Read: Chapters 5, 6, 7, 8; How to Resolve Conflict like a Pro :           Language Means Business – found in attachmentWatch: , presented by Sir Ken Robinson , presented by Daniel H. PinkThese videos are the property of The RSA and are used under the public domain guidelines found at . , presented by Judson LaipplyWatch all four videos that are posted in the assignments for this week. This week we are discussing implementation and communication.While virtually all of us have an idea about what we want to change and how we want to accomplish that change, we seldom create a comprehensive plan that includes implementation steps. Far too often, a well conceived change initiative ceases to exist altogether, because the change agent has not appropriately addressed many of the barriers to successful implementation. From poor communication to change resistance to poor design to lack of training, implementation barriers need considerable attention from change agents. What part do leaders play in implementation? The videos for this discussion have some clues about why change initiative implementation may fail. Some of those barriers are addressed in your text, but others are found in many other places.There is no greater barrier to change than communication issues. There is no greater skill than communication that can cross levels, depth, scope, and breadth of people and information. People who are adept communicators quite literally link the world for everyone else. Using the video above, think about the communication that Mr. Laipply uses as he works through his time on stage. Did you understand it? Did you laugh with the audience? What was the language that he used? Why did you understand it? How does culture feed into understanding this video? How does empathy impact our communication skills? Is empathy its own language? Do change agents need a great deal of empathy? Explain. Is there value in outrospection in change management? All of the questions here are presented to help create a framework for your answer. They do not require explicit and listed answers.—————————————————————————————————————————–Discussion boards are an all or nothing assignment. You either receive full credit or none at all. There is no partial credit. To receive ANY credit for the discussion board, you must meet ALL of the following criteria:Do NOT describe or restate the content of the discussion reading or video. Instead, choose one or two points that you find interesting/important and elaborate on those points in your discussion.A minimum response is 250 words.Every initial response is required to include, minimum, two scholarly or peer-reviewed resources to support your response. Our library allows you to choose these settings to help you find appropriate research to support your work.Do NOT use, wiki-anything,,,, blogs, or any other generic answer base, because you cannot verify the accuracy of the information on the website. Instead, search our extensive library databases to find articles that have contain verified information to support your discussion. If you find a blog from a notable source, you can include that information, but the blog will not count as one of your scholarly references.There are several articles in Course Documents and Web Links that you can, and should, use as references to support your discussions.Every response must be completed in APA style. That includes all citations, both in text and reference, and format. This includes indented paragraphs, font size, and other particulars that you will find specified in the APA manual. You will find an example of a paper written in APA style in Course Materials. Also, the APA style manual is a required text for this course. Discussion boards do not require cover pages, tables of content, and other front matter, and can be copied and pasted from a draft page, such that attachments are not necessary.You must respond to, at least, two (2) other students in class in their discussion boards as well as any questions and comments from the professor or other students. You are required to actively communicate with other students in this class.The initial post for each week’s discussion board is due by Wednesday, 11:59 p.m., of every week that a discussion board is due.There are no discussion boards in week 1 or week 9, because these are the weeks for preparation and the final exam.Technique counts, so be sure to proof read your posts for grammar, spelling, punctuation, and other technical issues that can impact communication quality. If you are not a strong writer, you can contact the Writing Center for help toward improving your work.I always suggest that students write their discussion board posts in Word or other word processing software rather than directly into Blackboard. This allows you to save your work and to make corrections before you post your work publicly. Blackboard has, regrettably, been known to eat some thoughtful and insightful responses simply because the response did not load correctly.Again, if you do not meet all of these requirements, you will not receive any credit for the discussion board. Below, you will see a checklist that will help you insure that your work meets graduate standards and decreases the likelihood that you will suffer oversights.DB ChecklistYesDid I discuss rather than describe the original content?Is my post 250 words or more?Did I cite the original content as well as two scholarly sources to support my work?Did I support my discussion with reliable sources only?Did I integrate course and text material?Did I adhere to APA style?Did I respond to two other students in their discussion boards?Did I respond to all questions and comments in my discussion board?Was my initial response posted by Wednesday, 11:59 p.m.?Did I proofread and make corrections prior to posting?Was my work reviewed by for plagiarized material and corrected prior to being posted?Language
eople say that business is all about relationships, but the truth is that
business is really all about communication. Communication is key
to virtually every aspect of business—from acquiring and retaining
customers to improving employee engagement and performance. At the
most fundamental level, business can’t happen without communication. This
is even more true in the era of globalization. As geographic borders become
porous and the world flattens, effective communication with customers,
employees, partners, suppliers, and other stakeholders across the globe
becomes essential to successfully running a company.
A simplistic approach to this issue (and one adopted by some lessprogressive companies) is to assume that everyone will speak English,
including all potential customers and employees. After all, English is the
lingua franca of much of the world, and the language you happen to be
reading this article in. Yet given the accelerating pace of globalization, and
the rising influence of many non-English-speaking countries, the flaws in
this thinking start to show.
a rosetta stone sponsored section presented by strategy+business
96 percent of respondents
SUCCESS in the current
business environment.
Companies that operate solely in English will
miss opportunities to capitalize on the explosive
growth in developing and untapped markets
at home and abroad. These companies also run
the risk of misunderstandings with customers, and
with members of an increasingly global workforce.
Worse, they now find themselves competing
against upstarts from emerging countries that
already operate in their home market’s preferred
language—and are pretty good at English, too.
Unfortunately, many U.S. companies face a
critical skills gap in foreign languages. According
to the U.S. Census Bureau, just 11.4 percent of the
population is fluent in more than one language.
There’s a long list of reasons why—from education
policies to cultural issues to business history.
After all, for a long time, English was enough.
Today, however, that’s no longer true. The language
disadvantage faced by U.S. companies is a growing
problem, and it’s becoming unsustainable.
At Rosetta Stone, we have the unique experience
of working with thousands of organizations across
different industries and sectors that are tackling
this very problem. We have watched companies
adjust to these demographic, cultural, and
economic trends and proactively build workforces
with the skills and capabilities needed
to grow and thrive in this multicultural
and international economy. Although
the combination of business functions
and processes impacted by improved
communication may vary from
company to company, we have seen
language skills consistently deliver
tangible business value and results
for organizations that invest in
language training.
Recent research we’ve conducted backs this up.
A survey of strategy+business readers—including
high-level managers and executives—found that 96
percent of respondents thought language skills are
either “very important” or “somewhat important”
for professional success in the current business
In our experience, companies that invest in
employee language-training programs generally
see improvements in employee productivity and
business performance across five key business
areas: market expansion, customer service,
workforce development, workplace safety, and
productivity and collaboration.
1. Market Expansion
One of the biggest business advantages of a
workforce that can effectively communicate in
more than one language is the ability to reach
new markets—both at home and abroad. On
the domestic side, the U.S. has become even
Exhibit 1 How important are language skills to professional success in today’s economy?
Very important
Neither important
nor unimportant
Not at all
a rosetta stone sponsored section presented by strategy+business
more of a melting pot than in the past, with
minorities accounting for a greater proportion
of the total population—and wielding increasingly
more spending clout. The Pew Research Center
has projected that immigrants and their U.S.born children will account for 82 percent of the
country’s population growth over the next 40
years, and nearly one in five Americans will be an
immigrant by 2050. And according to the Selig
Center for Economic Growth’s 2010 “Multicultural
Economy” report, the buying power of minorities is
projected to increase more than $1 trillion by 2015,
to $3.6 trillion.
On the international side, growth opportunities
in emerging markets far outnumber those in
developed economies. Over the next few years,
roughly 70 percent of world growth will come from
emerging markets, with China and India alone
accounting for 40 percent of that growth. By
2025, annual consumption in emerging markets is
projected to hit $30 trillion. Measured by import
activity, emerging markets have already caught
up to developed markets—a milestone achieved
for the first time in 2012. (This represents a
dramatic increase since 2000, when emerging
markets imported only half as much as developed
countries.) Nearly 30 percent of the U.S. economy
is now wrapped up in international trade, and
half of U.S. growth since the official end of the
recession in 2009 has come from exports.
Such growth represents compelling opportunities
Exhibit 2 Regarding market expansion,
does your company plan to grow the business
in countries or market segments at home
that speak a language other than the one
you currently use for daily operations?
Chancellor of then-West Germany famously said,
“If I’m selling to you, I speak your language. If I’m
buying, dann mussen Sie Deutsch sprechen.”
Which languages are going to be important?
Among survey results, there’s a clear shift
away from English, German, and French, which
respondents think will be less commonly used
by their employees in five years. By comparison,
Spanish, Mandarin, Portuguese, and Hindi are all
projected to increase in relevance over the same
time period, and become more important for
A common question about equipping existing
employees with language skills to expand the
business in growing, lucrative markets is “Can’t
companies just hire people who already speak the
target languages?” In some cases, they can. But
recruiting skilled and experienced talent is already
extremely challenging, and adding
a language requirement effectively
The buying power of minorities is
raises the degree of difficulty. As
projected to increase more than
previously noted, only about one in
$1 trillion by 2015, to $3.6 trillion. 10 people in the U.S. can speak more
than one language, which immediately
reduces the available talent pool
by 90 percent. “The universe that
for U.S. companies, a sentiment that comes
companies have to draw from is very limited,” says
through in our survey data. Among respondents,
Judy Verses, Rosetta Stone’s president of global
71 percent said they plan to grow the business
institutions. “When you combine that with the
in countries or market segments that speak a
technical or hard skills that employees need to be
different language than the one they currently
productive and effective in that role, it’s a really
use for daily operations. Without a workforce
tough combination.”
able to speak the languages of those countries
Companies can also bring in talent from
or segments, these potential new customers are
target markets, but that carries another set of
effectively out of reach. As Willy Brandt, the former
challenges—such as persuading promising foreign
a rosetta stone sponsored section presented by strategy+business
71 percent of respondents plan
to grow their business in
countries or market segments
that speak a different language
than the one they currently use
for daily operations.
executives to move to the U.S. (along with their
families, a potentially expensive and uncertain
endeavor). Cost is another factor, says Verses. “The
expense of recruiting these people, moving them
to the target market, and getting them set up with
their families in a new location can be significant.”
In many situations, she adds, if the right executives
are already in place, and language is the one
thing they’re missing, it’s far easier to add that
component than to search for new talent.
Another element of market expansion is when
new language skills are needed to help integrate
a merger. That was the case with CommScope, a
multibillion dollar telecom equipment manufacturer
with customers, employees, and partners in 18
countries across the world. CommScope operates
in the B2B space, and in the mid-2000s, it made
two large acquisitions. Prior to that point, it had
operated primarily in the U.S. market, but the deals
gave the company a far more global footprint,
virtually overnight. Suddenly CommScope had
to oversee operations—and manage its business
customers—and new employees—in many more
In the wake of these transactions,
the company began offering Rosetta
Stone language training to key
employees and executives. The
goal of the training was not to make
employees fluent in the new language,
as much as to give them a degree of
functional proficiency. “In order to
advance in new markets and with new
customers, we had to be able to at
least understand and communicate
at a basic level, even with the use of interpreters,”
says David Hartsoe, manager of CommScope’s
Global Learning Center (the company’s internal
workforce training program). “This added effort
on our part reflected our commitment to our
most basic principle—being a true partner for our
customers by meeting their needs to sustain and
grow as individual companies.”
Currently, CommScope employees are using
the online language training system from Rosetta
Stone to learn Spanish, Mandarin Chinese,
Italian, German, and Portuguese, among other
languages. The program has been so popular that
CommScope has a waiting list among employees,
and it is planning to double its number of seat
licenses for Rosetta Stone in 2013.
“We view language training as an investment, not
a cost,” says Hartsoe. “We have to understand the
cultures where we operate. That means speaking
to people there in their native language. Even at a
very basic level, it’s a sign of respect.”
He tells the story of one senior CommScope
executive who deals with the company’s Mexican
Exhibit 3 Which languages do your employees use on a daily basis today? And which do you
anticipate being important to your company in the next five years?
In the Next Five Years
* Most frequently mentioned “others”: Arabic, Dutch, Hebrew, Japanese, Italian, Korean, Russian
a rosetta stone sponsored section presented by strategy+business
89 percent of respondents
feel that customer satisfaction
and loyalty would increase
if employees could serve and
support customers in their
native languages.
operations, and as a result had been studying
Spanish for about two years. By that point he
had learned enough that he was able—with some
practice—to make a presentation in Spanish to
a group of Mexican colleagues. “They were just
blown away,” Hartsoe says. “That he’d go to those
lengths to be able to do that—it had a tremendous
Fundamentally, language skills are critical to
building relationships and helping the business
succeed in rapidly growing markets and segments
at home and abroad. They turn barriers into bridges.
2. Customer Service
The second pillar of business optimization through
language training is the way language skills
enhance customer service. Companies that seek to
improve service and support for their increasingly
multicultural and international customers need to
engage them in their preferred language.
There is a wealth of data showing that investments
to improve customer service pay off. For example,
a study published in the Harvard Business Review
found that a 5 percent improvement in customer
retention rates can increase profits by more than
25 percent. Another study found that a 1 percent
reduction in customer-service issues could
generate an additional $40 million in profit for a
medium-sized company over five years.
Increasingly, language training is one option for
driving such customer-service improvements, as
reflected in our survey data. Among respondents,
89 percent said they felt that customer satisfaction
and loyalty would increase if employees could
serve and support customers in their native
There’s substantial anecdotal evidence as well.
For example, Best Buy, the electronics retail chain,
offered voluntary language training
to its store-level sales associates.
It opted for Rosetta Stone instead of
traditional lessons, because
it wanted a solution that was online
and easily accessible, with minimum
setup requirements or administrative
One associate worked in a Best
Buy store located in a largely Hispanic
area, where many customers didn’t
speak English and some associates didn’t speak
Spanish. He studied Spanish on his own, advancing
through all five levels of Rosetta Stone’s program,
and since then the results have been dramatic.
“I’ll walk up to a customer and say ‘¿En que puedo
ayudarle?’ [ ‘How can I help you?’] and their
eyes light up and they get a smile on their face,”
the associate said. “I think they get a kick out of
the fact that I’m not of Hispanic origin but I’ve
still taken the time to learn their language. They
really appreciate that.” The associate tracked
his incremental sales for the transactions he
conducted in Spanish, and the total came to
approximately $100,000.
KLM, the Dutch airline, is another example.
Although Europeans typically can speak more
languages than Americans, KLM still faced real
challenges in communicating with its multinational
customer base. The company has a system in
which its nearly 9,000 flight crew members can
earn promotions only by qualifying in English and
one other language (either French, Spanish, Italian,
or German). To help employees build the requisite
language skills, classroom language instruction
Exhibit 4 Do you feel that customer satisfaction
and loyalty would increase if your employees
could serve and support customers in their
native languages?
a rosetta stone sponsored section presented by strategy+business
would not work, given the difficult travel schedules
that flight crew members maintain.
Instead, the company opted for Rosetta Stone’s
online language-training solution. When KLM first
opened registration for access to Rosetta Stone,
the available licenses were all taken within hours.
Since then, the company has significantly expanded
its relationship with Rosetta Stone, and seen crew
members’ language proficiency expand as well.
To be clear, in many of these cases, fluency
isn’t the real goal. It’s proficiency, the ability to
engage in common, everyday conversations or
handle basic interactions that require only limited
vocabulary. (And it doesn’t take much: One study
found that the most common 1,000 words in
any language make up about 85 percent of all
conversations.) Most customers are not interested
in a deep, philosophical discussion; they merely
want help with a basic transaction, and in many
cases they’re flattered that a company employee
took the time and effort to be able to speak to
them in their own language.
“Let’s face it,” says Verses at Rosetta Stone. “At
the end of the day, successful corporations are all
about relationships, and that’s linked to the ability
to communicate.” In that way, language training
can clearly help companies deliver consistent and
positive experiences to create a loyal, profitable
customer base.
3. Workforce Development
Unlike market expansion and customer service,
which are outward-facing, the remaining three
ways that language skills improve business
performance and efficiency are all internally
focused. The first of these is workforce
development. Language training helps companies
improve employee engagement and performance
by providing them with opportunities for personal
and professional growth, and equipping them
with the language skills required to compete
successfully in the global economy.
There are two elements at work here. The
first is that such investments boost morale and
loyalty among employees. One survey found
that opportunities for personal growth are the
top reason that people took their current job,
and also the top reason they’ve stayed—even
ahead of salary and work–life balance. And
for companies that think these discretionary
investments are difficult to justify in a sluggish
economy, they should consider the alternative:
replacing employees who leave. Estimates put this
cost at 50 percent to 150 percent of the person’s
annual salary (not to mention the disruption to the
business caused by high turnover, or the possibility
that you can’t find a replacement who’s as good).
Yet although employee loyalty and morale are
significant, there’s a more compelling argument
for investing in workforce development—it makes
the company more competitive. Exceptional
companies not only bring in the best people but
consistently look to make them more effective
and productive once they’re on board. These
companies consider their employees to be a longterm, strategic asset, which they can shape to
more directly respond to the changing needs of
the company. This investment, in turn, boosts the
company’s performance and profitability.
As with the other pillars, there is compelling
Exhibit 5 Which statement best describes your company’s underlying motivation for providing
professional development and training?
To gain a competitive
To boost morale: we want
advantage: we want a
to help our employees
workforce that has the latest become better workers and
skills required for our
more well-rounded people
To build employee
loyalty: satisfied employees
will work harder and stay
with the company longer
To recruit more effectively:
a strong benefits package
makes the company more
attractive to prospective
a rosetta stone sponsored section presented by strategy+business
Companies that invest in educating
their employees outperform the
overall market by more than
45 percent.
evidence that devoting financial resources to
workforce development generates a positive
return on investment. Including all categories
of development—not just foreign languages—
companies that invest in educating their employees
outperform the overall market by more than 45
percent, according to the American Society for
Training and Development.
Our survey results support this. Companies
indicate that they provide professional training to
their workers in part because it boosts employee
loyalty (12 percent) or boosts morale (18 percent).
Yet a far greater percentage—69 percent—provide
such training to gain a competitive advantage.
They recognize that they need a workforce with the
latest skills necessary for their industry.
“The world is getting smaller,” says Steve Swad,
CEO of Rosetta Stone. “The notion that you can
speak one language and communicate well in
business is becoming less true as time passes.
Training your workforce and equipping them with
multiple languages doesn’t just develop them
as people, it increases the productivity of the
company as well.”
4. Workplace Safety
Although miscommunications and
misunderstandings in some contexts can lead to
lost revenue opportunities, in other situations they
can be deadly. This is especially true in sectors
like manufacturing, oil and gas exploration, and
construction. The Occupational Safety and Health
Administration (OSHA) has estimated that 25
percent of job-site accidents can be attributed to
language barriers. Moreover, the U.S. Centers for
Disease Control and Prevention found that fatal
injury rates were 69 percent higher for foreignborn Hispanic workers than for native-born
Hispanic workers (who tend to have a better grasp
of English).
Given these challenges, language
training can equip frontline staff,
managers, and supervisors with
the critical communication skills
needed to minimize workplace
injuries, and reduce costs related to
turnover, training, and compliance
violations. Our survey results show
that some companies already recognize these
benefits. Nearly one in three respondents say their
companies take active steps through education
and training to make sure that managers and line
employees speak the same language. (Perhaps
more noteworthy is the size of the problem still
remaining—48 percent of survey respondents say
they still require everyone to speak English at job
sites, an increasingly unrealistic expectation.)
As in other functions and areas of the business,
employees do not need to be fully fluent in the
languages their co-workers speak to be effective.
For language skills to positively impact workplace
safety, supervisors and frontline workers need
only develop a basic proficiency in their target
language, with both sides meeting in the middle to
reduce miscommunications and on-the-job injuries
and fatalities.
For example, Gilbane, a family-owned real estate
development and construction firm in Providence,
Rhode Island, has a large population of Spanishspeaking contractors. As a result, it needed to help
its supervisors and field personnel learn Spanish in
order to communicate new safety procedures and
track incidents. Although the company could have
sent key employees to classroom-based Spanish
lessons, it instead opted to offer online language
training through Rosetta Stone to employees for
12-month periods, even affording them some study
time during working hours.
Equally important, the company surveyed
participants to gauge the success of the program.
The survey results showed that 72 percent of
managers anticipated greater interactions with
trade contractors in Spanish. In terms of language
proficiency, Spanish learners within the company
improved their pronunciation by 55 percent and
their vocabulary by 50 percent. The flexible,
online-anytime approach afforded by Rosetta
Stone also offered clear financial advantages;
a rosetta stone sponsored section presented by strategy+business
Only one in three respondents
say their companies take active
steps through education and
training to make sure that
managers and line employees
speak the same language.
Gilbane calculated a $450 savings per student over
classroom-based instruction, which equates to an
annual return on investment of 55.5 percent.
5. Productivity and Collaboration
Finally, many companies now use language training
to help their globally distributed and linguistically
diverse employees overcome language barriers to
share innovations, insights, and best practices with
their coworkers. This kind of collaboration is critical
for companies that aspire to operational excellence;
however, language differences can significantly
hinder it.
A Forbes study found clear evidence of how
much this impacts the business world. According
to the study, which looked at 100 U.S. companies
with more than $500 million in revenue, 67 percent
of participants said that miscommunication
contributed to inefficiency. Another 46 percent
said that miscommunication reduced collaboration
among employees, and 42 percent said that it
reduced productivity.
For example, Interstate Hotels & Resorts, which
either owns or manages more than 400 hotels
around the world, needed help establishing
networks among its employee base. The company
has properties in the U.S., Mexico, Ireland, Belgium,
Russia, and India, among other locales. A recent
expansion into China proved particularly difficult,
in that the company’s U.S. and Chinese employees
could not communicate with each other.
To address this, Interstate offered Rosetta
Stone language instruction as part of an Executive
Development program aimed at strengthening its
talent pipeline in China by sending senior managers
and highly promising employees from China to the
U.S. to participate in training. Because the training
was conducted entirely in English, the company
offered Rosetta Stone to participants
to improve their confidence and
language skills. In addition, U.S. team
leaders were given the opportunity
to learn Chinese before traveling
to company locations in China. The
language training helped them build
the critical listening and speaking
skills required to succeed during
their Chinese projects. As Bruce
Barishman, Interstate’s director of
organizational development and learning services,
put it, “Rosetta Stone has enabled Interstate to
literally talk the talk with regard to one of our
core values: ‘Embrace others’ differences with
In the past, company-based language training
was considered a nice perk to provide to
employees—a soft benefit HR departments
offered for personal improvement. Those days
are gone. Globalization and demographic shifts
have reshaped the business landscape, and even
though the U.S. remains the largest economy in
the world, the biggest growth opportunities are
now in market segments and countries that are
insulated by language barriers. To effectively
expand into those markets—and compete for both
customers and talent—companies need to speak
the language. Language skills are not just nice-tohave benefits, and they are not even competitive
differentiators anymore. Speaking the language
of your employees, customers, and partners is
fundamental to doing business.
a rosetta stone sponsored section presented by strategy+business
A Multiple Perspectives Approach
Third Edition
Ian Palmer
Richard Dunford
David A. Buchanan
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2017 by McGraw-Hill Education. All rights reserved. Printed
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Library of Congress Cataloging-in-Publication Data
Palmer, Ian, 1957Managing organizational change : a multiple perspectives approach / Ian Palmer, Richard Dunford,
  David A. Buchanan. — Third Edition.
   p. cm.
   Revised edition of Managing organizational change, 2009.
   Includes bibliographical references and index.
   ISBN 978-0-07-353053-6 (alk. paper)
   1. Organizational change. 2. Organizational change–Management. I. Dunford, Richard.
   II. Buchanan, David A. III. Title.
  HD58.8.P347 2016
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authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.
From Ian
To Dianne, Matthew, and Michelle
From Richard
To Jill, Nick, and Ally
From David
To Lesley with love—and thanks
This book is also dedicated to the memory of Gib Akin, our
co-author from 2005 to 2014.
A number of people have contributed to this edition, and we owe them all a debt of gratitude, including Jonathan Bamber, Lesley Buchanan, Daloni Carlile, Mimi Clarke, and
Alastair McLellan. In addition, we would like to thank our McGraw-Hill Education team,
including Michael Ablassmeir, Director, Laura Hurst Spell, Senior Product Developer; Jeni
McAtee, Evan Roberts, Karen Jozefowicz, Content Project Managers; Gunjan C
­ handola
(Lumina), Full-Service Content Project Manager; and DeAnna Dausener, Content Licensing Specialist. We would also like to thank the second edition reviewers for their helpful
feedback: Diane Bandow, Troy University; Cynthia Bean, University of South Florida–
St. Petersburg; Bradford R. Frazier, Pfeiffer University; Dominie Garcia, San Jose State
­University; Selina Griswold, University of Toledo; Mark Hannan, George Washington
University; Christopher S. Howard, Pfeiffer University; Jim Kerner, Athens State University; Catherine Marsh, North Park University; Patricia A. Matuszek, Troy University;
Ranjna Patel, Bethune Cookman University; Mary Sass, Western Washington University;
Dennis Self, Troy University; Patricia Scescke, National Louis University.
Brief contents
Preface ix
PART 1 Groundwork: Understanding and Diagnosing Change  1
Managing Change: Stories and Paradoxes  3
Images of Change Management  31
Why Change? Contemporary Pressures and Drivers  61
What to Change? A Diagnostic Approach  101
PART 2 Implementation: The Substance and Process of Change  137
What Changes—and What Doesn’t?  139
Vision and the Direction of Change  171
Change Communication Strategies  205
Resistance to Change  249
Organization Development and Sense-Making Approaches  279
Change Management, Processual, and Contingency Approaches  315
PART 3 Running Threads: Sustainability, and the
Effective Change Manager  353
Sustaining Change versus Initiative Decay  355
The Effective Change Manager: What Does It Take?  385
Name Index  423
Subject Index  433
Preface ix
Part 1
Groundwork: Understanding and
Diagnosing Change  1
1 Managing Change: Stories and
Paradoxes 3
Learning objectives  3
Stories About Change: What Can We
Learn? 4
The Story of Beth Israel Deaconess
Medical Center  5
The Story of Sears Holdings  8
The Story of J. C. Penney  10
Tension and Paradox: The State of the Art  14
Assessing Depth of Change  18
What’s Coming Up: A Road Map  19
Change Diagnostic: The Beth Israel Story  21
Change Diagnostic: The Sears Holdings
Story 23
Change Diagnostic: The J. C. Penney Story  24
Exercise 1.1: Writing Your Own Story of
Change 26
Additional Reading  27
Roundup 27
References 28
2 Images of Change Management  31
Learning objectives  31
What’s in a Name: Change Agents, Managers,
or Leaders?  32
Images, Mental Models, Frames,
Perspectives 33
The Six-Images Framework  34
Six Images of Change Management  37
Using the Six-Images Framework  46
Self-Assessment: What Is Your Image of
Managing Change?  49
Self-Assessment: Scoring  51
Exercise 2.1: Assessing Change Managers’
Images 52
Exercise 2.2: The Turnaround Story at
Leonard Cheshire  53
Additional Reading  55
Roundup 56
References 57
3 Why Change? Contemporary Pressures
and Drivers  61
Learning objectives  61
Environmental Pressures for Change  62
Why Do Organizations Not Change in
Response to Environmental Pressures?  79
Why Do Organizations Not Change after
Crises? 82
Internal Organizational Change Drivers  85
Exercise 3.1: Top Team Role Play  91
Exercise 3.2: Case Analysis: The Sunderland
City Story  91
Exercise 3.3: The Reputation Trap: Can You
Escape? 92
Additional Reading  93
Roundup 94
References 96
4 What to Change? A Diagnostic
Approach 101
Learning objectives  101
Organizational Models  102
Organization Strategy and Change  108
Diagnosing Readiness for Change  117
Built-to-Change 124
Exercise 4.1: The Capital One Financial
Story 125
Contents  vii
Exercise 4.2: Scenario Planning  127
Exercise 4.3: Readiness for Change
Analysis 128
Additional Reading 130
Roundup 131
References 134
Part 2
Implementation: The Substance and
Process of Change  137
5 What Changes—and What
Doesn’t? 139
Learning objectives  139
What Changes?  140
Innovation 146
Organizational Culture  150
Technology 155
Exercise 5.1: The Nampak Story  161
Exercise 5.2: Organizational Culture
Assessment 162
Exercise 5.3: How Will the Digital Revolution
Affect Your Organization?  163
Additional Reading  163
Roundup 164
References 166
6 Vision and the Direction
of Change  171
Learning objectives  171
Vision: Fundamental or Fad?  172
The Characteristics of Effective Visions  174
How Context Affects Vision  180
How Visions Are Developed  181
Why Visions Fail  187
Linking Vision to Change: Three
Debates 189
Exercise 6.1: Interviewing Change
Recipients 197
Exercise 6.2: Analyze Your Own
Organization’s Vision  197
Exercise 6.3: The Role of Vision at Mentor
Graphics 197
Additional Reading  198
Roundup 199
References 201
7 Change Communication
Strategies 205
Learning objectives  205
The Change Communication Process  206
Gender, Power, and Emotion  211
Language Matters: The Power
of Conversation  215
Change Communication Strategies  222
Contingency Approaches to Change
Communication 228
Communication Channels and the Role
of Social Media  232
Exercise 7.1: Listen to Who’s Talking  238
Exercise 7.2: How Defensive Are You?  239
Exercise 7.3: Social Media at the
Museum 240
Additional Reading  241
Roundup 242
References 244
8 Resistance to Change  249
Learning objectives  249
WIIFM, WAMI, and the Dimensions
of Resistance  250
Benefits 251
Causes 253
Symptoms 260
Managers as Resisters  261
Managing Resistance  263
Exercise 8.1: Diagnosing and Acting  270
Exercise 8.2: Jack’s Dilemma  270
Exercise 8.3: Moneyball  271
Additional Reading  272
Roundup 272
References 274
viii  Contents
9 Organization Development and
Sense-Making Approaches  279
Learning objectives  279
Alternative Approaches to Managing
Change 280
Organization Development (OD)  280
Appreciative Inquiry (AI)   291
Positive Organizational Scholarship (POS)  293
Dialogic Organizational Development   295
Sense-Making   298
Exercise 9.1: Reports from the Front Line  304
Exercise 9.2: Designing a Large-Scale Change
Intervention 304
Exercise 9.3: Making Sense of
Sense-Making 304
Exercise 9.4: Interpreting the Interpreter:
Change at Target  305
Exercise 9.5: Change at DuPont  306
Additional Reading  308
Roundup 308
References 310
10 Change Management, Processual, and
Contingency Approaches  315
Learning objectives  315
Alternative Approaches to Managing
Change 316
Why Change Fails  317
Change by Checklist  319
Stage Models of Change Management  325
Process Perspectives on Change  331
Contingency Approaches to Change
Management 335
Exercise 10.1: Develop Your Own Change
Model 341
Exercise 10.2: The British Airways Swipe
Card Debacle 342
Exercise 10.3: The Italian Job  344
Additional Reading  346
Roundup 346
References 349
Part 3
Running Threads: Sustainability, and
the Effective Change Manager  353
11 Sustaining Change versus
Initiative Decay  355
Learning objectives  355
Initiative Decay and Improvement
Evaporation 356
Praiseworthy and Blameworthy Failures  359
Actions to Sustain Change  362
Words of Warning  369
Exercise 11.1: A Balanced Set of
Measures 373
Exercise 11.2: Treating Initiative Decay  373
Exercise 11.3: The Challenger and Columbia
Shuttle Disasters  374
Additional Reading  379
Roundup 380
References 382
12 The Effective Change Manager:
What Does It Take?  385
Learning objectives  385
Change Managers: Who Are They?  386
Change Managers: What Kind of Role
Is This?  394
Change Management Competencies  397
Political Skill and the Change Manager  403
Developing Change Management
Expertise 410
Exercise 12.1: Networking—How Good
Are You?  412
Exercise 12.2: How Resilient Are You?  413
Exercise 12.3: How Political Is Your
Organization? 415
Additional Reading  416
Roundup 417
References 419
Name Index  423
Subject Index  433
Since the previous edition of this book published in 2009, the organizational world has
changed dramatically—the global financial crisis, fresh geopolitical tensions, environmental concerns, greater focus on corporate social responsibility, economic uncertainties,
emerging new markets, dramatic technological developments, demographic shifts, changing consumer tastes and expectations. Add to that mix the growing significance of social
media, where positive and critical views of organizations and their products and services
can be shared instantly and globally with large numbers of people.
From a management perspective, it feels as though the drivers for organizational change
are now more numerous, and that the pace of change has also increased; more pressure,
more change, faster change. While the pace of change may only appear to have quickened,
failure to respond to those pressures, and in some cases failure to respond quickly enough,
can have significant individual and corporate consequences. The personal and organizational stakes appear to have increased.
The management of organizational change thus remains a topic of strategic importance for most sectors, public and private. Current conditions have, if anything, increased
the importance of this area of management responsibility. This new edition, therefore,
is timely with regard to updating previous content, while introducing new and emerging
trends, developments, themes, debates, and practices.
In the light of this assessment, we believe that the multiple perspectives approach is
particularly valuable, recognizing the variety of ways in which change can be progressed,
and reinforcing the need for a tailored and creative approach to fit different contexts. Our
images of how organizational change should be managed affect the approaches that we
take to understanding and managing change. Adopting different images and perspectives
helps to open up new and more innovative ways of approaching the change management
process. We hope that this approach will help to guide and to inspire others in pursuit of
their own responsibilities for managing organizational change.
This text is aimed at two main readers. The first is an experienced practicing manager
enrolled in an MBA or a similar master’s degree program, or taking part in a management
development course that includes a module on organizational change management. The
second is a senior undergraduate, who may have less practical experience, but who will
probably have encountered organizational change through temporary work assignments,
or indirectly through family and friends. Our senior undergraduate is also likely to be
planning a management career, or to be heading for a professional role that will inevitably involve management—and change management—responsibilities. Given the needs
and interests of both types of readers, we have sought to present an appropriate blend of
research and theory on the one hand, and practical management application on the other.
Instructors who have used our previous edition will find many familiar features in this
update. The chapter structure and sequence of the book remain much the same, with some
minor adjustments to accommodate new material. The overall argument is again underpinned
by the observation that the management of organizational change is in part a rational or technical task, and is also a creative activity, with the need to design novel strategies and processes
x  Preface
that are consistent with the needs of unique local conditions. We hope that readers will find
the writing style and presentation clear and engaging. We have also maintained the breadth of
coverage of the different traditions and perspectives that contribute to the theory and practice
of managing organizational change, with international examples where appropriate.
The development of this new edition has introduced new content and new pedagogical
features. The new content for this edition includes the following:
Depth of change: Change can be categorized and understood with regard to how deeply
it penetrates an organization. A “depth of change” model is explained, using a “shallow to transformational” scale, forming the basis for discussion and analysis at various
points in the text (chapters 1, 4, and 12).
New tensions and debates: A new section explores contemporary dilemmas in organizational change management. One of these concerns striking the balance between
large-scale transformational change (which can be disruptive) and “sweating the small
stuff” (which can create a platform for further changes). A second concerns pace, with
some commentators advising how to speed up change, while others warn of the dangers
of “the acceleration trap” (chapter 1).
Change managers or change leaders: Some commentators claim this is an important
distinction, while others argue that this is a words game. Can we resolve this debate
(chapter 2)?
Post-crisis change: Recommendations for change from investigations into accidents,
misconduct, and catastrophes are often not implemented. We explore why this should
be the case—in conditions where it might be presumed that change would be welcome
and straightforward (chapter 3). We also consider briefly the problems and practice of
communication during and after crises (chapter 7).
Change in a recession: Is change more challenging when economic conditions are difficult? A new section argues that change may be more straightforward during a recession (chapter 3).
Innovation: We explore how change is driven by the proactive development, adoption, and diffusion of product and operational innovations, along with the distinction
between sustaining and disruptive innovations, and the nature and development of
innovative organization cultures (chapter 4).
Built to change: We explore the organizational capabilities that contribute to change,
adaptation, responsiveness, and agility, considering mechanistic and organic management systems, segmentalist and integrative cultures, and the concept of the “built-tochange” organization (chapter 4).
Change communication strategies: This chapter has been thoroughly updated, with the
emphasis on change communication, exploring the characteristics of effective change
communication strategies, the potential impact and applications of social media as corporate communications tools, and the “communication escalator” (chapter 7).
Middle management blockers: The traditional stereotype has middle managers subverting top team initiatives. Recent research suggests that this image is wrong, and
that middle management are often the source of creative strategic ideas as well as the
“engine room” for delivery (chapters 8 and 12).
Preface  xi
Organization development and sense-making approaches: As in the previous edition,
recent developments in organization development, appreciative inquiry, positive organizational scholarship, and dialogic organization development are explored (chapter 9).
Contingency and processual approaches: Covered in the last edition, recent developments have been incorporated to update these sections, reflecting their influence on
theory and practice (chapter 10).
Praiseworthy and blameworthy failures: The section on “recognizing productive failures” has been updated with recent commentary suggesting that some failures should
be rewarded (chapter 11).
The effective change manager: What does it take? This new chapter explores the capabilities of change managers, considering competency frameworks, interpersonal communication processes and skills, issue-selling tactics, and the need for the change
manager to be politically skilled (chapter 12).
The pedagogical features in the text include:
• learning outcomes identified at the beginning of each chapter;
• fewer, and shorter, “high-impact” case studies of organizational change and other diagnostic and self-assessment exercises for classroom use;
• movie recommendations, identifying clips that illustrate theoretical and practical
dimensions of organizational change management;
• a short “roundup” section at the end of each chapter, with reflections for the practicing change manager, and summarizing the key learning points (linked to the learning
• a small number of suggestions for further reading at the end of each chapter.
Since this book was first published, we have continued our conversations with managers who have been using it as part of their teaching, consulting, and other organizational change activities. In so many of these conversations, it was reassuring to hear how
the multiple perspectives framework that underpins this book struck the right chord with
them, opening up new, innovative, and different ways of seeing, thinking, conceptualizing,
and practicing organizational change. We hope that this new and updated third edition will
continue to inspire various change journeys, and we look forward to more conversations
along the way.
Online Resources
Instructors: If you are looking for teaching materials in this subject area, such as case studies, discussion guides, organizational diagnostics, self-assessments, company websites, or
audio-visual materials (feature films, YouTube clips) to use in lectures and tutorials, then
go to McGraw-Hill Connect:
Continually evolving, McGraw-Hill Connect has been redesigned to provide the only
true adaptive learning experience delivered within a simple and easy-to-navigate environment, placing students at the very center.
xii  Preface
• Performance Analytics – Now available for both instructors and students, easy-to-decipher
data illuminates course performance. Students always know how they are doing in class,
while instructors can view student and section performance at a glance.
• Personalized Learning – Squeezing the most out of study time, the adaptive engine
within Connect creates a highly personalized learning path for each student by identifying areas of weakness and providing learning resources to assist in the moment of need.
This seamless integration of reading, practice, and assessment ensures that the focus is
on the most important content for that individual.
The Connect Management Instructor Library is your repository for additional resources
to improve student engagement in and out of class. You can select and use any asset that
enhances your lecture.
The Connect Instructor Library includes:
• Instructor Manual
• PowerPoint files
• Test Bank
Students: If you are looking for additional materials to improve your understanding of
this subject and improve your grades, go to McGraw-Hill Connect:
Manager’s Hot Seat: Now instructors can put students in the hot seat with access to an
interactive program. Students watch real managers apply their years of experience when
confronting unscripted issues. As the scenario unfolds, questions about how the manager
is handling the situation pop up, forcing the student to make decisions along with the
manager. At the end of the scenario, students watch a post-interview with the manager and
view how their responses matched up to the manager’s decisions. The Manager’s Hot Seat
videos are now available as assignments in Connect.
LearnSmart: LearnSmart, the most widely used adaptive learning resource, is proven
to improve grades. By focusing students on the most important information each student needs to learn, LearnSmart personalizes the learning experience so they can study
as efficiently as possible.
SmartBook: An extension of LearnSmart, SmartBook is an adaptive ebook that helps
students focus their study time more effectively. As students read, SmartBook assesses
comprehension and dynamically highlights where they need to study more.
Understanding and
Diagnosing Change
CHAPTER 1  Managing Change: Stories and Paradoxes
CHAPTER 2  Images of Change Management
CHAPTER 3  Why Change? Contemporary Drivers and Pressures
CHAPTER 4  What to Change? A Diagnostic Approach
The central theme of the four chapters in Part 1 is groundwork. How are we to approach
an understanding of organizational change? With what approaches, perspectives, or
images of change management should we be working? What drivers and pressures
­produce organizational change? What diagnostic tools can we use in order to decide
what aspects of the organization and its operations will need to change or will benefit
from change?
Managing Change:
Stories and Paradoxes
Learning objectives
By the end of this chapter you should be able to:
Understand how stories of change can contribute to our knowledge of theory
and practice.
LO 1.2
Explain why managing organizational change is both a creative and a rational
LO 1.3
Identify the main tensions and paradoxes in managing organizational change.
LO 1.4
Evaluate the strengths and limitations of our current understanding of this field.
LO 1.1
4  Chapter 1  Managing Change: Stories and Paradoxes
LO 1.1
LO 1.2
  Stories About Change: What Can We Learn?
Changing organizations is as messy as it is exhilarating, as frustrating as it is satisfying, as muddling-through and creative a process as it is a rational one. This book
recognizes these tensions and how they affect those who are involved in managing
organizational change. Rather than pretend that these tensions do not exist, or that they
are unimportant, we confront them head on, considering how they can be addressed and
managed, recognizing the constraints that they can impose. We also want to demonstrate how the images that we hold about the way in which change should be managed,
and of the role of change agents, affect how we approach change and the outcomes we
think are ­possible.
To begin this exploration, we present three stories of recent changes. The first concerns the turnaround of the Beth Israel Deaconess Medical Center in Boston. The second concerns the new organizational model introduced at Sears Holdings in an attempt
to restore falling sales and profits. The third concerns innovative efforts to restore falling sales and a fading brand at J. C. Penney, a retailer. These stories address different problems, but they display many common issues concerning the management of
change. Each of these accounts comes with a set of assessment questions. We would
like to ask you to think through the answers to those questions for yourself, or in a class
Our aim is to demonstrate that stories about change can be one valuable source of
practical lessons, as well as helping to contribute to our general understanding of change.
These stories are of course distinctive, one-off. How can they contribute to knowledge
and practice in general, in other sectors and organizations? Stories are one of the main
ways of knowing, communicating, and making sense of the world (Czarniawska, 1998;
Pentland, 1999; Dawson and Andriopoulos, 2014). Our stories have actors: change leaders, other managers, staff, customers. They take decisions that lead to actions that trigger responses: acceptance, resistance, departure. There is a plot: a serious problem that
could be solved by organizational change. There are consequences: to what extent did the
change solve the problem, and were other problems created along the way? The sequence
of events unfolds in a typical manner: … and then … and then. This tells us why the outcomes were reached.
Our narratives are not just descriptions of a change process, of what happened. They
also provide us with explanations. These are process narratives. Process narratives have
several advantages over more traditional (quantitative, statistical) research methods (Mohr,
1982; Poole et al., 2000; Van de Ven and Poole, 2005):

they tell us about the context, give us a sense of the whole, a broader frame of reference;
complexity can be expressed within a coherent sequence of events;
the nature and significance of the causal factors acting on events are exposed;
the narrative patterns transcend individual cases.
This approach is based on what is called narrative knowing (Langley, 2009). Because
stories can reveal the mechanisms or logics behind a sequence of events, they are process
theories. (We will explore process perspectives on change in chapter 10.) What combinations of factors drive, slow down, accelerate, block the change process? The three stories
Chapter 1  Managing Change: Stories and Paradoxes  5
that follow explain the relative success of the organizational changes at Beth Israel, Sears,
and J. C. Penney. We will ask you to consider the extent to which those explanations, each
based on a single unique case narrative, can be applied to managing organizational change
in general, in other settings.
Although our three stories are quite different from each other, they have common features, with regard to the issues and processes that shape the outcomes of organizational
change. Despite the differences, they demonstrate common tensions and the choices
that are involved in the change process. When you have made your own assessments, in
response to the questions that precede each story, you will find our suggested answers in
the Roundup section at the end of the chapter.
LO 1.1
  The Story of Beth Israel Deaconess Medical Center
Issues to Consider as You Read This Story
1. Identify five factors that explain the success of this corporate turnaround.
2. How would you describe Paul Levy’s role and contributions to this turnaround?
3. What insights does this story have to offer concerning the role of the change leader?
4. What lessons about managing organizational change can we take from this experience
and apply to other organizations, in healthcare and in other sectors? Or, are the lessons
unique to Beth Israel Deaconess Medical Center?
The Setting
This is the story of a corporate turnaround, rescuing the organization from financial
disaster and restoring its reputation, competitiveness, and profitability. Based in Boston,
­Massachusetts, the Beth Israel Deaconess Medical Center (BID) was created in 1996 by
the merger of two hospitals. The business case for the merger was that the larger organization (over 600 beds) would be better able to compete with, for example, the Massachusetts
General Hospital and the Brigham Women’s Hospital. The two merged hospitals had different cultures. Beth Israel had a casual management style that encouraged p­ rofessional
autonomy and creativity. Deaconess Hospital was known for its rules-based, top-down
management. Staff were loyal to their own organization. After the merger, the Beth
Israel culture dominated, and many Deaconess staff, especially nurses, left to join the
The Problems
By 2002, BID was losing $100 million a year and faced “financial meltdown.” There were
problems with the quality and safety of care, with low staff morale, and with poor relationships between clinical staff and management. The media attention was damaging BID’s
The Solutions
External management consultants recommended drastic measures to turn around the hospital’s finances, and Paul Levy was appointed chief executive officer of BID in 2002. Levy
had no healthcare background and little knowledge of hospitals. He felt that gave him an
6  Chapter 1  Managing Change: Stories and Paradoxes
advantage, as he was a “straight talker” and could act as an “honest broker.” But staff were
skeptical at first.
Levy’s turnaround strategy was based on two themes: transparency and commitment to
quality. His first action was to share with all staff the full scale of the financial difficulties,
to create “a burning platform,” from which escape would only be possible by making radical changes. His second approach was to signal absolute commitment to the continuous
improvement of quality, in order to build trust and to establish a sense of common purpose. Levy described his management style:
Perhaps I had an overly developed sense of confidence, but my management approach is that
people want to do well and want to do good and I create an appropriate environment. I trust
people. When people make mistakes it isn’t incompetence, it’s insufficient training or the
wrong environment. What I’ve learned is that my management style can work.
Phase 1:  With the hospital “bleeding money,” urgent action was necessary. Levy accepted
some of the management consultants’ recommendations, and several hundred jobs were
lost, in an attempt to restore financial balance. He refused to reduce nursing levels, but
the financial crisis was resolved.
Phase 2:  Medical staff were tired of poor relationships with management. In 2003, Levy
hired Michael Epstein, a doctor, as chief operating officer. Epstein met with each clinical department to win their support for the hospital’s nonclinical objectives and to break
down silo working. Kathleen Murray, who had joined BID in 2002, was director of performance assessment and regulatory compliance. The hospital had no annual operating
plans, and she set out to correct this, starting with two departments that had volunteered
to take part in phase 1, orthopaedics and pancreatic surgery. Other departments soon
joined in. Operating plans had four goals, addressing quality and safety, patient satisfaction, finance, and staff and referrer satisfaction. One aim was to make staff proud of
the outcomes and create a sense of achievement. Although the performance of doctors
would now be closely monitored, the introduction of operating plans was seen as a
major turning point.
Phase 3:  To help address the view that medical errors were inevitable, Levy appointed
Mark Zeidel as chief of medicine. Zeidel introduced an initiative that cut “central line
infection” rates, reducing costs as well as harm to patients and providing the motivation
for more improvements. The board of directors were not at first convinced that performance data should be published, but Levy was persuasive, and he put the information
on his public blog, which he started in 2006, and which became popular with staff, the
public, and the media, with over 10,000 visitors a day. Levy explained:
The transparency website is the engine of our work. People like to see how they compare with others, they like to see improvements. Transparency is also important for clinical leaders and our external audience of patients and insurers. We receive encouraging
feedback from patients. We’ve also managed to avoid a major controversy with the media
despite our openness. Transparency’s major societal and strategic imperative is to provide
creative tension within hospitals so that they hold themselves accountable. This accountability is what will drive doctors, nurses and administrators to seek constant improvements
in the quality and safety of patient care.
Chapter 1  Managing Change: Stories and Paradoxes  7
Other performance data were published, for the hospital and for individual departments. This included measures to assess whether care was evidence-based, effective,
safe, patient-centered, timely, efficient, and equitable. Progress in meeting priorities for
quality and safety could be tracked on the hospital’s website, and the data were used by
staff to drive quality improvements. The board also set tough goals to eliminate preventable harm and increase patient satisfaction. Every year, staff were invited to summarize
their improvement work in poster sessions, featuring the work of 95 process improvement
teams from across the hospital.
Levy hired staff with expertise in lean methods. Previously an option, training in quality and safety became mandatory for trainee doctors, who had to take part in improvement
projects. The culture was collaborative, and nurses had the respect of doctors. Patients
often chose BID for the quality of nursing care. The departmental quality improvement
directors met twice a month to share experiences. Department meetings routinely discussed adverse events. A patient care committee fulfilled a statutory requirement for
board oversight of quality and safety. The office of decision support collected data on
complication rates, infection rates, department-specific quality measures, and financial
goals. A senior nurse said: “We felt a sense of ownership with issues of quality. We have
dashboards up in the units to see how we are doing. Staff know what the annual operating goals are, as they are actively involved in setting them and integrating them into
their work.”
The Outcomes
By 2010, BID was one of the leading academic health centers in the United States, with
6,000 employees and state-of-the-art clinical care, research, and teaching. Competing
effectively with other major healthcare organizations, BID was generating annual revenues of over $1.2 billion.
Paul Levy resigned in January 2011. He explained his decision in a letter to the board of
directors, making this available to staff and the public on his blog. The letter included the
following remarks:
I have been coming to a conclusion over the last several months, perhaps prompted by
reaching my 60th birthday, which is often a time for checking in and deciding on the
next stage of life. I realized that my own place here at BID had run its course. While I
remain strongly committed to the fight for patient quality and safety, worker-led process
improvement, and transparency, our organization needs a fresh perspective to reach new
heights in these arenas. Likewise, for me personally, while it has been nine great years
working with outstanding people, that is longer than I have spent in any one job, and I need
some new challenges.
Story Sources
Abbasi, K. (2010) Improvement in Practice: Beth Israel Deaconess Case Study. London: The
Health Foundation.
8  Chapter 1  Managing Change: Stories and Paradoxes
LO 1.1
  The Story of Sears Holdings
Issues to Consider as You Read This Story
1. How would you describe Eddie Lampert’s leadership style?
2. How would you assess his approach to implementing major organizational change—in
this case, restructuring the whole company with a new organizational model?
3. On balance, would you assess his organizational model as having been a success, or not?
4. What lessons about managing organizational change can we take from this experience
and apply to other organizations, in this or other sectors?
The Setting
Sears Holdings Corporation was a specialty retailer, formed in 2005 by the merger of
Kmart and Sears Roebuck. The merger was the idea of Eddie Lampert, a billionaire hedge
fund manager who owned 55 percent of the new company and who became chairman.
Based in Illinois, the company operated in the United States and Canada, with 274,000
employees, 4,000 retail stores, and annual revenues (2013) of $40 billion. Sears and
Kmart stores sold home merchandise, clothing, and automotive products and services. The
merged company was successful at first, due to aggressive cost cutting.
The Problem
By 2007, two years after the merger, profits were down by 45 percent.
The Chairman’s Solution
Lampert decided to restructure the company. Sears was organized like a classic retailer.
Department heads ran their own product lines, but they all worked for the same merchandising and marketing leaders, with the same financial goals. The new model ran Sears
like a hedge fund portfolio with autonomous businesses competing for resources. This
“internal market” would promote efficiency and improve corporate performance. At first,
the new structure had around 30 business units, including product divisions, support functions, and brands, along with units focusing on e-commerce and real estate. By 2009, there
were over 40 divisions. Each division had its own president, chief marketing officer, board
of directors, profit and loss statement, and strategy that had to be approved by Lampert’s
executive committee. With all those positions to fill at the head of each unit, executives
jostled for the roles, each eager to run his or her own multibillion-dollar business. The new
model was called SOAR: Sears Holdings Organization, Actions, and Responsibilities.
When the reorganization was announced in January 2008, the company’s share price
rose 12 percent. Most retail companies prefer integrated structures, in which different
divisions can be compelled to make sacrifices, such as discounting goods, to attract more
shoppers. Lampert’s colleagues argued that his new approach would create rival factions.
Lampert disagreed. He believed that decentralized structures, although they might appear
“messy,” were more effective, and that they produced better information. This would give
him access to better data, enabling him to assess more effectively the individual components of the company and its assets. Lampert also argued that SOAR made it easier to
divest businesses and open new ones, such as the online “Shop Your Way” division.
Chapter 1  Managing Change: Stories and Paradoxes  9
Sears was an “early adopter” of online shopping. Lampert (who allegedly did all his
own shopping online) wanted to grow this side of the business, and investment in the stores
was cut back. He had innovative ideas: smartphone apps, netbooks in stores, a multiplayer
game for employees. He set up a company social network, “Pebble,” which he joined
under the pseudonym “Eli Wexler,” so that he could engage with employees. However,
he criticized other people’s posts and argued with store associates. When staff worked out
that Wexler was Lampert, unit managers began tracking how often their employees were
“Pebbling.” One group organized Pebble conversations about random topics so that they
would appear to be active users.
The Chairman
At the time of the merger, investors were confident that Lampert could turn the two companies around. One analyst described him as “lightning fast, razor-sharp smart, very direct.”
Many of those who worked for him described him as brilliant (although he could overestimate his abilities). The son of a lawyer, it was rumored that he read corporate reports and
finance textbooks in high school, before going to Yale University. He hated focus groups
and was sensitive to jargon such as “vendor.” His brands chief once used the word “consumer” in a presentation. Lampert interrupted, with a lecture on why he should have used
the word “customer” instead. He often argued with experienced retailers, but he had good
relationships with managers who had finance and technology backgrounds.
From 2008, Sears’ business unit heads had an annual personal videoconference with
the chairman. They went to a conference room at the headquarters in Illinois, with some
of Lampert’s senior aides, and waited while an assistant turned on the screen on the wall
opposite the U-shaped table and Lampert appeared. Lampert ran these meetings from his
homes in Greenwich, Connecticut; Aspen, Colorado; and subsequently Florida, earning
him the nickname “The Wizard of Oz.” He visited the headquarters in person only twice a
year, because he hated flying. While the unit head worked through the PowerPoint presentation, Lampert didn’t look up, but dealt with his emails, or studied a spreadsheet, until he
heard something that he didn’t like—which would then lead to lengthy questioning.
In 2012, he bought a family home in Miami Beach for $38 million and moved his
hedge fund to Florida. Some industry analysts felt that Sears’ problems were exacerbated
by Lampert’s “penny pinching” cost savings, which stifled investment in its stores. Instead
of store improvements, Sears bought back stock and increased its online presence. In
2013, Lampert became chairman and chief executive, the company having gone through
four other chief executives since the merger.
The Outcomes
Instead of improving performance, the new model encouraged the divisions to turn against
each other. Lampert evaluated the divisions, and calculated executives’ bonuses, using a
measure called “business operating profit” (BOP). The result was that individual business units focused exclusively on their own profitability, rather than on the welfare of the
company. For example, the clothing division cut labor to save money, knowing that floor
salesmen in other units would have to pick up the slack. Nobody wanted to sacrifice business operating profits to increase shopping traffic. The business was ravaged by infighting
as the divisions—behaving in the words of one executive like “warring tribes”—battled
10  Chapter 1  Managing Change: Stories and Paradoxes
for resources. Executives brought laptops with screen protectors to meetings so that their
colleagues couldn’t see what they were doing. There was no collaboration, no cooperation.
The Sears and Kmart brands suffered. Employees gave the new organization model a new
name: SORE.
The reorganization also meant that Sears had to hire and promote dozens of expensive
chief financial officers and chief marketing officers. Many unit heads underpaid middle
managers to compensate. As each division had its own board of directors, some presidents sat on five or six boards, which each met monthly. Top executives were constantly
in meetings.
The company posted a net loss of $170 million for the first quarter in 2011. In
­November, Sears discovered that rivals planned to open on Thanksgiving at midnight, and
Sears executives knew that they should also open early. However, it wasn’t possible to get
all the business unit heads to agree, and the stores opened as usual, the following morning. One vice president drove to the mall that evening and watched families flocking into
rival stores. When Sears opened the next day, cars were already leaving the parking lot.
That December, Sears announced the closure of over 100 stores. In February 2012, Sears
announced the closure of its nine “The Great Indoors” stores.
From 2005 to 2013, Sears’ sales fell from $49.1 billion to $39.9 billion, the stock value
fell by 64 percent, and cash holdings hit a 10-year low. In May 2013, at the annual shareholders’ meeting, Lampert pointed to the growth in online sales and described a new app,
“Member Assist,” that customers could use to send messages to store associates. The aim
was “to bring online capabilities into the stores.” Three weeks later, Sears reported a first
quarter loss of $279 million, and the share price fell sharply. The online business contributed 3 percent of total sales. Online sales were growing, however, through the “Shop Your
Way” website. Lampert argued that this was the future of Sears, and he wanted to develop
“Shop Your Way” into a hybrid of Amazon and Facebook.
Story Sources
Kimes, M. 2013. At Sears, Eddie Lampert’s warring divisions model adds to the troubles.
Bloomberg Businessweek, July 11.
LO 1.1
  The Story of J. C. Penney
Issues to Consider as You Read This Story
1. What aspects of Ron Johnson’s turnaround strategy were appropriate, praiseworthy?
2. What mistakes did Ron Johnson make?
3. What would you suggest he could have done differently?
Chapter 1  Managing Change: Stories and Paradoxes  11
The Setting
J. C. Penney Company, Inc. (known as JCPenney, or JCP for short) was one of America’s
largest clothing and home furnishing retailers. An iconic brand, founded by James Cash
Penney and William Henry McManus in 1913, the headquarters were in Plano, Texas. By
2014, with annual revenues of around $13 billion, and 159,000 employees, JCP operated
1,100 retail stores and a shopping website at JCP once had over 2,000 stores,
back in 1973, but the 1974 recession led to closures. The company’s main customers were
middle-income families, and female. JCP had a “promotional department store” pricing
strategy with a confusing system of product discounts. There were around 600 promotions and coupon offers a year. Mike Ullman, chief executive since 2004, had grown sales
with a strong private label program, with brands such as Sephora, St. John’s Bay clothing, MNG by Mango, and Liz Claiborne. Another 14 stores were opened in 2004, and the
e-commerce business exceeded the $1 billion revenue mark in 2005.
The Problems
When the stock reached an all-time high of $86 in 2007, JCP was performing well. However, the recession in 2008 affected sales badly; core customers had mortgage and job
security problems. Between 2006 and 2011, sales fell from $19.9 billion to $17 billion.
JCP had one of the lowest annual sales per square foot for department stores (around
$150). Macy’s and Kohl’s, the main competition, had sales per square foot of around $230.
In 2011, the catalogue business, with nineteen outlet stores, was closed, along with seven
other stores and two call centers. The New York Times accused JCP of “gaming” Google
search results to increase the company’s ranking in searches, a practice called “spamdexing.” Google’s retaliation dramatically reduced JCP’s search visibility.
In 2008, JCP struck a deal with Ralph Lauren to launch a new brand, American Living,
sold only in their stores. But JCP was not allowed to use Ralph Lauren’s name or the Polo
logo. The idea failed. Sales continued to fall. In 2011, 50 to 70 percent of all sales were
discounted, based on a “high-low” pricing strategy. An item would be priced initially at,
say, $100. Customers would see the product and like it, but not like the price. After six
weeks, the price was marked down, say, to $50, and the goods started to sell. But those
items had been sitting on a shelf doing nothing for over a month.
The Solutions
In 2010, two billionaire investors, Bill Ackman and Steven Roth, approached Ullman with
an offer to buy large amounts of JCP stock. They felt that the company had potential.
Ackman and Roth were invited to join the board, attending their first meeting in February
2011. Leaving that meeting, Ullman was involved in a serious car accident, suffered multiple injuries, and spent three months in a neck brace, making his existing health problems
worse. The board wanted a replacement, and there were no internal candidates. Ullman
suggested Ron Johnson, who was working for Steve Jobs at Apple. Johnson then met with
Ackman and Roth to explore possibilities. Johnson said that he was concerned about the
lack of innovation in department stores, and he brought a positive, “can do” approach
more typical of Silicon Valley than retailing.
In November 2011, Ron Johnson was appointed chief executive officer. JCP stock rose
17 percent on the announcement. Johnson had been responsible for setting up Apple’s
12  Chapter 1  Managing Change: Stories and Paradoxes
highly profitable retail stores, and he had also been successful at another retailer, Target.
In December, after one month in post, he presented to the board his plans to revive the
company with a fundamentally new way of doing business. The board agreed. Johnson
told a journalist, “I came in because they wanted to transform; it wasn’t just to compete or
improve.” In a board update before leaving, Ullman noted that Johnson had not asked him
any questions about how the business was currently running.
Johnson moved quickly. First, he wanted to transform the culture. In February 2012,
he installed a large transparent acrylic cube in the company headquarters. The cube was
a version of the new company logo. Johnson told staff that he did not want to see the old
logo anywhere in the building. For a week, staff threw “old Penney” items into the cube:
T-shirts, mugs, stationery, pens, tote bags.
Second, no more promotions. Why wait six weeks to mark an item down to the price at
which it would sell? Why not sell at that price from the start? Johnson simplified the pricing structure with “everyday” prices, which were what used to be sale values; “monthly
value,” for selected items; and “best price,” linked to paydays—the first and third Fridays
of each month. The stores were tidier, with no messy clearance racks, and the customer
relationship became “fair and square” (another slogan).
Third, Johnson developed a “store within a store” strategy, with each store becoming a
collection of dozens of separate “boutiques.” He wanted a higher percentage of younger
and higher-priced brands such as Joe Fresh clothes, Martha Stewart home furnishings,
Michael Graves Designs, Happy Chic, and furniture from the British designer Sir ­Terence
Conran. These new boutiques, of course, were not interested in having their brands diluted
by discount pricing. Traditionally, JCP got 50 percent of sales from its own brands, which
were displayed by product (bath mats) rather than brand (Martha Stewart). When a director asked him when he was going to test his new approach, Johnson replied that he had
made his decision relying, like Steve Jobs, on instinct. Hundreds of stores were to be
redesigned by the end of 2012. JCP already sold Levi’s jeans, but Johnson wanted 700
Levi’s boutiques in the stores; building these boutiques cost JCP $120 million. Southpole,
a clothing brand that appealed to black and Hispanic customers, was dropped. St. John’s
Bay, a less fashionable women’s clothing brand generating $1 billion annual revenues,
was dropped.
The speed of these changes would be motivating and unifying, Johnson thought. He
wanted to rebrand an old, stale company with a modern name and logo. Johnson was a
charismatic and passionate presenter. He said that the changes would be painful and would
take four years to complete. The board were awed by the scale of the transformation, but
they did not challenge him. Johnson talked about the “six Ps”: product, place, presentation, price, promotion, personality. One analyst noted, “One ‘P’ that seems to be missing
is people.” Employees were also excited about the developments, especially when Johnson
threw them a lavish party, costing $3 million.
Johnson wanted to make checkout simpler, with roving clerks taking payment on iPads.
Millions were spent on equipping stores with Wi-Fi. He also wanted all items to have an
RFID tag, but that proved to be too expensive. He also decided to separate the store buying
group from the buying group, an approach used by Apple. However, this meant
that there was no coordination between what was available online and what customers
could find in the stores. Johnson was more concerned with “the look and feel” of the
physical stores, and less support went to the website.
Chapter 1  Managing Change: Stories and Paradoxes  13
Johnson hired his own new team of top executives, who distanced themselves from
the existing staff; most of them refused to move to Dallas, flying there weekly instead.
If you were not part of this new team, you were out of the loop. One director called the
“old” staff DOPES: dumb old Penney’s employees. Veterans called the new team the Bad
Apples. The new human resources director cancelled performance reviews as being too
bureaucratic. This made it easier to fire people; managers did not have to consult performance data before making that decision. The new team recruited Ellen DeGeneres—a
television celebrity and lesbian—to appear in JCP advertising. A conservative group, One
Million Moms, threatened a boycott, claiming that, “DeGeneres is not a true representation of the type of families that shop at their store. The majority of J.C. Penney customers
will be offended and chose to no longer shop there.” The relationship with DeGeneres was
discontinued. Johnson introduced a new exchange policy; customers could return an item,
without a receipt, and receive cash. This policy was immediately abused, and one popular
item was returned so often that its sales turned negative. The plan to put Martha Stewart
stores into JCP stalled when Macy’s sued, claiming breach of its own agreement with the
home furnishings brand.
The Outcomes
The results published in February 2012 were poor. Revenues had fallen by $4.3 billion,
making a $1 billion loss. The stock fell to $18, and Standard & Poor’s cut JCP’s debt
rating to CCC+ (a long way from “triple A”). In April 2012, JCP laid off 13 percent of
its office staff in Texas, closed one of its call centers, and also “retired” many managers, supervisors, and long-serving employees on the grounds that new working practices
required less oversight. In May 2012, store sales were down 20 percent compared with
the previous year. Johnson had projected a short-term drop in sales, but not by that much.
He commented that, “I’m completely convinced that our transformation is on track,” leading to a 5.9 percent rise in the stock. In July 2012, a further 350 headquarters staff were
laid off. By October 2012, online sales were almost 40 percent down over the year. It
was estimated that the decision to separate the two buying groups had cost JCP around
$500 million.
During Johnson’s two-year tenure, the price of the JCP stock fell by almost 70 p­ ercent,
and sales fell in 2012 by 25 percent, resulting in a net loss of $985 million. JCP had
alienated its traditional customers, who were used to shopping for discounts, but had not
attracted new ones, and 20,000 employees had lost their jobs. In March 2013, Steven Roth,
who had backed Johnson’s appointment but who had now lost faith, sold over 40 ­percent of
his JCP shares at a loss of $100 million. Bill Ackman resigned from the board in August,
selling his shares at a loss of $470 million.
In April 2013, the company chairman told Johnson that the board would be accepting
his resignation; within a few weeks, all but one of the other senior staff hired by Johnson
had also left. Mike Ullman was reinstated. He immediately restored the old promotional
pricing model. In May, JCP ran an “apology ad,” with an earnest female voice admitting, “We learned a very simple thing, to listen to you.” A coincidence of timing, in June,
­Johnson’s renovated home departments opened in stores, selling Jonathan Adler lamps,
Conran tables, and Pantone sheets. Too expensive for core customers, these departments
failed and were withdrawn. However, traditional sales in stores started to grow slowly, and
by November, Internet sales had increased by 25 percent on the previous year (Ullman had
14  Chapter 1  Managing Change: Stories and Paradoxes
reintegrated the stores and online buyers). Sales of the private brand merchandise lines
that had been restored also began to return to previous levels.
The JCP brand had been damaged. Sales per square foot of shopping space had fallen
steadily since 2010 as shoppers turned to Macy’s and Kohl’s. Macy’s sales per square foot
had risen. With sales and profitability falling, in January 2014, JCP closed 33 underperforming stores (3 percent of the total), with 2,000 layoffs. This would reduce annual operating costs by $65 million, but the company had made a loss of $1.4 billion in 2013. After
100 years in business, with Mike Ullman back in charge, JCP stock continued to fall in the
first half of 2014. Commenting on Johnson’s legacy at JCP, one analyst said, “Nobody will
be attempting something similar for a very long time.”
Story Sources
Reingold, J., Jones, M., and Kramer, S. 2014. How to fail in business while really, really trying.
Fortune, July 4, 169(5):80–92.
LO 1.3
LO 1.4
  Tension and Paradox: The State of the Art
tension when two or more ideas are in opposition to each other
paradox when two or more apparently correct ideas contradict each other
From a management perspective, organizational change is seen as problematic. How do
we persuade people to accept new technologies that will make their skills, knowledge,
and working practices obsolete? How quickly can people who find themselves with
new roles, and new relationships, learn how to operate effectively after a major reorganization? How about this new system for capturing and processing customer information? We prefer the old system because it works just fine. Change can be difficult.
Change that is not well managed, however, can generate frustration and anger.
Most estimates put the failure rate of planned changes at around 60 to 70 percent
(Keller and Aiken, 2008; Burnes, 2011; Rafferty et al., 2013). In a global survey of 2,000
executives by the consulting company McKinsey, only 26 percent of respondents said that
their transformational changes had successfully improved performance and enabled the
organization to sustain further improvements (Jacquemont et al., 2015). There is, therefore, no shortage of advice. However, that advice is both extensive and fragmented. The
literature—research and other commentary—can be difficult to access, and to absorb, for
the following reasons (Iles and Sutherland, 2001):
multiple perspectives there are contributions from several different schools, academic disciplines, and theoretical perspectives—there are several literatures
conceptual spread the concepts that are used range in scale, from whole schools of
thought or perspectives, through methodologies, to single tools
fluid boundaries depending on the definitions of change and change management
in use, the boundaries of the topic vary between commentators
Chapter 1  Managing Change: Stories and Paradoxes  15
rich history interesting and useful contributions date from the 1940s, and recent
work has not necessarily made previous commentary irrelevant
varied settings as with our stories, evidence and examples come from a range of
organizational types and contexts, using different methodologies
LO 1.2
Multiple perspectives is the most significant of these properties of the literature. That is
usually seen as a problem—“the experts can’t agree.” We disagree, and we prefer instead
to emphasize the advantages in adopting a multiple perspectives approach to the management of organizational change. First, a perspective that works in one context may not work
well in a different setting: we will explore contingency frameworks in chapter 10. Second,
this is a way of opening up debate: “Should we define our problem in these terms, or in
some other way?” Third, multiple perspectives encourage the search for creative solutions:
“Can we combine ideas from two or more approaches and adapt them to fit our context?”
We will meet all of these characteristics again in later chapters.
The practicing manager, less interested in theoretical perspectives, wants to know
“what works?” There are difficulties in providing a clear answer to that question, too, for
the following reasons:
many variables even with simple changes, the impact is multidimensional, and
measuring “effectiveness” has to capture all of the factors to
­produce a complete picture
slippery causality it is difficult to establish cause and effect clearly across complex
processes that unfold over time, usually at the same time as lots
of other changes
many stakeholders different stakeholders have different views of the nature of the
problem, the appropriate solution, and the desirable outcomes—
whose measures to use?
LO 1.3
What works well in one setting may not work well in another. The broad outlines of a good
change strategy are widely known and accepted. What matters is the detail, concerning how
a strategy or intervention is designed for a particular organization. For example, most practical guidelines begin by suggesting that change will be more readily accepted if there is a
“sense of urgency” that underpins the business case for change. That sense of urgency can
be seen in the financial meltdown at Beth Israel and the falling profitability at both Sears
and J. C. Penney. Note, however, that there are many different ways in which a sense of
urgency can be established and communicated. Some methods may emphasize the “burning
platform” in a way that heightens anxiety and encourages escape. Other approaches might
encourage instead a “burning ambition” to confront and solve the problem.
What works depends on the context. It is rarely possible to just do what someone else
has done. Change is in part a rational process; we know what kinds of issues need to be
taken into account. Change is also a creative process; it is always necessary to design—to
create—an approach that is consistent with local circumstances. Accounts of how other
organizations have handled change can be a rich source of ideas that can be adapted creatively to address similar problems in other settings.
The field of change management is also rich in tensions and paradoxes. We will explore
six of these briefly, in the form of key questions. These issues will also appear in later
16  Chapter 1  Managing Change: Stories and Paradoxes
chapters. You will probably encounter further tensions, in your reading across the subject
and in practice. How these tensions and paradoxes are managed has implications for the
process and outcomes of change.
Transformational Change, or Sweat the Small Stuff?
Where to start—with sweeping radical changes, or a gradual process of incremental initiatives? We will explore a simple model for “locating” the scale of change in the next section.
However, faced with geopolitical, economic, demographic, sociocultural, and technological developments, most organizations seem to think in terms of deep transformational
change. The Beth Israel, Sears, and J. C. Penney stories reflect this view, implementing
whole-organizational changes to deal with survival threats. This may mean that minor
changes are seen as less valuable and important and are overlooked in favor of the “high
impact” initiatives. This could be a mistake. Moore and Buchanan (2013), for example,
demonstrate how an initiative designed to fix small problems rapidly in an acute hospital
generated major performance improvements for almost no cost. In this case, “sweating
the small stuff” was an enabling strategy, getting people involved (the small problems
were identified by staff), establishing a reputation for getting things done, and creating the
platform for further developments. Shallower changes can facilitate and complement the
deeper initiatives, and evidence suggests that these should not be underestimated.
Systematic Tools, or Messy Political Process?
If one looks below the surface of cases of managed change, one can always discern the
ever-present effect of the “other side” of organizational life. The ambiguities, uncertainties,
ambivalences, tensions, politics and intrigues are always involved, and are influential and
addressed in some manner—however half-cocked, fudged, guessed at, messed up or little
(Badham, 2013, p. 24)
Most of the practical guidance on change implementation (chapters 9 and 10) suggests a
straightforward sequence of steps, with advance support from diagnostic tools and assessments
(chapters 4 and 5). This is a systematic process, with helpful tools. We have already suggested
that change is a creative process as well as a rational one. It is also a political process. Organizations are political systems, and because there are often “winners and losers,” change is a political process. The systematic tools-based approach, the creativity, and the politics work hand in
hand. We will explore the political skills that change managers require later (chapter 12). It is
important to recognize that, despite what the textbook or the change management consultant
says, those systematic tools are only part of the answer to “how to do it, and how to get it right.”
Organizational Capabilities, or Personal Skills?
Beth Israel, you may remember, was formed by the merger of two organizations with different cultures. One had a casual management style that encouraged professional autonomy and creativity. The other was known for its rules-based, top-down management. The
research evidence suggests that the “casual” style is likely to be more open to change, and
that this will be a more “agile” and responsive organization. Top-down management and
rules suggest that change will be slow, if it happens at all, dependent on due process and
committee cycles. In other words, we need to pay attention to organizational capabilities
to understand the change drivers and barriers (chapter 5). The skills of change leaders are
Chapter 1  Managing Change: Stories and Paradoxes  17
of course also important. However, skilled change agents struggle in rules-based organizations, and agile and responsive organizations still need capable change agents. We will
explore the capabilities of effective change managers in chapter 12.
Rapid Change, or the Acceleration Trap?
The pace of change—social, political, economic, technological—appears to have accelerated.
Can organizations keep up? There is now a considerable amount of advice on how to speed up
change, to accelerate the pace. Rapid change, however, can cause problems. Can people keep
up? Change too fast, and you run the danger of destabilizing the organization and creating
staff burnout. There is also, therefore, advice on how to manage “painless change” and how to
avoid “the acceleration trap.” We will explore the dilemma of pace further in chapter 3.
Change Leader, or Distributed Leadership?
It is widely assumed that change needs a champion, a senior figure, who sets the direction,
inspires others, and drives the project. A lot of work has gone into identifying the competencies of the “ideas champion,” the effective change leader. This parallels work on the capabilities of effective leaders in general (although most researchers argue that leadership success is
highly contingent). However, in most organizations, change is not a solo performance but a
team effort. There is usually a “guiding coalition” of more or less senior managers, who guarantee permission for change, oversee progress, and unblock problems that arise. Research has also
shown how change is driven by large numbers of organizational members, in an approach that
is also called “distributed leadership,” “leadership constellations,” or “leadership in the plural.”
Learning Lessons, or Implementing Lessons?
Change following crises, accidents, misconduct, failures, and other extreme events
often does not happen. There is always an investigation, which produces recommendations for preventing such an event from happening again (or at least reducing the probability). The evidence shows that those recommendations are often ignored. One might
assume that, in such circumstances, change would be rapid, straightforward, and welcome. The distinction between passive learning (identifying lessons) and active learning (implementing changes) is important here. The latter does not automatically follow.
Why is that not the case? In exploring “why organizations change” in chapter 3, we
will also consider why organizations do not change, when they perhaps should.
Change Has Never Been So Fast
That this is an age of change is an expression heard
frequently today. Never before in the history of
mankind have so many and so frequent changes
occurred. These changes that we see taking place
all about us are in that great cultural accumulation
which is man’s social heritage. It has already been
shown that these cultural changes were in earlier
times rather infrequent, but that in modern times
they have been occurring faster and faster until
today mankind is almost bewildered in his effort
to keep adjusted to these ever increasing social
changes. This rapidity of social change may be due
to the increase in inventions which in turn is made
possible by the accumulative nature of material culture (i.e., technology).
Source: Ogburn (1922), pp. 199–200.
18  Chapter 1  Managing Change: Stories and Paradoxes
The perceptive reader will have noticed that the answer to each of these six paradoxes,
these six questions, is in each case “both.” We need big change and small change. Change
is at the same time a systematic process and a political one. We need both organizational
and individual capabilities. The pace of change must, if possible, vary with circumstances.
Change is almost always driven by “a cast of characters” that includes one or more champions and many supporters. There is no point in learning lessons if we do not then implement them. As noted earlier, the way in which these tensio…
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