Online Lecture 6:

Organization Change
Thomas G. Cummings

Todays Learning Goals

1. Understand Big Picture of Organization
Change
Identify Forces Driving & Restraining
Organization Change
Know Why Traditional Change Methods Dont
Work
Understand 4 Types of Organization Change

2. Learn 2 Effective Methods for Changing

Organizations
Kurt Lewins Organization Change Model
Self-Design Organization Change Model

3. Explore Marshalls Center for Effective

Organizations, World Thought Leader on
Organization Change

Goal 1
Understand Big Picture of
Organization Change
Identify Forces Driving & Restraining
Organization Change

Forces Driving Organizations to

Change
Competitive environment

Globalization
Aggressive newcomers (e.g., Lego, Skype, U. of Phoenix)
Consolidation into bigger competitors (Disney & Pixar)
Deregulation (airline & telephone industries)

Internal Pressures
Eroding margins
Pressures to grow
Shareholder pressure/Demands for accountability

Proliferating & rapidly changing technologies

Changing workforce
Political & Economic Changes

Video of 8 Global Mega Trends

(Patrick Schwerdtfeger 16:34 min)
https://www.youtube.com/watch?v=NaDUi6BGII4

Forces Driving Organizations to

Resist Change
People Resistances

Habit (Liability of Success)

Difficult to Learn New Behaviors
Security/Economic Factors
Fear of Unknown

Organization Resistances
Strong organization culture
Structural Inertia
Organization structure
Reward systems
Information systems

Threats to Expertise, Power Relationships &

Resources
Little Slack or Funding
Poor Leadership

Goal 1
Understand Big Picture of
Organization Change
Identify Forces Driving & Restraining
Organization Change
Know Why Traditional Change Methods
Dont Work

Traditional Change Methods

Management initiated & controlled

Problem focused
Experts analyze and design solutions
Doers implement solutions
Rolled out as packaged change program
Employees treated as major source of
resistance

Problems with Traditional

Change Methods

Conflict between experts & doers

Lack of employee buy-in
Too rigid, not adaptive to local conditions
Limited implementation
Cynicism

Goal 1
Understand Big Picture of
Organization Change
Identify Forces Driving & Restraining
Organization Change
Know Why Traditional Change Methods
Dont Work
Understand 4 Types of Organization
Change

Organization Change: 2 Key

Dimensions

How radical or different from status quo

is the change?
Incremental
Revolutionary
Determined by how far organization is from a
goal or ideal state

How constant or incessant is the

change?
Discrete
Continuous
Determined by how rapidly the organizations
competitive environment is changing

Types of Organization Change

Discrete

Continuo
us

Incremental

Revolutionary

Adaptation

Re-creation

(JetBlue &
Mattel)

Fine Tuning
(Toyota & Honda)

(Apple & Harley

Davidson)

Transformati
on (IBM & GE)

Goal 2
Learn 2 Effective Methods for
Changing Organizations
Kurt Lewins Organization Change Model

Kurt Lewins Organization

Change Model
Driving forces

Encourage change
Push people & organization in new direction

Restraining forces
Resist change
Push people & organization not to change

Steady State: When driving forces equal

restraining forces, equilibrium (no change)

How to Change Steady State

Increase driving forces or decrease restraining
forces
Best strategy is to decrease restraining forces

Kurt Lewins Model: 3 Stage Process

Restraining
Forces

Restraining
Forces
Unfreezing
Steady State

Driving
Forces

Transition to
New Steady
State

Refreezing
New Steady
State
Driving Forces

Unfreezing Steady State

Understand organizations current steady
state
Force Field Analysis: Map the change
situation to identify existing driving &
restraining forces

Force-Field Analysis: Mapping

Change Situation

Restraining Forces (Dont

Change)

Organization
Steady State

Driving Forces
(Change)

Video of Lewins Force Field

Analysis
(Alanis Business Academy 6:34)
https://
www.youtube.com/watch?v=tRAKmzsYLG8

Unfreezing Steady State (cont.)

Reduce restraining forces
Create strong & urgent need to change
Communication & Education
Participation

Transition to New State

Compelling story & clear change vision
Powerful coalition of stakeholders on board
Strong leadership & role modeling
Implementation plan with objectives, roles, &
responsibilities
Mechanisms to communicate the change &
gain wide commitment
Building capability to perform new behaviors
Facilitation & Support

Refreezing New State

Integrate changes into organization culture
(values & norms)
Reinforcing mechanisms (systems, processes,
and incentives in line with the new behavior)
Monitor the changes & make necessary
adjustments

Goal 2
Learn 2 Effective Methods for
Changing Organizations
Kurt Lewins Organization Change Model
Self-Design Organization Change Model

Self-Design Organization Change

Model
Involves multiple stakeholders
Innovation on site
Learning by doing
Continuous change, improvement &
learning
Part of normal operations

Self-Design Model: Continuous

Change Process
Laying the Foundation
Acquiring
Knowledge
Diagnosing

Designing
Valuing

Action
Learnin
g Cycle

Laying the Foundation

Acquiring Knowledge
Conceptual Learning
Broad organizational concepts
Specific knowledge of design elements
(structure, information & control systems,
work design, human resource systems)
Self-design strategy

Practical Learning
Company visits
Cases & articles
Speakers & conferences

Laying the Foundation (cont.)

Valuing
Valued Performance Outcomes
Quantity, quality, time etc..
Innovation, efficiency, etc..

Valued Human Outcomes

Quality of work life
Employment security

Valued Organizational Conditions

Empowerment
Teamwork

Laying the Foundation (cont.)

Diagnosing
Inputs
Competitive environment
Business strategy

Design Elements
Task & human
Formal & informal organization

Outputs
Performance outcomes
Human outcomes

Approaches to Designing
Fine-Tuning
Current
Design
Limited
Change
(Increment
al)

Imitating
Others

Zero-Based
Designing
Extensive
Change
(Revolutiona
ry)

Action-Learning Cycle

Planning to
Modify &
Adjust Actions

Taking
Action to
Change &
Improve
Organizati
on

Diagnosi
ng
Progress

Collectin
g
Pertinent
Informati
on

Learning to Improve Organization

Co

in
t
n

ly
l
a

o
r
p
Im

ActionLearning
Cycle

d
e
v

a
m
r
fo
r
Pe

e
c
n

ActionLearning Cycle

ActionLearning
Cycle
Time

Types of Organization Change

Discrete

Incremental

Revolutionary

Adaptation

Re-creation

(Lewin Model)

Continuo
us

(Lewin Model)

Fine Tuning

Transformation

(Self-Design Model)

(Self-Design Model)

Goal 3
Explore Marshalls Center for
Effective Organizations, World
Thought Leader on Organization
Change

Center for Effective Organizations

Action Research with Organizations
Help organization learn to improve itself
Create knowledge that can be applied to other
organizations

Research Scientists and Faculty Members

Types of Projects

Strategic change
Designing high-involvement & team-based organizations
Corporate governance, boards, & senior executives
New reward, selection, & development practices
Management of innovation, learning, & knowledge
Optimizing human capital
Building sustainable organizations
Organization agility

Clients of the Center (partial list)

Honeywell
General Mills
General Dynamics
Johnson &
Johnson
Verizon
Pfizer, Inc.
Procter & Gamble
PwC
Capital One
Boeing
Hewlett Packard
Walt Disney
Company

CedarsSinai
AlliedSignal
KimberlyClark
ArcherDanielsMidland
RoyalBankofCanada
SonyPictures
StarbucksCoffee
Alcoa
Microsoft
Weyerhaeuser
Arco
Amgen

Video CEO - The First 35 Years

(15:46)
https://www.youtube.com/watch?v=OE_FewuJuM0

Designing High-Involvement
Organizations
Made up of units or work teams
Carry out whole work process that delivers
value to customer
Members have the skills and knowledge to
work without day-to-day management control
Clear responsibilities and decision making
authority
Measured and held accountable for results

All organization elements designed to

promote & reinforce employee
involvement
Created using self-design change model

Organization Design Components

Structure
Technology &
Work Design
Systems

Organizatio
n Culture

Informatio
n&
Control
Systems

Human Resource Systems

Selection
Training & Development
Performance Management
System

High-Involvement Organization
Features
Organization Structure: Flat & lean
Work Design: Self-managed teams
Information Systems: Open & distributed
Leadership: Visionary
Decision Making: Employee empowerment

High-Involvwement Organization
Features
Training &(cont.)
Development: Continuous
Selection Processes: Culture driven
Rewards: Performance & skill based
Culture: Strong & egalitarian
Workforce Accommodations: Plentiful

Takeaways
Organizations face increasingly complex &
rapidly changing competitive
environments
Not a question of whether to change but
how much to change and how
continuous to change
Type of change needed to compete in
todays environment moving from
adaptation (incremental & discrete)
towards transformation (revolutionary &
continuous)
Most organizations are not good at
managing change, no less transforming
themselves

Takeaways (cont.)
Lewins change model & self-design
change model together address 4 types
of change
Organizations need to learn how to do
both of them. This gives them dynamic
capability that is key to sustained
competitive advantage
Centers like Marshalls CEO can help
organizations learn this capability, but in
the end, organization must learn how to
change themselves