17
McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Organizational Change at Home Depot
Home Depot CEO Robert
Nardelli (left in photo) has dramatically changed the big box retailer’s culture by introducing systems that reinforce the new values .
Slide 17-2
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Desired
Conditions
Restraining
Forces
Current
Conditions
McShane/Von Glinow OB4e
Restraining
Forces
Driving
Forces
Restraining
Forces
Driving
Forces
Driving
Forces
Before
Change
Slide 17-3
During
Change
After
Change
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Forces for
Change
Direct Costs
Saving Face
Fear of the Unknown
Breaking Routines
Incongruent Systems
Incongruent Team Dynamics
Slide 17-4
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

The FBI has been slow to shift from law enforcement to domestic intelligence due to:
– Incongruent systems -- career paths, reward system, decentralized structure
– Breaking routines -- unfamiliar with intelligence gathering roles
– Saving face -- past turf wars with CIA created an antiinvestigation mindset
AP/ Wide World Photos
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e Slide 17-5

• Inform employees about driving forces
• Most difficult when organization is doing well
• Must be real, not contrived
• Customer-driven change
– Adverse consequences for firm
– Human element energizes employees
Slide 17-6
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Minimizing Resistance at Nissan
© Eriko Sugita/Reuters/Corbis
Carlos Ghosn launched a turnaround at Nissan Motor Company that saved the Japanese automaker and relied on change management practices rarely seen in Japan. Employee involvement was a key strategy to minimize resistance to the turbulent changes that occurred.
McShane/Von Glinow OB4e Slide 17-7
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Minimizing Resistance to Change
Communication  Highest priority and first strategy for change
 Improves urgency to change

Reduces uncertainty (fear of unknown)

Problems -- time consuming and costly
Slide 17-8
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Minimizing Resistance to Change
Communication
Learning
 Provides new knowledge and skills
 Includes coaching and action learning
 Helps break old routines and adopt new roles
 Problems -- potentially time consuming and costly
Slide 17-9
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Minimizing Resistance to Change
Communication
Learning
Employee
Involvement
 Increases ownership of change
 Helps saving face and reducing fear of unknown
 Includes task forces, future search events
 Problems -- time-consuming, potential conflict
Slide 17-10
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Minimizing Resistance to Change
Communication
Learning
Employee
Involvement
Stress
Management
 When communication, training, and involvement do not resolve stress

Potential benefits
 More motivation to change
 Less fear of unknown
 Fewer direct costs
 Problems -- time-consuming, expensive, doesn’t help everyone
Slide 17-11
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Minimizing Resistance to Change
Communication
Learning
Employee
Involvement
Stress
Management
Negotiation
 When people clearly lose something and won’t otherwise support change
 Influence by exchange-reduces direct costs
 Problems
• Expensive
• Gains compliance, not commitment
Slide 17-12
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Minimizing Resistance to Change
Communication
Learning
Employee
Involvement
Stress
Management
Negotiation
Coercion
 When all else fails
 Assertive influence
 Firing people -- radical form of “unlearning”
 Problems
• Reduces trust
• May create more subtle resistance
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e Slide 17-13

Refreezing the Desired Conditions
• Realigning organizational systems and team dynamics with the desired changes
– Alter rewards to reinforce new behaviors
– Feedback systems
• Help employees learn how they are doing
• Provide support for the new behavior patterns
Slide 17-14
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

 Need a vision of the desired future state
 Identifies critical success factors for change
 Minimizes employee fear of the unknown
 Clarifies role perceptions
McShane/Von Glinow OB4e Slide 17-15
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

• Change agents apply transformational leadership
– Help develop a vision
– Communicate the vision
– Act consistently with the vision
– Build commitment to the vision
• Also apply transactional leadership
– Aligning employee behavior through rewards, resources, feedback ,etc.
Slide 17-16
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

• Motivation
– Successful pilot project
– Supervisor support and reinforcement
• Ability
– Competencies to adopt pilot project
– Role modeling from people in pilot project
• Role perceptions
– Translating pilot project practices -- neither too specific nor too general
• Situational factors
– Resources and time to implement pilot project elsewhere
Slide 17-17
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

• Change needs both action and research focus
• Action orientation
– Solve problems and change the organizational system
• Research orientation
– Concepts guide the change
– Data needed to diagnose problem, identify intervention, evaluate change
Slide 17-18
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Establish
Client-
Consultant
Relations
Diagnose
Need for
Change
Introduce
Intervention
Evaluate/
Stabilize
Change
Disengage
Consultant’s
Services
Slide 17-19
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Appreciative Inquiry at Canadian Tire
Canadian Tire relied on appreciative inquiry by asking staff to describe events that have made the retailer successful. The company’s core values were then rebuilt around those positive experiences. Store employees were also involved in an appreciative inquiry exercise to reinforce these values.
McShane/Von Glinow OB4e Slide 17-20
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

 Directs participants’ attention away from problems and towards the group’s potential and positive elements.
 Reframes relationships around the positive rather than being problem oriented
McShane/Von Glinow OB4e © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Slide 17-21

Four-D Model of Appreciative Inquiry
Discovery
Discovering the best of
“what is
Dreaming
Forming ideas about
“what might be”
Designing
Engaging in dialogue about “what should be”
Delivering
Developing objectives about “what will be”
McShane/Von Glinow OB4e Slide 17-22
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Parallel Learning Structure Approach
• Highly participative social structures
• Members representative across the formal hierarchy
• Sufficiently free from firm’s constraints
• Develop solutions for organizational change which are then applied back into the larger organization
Slide 17-23
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Parallel
Structure
Organization
McShane/Von Glinow OB4e Slide 17-24
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Cross-Cultural and Ethical Concerns
• Cross-Cultural Concerns
– Linear and open conflict assumptions different from values in some cultures
• Ethical Concerns
– Privacy rights of individuals
– Management power
– Individuals’ self-esteem
– Consultant’s role
Slide 17-25
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Rules for the Road Ahead
• Understand your needs and values
• Understand your competencies
• Set career goals
• Maintain networks
• Get a mentor
Slide 17-26
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

“Take away my people, but leave my factories, and soon grass will grow on the factory floors.
Take away my factories, but leave my people, and soon we will have a new and better factory.”
Andrew Carnegie (1835-1919)
Slide 17-27
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

17
McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

17
McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Scenario #1: “Greener Telco”
• Scenario #1 refers to
Bell Canada’s Zero
Waste program, which successfully changed wasteful employee behaviors by altering the causes of those behaviors.
Courtesy of Bell Canada
Slide 17-30
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Relied on the MARS model to alter behavior:
Motivation -- employee involvement, respected steering committee
Ability -- taught paper reduction, email, food disposal
Role perc.
-- communicated importance of reducing waste
Situation -- Created barriers to wasteful behavior, eg. removed trash cans
Courtesy of Bell Canada
Slide 17-31
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e

Scenario #2: “Go Forward Airline”
• Scenario #2 refers to Continental Airline’s “Go
Forward” change strategy, which catapulted the company “from worst to first” within a couple of years.
McShane/Von Glinow OB4e Slide 17-32
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Continental Airlines’ Change Strategy
 Communicate, communicate, communicate
 Introduced 15 performance measures
 Established stretch goals (repainting planes in 6 months)
 Replaced 50 of 61 executives
 Rewarded new goals (on-time arrival, stock price)
 Customers as drivers of change
Slide 17-33
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McShane/Von Glinow OB4e