HCA250 Wk5 Assignment Paper

learning outcomes

Managing Change and Innovation

CHAPTER

how to manage

resistance to change.

techniques for stimulating

innovation.

what managers

need to know about

employee stress.

organizational change and

compare and contrast views on the change

process.

Describe

Explain

Define

Discuss

7.2

7.3

7.1

7.4

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p.201

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Imagine lying as a patient in a hospital bed and being visited by a 5-foot robot.1 You might attribute such a “vision” to too many drugs or too little sleep. But in Methodist Hospital in Houston, that 5-foot robot isn’t a vision. It’s real. The robot, which looks like “an oversize carpet cleaner with a computer monitor stuck on top,” visits patients, being guided remotely by a patient’s doctor from a command center on another floor. With this type of technology, especially in a critical care unit, a medical team can do its rounds and “read” vital signs and “see” how patients are doing without disturbing or distressing them.

Robots roaming hospital hallways aren’t the only technological advancements transforming how medical centers and health care systems work. Radio-frequency ID tags keep track of doctors, nurses, and pieces of equipment in real time, leading to faster emergency response times. “Smart beds automatically transfer patients’ breathing and heart rates to their charts,” quickly alerting nurses to potential or developing problems. And one of the biggest technological changes is in medical records information keeping. Rather than having massive numbers of paper-based files, health care organizations are moving toward completely digital medical records. But the rate of change has been slow. Currently, only 1.5 percent of private hospitals have a comprehensive electronic medical records system in all clinical units. Only 7.6 percent have a basic system in at least one unit. Yet, it’s a major change with significant promise. “Putting patient records into digital form . . . can provide a wealth of information about which treatments work and which don’t, and speed diagnosis and medical care.”

The investment that hospitals and other health care organizations are making in technology has basically two goals: (1) to improve medical care and reduce error rates, and (2) to minimize patient stress, which encourages healing. “Ironically, one of the most anticipated developments is that technology will allow hospitals to keep people out of them.” The vice president of the inno- vation and technology group at Kaiser Permanente’s Sidney R. Garfield Health Care Innovation Center says, “By 2015, the home will be the hub of health care.” And such changes are already taking place. In many rural areas of the United States where specialized medical care is scarce, telemedicine is in place to cover the gaps. For instance, 31 hospitals in remote locations in Michigan use robots, similar to the one described earlier, for diagnosis and follow-up. Robots are even found in operating rooms—the “assembly line” of a health care system—just as they are in other organization’s assembly lines, and for the same reasons: quality control and cost control.

In an industry where you’d expect up-to-date technology, the changes in the way health care organizations do their work haven’t been occurring as rapidly as you might

think. However, technological changes will continue to transform the industry and the organizations and the people who make it work.

191

Technology Transformers

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7.1

Define organizational change and

compare and contrast views on the change

process.

192

Structure Authority relationships

Coordinating mechanisms Job redesign

Spans of control

Technology Work processes Work methods

Equipment

People Attitudes

Expectations Perceptions

Behavior

EXHIBIT 7-1 Categories of Organizational Change

Change is a constant for organizations and thus for managers. Large companies, small

businesses, entrepreneurial start-ups, universities, hospitals, and even the military are changing

the way they do things. Although change has always been a part of the manager’s job, it’s

become even more so in recent years. And because change can’t be eliminated, managers

must learn how to manage it successfully. In this chapter, we’re going to look at organizational

change efforts, the ways that managers can deal with the stress that exists in organizations,

and how managers can stimulate innovation in their organizations.

What Is Change and How Do Managers Deal with It? If it weren’t for change, a manager’s job would be relatively easy. Planning would be easier because tomorrow would be no different from today. The issue of organizational design would be solved because the environment

would be free from uncertainty and there would be no need to adapt. Simi- larly, decision making would be dramatically simplified because the outcome

of each alternative could be predicted with near pinpoint accuracy. It would also simplify the manager’s job if competitors never introduced new products or

services, if customers didn’t make new demands, if government regulations were never modified, if technology never advanced, or if employees’ needs always remained the same. But that’s not the way it is.

Change is an organizational reality. Most managers, at one point or another, will have to change some things in their workplace. We classify these changes as organizational change, which is any alteration of an organization’s people, structure or technology. (See Exhibit 7-1.) Let’s look more closely at each of these three areas.

Changing structure includes any alteration in authority relationships, coordination mechanisms, degree of centralization, job design, or similar organization structure variables. For instance, in previous chapters, we’ve mentioned that work process engineering, restructuring, and empowering result in decentralization, wider spans of control, reduced work specialization, and work teams. These structural components give employees the authority and means to implement process improvements. For instance, the creation of work teams that cut across departmental lines allows those people who understand a problem best to solve that problem. In addition, cross-functional work teams encourage cooperative problem solving rather than “us versus them” situations. All of these may involve some type of structural change. HCA250 Wk5 Assignment Paper

Changing technology encompasses modifications in the way work is done or the methods and equipment used. One organizational area, in particular, where managers deal with changing technology is continuous improvement initiatives, which are directed at developing flexible processes to support better-quality operations. Employees committed

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CHAPTER 7 | MANAGING CHANGE AND INNOVATION 193

to continuous improvements are constantly looking for things to fix. Thus, work processes must be adaptable to continual change and fine-tuning. Such adaptability requires an extensive commitment to educating and training workers. Employees need skills training in problem solving, decision making, negotiation, statistical analysis, and team-building, and they must be able to analyze and act on data. For example, Herman Miller, Inc., used both technology and employee training to achieve its market-leading position in the office furniture industry.2

Changes in people refer to changes in employee attitudes, expectations, perceptions, or behaviors. The human dimension of change requires a workforce that’s committed to quality and continuous improvement. Again, proper employee education and training are needed, as is a performance evaluation and reward system that supports and encourages those improvements. For example, successful programs put quality goals into bonus plans for executives and incentives for employees.

Why Do Organizations Need to Change? In Chapter 2 we pointed out that both external and internal forces constrain managers. These same forces also bring about the need for change. Let’s briefly review these factors.

WHAT EXTERNAL FORCES CREATE A NEED TO CHANGE? The external forces that create the need for organizational change come from various sources. In recent years, the marketplace has affected firms such as AT&T and Lowe’s because of new competition. AT&T, for example, faces competition from local cable companies and from free Internet services such as Skype. Lowe’s, too, must now contend with a host of aggressive competi- tors such as Home Depot and Menard’s. Government laws and regulations are also an impe- tus for change. For example, when the Americans with Disabilities Act was signed into law, thousands of businesses were required to widen doorways, reconfigure restrooms, and add ramps. Even today, organizations continue to deal with the requirements of improving accessibility for the disabled.

Technology also creates the need for organizational change. Our chapter opening case perfectly illustrates how changing technology can impact organizations. The Internet has changed the way we get information, how products are sold, and how we get our work done. Technological advancements have created significant economies of scale for many organizations. For instance, technology allows Scottrade to offer its clients the opportunity to make online trades without a broker. The assembly line in many industries has also undergone dramatic change as employers replace human labor with technologically advanced mechanical robots. Also, the fluctuation in labor markets forces managers to initiate changes. For example, the shortage of registered nurses in the United States has led many hospital administrators to redesign nursing jobs and to alter their rewards and benefits packages for nurses, as well as join forces with local universities to address the nursing shortage.

As the news headlines remind us, economic changes affect almost all organizations. For instance, prior to the mortgage market meltdown, low interest rates led to significant growth in the housing market. This growth meant more jobs, more employees hired, and significant increases in sales in other businesses that supported the building industry. However, as the economy soured, it had the opposite effect on the housing industry and other industries as credit markets dried up and businesses found it difficult to get the capital they needed to operate. And although it’s been almost a decade since 9/11, the airline industry is still dealing with the organizational changes forced on them by increased security measures and other environmental factors such as high fuel costs. HCA250 Wk5 Assignment Paper

organizational change Any alteration of an organization’s people, structure, or technology.

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194 PART THREE | ORGANIZING

Developing Your Skill About the Skill Managers play an important role in organizational change. That is, they often serve as a catalyst for the change—a change agent. However, managers may find that change is resisted by employees. After all, change represents ambi- guity and uncertainty, or it threatens the status quo. How can this resistance to change be effectively managed? Here are some suggestions.5

Steps in Practicing the Skill 1 Assess the climate for change. One major factor in

why some changes succeed while others fail is the readiness for change. Assessing the climate for change

involves asking several questions. The more affirmative answers you get, the more likely it is that change efforts will succeed. Here are some guiding questions:

a. Is the sponsor of the change high enough in the organization to have power to effectively deal with resistance?

b. Is senior management supportive of the change and committed to it?

c. Do senior managers convey the need for change, and is this feeling shared by others in the organi- zation?

d. Do managers have a clear vision of how the future will look after the change?

WHAT INTERNAL FORCES CREATE A NEED TO CHANGE? Internal forces can also create the need for organizational change. These internal forces tend to originate primarily from the internal operations of the organization or from the impact of external changes. (It’s also important to recognize that these changes are a normal part of the organizational life cycle.)3

When managers redefine or modify an organization’s strategy, that action often intro- duces a host of changes. For example, when Nokia brings in new equipment, that’s an internal force for change. Because of this action, employees may face job redesign, undergo training to operate the new equipment, or be required to establish new interaction patterns within their work groups. Another internal force for change is that the composition of an organization’s workforce changes in terms of age, education, gender, nationality, and so forth. A stable organization in which managers have been in their positions for years might need to restructure jobs in order to retain more ambitious employees by affording them some upward mobility. The compensation and benefits systems might also need to be reworked to reflect the needs of a diverse workforce and market forces in which certain skills are in short supply. Employee attitudes, such as increased job dissatisfaction, may lead to increased absenteeism, resignations, and even strikes. Such events will, in turn, often lead to changes in organizational policies and practices. HCA250 Wk5 Assignment Paper

Who Initiates Organizational Change? Organizational changes need a catalyst. People who act as catalysts and assume the respon- sibility for managing the change process are called change agents.4

Any manager can be a change agent. When we talk about organizational change, we assume that it’s initiated and carried out by a manager within the organization. However, the change agent could be a nonmanager—for example, an internal staff specialist or an outside consultant whose expertise is in change implementation. For major systemwide changes, an organization will often hire outside consultants to provide advice and assistance. Because these consultants come from the outside, they offer an objective perspective that insiders usually lack. However, the problem is that outside consultants may not understand the organization’s history, culture, operating procedures, and personnel. They’re also prone to initiating more drastic changes than insiders—which can be either a benefit or a disadvantage—because they don’t have to live with the repercussions after the change is implemented. In contrast, internal managers who act as change agents may be more thoughtful (and possibly more cautious) because they must live with the conse- quences of their actions (see “Developing Your Change Management Skill”).

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“white-water rapids” metaphor of change A description of organizational change that likens that change to a small raft navigating a raging river.

“calm waters” metaphor of change A description of organizational change that likens that change to a large ship making a predictable trip across a calm sea and experiencing an occasional storm.

change agents People who act as change catalysts and assume the responsibility for managing the change process. HCA250 Wk5 Assignment Paper

CHAPTER 7 | MANAGING CHANGE AND INNOVATION 195

e. Are objective measures in place to evaluate the change effort and have reward systems been explicitly designed to reinforce them?

f. Is the specific change effort consistent with other changes going on in the organization?

g. Are managers willing to sacrifice their personal self-interests for the good of the organization as a whole?

h. Do managers pride themselves on closely moni- toring changes and actions by competitors?

i. Are managers and employees rewarded for taking risks, being innovative, and looking for new and better solutions?

j. Is the organizational structure flexible? k. Does communication flow both down and up in

the organization? l. Has the organization successfully implemented

changes in the past? m. Are employees satisfied with and do they trust

management? n. Is a high degree of interaction and cooperation

typical between organizational work units? o. Are decisions made quickly and do they take into

account a wide variety of suggestions? 2 Choose an appropriate approach for managing

the resistance to change. In this chapter, six strategies are suggested for dealing with resistance to change— education and communication, participation, facilita- tion and support, negotiation, manipulation and co-optation, and coercion. Review Exhibit 7–3 (p. 200) for the advantages and disadvantages and when it is best to use them.

3 During the time the change is being implemented and after the change is completed, communicate with employees regarding what support you may be able to provide. Your employees need to know that you are there to support them during change

efforts. Be prepared to offer the assistance that may be necessary to help them enact the change.

Practicing the Skill Read through the following scenario. Write down some notes about how you would handle the situation described. Be sure to refer to the three suggestions for managing resist- ance to change.

You’re the nursing supervisor at a community hospital employing both emergency room and floor nurses. Each of these teams of nurses tends to work almost exclusively with others doing the same job. In your professional reading, you’ve come across the con- cept of cross-training nursing teams and giving them more varied responsibilities, which in turn has been shown to improve patient care while lowering costs. You call the two team leaders, Sue and Scott, into your office to discuss your plan to have the nursing teams move to this approach. To your surprise, they’re both opposed to the idea. Sue says she and the other emergency room nurses feel they’re needed in the ER, where they fill the most vital role in the hospital. They work special hours when needed, do whatever tasks are required, and often work in difficult and stressful circumstances. They think the floor nurses have relatively easy jobs for the pay they receive. Scott, leader of the floor nurses team, tells you that his group believes the ER nurses lack the special training and extra experience that the floor nurses bring to the hospital. The floor nurses claim they have the heaviest responsibilities and do the most exacting work. Because they have ongoing contact with the patients and their families, they believe they shouldn’t be pulled away from vital floor duties to help ER nurses complete their tasks. Now . . . what would you do? HCA250 Wk5 Assignment Paper

How Does Organizational Change Happen? We often use two metaphors to clarify the change process.6 The “calm waters” metaphor envisions the organization as a large ship crossing a calm sea. The ship’s captain and crew know exactly where they’re going because they’ve made the trip many times before. Change surfaces as the occasional storm, a brief distraction in an otherwise calm and predictable trip. In the “white-water rapids” metaphor, the organization is seen as a small raft navigating a raging river with uninter- rupted white-water rapids. Aboard the raft are half a dozen people who have never worked together

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196 PART THREE | ORGANIZING

before, who are totally unfamiliar with the river, who are unsure of their eventual destination, and who, as if things weren’t bad enough, are traveling at night. In the white-water rapids metaphor, change is a natural state and managing change is a continual process. HCA250 Wk5 Assignment Paper

These two metaphors present distinctly different approaches to understanding and responding to change. Let’s take a closer look at each one.

WHAT IS THE “CALM WATERS” METAPHOR? Until recently, the “calm waters” metaphor dominated the thinking of practicing managers and academics. The prevailing model for handling change in such circumstances is best illustrated in Kurt Lewin’s three-step description of the change process.7 (See Exhibit 7-2.)

According to Lewin, successful change requires unfreezing the status quo, changing to a new state, and freezing the new change to make it permanent. The status quo can be considered an equilibrium state. Unfreezing is necessary to move from this equilibrium. It can be achieved in one of three ways:

� The driving forces, which direct behavior away from the status quo, can be increased. � The restraining forces, which hinder movement from the existing equilibrium, can be

decreased. � The two approaches can be combined.

Once the situation has been unfrozen, the change itself can be implemented. However, the mere introduction of change doesn’t ensure that it will take hold. The new situation, therefore, needs to be frozen so that it can be sustained over time. Unless this last step is done, it’s likely that the change will be short-lived and employees will revert to the previ- ous equilibrium state. The objective of freezing the entire equilibrium state, then, is to stabilize the new situation by balancing the driving and restraining forces.

Note how Lewin’s three-step process treats change as a break in the organization’s equilibrium state.8 The status quo has been disturbed, and change is necessary to establish a new equilibrium state. This view might have been appropriate to the relatively calm environment that most organizations faced in the 1950s, 1960s, and early 1970s, but the calm waters metaphor is increasingly obsolete as a description of the kinds of “seas” that current managers have to navigate. (See the “From the Past to the Present” box for more information on Lewin and his organizational research.), HCA250 Wk5 Assignment Paper

WHAT IS THE “WHITE-WATER RAPIDS” METAPHOR? Susan Whiting is chairman of Nielsen Media Research, the company best known for its television ratings, which are frequently used to determine how much advertisers pay for TV commercials. The media research business isn’t what it used to be, however, as the Internet, video on demand, cell phones, iPods, digital video recorders, and other changing technologies have made data

Unfreezing

Changing

Refreezing

EXHIBIT 7-2 The Three-Step Change Process

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CHAPTER 7 | MANAGING CHANGE AND INNOVATION 197

From the Past to the Present• • “There is nothing so practical as a good theory.” “If you want truly to understand something, try to change it.”

These two quotes by Kurt Lewin provide unique insights into who he was and how he approached studying management.9

Lewin, who’s often called the father of modern social psychol- ogy (a discipline that uses scientific methods to “understand and explain how the thought, feeling, and behavior of individuals are influenced by the actual, imagined, or implied presence of other human beings”), made his name in management circles through his studies of group dynamics. His approach was based on the belief that “group behavior is an intricate set of symbolic interactions and forces that not only affect group structure but also modify individual behavior.”

One of his research studies that looked at modifying family food habits during World War II provided new and important insights into introducing change. He found that

“changes were more easily induced through group decision making than through lectures and individual appeals.” So what did this mean? His findings suggested that changes would be more readily accepted when people felt they had an opportunity to be involved in the change rather than when they were simply asked or told to change. That’s an important lesson for any manager, even today, to learn and apply. HCA250 Wk5 Assignment Paper

Finally, another of Lewin’s major contributions was the idea of force field analysis, a framework for looking at the factors (forces) that influenced a situation. Those forces could either be driving movement toward a goal or blocking move- ment toward a goal. When you view this idea in terms of managing change, you can see how this process also could contribute to understanding the dynamics of what makes change work and how managers can overcome resistance to change; that is, increase the driving forces, decrease the blocking forces, or both.

collection much more challenging. Whiting says, “If you look at a typical week I have, it’s a combination of trying to lead a company in change in an industry in change.”10 That’s a pretty accurate description of what change is like in our second change metaphor—white- water rapids. It’s also consistent with a world that’s increasingly dominated by information, ideas, and knowledge.11

To get a feeling of what managing change might be like in a white-water rapids environment, consider attending a college that had the following rules: Courses vary in length. When you sign up, you don’t know how long a course will run. It might go for 2 weeks or 30 weeks. Furthermore, the instructor can end a course at any time with no prior warning. If that isn’t challenging enough, the length of the class changes each time it meets: Sometimes the class lasts 20 minutes; other times it runs for 3 hours. And the time of the next class meeting is set by the instructor during this class. There’s one more thing. All exams are unannounced, so you have to be ready for a test at any time. To succeed in this type of environment, you’d have to respond quickly to changing conditions. Students who were overly structured or uncomfortable with change wouldn’t succeed. HCA250 Wk5 Assignment Paper