Trade and Transport Facilitation in Southeast Europe Program
CHANGE MANAGEMENT
An Overview and Direction for Application
Working Paper No. 6
December 2001
P. W. Moeller
PREFACE
1.
The Launch Workshop for the Trade and Transport Facilitation in Southeast
Europe Program (TTFSE) was set within the context of Change Management (See
Discussion Paper #2, provided as attachment 1 to this paper) attended by representatives
of the client organizations in the fall of 2000. The workshop discussed the concept of
resistance and the need for a breakthrough in attitudes. It provided a basic model for
structuring the management of change. This centered on the use of a task force to
provide direction to management relative to the Change Management process and
especially relating the strategic plan of each Customs organization to the change process.
The workshop also present specific examples of technical assistance that could be
provided to assist management in general as well as in relation to the change process.
3.
Since the original discussion paper was quite short and was fit to the demands of
the Launch Workshop format, a somewhat broader and fuller discussion of Change
Management is provided here to help all those working with the TTFSE Program better
understand what is meant by this concept and how we can apply it within the concept of
the TTFSE Program. Although the following discussion seeks to provide definition it is
not definitive. Rather, it provides a ground for better understanding of areas where the
Program might help the reform process required of all the client Customs administrations
in the TTFSE Program.
4.
The initial sections provide an overview of some of the concepts associated with
Change Management. The final sections of the paper looks at the specifics of the client
Customs administrations under the TTFSE and suggest a direction for the future.
5.
Several supplemental sections, including a list of resources, are attached to the
paper to assist the reader. The list of resources readily demonstrates that many sources
offer discussions and tools relevant to our concerns.
TABLE OF CONTENTS
I.
INTRODUCTION
II.
SOME FOUNDATION WORKS
III.
THE NEW INSTITUTIONAL ECONOMICS
IV.
REVIEW OF SELECTED KEY WORKS
A.
Managerial Breakthrough
B.
Transition/Transformation Theory
V.
FINDING RELEVANCE FOR THE TTFSE
A.
Where are we?
B.
What is in a Name?
C.
The Specificity of the Regional Setting
VI.
PROPOSED FUTURE DIRECTION
A.
Country-Specific Actions Focused on Institutional Mechanisms in the
PADs
B.
Building a Case Study: Comparative Analysis
Attachment 1
Attachment 2
Attachment 3
Attachment 4
Attachment 5
Discussion Paper #2
Checklist for Sample Actions to Support Change
Support of Change Questionnaire
Launching a Change Management Initiative
PREM Governance and Public Sector Reform
CHANGE MANAGEMENT
An Overview and Direction for Application
Working Paper No. 6
I.
INTRODUCTION
1.1
The concept of change as both a philosophical and practical precept is not new.
The Greek philosopher Heraciltus offered a substantive discourse on the fact that one
cannot step in the same river twice and that the essence of reality was one of change.
Classical writers also discussed generational changes in values and lamented where
civilization was heading. More recent examples abound.
1.2
During the twentieth century, however, there has been a shift in the focus on
change, stimulated by the breadth, depth, and pace of change being encountered. The
majority of this discussion has been set within concerns of governmental and business
management, especially in relation to strategic planning, but nearly every one of the
social disciplines has addressed the relevance of change to their field of focus. Most
recently the discussion is often set within the context of globalization. Within the
confines of this short paper one cannot hope to do just to this discussion, but the
overview here is intended to provide a greater comfort level with what is meant by
Change Management.
1.3
The focus on globalization has shifted discussion from a single-country focus to
an international focus. The effective management of change has become an essential
element of program planning for economic development as well as social and political
analysis. Our focus here relates primarily to the development process within both
national and regional settings.
1.4
The basic perspective of Change Management differs from tradition strategic
management primarily in the extent of change involved. Major changes in the structure
and processes of groups, whether it be in the context of work or larger social and
institutional interaction, is something that is usually resisted by the majority of people.
Counteracting this resistance usually requires a change in the organizational culture, a
change in the way people think and behave. If this need is not addressed, change usually
does not take place and, even if seemingly carried out, erodes readily over time. The
systematic management of change can not only reduce the resistance to change but can
also increase the effectiveness of the process, the rate at which it can occur, and the
benefits to be achieved by the change.
II.
SOME FOUNDATION WORKS
2.1
Some of the foundation works appeared in the first decade after World War II.
Margaret Mead offered Cultural Patterns and Technical Change as early as 1955.
In this work she examined not only how certain cultures reacted more readily to certain
technical changes based on their cultural patterns but also how technical change itself
impacted on their cultures. She looked at the individual mental health of individuals
involved in change process as well as the overall impact on cultural norms.
2.2
Just two years later Vera Dean published The Nature of the Non-Western World.
She looked at the belief systems motivating people in non-western world, using a similar
perspective of culture as a filter to change as was used by Mead. These two works
became the foundation for other work in the field of cross-cultural communications.
2.3
By the 1960s the field of communication was being applied to international affairs
and development. Persuasive Communication by Erwin Bettinghaus, for example,
looked at what factors influence changes in people’s behavior, building on learning
theory. Cultural and personality factors were considered in relation to sources, messages,
and channels. He looked at change and resistance in terms of both groups and formal
organizations and developed a social action model for promoting changed behavior and
attitudes.
2.4
William Lerner and Wilbur Schramm were especially relevant to development
concerns in their edited work Communication and Change in the Developing Countries.
They started with such problems in communication and change as institutional building
and the mass media and offered a non-western model for development and innovation.
2.5
Less academic in tone but more far-reaching in its impact was Alvin Toffler’s
Future Shock which not only made the ultimate case for the role of change in our futures
but also discussed the limits of adaptability to be found in our exposure to accelerating
stress. He also offered a strategy for survival.
III.
THE NEW INSTITUTIONAL ECONOMICS
3.1
Significant contributions to the focus on Change Management have also been
made more recently by the New Institutional Economists. These contributions have
emphasized that institutions really matter and are the mechanisms by which not only the
rules of society are made and administered but also the way and extent to which the
goods of society are distributed. Elinor Ostrom and her collages in Institutional
Incentives and Sustainable Development looked particularly at infrastructure policies and
suitability. These works are more analytical, however, than they are “how to”
sourcebooks. 1
1
Although they tend to be more focused on institutions than change, see also such works by Robert
Klitgaard as Adjusting to Reality, and Mamadou Dia’s Africa’s Management in the 1990s and Beyond.
IV.
REVIEW OF SELECTED KEY WORKS
A.
Managerial Breakthrough
4.1
Even as early as the 1960s there were works that offered highly useful
perspectives on change. Joseph Juran in Managerial Breakthrough provided the
springboard for this field. He differentiated between the traditional managerial
responsibility of control and the need for a different approach in introducing change and
breaking though into a new organizational reality. Juran built upon the basic focus of
conventional management theory:







Policy Making
Setting Objectives
Planning to meet objectives
Organizing to execute the objectives
Selection and training for manning the organization
Motivation of staff
Appraising the results
4.2
Juran, however, felt one had to differentiate between the sequence of activities
based on the objectives managers had, either control or change. He set forth two
different tracks of sequenced actions (See figure 1).
Figure 1. Juran: Sequenced Management Actions for Breakthrough or Control
Common Initial Management Actions
 Policy Making
 Setting of Objectives
Actions for Breakthrough
 Breakthrough in attitudes
 Use of the Pareto principle
 Organizing for Breakthrough in
Knowledge
 Creation of a Steering Arm
 Creation of Diagnostic Arm
 Diagnosis/Analysis
 Breakthrough in cultural
patterns
 Transition to the new level
Actions for Control
 Choosing a unit of measure
 Choosing a standard
 Designing a sensor
 Measuring performance
 Interpretation of results\decision
Making
 Action
Related to this discussion of Douglass North’s Institutions, Institutional Change, and Economic
Performance.
4.3
Juran recognized that change was not new to organizations and that many
breakthroughs had occurred without having been formally organized. Again, by taking
an organized approach he felt the stress could be reduced and at the same the rate of
change itself could be sped up. He also stated early in his work that most manager would
not value the need for such an organized approach unless they had benefited from it or
experienced the bitter taste of having tried to move through change without it.
4.4
Breakthrough in Attitudes- The staring point is that change/breakthrough
requires a change in attitude. In fact it is important that breakthrough is seen as both
desirable and feasible. There is a need for an advocate, i.e. a champion, for the change.
A champion must have an adequate level of support in his organization in order for him
to play his role. He will also be dependent upon both the internal and external
environment in which the organization is set. Changing the attitude of the staff of the
organization will not be easy. The personal attitudes of most staff fall into three classes.
First, a little band of innovators who may readily support change, then the majority of
staff who will conservatively approach any change, and a final little band of inhibitors
who take an extremely negative position and may never be won over. The key is to use
the innovators to bring the majority of the conservatives in support of the change
objectives and the change process itself
4.5
Use of the Pareto Principle- In order to assess whether a breakthrough is likely
to happen, Juran suggests a feasibility study or audit. This process results in separating
the vital few from the trivial many, following the classic Pareto Principle. Targets for
actions are thus identified.
4.6
Organizing for Breakthrough in Knowledge- These target areas then become
the subjects of a drive for new knowledge, including the organization of the search
process. The dissemination of the knowledge to those who can use it, and the application
of the new knowledge to solve old problems. This process is facilitated by a team effort.
It is also dependent upon the use of specialists.
4.7
Creation of a Steering Arm- Juran recommends that the organizing process
requires two teaming efforts. A Steering group has the job of directing the acquisition
and use of new knowledge. It consists of the key persons affected by the vital few issues.
The Steering group provides a unity of purpose, reviews what knowledge is needed,
directs studies, and takes actions based on the findings.
4.8
Creation of Diagnostic Arm- A diagnostic group does the detailed work of fact
collection and analysis. This generally requires specific time, skills, and objectivity not
necessarily possessed by the steering group.
4.9
Diagnosis/Analysis- The results of the diagnostic group are brought back to the
steering group. As a result of the analysis/diagnosis undertaken, there is a breakthrough
in knowledge.
4.10 Breakthrough in Cultural Patterns- A breakthrough in knowledge does not
automatically lead to a breakthrough in performance. There are many associated human
habits, status indicators, and belief systems that may limit this process. Before the new
levels of performance can re reached these issues must be addressed.
4.10 Transition to the New Level- Once the cultural issues have been addressed one
can achieve a breakthrough in performance. One moves on to the new level. Sustaining
this new level, however, requires the application of control functions, following the usual
tradition of management. Juran goes into some detail on these functions. Once the
breakthrough is in place the cycle may begin again if a drive for a second breakthrough is
required.
4.12 Various other writers have followed Juran’s concept and added their own
perspectives. Robert Schaffer, for example takes on the idea of prompting short-term
success to build high performance organizations. He identifies the common barriers to
high performance and shows how in a crisis performance can often be dramatically
improved and change advanced. He also discusses new roles for managers in the context
of change.
B.
Transition/Transformation Theory
4.13 By the early 1990s Several other writers had shifted their interest in the concept of
Change Management to focusing more tightly on the transition or transformation process.
For example, William Bridges addressed how to make the most of change. He
emphasized that it is not the changes that cause the problem but the transition process
through which one must go to get there. His work is very solution oriented, with specific
examples of what to do and what not to do.
4.14 About the same time Oscar Mink and his associates collaboratively provided
their Total Transformation Management Process (TTMP) model in Change at Work.
This model builds on several other models, indicating the breadth of interest in this
approach:
 The Open Organization Model
 The Concerns-Based Adoption Model
 The Group Development Model
 The Linking-pin Model
 The Organizational Transitional Model
 The Action Research Model
4.15 Using their consolidated model the group discusses how to create transformation
teams and plan the transformation process. This includes a Change Management
assessment and ways to both activate and support the transformation process. The book
also includes a useful list of diagnostic tools. The elements of the TTMP Change
Management model are shown in Figure 2. Among the many lists and tables intended to
guide actions, they provide a checklist of actions to support the change process. This list
is provided as Attachment 2.
4.16 In Beyond the Wall of Resistance Rick Mauer provides some very practical
guidelines for building support for change and gives particular attention to the problems
of resistance. He also offers an audit format for assesses the potential support for change
(See Attachment 3). 2
4.17 Richard Beckhard and Ruben Harris offer a lot of useful suggestions on transition
management in Organizational Transitions. They suggest that activity planning should
be keyed to relevance, specificity, integration, chronology, and adaptability. They advise
on where to intervene first and discuss alternate transition management structures.
Although a short book, the suggestions they include in it are packed with utility for
pragmatic applications. 3 Mike Woodcock and Dave Francis have prepared a series of
25 tools for creating and managing change. These include training exercises and
evaluation processes relevant to the transition phase. Some of these may be relevant for
our work.
2
One can also look to communication theory for help in opening others to new ideas. See
Bettinghaus, Persuasive Communication.
3
See also framework for change initiatives suggested by Kathryn Troy, Attachment 4.
Figure 2. Change Management Model
>>>>>>Constant monitoring and feedback>>>>>>
Form the Transformation Leadership Team
and the Action Research Team
v
v
Evaluate the need for change
v
v
Define the
>
Future state
Transition
<
Describe the
present state
v
v
Assess the present in terms of the future
v
v
Plan for the change
v
v
Intervene at three levels
Individual
Group
Organization
v
v
Manage the Transition
v
v
Stabilize the Change
V.
FINDING RELEVANCE FOR THE TTFSE
A.
Where are we?
5.1
The TTFSE Program involves the promotion of organizational and related
institutional reform in each of the participating countries. The organizational changes
being proposed are not minor and often link to institutional issues extending beyond the
domain of Customs. We have proposed that the reform process, defined to varying
degrees of success by the respective strategic plans of each participating country, be
promoted by the transparent monitoring of performance indicators, the interaction of the
Regional Steering committee, and user surveys.
5.2
Although we have proposed the establishment of a task force as a mechanism for
promoting change with Customs, we have really black-boxed the management aspects of
the reform process, leaving this to each Customs administration to do for itself with the
assistance of the SECI/TTFSE Assistance Team (STAT). We have specified the
establishment of Local Project Teams (LPTs) at each pilot site to review the data and
lessons learned. We have not detailed how the LPTs should relate to the central policy
arm at headquarters, and we have seen a slow start-up in the operations of the LPTs. We
have also offered the option of technical assistance keyed to the needs of a specific
administration. Such requests have not been forth coming, and unless the performance
indicators show success it seems incumbent upon the team to examine how we might
facilitate the change process. This consideration is essential for the long-term
sustainability of the reform process.
B.
What is in a Name?
5.3
The Launch Workshop for the TTFSE Program used Change Management as its
central theme. The evaluation of the sessions by the participants gave the workshop a
very high rating. Informal communication, however, seems to indicate less satisfaction
with the workshop, if not by the participants but by some of their managers. On the one
hand this may indicate the unwillingness of the participants to be open with the team that
has been instrumental in the preparation of their loans/credits or a simple act of courtesy,
and on the other hand it may be a very reflection of the resistance to change we have
already discussed by managers. It would be useful if this informal feedback could be
better documented.
5.4
The concepts we have been discussing here do go beyond the usual management
concerns of control and focus on change. The approach specifically speaks of the need to
manage in a different way in order to carry out change. One could, however, refer to this
as institutional development or strategic management, the term Change Management
itself having no magic quality. If it is the terms to use that is the problem, than another
term can be used, preferably “institutional development” or possibly even “good
governance.” Most, certainly, however, the issue is greater than one of the terms to be
used.
C.
The Specificity of the Regional Setting
5.5
The presentation made by Selig Merber at the PRAL brown bag lunch on
Customs and Change Management was disappointing. Previous presentations he made
on improving Customs performance seemed mostly on target. Most certainly within the
context of the General Electric Corporation, moreover, he gave evidence of
understanding a broad range of techniques relative to Change Management. When
pressed, however, he did not really appreciate the importance of the environmental
setting in which specific Customs administration are set in adjusting the application of his
proposed techniques and approach. This is something that we do not wish to do in
talking with our clients or in trying to serve their needs.
5.6
This then is the issue we face. How can we take something that works well for a
corporation or organizational structure in a supportive environment 4 and apply it to the
region in which we work where such an environment is lacking? What are the problems?
5.7
First of all, each of the countries in the TTFSE program is going through a major
transition from an earlier existence under the soviet system or similar state controlled
economy (Yugoslavia) to being a system based to being a separate political system
seeking a market orientation. The institutional fabric of these new political systems, the
rules of the games by which decisions are made and goods and services are distributed,
remains in a state of flux even if we choose to now speak of these times as a posttransition phase. Major struggles are under way in terms of achieving good governance
where there is transparency, accountability, certainty, and equity for all the players. In
short, there is a high level of institutional stress.
5.8
Within such a setting the importance of the external environment is especially
important for the survival of the organizational units making up that system. The failure
of the former systems, moreover, led to the evolution of under-the-table transactions long
before the final brake up and fed the growth of currently high level of corruption that
exists in the region. The intrusion of politics upon technical and professional decision
making is omnipresent. Government agencies remain competitive fiefdoms without
much evidence of inter-agency cooperation. Institutional safeguards are weak, and there
are few checks and balances that are reliable.
5.9
The Bank has accepted the fact that institutions matter relative to sustainable
development and given considerable attention to the need for institutional development,
good governance, and anticorruption programs (see attachment 5). Indeed these are
objectives built into the TTFSE, and we have maintained that ECSIN/ECSIE should
advance such reforms rather than PREM or some other central unit.
5.10 How do we help our clients move forward un such an environment? It is within
this environment that the Champions of reform in our projects have to walk a tight rope.
4
In some case the environments in which corporations are set, however, are at least neutral if not
controlling and limiting.
Although as service provided they need to be sensitive to the whole array of stakeholders,
including but not exclusively just the users, they have to be especially sensitive to the
stakeholders that have the most power. The champions have not gotten to where they are
in their systems by being unaware of the volatility of their systems and system politics.
They have already development a sense of political savvy that fits their specific national
political culture. It may be presumptuous to assume that the TTFSE team as outsides can
assist the champions in consolidating their strength in the system, but certain control and
Change Management concepts and techniques may be helpful to them.
5.11 The TTFSE client governmental agencies remain very much characterized by
hierarchical structures and top-down styles of management, clearly inherited from former
regimes. Although modern management specialists may have a preference for flatter
structures and more participatory practices, replicating such structures and practices
could only be a long-term goal of the ten year period of reform and not within the
immediate purview of the TTFSE. Where champions wish to move into such arenas,
assistance can be offered, but it should not be pushed especially at the expense of
organizational stability.
5.12 More important to our discussion is the fact that the enforcement and compliance
functions of Customs administration have traditionally given them a hierarchical,
military-like structure. Management needs to play as a team at upper level, and this
something that could be improved in all of the clients, but it is unfair to expect them to
operate as modern corporations or even fully as one might hope other government
agencies without these primary functions would operate.
5.13 Finally, a key factor in much of the much of discussion on countering resistance is
based on the perceptions of employees that they have a future within an organization and
are willing in the end to adapt because they see such adaptation as beneficial to their
interests. We have a very “mixed bag” of staff in terms of their perception of their
personal interests and a predominance of short term goals for some. Building new
professional attitudes is something in which we are interested. Achieving such cannot be
achieved and sustained without changes in the incentive systems that currently exist,
often dependent upon policy or legal changes not under the control of Customs, but
changing attitudes and building a new professional culture is something with which we
much be concerned.
VI.
PROPOSED FUTURE DIRECTION
6.1
There would seem to be two directions for the TTFSE Team to take in
approaching institutional issues. The first involves country-specific actions based on
dialogue with each client on institutional mechanisms. The second involves comparative
analysis to readiness.
A.
Country-Specific Actions Focused on Institutional Mechanisms in the PAD
6.2
Assessment of Institutional Mechanisms- The first approach would begin with
dialogue with the clients, especially the champions, to see what specific areas of
assistance would interest them. Rather than risk having the concept of Change
Management seem too threatening or vague for them, the approach would address how to
implement the very reform process to which they have committed themselves and to
focus on the institutional mechanisms specified in the pad. The effectiveness of these
mechanisms would be assessed with each client in order to determine if they could be
improved with technical assistance and training. In some case a comprehensive set of
remedial actions might be developed but in most cases addressing one to three key issues
would be the better approach.
6.3
The Strategic Plan- The clients have already committed themselves to implement
a strategic plan attached to the loan/credit agreement and thus to the reforms in Annex 2
of the PADs. What limits do they see? Have they moved ahead with the idea of a task
force and if not why not? What other mechanism have they tried or would they like to
try? This dialogue should be initiated by the TTLs but perhaps be followed by a more
structured readiness audit.
6.4
Theoretically we know that champions need key change agents to help them lead
the change process. Eventually it is these agents who bring over the majority of
hesitating conservatives or resistors and counterbalance the small group of inhibitors. Do
the champions see the need to create more effective change agents. Do they see the need
for better teaming skills. Are they using such concepts as workshops, retreats, quality
circles, or focus groups to move change ahead, and if not would they see this as useful?
6.5
Is the planning being blocked by players external to the Customs administration
itself. Does management need a specific strategy or skills to carried out effective liaison
and build external coalitions? How effective are they in dealing with stakeholders in
general, public relations, and an evolving user orientation. How are they using feedback
from the users?
6.6
Promoting Inter-agency Relations- The promotion of inter-agency awareness and
collaboration is one or our serious objectives. What assistance might the clients need in
this area? What mechanisms have they used and how far has it gotten them? What
alternate means could they try? How well is this concept articulated by the client agency
itself? What other constraints exist?
6.7
Local Project Teams- The collection, and analysis of data and subsequent lesson
learning revolve around the functioning of the LPTs. What can be done to improve this
process. Can lessons be learned from more effective LPTs that can be shared with
others? How do the LPTs relate to headquarters and the policy process there? 5
6.8
General Management Skill Development and Training- Finally, regardless of the
mechanism suggested, there are basic skills essential for effective management. To what
extent would training in general management be useful for the operation of all
institutional mechanisms?
B.
Building a Case Study: Comparative Analysis
6.9
The second approach would be to conduct an analysis leading to a case study
comparing the readiness for reform in two countries, say the Federal Republic of
Yugoslavia to Moldova. It is clear that FRY is anxious to move ahead, whereas Moldova
has stated its commitment but not been able to deliver on it promises. We have already
done some preliminary analysis of the institutional issues in Moldova. By comparing the
two situations we would be able to identify some of the factors necessary for the
promotion of reform. This would be useful for us as a learning tool in dealing with the
promotion of reform in the other six countries.
6.10 The analysis would require a team effort with the lead of the TTLs and input from
the institutional and customs specialists. The output would be a useful product from the
perspective of the knowledge base but also as a demonstration of lessons learned under
the TTFSE. Dissemination within the Bank might be possible, although I doubt that this
should be externally shared.
6.11 In Conclusion I feel we can draw selectively upon the tools developed by
institutional development and Change Management specialists to build more effective
organizations and equip them with the means of addressing the institutional setting
within which they function. Institutional development is a long-termed process. We
cannot finish the process but we most certainly must start it.
5
Most of the institutional issues were to be supported by the STAT, but the lack of progress to date
would warrant an increased role by the TTFSE Team.
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Mindshift: The Employee Handbook for Understanding the Changing World of Work.
Dallas, Texas: Price Pritchett, 1996.
Mink, Oscar et. Al. Change at Work: A Comprehensive Management Process for
Transforming Organizations. San Francisco, Calif. : Jossey-Bass, 1993.
New Work Habits for a Radically Changing World.: 13 Ground Rules for Job Success in
the Information Age. Dallas, Texas: Pritchett and Associates, 1996
Ostrom, Elinor et. Al. Institutional Incentives and Sustainable Development :
Infrastructure Policies in Perspective. San Francisco : Westview, 1993.
Owen, Harrison. Open Space Technology: A User’s Guide. Potomac, Maryland: Abbott
Publishing, 1993.
Mauer, Rick. Beyond the Wall of Resistance: Unconventional Strategies that Build
Support for Change. Austin: Bard Books,1996.
Palmer, Monte and Larry Stern. Political Development in Changing Societies. An
Analysis of Modernization. Lexington, Mass. : Heath Lexington, 1971
Price Waterhouse. Better Change: Best Practices for Transforming Your Organization.
New York: Irwin, 1995.
Public Administration and Management: Problems of Adaptation in Different SocioCultural Contexts. Paris: UNESCO, 1982.
Rogers, Everett. Diffusion of Innovations, 4th ed. New York: Free Pres, 1995
Schaffer, Robert. The Breakthrough Strategy Using Short-term Successes to Build the
Higher Performance Organization. New York: Harper, 1988
Spencer Laura, Winning Through Participation: Meeting the Challenge of Corporate
Change with the Technology of Participation., Dubuque, Iowa: Kendall/Hunt Publishing,
1989.
Toffler, Alvin. Future Shock. New York: Random House, 1970.
Utterback. James. Master the Dynamics of Innovation: How Companies Can Seize
Opportunities in the Face of Technological Change. Boston, Mass.: Harvard Business
School Press, 1994.
Want, Jerome. Managing Radical Change: Beyond Survival in the New Business Age.
New York: John Wiley & Sons, 1995
Weisbord, Marvin and Sandra Sanoff. Future Search: An action Guide to Finding
Common Ground in Organizations and Communities. San Francisco: Berrett-Koehler,
1995.
Woodcock, Mike and Dave Francis. 25 Training Activities for Creating and Managing
Change. Amherst, Mass: Human Resource Development Press, 1992.
Attachment 1
Trade and Transport Facilitation in Southeast Europe Program
INSTITUTIONAL ANALYSIS:
An Approach to Change Management
Discussion Paper No. 2
I.
INTRODUCTION
1.1
The willingness of the World Bank to provide credit/loan support for physical
investments at selected border crossing points in the Southeast Europe Region was based
on the concurrence by all parties that such investment was to be matched with changes in
the processes and procedures followed by the Customs organizations in the region. In
fact most of the Customs organizations in the region had initiated various degrees of
reform programs often keyed to guidelines and assistance offered by the European Union.
The need for change was also reflected in the surveys of stakeholders conducted by the
World Bank (See Discussion Paper No.1).
1.2
The idea that there was a need to introduce change in the sector and that it should
be done on a regional basis was the cornerstone for the creation of the Regional Steering
Committee (RSC). The Memorandum of Understanding establishing the RSC places
special emphasis on the role of the RSC in reviewing of obstacles and delays to trade and
transit and the sharing information so that appropriate actions can collaboratively be
implemented.
1.3
Experience has shown that it is far easier to agree to the need for change than to
successfully implement the change process. The discussion here is intended to provide a
basic overview of the Change Management process. The objective is to make Customs
more comfortable with the management issues related to change and to give an
understanding of the type of technical assistance that can be provided in support of the
Change Management process. The level of detail here can but be limited, but the topics
presented can be subjects for further discussion and assistance.
II
BREAKTHORUGH: IN TERMS OF ATTITUDES
2.1
Among the first classical works on Change Management was a work written by
Joseph Juran 6 in which change was presented as the breaking out of a past condition or
situation and the breaking through into a new one. Juran speaks of the transition process
as “breakthrough.” The discussion here relies heavily on this concept breakthrough in
Change Management.
6
See Joseph M. Juran, Managerial Breakthrough, McGraw Hill, 1964.
2.2
It is not surprising that the introduction of change encounters resistance. Unless
individuals are highly negatively affected by a current situation they usually prefer to
keep things the way they are. For some people even keeping a bad system is preferred
over the uncertainty of what the new one will mean for them.
2.3
The reaction of individuals to change in an organizational setting, Juran observed,
is related to two dimensions: (i) the first is the personality structure of the individual and
(ii) the second relates to the overall organization culture. In both cases we are talking
about changes in attitudes and associated behavior, two very difficult things to change in
individuals as well as in organizations. For the time being, let us talk about individual
personalities and defer the discussion of organization culture until later.
2.4
Experience has shown that individuals can be grouped in three separate categories
according to the attitude they have about the introduction of change. What can we say
about these groups?

Innovators: There is usually a small group of innovators in any organization
that is eager to see change. Such individuals value change and are willing to
take risks. They are the individuals convinced that “any change will be better
than what exists now.” Sometimes they see change as a means of advancing
themselves the role they play in the organization, or their profession. They
are not a unified group and have different motives. They can be a catalyst for
supporting change, but they can also be too aggressive and leave most other
members of an organization uncomfortable with the idea of the change they
would support.

Conservatives: The conservatives are neither for nor against change as such,
but they are interest in results. In fact they want to see results or proof before
they are willing to move ahead with change. Such individuals represent the
vast majority of any organization. Logical reasoning may not win this type of
individual over; seeing that change is good because other real benefits,
however, will convince them of the advantage of change.

Inhibitors: The inhibitors, again, represent a small group within any
organization They have very negative perspectives about any proposals for
change. When presented with logical arguments of the advantage of change,
they will seek to discredit the logic or even avoid participation in the
discussion.
2.5
Efforts to introduce change require the recognition of the different roles these
groups play in the acceptance of change and the need to have varied strategies for dealing
with the respective groups. Particular consideration needs to be given to the personality
dimensions, following this typology, of the key managers in any organization and
whether they will be supporters or detractors of the change process.
2.6
There are also general considerations for both senior and mid-level management,
in supporting attitude change necessary for the introduction of change, for example, see
Exhibit 1.
Exhibit 1
Sample Management Actions in Support of Attitude Change
Top Management Needs to:
 clarify the organization’s policy about proposed change
 set examples by following the policy in a highly visible fashion
 support the preparation of written objectives and plans for reaching the policy
 ensure that organization incentives support the introduction and acceptance of the
proposed change
Mid-Level Management Need to :
 to ensure that there are regular channels for the flow or ideas and reactions
 set the example by personal participation in the change process
 ensure that the tools and instruments needed for the introduction of the change are
in place; this often requires the development of a training program
 provide reinforcement and rewards for support by staff of the change process
III.
BREAKTHROUGH IN KNOWLEDGE
3.1
Classical management theory specifies three steps relative to knowledge and the
introduction of change:



There needs to be a discovery or availability of new knowledge or information;
There needs to be a dissemination of this knowledge to those who can use it; and
There needs to be an application of the new knowledge to the solution of existing
problems.
Although these three steps are important individually, their importance comes most fully
when they are seen as a related process.
3.2
Within the TTFSE the pilot sites and the performance indicators will be playing a
major role in providing new information to management. These mechanisms are central
to the Change Management process of the TTFSE Program. The success of these
mechanisms, however, will be dependent upon both the related dissemination and
application steps. (See TTFSE Manual on Pilot Sites and Performance Indicators).
IV.
BREAKTHROUGH AS A RESULT OF TEAM DIRECTION
4.1
Achieving breakthrough in the introduction of change is almost always the result
of team effort. At the larger organization level this takes place through the establishment
of a task force representing the different sections or units of the organization; this group
is often referred to as the Change Management steering committee of the organization.
Underneath the umbrella of this group there are usually other task forces focused on
either functional or administrative issues. This interlocking cluster of steering
mechanisms provides for the implementation of the overall Strategic Plan and the
associated Action Plan adopted by the organization (See Exhibit 1).
4.2
In setting up the steering committee there are several requirements:
Leadership: Any group tasked with change should be established by the top
leadership of the organization with a clear indication of support by top
management for the change to take place (this should be reflected in the
organizational policy statement).
Terms of Reference: The steering committee needs to have a clear set of terms of
reference for the responsibilities and powers of the Steering Committee.
Appointment of Membership: The composition of the steering committee is
especially important in relation to the extent of change involved. If only one
section of an organization is involved, or if change is to take place at only one
level, then greater inclusion of representatives of these areas needs to be made.
All parties associated with the change process under consideration need to be
represented in one way or another. The use of subsidiary task forces is extremely
useful in breaking down issues in clusters and ensuring that those most useful in
supporting the change are involved.
Trainers or advisors on Change Management, or on some aspect of the change to
be introduced, may be required on a permanent or temporary/ad hoc basis.
Agreement on Internal Machinery and Operations: Such a group needs both rules
and structures to help its deliberation. In addition to the terms of reference of the
group, there needs to be a clear written understanding about: the duties of the
chairman, sectary and the members; how agendas are to be prepared; and the
maintenance of minutes.
4.3
The steering committee may need to initially assist in preparing the strategic plan
for change for an organization. If the plan has already been prepared, members selected
for the steering committee should have been involved in the preparation of the strategic
plan.
Exhibit 2
KEY ELEMENTS IN CHANGE MANAGEMENT STRUCTURE
Change
Management
Strategy and
Action Plan
▼
Organizational
Policy Statement
▼
▼
Change Management Steering Committee
Information
Source
►◄
▼
▲
Vertical and
Horizontal
Communication
Links
▼
▲
▲
Task Forces
►◄
►◄
Monitoring
and Control
Mechanisms
▲
Task Forces
►◄
Task Forces
▲
▲
▲
Training
Process
Consultation
Other
Technical
Assistance
V.
BREAKTHROUGH REQUIRES PARTICIPATION AND FEEDBACK
5.1
The success of Change Management is very much a function of the degree of
participation in the overall process led by the Steering Committee and Task Forces. This
process not only allows for the exchange of ideas and insights relevant to successful
implement of change that may have been overlooked by management but also provides a
sense of ownership on the part of the staff of the organization in the process underway. It
is crucial that the communication mechanisms established provide for vertical and
horizontal communication.
5.2
In some cases organizations develop a newsletter that is shared with the staff on
the change process, often documenting progress or effectiveness through the use of data.
Sometimes this information is also targeted to the public through the public relations
program of the organization. Since the results of the impact of change on users of the
services of an organization is important in evaluating the effectiveness of the change,
users are sometimes included in some of the focus groups or are separately interviewed or
surveyed.
5.2
Feedback is also a vital Change Management mechanism sometimes indicating
that the original expectations relative to the introduction of change must be adjusted or
must be addressed from a different perspective. Change Management, like all
institutional development, is in many respects an iterative process in which management
must sometimes recast its efforts of shift its emphasis.
VI.
RESISTANCE TO CHANGE
6.1
Although resistance to change is partially a function of individual personality
types, it is also very much related to the culture of an organization. Just as one can speak
of a national culture in any country, so too can one speak of an organizational culture
composed of learned behaviors and a collection of beliefs, values, habits, practice and
traditions shared by the members of the organization. Usually there is a high level of
congruence between the culture of an organization and the larger national culture, but
there are numerous examples of organizations with very distinct cultures.
6.2
Efforts to introduce change within any organization need to be considered within
the context of the culture of that organization. One needs to understand the culture of the
organization, a task that is often difficult for external consultants. The situation is
complicated by that fact that there are both formal and informal cultures in an
organization. Sometimes the informal culture even overrides the formal culture in
determining behavior.
6.3
The work place is a very important part of the social and culture life of
individuals. The culture of an organization defines diverse activities, providing codes of
conduct and expectations. For example what is the range of minimum and maximum
output for individuals performing in different positions, what rules exist concerning
communications and relations with supervisors, what actions are considered violations of
the ethics of the organization, what are the guidelines for punishment or reprimands?
6.4
Within the content of organization culture, it is important to remember that
change requires two steps: first, unlearning old habit, attitudes, and beliefs; and secondly,
learning new one. Unlearning often requires that the members of an organization
consider the history of a belief and care enable to see that although once well founded it
has become obsolete as a result of a change in the times. Learning to do things in a
different way can be facilitated by attaching some form of satisfaction to the learning.
Sometimes this is praise or approval, or it can be increased status, a sense of belonging to
the new professional culture of change, or material rewards including incentives. The
training that is often a pre-requisite for change can also be an inducement to support the
change process.
VII.
DIAGNOSTIC FEEDBACK, CONTROL, AND MONITORING
7.1
In order to judge the extent to which progress is being made as well as to
determine the effectiveness and desirability of the change being implemented, it is
necessary to have data that gives an analytical overview to what is happening. Setting up
diagnostic mechanism is an important part of Change Management. It is important that
the information is organized and presented in a way that is useful to the respective levels
of management. In the TTFSE the performance indicators are intended to serve this
purposes in terms of the larger context of change, but individual Customs organizations
may find it useful to have supplemental information made available to management.
7.2
The use of such diagnostic mechanisms is vital to the control and use of resources
and the monitoring and measurement of what is being achieved. Organizations may use
broad based or fine tuned benchmarks to monitor activities. These are often developed
on a comparative basis looking at the achievement of other organizations providing the
same services. Comparative review will be one of the key functions of the Regional
Steering Committee of the TTFSE Program.
VIII. TECHNICAL ASSISTANCE OPTIONS
8.1
Having provided the overarching structure for Change Management, how can the
SECI/TTFSE Team further assist the various Customs organization in the implementation
of their Strategic Plans? Following consultation with each Customs Organizations,
technical assistance packages can be prepared to assist the specific concerns of each
organization. A sample of the types of technical assistance available is provided in
Exhibit 3.
Exhibit 3
Sample Categories of Technical Assistance in Support of Change Management,
Human Resources Development, and Professionalism

ORGANIZATIONAL CULTURE/PROFESSIONAL ETHICS - Development of a
positive and innovative culture; encouraging communication and innovation; definition
of standards of conduct and accountability; establishing good governance practices

GENERAL MANAGEMENT - Evaluation of management techniques and
methodologies to ensure clear, concise decision making, effective communication of
management objectives, problem resolution, and efficient administration

PROCESS FACILITATION FOR CHANGE MANAGEMENT - Assistance with
development of task forces and other mechanisms in support of Change Management

OPERATIONAL SYSTEMS - Creation of clear mission objectives and supporting
procedures and strategies with systems of measurement and goal setting

COMPENSATION PACKAGE - Development of career path options with salary and
non-salary incentives to attain specific performance achievement and
Professionalism; development of a meaningful personnel appraisement mechanism

RECRUITMENT AND PERSONNEL SYSTEMS - Creation of specific hiring
standards with a comprehensive pre-employment assessment of applicants; upgrading or
modifying staffing systems to meet such specific objectives as performance criteria

TRAINING – Development of general and specialist training mechanisms at the
national level, complete with testing and evaluation procedures; use of
training as a means of measuring ability for advancement against specific
career paths

ENFORCEMENT/INTERNAL AUDIT - Development of effective enforcement and
audit capabilities, to include recommendations for adequate legal authority,
clear mission statements, means of measurement, essential training, career
path advancement, and recognition

PUBLIC RELATIONS - Creation of specific initiatives to inform the general
and importing public of the missions and accomplishments of Customs; establishment
of a routine dialogue with the business community to resolve issues,
discuss ideas and processes, and promote a positive environment with
meaningful communication with various client and user groups
Attachment 2
Checklist for Sample Actions to Support Change
Source: Oscar Mink et al)
Component 1: Developing
Component 2: Training
Component 3
supportive organization
Consultation and
arrangements
reinforcement
 Developing
 Developing positive
 Encouraging
Innovation-related
attitudes
people on a
policies
one-to-one basis
 Increasing Knowledge
 Establishing global
 Promoting
 Teaching innovationsrules
innovation se
related skills
among small
 Making Decisions
 Reviewing information
groups
 Planning
 Holding workshops
 Assisting
 Scheduling
 Modeling/demonstrating
individuals in
innovation use
 Staffing
Solving
 Restructuring roles
 Observing innovation
Problems
use
 Seeking or providing
 Coaching small
materials
 Providing feedback on
groups in
innovation se
 Providing space
innovations use
 Clarifying innovation
 Seeking/acquiring
 Sharing topics
misconceptions
funds
informally
 Providing equipment
 Providing
personalize
technical
assistance
 Holding brief
conversations
and applauding
progress
 Facilitating
small groups in
problem solving
 Providing small
comfort and
caring sessions
reinforcing
individual
attempts to
change
 Providing
practical
assistance
 Celebrating
successes
Component 4: monitoring










Gathering
Information
Collecting data
Assessing innovation
knowledge or skills
informally
Assessing innovation
se or concerns formal
Analyzing/processing
data
Interpreting
information
Reporting/sharing
data on outcomes
Providing feedback
on information
collected
Administering end-of
workshop
questionnaires
Conference with
users about progress
in innovation use
Component 5: External
communications
 Describing what the
innovation is
 Informing others
(besides users)
 Reporting to the board
and consistent groups
 Making presentation at
conferences
 Developing a public
relations campaign
 Gaining the support of
consistent groups
Source: Adopted from Hord et. al., p 75.
Component 6:
Dissemination
 Encouraging
others (outside
the
implementing
site) to adopt
the innovation
 Broadcasting
innovation
information and
materials
 Mailing
descriptive
brochures
 Providing free
demonstration
kits
 Training
innovation
representatives
 Making
regional
innovation
presentation to
potential
adopter
 Marketing the
innovation
Attachment 3
Support for Change Questionnaire
This questionnaire is designed to help interviewers understand the level of support or
opposition to change with an organization. Guidelines to the questions the interviewer
may ask in determining the scores are provided as footnotes.
1.
Values and Vision
(Do people throughout the organization share values or visions?)
1
Low
2.
5
6
7
High
2
3
4
5
6
7
High
2
3
4
5
6
7
High
Culture
(Is it a culture that supports risk taking and change?)
1
Low
5.
4
Cooperation and Trust
(Do cooperation and trust seem high through out the organization?)
1
Low
4.
3
History of Change
(Does the organization have a good track record handling change?)
1
Low
3.
2
2
3
4
5
6
7
High
4
5
6
7
High
Resilience
(Can people handle more?)
1
Low
2
3
6.
Rewards
(Will this change be seen as beneficial?)
1
Low
7.
3
4
5
6
7
High
Respect and Face
(Will people be able to maintain dignity and self-respect in conjunction with the
change?)
1
Low
8.
2
2
3
4
5
6
7
High
4
5
6
7
High
Status Quo
(Will this change be seen as mild?
1
Low
2
3
Notes
Values and Vision: Low score could indicate deep-seated resistance. Values may be in
conflict; individuals and groups may not see any common ground. His is serious. It
almost guarantees that any manor change will be resisted unless people learn how to
begin building a share set of values. On the other hands, low scores may indicate a
communication problem. In some organizations, values and vision remain secret. People
do no know where the organization is going. This is a communications problem and may
not indicate deeper potential resistance.
History of Change: Low scores indicate a strong likelihood that this change will be
resisted wit great fore/. Those who want the change will need to demonstrate separately
that they are serious this time. People are likely to be very skeptical so persistence will
be critically important
Cooperation and Trust: Low scores probably indicated deep-seated resistance. Is
should be taken seriously. It is difficult if not impossible to build support for any major
change without some degree of trust. The opposite of trust is fear, therefore, a low score
means not just the absence of trust but the presence of fear.
Culture: Mid-range to low sores indicate that it may be difficult for people to carry out
the changes even if they support you. They are saying tat the systems and procedures
hinder change. The change agents must be willing to examine these deeper systemic
issues.
Resilience: Low to mid-range scores probably indicate that people are burned out. Even
though they may see the need for this change, they may have little strength to give to it.
Two important questions: Is this change really necessary at this time? If so how can you
support people so that the change causes minimal disruption?
Rewards: Obviously low scores indicate strong potential resistance. Who in their right
mind would support something that they knew would harm them? If their perceptions are
accurate, then the change agents have a difficult challenge: How can they move forward
with the change and find ways to make it rewarding to others? If the low scores indicate
a misperception then the change agents must let people know why they are misinformed.
It is likely that this message will have to be communicated repeatedly (especially if trust
is low as well).
Respect and Face: Low scores probably indicate potential mid-level resistance. The
change agents must find ways to make this a situation in which all can win.
Status Quo: Low scores indicate that people view this change as very disruptive and
stressful.. The more people get involved in the change process the less resistance they are
likely to experience. Most often people resist change when they feel a loss of control.
Source: Maurer, Rick. Beyond the Wall of Resistance.
Attachment 4
Launching A Change Management Initiative
Steps to Remember
Take the Time to do an accurate DIAGNOSIS
 Focus on customers, suppliers, and potential allies as well as competitors.
 Collect and analyze relevant data; benchmark best practices.
 Engage the senior management team in envisioning a future state.
 Identify core competencies; “broken” processes.
 Develop a new corporate strategy.
 Use corporate strategy to focus Change Management and set priorities.
 Create a mechanism for continuing corporate self-assessment and renewal.
Recognize the organization’s need for INSPIRTATION
 Review the vision and values statement; if a new one is needed, incite broad.
Participation in the development process.
 Align corporate strategy with vision and values.
 Enlist the senior management team in values/strategy deployment.
 Establish role models for behavior change, starting at the top of the company.
 Search out and communicate success stories.
Build an INFORMATION Infrastructure
 Align information technology with performance needs. Is broader access to data
needed to get the job done? Do data networks support cross-functional processes?
 Develop an interactive internal/external communications strategy.
 Create bottom-up and lateral feedback mechanisms and sensing devices
(meetings, focus groups, surveys. etc.).
Make PERSUASION a priority
 Enable senior executives to make an impact on employees: establish leadership
norms; align leadership style with strategy, values and desired culture; train for
competency.
 Continuously communicate new corporate direction/expected results and progress
toward goals.
 Provide opportunities to experience the desire new order or behavior (role models,
parallel systems, site visits, benchmarking, etc.).
Create ENABLING systems and structures
 Align organizational design, business systems and work processes with corporate
vision/values and strategy.
 Build a learning environment through training, team participation, and the transfer
of knowledge across functions and units.
Establish ACCOUNTABILITY at all levels of the organization
 Organize the agenda of management review meetings to stress corporate
priorities.
 Select process owners.
 Tie management activities to results.
 Set goals and clarify levels of empowerment and responsibility.
 Align performance management system with vision/values/strategy and desire
results.
Make REINFORCEMENT a way of life.
 Align recognition and rewards system with vision/values/strategy and desired
results.
 Provide progress reports, success stories, and information on business conditions
and results continuously.
Source:
Kathryn Troy. Change Management: An Overview of Current Initiatives.
Attachment 5
Director:
Cheryl Gray x39188
Sector Manager:
Helen Sutch x35438
Building effective and accountable public institutions is a core development challenge. Experience
has shown that tackling deep-rooted structural and institutional weaknesses is essential for
sustainable poverty reduction. Misguided allocation of public resources, excessive government
intervention, and corruption have deterred private investment and slowed growth and poverty
reduction efforts in many countries. Much of the Bank’s poverty work underlines the high cost of
corruption, weak government and inadequate service delivery to the poor. Responding to this
accumulation of evidence, the Bank has increasingly focused its assistance on governance and
public sector institutional reform. Corruption, a fundamental symptom of public sector malfunction, is
also a key concern.
In November 2000, PREM issued a strategy to enhance the Bank’s ability to help its client countries
improve governance and public sector institutions. Based upon a stock-taking of the Bank’s
experience in these areas, Reforming Public Institutions and Strengthening Governance: A World
Bank Strategy envisions four directions for the Bank's future work:

Broadening the Bank’s approach, emphasizing "bottom-up" empowerment, transparency,
and competition in public service delivery (where feasible) as well as "top-down" reforms
inside government.

Working more closely with clients to undertake better, deeper, and more participatory
analytical work (including Public Expenditure Reviews, Institutional and Governance
Reviews, and anticorruption and governance surveys of households, firms, and
policymakers) to identify “good fit” reform options rather than one-size-fits-all notions of
"best practice”.

Taking a longer-term approach in Bank lending, where possible, to allow time for
institutional reform. The Bank is now pursuing both longer-term programmatic adjustment
loans (as with 3-year Programmatic Structural Adjustment Loans in Thailand and Latvia)
and longer-term investment loans (as with 10- to 12-year Adaptable Program Loans in
Bolivia and Tanzania).
Enhancing staffing and partnerships, to improve selectivity and quality in the Bank’s
assistance to its clients.
The Bank is in the process of implementing this strategy, gathering and disseminating lessons of
experience, and integrating governance and anticorruption concerns in all its activities, including
Country Assistance Strategies.
Support in core areas of public sector functioning, such as public expenditure analysis, tax
administration, civil service reform, auditing, and judicial reform, has grown steadily in recent years.
Among these topics, public expenditure management is increasingly emerging as a high priority for
both development and fiduciary reasons, particularly in light of the HIPC initiative. Not only is
efficient and effective public spending critical to poverty reduction, but strong public expenditure
management systems in client countries can help ensure that development assistance is being
utilized as intended. The Public Expenditure Review (PER) is an important instrument for assessing
and improving public expenditure outcomes in client countries.
In public service delivery, much of the Bank’s work has focused on institutional concerns, including
promotion of private provision, decentralization, and capacity building. Institutional concerns also
inform the revenue area, where the emphasis has been on institutional development of revenue
authorities and taxation of the informal sector. The Institutional and Governance Review (IGR) is
one diagnostic instrument that is used to analyze the institutional and governance arrangements in
the public sector and their link to public sector performance.
The public sector thematic groups, Administrative and Civil Service Reform, Anticorruption,
Decentralization, Legal Institutions of the Market Economy, Public Expenditure Analysis and
Management, and Tax Policy and Administration, take a lead role in developing and disseminating
knowledge products and services to assist those working on governance and public sector reform.
A thematic group on E-Government has also been launched recently, and the new E-Government
website illustrates, through a number of case studies, the potential for harnessing information
technology to improve the responsiveness, transparency and accountability of governments. For
those working on governance and public sector reform. All these resources, including thematic
websites and toolkits can be accessed from the Governance and Public Sector Reform website at
www.worldbank.org/publicsector.