Chapter 4 Types of
change
A. Planned
vs. unplanned change
1.
Planned change is
initiated by the organization itself with the purpose of improving its
functioning.
Ø It is a proactive approach to respond to new
external demands. This type of change often affects various segments of the
organization and requires a deliberate decision to alter the organization.
Ø For example, a company transitioning from a
traditional hierarchical structure to self-managed teams would require planned
change.
Ø It requires a strategic plan or a well-defined
change plan.
Ø It often affects multiple segments of the
organization.
Ø It can result from recognizing the need for change or responding to external demands.
2.
Unplanned change originates
outside of the organizational system and requires the organization to respond.
Ø It is often a response to unexpected events or
circumstances, such as changes in government regulations or shifts in the
economy.
Ø Unplanned change is imposed on the organization and
requires flexibility and adaptability to effectively respond.
Ø Unplanned change typically focuses on specific
segments of the organization and may occur in a spontaneous, accidental, or
evolutionary manner.
Steps in planned change
1.
Recognize the need for change: Identify
the internal or external forces that necessitate change.
2.
Develop the goals of the change: Determine
the specific changes needed in terms of products, technology, structure, and
culture. Evaluate both problems and opportunities.
3.
Select a change agent: Appoint
a person responsible for leading the change process and implementing it
effectively.
4.
Diagnose the current climate: Gather
data about the organization's current climate to prepare employees for change.
Provide feedback about the present situation and create awareness of the forces
driving change.
5.
Select an implementation method: Decide
on the best approach to bring about the desired change. Seek input from diverse
perspectives, visit other organizations for new ideas, and consider external
standards of performance.
6.
Develop a plan: Create
a detailed plan that includes specific events, activities, timelines, and
responsibilities. The plan serves as a roadmap for implementing the change.
7.
Implement the plan: ensure
sustained progress by allocating resources, fostering skill development,
reinforcing newly acquired behaviors, and establishing a supportive system..
8.
Follow the plan and evaluate it: This
involves comparing the actual results achieved to the goals that were initially
established.
B. Revolutionary
Vs. Evolutionary Change
1. Revolutionary/
Transformational Change
Revolutionary or transformational
change is profound and involves a complete overhaul,
renovation, and reconstruction.
Ø It is fundamental, dramatic, often irreversible, and
leads to radical breakthroughs in beliefs or behaviors.
Ø Organizations pursuing revolutionary change reshape
strategic goals and may undergo radical transformations in products or
services.
Ø Examples include shifting from a traditional hierarchical
structure to self-directed teams or implementing Business Process
Reengineering.
Advantages:
·
Lower risk of
the change failing to take effect.
·
Quick
implementation of the change.
·
Availability of
necessary resources.
·
Provides
political cover for the change initiator.
·
Enhances the
appearance of the organization on resumes and annual reports.
·
Gives a sense of
planned change, with subsequent mandates fitting together.
Disadvantages:
·
The change may
not become ingrained in the organization's culture before focus shifts, leading
to a rollback.
·
Loss of
political capital due to less inclusivity in the change process.
·
Job security
concerns for the change initiator if the change does not deliver expected
benefits.
·
Opportunity cost
of focusing solely on the mandated change, potentially neglecting other
improvements.
·
The solution
applied may not be a good fit for the organization, leaving pain points or
gaps.
·
People may feel
treated like robots due to the top-down nature of the change.
2. Evolutionary/
Incremental Change
Evolutionary change is
incremental and occurs gradually over time. It is often driven by the need for
the organization's survival, external pressures, or competitive factors.
Ø This change is convincing and involves change agents
gradually building proposals or prototypes that are iteratively presented.
Ø Examples of incremental change include continuous
improvement in quality management or the implementation of new computer
systems.
Advantages of Evolutionary Change:
·
High likelihood
that the change, once implemented, will become part of the organization's
culture.
·
Involves more
people in the design process, leading to greater identification and acceptance
of the change.
·
The change is
likely to fit the organization's understanding of the current situation.
·
Involves
multiple perspectives, resulting in more thoughtful solutions.
Disadvantages of Evolutionary Change:
·
High initial
risk, as people may not understand or buy into the change, making it
challenging to build momentum.
·
The change
process may be haphazard, with changes introduced that do not align with the
organization's goals.
·
May suffer from
a lack of central direction if there is no clear owner or change agent.
·
It can be
difficult to find individuals skilled in making evolutionary change, as it
requires specific expertise.
·
The people
driving evolutionary change often do not seek credit for their work, making it
challenging to identify them.
Business Process Reengineering (BPR)
Business Process Reengineering (BPR) is a concept that focuses on fundamentally
redesigning and improving business processes to achieve significant
improvements in performance measures such as cost, quality, service, and speed.
Ø It involves rethinking and reorganizing tasks, people, and IT systems to support an organization in realizing its goals.
Ø BPR aims to eliminate wasted or redundant effort and
improve efficiency by examining how processes currently operate and redesigning
them from scratch.
Ø It is an innovative approach that leverages best
practices and enablers, and it requires a multidimensional, integrated
solution.
Ø BPR involves cross-functional and inter-departmental
changes rather than simply overlaying new software or making incremental
improvements.
Ø BPR is not about incremental changes, downsizing, or
reorganizing and restructuring existing processes.
Ø A comprehensive and radical approach requires a
migration from activity management to process management. BPR involves a shift
in mindset and a departure from the status quo.
Why we need BPR?
1.
Improving efficiency: by
reducing time to market and providing quicker responses to customers.
2.
Increasing effectiveness; by
delivering higher quality and achieving long-term cost savings.
3.
Providing more work that
is meaningful for employees and aligning the company's vision at all levels of
the organization.
4.
Increasing flexibility and
adaptability to change: in order to strategize against the ever-changing
economy and technology, enabling new business growth.
Steps in Business process reengineering
1. Introduction into Business
Reengineering:
·
Developing and
effectively conveying the "case for action" and the "vision
statement" are essential tasks. The "case for action" serves to
provide a rationale for change by explaining why it is necessary, while the
"vision statement" outlines the desired operational framework of the
organization..
·
The CEO takes
responsibility for articulating and communicating these statements to the
senior management team and the rest of the organization.
2.
Identification
of Business Processes:
·
Identify and
describe the most critical business processes using process maps.
·
Process maps
provide a global perspective on work flows within the company.
·
High-level
processes are depicted, which can be further broken down into subprocesses on
separate maps.
·
Process maps
serve as a communication tool for discussing reengineering
3.
Selection
of Business Processes:
·
Decide which
high-level processes will be redesigned, considering factors like impact on
customers, likelihood of success, and alignment with strategic objectives.
·
Criteria for
selecting processes may include their contribution to strategic direction and
impact on customer satisfaction.
4.
Understanding
of Selected Business Processes:
·
Gain a better
understanding of the selected processes, focusing on what they do, their
performance, and critical issues affecting performance.
·
Detailed
analysis and documentation are not the primary goals; instead, provide a
high-level view to guide the creation of a new and superior design.
5. Redesign of the Selected Business
Processes:
·
The most
creative phase involving the invention of new rules and ways of working.
·
Requires
imagination and inductive thinking to develop a radically new and improved
design.
6.
Implementation
of Redesigned Business Processes:
·
Encompasses the
implementation phase of the Business Process Reengineering (BPR) project,
·
Success
contingent on the effective execution of preceding phases.
·
Hammer and
Champy underscore the significance of
project planning for a successful implementation.
Critical
Success and Failure Factors in BPR
Success Factors for BPR:
1. Clear Vision: Develop
a clear vision of the goals and objectives of the organization and its success.
2. Senior Management Commitment: Gain
strong commitment from senior management throughout the entire process,
including identifying an executive sponsor.
3. Project Planning: Conduct
sufficient project planning and preparation with a defined scope, roles, and
tools for each phase.
4. Change Management: Utilize
an effective and structured change management process, including developing a
strong communication plan.
5. Staff Support: Build
staff support and buy-in for the proposed solution.
6. Team Commitment: Secure
the commitment of team members to the project and assemble a team with the
right mix blend of skills.
7. Understand Business Issues: Develop
a clear understanding of business issues, including client needs, performance,
and standardization, and align them with the BPR solution.
8. "Quickly" Review As-Is: Document
and review high-level "as-is" business processes, focusing on
progress rather than exceptions to the rule and specific cases.
9. Always Have a Goal: Show
progress and demonstrate results by having short, medium, and long-term
targets.
10. Follow-up, Follow-up, Follow-up:
Ensure that things get done by consistently following up on the progress.
Fail Factors for BPR:
1. Lack of Alignment:
BPR effort not tied to organizational goals, objectives, and/or client
expectations.
2. Lack of Commitment: Teams
cannot ensure success if they lose senior management support or if team members
perform BPR "on the side" while handling day-to-day tasks.
3. Lack of Communication: Not
everyone is informed early, and staff concerned by changes are not engaged
throughout the process, leading to misalignment.
4. Improper/Insufficient Planning: Changing
scope or focus damages integrity and commitment.
5. Lack of Understanding of Business
Challenges: Business case is unclear or weak, and changes do not
address the real needs of the business.
6. Ignore the End Users: If
the solution designed does not consider the needs of end users, change will
face resistance and may not be implemented.
7. Ignore the Clients: If
processes are not designed to produce the value clients seek, results will be
unsatisfactory, and clients may seek alternatives.
8. Team Member Selection: Without
dedicated, strategic thinkers that can champion change, the improvement process
may not succeed.
9. Lack Enabling Technology: Decisions
based on existing technologies may hinder designing optimal processes.
10. Easily Overcome by Challenges: If
the team gets stuck on specific steps without considering the bigger picture,
motivation may be lost, and the team may get stuck in a particular phase.
Other types of change
Remedial Versus Developmental Change:
Remedial Change: is
intended to address and resolve current problems or issues within an
organization.
Ø It aims to improve poor performance, reduce burnout,
address budget deficits, or solve other pressing problems.
Ø Remedial projects are often focused and urgent, as
they aim to fix immediate issues.
Ø The success of remedial change is usually more
tangible and measurable, as it can be determined by whether the problem is
solved or not.
Developmental Change: aims
to enhance and build upon existing success.
Ø It seeks to make a successful situation even more
successful by expanding customer base, duplicating successful products or
services, or achieving further growth.
Ø Developmental projects may appear more general and
vague compared to remedial projects, as they focus on further improvement
rather than addressing specific problems.
Ø The goals of developmental change may vary in
specificity and importance to different members of the organization.
Organization-wide Versus Subsystem
Change:
Organization-wide Change: refers
to changes that affect the entire organization.
Ø Examples include major restructuring initiatives,
collaborations with other organizations, or "rightsizing" efforts
(e.g., downsizing or expanding the workforce).
Ø Organization-wide change is often necessary when an
organization needs to evolve to a different level in its life cycle or when
cultural change is required.
Ø Successful organizational change often involves a
shift in the organization's culture and affects multiple aspects of its operations.
Subsystem Change: focuses
on specific parts or subsystems within an organization.
Ø It may involve adding or removing a product or
service, reorganizing a department, or implementing a new process for
delivering products or services.
Ø Subsystem changes are more localized and targeted,
aiming to improve efficiency or effectiveness within specific areas of the
organization.