LEADING CHANGE IN PUBLIC ORGANIZATIONS Advanced Research Seminar ESADE – Institute for Public Governance and Management 13th March 2014 Joris van der Voet SHORT BIO Born in Leiden, The Netherlands, 1986 2004-2008: Studied Public Administration at Erasmus University Rotterdam (EUR) Msc. in Human Resource Management and Change Management in Public Organizations 2008-2009: Academic teacher at EUR 2009-2013: Ph.D. in Public Management at EUR Thesis: Leading change in public organizations 2013-2014: Researcher on COCOPS project 1st March 2014: Post doctoral researcher at ESADE OUTLINE Introducing myself Introducing the research theme ‘The effectiveness and specificity of change management in a public organization’ Objectives Theory Methodology Results Conclusions and implications Main conclusions of my Ph.D. research, and practical implications PUBLIC ORGANIZATIONS AND CHANGE PARADIGMS OF REFORM OPA • Dominance of the rule of law and politics • Separation of politics and administration • Central role for the administration in delivering services • Hierarchy NPM • Run government like a business • Focus on performance, efficiency and results • Freedom to manage / ‘entrepreneurial leadership’ • Markets, competition, contracts ‘NPG’ • Interdependence • Pluralism • Networks • Public private partnerships • Co-creation / coproduction PARADIGMS OF REFORM? OPA • Dominance of the rule of law • Separation of politics and administration • Central role for the administration in delivering services • Hierarchy NPM • Run government like a business • Focus on performance, efficiency and results • Freedom to manage / ‘entrepreneurial leadership’ • Markets, competition, contracts ‘NPG’ • Interdependence • Pluralism • Networks • Public private partnerships • Co-creation / coproduction A (desired) changing role of government should have consequences at the organizational level Without changes in the way public organizations operate and the behavior and attitudes of civil servants, nothing will change! This makes organizational change in public organizations a relevant research theme SHORTCOMINGS OF THE PUBLIC MANAGEMENT LITERATURE ON CHANGE Kuipers et al. (in press at Public Administration): Review of the literature 2000-2010: 141 articles on change in the public sector Use the strengths of (different) theoretical approaches In-depth empirical studies of the change process Work with practitioners (empirical evidence) Incorporate attention to the outcomes and successes of change More emphasis on leadership Discrepancies and interactions between micro- and sectorlevel changes Comparative studies of the management of change SHORTCOMINGS OF THE PUBLIC MANAGEMENT LITERATURE ON CHANGE: 1. 2. 3. 4. Often focused on reforms on the national or sector level, rather than change on the organizational level Attention is focused on the content of changes rather than on the process through which organizational change comes about Research designs often lack an outcome variable that allows the formulation of conclusions about the effectiveness or results of change implementation Do not theorize how the specific characteristics of public sector organizations affect the process of change or its outcomes THE SPECIFICITY OF PUBLIC ORGANIZATIONS Environmental factors Organization/environment transactions No market environment but budget mechanisms Presence of elaborate formal restraints Presence of intensive political influences Public organizations produce ‘public goods’ and are often monopolists Public managers are subject to more intense scrutiny Role model: expected to have higher degree of fairness, honesty, openness and accountability Organizational roles, structure, processes Multiple, conflicting and vague goals More red tape, more complex organizational structures and procedural requirements Less-decision making autonomy for managers Vulnerable to intervention of external groups Greater caution, reluctance to innovate Adapted from Pollitt (2003) / Rainey (2003) / Boyne (2002) The effectiveness and specificity of change management in a public organization: Transformational leadership and a bureaucratic organizational structure Joris van der Voet Forthcoming in the European Management Journal OBJECTIVES Observations in the literature: Much of what is known about change management is based on private sector research, cases and examples. In studies that do focus on public organizations, 1. 2. 3. Little attention for implementation processes Little focus on effects, outcomes or ‘success’ of change implementation Little attention for the specific context of public organizations Focus of the study: What factors contribute to effective implementation in public organizations? To what extent does the distinctive nature of public organizations make the implementation of change specific? THEORY: ‘CHANGE MANAGEMENT THEORY’ Two central premises: 1. Change is most easily implemented when there is support for change among employees 2. Employee support for change is not only dependent on ‘what’ changes in the organization, but also on ‘how’ the change comes about THEORY: DIFFERENT APPROACHES TO CHANGE Change management literature: planned vs. emergent change Planned change Emergent change Top-down, episodic and programmatic Bottom-up, continuous and openended Detailed objectives are formulated at the beginning of the process Only a general direction is known Emphasis on the content of change Emphasis on the process of change Employees are passive recipients Employees are active participants Leadership as a central factor THEORY: CHANGE LEADERSHIP Leadership believed to be crucial for implementing change ‘Leading change’ is concerned with motivating and stimulating others (i.e. employees) to implement the change Research is mostly focused on individuals at the top organizational level It is about behaviors and activities, rather than traits or personal characteristics However, there little evidence of the contribution of leadership during change, especially in the public sector THEORY: THEORY OF TRANSFORMATIONAL LEADERSHIP ‘Transformational leadership’ (Bass, 1985): Transformational leaders can ultimately transform the organization “by defining the need for change, creating new visions, [and] mobilizing commitment to these visions” (Den Hartog et al., 1997: p. 20). Multiple dimensions (Podsakoff et al. 1990): Articulating vision (inspires with future plans) Provide appropriate model (is a good example) Foster acceptance goals (gets people to work together) High performance expectancy (insists on high performance) Individual support (considers personal needs and feelings) Intellectual stimulation (inspires to think in new ways) THEORY: WHAT TYPE OF LEADERSHIP IS REQUIRED? Planned change Emergent change Type of leadership activities needed -Initiating change -Creating a vision -Communicating the vision -Being a role model -Creating commitment -Redirecting ongoing change -Making others accountable -Creating connections -Fostering experimentation -Taking a step back Theoretical connections -Transformational leadership (Bass, 1985) -Management guru’s (Kotter, 1996; Kanter, 1990) -‘Laissez faire’ leadership -Servant leadership (Van Dierendonck, 2009) -‘FRAMCAP’ (Higgs, 2010) Metaphor ‘Superhero’ ‘Invisible man’ THEORY: HYPOTHESIS 1 In planned processes of change, transformational leaders can be expected to be uniquely effective change leaders (Eisenbach et al., 1999; Higgs & Rowland, 2011) Hypothesis 1: A higher degree of transformational leadership of direct supervisors will increase the effectiveness of a planned process of change, but it will not increase the effectiveness of an emergent process of change THEORY AND HYPOTHESES: HOW TO ASSESS ‘EFFECTIVENESS’? Employee support is crucial for ‘effective’ or ‘successful’ change Focus on willingness to change (Metselaar, 1997: p. 42): “a positive behavioral intention towards the implementation of modifications in an organization’s structure, or work and administrative processes, resulting in efforts from the organization’s member side to support or enhance the change process” THEORY AND HYPOTHESES: THE ‘SPECIFICITY’ OF CHANGE IN PUBLIC ORGANIZATIONS Public organizations are often argued to be characterized by a bureaucratic organizational structure (Andrews, Boyne, Law & Walker, 2009; Pandey & Moynihan, 2006) A bureaucracy is an organization in which in which operations are to a large extent predetermined and predictable (Mintzberg, 1979) Characteristics: Centralization Formalization Red tape THEORY AND HYPOTHESES: BUREAUCRACIES AND PROCESSES OF CHANGE Conceptual arguments (but no empirical evidence): A planned approach to change is most suitable for rule-based, rigid organizational structures (Coram and Burnes, 2001) A top-down bureaucratic management style is associated with planned change, while a more decentralized, flexible management style corresponds with emergent change (Burnes, 1996) Bureaucratic organizational structures are negatively related to: Innovative solutions (Atuahene-Gima 2003, Damanpour 1991) Centralization is related to stability, while innovative, prospecting organizations are characterized by decentralized decision-making structures (Andrews, Boyne, Law & Walker, 2009; Walker, 2008 Adaptation and learning (Hage & Aiken, 1970; Lawrence & Lorsch, 1979; Mintzberg, 1979) Experimentation (March & Simon, 1958) THEORY AND HYPOTHESES: HYPOTHESES 2 AND 3 H2: The more bureaucratic the organizational structure, the more employee willingness to change is positively influenced by a planned process of change. H3: The less bureaucratic the organizational structure, the more employee willingness to change is positively influenced by an emergent process of change METHODOLOGY: DESIGN AND CASE SELECTION Case study design Urban Development Rotterdam Local Government organization Result of recent merger of Development Agency Rotterdam (DAR) and Agency of City Construction and Housing (ACCH) Many ongoing changes aimed at improving efficiency and performance (NPM) and more collaboration, “less rowing, more steering” (NPG) Reasons for case selection Different change approaches between the many departments within the organization Differing degree of perceived bureaucracy between DAR and ACCH departments METHODOLOGY: METHODS Quantitative methods Online survey among all employees in May 2012 about the ongoing changes, the organizational change, and their direct supervisors 580 of 1353 employees completed the survey (42,8%) METHODOLOGY: MEASURES Planned change and emergent change Transformational leadership style Bureaucracy Centralization Formalization Red tape Willingness to change Control variables: gender, age, education level, tenure, supervisory position PROCEDURE AND TECHNIQUES DAR departments are significantly more bureaucratic than ACCH departments In order to test the moderating effects of bureaucratic organizational structure, we compared a high bureaucracy model (DAR) with a low bureaucracy model (ACCH) Regression analyses and plotted moderating effects RESULTS General model Planned Change Emergent Change Transformational Leadership Planned*Transformational L. Emergent*Transformational L. Low High bur bur model model .169* .113 .251* .139 -.038 .237* .142* .199 .154 -.173* -.124 -.085 .046 .222* -.106 GENERAL MODEL 5 Willingness to change 4.5 4 3.5 Low transfor 3 High transfor 2.5 2 1.5 1 Low planned High planned LOW BUREAUCRACY MODEL 5 Willingness to change 4.5 4 3.5 Low transfor 3 High transfor 2.5 2 1.5 1 Low emergent High emergent RESULTS General model Planned Change Emergent Change Transformational Leadership Planned*Transformational L. Emergent*Transformational L. Low High bur bur model model .169* .113 .251* .139 -.038 .237* .142* .199 .154 -.173* -.124 -.085 .046 .222* -.106 CONCLUSIONS H1: A higher degree of transformational leadership of direct supervisors will increase the effectiveness of a planned process of change, but it will not increase effectiveness of an emergent process of change H2: The more bureaucratic the organizational structure, the more employee willingness to change is positively influenced by a planned process of change. H3: The less bureaucratic the organizational structure, the more employee willingness to change is positively influenced by an emergent process of change IMPLICATIONS Both planned and emergent change can be used to create support for change in public organizations High levels of bureaucracy do not impede the effectiveness of emergent approaches to change The leadership of direct supervisors may be an important contribution to create employee support for change In fact, in emergent processes of change, leadership role is a crucial factor However, in highly bureaucratic organizations, the leadership role of direct supervisors contributes little to emergent change Leading change in public organizations A study about the role of leadership in the implementation of organizational change in a public sector context Main conclusions and practical implications RESEARCH QUESTION To what extent and how does leadership affect the implementation of change and its outcomes, given the specific context of public organizations? Focus on: Complex organizational environment Bureaucratic organizational structure MAIN CONCLUSIONS 1. Their environmental and structural characteristics cause public organizations to favor the adoption of a planned change approach, while an emergent change approach results in more support for change among employees. 2. Despite the tendency of public organizations to adopt a planned change approach, both senior and lower level managers may contribute to the adoption of an emergent change approach. 3. Although favorable for support for change among employees, organizational change in public organizations requires a more elaborated type of change leadership than a mere transformational leadership style. PRACTICAL IMPLICATIONS Employees Stimulate them to participate IKEA-effect Direct supervisors Make them more important and complementary in planned change Invest in leadership development of lower level managers! Senior managers Fight the urge to adopt a planned approach to change (don’t become a ‘superhero’) Allow others to develop and lead the change Political leaders Politicians have tendency to ask for detailed time plannings, step-by-step plans, etc. Successful change requires front-line participation, experimentation and ownership Thank you for listening! www.jorisvandervoet.com Managing Organizational Change in Public Services: International issues, challenges and cases Editors: Prof. Rune Todnem By (Staffordshire University) Dr. Ben S. Kuipers (Erasmus University Rotterdam) Dr. Joris van der Voet (ESADE) METHODOLOGY: MEASURES Centralization (Aiken & Hage, 1968; Pandey & Wright, 2006; Jaworski & Kohli, 1993) There can be little action taken here until a supervisor approves a decision. A person who wants to make his own decision would be quickly discouraged here. Even small matters have to be referred to someone higher up for a final answer. I have to ask my boss before I do almost anything. Any decision I make has to have my boss' approval. Red Tape (Pandey & Scott, 2002) If red tape is defined as burdensome administrative rules and procedures that have negative effects on the organization’s effectiveness, how would you assess the level of red tape in your organization? METHODOLOGY: MEASURES Formalization (Deshpande & Zaltman, 1982; Jaworski & Kohli, 1993) I feel that I am my own boss in most matters. (R) A person can make his own decisions without checking with anybody else. (R) How things are done around here is left up to the person doing the work. (R) People here are allowed to do almost as they please. (R) Most people here make their own rules on the job. (R) The employees are constantly being checked on for rule violations. People here feel as though they are constantly being watched to see that they obey all the rules. METHODOLOGY: MEASURES Planned change (Farell, 2000) Emanates from senior management.+ Occurs through company-wide change programs. Occurs through changing individual knowledge and attitudes.+ Occurs in an unplanned fashion.+ (R) Occurs through a systematic process of well-managed events. Is monitored through regular progress surveys. Emergent change (Farell, 2000) Occurs through continually learning about our environment. Occurs by encouraging employees to understand and adapt to changing circumstances in our environment. Is part of an ongoing process of adapting to our environment. Is a slow process, which emerges over time.+ Is about matching the organizations’ capabilities to the business environment. METHODOLOGY: MEASURES Transformational leadership (Podsakoff et al., 1990) My direct supervisor … Is always seeking new opportunities for the organization. Inspires others with his/her plans for the future. Is able to get others committed to his/her dream. Leads by “doing,” rather than simply by “telling.” Leads by example. Provides a good model for me to follow. Fosters collaboration among work groups. Etc. METHODOLOGY: MEASURES Willingness to change (Metselaar, 1997) 1. 2. 3. 4. I intend to try to convince employees of the benefits the changes and developments within Urban Development Rotterdam will bring. I intend to put effort into achieving the goals of the changes and developments within Urban Development Rotterdam. I intend to reduce resistance among employees regarding the changes and developments within Urban Development Rotterdam. I intend to make time to implement the changes and developments within Urban Development Rotterdam.