1. Chapter 6
Managing Change and Innovation

2. What is Change?
• Change refers to an event that occurs when
something passes from one state or phase to
another.
• In another way, Change occurs when one
state of equilibrium is disturbed and ends at
other state of equilibrium.

3. Few changes over the years
Nobody can go back and start a new beginning, but anyone can start today and make
a new ending.

4. When change is likely to happen
Beckhard’s Change
Equation
Kurt Lewin’s Formula of Change
C={D x V x A x FS > R}
Organisations go for a
change only when above
equation holds true for it.
C=Change
D= Dissatisfaction with
present state or status quo.
V=Vision, Where to go?
How to go? What to do?
A=Ability, resources,
money, time, expertise.
FS=First Step
R=Resistance
Unfreezing
Changing
Refreezing

5. What is Change Management?
Change Management is management of
transition from the present state to desired
state.
Present
State
Transition State
Desired
State
Hence, change management is management of transition between the
current and desired state. Any change that does not require
management of transition state does not require change management

6. Current State
• Employees (including management and executives!) generally
prefer the current state, because that is where they live
Current
State
Transition
State
Future
State
“better the devil you know is better than the devil you don’t”

7. Future State
• The future state is unknown to the employee; will it be
better, or worse?
• This is where Project teams “live”
Current
State
Transition
State
Future
State

8. Transition State
• The transition state creates stress and anxiety
Current
State
Transition
State
Future
State

9. Change vs. Transition
Change is the shift, transition is the process of one state of being to another
CHANGE
•
•
•
•
•
•
•
External
Organisational
Quicker
More visible
More predictable
Physical
Tangible
TRANSITION
•
•
•
•
•
•
•
Internal
Personal
Slower
Less visible
Less predictable
Psychological
Intangible

10. Change vs. Transition

11. The Change Process
• The Calm Waters Metaphor
– Lewin’s description of the change
process as a break in the
organisation’s equilibrium state.
• Unfreezing the status quo
• Changing to a new state
• Refreezing to make the change
permanent
• White-Water Rapids Metaphor
– The lack of environmental
stability and predictability
requires that managers and
organisations continually adapt
(manage change actively) to
survive.
Metaphor: a figure of speech in
which a word or phrase literally
denoting one kind of object or
idea is used in place of another
to suggest a likeness or analogy
between them.
“He was drowning in paperwork”
is a metaphor in which having to
deal with a lot of paperwork is
being compared to drowning in
an ocean of water

12. External and Internal Forces for Change
Types of forces to consider

Competition

Economic Factors

Political Factors

Available Resources

Traditions

Vested interests

Introduction of new technology

Organisational structures

Relationships

Social or organisational trends

Attitudes of people

Present or past practices

Union Pressures

Institutional policies or norms

Costs

13. Organisational Change and
Change Agents
• Organisational Change - any alterations in the
people, structure, or technology of an
organisation.
• Change Agents - persons who act as catalysts
and assume the responsibility for managing
the change process.

14. Types of Change Agents
• Managers: internal
entrepreneurs
• Non-managers: change
specialists
• Outside consultants:
change implementation
experts

15. The Three-Step Change Process

16. Force Field Analysis
Driving Forces
Restraining Forces
Proposed Change
1. Customers want new products
1. Loss of staff overtime
3
4
2. Improved speed of production
2
3. Enhanced volume of output
3
4. Maintenance costs increasing
1
Upgrading
Factory
with new
manufacturing
machinery
2. Staff frightened of new
technology
3
3. Environmental impact of new
techniques
1
4. High cost of the technology
3
5. Disruption
3
Total = 10
Total = 13

18. Three Types of Change

19. Types of Change
• Structure
– Changing an organisation’s structural components or its
structural design
• Technology
– Adopting new equipment, tools, or operating methods
that displace old skills and require new ones
• Automation - replacing certain tasks done by people with
machines
• Computerisation
• People
– Changing attitudes, expectations, perceptions, and
behaviours of the workforce

20. Organisational Development
• Organisational Development (OD) techniques or programmes to change people
and the nature and quality of interpersonal
work relationships.
• Global OD - OD techniques that work for U.S.
organisations may be inappropriate in other
countries and cultures.

21. Popular OD Techniques

22. Managing Resistance to Change
• Why People Resist Change
– The ambiguity and uncertainty
that change introduces
– The comfort of old habits
– A concern over personal loss
of status, money, authority,
friendships, and personal
convenience
– The perception that change is
incompatible with the goals
and interest of the
organisation
ADKR Model

23. Techniques for Reducing Resistance to Change

24. Changing Organisational Culture
• Cultures are naturally resistant to change.
• Conditions that facilitate cultural change:
– The occurrence of a dramatic crisis
– Leadership changing hands
– A young, flexible, and small organisation
– A weak organisational culture

25. Changing Culture

26. Stress and Stressors
• Stress - the adverse reaction people have to
excessive pressure placed on them from
extraordinary demands, constraints, or
opportunities.
• Stressors - factors that cause stress.

27. What Causes Stress?
• Role Conflicts - work expectations that are
hard to satisfy.
• Role Overload - having more work to
accomplish than time permits.
• Role Ambiguity - when role expectations are
not clearly understood.

28. Personal Factors Causing Stress
• Type A personality people who have a
chronic sense of
urgency and an
excessive competitive
drive.
• Type B personality people who are relaxed
and easygoing and
accept change easily.

29. Symptoms of Stress

30. Stimulating Innovation
• Creativity - the ability to combine ideas in a
unique way or to make an unusual
association.
• Innovation - turning the outcomes of the
creative process into useful products, services,
or work methods.

31. Stimulating Innovation (cont.)
• Idea Champions individuals who actively
and enthusiastically
support new ideas,
build support,
overcome resistance,
and ensure that
innovations are
implemented.

32. Change-Capable Organisations

33. World’s Most
Innovative Companies

34. Innovation Variables

35. Structural Variables
• Adopt an organic structure
• Make available plentiful resources
• Engage in frequent inter-unit communication
• Minimise extreme time pressures on creative
activities
• Provide explicit support for creativity

36. Cultural Variables
• Accept ambiguity
• Tolerate the impractical
• Have low external controls
• Tolerate risk taking
• Tolerate conflict
• Focus on ends rather than means
• Develop an open-system focus
• Provide positive feedback

37. Human Resource Variables
• Actively promote training and development to
keep employees’ skills current
• Offer high job security to encourage risk
taking
• Encourage individuals to be “champions” of
change

38. •
What can happen if change is NOT
managed?
•
What can happen if change is EFFECTIVELY
managed?
•
Productivity declines as people become more consumed
with the change being introduced.
Passive resistance festers.
Active resistance emerges and sabotages the change.
Valued employees leave the organization, a very costly
proposition in terms of the lost contribution and the
cost to replace them.
Employees become disinterested in the current state
and the future state.
Employees begin arguing about change and the
direction of the company.
People are left to wonder why the change is happening.
More people begin taking sick days or not showing up
for work.
People find work-around to avoid implementing the
new way of doing things.
Employees revert back to the old way of doing things.
Changes are not fully implemented.
Changes are scrapped and cancelled due to the lack of
support throughout the organization.
Divides are created in the organization between 'us' and
'them'.
The organization builds a history of failed and painful
changes.
Many types of risk are created - risk to the project, to
the organization, to the employees involved and to the
individuals supporting or chartering the change
•
Employees have a solid understanding of why change is
happening.
Employees engage in both the solution and the change.
Training is used to build knowledge after employees
have made the personal decision to support the change.
Resistance is identified and dealt with early in the
process.
Senior leaders demonstrate their own and the
organization's commitment to the change.
Communications are segmented and customized for
different audiences, answering the questions that they
care about.
Momentum is built throughout different areas and
levels within the organization.
Changes are less painful to the organization and to the
employees.
A coalition of support among senior leaders and
managers creates momentum throughout the
organization.
Probability of meeting project objectives is increased.
The organization begins to build a history of successful
change, creating a better 'backdrop' for the next change
initiative
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