrees of emotions among
change implications people; fear of job loss, feelings of unfairness in exploiting
cheaper offshore countries etc.
o The need to deal with a new culture, new country triggers stress
o Global Sourcing sends a very unique feeling in the company which the authors of this
paper would like to define as “Fear of Domino Effect”. In large organizations, even when
Global Sourcing happens in one small department, the employees of the whole company
feeling that their department is next. The magnitude of propagation of this fear in the
company is not seen in other change management problems.
o In large companies, visionaries/leaders and the change sponsors do not share the same
passion for Global Sourcing because the Change Sponsors do not see all the components
of Global Sourcing as seen by the visionaries/leaders. So the change sponsors foster a
shade of doubt. So when their employees confront them with questions, they may not able
to explain the Global Sourcing path of the company. This triggers loss of credibility among
employees.
o Global Sourcing discussions/negative comments often take place in the cafeteria/elevators
and there is a danger of people with the same cultural identity as the offshore country
being targets of these comments. So companies face a big challenge of managing their
diversity values
B. Communication Challenges
o The timing of the Global Sourcing communication to employees is very critical- yet
companies seem to delay a formal communication to the employees on their Global
Sourcing efforts. Employees start getting their information through grapevine, this
information is often distorted creating unnecessary panic in the company
o The media is very focused on highlighting work being moved back from offshore countries
to the US. For example the recent reports on Dell, Lehman Brothers moving a portion of
their work, back from India to the US. While these reports provide some perspective, the
task masters of Global Sourcing in different companies are faced with constant
bombardment of these reports and are having to explain their model behind Global
Sourcing based on these reports
C. Execution Challenges
o The typical tolerance people have during any big project execution is much reduced when
it comes to Global Sourcing execution. So for any small issues during execution, people
question the very basics of Global Sourcing. Developing the acceptance of the offshore
entity as part of the company is a big puzzle in front of the change management task
masters
o Large companies usually have Change Management departments and have tremendous
experience managing change. While this experience can really help in Global Sourcing
change management, some companies try to view Global Sourcing as any other change
and use the typical change management solutions leading to potential failure.

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 An Overview of Change Management Models

5.0 Overview of Change Management Models

We take a look at two different models: Theories of Change, and Speed of Change.

5.1 Theories of Change by Michael Beer and Nitin Nohria

In the article “Cracking the Code of Change” Michael Beer and Nitin Nohria describe two theories
4.
of change

Model Description:
Theory E Change focuses on the economic value as dictated by the share holder returns. This
is a drastic theory of change focusing only on the bottom line through financial incentives,
Theory E- Change restructuring and layoffs
Al Dunlop’s firing Theory O Change is a softer, tactical approach that focuses on
11,000 Scott paper developing corporate culture and capability of the human resources.
employees is a The main focus of this theory is trust building and achieving
stunning example emotional commitment through team work and communications

Theory O- Change
Companies that Applicability of the Model
subscribe to Theory- It is very difficult to subscribe to just one theory of change. Most
O as Hewlett-Packard companies use a mix of both. Though companies want to use both
did when theories, as the theories are so drastically different, combining them
performance flagged can potentially take the trust away from the employees. While the
typically have theories give a good directional sense of what route the
psychological organizations could take, they are limited in offering tools/solutions
contracts with to enable the organization conduct the change smoothly
employees
Source: Cracking the
code of Change

5.2 Speed of Change Model by Daryl R. Conner

The speed of change model is explained by Daryl R. Conner in his book ‘Managing at the Speed
5
of Change ‘.

Model Description:
The Speed of Change model states that each of us is designed by nature to move through life
most effectively and efficiently at a unique pace that will allow us to face changes. The author
refers to this speed as the speed of change. The model suggests that it is very critical for
organizations to be aware of this inherent nature of people. Some people will be able to absorb
change much more easily than others. When one is faced with changes at a rate much higher
than what one can absorb, there are undesirable effects. These undesirable effects could vary in
severity such as emotional burn out, inefficiency, sickness, destructive behavior in the campus,
chronic absenteeism etc.

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 An Overview of Change Management Models

The author of this model explains that there exists a point at which humans can no longer
assimilate change without displaying dysfunctional behavior. Conner defines this point as the
Future Shock Future Shock.
A point at which
Humans can no The model recommends that the single most factor necessary for
longer assimilate individuals to increase their speed of change is human resilience.
change without Human Resilience is the ability to absorb higher levels of changes
negative effects while maintaining equilibrium. The model recommends that in order
Source: Managing at for change management efforts to be successful, resilient individuals
the Speed of Change
should lead the change management efforts. There are powerful
guidelines for the traits of resilient people defined by Conner.
Resilient people have the following traits:
• Display a sense of security and self assurance that is based on their view of life (Positive)
• Have a clear vision of what they want to achieve (Focused)
• Demonstrate special pliability (Flexibility)
• Develop structured approaches (Organized)
• Engage change rather than defend against it (Proactive)

Positive
Focused
Flexibility
Organized
Proactive

Resilience

Figure 3.0 Resilience Components

Applicability of the Model

This model is a very popular model in the Change Management world and the works associated
this theory are widely used by Change Management consultants in developing leadership traits
among individuals. This model also provides a set of guidelines for individuals wanting to excel in
organizations. However, this model is not intended to provide the blue print or techniques to
handle emotions when people have reached their After Shock point and how that will impact the
organization’s change management initiatives. It is not always easy for the After Shock Point to
be gauged without actually exposing people to change initiatives, however resilient they might
appear to be.

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 An Overview of Change Management Models

5.3 The Burke-Litwin Model of Organizational Performance and Change

In the book “The Change Management Handbook – A Road Map to Corporate Transformation”
6
W. Warner Burke describes the Burke-Litwin Model of Organizational Performance and Change .
Model Description:
This complex model considers the organizational phenomena with different variables affecting
change. These variables are grouped into two:

British Airways The Transformational factors: Transformational factors include

implementation of the External environment, Mission and Strategy, Leadership and
Burke-Litwin model Organizational culture. These refer to areas in which organizational
resulted in it having alteration is caused by the interaction of the customer and
significantly improved competitor forces with internal capabilities and require an entirely
service as passengers new behavior pattern on the part of organizational members.
would call it from The Transactional factors: Transactional factors include
“bloody awful” to Management practices, Structure, Work unit climate, Policies and
“bloody awesome”. Procedures, Task requirements & individual skills and abilities
Source: The Change
Management Handbook – A
Motivation and Individual needs and values. These are relatively
Road Map to Corporate short term changes among people and groups within the
Transformation organization.

For this model to be effective, it is important to distinguish between transformational and

transactional factors. At the same time, it is important to remember that both are linked and both
contribute towards the success of this model by affecting individual and organizational
performance as can be seen from Fig.4.0

External Environment

Leadership
Mission and Organizational Culture
Strategy

Management Practice
Feedback

Structure Systems (policies and

procedures
Work unit climate

Motivation
Task requirements Individual needs and
and individual values
skills/abilities
Individual and
Organizational
performance

Figure 4.0 The Burke-Litwin Model

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 An Overview of Change Management Models

Transformational issues call for a survey that probes mission and strategy, leadership, culture
and performance. Transactional issues need to focus on structure, systems management
practices, climate and performance. Other transactional issues might include job-person match,
motivation and individual needs and values.

Applicability of the Model

This model is very effective if employed correctly. It is, however, a very complex model that
requires several different issues to be addressed separately yet in an inter linked manner. It calls
for several hours of interviews with employees collecting feedback and also requires a very
strong leadership backing for complete execution.

6.0 Conclusion
Change Management is a very complex task. Global Sourcing adds unique challenges to
Change Management. The various change management models developed by the thought
leaders provide a good insight and understanding of the key variables that need to be addressed
for successful change management.

Zinnov has developed a Change Management Model called Strategize-Execute-Maintain

TM
(SEM) aimed at helping clients manage change during Global Sourcing. The model consists of
3 modules
o Strategy Module that enables companies proactively plan and prepare for change
o Execution Module that enables companies to manage the different emotions and convert
those emotions into positive emotions
o Maintain module that enables companies to make ongoing improvements to managing
change
Our comprehensive change management model enables us to efficiently integrate Global
Sourcing change management efforts for our clients

7.0 References

1. Micheal Beer and Nitin Nohria. Cracking the Code of Change. Harvard Business Review,
May-June, 2000, pp 133.

2. Peter Senge et al. The Dance of Change. Doubleday, 1999.

3. Harry Woodward and Steve Buchholz. Aftershock: Helping People through Corporate
Change. John Wiley & Sons, 1987

4. Micheal Beer and Nitin Nohria. Cracking the Code of Change. Harvard Business Review,
May-June, 2000, pp 134.

5. Daryl R. Conner. Managing at the Speed of Change. Villard Books, 1993.

6. Lance A. Berger, Martin J. Sikora and Dorothy R. Berger. The Change Management
Handbook: A Roadmap to Corporate Transformation. Richard D. Irwin, Inc., 1994.

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