Business Question

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8
Managing Change
learning
objectives

A

Understand the five key elements of successful change management.
Explore the processes of change associated with each element.

fter diagnosing reveals the causes of problems or identifies opportunities for development, organization members begin planning
and subsequently implementing the changes necessary to improve organization effectiveness and
performance. A large part of organization development (OD) is concerned with interventions for
improving organizations. The previous chapter
discussed the design of interventions and introduced the major ones currently used in OD.
Chapters 10–20 describe those interventions in
detail. This chapter addresses the key activities

associated with successfully managing organizational changes.
Change can vary in complexity from the introduction of relatively simple processes into a small
work group to transforming the strategies and design
features of the whole organization. Although change
management differs across situations, in this
chapter we discuss activities that must be performed in managing any kind of organizational
change. (Tasks applicable to specific kinds of changes are examined in the chapters on intervention
in Parts 3–6.)

8-1 Overview of Change Activities
The OD literature has directed considerable attention at managing change. Much of the
material is highly prescriptive, advising managers about how to plan and implement
organizational changes. For example, one study suggested that successful managers in
continuously changing organizations (1) provide employees with clear responsibility
and priorities, including extensive communication and freedom to improvise; (2) explore
the future by experimenting with a wide variety of low-cost probes; and (3) link current
projects to the future with predictable (time-paced rather than event-paced) intervals and
choreographed transition procedures.1 Traditionally, change management has focused on
identifying sources of resistance to change and offering ways to overcome them.2 Other
contributions have challenged the focus on resistance and have been aimed at creating
visions and desired futures, gaining political support for them, and managing the transition of the organization toward them.3 Still others have described the learning practices
and leader behaviors that accelerate complex change.4
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FIGURE 8.1

© Cengage Learning

Activities Contributing to Effective Change Management

The diversity of practical advice for managing change can be organized into five
major activities, as shown in Figure 8.1. The activities contribute to effective change
management and are listed roughly in the order in which they typically are performed.
Each activity represents a key element in change leadership.5 The first activity involves
motivating change and includes creating a readiness for change among organization
members and helping them address resistance to change. Leadership must create an
environment in which people accept the need for change and commit physical and

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psychological energy to it. Motivation is a critical issue in starting change because ample
evidence indicates that people and organizations seek to preserve the status quo and are
willing to change only when there are compelling reasons to do so. The second activity is
concerned with creating a vision and is closely aligned with leadership activities. The
vision provides a purpose and reason for change and describes the desired future state.
Together, they provide the “why” and “what” of planned change. The third activity
involves developing political support for change. Organizations are composed of powerful
individuals and groups that can either block or promote change, and leaders and change
agents need to gain their support to implement changes. The fourth activity is concerned
with managing the transition from the current state to the desired future state. It involves
creating a plan for managing the change activities as well as planning special management structures for operating the organization during the transition. The fifth activity
involves sustaining momentum for change so that it will be carried to completion. This
includes providing resources for implementing the changes, building a support system
for change agents, developing new competencies and skills, and reinforcing the new
behaviors needed to implement the changes.
Each of the activities shown in Figure 8.1 is important for managing change.
Although little research has been conducted on their relative contributions, leaders
must give careful attention to each activity when planning and implementing organizational change. Unless individuals are motivated and committed to change, getting movement on the desired change will be extremely difficult. In the absence of vision, change is
likely to be disorganized and diffuse. Without the support of powerful individuals and
groups, change may be blocked and possibly sabotaged. Unless the transition process is
managed carefully, the organization will have difficulty functioning while it moves from
the current state to the future state. Without efforts to sustain momentum for change,
the organization will have problems carrying the changes through to completion. Thus,
all five activities must be managed effectively to realize success.
In the following sections of this chapter, we discuss more fully each of these change
activities, directing attention to how leaders contribute to planning and implementing
organizational change.

8-2 Motivating Change
Organizational change involves moving from the known to the unknown. Because the
future is uncertain and may adversely affect people’s competencies, worth, and coping
abilities, organization members generally do not support change unless compelling reasons convince them to do so. Similarly, organizations tend to be heavily invested in the
status quo, and they resist changing it in the face of uncertain future benefits. Consequently, a key issue in planning for action is how to motivate commitment to organizational change. As shown in Figure 8.1, this requires attention to two related tasks:
creating readiness for change and overcoming resistance to change.

8-2a Creating Readiness for Change
One of the more fundamental axioms of OD is that people’s readiness for change
depends on creating a felt need for change. This involves making people so dissatisfied
with the status quo that they are motivated to try new work processes, technologies,
or ways of behaving. Creating such dissatisfaction can be difficult, as anyone knows
who has tried to lose weight, stop smoking, or change some other habitual behavior.

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Generally, people and organizations need to experience deep levels of hurt before they
will seriously undertake meaningful change. For example, IBM, Harley-Davidson, and
Sears experienced threats to their very survival before they undertook significant
change programs. The following three methods can help generate sufficient dissatisfaction to produce change:
1. Sensitize organizations to pressures for change. Innumerable pressures for change
operate both externally and internally to organizations. As described in Chapter 1,
modern organizations face unprecedented environmental pressures to change themselves, including heavy foreign competition, rapidly changing technology, and volatile
global economies. Internal pressures to change include new leadership, poor product
quality, high production costs, and excessive employee absenteeism and turnover.
Before these pressures can serve as triggers for change, however, organizations must
be sensitive to them. The pressures must pass beyond an organization’s threshold of
awareness if managers are to respond to them. Many organizations, such as Kodak,
Polaroid, and Northwest Airlines, set their thresholds of awareness too high and
neglected pressures for change until those pressures reached disastrous levels.6
Organizations can make themselves more sensitive to pressures for change by
encouraging leaders to surround themselves with devil’s advocates; by cultivating
external networks that comprise people or organizations with different perspectives
and views; by visiting other organizations to gain exposure to new ideas and methods; and by using external standards of performance, such as competitors’ progress
or benchmarks, rather than the organization’s own past standards of performance.7
At Wesley Long Community Hospital, in Greensboro, North Carolina, for example,
managers visited the Ritz-Carlton Hotel, Marconi Commerce Systems’ highinvolvement plant, and other hospitals known for high quality to gain insights
about revitalizing their own organization.
2. Reveal discrepancies between current and desired states. In this approach to generating a felt need for change, information about the organization’s current functioning
is gathered and compared with desired states of operation. (See Section 8-3 “Creating
a Vision,” on page 184, for more information about desired future states.) These
desired states may include organizational goals and standards, as well as a vision of a
more desirable future state.8 Significant discrepancies between actual and ideal states
can motivate organization members to initiate corrective changes, particularly when
members are committed to achieving those ideals. A major goal of diagnosing, as
described in Chapter 5, is to provide members with feedback about current organizational functioning so that the information can be compared with goals or with desired
future states. Such feedback can energize action to improve the organization. At Waste
Management, Sunbeam, and Banker’s Trust, for example, financial statements had
reached the point at which it was painfully obvious that drastic renewal was needed.9
3. Convey credible positive expectations for the change. Organization members invariably have expectations about the results of organizational changes. The positive
approaches to planned change described in Chapter 2 suggest that these expectations
can play an important role in generating motivation for change.10 Expectations can
serve as a self-fulfilling prophecy, leading members to invest energy in change programs that they expect will succeed. When members expect success, they are likely
to develop greater commitment to the change process and to direct more energy into
the constructive behaviors needed to implement it.11 The key to achieving these positive effects is to communicate realistic, positive expectations about the organizational
changes. Research suggests that information about why the change is occurring, how it

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will benefit the organization, and how people will be involved in the design and
implementation of the change was most helpful.12 Organization members also can be
taught about the benefits of positive expectations and be encouraged to set credible
positive expectations for the change program.

8-2b Overcoming Resistance to Change
Change can generate deep resistance in people and in organizations, thus making it difficult, if not impossible, to implement organizational improvements.13 At a personal
level, change can arouse considerable anxiety about letting go of the known and moving
to an uncertain future.14 People may be unsure whether their existing skills and contributions will be valued in the future, or may have significant questions about whether
they can learn to function effectively and to achieve benefits in the new situation. At
the organization level, resistance to change can come from three sources.15 Technical
resistance comes from the habit of following common procedures and the consideration
of sunk costs invested in the status quo. Political resistance can arise when organizational
changes threaten powerful stakeholders, such as top executive or staff personnel, or call
into question the past decisions of leaders.16 Organization change often implies a different allocation of already scarce resources, such as capital, training budgets, and talented
people. Finally, cultural resistance takes the form of systems and procedures that reinforce the status quo, promoting conformity to existing values, norms, and assumptions
about how things should operate.
There are at least three major strategies for positively dealing with resistance to
change:17
1. Empathy and support. A first step in overcoming resistance is learning how people are
experiencing change. This strategy can identify people who are having trouble accepting the changes, the nature of their resistance, and possible ways to overcome it, but it
requires a great deal of empathy and support. It demands a willingness to suspend
judgment and to see the situation from another’s perspective, a process called active
listening. When people feel that those people who are responsible for managing change
are genuinely interested in their feelings and perceptions, they are likely to be less
defensive and more willing to share their concerns and fears. This more open relationship not only provides useful information about resistance, but also helps establish the
basis for the kind of joint problem solving needed to overcome barriers to change.
2. Communication. People resist change when they are uncertain about its consequences. Lack of adequate information fuels rumors and gossip and adds to the anxiety generally associated with change. Effective communication about changes and
their likely results can reduce this speculation and allay unfounded fears. It can
help members realistically prepare for change. However, communication is also one
of the most frustrating aspects of managing change. Organization members constantly receive data about current operations and future plans as well as informal
rumors about people, changes, and politics. Managers and OD practitioners must
think seriously about how to break through this stream of information. One strategy
is to make change information more salient by communicating through a new or
different channel. If most information is delivered through memos and emails,
then change information can be delivered through meetings and presentations.
Another method that can be effective during large-scale change is to deliberately
substitute change information for normal operating information. This sends a
message that changing one’s activities is a critical part of one’s job.

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3. Participation and involvement. One of the oldest and most effective strategies for
overcoming resistance is to involve organization members directly in planning and
implementing change. Participation can lead both to designing high-quality changes
and to overcoming resistance to implementing them.18 Members can provide a
diversity of information and ideas, which can contribute to making the innovations
effective and appropriate to the situation. They also can identify pitfalls and barriers
to implementation. Involvement in planning the changes increases the likelihood
that members’ interests and needs will be accounted for during the intervention.
Consequently, participants will be committed to implementing the changes because
doing so will suit their interests and meet their needs. Moreover, for people having
strong needs for involvement, the act of participation itself can be motivating, leading to greater effort to make the changes work.19
Application 8.1 describes how an OD consultant helped the sexual violence prevention unit of the Minnesota Department of Health generate commitment to a change
process when the unit’s leader left shortly after the change process began.20

8-3 Creating a Vision
The second activity in managing change involves creating a vision of what members
want the organization to look like or become. It is one of the most popular yet least
understood practices in management.21 Generally, a vision describes the core values
and purpose that guide the organization as well as an envisioned future toward which
change is directed. It provides a valued direction for designing, implementing, and assessing organizational changes. The vision also can energize commitment to change by providing members with a common goal and a compelling rationale for why change is
necessary and worth the effort. However, if the vision is seen as impossible or promotes
changes that the organization cannot implement, it actually can depress member motivation. For example, George H. W. Bush’s unfulfilled “thousand points of light” vision was
emotionally appealing, but it was too vague and contained little inherent benefit. In contrast, John Kennedy’s vision of “putting a man on the moon and returning him safely to
the earth” was just beyond engineering and technical feasibility. In the context of the
1960s, it was bold, alluring, and vivid; it provided not only a purpose but a valued direction for the country. Recent research suggests that corporations with carefully crafted
visions can significantly outperform the stock market over long periods of time.22
Creating a vision is considered a key element in most leadership frameworks.23
Organization or subunit leaders are responsible for effectiveness, and they must take an
active role in describing a desired future and energizing commitment to it. In the best
cases, leaders encourage participation in developing the vision to gain wider input and
support. For example, they involve subordinates and others who have a stake in the
changes. The popular media frequently offer accounts of executives who have helped to
mobilize and direct organizational change, including Sergio Marchionne at Fiat and
Louis Gerstner at IBM. Describing a desired future is no less important for people leading change in small departments and work groups than for senior executives. At lower
organizational levels, there are ample opportunities to involve employees directly in the
visioning process.
Developing a vision is heavily driven by people’s values and preferences for what the
organization should look like and how it should function. The envisioned future represents people’s ideals or dreams of what they would like the organization to look like or
become. Unfortunately, dreaming about the future is discouraged in most organizations

application 8 1

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185

MOTIVATING CHANGE IN THE SEXUAL VIOLENCE
PREVENTION UNIT OF MINNESOTA’S
HEALTH DEPARTMENT

A

ddressing the prevention of sexual violence is a complex challenge. Unlike cigarette smoking or automobile accidents,
sexual violence is not only a health issue,
but also a social issue connected to people’s
attitudes, beliefs, norms, and taboos. The sexual violence prevention unit of Minnesota’s
health department decided to undertake a fiveyear strategic planning effort to address the “primary prevention” of sexual violence. Primary
prevention is defined as activities that focus
on preventing sexual violence before it occurs.
While there have been numerous successful
programs focused on dealing with victims or
addressing what happens after an assault,
there was a clear need for primary prevention.
There were two driving forces for the plan.
First, the U.S. Centers for Disease Control had
identified sexual violence as a key health issue
and was providing grants to states for the development of primary prevention plans. Second,
Minnesota was a recognized leader in sexual violence prevention. The health department worked
closely with the Minnesota Coalition Against
Sexual Violence (MNCASA), a primary recipient
of state funding, and other stakeholders who
were working on sexual violence prevention.
This coalition had been meeting for several
years to develop education in primary prevention
and to engage in a cross-sector dialogue on
the issue.
The two primary objectives of the project
were to:
• Create a strategic plan for the primary prevention of sexual violence in the state of
Minnesota.
• Mobilize a broad range of individuals and
organizations to take action in the primary
prevention of sexual violence.
This application describes the activities
involved with motivating change within the sexual violence prevention unit to create the strategic planning process. Application 8.3 describes
the activities associated with managing the

various stakeholders involved with this change
and the large group intervention that kicked off
the strategic planning and implementation effort.

BEGINNING THE PROJECT
The sexual violence prevention unit hired a
local OD consulting firm to facilitate the strategic planning process. Everyone in the unit
believed that strategic planning was the next
right step. Community members wanted
action. In fact, they had stopped meeting in a
dialogue forum because they felt they were
not making progress in addressing the issue
systemically or strategically.
The project got off to a rough start. The day
after the OD consultants began working with the
unit, the unit director resigned. She had been a
major force in bringing the project to fruition, and
her departure represented a key challenge for
the consultants. In the interim, the unit’s program director and administrator stepped in to
provide content leadership with the help of the
director of MNCASA. Her departure also created
a strong need to mobilize the members of the
unit and to recruit the necessary external stakeholders with content knowledge and community
reputation to galvanize action in the community.
To focus the key stakeholders on the
change effort, the OD consultants met with
the departing director to identify a range of community stakeholders to interview. The interviews were critical in building the consultants’
knowledge of the issue and quickly establishing
relationships with key stakeholders. They also
helped identify community members who
could provide leadership on the project.

MOTIVATING COMMITMENT
As part of the effort to reinforce commitment to
the change process, a steering committee was
formed. It consisted of project leaders from the
health department, the OD consultants, and six
community members. This committee was
responsible for identifying and recruiting other

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internal and external stakeholders to participate in
the planning process. They also served as advisors
to the OD consultants on selecting the best forum
to conduct the planning, reviewing draft agendas,
and providing feedback on plan drafts. They were
asked to convene for two meetings as well as provide input on plans and written reports virtually.
All of the steering committee members were
volunteers recruited by the project leaders and OD
consultants after the initial interviews. The OD consultants were part of the identification and recruitment
process because they had formed relationships with
several of the members through previous work and
had established strong rapport through their interviews. The community members of the committee
were chosen not only because of their expertise and
history in the field, locally and nationally, but also
because they had good process skills. Another

criterion for participation was diversity. It was important that this group include members who could
speak for underrepresented groups, such as Native
American, Hispanic, African American, and youth segments. Everyone who was asked to participate
wanted to be part of this effort.
Despite this high level of commitment to the
project, time was a big constraint. To use time
well, the consultants asked for two meetings. In
between meetings, they drafted proposals for the
group to react to, rather than asking members to
decide on the work to be done by the group. When
members could not be at a meeting, the consultants got their input individually, both before and
after the meeting. Because of their commitment
to prevention, all of the steering committee members stayed in close contact with the consultants
and responded promptly to all requests.

because it requires creative and intuitive thought processes that tend to conflict with the
rational, analytical methods prevalent there.24 Consequently, leaders may need to create
special conditions in which to describe a desired future, such as off-site workshops or
exercises that stimulate creative thinking.
Research suggests that compelling visions are composed of two parts: (1) a core
ideology or relatively stable identity that describes the organization’s core values and
purpose and (2) an envisioned future with bold goals and a vivid description of the
desired future state that reflects the specific change under consideration.25

8-3a Describing the Core Ideology
The fundamental basis of a vision for change is the organization’s core ideology. It
describes the organization’s core values and purpose and is relatively stable over time.
Core values typically include three to five basic principles or beliefs that have stood the
test of time and best represent what the organization stands for. Although the vision ultimately describes a desired future, it must acknowledge the organization’s historical
roots—the intrinsically meaningful core values and principles that have guided and will
guide the organization over time. Core values are not “espoused values”; they are the
“values-in-use” that actually inform members what is important in the organization.
The retailer Nordstrom, for example, has clear values around the importance of customer service; toymaker Lego has distinct values around the importance of families;
and the Disney companies have explicit values around wholesomeness and imagination.
These values define the true nature of these firms and cannot be separated from them.
Thus, core values are not determined or designed; they are discovered and described
through a process of inquiry.

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Members can spend considerable time and energy discovering their organization’s
core values through long discussions about organizational history, key events, founder’s
beliefs, the work people actually do, and the “glue” that holds the organization together.26
In many cases, organizations want the core values to be something they are not. For
example, many U.S. firms want “teamwork” to be a core value despite strong cultural
norms and organizational practices that promote individuality.
The organization’s core purpose is its reason for being, the idealistic motivation that
brings people to work each day and gives work meaning.27 A core purpose is not a strategy. Purpose describes why the organization exists and the organization’s understanding
of its image, brand, and reputation; strategy describes how an objective will be achieved.
Research suggests that organization purposes may fall into one of four categories and
that organizations often create a slogan or metaphor that captures the real reason they
are in business.28 Heroism refers to a purpose that exhorts members to do great things.
Dell Computer, Microsoft, and Ford were all founded to change the world for the better.
Henry Ford wanted to “build a machine to improve the world.” Discovery, a core purpose for Apple, Sony, and 3M, refers to an innate desire to learn new things. A third
purpose, altruism, infers a belief in serving others. Disney’s return to prominence in the
late 1980s and 1990s was guided by the essential purpose of “making people happy” and
Whole Foods, Ben and Jerry’s, and The Body Shop all take on the responsibility of serving the greater good. Tata Corporation’s purpose of “what India needs next” has supported their growth for over 100 years. Finally, Berkshire Hathaway and Toyota reflect
the purpose of excellence.
Hatch’s concept of organization identity is similar to purpose and core ideology.29
Identity—the way core values, purpose, brand, and reputation are integrated—provides
guidelines for the strategic choices that will work and can be implemented versus those
that will not work because they contradict the true nature of the organization. Lawler
and Worley suggested that the real power of an organization’s identity was its ability to
consistently support and encourage change even though identity itself remained fairly
stable.30 An envisioned future can be compelling and emotionally powerful to members
only if it aligns with and supports the organization’s core values, purpose, and identity.31

8-3b Constructing the Envisioned Future
The core ideology provides the context for the envisioned future. Unlike core values
and purpose, which are stable aspects of the organization and must be discovered, the
envisioned future is specific to the change project at hand and must be created.
The envisioned future varies in complexity and scope depending on the changes being
considered. A relatively simple upgrading of a work group’s word-processing software
requires a less complex envisioned future than the transformation of a government
bureaucracy.
The envisioned future typically includes the following two elements that can be
communicated to organization members:32
1. Bold and valued outcomes. Descriptions of envisioned futures often include specific
performance and human outcomes that the organization or unit would like to
achieve. These valued outcomes can serve as goals for the change process and standards for assessing progress. For example, BHAGs (Big, Hairy, Audacious Goals) are
clear, tangible, energizing targets that serve as rallying points for organization action.
They can challenge members to meet clear target levels of sales growth or customer
satisfaction, to overcome key competitors, to achieve role-model status in the industry,

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or to transform the organization in some meaningful way. For example, in 1990,
Wal-Mart Stores made a statement of intent “to become a $125 billion company
by the year 2000.” (Revenue in 2012 exceeded $445 billion.) Following the downsizing of the U.S. military budget, Rockwell proposed the following bold outcome for
its change efforts: “Transform this company from a defense contractor into the best
diversified high-technology company in the world.”
2. Desired future state. This element of the envisioned future specifies, in vivid detail,
what the organization should look like to achieve bold and valued outcomes. It is a
passionate and engaging statement intended to draw organization members into the
future. The organizational features described in the statement help define a desired
future state toward which change activities should move. This aspect of the visioning
process is exciting and compelling. It seeks to create a word picture that is emotionally powerful to members and motivates them to change.
Application 8.2 describes how Premier recognized the need for change and built a
vision of the future for their organization.33

8-4 Developing Political Support
From a political perspective, organizations can be seen as loosely structured coalitions of
individuals and groups having different preferences and interests.34 For example, shopfloor workers may want secure, high-paying jobs, and top executives may be interested
in diversifying the organization into new businesses. The marketing department might be
interested in developing new products and markets, and the production department may
want to manufacture standard products in the most efficient ways. These different
groups or coalitions compete with one another for scarce resources and influence.
They act to preserve or enhance their self-interests while managing to arrive at a sufficient balance of power to sustain commitment to the organization and achieve overall
effectiveness.
Given this political view, attempts to change the organization often threaten the balance of power among groups, thus resulting in political conflicts and struggles.35 Individuals and groups will be concerned with how the changes affect their own power and
influence, and they will act accordingly. Some groups will become less powerful; others
will gain influence. Those whose power is threatened by the change will act defensively
and seek to preserve the status quo. For example, they may try to present compelling
evidence that change is unnecessary or that only minor modifications are needed. On
the other hand, those participants who will gain power from the changes will push
heavily for them, perhaps bringing in seemingly impartial consultants to legitimize the
need for change. Consequently, significant organizational changes are frequently accompanied by conflicting interests, distorted information, and political turmoil.
Methods for managing the political dynamics of organizational change are relatively
recent additions to OD. Traditionally, OD has neglected political issues mainly because
its humanistic roots promoted collaboration and power sharing among individuals and
groups.36 Today, change agents are paying increased attention to power and political
activity, particularly as they engage in strategic change involving most parts and features
of organizations. Some practitioners are concerned, however, about whether power and
OD are compatible.
A growing number of advocates suggest that OD practitioners can use power in positive ways.37 They can build their own power base to gain access to other power holders
within the organization. Without such access, those who influence or make decisions

application 8 2

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189

CREATING A VISION AT PREMIER

P

remier (www.premierinc.com) is a leading
health care alliance collectively owned by
more than 200 independent hospitals and
health care systems in the United States.
Together, the owners operate or are affiliated
with nearly 1,500 hospitals and other health
care sites. Premier resulted from the 1995
merger of Chicago-based Premier Health
Alliance, San Diego-based American Healthcare
Systems, and The SunHealth Alliance of
Charlotte, North Carolina. Premier offers a
comprehensive array of services and products
through its companies and business units,
including group purchasing, consulting services,
technology management services, insurance
services, benchmarking and market intelligence
services, and legislative advocacy.
Two and a half years after the organization’s formation, a comprehensive organizational assessment suggested that Premier
had not been successful in establishing a common organizational culture. Many of its services and employees continued to operate in
a fractured or isolated fashion relating largely
to their prior organization and its geographic
location. As a result, Premier’s strategy and
business model were poorly understood, and
more importantly, not well implemented. The
assessment pointed to a growing lack of trust
in the organization. Premier executives conceded that the organization was culturally adrift
and without a well-understood or widely
accepted sense of direction.
Another key finding of the assessment
concerned the organization’s vision. Shortly
after the merger, a new set of values,
mission, and vision statements had been
developed. The statements themselves were
clear and compelling; however, they had been
developed by a relatively small group of
executives. At best, most employees did not
feel much ownership of the values; at worst,
they saw the failure of top management
to behave consistently with the values as evidence that they were not trusted, supported,
or important.

In the fall of 1997, Premier hired Richard
Norling as COO. Norling had been a chief executive at one of the health care systems that
owned Premier, and his arrival signaled the
potential for change and new possibilities. At
his former organization, Norling had initiated
and sustained a comprehensive OD effort,
based on identifying core organizational values
and the behaviors that supported them. The
experience of that health care system had
demonstrated that core values shaped and
accepted by an organization’s employees
could build a deep sense of community in the
organization, and lead to greater levels of trust
and commitment that could be harnessed to
enhance organization performance and effectiveness. Given Premier’s emerging problem,
a similar approach made sense.
In the spring of 1998, Premier executives
determined to address these issues by building
on the values and mission statements that had
been developed earlier. Their intent was to
involve a large number of employees in validating
Premier’s values, specifying the behaviors that
supported them, and identifying ways in which
the values could be integrated into the routines
and processes of the organization—all of which
would (they hoped) infect the organization with a
renewed sense of identity and enthusiasm.
The first step in Premier’s change process
was planning and conducting a three-day
values conference with over 200 employees.
The conference was designed by a team of
employees representing a diagonal slice of
the organization and assisted by an OD practitioner. At the conference, employees examined Premier’s business model and their
organizational culture; developed and recommended a set of core organizational values
for the organization; crafted an envisioned
future; and identified and proposed strategies
for employee involvement, integration, and
organization transformation companywide.
Following the conference, the team of
Premier employees who had planned the
meeting was asked to become a permanent

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committee, charged with refining and implementing plans and recommendations that the conference participants had generated.
Ultimately, input was obtained from over 60%
of the workforce and 16 actions were recommended and approved by senior management.
Some of those actions included:
• Incorporating the values into Premier’s performance management/performance appraisal
system
• Incorporating the values into the recruitment and
selection process by developing sample interview questions for use by hiring managers

aimed at helping them learn whether prospective
employees would be a good match to Premier’s
organizational culture
• Instituting an annual meeting of approximately
200 employees from all parts of Premier modeled after the 1998 values conference. The
agenda would be focused on business issues,
strategy, and organizational culture and values.
Rotate those invited so that every Premier
employee has an opportunity to attend every
three to five years.
The outcome of the vision and values effort
follows:

FOUNDATION STATEMENTS
Core Ideology
Core Values
• Integrity of the individual and the enterprise
• A passion for performance and a bias for
action, creating real value for all stakeholders,
and leading the pace
• Innovation: seeking breakthrough opportunities,
taking risks, and initiating meaningful change
• Focus on people: showing concern and respect
for all with whom we work, building collaborative relationships with the community, our
customers, coworkers, and business associates

Core Purpose
To improve the health of communities
Core Roles of the Enterprise
• Improve quality, reduce costs
• Improve financial health
• Create value for owners
• Improve organizational health
• Facilitate knowledge transfer
• Grow the enterprise

Envisioned Future
10–30 Year Goal
Premier’s owners will be the leading health care systems in their markets, and, with them,
Premier will be the major influence in reshaping health care
Vivid Description
By the year 2020, we will have changed the world’s
view of U.S. health care to “the best and most costeffective” at sustaining the good health of populations. In the United States, the health care industry
will be considered the best managed and most
innovative of all the economic sectors.
Across the nation, our owners, physicians, and
other allies will lead the local transformations that
are the building blocks of a reshaped health care
system. These transformations will begin to make
public health and health services indistinguishable,

engaging citizens and civic resources in endeavors
that attack the causes of illness and injury. Through
efforts that go far beyond providing treatment,
people will have a sense of responsibility for their
own personal health and the health of their
communities.
Together in Premier, we will invent new and
superior models of delivering health services, and
we will leverage the size, linkages, and resources
of Premier to deliver those services to more
people, at a lower cost and higher quality, than
any others will. Our owners will operate at costs

CHAPTER 8 MANAGING CHANGE

in the lowest quarter among all similar organizations at quality levels in the highest quarter.
We will research and use the most effective and
seamless clinical approaches to achieve superior
health outcomes and increased values. Our competitive edge will be the unmatched ability to
transfer and act on our collective experience and
innovation.
Our owners will earn recognition as the most
valued community resource for health. As a result of

191

their efforts, “Premier” will be viewed as the hallmark of quality and value that all others seek to
emulate. When people see our emblem, they will
associate it with health care improvement and
advances in health status.
Demonstrating a better way and supported by
our constituencies, we will build consensus for
national policy directions that stimulate and reward
health and healthy communities.
We will indeed be premier.

may not have the advantage of an OD perspective. OD practitioners can use power strategies that are open and aboveboard to get those in power to consider OD applications.
They can facilitate processes for examining the uses of power in organizations and help
power holders devise more creative and positive strategies than political bargaining,
deceit, and the like. They can help power holders confront the need for change and can
help ensure that the interests and concerns of those with less power are considered.
Although OD professionals can use power constructively in organizations, they probably
will continue to be ambivalent and tense about whether such uses promote OD values
and ethics or whether they represent the destructive, negative side of power. That tension
seems healthy, and we hope that it will guide the wise use of power in OD.
As shown in Figure 8.2, managing the political dynamics of change includes the following activities: assessing the change agent’s power, identifying key stakeholders, and
influencing stakeholders.
FIGURE 8.2
Sources of Power and Power Strategies

SOURCE: Power and Organization Development: Mobilizing Power to Implement Change (Prentice
Hall Organizational Development Series), 1st Ed. By Greiner, Larry E.; Schein, Virginia E., ISBN
0201121859. © 1988 Addison-Wesley Publishing Company Inc.

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PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

8-4a Assessing Change Agent Power
The first task is to evaluate the change agent’s own sources of power. This agent may be
the leader of the organization or department undergoing change, or he or she may be the
OD practitioner if professional help is being used. By assessing their own power base,
change agents can determine how to use it to influence others to support changes.
They also can identify areas in which they need to enhance their sources of power.
Greiner and Schein, in the first OD book written entirely from a power perspective, identified three key sources of personal power in organizations (in addition to
one’s formal position): knowledge, personality, and others’ support.38 Knowledge
bases of power include having expertise that is valued by others and controlling important information. OD professionals typically gain power through their expertise in
organizational change. Personality sources of power can derive from change agents’
charisma, reputation, and professional credibility. Charismatic leaders can inspire
devotion and enthusiasm for change from subordinates. OD consultants with strong
reputations and professional credibility can wield considerable power during organizational change. Others’ support can contribute to individual power by providing access
to information and resource networks. Others also may use their power on behalf of
the change agent. For example, leaders in organizational units undergoing change can
call on their informal networks for resources and support, and encourage subordinates
to exercise power in support of the change.

8-4b Identifying Key Stakeholders
Having assessed their own power bases, change agents should identify powerful individuals and groups with an interest in the changes, such as staff groups, unions,
departmental managers, and top-level executives. These key stakeholders can thwart
or support change, and it is important to gain broad-based support to minimize the
risk that a single interest group will block the changes. As organizations have become
more global, networked, and customer-focused, and change has become more strategic,
it is also important to identity key external stakeholders. Key customers, regulatory
agencies, suppliers, and the local community, for example, can exert considerable influence over change.
Identifying key stakeholders can start with the simple question, “Who stands to gain
or to lose from the changes?” Once stakeholders are identified, creating a map of their
influence may be useful.39 The map could show relationships among the stakeholders in
terms of who influences whom and what the stakes are for each party. This would provide change agents with information about which people and groups need to be influenced to accept and support the changes.

8-4c Influencing Stakeholders
This activity involves gaining the support of key stakeholders to motivate a critical mass
for change. There are at least three major strategies for using power to influence others
in OD: playing it straight, using social networks, and going around the formal system.40
Figure 8.2 links these strategies to the individual sources of power discussed above.
The strategy of playing it straight is very consistent with an OD perspective, and thus
it is the most widely used power strategy in OD. It involves determining the needs of
particular stakeholders and presenting information about how the changes can benefit
them. This relatively straightforward approach is based on the premise that information
and knowledge can persuade people about the need and direction for change. The success

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193

of this strategy relies heavily on the change agent’s knowledge base. He or she must have
the expertise and information to persuade stakeholders that the changes are a logical
way to meet their needs. For example, a change agent might present diagnostic data,
such as company reports on productivity and absenteeism or surveys of members’ perceptions of problems, to generate a felt need for change among specific stakeholders.
Other persuasive evidence might include educational material and expert testimony,
such as case studies and research reports, demonstrating how organizational changes can
address pertinent issues.
The second power strategy, using social networks, is more foreign to OD and
involves forming alliances and coalitions with other powerful individuals and groups,
dealing directly with key decision makers, and using formal and informal contacts to
gain information. In this strategy, change agents attempt to use their social relationships
to gain support for changes. As shown in Figure 8.2, they use the individual power base
of others’ support to gain the resources, commitment, and political momentum needed
to implement change. This social networking might include, for example, meeting with
other powerful groups and forming alliances to support specific changes. This would
likely involve ensuring that the interests of the different parties—labor and management,
for example—are considered in the change process. Many union and management cooperative efforts to improve performance and reduce costs involve forming such alliances.
This strategy also might include using informal contacts to discover key roadblocks to
change and to gain access to major decision makers who need to sanction the changes.
The power strategy of going around the formal system is probably least used in OD
and involves purposely circumventing organizational structures and procedures to get
the changes made. Existing organizational arrangements can be roadblocks to change,
and working around the barriers may be more expedient and effective than taking the
time and energy to remove them. As shown in Figure 8.2, this strategy relies on a strong
personality base of power. The change agent’s charisma, reputation, or professional credibility lend legitimacy to going around the system and can reduce the likelihood of negative reprisals. For example, managers with reputations as winners often can bend the
rules to implement organizational changes. Their judgment is trusted by those whose
support they need to enact the changes. This power strategy is relatively easy to abuse,
however, and OD practitioners should consider carefully the ethical issues and possible
unintended consequences of circumventing formal policies and practices.
Application 8.3 shows how Minnesota’s sexual violence prevention unit recruited
external and internal stakeholders into the strategic planning process. They used the
social networks of people with clear interests in the subject to support the planning and
implementation of change.

8-5 Managing the Transition
Implementing organization change involves moving from an existing organization state
to a desired future state. Such movement does not occur immediately but, as shown in
Figure 8.3, instead requires a transition period during which the organization learns how
to implement the conditions needed to reach the desired future. Beckhard and Harris
pointed out that the transition may be quite different from the present state of the organization and consequently may require special management structures and activities.41
They identified three major activities and structures to facilitate organizational transition:
activity planning, commitment planning, and change-management structures. A fourth
set of activities involves managing the learning process during change.

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PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

A

pplication 8.1 described the beginning of
the sexual violence prevention unit’s project to develop a five-year plan for primary
prevention. The plan’s unique purpose was
to mobilize statewide efforts to prevent sexual
violence before it occurs. In this application, the
process that the committee used to identify and
manage the political stakeholders—both internal
and external—is described.

IDENTIFYING AND RECRUITING
STAKEHOLDER PARTICIPATION
The steering committee interviewed representatives from various stakeholder groups, coalitions,
and state agencies. The results of the interviews
suggested (1) a need for broad involvement, especially from underrepresented groups, such as
communities of color, immigrant communities,
gay and lesbian groups, and youth and (2) a desire
among those involved to move from dialogue and
education toward taking collective action.
In response to these data, the OD consultant proposed a two-day strategic planning
retreat for a large group of stakeholders. This
format was selected because of the strong
desire voiced in the interviews to get to action.
The steering committee confirmed that this
approach was preferable to stretching the planning over weeks of shorter meetings.
The unit administrator was essential in pulling together the list of stakeholders who were
invited to participate. The goal was to get as
many stakeholders as possible involved, and
she knew the majority of people who were
active in sexual violence prevention work in
Minnesota. The steering committee reviewed
and augmented the initial list to create a diverse
group of 80 stakeholders to invite to the retreat.
This group included people from the many
groups, coalitions, state agencies, and underrepresented communities across the state.
Invitations to attend the retreat were sent
out via email. The OD consultants crafted the
invitation and the Health Unit Director sent

them out. The steering committee members
also contacted personally any invitees they
knew and encouraged them to attend. The
Health Unit Administrator was instrumental in
communicating with those invited. Follow-up
reminders and phone calls were made to
ensure that an RSVP was received from everyone invited to attend. In addition, there were
regular communications on the progress of the
planning effort in newsletters, meetings, and
conferences, communication channels that
were already in place. An important constraint
to this process was the nature of the physical
facility that was to hold the meeting (see
below). The steering committee had to balance
the need for broad participation with the limits
of the meeting space. One tool they used was
to limit participation to the first 50 people who
signed up. This encouraged people to sign up
early to secure their space at the retreat.
Because primary sexual violence prevention was a central concern to most of these
stakeholders, there was little resistance in
terms of interest in participating. Other hurdles, however, had to be addressed, including
the costs associated with attending the conference, travel issues, and the time to attend. The
health department was able to secure funding
to cover participants’ costs. However, the
steering committee had to work hard to find a
meeting site that was within commuting distance from many cities and able to provide
rooms for those traveling from afar. In the
end, a Catholic retreat center fit many of the
requirements of the conference, but presented
another set of challenges. For a few stakeholder groups, there were negative perceptions about the perceived role of the church
in sexual violence; the location lacked air conditioning; and there was no handicap access.
The planners of the project were also able
to build on several efforts that the health
department had previously used to gain stakeholder involvement. For several years, the

application 8 3

DEVELOPING POLITICAL SUPPORT FOR THE STRATEGIC
PLANNING PROJECT IN THE SEXUAL VIOLENCE
PREVENTION UNIT

CHAPTER 8 MANAGING CHANGE

department hosted a forum called the Sexual Violence Prevention Action Council. This group had
been engaged in education and dialogue on the
issue. Diverse stakeholders were already coming
together around the issues and had adopted a
framework developed by the Prevention Institute
called the “Spectrum of Prevention.” Without this
foundational work, it would have been risky to
attempt to get stakeholders aligned around a strategic plan in a two-day meeting.
Finally, another tool the steering committee
initiated for gaining involvement was an online survey. This survey was sent to all invitees so that
even those who could not attend the retreat
would have a voice in the planning. The survey
was also sent to others who were not invited to
the retreat. They were encouraged to pass the survey on to other stakeholders who might be interested in this plan. Close to 100 people responded
to the survey. A majority of respondents provided
contact information and volunteered to help with
the plan implementation.

195

process would work. They agreed to meet during
lunch on the second day to review the work and to
determine how to move the group toward action.
During the lunch meeting, the steering committee decided that the strategies were not clear
enough to create teams at the meeting. While the
group was concerned about losing people’s action
commitment, they believed it was more important
to have teams that made strategic sense and utilized limited resources well. After lunch, the strategies and success indicators were posted on the
wall. Consultants then used a multivoting process
to identify six priorities for action.
Following the retreat, the OD consultants
developed a proposed structure for action around
these six priorities and sent this to the steering
committee members for review. Their feedback
was incorporated into an action structure that
was included in the written strategic plan. Health
department staff members then took over the planning and launching of these teams.

SUSTAINING MOMENTUM
CONDUCTING THE MEETING
Fifty invitees were able to attend the planning
retreat. Using a large-group OD process over two
days, participants worked together to create the
framework of a strategic plan. Part of the planned
agenda was to have stakeholders sign up for an
action team toward the end of the two days. The
dilemma faced during the session was in trying to
get both focused strategies and a very diverse group
of stakeholders to take action. Actions would need
to occur both at the state level and within individual
communities. Going into the meeting, the steering
committee was not sure that the team sign-up

When the strategic planning project had begun, the
head of the sexual violence prevention unit had left
the organization, and the position had gone unfilled
throughout the project. Just prior to the retreat, a
well-known state leader in sexual violence work,
Patty Wetterling, agreed to fill the position. Seventeen years earlier, Wetterling’s young son had been
abducted in their small Minnesota town and was
never found. Her work in establishing new laws
regarding abductions as an advocate and state legislator, as well as a run for the U.S. Senate, made
Wetterling a perfect choice to provide statewide
leadership in implementing the strategic plan.

FIGURE 8.3

© Cengage Learning

Organization Change as a Transition

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PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

8-5a Activity Planning
Activity planning involves making a road map for change, citing specific activities and
events that must occur if the transition is to be successful. It should clearly identify, temporally orient, and integrate discrete change tasks, and it should explicitly link these tasks
to the organization’s change goals and priorities. Activity planning also should gain topmanagement approval, be cost-effective, and remain adaptable as feedback is received
during the change process.
An important feature of activity planning is that visions and desired future states
can be quite general when compared with the realities of implementing change. As a
result, it may be necessary to supplement them with midpoint goals as part of the activity plan.42 Such goals represent desirable organizational conditions between the current
state and the desired future state. For example, if the organization is implementing continuous improvement processes, an important midpoint goal can be the establishment of
a certain number of improvement teams focused on understanding and controlling key
work processes. Midpoint goals are clearer and more detailed than desired future states,
and thus they provide more concrete and manageable steps and benchmarks for change.
Activity plans can use midpoint goals to provide members with the direction and security they need to work toward the desired future.

8-5b Commitment Planning
This activity involves identifying key people and groups whose commitment is needed
for change to occur and formulating a strategy for gaining their support. Although commitment planning is generally a part of developing political support, discussed above,
specific plans for identifying key stakeholders and obtaining their commitment to change
need to be made early in the change process.

8-5c Change-Management Structures
Because organizational transitions tend to be ambiguous and to need direction, special structures for managing the change process need to be created. These management structures
should include people who have the power to mobilize resources to promote change, the
respect of the existing leadership and change advocates, and the interpersonal and political
skills to guide the change process. Alternative management structures include the following:43
• The chief executive or head person manages the change effort.
• A project manager temporarily is assigned to coordinate the transition.
• A steering committee of representatives from the major constituencies involved in
the change jointly manages the project.
• Natural leaders who have the confidence and trust of large numbers of affected
employees are selected to manage the transition.
• A cross section of people representing different organizational functions and levels
manages the change.
• A “kitchen cabinet” representing people whom the chief executive consults with and
confides in manages the change effort.

8-5d Learning Processes
Most organization changes involve the acquisition of new knowledge and skills that support
new behaviors. Research at the Center for Effective Organizations suggests that change can

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197

be implemented more quickly when leaders consciously design learning processes into the
transition.44 Four practices, supported by a continuous dialogue and conversation process,
were associated with accelerated transitions. The first learning practice, creating a systems
view of the organization, involves creating a model of work and change that allows individual organizational members to see how their efforts contribute to organizational functioning
and performance. When people can see how their efforts support change, it is easier
for them to pick up new skills and knowledge; there is a context created that demands
new behaviors.
The second learning practice, creating shared meaning, describes the use of models,
language, tools, and processes that provide people with a way to making sense of the
change. Most organization change is accompanied by considerable anxiety as the organization begins moving from the known to the unknown. By creating common ways of
viewing the change, work, customers, and the new organization, people develop a shared
view of the new reality. This shared view lowers anxiety and allows organization members to learn new skills and behaviors more quickly.
Engaging in “after-action reviews” or other processes that reflect on change experience
is the third learning practice. In this activity, initial attempts to try out new activities, new
processes, or new behaviors are assessed and reviewed. Organization members get to ask,
“how well did we do?” and “what can we learn from that?” The answers to these questions
are then used to redesign or redefine correct behavior. When people get timely and supportive feedback on new behaviors, their ability to learn more quickly increases.
The final learning practice involves decentralizing implementation processes and decisions to the lowest levels possible in the organization, what the researchers called “local
self-design.” Complex organization change contains too many variables, uncertainties, and
local contingencies to be completely programmed from the top of the organization. By
allowing organizational units in the lower organization levels to be responsible for the
implementation of change, the overall change is accelerated. It is important in this process
of local self-design to ensure that the organizational units have a clear understanding of
their boundaries. That is, senior leaders in the organization need to be clear about what
resources are available for change, the timeline within which the change must occur, and
the things that cannot be changed in achieving the change goals.
These four learning practices are held together by conversation and dialogue. More
than any other single practice, it is the opportunity to discuss the organization change—
to create shared meaning, to understand how each individual fits into the change, to
reflect on experience, and to discuss the change at local levels—that integrates the practices and accelerates implementation. Leading change, therefore, is largely a function of
creating opportunities for organization members to discuss change activities.
Application 8.4 shows how Hewlett-Packard and Compaq used all of these techniques
to manage the integration activities associated with this acquisition. Despite research indications of a high proportion of failed acquisition processes, the extraordinary detail used in
this process, and the bank of institutionalized knowledge (see Application 9.2), the HP–
Compaq integration process received positive reviews.45

8-6 Sustaining Momentum
Once organizational changes are under way, explicit attention must be directed to sustaining energy and commitment for implementing them. The initial excitement and
activity of changing often dissipate in the face of practical problems of trying to learn

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PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

I

n the Fall of 2001, Carly Fiorina announced
HP’s intent to acquire Compaq Corporation.
Over the next nine months, a proxy fight
ensued as many shareholders and employees challenged the wisdom of the proposed
change. Wall Street analysts and organization
researchers too debated whether or not the
acquisition made sense, especially given the
size of the change and the rather dismal history
of performance in acquisition cases. Scott
McNealy, chief executive of rival Sun Microsystems Inc., predicted “a slow-motion
collision of two garbage trucks.”
Within days of the initial announcement,
however, Fiorina and Michael Capellas, then
CEO of Compaq, met with Webb McKinney, a
19-year HP veteran, and Jeff Clarke, Compaq’s
CFO and survivor of Compaq’s acquisition of
Digital Equipment Corporation. These two
men were named to lead the transition process, one that would involve redeploying a
combined 145,000 workers in 160 countries
including more than 15,000 layoffs, untangling
163 overlapping product lines, and producing
$2.5 billion dollars in promised cost reductions.
It was no accident that McKinney and Clarke
were asked to lead the integration team. Both
were senior managers with substantial followings and excellent reputations. Days after their
initial meeting, they began recruiting managers
in equal numbers; Clarke rounded up Compaq
talent and McKinney lined up their HP matches.
Within weeks of the merger’s announcement,
the integration group, called the “clean team,”
had 500 members; by March 2002, more than
900. Even after the merger closed in May 2002,
it kept growing, peaking at more than 1,000 fulltime employees. By establishing such a huge
body of outstanding managers and reassuring
them that their jobs would be safe even if the
merger failed, Clarke and McKinney were able to
coax them to share in confidence everything
they knew. It also kept most of them motivated
to stay—another critical benchmark.
In addition to getting the right people on
board, McKinney and Clarke set up an assembly

line for decision making. Their research on successful and unsuccessful acquisitions and
Clarke’s experience with the Digital acquisition
convinced them that slow decision making and
the lack of a clear decision-making process was
like a cancer in the transition process. In
response, they created the “adopt and go”
strategy: Get cross-company pairs of managers
to meet daily to determine the best choice or
best course of action on any particular issue.
Weekly meetings kept the pace fast. If any
issues couldn’t be resolved by the teams,
McKinney and Clarke would jump in. If those
two couldn’t resolve the impasse, they’d pass
it to a committee chaired by Fiorina.
In addition to getting the right people on
board and setting up a decision process built
for speed, the transition team created activity
plans for the key issues facing the integration,
including people, products, culture, Day-one
activities, and day-to-day operations. Excerpts
and examples from some of those plans are
reviewed below.
• The “adopt and go” process was used to
decide which products to keep and which to
discontinue. At weekly presentations with
McKinney and Clarke, managers had to
offer up one for elimination. In contrast to
Compaq’s merger with Digital, HP executives made quick product decisions and
every week pored over progress charts
with red, green, and yellow markers to
review how each product exit was proceeding. Red and yellow markers indicated a
task was troubled; green signaled a task
going well. In four months, a road map for
product lines emerged and helped to close
redundant warehouses and factories, ultimately saving $500 million in procurement
costs. In the end, while many Compaq products beat out HP’s, such as Compaq’s iPac
over HP’s Jornada, the HP brand survived.
• The “adopt and go” process also helped
HP make the hard decisions about personnel appointments. HP appointed its top

application 8 4

TRANSITION MANAGEMENT IN THE HP–COMPAQ
ACQUISITION

CHAPTER 8 MANAGING CHANGE

three tiers of executives before the acquisition
was finalized and made new levels of appointments every few weeks. While not perfect—
rumors that Compaq people were favored in
the sales organization—Clarke contends that
all decisions were made “by the book.”
• HP created a team to deal specifically with
melding the corporate cultures and hired consultants to document the differences. To address
perceptions that Compaq employees were
“shoot from the hip cowboys” and that HP
staff members were “bureaucrats,” the team
created a series of cultural workshops. They
were designed to identify the various cultures
and subcultures, and then integrate them. For
example, key sales managers and about two
dozen salespeople from both HP and Compaq
held a workshop designed to address sales integration and transition issues. Many attendees
first looked at each other suspiciously. Following
some ice-breaker exercises, however, an HP
representative talked about how HP had been
working with key customer SBC, the telecommunications company. That was followed by a
Compaq rep discussing how it sold to SBC.
Then the big group drew up a 100-day work
plan for selling to SBC in the future, including
a weekly conference call for the team every
Friday. The progress from these sessions was
tracked by a team of 650 part-time internal “cultural consultants,” who also continued in their
normal jobs at the company.
• The cultural workshops delivered in the first
quarter after the deal was signed set the
stage for further cultural integration. The workshops welcomed everyone to the new team,
described the HP business, HP’s values and
operating models, the roles and objectives
of different groups, and how people were

199

expected to work together. All of this material
was pushed out into the HP market before the
launch, inviting a few thousand of the top HP
managers to an orientation and education session on what to do, how to communicate, and
the details of the new HP and their roles in it.
• The clean team also made extensive “Day-one”
plans. Day-one readiness included plans to
address customers, issues of leadership and
structure, and internal administrative issues.
The new HP was launched with everyone on
the same email, not a paycheck missed, and
every sign changed the morning of launch day.
Customers participated heavily in the transition
process. Customer councils, interviews,
research, information sessions, education, and
other data were included in the knowledge transfer to groups that faced the customer. The goto-market plans were detailed, with playbooks
given to each group manager who touched the
customers, so that on launch day they knew
what to do, what to say to a customer, where
to get information. Each customer was given an
HP buddy from the same level so that he or she
could contact that person and get whatever information the customer needed. There was an
enormous amount of detail, down to the script
of what to say, what answers to give to specific
questions, where to get further information, and
how to transition an inquiry to the right person.
By most measures, this transition work paid
off: HP met the integration goals that Chairman
and Chief Executive Carleton S. Fiorina set for the
merged company. The biggest of these was cost
savings, which surpassed expectations. By mid2003, HP said it saved $734 million—14% more
than projected—from payroll cuts and better terms
with its suppliers.

new ways of operating. A strong tendency exists among organization members to return
to old behaviors and well-known processes unless they receive sustained support and
reinforcement for carrying the changes through to completion. In this section, we present approaches for sustaining momentum for change. The subsequent tasks of assessing
and stabilizing changes are discussed in Chapter 9. The following five activities can help

200

PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

to sustain momentum for carrying change through to completion: providing resources
for change, building a support system for change agents, developing new competencies
and skills, reinforcing new behaviors, and staying the course.

8-6a Providing Resources for Change
Implementing organization change generally requires additional financial and human
resources, particularly if the organization continues day-to-day operations while trying to change itself. These extra resources are needed for such change activities as
training, consultation, data collection and feedback, and special meetings. Extra
resources also are helpful to provide a buffer as performance may drop during the
transition period. Organizations can underestimate seriously the need for special
resources devoted to the change process. Significant organizational change invariably
requires considerable management time and energy, as well as the help of OD consultants. A separate “change budget” that exists along with capital and operating budgets
can earmark the resources needed for training members in how to behave differently
and for assessing progress and making necessary modifications in the change program.46 Unless these extra resources are planned for and provided, meaningful change
is less likely to occur.

8-6b Building a Support System for Change Agents
Organization change can be difficult and filled with tension not only for participants
but also for change agents as well.47 They often must give members emotional support,
but they may receive little support themselves. They often must maintain “psychological distance” from others to gain the perspective needed to lead the change process.
This separation can produce considerable tension and isolation, and change agents
may need to create their own support system to help them cope with such problems.
A support system typically consists of a network of people with whom the change
agent has close personal relationships—people who can give emotional support, serve
as a sounding board for ideas and problems, and challenge untested assumptions. For
example, OD professionals often use trusted colleagues as “shadow consultants” to help
them think through difficult issues with clients and to offer conceptual and emotional
support. Similarly, a growing number of companies, such as Procter & Gamble, The
Hartford, and Kaiser Permanente, are forming internal networks of change agents to
provide mutual learning and support.

8-6c Developing New Competencies and Skills
Organizational changes frequently demand new knowledge, skills, and behaviors from
organization members. In many cases, the changes cannot be implemented unless members gain new competencies. For example, employee involvement programs often require
managers to learn new leadership styles and new approaches to problem solving. Change
agents must ensure that such learning occurs. They need to provide multiple learning
opportunities, such as traditional training programs, on-the-job counseling and coaching,
and experiential simulations, covering both technical and social skills. Because it is easy
to overlook the social component, change agents may need to devote special time and
resources to helping members gain the social skills required to implement changes.

CHAPTER 8 MANAGING CHANGE

201

As part of McKesson’s commitment to quality, the corporation identified specially
selected high performers to become Six Sigma black belts and then promoted them
accordingly to signal the importance of these skills and knowledge in career planning.
In addition, senior managers in all of the divisions are required to attend training that
builds new problem-solving skills, team behaviors, and a commitment to the quality
philosophy.48

8-6d Reinforcing New Behaviors
In organizations, people generally do those things that bring them rewards. Consequently,
one of the most effective ways to sustain momentum for change is to reinforce the kinds of
behaviors needed to implement the changes. This can be accomplished by linking formal
rewards directly to the desired behaviors. For example, Integra Financial encouraged more
teamwork by designing a rewards and recognition program in which the best team players
got both financial rewards and management attention, and a variety of behaviors aimed at
promoting self-interest were directly discouraged.49 (Chapter 15 discusses several rewardsystem interventions.) In addition, desired behaviors can be reinforced more frequently
through informal recognition, encouragement, and praise. Perhaps equally important are
the intrinsic rewards that people can experience through early success in the change effort.
Achieving identifiable early successes can make participants feel good about themselves
and their behaviors, and thus reinforce the drive to change.

8-6e Staying the Course
Change requires time, and many of the expected financial and organizational benefits
from change lag behind its implementation. If the organization changes again too
quickly or abandons the change before it is fully implemented, the desired results may
never materialize. There are two primary reasons that managers do not keep a steady
focus on change implementation. First, many managers fail to anticipate the decline in
performance, productivity, or satisfaction as change is implemented. Organization members need time to practice, develop, and learn new behaviors; they do not abandon old
ways of doing things and adopt a new set of behaviors overnight. Moreover, change
activities, such as training, extra meetings, and consulting assistance, are extra expenses
added onto current operating expenditures. There should be little surprise, therefore, that
effectiveness declines before it gets better. However, perfectly good change projects often
are abandoned when questions are raised about short-term performance declines.
Patience and trust in the diagnosis and intervention design are necessary.
Second, many managers do not keep focused on a change because they want to
implement the next big idea that comes along. When organizations change before they
have to, in response to the latest management fad, a “flavor-of-the-month” cynicism can
develop. As a result, organization members provide only token support to a change
under the (accurate) notion that the current change won’t last. Successful organizational
change requires persistent leadership that does not waver unnecessarily.
Application 8.5 describes the implementation of an engagement and innovation process at the RMIT University Library in Australia. After initial interventions were made, a
midterm review suggested additional changes that were designed to sustain the change
process’s momentum.50

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PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

R

MIT University is a large tertiary educational institution located in Melbourne
Australia. The university has more than
75,000 students, including approximately
16,000 students attending an off-shore campus
or studying with partner institutions. Australian
education is undergoing rapid change in
response to various government initiatives, the
change to a “demand-driven” system, and a
general tightening of funding. These pressures
have resulted in the need for more innovation in
the education process and increased leadership
capacity to support these changes.
In addition to the changes in the broader
education environment, the large amount of
technological change in the information industry
provided the library management and staff an
important context and encouragement to innovate and change. The most direct and obvious
indicator of the changing role of the library
was the steady drop in its traditional form of
service—loaning out books. Despite a 33%
increase in students between 2000 and 2010,
the number of book loans per student declined
from 10.8 to 5.7. Other indicators of library use
also changed, including a shift from long, indepth reference questions from faculty and students to shorter and more specific inquiries.
Engaged staff and confident leaders were
needed to adapt to changed patterns of use, to
meet changing user expectations, and to envisage and implement new approaches to service.
However, input from a broad leadership group
formed inside the library and an organizationwide climate survey, which provided results at
unit level, indicated that library staff engagement levels were below desirable levels.
Over the last five years, the RMIT University
Library has adopted strategies that were designed
to increase and sustain employee engagement
and levels of innovation. The library’s initial
approach involved four interventions: leadership
development, specific purpose working groups,
cross unit work experiences, and increased
involvement in professional associations.

LEADERSHIP DEVELOPMENT
As part of a broader University-level leadership development program—leadRMIT—the
RMIT University Library worked to strengthen
its leadership capacity. Since 2008, the library
has recognized 18 to 20 staff as a “leadership” group. The group identified the positive
and negative elements of the library’s existing
culture. Desirable changes to the culture were
then identified and a variety of leadership
development activities were provided to
equip managers to support the agreed direction. This included participating in the leadRMIT courses which involved several full-day
sessions with expert external facilitators over
a few months. In addition, survey instruments
that identified the leadership skills and
emotional competencies of the managers
provided insights into the approaches and
leadership styles that supported staff engagement. The library arranged sessions to
address specific people management skill
needs. After the initial batch of training, a
round table was formed as an ongoing opportunity to share insights gained from professional reading, conferences, and other
sources, and to discuss leadership and management issues.

THE CUE PROGRAM
As in any large library, there was a tendency
towards a culture of specialization in the workplace. Staff in the loans area, for example, had
little knowledge or experience in the technical
service areas, and those in technical service
areas tended not to have experience working
with library users. To overcome this “silo effect”
and build a more flexible workforce, cross unit
work experience opportunities (called “CUEs”)
were instituted in 2008. Under this system, managers were invited to create training opportunities that were then placed on an internal
register. A CUE was initiated by a librarian
expressing interest in an opportunity that was

application 8 5

SUSTAINING CHANGE AT RMIT UNIVERSITY LIBRARY
IN MELBOURNE, AUSTRALIA

CHAPTER 8 MANAGING CHANGE

mediated by the staff development librarian. Four categories of CUEs were defined, including:
1. Short, half-day opportunities over a three-day
period were primarily aimed at staff in their
first two years of employment to enhance
cross unit cooperation.
2. A shadowing assignment provided a shortterm opportunity to gain insight into another’s
work, often where actually doing the work was
not feasible.
3. Longer one-day/week for six months opportunities promoted multiskilling and workforce
flexibility.
4. Full-time immersion experiences over four to eight
weeks provided an opportunity to deepen and
enhance multiskilling and workforce flexibility.

SPECIFIC PURPOSE WORKING GROUPS
A variety of specific working groups were created to
encourage more open and innovative approaches to
the changing environment. For example, the New
Professionals Group was created with the intention
of entrenching a positive organizational culture and
developing organizational savvy and capability. It
was hoped that the formation of this group would
support the less-experienced professionals to act as
change agents. Similarly, the Innovative Librarians
or “Innovatives” group focused on exploring new
technologies, communicating these to staff, and
making recommendations as to how these might
be used. One of the challenges in terms of the
impact of this group was that the members were
in relatively low-influence positions in terms of traditional hierarchy and they often lacked strong advocacy skills and confidence.

INVOLVEMENT IN PROFESSIONAL
ASSOCIATIONS
To maximize innovative activity requires buy-in
which extends beyond leaders and select individuals. As a result, the university librarian promoted
involvement in professional associations and led by
example. Library staff were encouraged and supported to participate in professional activities,
including attending and presenting at meetings
and conferences, writing news items and articles,
and undertaking study tours.

203

Although every intervention ideally should
receive a separate and formal assessment, several indicators were used to sense implementation success and suggest follow-on activities. For
example, a management skills audit undertaken in
late 2010 and early 2011 affirmed significant progress in the overall confidence levels of managers
regarding their people management skills. Anecdotal evidence, evaluation forms provided by participants in the CUE program, and the ongoing
commitment of managers to create and support
the scheme indicated that the experience was
valuable for the staff member and productive
from the manager’s perspective. Finally, the
impact of participation in cross unit projects and
the specific purpose groups had clearly had positive impact on participants.
To sustain the staff’s engagement and to
encourage additional innovation at the library, a
simple innovation process was created and was
supported by an individual and team development
program.

A MODEL OF INNOVATION
The RMIT University Library innovation process
was modeled after popular processes developed
by IDEO as well as library specific processes
located through benchmarking efforts. In itself the
model was far from novel, but its simple “generate, develop and deploy” labels provided a common language for units and staff across the
library and served as a basis for skill development
in support of innovation.
For example, a short-term specific-purpose
working group was formed to select and describe
idea generation techniques considered appropriate
to the RMIT University Library. This group also developed approaches for strengthening ideas. They
wanted to avoid “idea assassination” where ideas
were recommended without adequate thought and
to ensure that good ideas were as well presented as
possible before formal approvals were sought. This
necessitated clarifying criteria used to decide
whether or not to accept and implement suggestions, and reaching agreement on a template for
making suggestions and providing feedback. To
ensure this work was not isolated from reality, techniques were piloted on current library projects.

204

PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

INDIVIDUAL AND TEAM DEVELOPMENT
To support broader individual and team skill
development, the library adopted a team management profile process. Staff members completed an online survey and then participated in
workshops to understand the sources of team
effectiveness, to gain insights into and appreciation of diverse approaches to work, to assess
team strengths weaknesses and priorities, and
to take steps to enhance effectiveness. While
the workshops did not place a major focus on
the link between team effectiveness and innovation, the team management profiles and
workshop experiences laid an important foundation for improving innovation levels by identifying individual work preferences, affirming the
value of each person’s unique contribution,
increasing understanding between individuals
which may increase levels of trust, and opening
up conversations on new ways of thinking
about work.

The RMIT University Library used initial
interventions and an informal midterm
assessment to track the progress of the
change and then crafted additional interventions to sustain the change. The initial interventions of leadership development to
enhance the knowledge, motivation, and
skills of managers to engage staff; cross
unit work experiences to build a more flexible
workforce; specific purpose working groups
to address particular issues; and the promotion of involvement in professional associations helped start the change. Subsequently,
adoption of a common innovation process
model and the provision of practical team
effectiveness techniques helped to sustain
innovation and engagement in the organization. A repeat organizational climate survey
in the future will help to determine whether
the engagement levels have risen among
library staff.

SUMMARY
In this chapter, we described five kinds of activities that
change agents must carry out when planning and
implementing changes. The first activity is motivating
change, which involves creating a readiness for change
among organization members and overcoming their
resistance. The second activity concerns creating a
vision that builds on an organization’s core ideology.
It describes an envisioned future that includes a bold
and valued outcome and a vividly described desired
future state. The core ideology and envisioned future
articulate a compelling reason for implementing
change. The third task for change agents is developing
political support for the changes. Change agents first
must assess their own sources of power, then identify
key stakeholders whose support is needed for change

and devise strategies for gaining their support. The
fourth activity concerns managing the transition of
the organization from its current state to the desired
future state. This requires planning a road map for
the change activities, as well as planning how to gain
commitment for the changes. It also may involve creating special change-management structures and a set
of learning processes that accelerate the transition. The
fifth change task is sustaining momentum for the
changes so that they are carried to completion. This
includes providing resources for the change program,
creating a support system for change agents, developing new competencies and skills, reinforcing the new
behaviors required to implement the changes, and staying the course.

CHAPTER 8 MANAGING CHANGE

205

NOTES
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206

PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

The New American Workplace (New York: Palgrave
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contribution.
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38. Greiner and Schein, Power and Organ…
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