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«Change Management with Lean approach How the benefits from Lean can be applied in Change Management Master of Science Thesis in the Master’s ...»

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Finally, it is all about the people and their identifying, understanding, managing and improving process - things any organization has to do particularly well in order to achieve its objectives and become successful (Oakland and Tanner, 2007).

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 12 2.1.5 Why failure?

We have now been introduced with different methods and theories about the change management area. They have much in common, such as structuring the models by processes with different steps which are supposed to be followed and so on. These simplified steps and rules may sound easy to follow and with small risks of not succeeding with the change, but according to several sources, many change efforts fail. Frankly there are only approximately 10 % of all organizational change that succeed (Oakland and Tanner, 2007, p. 1).

According to Karp and Helgö (2008, p. 86), this has its foundation in the understanding from the leaders. Even though it exists decades of research and experience in the area, managers still struggle with change. Karp and Helgö (2008, p.

86) thinks it is due to people tending to professionalize all types of human interactions into tools of change management. This is a too mechanistic and instrumental approach to human beings, change and leadership in general. The leaders lack in understanding the complexities they are facing. It has less to do with structures and strategies than with the nature of human beings and the reaction to change and the leaders.

There are often different views and thoughts on if and why changes should be implemented. Karp and Helgö (2008, p. 88) believes that top managers and leaders on top level sees the changes as opportunities to strengthen and renew the organization.

They also see the changes as possibilities to advance in their careers. This is not the case for many other employees, including the middle managers. The changes are mostly not their idea nor are they welcome.

Porter (2011, p.25) is on the same track. He means that the majority of the changes fail due to poor understanding and effort in the people and culture involved in the change. Leaders should instead involve stakeholders in every step of the process to ensure success. Porter states that there are two causes which are the most underlying failure points and knowing these will help you in your change process.

1. Most people are by nature, creatures of habits and when change is suggested this is directly reflected with fear. This is often focused or founded by loss of their own livelihoods. They get concerned that the change will make them less valuable and wanted in the organization.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35

2. Users will not change themselves. If they are doing as they understand what they are expected to do in their job, then they will see no need in changing their behavior.

Furthermore, Porter (2011, p.25) states that if the change leader wants to implement a change, the end users must accept it, otherwise they will not adopt to it nor will the change become sustainable or stabile. The leader must understand the change from the user's perspective and how it will affect their job and its environment.

According to Oakland and Tanner (2007, p. 2) a research revealed that a typical company has, during the last five years, applied more than three new tools or techniques annually. This trend is continuing, since the typical company would adopt another 3.7 tools in the coming 12 months. However, these attempts from the companies are unfortunately in vain. "Most improvement effort have as much impact on company performance as a rain dance has on the weather!" (Oakland and Tanner, 2007, p. 2) Another factor why the change management are known to fail is the ignorance from the manager of the three phases, which employees are known to go through during a change; denial, resistance and exploration. They expect the employees to move very quickly from the first phase to the last, when in fact that each individual go through all of the phases at different time and speed. There are many things that managers do that creates crisis in the management of change. Some of the things may not be done intentionally, but the result of these actions is generally the opposite of what they hoped for (Stanleigh, 2007, p. 35).

Things that creates crisis and can be the factors to why change management fail are:

 "not engaging all employees;"  "managing change only at the executive level;"  "telling people they have to change, we´re in a crisis;"  "sending staff on a change program and expecting change to occur;"  "not honoring the past;"  "not giving time for staff to vent fist and then change."

(Stanleigh, 2007, p. 35).

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 14 Once again we can see that the people involved, such as the end users and other stakeholders, are so incredibly important for the change process to become successful.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 2.1.6 Resistance to Change As seen in the previous part, paying too little attention to the people before and during the change, was the major cause to why changes failed. Change was reflected with fear and ignorance and the lack of understanding and need for change led to resistance. Managers attempted to follow their mechanistic and instrumental models of how to succeed when they totally missed the issue of handling resistance from the people. Resistance can come from all levels in the organization, but mostly the resistance comes from the employees which are directly affected by the change.

Since it appears that this area is so important for change management, this chapter will introduce the subject of resistance within organizational change.

Hayes (2007, p. 278) argues that change (C) will occur when the product of dissatisfaction with the present situation (D), vision of what is possible (V) and practical first step towards reaching the vision (F) are greater than the cost of

change/resistance (R):

–  –  –

But is it really that easy to define resistance, by making a formula of it? Smollan (2011, p. 12) defines resistance as a destructive force that runs counter to the interests of the organization. It is also frequently seen as a form of refusal to do what is required or as evidence of a half-hearted effort (Smollan, 2011, p. 12).

Hayes (2007, p. 205) presents four main reasons to why people resists change: Parochial self-interest Many stakeholders involved in the change, focuses on their own best interests, rather than the organization's. If these people think that any change would cause them to lose something of value, they will resist change. What managers often do wrong is that they do not pay enough with attention to the employees' personally concerns with the changes.

As mentioned earlier, resistance can come from all levels of the organization. This can be expressed when managers, even senior managers, can become resistant to change if they feel that their power or authority is threatened.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 16 Misunderstanding and lack or trust Poor communication can lead to misunderstandings which in turn can be the source of resistance. Stakeholders often resist change due to the lack of understandings of the implications it may have for them. This may lead them to perceive that the change will cost them more than they will gain.

Bad trust goes hand in hand with resistance. When stakeholders do not trust the change leaders, they are likely to resist any change they propose. Change leaders often fail to anticipate this kind of resistance, because they believe that people only resists changes that undermine their best interests. Different assessments Another common reason why some resist change is that different stakeholders assess the change differently. Change leaders are sometimes seen as they assume to have all the relevant information they need to conduct an adequate organization analysis and that the people affected by the change have the same facts. Often neither assumptions are correct. Change leaders often lack in take in account of how the change might affect external stakeholders, outside the organization. These stakeholders can be an important source of resistance. Low tolerance for change We are all limited in our ability to change, some are more than others. This limitation reflects on peoples' concern on how to develop new skills and behaviours that will be required of them, which makes them develop resistance to change. Even when the stakeholders understand the need for change, they can sometimes be emotionally unable to make any change. The change may involve a grieving process, similar to that which occurs when a person loses a loved one.

An interesting point that (Smollan, 2011, p. 13) shares is that the resistance from the employees can be positive for the organization. The resistance may prevent the organization from making costly mistakes. This means that the employee not only resists due to their own interests, but also to the organization's interest. Changes processes can involve huge risks which change leaders often have miscalculated.

Sometimes employees has another point of view, and may be more appropriate information regarding the change, which can awake the refusal and doubt among them.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 2.1.7 How to better deal with resistance to change In the 1940s Lewin first introduced a method with the idea of removing the resistance to proposed changes within organizations (Fielder, 2010, p. 371). But since then, much have happened. As Smollan (2011, p. 14) puts it; resistance may not be inevitable, but there are methods or ways to manage it, before or when it is manifested, and as Smollan stated that it can even be good for the organization with some resistance.

As we have seen from the literature, employee participation is often mentioned as a step in the change process. But, according to Lawrence (1969, p. 4) this is not a good way for the management to think about the problem. He means that it may cause more problems than it helps.

However, Smollan (2011, p. 14) presents some guidelines for the manager to reflect upon (which among others includes employee participation), and may help to manage the work of dealing with the resistance to change.

 Discuss the proposed change with the various stakeholders and understand their view in order to see the potential impact of change for them. This can be facilitated by letting the employees participate to produce better decisions and to show dedication to them.

 Understand that in the change there might be winners and losers. It is naturally for people to defend against loss, which is why the leader must work out either how to minimize the losses or to compensate for them.

 Handle resistance with care. Try to understand that resistance may be conscious, semiconscious and unconscious and behavior resistance may be overt and covert.

 Think over which strategies to use before dealing with resistance. Will participation simply waste valuable time while problems grow or opportunities wither? How helpful will they be?

Self (2007, p. 12) means that if the organization is not ready for change, it will automatically create resistance by the employees. The change leader is responsible for making the organization ready for change, which should also be their target instead of trying to overcome the resistance.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 18 As, Smollan (2011, p. 14) presented earlier, the change leader should make an effort to understand the people affected by the change and the potential impact on them, Self (2007, p. 13) also highlight that point. The change leader must clarify how the impact will be, to acknowledge and provide as much help as possible to those that may be affected.

Fielder (2010, p. 374) uses a model to manage the resistance in change program. This model is based on models and tasks structured for project risk management and consists of the phases. Only a simplified form of the model will be presented, which

provides bullet points that are aimed to be followed, one by one:

 "Identification and evaluation of resistance potentials."

 "Planning of managing resistance."

 "Avoidance/promotion of and preparation of resistance."

 "Resolution of resistance."

 "Controlling of resistance measures and potentials."

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 2.1.8 Essential Factors It is discovered from the literatures that there are some common factors appearing in

the change-models. These factors are:

1. Understand the problem - All models described earlier, have an introduction of describing the essence of knowing and understanding the problem. Some pay more attention (Lewin's three step model and Dalziel and Schoover Model) to describe that the understanding of the problem is fundamental in order to understand the need for change. The change must be understood by everyone involved. Including senior management, change leaders, workers and other stakeholders.

2. Understand the need for change - When the problem is understood there needs to be some drivers for the people affected by the change. The necessity and the benefits of the change must be emphasized. This phase is emphasized in Lewin's three-step model (with driving and resisting forces) and also in the Organizational Change Framework.

3. Support from all the levels in the organization - In order to succeed with the change, it is essential to have the support from all levels of the organization, including external stakeholders. Frequent communication and information to these are vital, especially at the initiation phase of the change. The Dalziel and Schoover Model emphasizes this more than other models.

4. Targets - The Dalziel and Schoover Model, The Organizational Change Framework and Lippitt's Phases of Change Theory, all of these models brings up the essence of setting up clear targets such as project goals, visions, missions and values. These measurements facilitates the vision of the future state and also the understanding of the expectations.

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