MANAGING CHANGE, STREES AND INNOVATION

Change is an alteration of an organization’s environment, structure, technology, or people. Because

change is an organizational reality, that is inevitable (sure to happen) and may bring opportunities or
threads, handling it is an integral part of every manager’s job.

People who are the catalysts for change and manage the change process are change agents. A manager
may be a change agent.

However, the change agent can be a non manager—for example, an internal staff specialist or outside
consultant. Management often uses outside consultants because they can offer a fresh perspective
which insiders lack. But, they may not understand the organization’s history, culture, operating
procedures, and personnel.

Furthermore, outside change agents often initiate more drastic changes because they do not have to
live The external forces of change come from various sources. In recent years, the marketplace has
affected firms by introducing new competition. Bell Atlantic, for example, is experiencing competition
from cable companies to provide local phone service.

Technology causes change. E-commerce and the Internet have changed how we sell products and
access information.

Economic changes affect almost all organizations. Dramatic decreases in interest rates in the late 1990s
fostered significant growth in the housing market. This meant more jobs, more people working, and
more sales for other businesses that support the building industry.

Internal forces originate from the operations of the organization or from the impact of external
changes: such as management redefining its strategies, new equipment in workplace, and demographic
changes in the organization’s workforce. These forces lead to changes in the policies and practices of
management. with the repercussions after the changes have been implemented.

Managers make changes to increase the effectiveness of their organizations. Change, however, can be a
threat to managers and no managers alike. So, organizations resist change, even when it is beneficial.

People resist change for three reasons:

In the first place, change substitutes ambiguity and uncertainty for the known. Even if workers do not
like the current system of management, at least they know the ropes.

People also resist change because they fear losing something they already possess. The greater their
investment in the status quo, the more they resist change because they fear losing their position,
money, friendships, or personal conveniences.

Finally, people will resist any changes they do not believe are in the organization’s best interests.

Change is an alteration of an organization’s environment, structure, technology, or people. Because

change is an organizational reality, handling it is an integral part of every manager’s job.

THREE STAGES OF CHANGE

Lewin’s three stages of change

Step1: unfreeze the status quo: physical setting, mental setting, strategies, models, technology and
structures pushes a company to a quasi-stationary equilibrium: organizations need to agitate the
equilibrium to instigate a behavior that is open to change.

 Determine what needs to change: survey your company and understand why change is
necessary
 Ensure support from management & c-suite: bring stakeholder onboard and show them the
positive impact to be brought by change
 Create a need for change: market a compelling message why change is best, its benefits in the
long run (long term vision)

Step2: change: implement change through various options in small scales (it’s a trial and error) examine
what works and what doesn’t as well as parts that are resistant. For successfulness and long-term
effectiveness of the implemented change the following drivers are important:

 Information-flow: share information across the levels of organizational hierarchy, provide

variety of skills and expertise, coordinate problem solving across the company. Widely and
clearly – benefits and effects
 Leadership: promote, empower and influence other to achieve goals (vision and motivation) –
the iterative approach is to sustain change, as inadequate reinforcement lead to short lived
change that does not meet its set objectives
 Inclusion: involve others as much as possible: easy wings accumulate into larger wins through
synergetic efforts – working with more people may not only achieve navigating through various
stakeholder but also leads to increased success in joint hands

Step3: refreeze: seek ways to sustain the enacted change. The goal is make involved parties to
consider, believe and adopt/espouse/accept the new state as the new status-quo for them to not resist
the transformation of norms, activities, strategies and process as per the new state. Then companies
need to:

 Tie new changes into culture (new norms, beliefs and conduct): by identifying change support
and barriers
 Develop and create ways to sustain the change long-term: leadership and management
support and adapt structures when necessary, establish feedback processes and create a
reward system
 Offer training: informal and formal skills development for employees to fit well and excel into
the new sphere (learning organization: skilled at creating, acquiring and transferring knowledge,
and modifying its behaviors to reflect new trends in the organization’s environment) – scan,
monitor, forecast and assess
 Celebrate success

 Changing structure means altering authority relationships, coordination mechanisms,

centralization of authority, job design, or similar structural variables.
  Changing technology means modifying methods and equipment used to complete work
processes.
 Changing people involves adjusting employee attitudes, expectations, perceptions, or behaviors.

How manager respond to changes in preparation for the future:

Reactive (followers) Proactive (leader)

Keep from being swamped by the Aggressively alter strategies to drive
waves of change by revising their change to new directions by:
strategies to keep up with the Predicting/anticipating and initiate
waves of changes (current trend) change to ride the crest of the waves

The term organizational development refers to a collection of techniques for understanding, changing,
and developing work force effectiveness: process consultation, survey feedback, team building, and
intergroup development

Stress is a force or influence that a person feels when facing opportunities, constraints, or demands
which are important yet uncertain. Stress can be positive in a situation that offers an opportunity for
gain. But, stress is most often associated with constraints (barriers that keep someone from doing what
he or she wants) and demands (things that take up someone’s time and require the person to shift
priorities). Furthermore, when constraints or demands have an effect on an important event and the
outcome is unknown, pressure is added—pressure resulting in stress.

Factors that create stress can be grouped into two categories: personal and organizational.

Personal stress can be caused by illness, divorce, death in the family, and financial problems. Because
employees bring their personal problems to work with them, a manager must take such personal factors
into account when trying to manage workplace stress.

Organizational stress can be caused by task demands are related to an employee’s job: for example,
the design of the job, working conditions, and physical work layout. Interdependence between an
employee’s tasks and the tasks of others creates stress. Autonomy, on the other hand, tends to reduce
stress.

Role demands relate to pressure placed on an employee as a function his or her role in the organization.

Workplace stressors can arise from changes in the task, duties, and responsibilities of jobs, downward
adjustments in numbers of employees to match current demand for products and services, and
rearrangements in the current working relationships to fit organizational structure to changes
necessitated by changes in the firm’s strategic direction.

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SOME EMPLOYEES ARE MORE PRONE TO STRESS.

Consider the Type A-Type B personality dichotomy.

Type A personalities are characterized by a chronic sense of urgency and an intense drive to compete.
These ambitious, achievement oriented workers have difficulty accepting and enjoying leisure time.

On the other hand

type B personalities are more relaxed and easy-going.

Managers must recognize that Type A employees are more likely to show symptoms of stress, even if
organizational and personal stress factors are low.

Stress reveals itself through psychological symptoms, such as boredom, anxiety, and procrastination;
and behavioral symptoms, such as substance abuse sleep disorders, or excessive absence.

Most of the early interest in stress management focused heavily on health-related or physiological
concerns: changes in metabolism, elevated blood pressure, and increased risk of heart attacks.

Many of these physiological concerns require the skills of trained medical personnel, so their immediate
and direct relevance to HRM is negligible. Of greater importance to managers are psychological and
behavioral symptoms of stress that can be witnessed in the employee.

Without some stress, people would have no energy. Accordingly, stress reduction programs should
target the dysfunctional aspects of stress.

One way to reduce stress is to make sure that employees are properly matched to their jobs and that
they know the extent of their “authority.”

Furthermore, by letting employees know precisely what is expected, role conflict and ambiguity can be
minimized. On-the-job stress can also be reduced by redesigning jobs and encouraging employee
participation.

Many companies have started employee assistance and wellness programs. An extension of substance
abuse programs, employee assistance programs (EAPs) have focused on new areas, such as health care.
Studies suggest that organizations can save $5 for every EAP dollar spent.

Designed to keep workers healthy, wellness programs focus on weight control, stress management, or
physical fitness. Studies show that such programs control health care costs and reduce health related
absenteeism.

Given the dynamics of the global marketplace, organizations must create new products and adopt
new technologies.

Creativity is the ability to combine ideas in a unique way or to make unusual associations between
ideas. Creative organizations develop novel approaches or unique solutions to challenges and
opportunities.

Innovation is the process of turning a creative idea into a marketable product, service, or operating
method. Innovative organizations channel creativity into useful outcomes.
While some believe that creativity is inborn, others believe that creativity can be stimulated by using a
fourfold process: perception, incubation, inspiration, and innovation.

Moving from creative perception to reality is not automatic. Instead, ideas go through an incubation
process. During incubation, employees collect, store, retrieve, study, and reshape data until they create
something new. This process can take years. Inspiration occurs when all of your prior efforts successfully
come together. Innovation means turning inspiration into a useful product, service, or methodology.

Three sets of organizational variables stimulate innovation: structure, culture, and human resource
practices.

Structural variables affect innovation in three ways:

(1) organic structures promote innovation,

(2) plentiful resources stimulate innovation, and

(3) effective communication overcomes barriers to innovation. All three require the commitment of top
management.

Innovative organizations encourage experimentation and risk-taking behavior by rewarding both

successes and failures. Such organizations are likely to have the following seven characteristics:

1. Acceptance of ambiguity

2. Tolerance of the impractical

3. Low external controls

4. Tolerance of risk

5. Tolerance of conflict

6. Focus on ends rather than on means

7. Open systems focus

Innovative organizations train and develop their members to keep their knowledge, skills, and abilities
current; offer job security rather than the fear of being fired to promote risk-taking; and encourage
individuals to become champions of change.

Once a new idea is developed, champions of change promote the idea and build support. Then, they
overcome resistance to the idea and ensure that the innovation is completed. These persons are self-
confident, energetic, persistent, risk-takers. In addition, they have the decision-making discretion to
induce and implement innovations.