Foundations

Change is ever-present in organizations. We are sympathetic to the argument that, rather than talking about organizations as nouns, with the implication that they are ‘finished objects’, it is more helpful to focus on the processes of organizing, with the implication that we are always engaged in the practices that constitute a current state of affairs that will shortly become different (Chia, 1995; Tsoukas and Chia, 2002). In this view, the practices of organizing are always unfinished and ‘in process’. Indeed, these processes of organizing are not generally simple and singular but, instead, are open to multiple interpretations. Different people involved in the same set of organizational practices may have quite different stories of what are ostensibly the same set of events (Buchanan and Dawson, 2007). This makes the job of managing change intensely complicated. Actions are open to interpretation and reinterpretation and good intentions can go awry. What started out as a clear communication can become translated so many times that it takes on new meanings (Oswick et al., 2010) and ambiguity can pervade the field of change.

Extended Cases

In this part we present nine extended cases. As noted in Chapter 1, these extended cases cover a range of public and private sector settings as well as varying sectors, technologies and time frames. Some of the cases are anonymized accounts drawn from our own research with those organizations. The data in these anonymized cases are typically drawn from a wealth of material gathered over longitudinal research engagements. We have also worked closely with a number of the named organizations, but we have drawn only on publicly available sources in order to make it easier to gather further details if desired. Some of the cases (e.g. ABB, Admiral and Oticon) present an overview of the organization from foundation to the present day, and, again, this was a deliberate choice to offset the tendency in some cases to focus on isolated episodes. Viewing change against a longer time frame helps ground any analysis in a sense of where the organization is coming from and heading towards.

Learning objectives

The aims of this chapter are to:

• explore the different ways in which change objectives can be set;

• investigate the consequences for analysis and action of the way that objectives are framed;

• equip the reader with an approach (WXYZ) that can be applied in large-scale strategic change and smaller-scale developments; and

• encourage the reader to be aware of the strengths and limitations of setting clear change targets.

In Chapter 2 we highlighted some of the ways in which scholars have tried to classify change depending on the nature of the change – large- or small-scale, internally or externally driven, proceeding slowly or quickly. However, here we begin to set out ways in which the broad sense that change is needed can be translated into a more particular definition of what needs to be changed and how this might be achieved. Since organizations are complex and multifaceted, the process of specifying the change challenge tends to proceed iteratively. It may be attractive to think of a more logical and linear process whereby treatment follows diagnosis but in organizational change it is not unusual to revisit the specification of the change challenge repeatedly as the change itself unfolds. Of course, this revisiting could be taken to suggest that the change was inaccurately or incompetently specified at the outset. However, in practice it may simply be that new information has come to light as the change proceeds.

The aims of this chapter are to:

• introduce the concepts of stakeholders and influence;

• explore an approach to mapping stakeholders;

• identify the potential dynamics of stakeholders; and

• consider the implications for strategic and tactical action.

As a change idea or programme is introduced people will naturally align themselves with various positions with regard to the change. For some the change may represent a step in the right direction, and so be something to be supported. For others it could constitute a threat, for example by rendering their current competencies redundant, and so they may oppose the change. In many change situations there are a great variety of possible positions, and the complexity is increased as stakeholders change their positions over time. Therefore, when leading change it is helpful to understand the positions that stakeholders may adopt and what the consequences of this can be for change outcomes. In this chapter we explore a technique for mapping stakeholders’ positions, recognizing the influence that they might exert and the dynamics that emerge as people act and react to each other.

Power Provision plc is one of the main generators and providers of electrical and gas power in Europe. It has extensive distribution networks and over 10 million customers. In addition to domestic and business supply, services include municipal activities such as street lighting supply. Power Provision has a long history of generation and had an interest in renewables before most of its competitors. During the last ten years this area of activity has been emphasized, and Power Provision is regarded as a leader in renewable energy, although a considerable proportion of its generation is still produced in conventional ways (fossil fuel power stations). Although the branding and publicity tend to focus on renewables, the strategic aim is concerned with delivering dividends and share price performance to its shareholders by having highly efficient operations. Power Provision has been successful in doing this, and over the last five years it has delivered returns that are above those of almost all of its main competitors. Hence, Power Provision can tell a success story, but the changes along the way have entailed challenges and problematic phases.

Power Provision plc was formed by a merger of two companies in the late 1990s. At the time the industry was seeing a lot of merger and acquisition activity. In the case of Power Provision, the integration of two successful companies was portrayed as a merger in which agreement was formed through collaboration. To some extent this was true. The two pre-merger companies operated in different geographical areas, had largely different modes of power generation and served different customer bases. Therefore, there was a clear logic to the merger strategy. However, the two companies were not the same size and were not in the same financial states. The smaller company was more successful financially and had a brand that was more conducive to a market in which customers were becoming more interested in environmental matters. The larger company had more extensive infrastructure and a bigger customer base but was less successful financially. Following the merger the new CEO and finance director came from the smaller company.

Diagnosing

When several large public sector organizations were asked to merge, a change forum was instituted in order to allow senior managers to meet regularly and plan what would be a major structural change. A change team was also set up in a UK-based engineering firm to tackle the organizational sources of the firm’s gradually declining competitiveness. In both cases, one of the first pieces of activity undertaken in the change process related to establishing a diagnosis of the organization’s current position. Within the enquiry–action framework, diagnostics are the first of three areas discussed. Over the next four chapters we discuss four approaches to diagnosis. Chapter 3 first considers the extent to which it is possible and appropriate to define the change challenge precisely. In Chapter 4 we present an approach that assesses the level of engagement and vitality within the organization. Most organizations aspire to have staff who are engaged by their work, since it is thought that committed staff produce better results, build better relationships with customers and suppliers, are less likely to leave the organization and help foster an atmosphere that is conducive to both innovation and change. In Chapter 5 we consider the political dynamics of the organization, as any attempt to change the organization is likely to challenge existing power structures, personal empires and allegiances. Working with, rather than against, these political forces is essential in modern-day organizations. Finally, in Chapter 6, we suggest ways of diagnosing the extent to which organizational culture and habitualized routines might inhibit or enable the change process. All organizations develop routines for the execution of complex tasks such as negotiating contracts, developing new services or products, recruiting and training staff, etc. These routines form one part of the organization’s culture, but routines can also crystallize to the point at which they unintentionally stifle the ability to learn new solutions to existing problems. The relationship between learning and unlearning is therefore an important one.

The aims of this chapter are to:

• introduce the concept of evidence;

• build familiarity with a range of techniques used to gather evidence; and

• identify the political and social challenges of gathering and presenting evidence in change processes.

The concept of evidence is not unproblematic. Some research traditions challenge the very idea of what it means to claim to have evidence if one is operating with a view that our experience in the world is a socially constructed and relational phenomenon (Berger and Luckmann, 1966). However, the view that reality is socially constructed does not mean that ‘reality’ is any less ‘real’ in how people experience it. In some of our own research we have discussed the ways in which those managing an organization relate to evidence about aspects of that organization, in that there are ‘areas of interaction between the fantasized and the experienced’ (MacIntosh and Beech, 2011: 31). Hence, what to one individual or group within the organization might be taken as straightforward and factual might be seen by others as untrue or a fantasy that is being used for political ends. Our own view is that a constructionist and dialogic perspective offers a useful means of looking at both how views come to be held (for example, that some aspect of a change process is important or unimportant) and how those views might impact on future action. On a related note, Scott Cook and John Seely Brown (1999) offer an excellent discussion of the distinction between knowledge and knowing. They use the example of riding a bicycle to suggest that there are aspects of our abilities that we nonetheless struggle to articulate. Theoretically, it would be possible for people to specify in great technical detail the mechanics of how to ride a bicycle even if they were unable to do so themselves, but most of us who know how to ride a bicycle could not offer a solid explanation of the process. As a result, the tacitness of how we know something and the social process by which we construct explicit knowledge are both problematic.

Enacting Change

Taking action is clearly central to managing change, and this is the focus in Part C. Some actions are clear and overt, as when, for example, the organizational structure is altered. In this case, the change is observable and it is possible for everyone to know what has happened. Other actions are less obvious. For instance, changing through gradual development or changing the way that ideas are framed can be subtle processes that are not recognized by everyone. Change managers need to balance the overt and the subtle, as both are needed. Even when a structural change is observed by everyone it can take a longer process of subtle attitudinal change before people genuinely believe in the change. Equally, subtle changes over time need to be symbolized and made explicit in order for them to be strongly embedded. Successful change managers tend to be good at judging how quickly to push things and knowing when to allow time for debate and disagreement. Change actions are, therefore, almost never ‘one-offs’. Rather, there is an ongoing process in which different ways of enacting the change are marshalled over time in order to speed up or allow time to reflect, make overt changes or allow subtle (sometimes psychological) shifts. In this section we explore seven forms of change action. Having read the section you should be in a position to reflect on the appropriate blend of actions for different change management tasks as you encounter them.

The aims of this chapter are to:

• discuss the connections between change and personal identity;

• develop a model of identity work;

• encourage the critical evaluation of a mini-case of a construction company; and

• suggest guiding questions and considerations for working with issues of identity work when managing change.

Introduction

The question of identity – ‘Who am I?’ – is a deceptively simple question. The answers are manifold and complex. Identity has traditionally been thought of as that which is essential and unchanging – that which pervades over time and in different circumstances. For example, a person who is essentially extrovert may be outgoing both at work and with friends, and may have this identifiable characteristic throughout life. Other aspects of who they are might be more transient; for example, the same person, whilst remaining extrovert, may not think about politics in the same way or associate him- or herself with the same occupational groups throughout life, because he or she is focused on, and influenced by, external sources of ideas and information.

Although there may be aspects of the self that are relatively unchanging, in the context of organizations and work much research has focused on aspects of identity that have degrees of fluidity that are affected by change and that themselves stimulate change. At a simple level, as people move through different roles (e.g. team leader, manager, director) they often take on differences in persona. With experience they look at the world in a slightly different way, and they have a different repertoire of skills to draw upon. Equally, as they have experiences, both positive and negative, they can come to think of themselves in new ways and can recognize themselves as members or outsiders of identifiable social groups.

Introduction

In this concluding chapter we revisit the enquiry–action framework in the light of the ideas, techniques and cases that have been discussed. We explore how the framework can be used in leading and managing change and we consider how the separate practices of the framework can be integrated. The aims of the chapter are to:

• elucidate the practicalities of the enquiry–action framework;

• discuss the integration of practices;

• identify connections between the enquiry–action framework and the theories of change introduced earlier in the book; and

• explore implications for the nature of leading and managing change.

Fineman, Sims and Gabriel (2005) introduce the metaphor of a river as a way of thinking about organizations, or, rather, the set of practices that constitute organizing. This relates to a perspective on organizations as being in flux (Chia, 1995) as actors act, interact and react within a socio-economic climate that is typically changeable. In some senses, this may appear to be unsettling. In this way of thinking we never reach the ‘refreezing’ part of Kurt Lewin’s (1947) model of change (unfreeze, change, refreeze), and hence there is never a finished conclusion or a point at which we can objectively say that a change was a success or a failure. Although this might be disconcerting, we see it as being of more practical help than a traditional way of thinking of organizations as objects, machines or closed systems (Marshak, 2009). There is constant motion but at the same time an identity and a set of meanings that are conserved over time. Viewed by a swimmer in the river, it is a place of constant change. Viewed by a cartographer on a series of maps drawn over time, it is an incrementally changing feature of the landscape. Hence, it is not only that there is a core of organizing practices that remain the same over time and a periphery that changes. Rather, what changes, what is core and how these ideas are interpreted will vary from different perspectives (Tsoukas and Chia, 2002). For example, in the Oticon case one can ask whether manufacturing hearing aids is the company’s core or if the core as experienced by designers is a combination of innovation, speed and hearing aids – that is, the core might reflect the values introduced by the CEO Lars Kolind.

The aims of this chapter are to:

• introduce the concept of integrated, differentiated and fragmented cultures;

• explore an approach to analysing culture using Gerry Johnson’s ‘cultural web’ as a diagnostic tool;

• consider the implications of culture for how change might be planned, enacted and reacted to;

• identify the distinction between single- and double-loop learning and consider which might be appropriate in different circumstances;

• introduce the concept of defensive routines and highlight the ways in which they can inhibit change; and

• make readers aware of the dangers of oversimplifying the concept of culture as it applies to organizations.

Organizations are social settings in which individuals and teams interact in the conduct of business. As they do so they construct meanings associated with their activities and the objects that they use. For example, a senior manager with a large office might symbolize his or her status rather than simply providing a venue for meetings. The meanings associated with such a symbol can vary. For example, some might regard a large office as something to aspire to and a mark of achievement, whilst others might see it as symbolizing the separation of senior managers from the rest of the workforce (as discussed in the ITS Canada case, Extended Case 2). The ascription of such meanings is variable and is beyond the control of management, yet it will have an impact on how people behave. For this reason, organizations are often ascribed cultural characteristics as a helpful means of describing what the organization is like. Some organizations are described as entrepreneurial, others as bureaucratic; some may be aggressive, others collaborative; some may be characterized as innovative whilst others are seen as traditional. Of course, a singular description is unlikely to capture every aspect of the organization, or to be universally true. Perhaps the most commonly cited definition of organizational culture is ‘how things are done around here’ (Drennan, 1992: 3), which resonates with many people’s experience and nicely captures a view of what is communicated to those inside and beyond the organization. If nothing else, such descriptions help us make sense of the organization, particularly as a newcomer. New members of an organization must establish what is acceptable in their new surroundings.

The aims of this chapter are to:

• explore the nature and practices of selection decision making;

• introduce the psychological contract and discuss its importance for managing change;

• discuss approaches to selecting people to join change teams and organizations; and

• consider the application of practices contrasting environments.

Having the right people in the right place at the right time is important for the effective enactment of change. Whilst this might sound simple, in practice there are several potential pitfalls, and the process of effective selection decision making is a core skill of the change manager. For Kotter (1996), the ability to secure the right people for the coalition that will drive change is a foundational step in deciding the limits to the way the change will go. Marshak’s (2009) metaphors of ‘move and relocate’ and ‘liberate and recreate’ (see Chapter 2) are pertinent here, as stopping doing things one way and moving to another can entail a change in the people; equally, the idea of liberation is that the people who are liberated will be able to move the company in a new and interesting direction. Accordingly, it is important for the people who are chosen to have both the right capabilities and the motivation for working towards the agreed goals. This can involve establishing a ‘psychological contract’ (Conway and Briner, 2005), or informal and unwritten agreement, over the direction of change and the willingness to exert effort towards the goals.

The aims of this chapter are to:

• discuss the relationship between the business environment and the structure of organizations;

• explore the alternative structures that companies can adopt and consider their relative strengths and weaknesses;

• suggest a framework for redesigning structure; and

• enable a critical discussion of a mini-case and of the Oticon case study.

Introduction

LucasArts is the company, headed by George Lucas, that is behind the special effects used in the Star Wars movies, amongst other digital technology products. In the last decade competition in the special effects industry has increased dramatically, but so have the opportunities in line with the increasing quantities and qualities of digital games, some of which use techniques that only companies at the top end of the market, such as LucasArts, can achieve (Jones, 2009). However, LucasArts had a problem. They employed a large number of creative digital artists, who would be well placed to take advantage of new market opportunities, but the digital artists worked independently within departments that focused on specialist activities, often communicating only between departments that were geographically remote from each other via video conferencing systems. Lucas decided that it was necessary to restructure in order to change the process and output of the company. He relocated the digital artists into a single site that was designed to encourage interaction. It included open areas, lounges and high-quality communal facilities. He asked them to develop a common digital platform so that people currently working in different departments could potentially collaborate. The operational leaders introduced temporary project teams and challenged the workers to develop new products for both the film and games industries. The result has been an increase in the sharing of skills between individuals and departments. LucasArts has subsequently been even more innovative, and, in addition to producing the film special effects for which it was famous, it has developed notable successes in the games industry, including products such as ‘Star Wars: The Force Unleashed’.

The aims of this chapter are to:

• introduce concepts and frameworks from the literature on change management;

• enable readers to distinguish between different modes of change;

• consider the relationship between change management practices and modes of change;

• encourage reflection on the theories that can support the enquiry–action and other frameworks; and

• help students develop an understanding of classical ideas and contemporary thinking alike about change.

Change has a long history in the organizational and management literatures, and it is prudent to place contemporary developments in context relative to other prior contributions. We therefore review contributions from respected scholars that we have found helpful before discussing their application in the enquiry–action framework. The review in this chapter is necessarily limited, since there is a vast amount of work that could be included. We have selected four approaches to conceptualizing change that have been influential in the literature, so as to offer a partial yet indicative and constructive means of introducing change.

Approach one: foci and modes of change

Change in organizations can be thought of in many different ways, and Andrew Van de Ven and Scott Poole (1995; 2005) have developed a useful framework that helps in systematically arranging the plethora of alternatives. There are two axes to their framework. First is the issue of change focus, or what they term the ‘unit of change’. Some ways of thinking about change focus relatively closely on a particular company, product or process. For example, someone seeking to champion a new product might be expected to be concerned principally with change in relation to that product, rather than the whole company. Other models focus more broadly on multiple entities interacting together in a system, such as several companies competing in the same market, or several proposals for new products competing with each other for limited investment funding.

The aims of this chapter are to:

• suggest ways in which customers can be segmented;

• describe the role of strategic groups in defining change challenges; and

• consider the choices that an organization faces when changing customers and competitors.

Using some of the diagnostic approaches from the enquiry–action framework (presented in Part B of this book) may lead you to conclude that the change required tends to be externally rather than internally focused. In other words, that the change needs to reposition the organization in terms of the types of customers that are being served and/or which competitors this involves. Such externally focused repositioning may well cause or be caused by changes in organizational structure, self-image or business process. The direction of causality is far less important than the observation that there are interconnections, and that iterations may be required to arrive at a set of changes that help match internal organizational arrangements with the external organizational environment. Although the language of customers and competitors sits most comfortably in the context of private sector organizations, it is both possible and helpful to conceptualize customers and competitors alike in the context of public, voluntary and charitable organizations. We return to this theme later in the chapter, but we begin by considering two related but distinct changes that an organization may engage with: changing customers and changing competitors.

The UK government relies on Her Majesty’s Revenue and Customs to fund many of the policies it initiates. Monies raised through taxation are used to fund the welfare state, the health service, the armed services and many other aspects of government activity. Taxation has been a feature of virtually all civilizations, from the Egyptians and Romans to modern democracies, to the extent that Benjamin Franklin is reported to have said that there is nothing so certain as death and taxes. However, although it is central to civilized life, taxation is neither straightforward nor popular.

When the UK government decided to merge the Inland Revenue with Her Majesty’s Customs and Excise, it was simply the latest in a series of organizational changes. The resulting organization, HMRC, faced the challenge of integrating two previously independent organizations, each of which had a long history. The last chairman of the Inland Revenue, Sir Nicholas Montagu, speaking at the 2005 Scotland plc Awards ceremony, commented on the difficulty in changing the mindset of the organization:

The Island Opera Company operates on a project basis. There is a senior management board that oversees the company, and it appoints what is in effect a project team to run each production. This case concerns the final rehearsal phase for the opera The Marriage of Figaro. The artistic director, Jeremy, was a relative novice director but was appointed to the position because the board was impressed by his talent. Previously he had been a singer, and he only recently finished his successful performing career. The board put one of its own members, Simon, into the project as conductor in order to support Jeremy. Although on the project Simon would ‘report’ to Jeremy, outside the project Jeremy was junior in Island Opera compared to Simon’s position. The other central character in this case is Bella, who was the lead soprano. She was relatively young and this was her first major role, and she was generally regarded as an up-and-coming talent.

The soloists have been in preparation for a considerable period of time, but we focus on the last six weeks of rehearsals, when the chorus and then the orchestra arrived. Bella’s ambition was to become a singer with the Metropolitan Opera House in New York:

Bella was relatively young in her peer group, and she was ‘excited beyond belief’ because of ‘the magnitude of the role’ and ‘the size of opera’, and for her this was ‘the culmination of seven years of work’. Indeed, she was aware of the opportunity The Marriage of Figaro presented in terms of raising her profile and advancing her career. For Bella, this role was a vehicle to attract the attention of artistic directors, to gain legitimacy as an opera singer.