Managing Change and Innovation
Organisation
Managing Change and Innovation
Syllabus tag: KASNEB CPA | Advanced Level | CA31 Leadership and Management | Topic 6 Managing Change and Innovation
Lesson objectives
By the end of this topic, you will be able to:
- Distinguish types of organisational change
- Apply Lewin's three-stage model and force field analysis
- Apply Kotter's eight steps
- Identify sources of resistance and appropriate responses
- Explain why change programmes fail
Why this matters
Most change programmes fall short of their objectives, and the reasons are consistent and known. A candidate who can name the failure modes and the counter-measures is answering the question examiners actually ask.
Types of change
| Incremental | Transformational | |
|---|---|---|
| Proactive | Tuning | Reorientation |
| Reactive | Adaptation | Re-creation |
Re-creation — transformational change forced by crisis — is the most difficult and the most common, because organisations rarely transform themselves while things are going well. That is the central problem of change management: the best time to change is when there is least appetite for it.
Lewin's model
Unfreeze — Change — Refreeze.
Unfreezing creates the readiness to change: establishing that the present position is untenable, and reducing the anxiety attached to moving.
Changing implements the new arrangements.
Refreezing embeds them, through revised procedures, training, reporting and reward, so the organisation does not revert.
The stage most often skipped is refreezing. A new system is installed, attention moves elsewhere, and within a year staff have reverted to informal workarounds. The change was made and never embedded.
Force field analysis
Any situation is held in equilibrium by driving forces pushing for change and restraining forces resisting it.
The insight is that reducing restraining forces is more effective than increasing driving forces. Pushing harder against resistance raises tension and provokes counter-pressure; removing the reason for resistance allows the existing drivers to move the position.
In practice: a manager facing opposition to a new system does better to address the fear of job loss behind it than to repeat the business case more loudly.
Kotter's eight steps
- Establish a sense of urgency
- Form a guiding coalition with enough power to lead
- Develop a vision and a strategy to achieve it
- Communicate the vision — repeatedly and through behaviour
- Empower action by removing obstacles
- Generate short-term wins
- Consolidate gains and produce more change
- Anchor the change in the culture
Two steps carry most of the failures.
Step 1. Without urgency, people treat the change as optional. Manufactured urgency is transparent and worse than none; the case must be real.
Step 6. Short-term wins matter because a programme showing no results for eighteen months loses its supporters. Delivering something visible early buys the credibility to continue.
:::checkpoint A chief executive announces a major restructuring by email, appoints a project team of junior analysts, and sets a first review after two years. Identify which of Kotter's steps have been mishandled and the likely consequence of each. :::
Resistance to change
| Source | Nature |
|---|---|
| Self-interest | Fear of losing status, income or position |
| Misunderstanding | Not knowing what the change involves |
| Different assessment | Genuinely believing the change is wrong |
| Low tolerance | Anxiety about coping with new demands |
| Loss of control | Change done to people rather than with them |
The third is worth separating from the others. Some resistance is well-founded, and a manager who treats every objection as an obstacle to be overcome loses the information the objection carries. The staff closest to a process often know why a proposed change will not work.
Kotter and Schlesinger's responses:
| Approach | Use when | Drawback |
|---|---|---|
| Education and communication | Resistance comes from misinformation | Slow |
| Participation and involvement | Initiators lack information; others have power | Slow; may produce a poor solution |
| Facilitation and support | Resistance is from anxiety | Time-consuming; may fail |
| Negotiation and agreement | A group will clearly lose out | Expensive; invites others to negotiate |
| Manipulation and co-optation | Other approaches too slow or costly | Risks future distrust if discovered |
| Explicit and implicit coercion | Speed essential; initiators have power | Risky; leaves people resentful |
The list runs from slow and durable to fast and damaging. The choice depends on the time available and the power held, and the last two carry consequences beyond the immediate change.
Why change fails
- No real sense of urgency
- Weak or unrepresentative guiding coalition
- Vision unclear or under-communicated
- Obstacles left in place — structures, systems, reward
- No short-term wins
- Victory declared too early
- Change never anchored in culture, so it reverts
- Human element neglected while the technical change is managed
The last is the recurring finding. Organisations manage the system implementation carefully and the people badly, then attribute the failure to the technology.
:::checkpoint A company installs a new costing system successfully but finds after a year that managers still make decisions using the old reports, which staff continue to prepare informally. Diagnose the failure using Lewin and suggest what should have been done. :::