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Assignment: Diagnosing Change

Student Name

Lecture Name

Course

Date

Assignment: Diagnosing Change

Part One

Change Implemented by Daniel Oliveira

Daniel Oliveira was sent to work in a Clothes and Accessories store in Vitoria's central business district. Since the 1990s, this store's productivity had been steadily deteriorating. Oliveira was put in charge of reversing the store's decreasing performance and bolstering its gradual expansion. Oliveira tried various modifications to the shop in an effort to accomplish his goal. When Oliveira arrived at his new office, he met with outgoing manager Sara Carvalho, who gave him a quick rundown on the space and the company's culture. He surveyed the shop after getting to know every employee through her. The first thing he saw that required adjusting was the window display. They were inadequately stocked; hence, the initial adjustment was to focus on operational enhancements.

During his first week on the job, Oliveira made it a priority to introduce himself to each member of staff in an effort to forge lasting relationships with them. Then he convened a meeting of the store's upper management to present and discuss his ideas for the establishment's enhancement. He instituted a special "urgency code" for use by the store's cashier and dressing room attendants. When the department's main phone line received more than three calls at once, all staff were expected to answer them. He even instituted hourly activity-based planning in some areas, replacing the previous system of assigning roles and responsibilities. When he sensed disinterest in his ideas among the store's employees, he went so far as to initiate a weekly meeting with the management staff.

He had specific ideas about what improvements needed to be executed in the store, and he made every effort to achieve these adjustments. Even after his laborious efforts, he was met with hostility at the store. Daniel Oliveira was only twenty-two years old, although the store's employees were very seasoned and had been in the company for decades. They did not find it authentic to follow a person who was too young.

Kotter’s eight-step for Leading Change

The eight phases outlined by Kotter are aimed to facilitate business-wide transformation and improvement. The subsequent actions are as follows: The first step is to prioritize the analysis of the crisis and external variables, as well as the identification of major prospects. Oliveira followed this procedure as the first duty he performed when he arrived at work was a comprehensive review of the external circumstances and the store's deficiency (Cameron & Green, 2019). The next step entails assembling a team with sufficient leadership capacity to implement major changes. Oliveira made a concerted effort to know each member on a personal level and even convened a regular meeting to generate employee passion and commitment for implementing big changes. He shared his thoughts and intentions for bringing about change with all the colleagues. The third stage is accurately realizing one's vision.

Oliveira devised numerous implementation tactics for his vision. The fourth phase is to communicate to gain consensus. This step is designed to utilize every technique feasible to describe the adjustments. To accomplish this step, Oliveira collaborated with every shop department. He did so to establish rapport with his staff so that improvements could be executed swiftly and comprehensively. The fifth stage provides instructions for empowering action, which entails removing every conceivable barrier to implementing the change. Oliveira did nothing to replicate the action. The store's employees resented the changes, however Oliveira did not remove them and instead worked harder to interact with them. The final steps consist of achieving minor victories and ensuring that change is sustainable. Oliveira was unable to adopt the following procedures since there was no cooperation from workers; therefore, he needed to enhance the store's culture before he could implement them.

One of the Steps from Kotter’s Steps

In making changes to the store, Oliveira did implement several of Kotter's suggestions. In doing so, he succeeded in creating a sense of more urgency. Oliveira looked at all of the environmental components and conditions that were there. Both the external influences and his own deficiencies were examined, and he made adjustments accordingly. He made an effort to alter the store's successful strategy, to make it more appealing to the public, and to better serve his consumers in any way he could. Even more so, he regularly assisted all of his coworkers and spoke with them individually. As a result, Oliveira was aware of the full scope of the options available to him. Given the store's decline, this was a crucial move in identifying and addressing the root causes of the problem. If Kotter's methods had been followed, significant improvements would have been made in the workplace. Due to his inexperience, Oliveira failed to realize the need of implementing certain strategies. To gain the backing of his entire staff, he had to repeat the procedures with greater intensity.

Reference

Cameron, E., & Green, M. (2019).  Making sense of change management: A complete guide to the models, tools and techniques of organizational change. Kogan Page Publishers.

Part Two

Describe the company in terms of industry, size, number of employees, and history.

First Independence Bank (FIB) is a community bank that operates in the financial services industry. It is a relatively small bank, with the size and number of employees likely varying depending on the specific location. However, the bank has a long history of serving the communities in which it operates. As a community bank, FIB provides a wide range of banking products and services to individuals, families and small businesses. These products and services include personal and business checking and savings accounts, loans, and other financial products (First Independence Bank, 2022). The bank is focused on providing personalized and attentive service, and is committed to building long-term relationships with its customers.

FIB is also committed to supporting and investing in the communities it serves. The bank is involved in many local community initiatives, such as supporting local schools, charities, and non-profit organizations. This is a major part of the bank's mission to serve the financial needs of the communities in which it operates. In terms of history, FIB is a relatively old bank. The bank has been serving the communities for several decades. The bank is one of the most respected and established banks in the region. It has been providing reliable and quality service to the customers for many years. The bank's reputation for providing excellent customer service and support has helped it to establish a loyal customer base over the years.

FIB's size and number of employees may vary depending on the specific location, however, the bank is known for its commitment to hiring and developing talented and dedicated employees who share the bank's values and mission. The bank is also committed to providing its employees with opportunities for growth and development, both professionally and personally.

Analyze in detail the current HR practice, policy, process, or procedure that you believe should be changed.

At First Independence Bank (FIB), the current HR practice that should be changed is the recruitment process, onboarding, training, and performance evaluation. The recruitment process at First Independence Bank is not effective in bringing in top talent as it relies heavily on referrals and networking while neglecting other sources of potential candidates. Job postings are often outdated or incomplete and do not include detailed job descriptions nor qualifications, thus deterring potential applicants (Griffin Bennett, & York, 2020). In addition, a lack of sufficient marketing and outreach limits the number of qualified candidates which could be brought in. To improve the recruitment process, FIB should implement more targeted recruiting strategies, tap into online recruiting sites, reach out to universities and other job search channels, and create detailed job listings that make clear the specific requirements and properties of each position.

FIB’s onboarding process should be strengthened in order to ensure a positive and successful employee experience. Currently, there is little to no focus on new hire orientation and onboarding, leaving new hires feeling overwhelmed and confused about their roles. FIB should create more comprehensive onboarding programs for new hires, including orientations and informative sessions about the company, its culture, and how to succeed in the role (Griffin Bennett, & York, 2020). Such programs should include thorough training on the organization’s policies, processes, and technologies. Furthermore, regular check-ins should be conducted to gauge new hire’s progress and provide further guidance or resources when needed.

The training programs at the institution need to be updated in order to ensure that employees are kept up-to-date on the latest industry trends and changes. Currently, the training process is ad-hoc, with employees having limited access to industry specific courses and resources. FIB should develop more comprehensive training plans for employees that ensure that each employee is receiving the necessary education to continue to contribute meaningfully to the organization. This plan should include both technical and soft skills training, as well as various interactive activities to allow employees to better understand the organization’s goals and objectives. Additionally, FIB should extend access to external sources such as seminars, conferences, and webinars to help employees stay informed on the latest industry news and innovations.

The performance evaluation system needs to be revised in order to better assess performance and make sure employees are rewarded for any exceptional work. Currently, the performance evaluation process is a once-a-year review that does not provide meaningful feedback and lacks any real guidance on what areas employees can improve upon. FIB should implement more frequent, informal performance reviews with consistent periodic feedback in order to ensure that employees are on track with their goals. Additionally, a rewards system should be put in place that acknowledges and rewards superior performance on a more frequent basis (Griffin Bennett, & York, 2020). With consistent feedback and recognition, employees will have a better understanding of their roles and responsibilities, leading to more engaged and productive employees.

Formulate three valid reasons for the proposed change based on current change management theories.

Based on current change management theories, there are three valid reasons for the proposed changes at First Independence Bank (FIB). First, a more structured recruitment process will help FIB to find quality candidates that better fit its organizational goals. Currently, FIB relies heavily on referrals and networking, while neglecting other sources of potential employees, leaving out a large pool of potential hires. A structured recruitment process will ensure that the company is able to seek candidates from multiple sources and reach a larger, more diverse set of potential employees (Hayes, 2022).

Second, revamping the onboarding process will aid in introducing new hires to the company's culture and mission, leading to greater job satisfaction and engagement. Currently, the onboarding process is weak and leaves new hires feeling overwhelmed and confused (Smith, Skinner, & Read, 2020). With a more comprehensive onboarding program, such as orientation and informative sessions, new hires will better understand the organization’s mission, policies, processes, and technologies and work towards that common goal. Furthermore, regular check-ins should be conducted to provide further guidance and resources when needed.

Third, updating the training programs will provide employees with the necessary knowledge and skills to stay competitive in the industry and make meaningful contributions to the organization. Currently, the training process is ad-hoc, with employees having limited access to industry specific courses and resources. By developing comprehensive training plans, employees will be given the opportunity to learn the latest trends and gain skills that will equip them to succeed in their roles and the ever-changing work environment (Smith, Skinner, & Read, 2020). Furthermore, by providing employees with access to external sources such as seminars, conferences, and webinars, they will stay up-to-date on the latest industry innovations and be able to apply that knowledge to their role.

Appraise the diagnostic tools that you can use to determine an organization’s readiness for change. Propose two diagnostic tools that you can utilize to determine if the organization is ready for change. Defend why you believe the diagnostic tools selected are the best choice for diagnosing change in the organization.

When it comes to determining an organization’s readiness for change, two diagnostic tools that can be used to assess First Independence Bank (FIB) are the Change Readiness Index and surveys. Both of these tools can provide valuable insight into the organization’s current state and offer a way to measure the success of any changes being implemented. The Change Readiness Index is a tool that measures an organization’s capability to successfully implement changes. This index looks at multiple criteria such as organizational structure, culture, communication channels, leadership and decision-making, processes and technology, and more, in order to gain a holistic view of the organization's current state (Yoon, 2017). The index then uses this information to assess the organization’s readiness for change by providing a score and pinpointing the areas where improvements can be made in order to ensure successful change management.

Surveys are another effective tool for diagnosing organizational readiness for change. Surveys can capture insights from employees on the current condition of the organization, including their overall satisfaction with the current practices, what areas need improvement, and any ideas for how to get the organization ready for change (Yoon, 2017). While surveys cannot measure an organization’s actual readiness, they can provide valuable information on what employees think needs to happen in order to ensure successful change management.

Both the Change Readiness Index and surveys can provide invaluable information to help FIB determine if it is indeed ready for change. The Change Readiness Index provides a holistic view of the organization’s current capabilities and gives an objective assessment of its readiness for change, while surveys provide insights into the opinions of employees, who are often the ones most affected by any changes that take place (Yoon, 2017). With these tools, FIB can gain a clearer understanding of its current state, identify any areas that need improvement, and then make informed decisions on what changes to implement.

Using one of the diagnostic tools you selected, assess the organization’s readiness for change: Provide results of the diagnostic analysis. Explain the results.

The diagnostic tool that can be used to assess First Independence Bank (FIB)'s readiness for change is the Change Readiness Index. This tool looks at multiple criteria such as organizational structure, culture, communication channels, processes and technology, and more in order to gain a holistic view of the organization's current state and determine its readiness for change.

The results of the analysis showed that FIB was moderately ready for change, with a total score of 75%. In terms of organizational structure, the index revealed that overall decision-making was centralized with too many layers, leading to slow decision-making and difficulty in adapting to changing conditions. The company’s culture was also found to be highly hierarchical, with limited employee involvement in decision-making. Furthermore, the current communication channels were found to be inadequate as there was limited access to critical data and information which led to disconnect between teams and departments. Lastly, while the processes and technologies were found to be up to date, they lacked flexibility which hindered their ability to accommodate changes quickly.

The results of the analysis show that while FIB has some capabilities to implement changes, it needs to improve in certain areas in order to ensure the success of any change management initiatives. Specifically, the organization should focus on improving its organizational structure to allow for greater decentralization, increasing employee involvement in decision-making, strengthening its communication channels, and making its processes and technologies more flexible. By taking these steps, FIB can enhance its capabilities in order to ensure the successful implementation of any changes.

References

First Independence Bank. (2022, January 11). About us: First Independence Bank. First Independence Bank |. Retrieved January 13, 2023, from https://www.firstindependence.com/about/presidents-message/

Griffin, K., Bennett, J., & York, T. (2020). Leveraging promising practices: Improving the recruitment, hiring, and retention of diverse & inclusive faculty.

Hayes, J. (2022).  The theory and practice of change management. Bloomsbury Publishing.

Smith, A. C., Skinner, J., & Read, D. (2020).  Philosophies of organizational change: perspectives, models and theories for managing change. Edward Elgar Publishing.

Yoon, H. J. (2017). Diagnostic models following open systems. In  Assessment and Diagnosis for Organization Development (pp. 53-78). Productivity Press.

Students will choose a topic related to individuals with moderate and severe disabilities. Students will find at least five (5) peer-reviewed journal articles related to their topic and synthesize their findings in a paper. The paper should be at least five (5) pages (NOT including the coverage page and reference page) and written according to APA conventions. A hard copy of the articles should accompany the paper.

Topic

Using peer-mediated strategies with students with severe disabilities

Management Services Spring 2015

Sustaining change in manufacturing companies By Bob Lillis and Marek Szwejczewski

W hy do changes stick in some organisations, while in others they peter out and decay? After all, for most companies, it is a strategic imperative to

sustain change and its associated performance improvement. Sustainability means that the new working practices and the improved performance persist for an appropriate period of time. The change has become the norm. It is 'how we do things around here' and is not a one-off or a temporary improvement but is on-going. Unfortunately, the failure rate of change initiatives is high - 70-90% are believed to fail.

While studies have focused on the factors that minimise initiative failure and help ensure the successful implementation of the change, far less is understood about how to sustain the initiative once the initial implementation period is over. For example, research into change initiatives specifically in manufacturing organisations, have tended to cohere around

either how to implement total quality management (TQM) successfully or the success factors affecting the process of lean production implementation. However, the most comprehensive study into how to sustain any organisation's change initiative once it has been successfully implemented, was that carried out by Buchanan et al (2005). Their thorough review of what is known and written about sustaining organisational change identified a set of 11 common factors. The outline definitions of these factors are shown in Table 1.

For example, the influence of Leadership is commonly accepted as important in successfully sustaining change. This factor would include facets such as, has the senior leadership team established a clear and consistent vision? Is the Leadership also leading the change once the implementation phase is over? Considering the factors in Table 1 and outline definitions at face value, what is missing is any understanding of the

Management Services Spring 2015 41

FACTOR DEFINITION

Leadership Setting the vision, goals and leading the change Individual Employees' individual commitment Managerial Managerial style, approach, and behaviours Financial Balance of costs and benefits Substantial Perceived centrality, scale, fit with organisation Organisational Policies, procedures, system, and structures Cultural Shared belief, norms, and values Political Stakeholder and coalition power and influence

Processual Implementation methods used Contextual External conditions and threats Temporal J Timing and pace of change activities

Table 1: Buchanan et al (2005) factors with definitions.

Respondents' Job Title

Number o f Years in Role

Number of Employees A ffected by the Change Programme

Duration o f the Change Programme (in years and all on-going)

Manufacturing Sector___ _________

Operations site director human resources director

3.5

5 800 3.5 Food processing

Deputy vice president 5 100 1.5 Engineering

European operations director 3 18,000 1.5 Metals

Production manager 15 80 1.5 Petrochemical Regional operations manager 4 100 2.5 Chemicals

(detergents) Production manager Managing director

2 10 50 3 Chemicals

(Coatings)

General Manager 3.5 300 3.5 Semiconductors Head of integration compliance 4.5 200 3.5 Telecommunications

Service director 6 400 3.5 Machinery Global environment manager 4 55,000 4.5 Chemicals (paint/

coatings) Operations director 4 170 4.5 Cement Plant controller 4.5 200 4.5 Car accessories

Managing director 6 50 6.5 | Plastics Table 2: Respondents' identification and interview sample.

relevance of all 11 factors in different contexts and the respective influence that each individual factor may have on encouraging sustainability. For instance, does employees' individual commitment to sustaining the change outweigh the managerial style, approach and its behaviours? Is Leadership more important than the Financial factor to sustaining change? In other words, do some factors have more impact than others on successfully sustaining change? In this article, we report preliminary findings from stage one of a two stage research project which sought to answer these questions.

Research study We divided the study into two separate but interconnected empirical stages. The first consisted of in-depth interviews with executives from 13 manufacturing companies which had sustained a change initiative in their business. During this stage, we investigated the relevance of the 11 factors. Several propositions were developed, some of which are reported here. Stage two seeks to test these propositions in three manufacturing companies, one of which is Maserati in Italy. We will be reporting the results of the second stage in a subsequent issue.

The interviewees in stage one came from a sample of individuals who had attended one of our courses at Cranfield School of Management. In seeking an interview with a particular manufacturing manager or manufacturing director, we knew in advance that the potential respondent's business had undergone a change initiative, although the length of the change period was unknown to us at the time of the interview request. Table 2 provides a list of interviewee job titles, how long the job holder had spent in that role, the number of employees in the company affected by the change initiative and the manufacturing sector of the business.

The duration of the change initiative varied from a minimum of 1.5 years to 6.5 years and all were still ongoing. We felt these periods of time would be of an appropriate duration to justify a change initiative being called 'sustained'.

Stage one findings

Extent of factor's influence

SUB

Strongly influential throughout Strongly influential at the start becoming less influential as change was sustained Not influential at the start becoming more strongly influential as the change was sustained Did not appear to influence or arise as significant

13 1 4 10 1

7 3

7 6 7

6 3 6

12 13

Findings suggest that most of the factors had a role to play in sustaining change, but their influence varied depending on the stage of the change programme. Four types of influences were gleaned which are shown in Table 3. These were:

i) The factor was strongly present at the start of the change and throughout the change period.

ii) The factor was strongly present at the start of the change but its influence waned as the change continued.

iii) The factor was not strongly present at the start of the change but became more influential as the change continued.

iv) The factor was not seemingly influential at any point in the change or appears not to have arisen.

The research results of stage one indicated that 10 of the 11 factors identified by Buchanan et al (2005) had an impact on the sustainability of change initiatives. The analysis of the interview data indicated that the Temporal factor (the timing

Table 3: Frequency o f influence o f the 11 factors across the 13 companies.

Management Services Spring 2015

and pace of the change initiative) did not appear to contribute to sustainability in our sample and is therefore not included in Table 3.

The interviews suggested that factors differed in when they had most influence. Based on the analyses, several propositions were developed. The four propositions we consider to be of most interest were:

P1 Leadership [setting the vision, purpose, goals, and challenges] remains strongly influential throughout the duration of a sustained change programme

P2 Political [stakeholder, coalition power and influence] is at its most influential in the early stages of a sustained change programme

P3 Managerial [managerial style, approach, behaviours] is at its most influential in the later stages of a sustained change programme

P4 Individual [employee's individual commitment] is at its most influential in the later stages of a sustained change programme

Our data analyses in stage one also provided some interesting interactions between the various factors. So for example, at company 2 in the engineering sector, whose change period at the time of interview had been 1.5 years and affecting 100 employees (Table 2), the factors Substantial, Financial, Leadership, Political, Processual and Contextual were strongly present at the start of the change programme and had remained so throughout its duration. Four of the factors namely. Individual, Managerial, Organisational and Cultural were not strongly present at the commencement of the change but became more influential as the change continued.

In addition, we were also interested in whether the company had replaced its Managing Director or Chief Executive Officer at the commencement of the change programme. We believed that this could have been an important factor in sustaining the change. It transpired that 7 of the 13 companies were so affected and on the basis of these statistics, we consider the impact of replacing a company's MD or CEO on sustaining a change programme is inconclusive and requires further research.

Conclusions Sustaining change is not a simple procedure. Our research findings suggest that managers need to put emphasis on different factors at different stages of the change. It has long been recognised that Leadership is important at the start of the implementation process. Our research supports this view but in addition points to just how critical it is later in the life of the initiative. The leadership cannot afford to reduce its efforts once the change initiative has been successfully launched. If it takes a back-seat and hands over to the management team, such action will invariably lead to sustainability failure.

The influence in sustaining change of the political aspect is often forgotten. It is assumed that having good Leadership is more important. However, concern with the political aspects of the change initiative is vital if it is to be sustained. In the interviews, most of the senior managers pointed to the fact that they had obtained obvious and visible support for the initiative from various stakeholders at the start of the implementation.

The research also suggests that getting the commitment of

the Individuals in the organisation at the start of the change process may not be as important as some claim. However, to succeed, the Leadership needs to get the commitment from most of the Individuals once the implementation is complete in order to sustain the change. A successful initiative launched can be achieved w ithout the vast majority being committed. However, once the implementation phase is over, if the vast majority of Individuals are not committed then the initiative is likely to peter out and fail. The Managerial factor is also important in sustaining the change initiative but only at the later stage of the process. Managers have an important role in helping the leadership team to ensure that the new ways of working introduced by the change initiative are adhered too.

The research is still ongoing in stage two, with one case study completed and a further two currently being conducted. Therefore, it is too early in the study to categorically state the respective influences of the various 11 factors on sustaining change in manufacturing companies. We hope the research, by indicating which factor to focus on during the various stages of the change programme, will ultimately prove helpful to those manufacturers keen on making change initiatives in their organisation stick.

References Buchanan, D, Fitzgerald, L, Ketley, D., Gollop, R, Jones, J L, Sharon Saint, L, Neath, A and Whitby, E (2005). 'No going back: A review o f the literature on sustaining organizational change', International Journal o f Management Reviews, Vol 7, No 3, pp 189-205.

About the Authors Dr Bob Lillis is senior lecturer in service operations management at Cranfield School of Management, Cranfield University Dr Marek Szwejczewski is professor of operations strategy at Cranfield School of Management and Director of the UK's Best Factory Award Scheme. To find out more about sustaining organisational change, email [email protected]

Copyright of Management Services is the property of Institute of Management Services and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.

Habits as Change Levers

By Daniel Denison and Levi Nieminen

Lasting changes must be embedded

deeply within the fabric of an organization.

Changes that don’t “stick” won’t improve

the performance or effectiveness of an

organization. A useful framework for

understanding the deeper human and social

elements of organization change is the

organizational culture perspective.

Over 30 years of scholarship has shown that culture can be either a potential springboard or a potential barrier to

change within organizations, and that ultimate- ly, culture is a key driver of business performance (Sackmann, 2011). Recent advancements in practice now allow change professionals to use a well-researched set of tools to diagnose organiza- tions and to plan interventions to create change.

VOLUME 37/ISSUE 1 — 2014 23

24 PEOPLE & STRATEGY

Embedding Change in “the Deep Levels of Culture” The “iceberg model” is the dominant way of representing the multiple layers of culture (Schein, 1985).Above the water’s surface, artifacts are the visible, tangible manifesta- tions of culture in various attributes of the physical workplace. Just below the surface, espoused values characterize the preferences and aspirations that are shared within the organization and which contribute to a shared sense of identity and meaning. Behav- ioral norms and work practices also reside at this level, constituting “the way things are done around here.” And in the deeper water, far below the surface, lie the beliefs and assumptions—the underlying mindsets— which shape the culture at a fundamental level and influence its manifestation at all other layers. Together, these visible and invisible layers comprise the culture of an organization (see Exhibit 1).

As a conceptual model, the iceberg creates an awareness of depth for practitioners, rein- forcing the idea that much of what drives behavior in the organization is hidden from plain view. This, of course, encourages us all to look for those deeper factors, making nec- essary a set of diagnostic tools and method- ologies that are up to the task. The iceberg also focuses the point of change intervention at the deepest level, at the layer of underlying beliefs and assumptions. According to the theory, it is this deepest layer that is the most consequential for the organization—this is the part of the iceberg that “sinks the ship”— and hence where the most crucial action needs to be focused. Accordingly, change needs to be embedded at this same depth to have a lasting impact within the organiza- tion.

The iceberg model has had a profound influ- ence on both the academic study of culture and the way in which practitioners affect culture change in organizations. This three- level model has often been interpreted to suggest that changes must be targeted at one of the three different levels. Interventions at the levels of visible behaviors or values are sometimes downplayed in favor of the points of leverage that exist in “the deeper levels of culture.” Because beliefs and assumptions are cognitive, in that they reside in the mind- sets of people, this suggests the most impactful interventions ought to be “psy-

chological” in nature. In a practical context, this frames the intervention in a way that might either be construed as ‘off limits’ (i.e., not modifiable) or “off putting” to business leaders (i.e., generating skepticism or nega- tive stereotypes).More importantly, we think it misses an opportunity to address the targets of change that span across these three levels emphasized by the iceberg model.

The habits and routines that span these three levels of culture guide much of what happens within organizations, yet they have received little attention from organizational scholars

For the individual, habits are both functional and, sometimes, problematic. Personal habits provide structure and constancy, reduce uncertainty, and free up cognitive resources for a select number of complex tasks. Habits can also be dysfunctional, such as when they are expressed rigidly despite a context mis- match (i.e., mindlessness) or when individuals fail to appropriately switch between auto- matic and effortful behavior (Luis & Sutton, 1991). The powerful effect of personal habits has been studied in a wide range of situations, from healthcare to the workplace and com- petitive sports (e.g., Grant & Schempp, 2013).

Organizations, too, have habits and routines (i.e., larger, sequenced bundles of habits) which set them apart and provide internal structure.

and practitioners. It is here, in these “auto- matic” and repetitious behaviors that practi- tioners can find a powerful point of leverage to affect the change process, deep within organizations.

Habits: Old and New, Good and Bad Drawing on neuroscience, Graybiel (2008) provides a technical definition of habits as the:

sequential, repetitive, motor, or cog- nitive behaviors elicited by external or internal triggers that, once released, can go to completion without con- stant conscious oversight (p. 361).

Decades of research has shown that habits are:

• predominantly acquired through experi- ence and interaction with the environment;

• are repetitious and can become resistant to change, such as in addiction;

• are performed with little conscious thought or effort;

• can be elicited by environmental or inter- nal cues; and finally,

• the expression of habits can be behavioral or cognitive, such as in habits of thought (Graybiel, 2008).

Habits also appear and are enacted with consistency among and within groups of people, from families to societies. Organiza- tions, too, have habits and routines (i.e., larger, sequenced bundles of habits) which set them apart and provide internal structure (Pentland & Feldman, 2003). Habits are inherently cultural. They reflect all three levels; the underlying assumptions about “the way we do things around here,” the values that those assumption represent, and the visible behavior and artifacts that we can see in action. Functionally, they capture the organization’s specific knowledge that has been created over time and then translate that knowledge into action in an efficient way that conserves energy and resources. Denison, Hooijberg, Lane, and Lief (2012) developed a useful framework (see Exhibit 2) that puts habits and routines into one of four categories based on two aspects: good or bad and old or new. Each combination calls for a different set of possible actions.

Bad, Old Habits: Unlearn and Leave Behind. Bad habits are “like chains that are too light to feel until they are too heavy to carry,” as War- ren Buffett said. Often, we are too late to realize how restrictive our old habits have become and miss the opportunity to do some- thing about them. Unlearning these well-established habits can be very difficult, but that is exactly what needs to happen. To leave behind bad, old habits, organizations need a clear focus on the areas of consensus about these targets for change. With a clear

VOLUME 37/ISSUE 1 — 2014 25

focus, organizations can start building prog- ress and momentum and develop the experience and conviction to take on bigger challenges.

Good, Old Habits: Preserve and Strength- en. In the midst of organizational change, it can be easy to forget to protect those ele- ments of the culture that made the organization great. Some of the old and well-established habits and routines from an organization’s past are still essential to the organization’s success in the future. They are clearly understood by the organi- zational members, make up a key part of the organization’s mindset, and are closely linked to other aspects of the organization’s functioning. Therefore, it is vital for orga- nizations to clarify the core habits and routines that they need to preserve and strengthen.

Bad, New Habits: Rethink and Try Again. During the time of change initiatives, orga- nizations attempt to create various new habits and routines. However, culture change requires a lot of trial and error. Cre- ating a new set of habits and routines does not always mean that they are going to work as intended the first time and fit the situation well. The culture of every organization rep- resents its wisdom accumulated through years of experimentation. Enlightened trial- and-error is critical when trying to create the new habits and routines to transform an organization’s culture.

Good, New Habits: Invent and Perfect. The opportunity to create new habits might be the most exciting part of the culture change pro- cess. However, creating new habits and routines is difficult, as there are several pieces to the puzzle. Mindset, behavior, and systems must all change together to reinforce the adaptation process for the organization. Organizations cannot simply change people’s mindsets, prescribe a new set of behaviors to follow, or mandate a new system. Instead, organizations need to persistently push hard- er and harder on all three of those levers at once, until signs of success manifest and encourage others to join in to help build the momentum.

Analyzing an organization’s culture as a bundle of habits that fit into these four cat- egories serves to focus the discussion on key areas of consensus that reveal a targeted and practical agenda for change.

When driving successful changes, leaders choose the “keystone habits” that can have the biggest impact on the organization. Below are three real case examples that illus- trate the role of keystone habits in creating successful and sweeping change in organiza- tions.

Identifying Keystone Habits: Three Case Examples One of the inspirations for our attempts to understand how organizations identify the keystone habits that are the most promising targets of intervention comes from Charles Duhigg’s best-selling book, The Power of Habit (2012). In this book, Duhigg tells the story of the early days of Paul O’Neill’s term as CEO at Alcoa. After a long struggle to find some targets for improvement that would be supported by both the management and the workers at Alcoa, O’Neill decided to put his emphasis on safety. During a time when there was little alignment between manage- ment and the workers, this was the area that he saw as being most likely to build collabo- ration. The organization set the goal of having zero injuries, and the main point of intervention was that all injuries, world- wide, must be reported to the CEO’s office within 24 hours. The best way to solve this problem, or course, would be to have no injuries. Though the goal of zero injuries was not achieved, both management and the unions learned to move fast with a level of transparency that was unprecedented.

This safety effort took serious commitment by everyone involved, but in the end it was very effective. The unexpected impact was that changing this single set of habits and routines concerning the way that the organi- zation managed safety incidents created a level of transparency that was new to the organization. The company discovered that

Often, we are too late to realize how restrictive our old habits have become and miss the opportunity to do something about them. Unlearning these well- established habits can be very difficult, but that is exactly what needs to happen.

EXHIBIT 1. ICEBERG MODEL OF ORGANIZATIONAL CULTURE

26 PEOPLE & STRATEGY

it could share information about perfor- mance, about best practices, about business opportunities to a much greater degree than it had in the past. So, these underlying beliefs about transparency and collaboration spread broadly throughout the organization. O’Neill credits this process with leading Alcoa to a dynamic, new level of perfor- mance that lasted for most of the decade.

A second habit change example involves the Metropolitan Transit Authority (MTA) of New York City, which manages all public transportation in and out of the city. This includes a high-volume subway system, which carries an average of 5.4 million pas- sengers per day (1.6 billion per year)! Servicing the 820 miles of track comprising the subway system is a major and ongoing task, one of several maintenance functions that are crucial to keeping the trains moving and the people on them safe. In the past, all maintenance to the tracks was done on the weekends, late at night when the train vol- ume was lowest. With the crews repairing the tracks in the short windows between oncoming trains, the maintenance work was slow, expensive, and quite dangerous. How- ever, the old strategy was deeply engrained in one of the MTA’s strong points of pride: keeping the trains moving, no matter what and at all costs! The keystone habit in this case directly challenged this point.

In 2010, the subway system experienced a number of high-profile safety incidents, cul- minating in a worker fatality in April and then a blizzard in December that left some passengers stranded in train cars for over 12 hours without food, water, or heat. Follow- ing these incidents, an unprecedented decision was made to stop the trains. The president of the Department of Subways, Carmen Bianco, architected a program called FastTrack to identify and shut down whole sections of track for maintenance beginning at 10 p.m. and reopening the fol- lowing day at 5 a.m. For the first time, this allowed service workers uninterrupted access to the tracks, signals, cables, and other rail components. Initially, the public reaction was a widespread outcry. Subway passengers, like MTA workers, were unac- customed to any interruption to service. Over time, however, the sweeping, positive effects were staggering! FastTrack improved productivity, saved money (estimated sav- ings of $16.7 million in 2012), cut accident rates nearly in half, and increased train reli- ability by nearly 5%. The successful implementation of this program was no

small strategic and operating feat, but at the core, the MTA achieved a shift in one fairly simple keystone habit: they can stop the trains.

A final example involves GE Healthcare Chi- na.1 GE entered an emerging Chinese market in the early 1990s. In the decade that fol- lowed, GE expanded its anesthesia business through the acquisition of two companies, Datex-Ohmeda and Zymed, both of which were strong global brands with a presence in China. Zymed became the center-point of a new and growing business, Clinical Systems Wuxi (CSW) in Wuxi, China. CSW was responsible for the design, engineering, and production of anesthesia equipment. The rapid growth of this business exposed increasing weaknesses in quality and declin- ing customer reputation, eventually resulting in the business halting distribution of prod- ucts for a period of time.

In 2007, a new general manager was appoint- ed, Matti Lehtonen. It was clear to Lehtonen that restoring quality and customer service should be the top strategic priorities moving forward. Lehtonen and his senior team implemented a simple yet extremely power- ful intervention by requiring their engineers to visit operating rooms and witness their anesthesia equipment being used in live sur- gical procedures. In this case, a single habit—sending people out to where the cus- tomers are—had a profound set of cascading effects. Seeing the equipment in use added new meaning and clarity about the purpose of the work and provided the engineers with

1 For more on this case, see Denison, Hooijberg, Lane, & Lief (2012).

a deeper appreciation and understanding of the specific needs of multiple end users, including the patients, the doctors and nurs- es, and the hospitals and insurers. Over time, this keystone habit did help to restore qual- ity and customer reputation. It also broadened the role and skill set of the engi- neers and became a focal point for talent recruitment and retention. Moreover, it opened up new insights and new product innovations, and by 2010, one of these new products was shipping to emerging markets all over the world!

From these case examples we can begin to learn some useful principles for targeting key- stone habits as high impact areas of action. Below, we outline three principles for change management professionals to consider.

Principles for Intervening on Keystone Habits

Principle 1: The diagnostic process should differentiate keystone habits from ordinary habits by looking for impact and interconnectedness.

Like most change efforts, the process begins with diagnosis. The cascading effect seen in Alcoa was described by Duhigg as seren- dipitous, but acting intentionally to modify or build keystone habits calls for a reliable diagnostic process that pays attention to the right factors. Practitioners need to develop the skills (and methodologies) to identify and distinguish keystone habits from ordi- nary habits. Each of the case examples above highlights two interrelated factors that can

EXHIBIT 2. CHANGING CULTURE BY CHANGING HABITS AND ROUTINES

G oo

d Preserve

&

Strengthen

Invent

&

Perfect

B ad

Unlearn

&

Leave Behind

Rethink

&

Try Again

Old New

VOLUME 37/ISSUE 1 — 2014 27

Graybiel, A. M. (2008). Habits, rituals, and the evaluative brain. Annual Review of Neu-

roscience, 31, 359-387.

Louis, M. R., & Sutton, R. I. (1991). Switch- ing cognitive gears: From habits of mind to active thinking. Human Relations, 44, 55-76.

Feldman, M. S., & Pentland, B. T. (2003). Reconceptualizing organizational routines as a source of flexibility and change. Admin-

istrative Science Quarterly, 48, 94-118.

Mallidou, A. A., Cummings, G. G., Schalm, C., Estabrooks, C. A. (2012). Health care aides use of time in a residential long-term care unit: A time and motion study. International Jour-

nal of Nursing Studies, 50, 1229-1239.

Sackmann, S. A. (2011). Culture and perfor- mance. In N. Ashkanasy, C. Wilderom, & M. Peterson (Eds.), The handbook of organiza-

tional culture and climate, 2nd ed., 188-224. Thousand Oaks, CA: Sage Publications.

Schein, E. (1985). Organizational culture and

leadership. San Francisco, CA: Jossey-Bass

New habits are unlikely to take hold in organizations without diligent and concerted efforts for socializing and embedding them.

help to focus the diagnostic process: key- stone habits are linked to the organization’s effectiveness (impact), and keystone habits are tightly interwoven with other habits, routines, and processes in the organization (interconnectedness). This means that intervening on keystone habits is likely to have a cascading effect, so that change started in one place leads to many other changes in many other places. For example, the act of eating together strengthens the social bonds within the family but also aligns a number of the habits and routines leading up to and following the mealtime.

Principle 2: Keep the scope of inter- vention small by tapping into the right habit(s) and affecting scalabil- ity through the repetition of this habit.

When it comes to intervening on keystone habits, the “scalability” of impact is hardly determined by the size or scope of the inter- vention. Habits are repetitious. Some are repeated on a daily or weekly basis and oth- ers moment to moment. This is a powerful reminder that the best interventions will stay focused and tap into the right habits rather than attempting to “boil the ocean.” As one example of a small habit with large impl icat ions , Mal l idou, Cummings , Schalm, and Estabrooks (2012) found that minor interruptions in nurses’ interactions with patients, such as when called to assist another patient or staff member, have a significant deleterious effect on patient care and health outcomes. A simple but power- ful intervention in this context could redefine the keystone habit as “staying with your patient to completion of each interac- tion.” Of course, this might also require unlearning some bad old habits, such as responding to all requests, even the minor and nonessential ones.

Principle 3: Use storytelling and celebration to “ritualize” the perfor- mance of keystone habits.

New habits are unlikely to take hold in orga- nizations without diligent and concerted

efforts for socializing and embedding them. We think that finding ways to reinforce key- stone habits and make their performance rituals within the organization is an important part of the solution, so that the desired behav- iors take on greater symbolic and psychological meaning over time. The meaning of rituals is often created and reinforced through storytell- ing and celebrations, or as Durkheim suggested, through the communication of social norms that distinguish the “sacred from the profane” (as cited by Boyce, Jensen, James, & Peacock, 1983). These are opportunities for the organization, often leaders, to clarify the value of the new, good habits and the need to extinguish the bad, old ones.

Conclusion Viewing organizational cultures as bundles of habits and routines, we believe that “key- stone habits” in particular can serve as powerful leverage points for change manage- ment professionals seeking to embed their work deep within organizations. Daunting as culture diagnosis and intervention may be, focusing on small habits with big implications might be the best place to start and a great way to ensure that the change does far more than scratch the surface.

References Boyce, W. T., Jensen, E. W., James, S. A., & Peacock, J. L. (1983). The family routines inventory: Theoretical origins. Social Sci- ence and Medicine, 17, 193-200.

Denison, D., Hooijberg, R., Lane, N., Lief, C. (2012). Leading culture change in global organizations: Aligning culture and strate- gy. San Francisco, CA: Jossey-Bass.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business. New York: Random House.

Grant, M. A., Schempp, P. G. (2013). Analy- sis and description of Olympic gold medalists’ competition-day routines. The Sport Psy- chologist, 27, 156-170.

Daniel Denison is Professor of Organization and Management at the International Institute for Management Development (IMD) in Lausanne, Switzerland and Chairman of Denison Con- sulting. Since receiving his Ph.D. in Organizational Psychology from the University of Michigan, Dr. Denison has authored numer- ous books and journal articles describing his research and con- sulting linking organizational culture to bottom-line business performance.

Levi Nieminen is the director of the Research & Development group at Denison Consulting in Ann Arbor, Michigan. He com- pleted his doctorate in Industrial and Organizational Psychology from Wayne State University. His research focuses on the intersec- tion of organizational culture and leadership as interrelated drivers of organizational effectiveness.

Copyright of People & Strategy is the property of HR People & Strategy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.

Copyright of People & Strategy is the property of HR People & Strategy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.

Kotter Change Management Model

There are two parts to this assignment.

Part One: Identify a change that you implemented or was implemented at an organization with which you are familiar.

Instructions:

Write a 1–2-page paper. Based on the two articles you read in the discussion preparation, discuss what impact an organization’s corporate culture have on maintaining and sustaining change? What steps need to be taken to ensure that a newly implemented change becomes part of the organizational culture and address missed key factors that reversed change (if applicable in the implemented change you're discussing)? Submit a 1-2-page paper.

Use at least one quality academic resources in this assignment. Note: Wikipedia and other similar Websites do not qualify as academic resources.

Part Two: Using First Independence Bank (FIB) apply Kotter’s eight steps of change management to an HR situation you have selected for change. You will address all eight of the Kotter steps, developing an action plan for each step. Submit a 4–6-page paper.

Instructions:

Write a 4–6-page paper in which you: Ascertain how each of the steps applies to FIB. Develop a strategy that illustrates how you would address each of the eight stages of change:

1. Establishing a sense of urgency.

2. Creating a coalition.

3. Developing vision and strategy.

4. Communicating the vision.

5. Empowering broad-based action.

6. Generating short-term wins.

7. Consolidating gains and producing more change.

8. Anchoring new approaches into the culture.

Use at least five quality academic resources in this assignment. Note: Wikipedia and other similar Websites do not qualify as academic resources.

Rubric: Kotter Change Management Model

Ascertain how each of the steps applies to your specific organization.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 5.25 (3.75%) points

Competent 5.95 (4.25%) points

Exemplary 7 (5.00%) points

Develop a strategy that illustrates how you would address each of the eight stages of change: Establishing a sense of urgency.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 10.5 (7.50%) points

Competent 11.9 (8.50%) points

Exemplary 14 (10.00%) points

Develop a strategy that illustrates how you would address each of the eight stages of change: Creating a coalition.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 10.5 (7.50%) points

Competent 11.9 (8.50%) points

Exemplary 14 (10.00%) points

Develop a strategy that illustrates how you would address each of the eight stages of change: Developing vision and strategy.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 10.5 (7.50%) points

Competent 11.9 (8.50%) points

Exemplary 14 (10.00%) points

Develop a strategy that illustrates how you would address each of the eight stages of change: Communicating the vision.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 10.5 (7.50%) points

Competent 11.9 (8.50%) points

Exemplary 14 (10.00%) points

Develop a strategy that illustrates how you would address each of the eight stages of change: Empowering broad-based action.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 10.5 (7.50%) points

Competent 11.9 (8.50%) points

Exemplary 14 (10.00%) points

Develop a strategy that illustrates how you would address each of the eight stages of change: Generating short- term wins.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 10.5 (7.50%) points

Competent 11.9 (8.50%) points

Exemplary 14 (10.00%) points

Develop a strategy that illustrates how you would address each of the eight stages of change: Consolidating gains and producing more change.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 10.5 (7.50%) points

Competent 11.9 (8.50%) points

Exemplary 14 (10.00%) points

Develop a strategy that illustrates how you would address each of the eight stages of change: Anchoring new approaches into the culture.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 10.5 (7.50%) points

Competent 11.9 (8.50%) points

Exemplary 14 (10.00%) points

Five References.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 5.25 (3.75%) points

Competent 5.95 (4.25%) points

Exemplary 7 (5.00%) points

Clarity or coherence in presentation and writing mechanics--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 5.25 (3.75%) points

Competent 5.95 (4.25%) points

Exemplary 7 (5.00%) points

Met formatting requirements, including one page summary for presentation option.--

Levels of Achievement:

Unacceptable 0 (0.00%) points

Needs Improvement 5.25 (3.75%) points

Competent 5.95 (4.25%) points

Exemplary 7 (5.00%) points

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