Chapter 1
Process models of change (part 2)
1
The impact of change sequences on the
outcome of the change process
This tutorial considers the impact of reactive or selfreinforcing sequences and examines how they can affect
change agents’ ability to determine outcomes and manage
change trajectories.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
2
The impact of sequence on outcome
Teleological and dialectical theories suggest that members of a
system have considerable freedom to construct change trajectories.
The nature of the change sequence (whether reactive or selfreinforcing) will affect the extent to which those leading the
change will be able to realise this possibility.
A
B
C
D
E
The way an earlier event will impact on later events depends
on how others respond.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
3
Reactive sequences
Dialectical theories focus on the conflicting goals of those involved
in a situation.
These conflicts give rise to reactive sequences in which one party
challenges another party’s attempt to secure a particular change.
A
B
= critical
C
D
E
F
junctures
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
4
Reactive sequences
Reactive sequences highlight the importance of not only working to set
a viable direction for change but also acting in ways that will align all
those involved to support it.
Those leading a change can attempt to avoid conflict by formulating a
vision that accommodates the interests of many constituencies (bosses,
peers, subordinates, customers, suppliers, bankers) but it may not always
be possible to satisfy them all and therefore some may resist the change.
A
B
= critical
C
D
E
F
junctures
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
5
BA-cabin crew dispute (an example of reactive
sequences)
A proposal to reduce the number of cabin crew
was resisted.
Actions and reactions, including strikes,
suspensions and dismissals, continued for 18
months.
See chapter 1 for a detailed
account of how this example
illustrates the impact of reactive
sequences.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
© PhotoDisc/Getty
images
6
Self-reinforcing sequences
Self-reinforcing sequences occur when a decision or action
produces positive feedback that reinforces earlier events and
supports the direction of change.
There are three drivers of self-reinforcing sequences:
• increasing returns
• psychological commitment to past decisions
• cognitive biases.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
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1. Increasing returns
A particular technology which is first to market or widely adopted by
early users (the QUERTY keyboard and VHS video format) may generate
increasing returns and achieve a decisive advantage over competing
technologies (the Dvorak keyboard and Betamax video format).
QWERTY keyboard 1873
© Macmillan Australia/Primary Library/Alan
Dvorak keyboard 1932
... even though it may not be the most efficient alternative.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
8
Four conditions promote increasing returns
• Set-up costs
• Learning
• Coordination
• Adaptive expectations
© ImageSource
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
9
NOKIA – Sticking with a winning formula for too long
For almost two decades hardware had delivered increasing
returns for Nokia and had been the source of the company’s
profitability.
See chapter 1 for a detailed account
of how this example illustrates the
impact of self reinforcing sequences
that are based on increasing returns.
© PhotoDisc/Getty
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
10
2. Psychological commitment to past decisions
Two factors appear to encourage the escalation of commitment:
1. The leader’s need to demonstrate competence and justify an
earlier decision.
This can take the form of self justification to protect their own self image
or justification to others in order to prove to them that an earlier decision
was not wrong.
2. A response to a perceived pressure for consistency.
In many organisational settings there is a perception that change
managers who are consistent in their actions are better leaders
than those who switch from one course of action to another.
This self-reinforcing mechanism often makes it difficult to change
course, even when those leading the change are aware that a series
of past decisions have been sub-optimal.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
11
Failure of the FiReContol project
The project was launched in 2004 with a budget of £70 million, but
following a series of delays and difficulties, was terminated in
December 2010 with none of the original objectives achieved and a
minimum of £469 million being wasted.
See chapter 1 for a detailed
account of how this example
illustrates the impact of self
reinforcing sequences that
are based on the escalation
of commitment.
© GETTY
© PhotoDisc/Getty Images
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
12
3. Cognitive biases and interpretive frames
Those leading the change can become so committed to a
project that they only pay attention to information that
supports their own position.
This cognitive bias may be reinforced if:
1. The leader(s) have a history of past successes
2. Members of the leadership team suppress dissent and
impede reality testing
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
13
Unrealistic goals for change at Direct Banking
A new CEO was appointed and quickly announced his
intention to introduce Voice Activation and Routing
(VAR) technology.
© CORBIS
See chapter 1 for a detailed
account of how this example
illustrates the impact of self
reinforcing sequences that are
based on cognitive biases.
© ImageSource
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
14
Path dependence
An important feature of many self-reinforcing sequences is that early
steps in a particular direction can produce further movement in the
same direction.
Path dependence begins with some critical events ( ) that trigger a pattern of
self-reinforcing practices which eventually squeeze out alternatives and limit
the change manager’s scope for action.
A critical event
constrains
future
possibilities
Few constraints on
the leader’s’ freedom
to act
New critical events
further constrain
possibilities
A pattern of events begins to
dominate and diverts the leader’s
attention away from alternatives
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
Range of
possible
futures
Leader locked in to
a particular way of
functioning
15
Minimising the impact of reactive and self-reinforcing
sequences
Leaders can be less effective than they might be because they fail to
recognise some of the dynamics that affect outcomes.
Reactive sequences
Change agents can improve their effectiveness by scanning
their environment for threats and by anticipating resistance or
responding quickly when others fail to support their actions.
Self-reinforcing sequences
A minimum condition for breaking out of the path
dependency that is often associated with self-reinforcing
sequences is the restoration of choice. Change managers need
to do whatever they can to maintain an awareness of and the
freedom to adopt alternative courses of action.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
16
Complex patterns
Change often unfolds as a pattern of punctuated equilibrium
which involves an alternation between:
• self-reinforcing sequences, during which increasing
returns and other forces promote the development of
routines that narrow the scope for action, and
• reactive sequences where negative reactions and a hostile
context can trigger discontinuities that push the change in a
new direction.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
17
Improving the practice of change management
In order to minimise any negative impact from reactive and selfreinforcing sequences those leading change need to be able to:
• step back and observe what is going
on, including their own and others’
behaviour,
• identify critical junctures and
subsequent patterns – some of which
may be difficult to discern, and
• explore alternative ways of acting that
might deliver superior outcomes.
© John Hayes (2014), The Theory and Practice of Change Management, 4th ed.
© PHOTODISC
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The scenario
A long-established bank is facing strong competition from new entrants into the
retail banking market. The new entrants have acquired some high-street branches
but specialize in the provision of telephone and internet banking services. Conse-
quently, they have a lower cost base because they do not carry the overheads asso-
ciated with a large branch network.
The operations board of the traditional bank is busy working on a number of
important projects and does not seem to have recognized the potential impact of
the new competition on their market share and margins.
You are a member of the operations board and you have given a lot of thought to
the problem. You believe that the only viable strategy is to reduce the size of the
existing branch network in order to reduce overheads, but to do so in a way that
will lead to an increase in net revenue per customer. At this stage, you have not
Copyrighte
cess perspective
thought through all the details of the strategy. For example, should the branches
targeted for closure be city centre branches occupying expensive properties, but
providing services for high net worth customers who the bank would be reluctant
to lose, or small rural branches occupying less expensive premises but with fewer
customers of high net worth to the bank?
Step 1
You have brainstormed a list of possible actions that could provide the basis for a
way forward. These are listed below in Table 1.1.
You are invited to review and revise this list of actions and use your experience to:
• Delete any items that, on reflection, you feel are unimportant or irrelevant.
• Add, in the space provided at the bottom of Table 1.1, any other actions that you
feel should be included. You are allowed to add up to four additional actions.
• Think about how the actions might be sequenced from start to finish. For each
action, identify whether you think it should occur early or late in the change
management process. You can record this view in the space provided on the
right-hand side of the table.
Table 1.1 Possible actions that will inform the strategy taken by the bank
Early
Late
1 Identify key stakeholders who might be affected by the change
2 Provide a counselling service and retraining for those who are to be displaced
3 Inform staff how they, personally, will be affected by the closure plan
5 Identify a project leader and set up a branch closure team
6 Announce the scope and scale of the closure plan to all staff
7 Brief key managers about the problem and win their support for the closure plan
8 Identify which branches are to be closed
9 Review the success (or otherwise) of the closure programme and disseminate throughout the
organization any lessons learned about change management
10 Identify the information that will be required in order to decide the number and location of
branches to be closed in order to achieve targeted benefits
11 Announce closure plan to existing customers
12 Train members of the branch closure team in change management skills
13 Identify (and quantify) benefits sought from closures
14 Develop a personnel package for displaced staff
15 Assess effects of the closures on other aspects of the bank's functioning
16 Plan any training that may be required for staff who are to be reassigned to other work
17 Hold team meetings to brief staff about the closure plans and indicate when they will be
informed about how they (personally will be affected by the change
18 Identify what steps could be taken to retain high value customers affected by the closures
20 Issue newsletter outlining progress towards full implementation
21 Decide who should be involved in analysing the information relating to whether a closure
plan will deliver sufficient benefits to justify the costs involved
22 Seek views of customers who might be affected by the closures about what issues should be
given attention
23 Seek views of branch staff about the issues that will have to be given attention if the closure
plan is to be successfully accomplished
24 Post-implementation, provide feedback to staff about how the change is affecting
performance
25
Initiate programme to make properties suitable for disposal (eg, remove vaults)
26 Celebrate successes and build on them in order to motivate people to continue working to
improve the bank's competitive position
27 Decide on date for first closures
28 Identify any personal gains or losses that might be perceived by those employees who will be
affected by the closures
29 Specify timetable for implementing the closure plan
30
Consider what might be done to motivate employees to accept the change
31 Issue a press release about the closure plan
32 Monitor progress against timetable and anticipated benefits
33 Explore the best way of disposing of redundant properties
34 Identify social banking issues raised by the closures (eg. what will happen to customers
without transport when their local branch closes)
35 Plan what will happen to displaced staff (redeployment, early retirement, redundancy)
36 Arrange an awayday for members of the ops board to focus their thinking on emerging threats
and opportunities
38 Reflect on how well the change is progressing and discuss with colleagues what else could be
done to ensure the change is successful
39 Decide who should be involved in identifying which branches are to be closed
Step 2
Consider your list of action statements and assemble them into a plan.
• Identify the sequence of actions from start to finish, recognizing that some
actions may occur in parallel or be repeated.
• Identify relationships between actions in your plan and consider how different
actions might be grouped together form separate steps or distinctive parts of
your plan.
• Summarize your plan as a flow diagram. For help with this, visit the companion
website at www.palgrave.com/companion/hayes-change-management for a
list of the action statements you can drag and drop into a flow diagram. This will
enable you to experiment with different ways of sequencing actions, and group-
ing them into categories that reflect the main steps in your approach to manag-
ing the change process.
You might find it useful to compare the change model you developed here to
manage the branch closures with the model presented at the end of Chapter 2. As
you read the remaining chapters of this book, you might also find it helpful to
reflect on how the content of each chapter might influence your approach to
managing this kind of change.
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