MGT 6681 Troy University Organizational Development and Change Application Essay

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Page i Managing Organizational Change A Multiple Perspectives Approach Ian Palmer Richard Dunford David A. Buchanan Fourth Edition Page ii MANAGING ORGANIZATIONAL CHANGE: A MULTIPLE PERSPECTIVES APPROACH, FOURTH EDITION Published by McGraw Hill LLC, 1325 Avenue of the Americas, New York, NY 10121. Copyright © 2022 by McGraw Hill LLC. All rights reserved. Printed in the United States of America. Previous editions © 2017, 2009, and 2006. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw Hill LLC, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 LCR 24 23 22 21 ISBN 978-1-260-04371-6 (bound edition) MHID 1-260-04371-1 (bound edition) ISBN 978-1-264-07161-6 (loose-leaf edition) MHID 1-264-07161-2 (loose-leaf edition) Executive Portfolio Manager: Michael Ablassmeir Product Developer: Laura Hurst Spell Marketing Manager: Lisa Granger Content Project Managers: Melissa M. Leick, Bruce Gin Buyer: Laura Fuller Designer: Matt Diamond Content Licensing Specialist: Gina Oberbroeckling Cover Image: HT-Pix/Getty Images Compositor: Aptara®, Inc. All credits appearing on page or at the end of the book are considered to be an extension of the copyright page. Library of Congress Cataloging-in-Publication Data Names: Palmer, Ian, 1957-author. | Dunford, Richard, author. | Buchanan, David A., author. Title: Managing organizational change : a multiple perspectives approach / Ian Palmer, Richard Dunford, David A. Buchanan. Description: Fourth edition. | New York, NY : McGraw-Hill Education, [2022] | Includes index. Identifiers: LCCN 2020031288 (print) | LCCN 2020031289 (ebook) | ISBN 9781260043716 (hardcover) | ISBN 9781264071616 (spiral bound) | ISBN 9781264071531 (ebook) | ISBN 9781264071579 (ebook other) Subjects: LCSH: Organizational change. | Organizational change—Management. Classification: LCC HD58.8 .P347 2022 (print) | LCC HD58.8 (ebook) | DDC 658.4/06—dc23 LC record available at https://lccn.loc.gov/2020031288 LC ebook record available at https://lccn.loc.gov/2020031289 The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw Hill LLC, and McGraw Hill LLC does not guarantee the accuracy of the information presented at these sites. mheducation.com/highered Page iii DEDICATIONS From Ian To Dianne, Matthew, and Michelle From Richard To Jill, Nick, and Ally From David To Lesley with love—and thanks Page iv Acknowledgments A number of people have contributed to this edition, and we owe them all a debt of gratitude, including Francis Adeola, University of New Orleans; Terrence R. Bishop, Northern Illinois University; Frederick Brockmeier, Northern Kentucky University; Lesley Buchanan; and James Cornwell, U.S. Military Academy. We must also thank the many change managers—too many to name—with whom we have explored the issues addressed in this book, for their time, their insights, and their willingness to share their experiences with us. Page v Brief contents Preface PART 1 x Groundwork: Understanding and Diagnosing Change 1 Managing Change: Stories and Paradoxes 2 Images of Change Management 3 Why Change? Contemporary Pressures and Drivers 4 What to Change? A Diagnostic Approach PART 2 3 29 63 103 Implementation: The Substance and Process of Change 139 5 What Changes? 6 Purpose and Vision 7 Change Communication Strategies 8 Resistance to Change 9 Organization Development and Sense-Making Approaches 10 Change Management Perspectives PART 3 1 141 175 211 249 281 319 Running Threads: Sustainability and the Effective Change Manager 353 11 Sustaining Change versus Initiative Decay 12 The Effective Change Manager: What Does It Take? Name Index Subject Index DIGITAL EDITION 425 433 355 387 Page vi Contents Preface x Part 1 Groundwork: Understanding and Diagnosing Change 1 Managing Change: Stories and Paradoxes Learning Objectives 3 3 Stories about Change: What Can We Learn? The Starbucks Story The Sears Story 4 5 7 The Detroit Story 10 Tension and Paradox: The State of the Art Assessing Depth of Change 11 16 What’s Coming Up: A Roadmap 18 Change Diagnostic: The Starbucks Story Change Diagnostic: The Sears Story 20 21 Change Diagnostic: The Detroit Story 23 Exercise 1.1 Writing Your Own Story of Change Additional Reading Roundup References 2 24 25 25 26 Images of Change Management Learning Objectives 29 29 What’s in a Name: Change Agents, Managers, or Leaders? Images, Mental Models, Frames, Perspectives The Six-Images Framework 32 Six Images of Change Management Using the Six-Images Framework 36 45 31 30 1 Self-Assessment: What Is Your Image of Managing Change? Self-Assessment: Scoring 51 Exercise 2.1: Assessing Change Managers’ Images Exercise 2.2: Turnaround at Beth Israel Additional Reading Roundup References 3 52 53 56 57 58 Why Change? Contemporary Pressures and Drivers Learning Objectives 64 Environmental Pressures for Change 66 Why Do Organizations Not Change after Crises? Exercise 3.1: COVID-19 Consequences Exercise 3.2: Top Team Role Play 88 90 91 Exercise 3.3: Case Analysis—The Netflix Story 92 Exercise 3.4: The Reputation Trap—Can You Escape? Additional Reading References 4 63 63 Internal Organization Change Drivers Roundup 49 94 96 96 98 What to Change? A Diagnostic Approach Learning Objectives 103 Organizational Strategy and Change Diagnosing Readiness for Change Agile Organization 112 121 130 Exercise 4.2: Readiness for Change Analysis Roundup 134 References 135 Page vii 125 Exercise 4.1: Scenario Planning Additional Reading 103 133 131 Part 2 5 Implementation: The Substance and Process of Change 139 What Changes? 141 Learning Objectives What Changes? 141 142 Organizational Culture 153 Digital Transformation and the Social Matrix Exercise 5.1: The Mattel Toy Story 159 166 Exercise 5.2: Organizational Culture Assessment 168 Exercise 5.3: How Will Digital Transformation Affect Your Organization? 168 Additional Reading 6 Roundup 169 References 172 168 Purpose and Vision 175 Learning Objectives 175 Missions and Visions: Fundamental or Fads? Mission: Why Are We Here? 178 Vision: Where Are We Going? 183 Why Visions Fail 176 192 Linking Vision to Change: Three Debates 194 Exercise 6.1: Interviewing Change Recipients 201 Exercise 6.2: Analyze Your Own Organization’s Mission and Vision 202 Exercise 6.3: The Role of Vision at Mentor Graphics Additional Reading Roundup References 7 203 204 206 Change Communication Strategies Learning Objectives 211 211 202 The Change Communication Process Gender, Power, and Emotion 212 217 Language Matters: The Power of Conversation Change Communication Strategies 222 228 Contingency Approaches to Change Communication 231 Communication Channels and the Impact of Social Media Exercise 7.1: Listen to Who’s Talking 239 Exercise 7.2: How Defensive Are You? 240 Exercise 7.3: Social Media at the Museum Additional Reading Roundup 241 242 243 References 8 245 Resistance to Change Learning Objectives 249 249 WIIFM, WAMI, and the Dimensions of Resistance Benefits 251 Causes 254 Symptoms 250 261 Managers as Resisters 263 Managing Resistance 265 Exercise 8.1: Diagnosing and Acting Exercise 8.2: Jack’s Dilemma Exercise 8.3: Moneyball Additional Reading 9 235 Roundup 274 References 277 272 Page viii 272 273 274 Organization Development and Sense-Making Approaches Learning Objectives 281 Alternative Approaches to Managing Change Organization Development (OD) 282 282 281 Appreciative Inquiry (AI) 293 Positive Organizational Scholarship (POS) Dialogic Organization Development Sense-Making 295 297 300 Exercise 9.1: Reports from the Front Line 307 Exercise 9.2: Designing a Large-Scale Change Intervention Exercise 9.3: Making Sense of Sense-Making 307 Exercise 9.4: Interpreting the Interpreter: Change at Target Exercise 9.5: Change at DuPont Additional Reading Roundup 309 311 313 Change Management Perspectives Learning Objectives Why Change Fails Change by Checklist Stage Models 319 319 Options for Managing Change 320 321 323 327 The Process Perspective 333 Contingency Approaches 336 Exercise 10.1: Develop Your Own Change Model Exercise 10.2: Getting Boeing Back in the Air 343 343 Exercise 10.3: Did Heinz Choke on the 3G Recipe? Additional Reading Part 3 11 308 311 References 10 307 Roundup 348 References 351 346 348 Running Threads: Sustainability and the Effective Change Manager 353 Sustaining Change versus Initiative Decay Learning Objectives 355 355 Initiative Decay and Improvement Evaporation Praiseworthy and Blameworthy Failures Actions to Sustain Change Words of Warning 356 359 361 369 Exercise 11.1: A Balanced Set of Measures Exercise 11.2: Treating Initiative Decay 374 374 Exercise 11.3: The Challenger and Columbia Shuttle Disasters Additional Reading Roundup 380 381 References 12 383 The Effective Change Manager: What Does It Take? Learning Objectives 388 Change Managers: What Kind of Role Is This? Change Management Competencies Political Skill and the Change Manager 399 401 404 Developing Change Management Expertise Exercise 12.2: How Resilient Are You? Roundup 419 References Subject Index 425 433 421 414 415 Exercise 12.3: How Political Is Your Organization? 418 Page ix 411 Exercise 12.1: Networking—How Good Are You? Additional Reading 387 387 Change Managers: Who Are They? Name Index 375 417 Page x Preface The previous edition of this book was published in 2016. Since then, the organizational world has continued to change dramatically. The aftermath of the global financial crisis is still with us; there are fresh and severe geopolitical tensions; environmental concerns are increasingly urgent; the focus on corporate social responsibility has intensified; organizations are under pressure to demonstrate their environmental, social, and governance (ESG) credentials; technological developments continue to surprise; and cybersecurity is a constant concern. Organizations have to consider how to manage demographic trends including an ageing, multigenerational, and multicultural workforce. Consumer preferences and expectations change radically and rapidly. Stir into this mix the impact of social media, where positive and critical views of organizations and their products and services—along with personal and corporate reputations—can be shared instantly and globally. What Do CEOs Think? The business magazine Fortune carries out an annual survey of U.S. chief executives, asking them about trends and challenges. The 2019 survey (Murray, 2019) found that the main challenges facing these CEOs were: cybersecurity technological change increased regulation shortages of skilled labor competition from China shareholder activism They were positive about the economy and business opportunities, particularly in America, and 65 percent said that they expected to be employing more people in two years’ time and planned to continue investing in artificial intelligence (AI); 60 percent said that they had already used AI to improve efficiency and cut costs; and 22 percent had used AI to create new products and services. However, around half were expecting a recession within two years. How do CEOs feel about wider social issues and criticisms of large organizations in particular? Over 70 percent said they thought that capitalism was not in crisis but that “some tweaking” to better serve society would be appropriate. Over 40 percent felt that their business strategy should include finding ways to address major social problems. They also felt that companies such as Amazon, Facebook, and Google had grown so large and influential that they needed additional regulation. Murray, A. 2019. 2019 CEO survey: The results are in. Fortune 179(6):3. From a management perspective, the drivers or catalysts for change are Page xi now more numerous and unpredictable. The pace of change has not slackened: more pressures, more opportunities, more changes, faster changes. Failure to respond to those pressures and opportunities, and in some cases failure to respond quickly enough, can have significant individual and corporate consequences. The “agile organization” has become fashionable—and is perhaps strategically indispensable. Many companies are experimenting with new ways of organizing—co-working spaces, no hierarchy, social enterprises, virtual teams, and platform organizations. The personal and organizational stakes appear to have increased. The management of organizational change thus continues to be a topic of strategic importance for most sectors, public and private. Current conditions have continued to increase the importance of this area of management responsibility. This new edition, therefore, is timely with regard to updating previous content, while introducing new and emerging trends, developments, themes, debates, and practices. In light of this assessment, we continue to believe that the multiple perspectives approach is particularly valuable, recognizing the various ways in which change can be progressed and highlighting the need for tailored and creative approaches to fit different contexts. Our images of how organizational change should be implemented affect the approaches that we take to understanding and managing change. Adopting different images and perspectives helps to open up new and more innovative ways of approaching the change management process. We hope that this approach will guide and inspire others in pursuing their own responsibilities for managing organizational change. This text is aimed at two main readers. The first is an experienced practicing manager enrolled in an MBA or a similar master’s degree program or taking part in a management development course that includes a module on organizational change. The second is a senior undergraduate, who may have less practical experience, but who will probably have encountered organizational change directly through temporary work assignments or internships or indirectly through family and friends. Our senior undergraduate is also likely to be planning a management career, or to be heading for a professional role that will inevitably involve management—and change management—responsibilities. Given the needs and interests of both our readers, we have sought to present an appropriate blend of research and theory, on the one hand, and practical management application, on the other. Instructors who have used our previous editions will find familiar features in this update. The chapter structure and sequence of the book remain much the same, with minor adjustments to accommodate new material. The overall argument is underpinned by the observation that the management of organizational change is in part a rational or technical task and is also a creative activity, with the need to design novel strategies and processes that are consistent with the needs of unique local conditions. We hope that readers will find the writing style and presentation clear and engaging. We have maintained the breadth of coverage of the different traditions and perspectives that contribute to the theory and practice of managing change, with international examples where appropriate. Page xii What’s New in This Edition? The new content for this edition includes the following: Real-world examples. We draw on the experience of change in the following organizations, including a U.S. city and baseball team and one nation-state. Examples range from full-length cases to short vignettes: Airbnb, Alibaba, Best Buy, Beth Israel Deaconess Medical Center, BlackRock, Boeing, BP, British Army, Carnival Cruise Line, Chobani, Continental Airlines, Detroit, DuPont, Estée Lauder, FedEx, Etsy, Facebook, Ford, General Motors Poland, Goldman Sachs, Google, HP, IBM, Instagram, Intuit, Johnson & Johnson, Kaiser Permanente, Kraft Heinz, Lego, Levi Strauss, McDonald’s, Mattel, Mentor Graphics, a Siemens Business, Microsoft, NASA, Netflix, Nike, Oakland Athletics, Progressive Insurance, Sandvik AB, Sears, Semco, Spotify, Starbucks, Swiss Re, Thai Union, Twitter, Uber, Unilever, U.S. Postal Service, Vanuatu, YouTube, and Zumba Fitness. Leadership language. The power of meaningful stories is well known. But the role of language in articulating vision and mission statements is less well understood. However, research on organization mission statements has found that concrete imagery works, and abstractions do not, with regard to encouraging support for change. In addition, support for change is more likely to be forthcoming when vision statements emphasize continuity as well as change (chapters 1 and 6). Change managers and change leaders. We argue that the distinction between leaders and managers is blurred and that these are different labels for the same role. However, research offers counterintuitive advice with regard to the complementary roles of middle managers and senior executives. Middle managers may be better able to initiate change, because they have a better understanding of frontline operations. Senior leaders may be better able to execute change, because they have more power and better access to resources (chapters 2 and 8). The world out there. Conditions in the external environment of the organization continue to become more turbulent, volatile, and unpredictable. The nature of globalization is also changing, creating more pressures and opportunities, as well as more change drivers and catalysts (chapter 3). COVID-19 consequences. The World Health Organization declared a global pandemic in March 2020, following an outbreak of a zoonotic coronavirus, COVID-19, for which there was no treatment or cure at the time of writing. To stop the virus from spreading, countries closed borders and introduced social distancing. These steps had a major impact on social life, working patterns, and most businesses, driving major organizational changes. Exercise 3.1 asks readers to consider the nature of these changes and the long-term consequences (chapter 3). Technology as a change driver. Robots, cobots, machine learning, artificial intelligence, automation. Emerging technologies are reshaping the world of work, probably creating more benefits and opportunities than downsides. Many organizations are undergoing digital transformations. Professional roles are no longer immune to automation. The change implications are significant, requiring careful management (chapter 3). Initiative overload. Too much change is a problem for many organizations. Page xiii This leads to a dilution of effort and misallocation of resources. Why does this happen? What can be done to manage multiple change initiatives more effectively? (chapter 4). Agile organization. Adaptability is a strategic priority in a turbulent, unpredictable world. “Agile” has its roots in the concepts of “mechanistic and organic” systems, “segmentalist and integrative” cultures, and “built to change” organizations. The core concept is based on the classic concept of autonomous, self-managing teams, but the approach needs “agile managers” in new roles, able to balance flexibility with stability (chapter 4). Social media. Social media platforms have become increasingly important as a general management tool, contributing to change management by improving communications, employee voice, and involvement and by building momentum for change. Many organizations have yet to exploit fully these opportunities, and there is a need to balance the opportunities with the risks (chapters 5 and 7). The purpose-driven organization. Purpose, or organizational mission, is now recognized as a driver of competitive advantage, and thus of change. But the concept is not always taken seriously by organizations, which often produce vague, abstract statements of purpose. We consider the evidence that supports clarifying the organization’s mission or purpose and consider the language in which purpose is best articulated (chapter 6). Pragmatic resistance to change. Everyday resistance to change can benefit the organization by preventing or reshaping poorly designed change initiatives (chapter 8). Has resistance to change been exaggerated? New research shows that employees often welcome the opportunities that new technologies have to offer. This positive approach contrasts with the beliefs and expectations of many managers (chapter 8). Counterproductive work behavior (CWB). Evidence suggests that some types of damaging CWB can be triggered by change initiatives. Why does this happen? What can be done about it? (chapter 8). Evidence-based implementation. A systematic review of the research suggests that there are 10 steps to successful change. Most organizations seem to ignore the evidence, and this may contribute to the reportedly high failure rate of major change initiatives (chapter 10). Change resourcing. Contrary to accepted wisdom, research now suggests that, at least in some circumstances, underfunding a change initiative can be advantageous. How can this be? (chapter 10). Transformational change. What is the nature of transformations? Why do as many as three-quarters fail? Many of the causes of failure are predictable. What can organizations do to improve the odds of success? (chapter 10). Issue-selling. Why multimodal approaches are more successful for pitching Page xiv change initiative ideas to senior management: how to choose the right combination of words, body language, and visual imagery (chapter 12). Collective change agency. Responsibility for change management rarely rests with one individual, or even with a small group. Now, different models of change delivery units are emerging. Which approach best fits your organization? (chapter 12). The politics of change. Management political games can disrupt or stop change initiatives. Political skill is critical for the change manager. The constructive aspects of “playing politics” are now widely recognized, challenging the negative stereotype of politics as harmful “dirty tricks” (chapter 12). Chief transformation officer (CTO). A new kind of change agent, a “high-level orchestrator” of change. What is the nature of this role, and what capabilities are required? (chapter 12). Pedagogy The pedagogical features in the text include: learning outcomes identified at the beginning of each chapter a mix of short and longer “high-impact” case studies of organizational change case studies of “new economy” as well as “old economy” organizations organizational diagnostic and self-assessment exercises for personal and classroom use movie recommendations, identifying films and clips that illustrate theoretical and practical dimensions of organizational change management YouTube clip recommendations, following up case and research accounts with commentary from the managers and researchers concerned a “roundup” section at the end of each chapter, with reflections for the practicing change manager, summarizing the key learning points linked to the learning outcomes suggestions for further reading at the end of each chapter. Instructors will also find useful the experiential learning exercises in the edited collection by Schwartz et al. (2019).* Since our book was first published, we have continued our conversations with managers who have been using it as part of their teaching, consulting, and other change activities. In many of these conversations, it was reassuring to hear how our multiple perspectives framework strikes the right chord with them, opening up new, innovative, and different ways of seeing, thinking, conceptualizing, and practicing organizational change. We hope that this new and updated fourth edition will continue to inspire our various change journeys, and we look forward to more conversations along the way. Page xv Additional Resources Instructors. If you are looking for teaching materials in this subject area, such as case studies, discussion guides, organizational diagnostics, self-assessments, company websites, audio-visual materials (feature films, YouTube clips) to use in lectures and tutorials, then go to: connect.mheducation.com. Page xvi Page xvii PART 1 Groundwork: Understanding and Diagnosing Change CHAPTER 1 CHAPTER 2 CHAPTER 3 CHAPTER 4 Managing Change: Stories and Paradoxes Images of Change Management Why Change? Contemporary Pressures and Drivers What to Change? A Diagnostic Approach The central theme of the four chapters in Part 1 is groundwork. How are we to approach an understanding of organizational change? With what approaches, perspectives, or images of change management should we be working? What drivers and pressures produce organizational change? What diagnostic tools can we use to decide what aspects of the organization and its operations will need to change or will benefit from change? Page 2 Page 3 Chapter 1 Managing Change: Stories and Paradoxes Learning Objectives By the end of this chapter you should be able to: LO 1.1 LO 1.2 LO 1.3 LO 1.4 Understand how stories of change can contribute to our knowledge of theory and practice. Explain why managing organizational change is both a creative process and a rational process. Identify the main tensions and paradoxes in managing organizational change. Evaluate the strengths and limitations of our current understanding of this field. Jonathan Haidt, social psychologist Page 4 Stories about Change: What Can We Learn? LO 1.1 LO 1.2 Changing organizations is as exhilarating as it is messy, as satisfying as it is frustrating, as creative as it is rational. This book recognizes these tensions and how they affect those who are involved in managing change. Rather than pretend that these tensions do not exist or that they are unimportant, we confront them head-on, considering how they can be addressed and managed, recognizing the constraints that they can impose. We also want to demonstrate how the images that we have about the way in which change should be managed, and our image of the role of change agents, affect how we approach change and the outcomes that we think are possible. To begin this exploration, we present three stories of recent changes. The first concerns how Roz Brewer restored the “buzz” at Starbucks. The second concerns the organizational model introduced at Sears Holdings in an unsuccessful attempt to restore falling sales and profits. The third describes how Mike Duggan, mayor of Detroit, transformed the city’s fortunes. These stories each address different problems: a coffeehouse chain, a retailer, and a city. But they illustrate common issues concerning the management of change. Each account opens with a set of assessment questions. We ask that you think through the answers for yourself. What can we learn about change management from stories like these? You will find our answers to these questions at the end of the chapter. Our aim is to demonstrate that stories about change can be a valuable source of practical lessons, as well as help to contribute to our general understanding of change. This narrative perspective has a number of advantages. Stories are a familiar and popular medium. They give us rich information set in context. They enable us to put ourselves at the center of the action. They encourage us to consider how we could transfer the issues that we are reading about into our own experience. These stories are, of course, each distinctive, one-off. How can they contribute to knowledge and practice in general, in other sectors and organizations? Stories are one of our main ways of knowing, communicating, and making sense of the world (Dawson and Andriopoulos, 2017; Gabriel, 2019). Our stories have actors: change leaders, other managers, staff, customers, etc. They make decisions that lead to actions that trigger responses: acceptance, resistance, departure. There is a plot: a serious problem that could be solved by organizational change. There are consequences: To what extent did the change solve the problem, and were other problems created along the way? The sequence of events unfolds in a typical manner: . . . and then . . . and then. This tells us why the outcomes were reached. These narratives do not simply describe what happened with a change initiative. They also provide us with explanations. These are process narratives. Process narratives have advantages over more traditional (quantitative, statistical) research methods (Mohr, 1982; Langley et al., 2013): They tell us about the context, give us a sense of the whole, a broader frame of reference. Complexity can be expressed within a coherent sequence of events. The nature and significance of the causal factors acting on events are exposed. The narrative patterns transcend individual cases. Page 5 This approach is based on what is called narrative knowing (Langley and Tsoukas, 2010; Vaara et al., 2016)—understanding events through the stories that are told about them. Because stories can reveal the mechanisms, or logics, behind a sequence of events, they are process theories. (We will explore process perspectives on change in chapter 10.) What combinations of factors drive, slow down, accelerate, or block the change process? The three stories that follow explain the relative success of the changes in Starbucks, Sears, and Detroit. We will ask you to consider the extent to which those explanations, each based on a single unique case narrative, can be applied to managing organizational change in general, in other settings. LO 1.1 The Starbucks Story Issues to Consider as You Read This Story 1. To what extent can management expertise in general, and change management expertise in particular, translate from one company and sector to another? 2. What elements of Roz Brewer’s approach to change management would be appropriate for you to use in your organization? 3. Do you think that senior executives should be closely involved with the frontline day-to-day operations of the business as Brewer was? The Context Founded in 1971, based in Seattle, with over 30,000 locations, 330,000 employees, and annual revenues of around $25 billion, Starbucks is the largest seller of coffee in the world. The Problem Roz Brewer joined Starbucks’ business in America as chief operating officer in 2017, the first woman and first African-American to hold such a senior position in the company. In her new role, she had a number of problems to deal with. The company’s iconic founder and executive chairman, Howard Schultz, had decided to leave the company after three decades. After five years of exceptional growth, sales had stalled. In 2018, the company was accused of racial bias after a manager called police to deal with two Black men who had been waiting for a friend in an outlet in Philadelphia; they had not bought drinks and refused to leave when asked. Some customers called for a Starbucks’ boycott after a social media video of the arrest went viral. When Brewer analyzed Starbucks’ business operations in detail in her first three months, she found that the company was “melting down behind the coffee bar.” Paradoxically, this was the result of the success of the mobile order and pay system; customers placed their orders through an app before coming to the store. But the stores were not ready for the sudden increase in orders. Crowds of customers jostled each other as they waited for their drinks, and stressed baristas struggled to keep up with the flow. She also found that 40 percent of employees’ time was spent on tasks away from the customers, such as counting milk jugs three times a day and unnecessarily restocking the floor with cups. And like many other organizations, there were too many development and change initiatives being run by corporate headquarters. Page 6 The Solution Brewer was not an obvious choice for the role at Starbucks. Her previous position was as a senior executive at Walmart. Investors were skeptical that her experience with a big-box retailer could translate to a “high touch” coffee shop business. And she preferred green tea to coffee. However, one of Brewer’s colleagues at Walmart said, “Roz is a tough cookie. She’s into the details. She’s not a fluffy person. She gets things done.” Another colleague said, “She’s an operator. She’s not just a person with a point of view and vision. She can execute” (Kowitt, 2019, pp. 86 and 88). Schultz had managed the company by instinct and intuition. Brewer, who trained as a chemist, focused on the numbers and sought to bring some discipline and order to the stores. Brewer and her team simplified, eliminated, or automated tasks to allow store staff to spend more time with customers. Dedicated baristas were appointed to handle the mobile orders in stores where those were popular. Cleaning was carried out when the stores were closed. Two-thirds of the corporate projects were stopped. Only those relating to three priorities—beverage innovation, store experience, and the digital business—were allowed to continue. Brewer earned a reputation for making tough decisions. For example, she asked her team to assess the benefits and disadvantages of Mercato—Starbucks’ fresh food business that was introduced, with much publicity, to 1,500 stores in 2017. The assessment showed that Mercato did not fit the company’s priorities, so she killed it. She also cut specialist stand-alone, time-limited offers, like the Unicorn Frappucino. These were popular with only a small number of customers, and they complicated the baristas’ work. She had the development team work instead on simpler products that could be made with existing ingredients. Following analysis of the timing of customer visits to stores and focusing on converting occasional midday customers to “rewards” members (who account for 40 percent of sales), Brewer was able to grow the afternoon business, which was traditionally a slack period. Following what became known as “the Philadelphia incident,” Brewer flew to Philadelphia to apologize in person to the two men, and she organized racial bias training for 175,000 employees. Brewer also spent a lot of her time visiting the stores, talking to employees, and assessing their pride in the business. Do employees who recognize her look her in the eye? Brewer says, “If they look down at their feet, they’re not proud about the store. Ninety-nine percent of the time I’m right about that” (Kowitt, 2019, p. 91). Brewer sees Starbucks’ stores as more than coffee shops; they are also public spaces, like libraries, serving the needs of employees and communities. In some shops, if they think that safety will be increased, managers have been allowed to install needle boxes in restrooms, for the disposal of drug users’ syringes. “Brewer wants baristas to make the perfect flat white or pour-over. But she also wants them trained in how to deal with the hardest social situations they could possibly encounter so that everyone feels like they belong in Starbucks” (Kowitt, 2019, p. 92). The Outcome Starbucks’ sales growth recovered, proving Brewer’s critics wrong. By 2018, there were 15 million rewards members, who spend three times as much as nonmembers. Afternoon customers started to generate 50 percent of beverage sales, and in 2019 Starbucks saw its best sales growth in three years. Starbucks’ stock price rose 70 percent between 2017 and 2019. Page 7 Case Sources Kowitt, B. 2019. How Starbucks got its buzz back. Fortune, 180(4):84–92. On YouTube, find ‘Starbucks COO Roz Brewer on big changes at Starbucks’ (2019; 6 minutes). LO 1.1 The Sears Story Issues to Consider as You Read This Story 1. How would you describe Eddie Lampert’s leadership style? 2. How would you assess his approach to implementing major organizational change—in this case restructuring the whole company with a new organizational model? 3. On balance, how would you assess his new organizational model? 4. What lessons about managing organizational change can we take from this experience and apply to other organizations, in this or other sectors? The Setting A household name in America, Sears was once the world’s largest retailer. In October 2018, the company filed for Chapter 11 bankruptcy, and its remaining assets were sold to a hedge fund, ESL Investments, owned by Eddie Lampert. What happened? Sears Holdings Corporation was a specialty retailer, formed in 2005 by the merger of Kmart and Sears Roebuck. The merger was the idea of Eddie Lampert, a billionaire hedge fund manager who owned 55 percent of the new company and who became chairman. Based in Illinois, the company operated in the United States and Canada, with 274,000 employees, 4,000 retail stores, and annual revenues (2013) of $40 billion. Sears and Kmart stores sold home merchandise, clothing, and automotive products and services. The merged company was successful at first, due to aggressive cost cutting. The Problem By 2007, two years after the merger, profits were down by 45 percent. The Chairman’s Solution Lampert decided to restructure the company. Sears was organized like a classic retailer. Department heads ran their own product lines, but they all worked for the same merchandising and marketing leaders, with the same financial goals. The new model ran Sears like a hedge fund portfolio with autonomous businesses competing for resources. This “internal market” would promote efficiency and improve corporate performance. At first, the new structure had around 30 business units, including product divisions, support functions, and brands, along with units focusing on e-commerce and real estate. By 2009, there were over 40 divisions. Each division had its own president, chief marketing officer, board of directors, profit and loss statement, and strategy that had to be agreed on by Lampert’s executive committee. With all those positions to fill at the head of each unit, executives competed for the roles, each eager to run his or her own multibillion-dollar business. The new model was called SOAR: Sears Holdings Organization, Actions, and Responsibilities. Page 8 When the reorganization was announced in January 2008, the company’s share price rose 12 percent. Most retail companies prefer integrated structures, in which different divisions can be compelled to make sacrifices, such as discounting goods, to attract more shoppers. Lampert’s colleagues argued that his new approach would create rival factions. Lampert disagreed. He believed that decentralized structures, although they might appear “messy,” were more effective and they produced better information. This would give him access to better data, enabling him to assess more effectively the individual components of the company and its assets. Lampert also argued that SOAR made it easier to divest businesses and open new ones, such as the online “Shop Your Way” division. Sears was an early adopter of online shopping. Lampert (who allegedly did all his own shopping online, but had no previous experience in retailing) wanted to grow this side of the business, and investment in the stores was cut back. He had innovative ideas: smartphone apps, netbooks in stores, and a multiplayer game for employees. He set up a company social network called Pebble, which he joined under the pseudonym Eli Wexler, so that he could engage with employees. However, he criticized other people’s posts and argued with store associates. When staff worked out that Wexler was Lampert, unit managers began tracking how often their employees were “Pebbling.” One group organized Pebble conversations about random topics just so they would appear to be active users. The Chairman At the time of the merger, investors were confident that Lampert could turn the two companies around. One analyst described him as “lightning fast, razor-sharp smart, very direct.” Many of those who worked for him described him as brilliant (although he could overestimate his abilities). The son of a lawyer, it was rumored that he read corporate reports and finance textbooks in high school, before going to Yale University. He hated focus groups and was sensitive to jargon such as “vendor.” His brands chief once used the word consumer in a presentation. Lampert interrupted, with a lecture on why he should have used the word customer instead. He often argued with experienced retailers, but he had good relationships with managers who had finance and technology backgrounds. From 2008, Sears’ business unit heads had an annual personal videoconference with the chairman. They went to a conference room at the headquarters in Illinois, with some of Lampert’s senior aides, and waited while an assistant turned on the screen on the wall opposite the U-shaped table and Lampert appeared. Lampert ran these meetings from his homes in Greenwich, Connecticut; Aspen Colorado; and subsequently Florida, earning him the nickname, “The Wizard of Oz.” He only visited headquarters in person twice a year because he hated flying. While the unit head worked through the PowerPoint presentation, Lampert didn’t look up, but dealt with his emails or studied a spreadsheet until he heard something that he didn’t like—which would then lead to lengthy questioning. In 2012, he bought a family home in Miami Beach for $38 million and moved his hedge fund to Florida. Some industry analysts felt that Sears’ problems were exacerbated by Lampert’s penny-pinching cost savings, which stifled investment in its stores. Instead of store improvements, Sears bought back stock and increased its online presence. In 2013, Lampert became chairman and chief executive, the company having gone through four other chief executives since the merger. Page 9 The Outcomes Instead of improving performance, the new model encouraged the divisions to turn against each other. Lampert evaluated the divisions and calculated executives’ bonuses, using a measure called “business operating profit” (BOP). The result was that individual business units focused exclusively on their own profitability, rather than on the welfare of the company. For example, the clothing division cut labor to save money, knowing that floor salespeople in other units would have to pick up the slack. Nobody wanted to sacrifice business operating profits to increase shopping traffic. The business was ravaged by infighting as the divisions—behaving in the words of one executive like “warring tribes”—battled for resources. Executives brought laptops with screen protectors to meetings so that their colleagues couldn’t see what they were doing. There was no collaboration and no cooperation. The Sears and Kmart brands suffered. Employees gave the new organizational model a new name: SORE. The reorganization also meant that Sears had to hire and promote dozens of expensive chief financial officers and chief marketing officers. Many unit heads underpaid middle managers to compensate. As each division had its own board of directors, some presidents sat on five or six boards, which each met monthly. Top executives were constantly in meetings. The company had not been profitable since 2010 and posted a net loss of $170 million for the first quarter in 2011. In November that year, Sears discovered that rivals planned to open on Thanksgiving at midnight, and Sears’ executives knew that they should also open early. However, it wasn’t possible to get all the business unit heads to agree, and the stores opened as usual, the following morning. One vice president drove to the mall that evening and watched families flocking into rival stores. When Sears opened the next day, cars were already leaving the parking lot. That December, Sears announced the closure of over 100 stores. In February 2012, Sears announced the closure of its nine “The Great Indoors” stores. From 2005 to 2013, Sears’ sales fell from $49.1 billion to £39.9 billion, the stock value fell by 64 percent, and cash holdings hit a 10-year low. In May 2013, at the annual shareholders’ meeting, Lampert pointed to the growth in online sales and described a new app called “Member Assist” that customers could use to send messages to store associates. The aim was “to bring online capabilities into the stores.” Three weeks later, Sears reported a first-quarter loss of $279 million, and the share price fell sharply. The online business contributed 3 percent of total sales. Online sales were growing, however, through the “Shop Your Way” website. Lampert argued that this was the future of Sears, and he wanted to develop “Shop Your Way” into a hybrid of Amazon and Facebook. The company’s stock market valuation fell from $30 billion in 2007 to $69 million in October 2018, while carrying $5 billion in debt. Revenues in 2018 were $16.7 billion, down from $50.7 billion in 2007. Sears had around 3,500 stores in America in 2007, and young shoppers rarely visited the 866 stores that remained in August 2018. Sears filed for Chapter 11 bankruptcy in 2018, and Lampert resigned as chief executive, but stayed on as chairman. Case Sources Kimes, M. 2013. At Sears, Eddie Lampert’s warring divisions model adds Page 10 to the troubles. Bloomberg Businessweek, July 11. http://www.businessweek.com/articles/2013-07-11/at-sears-eddie-lampertswarring-divisions-model-adds-to-the-troubles. Forbes (n.d.), #2057 Edward Lampert, http://www.forbes.com/profile/edwardlampert. Sears Holdings, http://www.searsholdings.com. Sears holdings, Wikipedia, http://en.wikipedia.org/wiki/Sears_Holdings. Shop Your Way, http://www.shopyourway.com. The Economist. 2018. The collapse of an American retail giant. October 20. https://www.economist.com/business/2018/10/20/the-collapse-of-anamerican-retail-giant. On YouTube, find ‘The fall of a retail icon: why Americans stopped shopping at Sears’ (2018, 6 minutes). LO 1.1 The Detroit Story Issues to Consider as You Read This Story 1. Mike Duggan transformed Detroit without a “management textbook” plan for change. Why do you think he was successful? 2. What aspects of Duggan’s change management style would be appropriate for you to use in your organization? 3. To what extent can we generalize from managing change in a Midwestern American city to managing change in commercial organizations? The Context Detroit, Michigan, has a population of over 4 million people. It was once the fourth largest city in America. In the early twentieth century, Henry Ford and other motorcar manufacturers made Detroit famous as the automotive capital of the world; Detroit is also known as the Motor City and Motown. But decades of decline, starting in the 1970s, made Detroit famous as America’s worst urban disaster story, as an iconic city in America’s Midwestern rust belt. The Problem Oil crises in the 1970s meant that customers wanted smaller, fuel-efficient vehicles, not the “gas guzzlers” that Detroit made. In the late twentieth century, with falling employment in the motor industry and other businesses leaving, Detroit’s population fell. As skilled workers found employment elsewhere, the proportion of poor people in the city’s population increased. These factors led to a smaller tax base, lower property prices, abandoned homes, and higher crime rates. The city administration was corrupt, and several officials (including the mayor) were imprisoned. In 2011, half of Detroit’s property owners failed to pay their taxes. By 2013, Detroit was bankrupt, and $18.5 billion in debt. When the current mayor, Mike Duggan, was elected in 2013, 40 percent of the city’s streetlights and 25 percent of the fire hydrants were not working and 40,000 properties were vacant. The city had stark racial, economic, and social divisions. In the run-up to his election, Duggan organized house parties with small groups of residents across Detroit. In total, 8,000 people turned up to these meetings, and Duggan described this experience as powerful: You go to a house party at Mack and Beals, where the people had an abandoned house on each side of their property, and their streetlights were out, they have one perspective on the city of Detroit. And then you go to Indian Village and they have a different perspective. And East English Village has a different perspective. But the aspirations of the people of the city are really the same. They want their neighborhoods back. They want the police to show up. They want the abandoned buildings dealt with. And they want to be able to stay in their neighborhood and not leave. They did teach me about the different issues in those neighborhoods. They were enormously educational. Anyone can come up to me from any neighborhood in this city, and I’m able to have a conversation about their problems and what we’re going to do about them. Page 11 The Solution Duggan’s past experience involved turning around the Detroit Medical Center, which had lost $500 million over the six years, before he was appointed chief executive in 2004. The Center generated over $57 million net income in 2012. Duggan’s priority as mayor of Detroit was once again to reverse the decline. He describes his strategy as “focusing on the boring.” Get the boring stuff right—streetlights, fire hydrants, ambulance response times—and the rest falls into place. If each individual person says, OK my job is to get the grass cut in the parks; my job is to get the tractors repaired 20 percent faster to get the grass cut in the parks, turnaround occurs. People get into public service because something in their heart wants them to help people, and over time the bureaucracy beats that idealism out of them. We are trying to bring idealism back. Duggan continued to hold weekly meetings with residents, in their homes, where he asked them what he could fix next. The Outcomes Bankruptcy brought some debt relief. Wealthy Detroit families invested in redevelopment, which brought sports teams and businesses back to the city. Entrepreneurial start-ups came to Detroit for its low costs and light traffic and because “rust belt” became trendy. Now the streetlights work, the fire hydrants have been repaired, and the city’s population is growing again. In 2018, Duggan bid to host the new U.S. headquarters for Amazon (subsequently awarded to northern Virginia). “Mike Duggan is an unremarkable guy who has done unremarkable things to achieve extraordinary results.” Case Sources Hagen, N. 2018. Halting Detroit’s decline. Financial Times, January 8, p. 24. https://www.crainsdetroit.com/awards/mike-duggan-making-improbableinevitable. On YouTube, find ‘The revitalization of Detroit — Talks at GS’, (2016, 15 minutes). Tension and Paradox: The State of the Art LO 1.3 LO 1.4 tension when two or more ideas are in opposition to each other paradox when two or more apparently correct ideas contradict each other Page 12 From a management perspective, organizational change is seen as problematic. How do we persuade people to accept new technologies that will make their skills, knowledge, and working practices obsolete? How quickly can people who find themselves with new roles, and new relationships, learn to operate effectively after a major reorganization? How about this new system for capturing and processing customer information? We prefer the old system because it works just fine. Change can be difficult. Change that is not well managed, however, can generate frustration and anger. Most estimates put the failure rate of planned changes at around 60 to 70 percent (Bucy et al., 2017; Stouten et al., 2018; Keller and Schaninger, 2019). There is, therefore, no shortage of advice. However, that advice is both extensive and fragmented. The literature—research and other commentary—can be difficult to access, and to absorb, for several reasons: many perspectives There are contributions from different academic disciplines and theoretical perspectives—there are several literatures. rich history Work dating from the 1940s is still interesting and useful; recent research has not necessarily made previous commentary irrelevant. range of concepts The concepts that are used vary in scale, from schools of thought or perspectives on change, through methodologies, to single tools. blurred boundaries Depending on the definitions of change and change management in use, the boundaries of the topic vary between commentators. varied settings LO 1.2 As with our stories, evidence and examples come from a range of organizational types and contexts, using different methodologies. Many perspectives is the most significant of these properties. That is usually seen as a problem—“the experts can’t agree.” We disagree and prefer instead to emphasize the advantages in adopting a multiple-perspectives approach to the management of organizational change. First, a perspective that works in one context may not work well in a different setting: We will explore contingency frameworks in chapter 10. Second, this is a way of opening up debate: “Should we define our problem in these terms, or in some other way?” Third, multiple perspectives encourage the search for creative solutions: “Can we combine ideas from two or more approaches and adapt them to fit our context?” We will meet all these characteristics again in later chapters. The practicing manager, less interested in theoretical perspectives, wants to know “what works?” It is difficult to give a clear answer to that question, too, for the following reasons: many variables Even with simple changes, the impact is multidimensional, and measuring “effectiveness” has to capture all the factors to produce a complete picture. slippery causality It is difficult to establish cause and effect clearly across complex processes that unfold over time, usually at the same time as lots of other changes. many stakeholders Different stakeholders have different views of the nature of the problem, the appropriate solution, and the desirable outcomes. Whose measures should we use? Page 13 What works well in one setting may not work well in another. The broad outlines of a good change strategy are widely known and accepted. However, what matters is the detail, concerning how an intervention is designed for a particular organization. For example, most practical guidelines begin by suggesting that change will be more readily accepted if there is a “sense of urgency” that underpins the business case for change. That sense of urgency can be seen in the issues facing Starbucks, in the falling profitability at Sears, and in the many problems in Detroit. Note, however, that there are many different ways in which a sense of urgency can be established and communicated. Some methods emphasize the (negative) “burning platform” that heightens anxiety and encourages escape. Other approaches encourage a (positive) “burning ambition” to confront and solve the problem. What works depends on the context. It is rarely possible to just do what someone else has done. Change is in part a rational process; we know what kinds of issues need to be taken into account. Change is also a creative process; it is always necessary to design—to create—an approach that is consistent with local circumstances. However, creatively adapted, such accounts of how other organizations have handled change can be helpful in addressing similar problems in other settings. LO 1.3 The field of change management is also rich in tensions and paradoxes. We will explore six of these briefly, in the form of key questions. These issues will also appear in later chapters. You will probably encounter further tensions in your reading across the subject and in practice. How these tensions and paradoxes are managed has implications for the process and outcomes of change. Transformational Change, or Sweat the Small Stuff? Where to start—with sweeping radical changes, or a gradual process of incremental initiatives? We will explore a simple model for “locating” the scale of change in the next section. However, faced with geopolitical, economic, demographic, sociocultural, and technological developments, most organizations seem to think in terms of deep transformational change. The Sears story reflects this view, implementing whole-organizational changes to deal with survival threats. In contrast, Roz Brewer at Starbucks began by focusing on operational details —“behind the coffee bar”—and Mike Duggan turned Detroit around by focusing on “the boring stuff.” A focus on transformation may mean that minor changes are seen as less valuable and important and are overlooked in favor of “high impact” initiatives. This could be a mistake. Moore and Buchanan (2013), for example, demonstrate how an initiative designed to fix small problems quickly in a hospital generated major improvements for almost no cost. In this case, “sweating the small stuff” was an enabling strategy, getting people involved (the small problems were identified by staff), establishing a reputation for getting things done, and creating the platform for further developments. Shallower changes can facilitate and complement the deeper initiatives, and evidence suggests that these should not be underestimated. Systematic Tools, or Messy Political Process? If one looks below the surface of cases of managed change, one can always discern the ever-present effect of the “other side” of organizational life. The ambiguities, uncertainties, ambivalences, tensions, politics and intrigues are always involved, and are influential and addressed in some manner—however half-cocked, fudged, guessed at, messed up or little understood. (Badham, 2013, p. 24) Page 14 Most practical guidelines on change implementation ( chapters 9 and 10) suggest a systematic sequence of steps, with support from diagnostic tools and assessments ( chapters 4 and 5). We have already suggested that change is a creative process as well as a rational one. It is also a political process. Organizations are political systems, and because there are often “winners and losers,” change is a political process. The systematic tools-based approach, the creativity, and the politics work hand in hand. We will explore the political skills that change managers require later ( chapter 12). It is important to recognize that, despite what the textbook or the change management consultant says, those systematic tools are only part of the answer to, “how to do it, and how to get it right.” Organizational Capabilities, or Personal Skills? Starbucks’ founder Howard Schultz grew the company on a combination of instinct and intuition. Roz Brewer brought a different style, based on the evidence, data, and the numbers. Either of these approaches works well in the right context, particularly with regard to whether or not the organization will welcome change. We thus need to pay attention to organizational readiness and capabilities, as well as individual personalities and skills, to understand the change drivers and barriers ( chapter 5). The skills of change agents are, of course, also important. However, skilled change agents struggle in rules-based organizations, and agile organizations still need capable change agents. We will explore the capabilities of effective change managers in chapter 12. Rapid Change, or the Acceleration Trap? The pace of change—social, political, economic, technological—appears to have accelerated. Can organizations keep up? There is now a considerable amount of advice on how to speed up change, to accelerate the pace. Rapid change, however, can cause problems. Can people keep up? Change too fast, and you run the danger of destabilizing the organization and creating staff burnout (Buchanan and Macaulay, 2019). There is also, therefore, advice on how to manage “painless change,” and how to avoid “the acceleration trap” (see chapter 8). Change Has Never Been So Fast That this is an age of change is an expression heard frequently today. Never before in the history of mankind have so many and so frequent changes occurred. These changes that we see taking place all about us are in that great cultural accumulation which is man’s social heritage. It has already been shown that these cultural changes were in earlier times rather infrequent, but that in modern times they have been occurring faster and faster until today mankind is almost bewildered in his effort to keep adjusted to these ever-increasing social changes. This rapidity of social change may be due to the increase in inventions which in turn is made possible by the accumulative nature of material culture [i.e., technology]. (Ogburn, 1922, pp. 199–200). Change Leader, or Distributed Leadership? There is a personality at the heart of each of our stories: Roz Brewer, Eddie Lampert, Mike Duggan. It seems that the fate of change is in the hands of the leader. This is rarely the case. It is widely assumed that change needs a champion, a senior figure, who sets the direction, inspires others, and drives the project. A lot of work has gone into identifying the competencies of this “ideas champion,” the effective change leader. This parallels work on the capabilities of effective leaders in general (although the evidence says that leadership success is highly contingent). However, in most organizations, change is not a solo performance but a team effort. There is usually a “guiding coalition” of more or less senior managers, who guarantee permission for change, oversee progress, and unblock problems. Different models of change delivery units have evolved ( chapter 12). Research has shown how change is often driven by large numbers of organizational members, through “distributed leadership” or “leadership constellations,” or “leadership in the plural.” As you read the case history “The Vanuatu Plastics Ban,” note the number of individuals, groups, agencies, government ministers, and government departments contributing to this change. Vanuatu is a nation state, not a company, but this distributed approach to implementing change is typical. Page 15 The Vanuatu Plastics Ban Vanuatu in the South Pacific is made up of 80 islands stretching over 1,000 kilometers, with a population of 300,000 people. Three and a half hours flight time from Sydney on the east coast of Australia, Vanuatu’s coral reefs and World War II wrecks are popular with scuba divers. Ocean plastic is a global problem, harming marine life and polluting the food chain. It is estimated that by 2050, there will be more plastic by volume in the world’s oceans than fish. Most of this marine pollution comes from East Asian and Pacific countries. The United Nations has “declared war” on marine litter, noting that a garbage truck of plastic is dumped into the ocean every minute. Vanuatu makes a tiny contribution to global plastic waste. However, the waste damages the islands’ ecosystems and biodiversity. Vanuatu hosted cleanup days to develop awareness of the problems that plastics created. But after these cleanups, the plastic waste would gradually return. Solution: First Phase The war on plastic in Vanuatu started with a campaign organized by Christelle Thieffry and Georges Cumbo. Having seen the plastic rubbish on the beaches around the capital Port Vila, they launched their Facebook page in March 2017, calling for a ban on plastic bags. Their Facebook campaign attracted a lot of support, so they launched a petition in May 2017, gaining 2,000 signatures. Their efforts attracted the attention of politicians. In July 2017, the Prime Minister, Charlot Salwai, announced the government’s intention to eradicate plastic bags within a year. In 2018, Vanuatu banned single-use plastics, including bags and polystyrene containers, with fines of $175 to $900 for violations (World Bank, 2019). When the ban was introduced, it was resisted. But people became accustomed to the idea, and shops became more comfortable about not giving shoppers plastic bags. Ellen Jimmy, a stallholder in Port Vila’s market, said that her business had not been harmed by the ban, and customers rarely complained (Visser, 2019). Solution: Second Phase Donna Kalfatak became Director of Vanuatu’s Department of Environmental Protection and Conservation in 2019. To implement the second phase of the plastics ban, she worked with Vanuatu’s waste management team, the Ministry of Climate Change, and the Ministry of Foreign Affairs. The Centre for Environment, Fisheries, and Aquaculture Science conducted a waste audit and concluded that the ban should be extended to disposable diapers, drinking straws, grocery packaging, Styrofoam food containers, and plastic cutlery. Christina Shaw and her colleagues at Dive Against Debris gathered further data. The Minister of Foreign Affairs and External Trade, Ralph Regenvanu, announced the expanded list of banned items, endorsed by the Council of Ministers, in December 2019. The Outcomes The ban had an immediate effect, with locals noting the absence of trash on the capital’s streets and urban areas. The ban was helped by the islands’ handicrafts tradition of making biodegradable bags woven from pandanus fronds. Sales of these bags grew, benefitting those who made them (Bulvanua Arts and Crafts Cooperative members). But bottle caps and chip packets still wash up on the beaches, and plastic bags and water bottles have not disappeared. To evade the ban on bags, some shops packaged fruits and vegetables in plastic netting. These will eventually be banned, too. Page 16 Foreign Minister Ralph Regenvanu thinks that Vanuatu’s success may be explained by the fact that it is a small country. Only one company that makes plastic products and the government have helped them to adapt to the new regulations. Regenvanu says, “It’s because we’re so small that we can do it. We’re like a little laboratory for being able to do things like this. One of the advantages here is that it is so small that you can do things that you may think impossible in other places” (Visser, 2019). Case Sources Visser, N. 2019. Vanuatu has one of the world’s strictest plastic bans. It’s about to get tougher. Huffington Post, February 24. https://www.huffingtonpost.com.au/entry/vanuatuplastic-ban-law-ocean-pollution_n_5c6ee757e4b0f40774cd355d. World Bank. 2019. Meet the innovator battling plastic waste in Vanuatu: Donna Kalfatak. June 4. https://www.worldbank.org/en/news/feature/2019/06/0 4/meet-the-innovators-battling-plastic-waste-in-vanuatudonna-kalfatak. Find on YouTube, ‘Local Impact Story Big Blue Vanuatu’ (2018, 1.38 minutes) Learning Lessons, or Implementing Lessons? Change following crises, accidents, misconduct, failures, and other extreme events often does not happen. There is always an investigation, which produces recommendations for preventing such an event from happening again (or at least reducing the probability). The evidence shows that those recommendations are often ignored. One might assume that, in such circumstances, change would be welcome, rapid, and straightforward. The distinction between passive learning (identifying lessons) and active learning (implementing changes) is important here. The latter does not automatically follow. Why is that not the case? In exploring “why organizations change’ in chapter 3, we will also consider why organizations do not change, when perhaps they should. The perceptive reader will have noticed that the answer to each of these six paradoxes, these six questions, is in every case “both.” We need big change and small change. Change is at the same time a systematic process and a political one. We need both organizational and individual capabilities. The pace of change must, if possible, vary with circumstances. It almost always takes “a cast of characters” that includes champions and supporters to drive change. There is no point in learning lessons if we do not then implement them. As noted earlier, the way in which these tensions are confronted and managed both drives and constrains the change process and influences the outcomes. Assessing Depth of Change LO 1.4 We have noted the tension between transformational change and the small stuff. Depth is one metaphor that can be used to categorize change. Figure 1.1 presents a framework for that assessment. Page 17 FIGURE 1.1 Assessing Depth of Change At the bottom of Figure 1.1 sits the “small stuff” that may not even be regarded as “change.” In the middle of the scale, we have “sustaining innovation” that involves improving on current practices. At the top of the scale is “disruptive innovation,” which involves radically new business models and working methods (Christensen et al., 2015). Clearly, in considering change in an organization, the proposed solution should be consistent with the diagnosis of the problem. Using shallow changes to address strategic challenges may not be appropriate. Attempting to solve minor difficulties with disruptive innovation could consume disproportionate amounts of time and resources. Shallow changes are often easier to implement than frame-breaking changes. Transformational “off the scale” changes are more challenging because they are costly and time consuming and affect larger numbers of people in more significant ways, potentially generating greater resistance. However, in most organizations, several changes at different depths are likely to be under way at the same time (see the box “ Turnaround at Etsy”). Many large organizations have thus established corporate project or program management offices (PMOs), or delivery units, to support and coordinate their multiple initiatives (Ward and Daniel, 2013; Wylie and Sturdy, 2018). Page 18 One of the tensions in this framework concerns the ambitions of the individual manager. When one is interviewed for the next promotion, stories about the impact of the deep transformations for which one has been responsible are typically more impressive than stories about minor stuff. If an initiative looks like “change for the sake of change,” find out who will be adding it to their resumé. Turnaround at Etsy When an organization is in trouble, should management focus on changing the high-level strategy or on fixing “the small stuff”? Here is an example of a company that did both, while cutting the number of change initiatives that were running. Founded in 2005 and based in New York, Etsy is an e-commerce company linking customers with suppliers of handmade and vintage items such as jewelry, bags, clothing, toys, art, craft supplies, and furniture, with 60 million items for sale at any given time. But in this sector, Etsy is a small company, with less than 900 staff, competing with large e-commerce companies (such as Amazon Handmade), which offer fast, consistent, and reliable online shopping. When Josh Silverman became chief executive in 2015, Etsy was making a loss. Sales were slowing. A major investor wanted the company to be sold if business did not improve. Etsy had 800 active business development initiatives. Silverman cut half of these, and most of the rest were fast-tracked to completion in weeks rather than months or years. Technical resources were moved to a cloud platform to give the technical team more time to focus on Etsy’s issues. In his first few weeks in the job, Silverman made a quarter of the employees redundant—a decision he described as “tough love.” Etsy has 40 million active buyers, but 60 percent make a purchase only once a year, with the average shopper spending $100 annually. With its ethos of “keeping commerce human,” Etsy has a loyal base of customers and suppliers. To grow, Etsy has to reach beyond this core group. Silverman also focused on the “nuts and bolts” of the online business. An autocorrect feature was added to the website’s search box. Customers were reassured about the safety of using credit cards for online payments. Silverman made sellers use the company’s own payments system, allowing Etsy to charge transaction fees and standardize the checkout procedure. Tools to support the sellers were introduced, including a dashboard to track orders and streamline payments. The search algorithm was redesigned: While it used to prioritize low-value items that sold more often, it now finds higher-priced items of better quality, encouraging shoppers to consider buying a desk, for example, when searching for a desk lamp. The new algorithm also prioritizes sellers who offer free shipping. What Silverman has not changed, however, is Etsy’s youthful, idealistic organizational culture. The headquarters in Brooklyn has a bicycle garage, local food in the cafeteria, and a plan to offset its shipping-related carbon dioxide emissions. Sales revenue rose by 65 percent over two years, to $604 million in 2018. The company has been profitable for two years, and its stock value was five times higher in 2019 than when Silverman took over (based on Wahba, 2019). What’s Coming Up: A Roadmap LO 1.4 This text is divided into three parts. Part 1, including this chapter, sets out the groundwork and is concerned with understanding and diagnosing change and with different images of change management. Part 2 focuses on implementation, exploring the substance of change, the role of vision, managing resistance, developing communication strategies, and several approaches to the implementation process. Part 3 examines two running threads, which relate to all the previous chapters. The first concerns managing the sustainability of change, which we argue has to be considered from the beginning, and not managed as an afterthought. The second running thread is an assessment of what it takes to be an effective change manager—which is, of course, the theme of the book as a whole. Figure 1.2 sets out a roadmap, an overview of the content. Page 19 FIGURE 1.2 To Be an Effective Change Manager, This Is What You Need . . . Page 20 One of the main assumptions underpinning this roadmap is that our images of the roles of change leaders affect how we approach the other issues on the map. Remember, for example, how the different change leadership styles adopted by Roz Brewer at Starbucks, Eddy Lampert at Sears, and Mike Duggan in Detroit colored their approaches to designing and implementing the changes that they wanted to implement. This explains why “images,” chapter 2, is at the center of the figure. However, by necessity, a book such as this follows a linear sequence for presentational reasons. This is not necessarily the sequence in which change leaders will need to consider these issues or in which instructors will wish to introduce and explore these themes. What will work best depends on context. In some cases, the question of “vision” may be fundamental to the change process, and it would be unwise to proceed until that issue has been resolved. In many change models and textbooks, the question of sustainability is presented at the end, as it is here. However, if sustainability is not built into change implementation from the beginning, then this may become an unnecessary problem. Communication is another issue that is typically involved throughout the change process. This roadmap comes with an added caution. If you follow a recipe correctly, that cake should be perfect; enjoy. However, success is not guaranteed by following a set of change implementation guidelines. There are two main reasons for this. First, designing a change process is a task with both technical and creative components; blending these components can in many circumstances be a challenging business involving much trial and error. Second, what works depends on organizational context, which is not stable, but which can change suddenly and in unpredictable ways. External conditions can change, intensifying or removing the pressures for change. Budget considerations may mean that resources are diverted elsewhere. Key stakeholders change their minds and shift from supporting to resisting. There are numerous factors that are not under the control of change leaders, and things go wrong despite careful planning and preparation. This is one reason why, as chapter 12 explains, resilience or “bouncebackability” is a core attribute for effective change leaders. Change Diagnostic: The Starbucks Story LO 1.1 Here are the three questions that you were asked to consider while reading Roz Brewer’s story, followed by our answers. 1. To what extent can management expertise in general, and change management expertise in particular, translate from one company and sector to another? Page 21 Critics argued that Brewer, with experience of the big-box retailer Walmart, was not a good choice for Starbucks’ coffee shop business. But she is not the only executive to transfer her capabilities to a completely different sector. Before joining and managing the turnaround of the computer company IBM, Lou Gerstner worked for American Express, a financial services company, and Nabisco, a cookie and snacks manufacturer. Most management skills are “portable”: strategic thinking, commercial awareness, communication and listening, diagnostics, data analysis, problem-solving, teamworking—and, of course, change management expertise. Gerstner may have had a limited understanding of how computers work or how they were made, but he had people around him who did and on whose expertise he could draw. It was probably easier for Brewer to develop an operational understanding of Starbucks’ business. 2. What elements of Brewer’s approach to change management would be appropriate for you to use in your organization? The main elements of Brewer’s approach were: Focus on the evidence, not on intuition. Understand in detail how the company meets the needs of its customers. Be prepared to make tough, controversial decisions. When the company makes a mistake, apologize openly and take remedial action. Develop rapport and empathy with employees. See the organization as a part of the community, not just as a bunch of sales outlets. 3. Do you think that senior executives should be closely involved with the frontline day-to-day operations of the business as Brewer was? This is a difficult judgment call. If you want to make improvements, it helps if you have a good understanding of the details of the operations that you want to change. Often, top management is accused of being too remote from the day-today, of not understanding frontline operations, and of making poor (or even unworkable) decisions as a result. Frontline staff members often complain that they never see top management or that any visits management does make are too short to be worthwhile. Understanding the operational details of the business can thus enhance management credibility and establish goodwill with employees on the frontline. However, acquiring that understanding takes time for someone not familiar with the business. Brewer spent three months doing little else. Shouldn’t top management focus on more important strategic issues? There is also a danger that frontline and middle managers will feel threatened by a senior executive appearing to do their jobs. If you want to know what is going wrong, why not ask them, rather than doing it for yourself? It is helpful to pause and consider the benefits and disadvantages, before dropping into the operational details, as Brewer did. Should you draw on the expertise of the current team instead of doing this yourself? Change Diagnostic: The Sears Story LO 1.1 Is this the Sears story or the Eddie Lampert story? One commentator said that, as well as the other issues facing retailers, Sears had a unique problem—Lampert himself. Here are the four questions that you were asked to consider while reading the Sears story, followed by our answers. 1. How would you describe Eddie Lampert’s leadership style? Lampert could be described as a transformational leader. He was highly intelligent and decisive. He was innovative, concerning both the company structure and its service delivery. He had a clear and interesting vision for the online future of the business. Check out Shop Your Way for yourself. However, he also appears to have been an autocratic leader. There is Page 22 little evidence to suggest that he either sought or considered the views of others, including his senior colleagues, before making business-critical decisions. He was something of a recluse, preferring to meet with his division heads infrequently and through a video link (and he rarely allowed media interviews). His “engagement” with staff through the company’s social network was more confrontational than consultative. 2. How would you assess his approach to implementing major organizational change—in this case restructuring the whole company with a new organizational model? If rapid action is necessary to rescue an organization that is experiencing extreme difficulties, then an autocratic approach may be appropriate. It takes time to pause, to ask everyone else what they think should be done, to process that feedback, to develop a more widely informed decision, to check that with those involved, and then to implement the approach. By that time, the company could be bust. Lampert’s “crisis management” style may thus have been appropriate immediately after the merger. Although profitability was declining, it is debatable whether that approach was appropriate in 2008. A more prudent approach in this case would probably have been to listen to the views of colleagues, at all levels of the company, and to take those into account, before imposing that reorganization. There could have been many other ways in which to achieve the required end results, including improved divisional and corporate performance, and data transparency. Whatever restructuring was implemented, it was probably going to be more successful if those who were affected understood the decision, had contributed significantly to it, and had agreed with it. “Behavioral flexibility” is one of the core capabilities of managers and leaders at all levels in an organization. This means adapting one’s overall approach and personal style to fit the circumstances. Lampert did not do that. 3. On balance, how would you assess his new organizational model? From 2005 to 2013, the company’s sales, profits, and share value fell. Although not mentioned in the case account, many experienced executives left the company, frustrated by the impact of the restructuring. Divisional collaboration was stifled, and it appears that the competition stimulated by the new organizational model was not healthy competition. The model, therefore, appears to have been damaging to the company’s performance and to its reputation. The new model, however, made it easier for Lampert to set up the online business as a division run independently of the other units. The balance of benefits and costs, however, appears to be weighted on the costs side. 4. What lessons about managing organizational change can we take from this experience and apply to other organizations, in this or other sectors? Change leaders need to adapt their style to fit the context. An autocratic style can rapidly resolve a crisis. In other circumstances, “decisive action” may leave others feeling that they have been excluded, and they may decide to undermine decisions that they feel were ill-advised (especially where the approach was considered to be idiosyncratic), as well as imposed on them. Page 23 Change Diagnostic: The Detroit Story LO 1.1 Here are the three questions that you were asked to consider while reading Mike Duggan’s story, followed by our answers. 1. Mike Duggan transformed Detroit without a “management textbook” plan for change. Why do you think he was successful? First, Duggan did not have a detailed plan to “sell” to Detroit’s residents and employees. He had a single, clear aim—to reverse the city’s decline. The operational details came from the residents themselves, and most, if not all, of the employees were also Detroit residents. Instead of telling the residents what he wanted to do, he asked them what they wanted him to do. As he was doing what the residents were asking him to do, there was no resistance to the changes that he made. Second, the changes that he introduced were immediately visible and beneficial: The streetlights and the fire hydrants worked again, and the city’s population started to grow. Third, he won support for these changes from more affluent residents, creating a “virtuous circle,” which enticed entrepreneurs to the city, which became fashionable. This could be described as a textbook case of participative change management, although there was no formally documented change strategy. 2. What aspects of Duggan’s change management style would be appropriate for you to use in your organization? Duggan’s change management style had four components. First, he had previous successful turnaround experience and sincerely believed that he could do a similarly good job for Detroit. Second, he was willing to listen and to learn from those on the ground before launching into a major change program. Third, he paid attention to the operational details of the city’s infrastructure, in the belief that minor improvements would be cumulative and transformational. Fourth, he trusted the public-service idealism of the city’s employees. Self-belief, willingness to listen, attention to detail, trust in others—are those attributes useful for you in your change management role? 3. To what extent can we generalize from managing change in a Midwestern American city to managing change in commercial organizations? Can we take general advice from a sample of one? The answer to this question, traditionally, is “no.” But this is misleading. Of course, we can. We are always looking at single instances and asking ourselves, “Would that work for me or for my organization?” The technical term for this is naturalistic generalization; we naturally consider whether or not the behaviors and methods and techniques that we see, in single examples, would apply to us in some way. We can ask whether Duggan’s approach to Detroit’s residents would apply to a chief executive’s approach to employees. We can consider how Duggan’s focus on the “small, boring stuff” could contribute to a change program in a commercial organization or public-sector agency. Duggan’s belief in the idealism of his employees applies in other parts of the public sector (healthcare, for example), and also in some commercial organizations. Page 24 EXERCISE 1.1 Writing Your Own Story of Change LO 1.1 Think of a change that you have experienced, in either your work or personal life. We would like to ask you to write a story about that experience. Here is a definition of a story to help you: A story expresses how and why life changes. It begins with a situation in which life is relatively in balance: You come to work day after day, week after week, and everything’s fine. You expect it will go on that way. But then there’s an event—in screenwriting, we call it the “inciting incident”—that throws life out of balance. You get a new job, or the boss dies of a heart attack, or a big customer threatens to leave. The story goes on to describe how, in an effort to restore balance, the protagonist’s subjective expectations crash into an uncooperative objective reality. A good storyteller describes what it’s like to deal with these opposing forces, calling on the protagonist to dig deeper, work with scarce resources, make difficult decisions, take action despite risks, and ultimately discover the truth. (McKee, 2003, p. 52) Plan A Write down your experience of change in about one page, and then answer these questions: What made this experience a “story”? What lessons for managing change can you take from your story? Compare these with the lessons from the Starbucks, Sears, and Detroit stories. Which are the same? From your experience, what new lessons have you added, particularly for future changes in which you might be involved? In small groups, share your lessons with colleagues. Which lessons are similar, and what are the differences among you? What three main conclusions can you take from these stories about managing change? Plan B In small groups of around four to six people, ask each group member to tell their story of change, taking only three or four minutes each. Record key elements of each story on flipchart paper. When everyone has told their story, answer the following questions: What are the common themes and issues across these stories? What are the differences between these stories? Of the change lessons from Starbucks, Sears, and Detroit, which are revealed in the groups’ stories and which are absent? What are the implications of this? Are there any further lessons embedded in these stories that could apply to future changes in which group members may be involved? What three main conclusions can you take from these stories about managing change? Page 25 Additional Reading Barsoux, J. L., and Narasimhan, A. 2017. What everyone gets wrong about change management. Harvard Business Review 95(6):78–85. Notes that three-quarters of change efforts are unsuccessful. The answer, they argue, is to align three factors: the catalyst for transformation, the organization’s “quest” or strategy, and leadership capabilities. In other words, successful change depends on a combination of organizational and individual characteristics. Christensen, C. M., and Carlile, P. R. 2009. Course research: Using the case method to build and teach management theory. Academy of Management Learning and Education 8(2):240–51. Explains how to use stories and case studies in management teaching, to develop, test, and improve theory. Colvile, R. 2016. The great acceleration: How the world is getting faster, faster. London: Bloomsbury. Argues that almost everything we do—walking, travelling, communicating, processing information, buying things, you name it—is getting faster. He also claims that this is beneficial, because we are wealthier and better informed than we were. But organizations that are not able to keep up with the pace of change will suffer, and many of us now feel overwhelmed by too much information. Gabriel, Y. 2019. Case studies as narratives: Reflections prompted by the case of Victor, the wild child of Aveyron. Journal of Management Inquiry 28(4):403– 408. Argues from an unusual basis, that stories and case studies can give us considerable insights and are thus valuable vehicles for developing and sharing management knowledge. Hughes, M. 2011. Do 70 per cent of all organizational change initiatives really fail? Journal of Change Management 11(4):451–64. Challenges the evidence behind the argument that so many change initiatives fail, suggesting that this has been exaggerated. Roundup Successful change is not guaranteed, despite the care and attention given to implementation planning. If there is one firm prediction that we can make about change, it is that it will go wrong, however meticulously designed. Why? By definition, we are always doing it for the first time—in this organization, facing these problems, with these resources, given the past history—and so on. One cannot confidently predict what will happen. The change leader is always building the plane as it flies. This is not an argument against planning; it is an argument for recognizing when things are going wrong, learning from that, and adapting accordingly. So this text does not set out to tell change leaders what to do. Such perspectives perpetuate the problem by creating the illusion that the outcomes can be kept under control if carefully planned steps are followed. Most people’s experience of organizations suggest that they are complex and untidy—and political—arenas. Acknowledging these characteristics is the first step to taking a more realistic view of what change leaders can expect to achieve. As discussed in chapter 2, it is more appropriate to think in terms of shaping the change process rather than controlling it. We hope that reflective change leaders will accept that choices must be made for change to proceed and that these are informed choices, not adopted on the grounds that there is one best way to approach the process. Here is a short summary of the key points that we would like you to take from this chapter, in relation to each of the learning objectives: LO 1.1 * Page 26 Understand how stories of change can contribute to our knowledge of theory and practice. Stories can be read as process narratives, which explain what happened in a given context. These explanations are therefore theories of change, pointing to the combination of factors interacting over time, leading to more or less successful change. Although those theories cannot be copied simply to other organizations and contexts, they are still a rich source of general lessons, and aspects of one organization’s approach can be adapted to fit other organizational contexts, if appropriate. LO 1.2 * Explain why managing organizational change is both a creative and a rational process. As with management practice in many other areas, what is going to work well when it comes to implementing change depends on the organizational context. Although general guidelines help to identify the factors to take into consideration, the details have to be determined by local, informed management and staff judgment. That is a creative process. LO 1.3 * Identify the main tensions and paradoxes in managing organizational change. Should we focus on transformational changes, or do we need to sweat the small stuff as well? Should change be a rational, systematic process, or do we need to recognize the political dimension? What is more important, organizational capabilities or individual skills in implementing change? Should we accelerate the changes or adopt a more measured pace? Do we rely on one change champion or recognize the distributed contributions of many change agents? Once we have learned the lessons from a crisis or other extreme event, how do we ensure that these are put into practice? LO 1.4 * Evaluate the strengths and limitations of our current understanding of this field. There is a significant amount of commentary, but little consensus. Most of the advice says much the same thing, but the failure rate of change is still high. The commentary is highly fragmented and includes multiple perspectives and conceptualizations. Evidence comes from a range of different settings and approaches, and contributions from the last century are still relevant today. Establishing cause and effect with regard to change and outcomes is made difficult by the many variables and the many stakeholders typically involved. References Badham, R. 2013. Short change: An introduction to managing change. Sumy, Ukraine: Business Perspectives. Barsoux, J. L., and Narasimhan, A. 2017. What everyone gets wrong about change management. Harvard Business Review 95(6):78–85. Buchanan, D., and Macaulay, S. 2019. The seven deadly myths of change. Training Journal (November):29–31. Page 27 Bucy, M., Fagan, T., Maraite, B., and Piaia, C. 2017. Keeping transformations on target. New York and London: McKinsey & Company. Christensen, C. M., and Carlile, P. R. 2009. Course research: Using the case method to build and teach management theory. Academy of Management Learning and Education 8(2):240–51. Christensen, C. M., Raynor, M., and McDonald, R. 2015. Disruptive innovation. Harvard Business Review, 93(12):44–53. Dawson, P., and Andriopoulos, C. 2017. Managing change, creativity and innovation, 3rd ed. London: Sage Publications. Denis, J. L., Lamothe, L., and Langley, A. 2001. The dynamics of collective leadership and strategic change in pluralistic organizations. Academy of Management Journal 44(4):809–37. Gabriel, Y. 2019. Case studies as narratives: Reflections prompted by the case of Victor, the wild child of Aveyron. Journal of Management Inquiry 28(4):403–8. Hagen, N. 2018. Halting Detroit’s decline. Financial Times (January 8):24. Hughes, M. 2011. Do 70 per cent of all organizational change initiatives really fail? Journal of Change Management 11(4):451–64. Keller, S., and Schaninger, B. 2019. A better way to lead large-scale change. New York: McKinsey & Company. Kimes, M. 2013. At Sears, Eddie Lampert’s warring divisions model adds to the troubles. Bloomberg Businessweek, July 11. http://www.businessweek.com/articles/2013-07-11/at-sears-eddie-lampertswarring-divisions-model-adds-to-the-troubles. Kowitt, B. 2019. How Starbucks got its buzz back. Fortune 180(4):84–92. Langley, A., and Tsoukas, H. 2010. Introducing perspectives on process organization studies. In Process, sensemaking, and organizing, ed. T. Hernes and S. Maitlis (1–26). Oxford: Oxford University Press. Langley, A., Smallman, C., Tsoukas, H., and Van de Ven, A. H. 2013. Process studies of change in organization and management: Unveiling temporality, activity, and flow. Academy of Management Journal 56(1):1–13. McKee, R. 2003. Storytelling that moves people. Harvard Business Review 81(6):51–55. Mohr, L. B. 1982. Explaining organizational behavior: The limits and possibilities of theory and research. San Francisco: Jossey-Bass Publishers. Moore, C., and Buchanan, D. A. 2013. Sweat the small stuff: A case study of small scale change processes and consequences in acute care. Health Services Management Research 26(1):9–17. Ogburn, W. F. 1922. Social change: With respect to culture and original nature. New York: B.W. Huebsch. Page 28 Stouten, J., Rousseau, D. M., and De Cremer, D. 2018. Successful organizational change: Integrating the management practice and scholarly literatures. Academy of Management Annals 12(2):752–88. Vaara, E., Sonenshein, S., and Boje, D. M. 2016. Narratives as sources of stability and change in organizations. Academy of Management Annals 10(1):495–560. Visser, N. 2019. Vanuatu has one of the world’s strictest plastic bans. It’s about to get tougher. Huffington Post, February 24. https://www.huffingtonpost.com.au/entry/vanuatu-plastic-ban-law-oceanpollution_n_5c6ee757e4b0f40774cd355d. Wahba, P. 2019. Crafting a comeback at Etsy. Fortune 180(2):33–35. Ward, J., and Daniel, E. 2013. The role of project management offices (PMOs) in IS project success and management satisfaction. Journal of Enterprise Information Management 26(3):316–36. Wylie, N., and Sturdy, A. 2018. Structuring collective change agency internally: transformers, enforcers, specialists and independents. Employee Relations 40(2):313–28. Source of the chapter opening quote: Wylie Communications, Quotes on the power of storytelling. https://www.wyliecomm.com/writing-tips/creativecommunications/storytelling/quotes-on-the-power-of-storytelling. C...
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Running Head: ORGANIZATIONAL DEVELOPMENT AND CHANGE

Organizational Development and Change
Student Name
Affiliate Institution
Professor
Date

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Running Head: ORGANIZATIONAL DEVELOPMENT AND CHANGE

2

Executive Summary
With the changing global competition, organizational changes have become a very common
strategy since this also addresses the growth and developmental issues most corporations face.
These changes are very necessary and imminent whether the organization is facing growth and
development or is facing a recession (Palmer, Dunford & Buchanan, 2016). This paper will try to
analyze organizational change and development, giving a detailed report and analysis of an
organizational problem or crisis that needs address. The paper points out the issue, highlights as
well as analyze the strategic plan to help reverse and or restore the organization to remain
relevant and or competitive.
Organizational change is a very messy, frustrating, and involving process and or strategy
that organizations use to ensure they remain competitive in their various industries. As seen over
the years, organizations such as General Motors had to undergo a change process to help revive
and or restore the company to its competitive status. Problem identification thus becomes a
critical factor in the change process since it gives the organization a clear goal for the change
process as the evaluation of the change process thus becomes very applicable or achievable with
the problem in mind.

Running Head: ORGANIZATIONAL DEVELOPMENT AND CHANGE

3

Introduction
ABC corporation is an e-commerce organization that was started in the year 2003has grown
tremendously, thanks to the current technological growth. Customers resorting to online business
practices helped push the introduction of ABC Corporation which came at a time when it was
needed the most as the global population was quickly resorting to online trade and or business.
ABC Corporation, therefore, was initiated to connect the businesses and or producers with their
target customers by providing them with a platform that they could connect and or communicate
as well as a safe space to make payments and wait for the good or product to be delivered. To
achieve this, the company has ensured it has in place a team of highly qualified and competent
workforce who are sourced globally. This strategy was necessary for ABC Corporation to ensure
that diversity is reached and maintained thus creating a strong organizational culture.
Mission:
ABC Corporation was incepted to help connect and empower customers through the technology
which is achievable through connecting millions of sellers to their target buyers in over 180
markets around the globe. ABC Corporation’s market is very wide, ranging from B2C and C2C,
and operates in more than 180 countries globall...


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