Alternative Methods for Managing a Discontinuous Change

The preceding two section chapters described the attitude toward resistance which has historically been found in firms and most other organizations. This attitude can be summed up, to borrow from Senator Moynahan, as ‘benign neglect.’ Firms introduce new strategies without anticipating, nor providing, for the resistance, and they deal with it reactively when it arises.

Ansoff noted ‘this attitude may be justified when the changes in strategy are evolutionary, minor and incremental, because the level of resistance to these will not be significant enough to warrant special attention. But as discontinuous strategy changes become frequent, the costs and delays due to resistance will increasingly focus the firm’s attention on managing the transition process.’

In this chapter, we present four approaches toward managing discontinuous changes , compare their advantages and disadvantages, and propose a method for selecting the approach that is appropriate to a given situation.

Coercive Change Management

The preceding discussion has shown that, when strategic planning is introduced into a firm, support and influence by top management is typically used to overcome resistance to planning . Further, implementation of the new strategy is the first and initial concern, followed by a step-by-step recognition of the systemic deficiencies. Discovery of the need to change culture and power (if it comes at all) comes last.

We shall refer to such a method of introducing discontinuous change, which follows a resistance inducing sequence and uses power to overcome resistance, as a coercive change process .

Experience shows that coercive change is expensive and socially disruptive, but it offers the advantage of a rapid strategic response. Thus, the coercive approach must be used when urgency is high and rapid response is essential.

But given an understanding of the nature of resistance, it need not be the brute force approach typically used in the past. Even under pressures of time, resistance can be managed and costs minimized. The typical pitfalls in the brute force approach are:

1.
Failure, prior to the change, to muster be amount of power necessary to assure its completion. The result is frustration of the change, which peters out before the new strategy is in place.
2.
Failure to anticipate the sources and strength of behavioral resistance. The results are unanticipated confusion, costs, and delay.
3.
Failure to attack its root causes, when resistance surfaces. The result is paralysis by analysis .
4.
Premature removal of the political support behind the change. The result is regression of the change.
5.
Failure to follow up implementation instructions issued to resisting units/individuals. The result is sabotage of the change.
6.
Failure to recognize the need for new competence , and capacity. The results are suppression of change in favor of operating concerns, low quality of strategic decisions, and ineffective implementation.

The pitfalls can be avoided, and the coercive change made more effective, through the following measures:

1.
Before launching the change, the organization must identify the potential sources of cultural and political resistance/support by performing a behavioral diagnosis .
2.
Build the necessary political platform for the change, that is, muster enough power behind it to assure successful completion.
3.
During the change, managers must monitor the process for incipient signs of resistance and deal with them before the resistance erupts.
4.
After the strategy change is made, turn attention to capability/capacity, and continue to apply power until the new strategy and capability match, and the change is institutionalized within the firm.

If a firm using the coercive approach lacks a strategic planning capability, it can save time by using external consultants for strategy formulation. It should be kept in mind, however, that if the consultants recommend changes which impact on the culture and the power structure, they will be unpopular. Top management will need to apply continuous pressure and follow up to assure implementation of the consultants’ advice.

Adaptive Change

Firms and other organizations which are not subjected to strategic shocks do, nevertheless, go through discontinuous strategic changes, this occurs through step-by-step accumulation of incremental changes which, over a long period of time, add up to transformation of culture , power structure, and competence . This is a process which sociologist calls organic adaptation which is unmanaged from the top and occurs in response to successive environmental stimuli, or to unsatisfactory performance by the firm, or, more rarely, it is brought about by creative forces within the firm. The successive adaptations are usually arrived at through trial and error.

If the change is spread over a long period of time, at any given time the resistance will be low, but not absent, because even incremental departures from the ‘historical order of things’ induce organizational dysfunctions and conflicts. But the required power is correspondingly low and applied by the proponents of the change who are usually below the top management level. The conflicts are resolved through compromises, bargains, power shifts.

We shall refer to introduction of a discontinuous strategic change through a series of incremental steps spread over time as an adaptive change process . It is slow but has the virtue of minimizing the level of resistance at any given time. Even though it may be argued that this amounts to spreading pain over time, the adaptive response belongs in the repertoire of valid responses, because it makes change possible under conditions when very little power is available to the proponents of change.

Like the coercive approach, adaptive change can be made more effective if it is managed. The suggestions made in the preceding section for improving the effectiveness of coercive change apply equally in this case. In addition, adaptive change should be made to follow the change motivating sequence . It will be recalled that this requires that changes in climate , mentality and power be made first, systemic changes in competence and capacity should follow, and strategy is changed only when the organization is ready and winning.

Crisis Management

During the last quarter of the twentieth century, there is an increasing likelihood that the firm will fail to perceive some rapidly developing and novel discontinuities until they forcefully impact on the firm. When a change appears to imperil the firm’s survival and places the firm under severe time pressures, the firm is confronted with a crisis.

When a crisis strikes, behavioral resistance is replaced by support. But solutions are not obvious, and time pressures are great. The initial task of top management is not to cope with resistance but to prevent panic and to generate a rapid and effective response.

However, as the firm emerges from the crisis, management must anticipate and counteract premature revival of resistance which usually accompanies early signs of recovery.

Frequently, a group of key managers convinces itself of the inevitability of an impending crisis while the rest of the firm does not yet see it coming. If this group has sufficient power and influence, it must take recourse to a coercive response. The suggestions made earlier for effective use of coercive power apply, except that they must be executed under severe time pressures.

When a crisis is imminent, the managers who perceive its advent ahead of the rest of the organization have the following options:

1.
Make a determined effort to convince others of the inevitability of the crisis and launch an anticipatory response.
2.
Resign oneself to the inevitability of the crisis and prepare to play the savior role when the crisis arrives.
3.
Trigger off an early artificial crisis , usually by inventing an external enemy, who threatens survival of the firm. This is an approach which has been used by political leaders throughout history.

The first two alternatives are less risky than the third, which carries not only high personal risk for the leaders, but also severe ethical implications inherent in creating an artificial crisis which will not necessarily transform itself into a real one. But its advantages are that it drastically reduces resistance, engenders support for the solution, and enhances the chances of a successful recovery.

Managed Resistance (‘Accordion’) Method

Of the three approaches discussed above, crisis management should be reserved for emergencies. The coercive and the adaptive approaches are each an extreme way for dealing with change. The coercive approach is a ‘damn the torpedoes, full speed ahead’ way of overpowering resistance. Even when optimally managed, it is costly, disruptive and conflict-ridden, but it is a necessary solution under conditions of high urgency. The adaptive approach is a ‘Rome was not built in a day’ way of introducing change: it minimizes resistance, but it is too slow under conditions of environmental urgency.

Hence, there is a need for an intermediate approach which works under conditions of moderate urgency and which can be implemented within the time limits dictated by the environment. We shall call this approach, the managed resistance , or ‘accordion,’ method for managing a discontinuous change. We describe it in detail in the following two chapters. Its salient characteristics are the following:

1.
It is applicable under conditions of moderate urgency when there is more time than necessary for the coercive method and not enough for the adaptive.
2.
The duration of the change is tailored to the available time. As urgency increases, the method moves toward the coercive extreme. As urgency decreases, it approaches the adaptive change . Hence its name ‘accordion’ to describe the stretchable property.
3.
This accordion property is made possible by the use of a modular approach: the planning process is subdivided into modules; at the end of each module appropriate implementation projects are launched.
4.
The conventional idea, that planning and implementation must be sequential, is abandoned in favor of parallel planning and implementation.
5.
Resistance is minimized and controlled; first, by building a launching platform ; second, by using the change motivating sequence within each module; third, by developing implementability during the planning process; and, fourth, by controlling resistance during the change process.

The advantage of the managed resistance method is that it tailors the firm’s response to the external timing imperatives on the one hand, and to the internal power realities on the other. The disadvantage is that it is more complex than either of the extreme approaches. Furthermore, it requires continual attention from top management.

Because the know-how necessary for designing and conducting such a complex process will often be lacking in the firm, outside assistance will be needed. However, the contribution of the outside consultants must be different from the coercive method . One of the key features of the accordion method, a feature which is essential for enhancing the acceptance of change, is that the implementers must also be planners .

Hence the roles of the consultants are: to assist in the design of the process, to supply tools of analysis, to train managers, to help monitor the process, to play the devil’s advocate.

Comparison of Methods

Table 23.1 compares the advantages and shortcomings of several methods. We need to recall that all of these methods are ‘heavyweight,’ requiring considerable attention and energy from management, and that they become useful and necessary only when the change in strategy requires what Machiavelli called, introduction of ‘a new order of things.’

Table 23.1

Comparison of change methods

Method	Applicability	Advantage	Shortcomings
Coercive	–High urgency	–Speed	–High resistance
Adaptive	–Low urgency	–Low resistance	–Slow
Crisis	–Survival threat	–Low resistance	–Extreme time pressure –Failure risk
Managed resistance	–Medium urgency –Recurrent discontinuities	–Low resistance –Tailored to time –Comprehensive capability change	–Complexity

As the figure shows, because of the high failure risk, crisis management is an undesirable substitute for the coercive method , but it has to be used whenever the management either fails to anticipate a crisis, or does not have enough power to force a timely response.

The adaptive approach is the slowest, but it provokes the least resistance and requires the least commitment of managerial attention and resources. It is useful in environments in which threats/trends/opportunities are highly predictable and the urgency is therefore low.

The managed resistance (‘accordion’) method is to be preferred whenever urgency is not so great as to require the coercive change. Its chief advantage is that it strikes the best possible tradeoff between reducing resistance and use of power, within the limits of the available time.

As the figure shows, the managed resistance method is also effective under conditions when the environmental discontinuity is not singular but repetitive and the firm needs to develop a permanent change-responsive strategic capability. It is also more effective than the brute force introduction of strategic planning which has repeatedly been used in the past.

*Choosing the Appropriate Method

The logical procedure illustrated in Fig. 23.1 can be used in choosing a method to be used to push a major discontinuous change through the firm.

../images/435756_3_En_23_Chapter/435756_3_En_23_Fig1_HTML.gif — Fig. 23.1
Choice of change method

1.
Use the strategic posture analysis of to determine the gap between the management capability of the firm and the capability needed to introduce and support the change.
2.
Taking into account the speed with which the change is expected to develop and the probable competitive dynamics, estimate the time to impact (t₁) for a timely response (if the change is an opportunity, t_i will depend on whether the firm intends to adopt a position of leadership, or to become a follower).
3.
Make power and resistance diagnoses to determine:
1. a.
  The maximum power base (P_max)
2. b.
  The minimum resistance (R_min) which will have to be overcome after platform-building.
4.
Estimate the time t, which the firm would need for response. Also, estimate time t, needed for adaptive response.

5.
Compare the power base P_max to the resistance R_min and decide whether the available power is sufficient to push the change through the firm using the adaptive method.
6.
If the power is insufficient, and failure to introduce the change will trigger a crisis, one or more preparatory approaches described in Sect. 6.3.3 should be taken.
7.
If the power is insufficient, but the change will not trigger a crisis, continue building support until it reaches the minimum necessary level to assure pushing the change through the firm.

${\text{Urgency}}\,{\mathbf{ \propto }}\,\frac{1}{{t_{i} - t_{c} }}$

8.
If P_max is adequate, the next step is to estimate the urgency by using the following relationship.
9.
Choose the response approach according to the following rules:
1. a.
  If t₁ > t_a use the adaptive method.
2. b.
  If t_a > t_c use the managed resistance.
3. c.
  If t_i _≈ t_c use the coercive method.
4. d.
  If t_i < t_c prepare for a crisis.

The preceding conclusions determine the minimal level of aggressiveness which management needs to pursue for timely change. When a choice is available, the level of aggressiveness above the minimum is determined by the following factors:

1.
Management style: authoritarian managers will prefer to move decisively and forcefully and will prefer shorter change processes; participative managers will prolong the process as long as possible in the interests of minimizing resistance.
2.
The choice will be influenced by the uncertainties in the time available t_i. It may be difficult to estimate with precision the time by which a market must be entered in order to capture the emerging demand, or when a new competitive response must be in place before the firm loses its market share. When the uncertainty in the estimates is large, management will incline toward high power and short duration.
3.
The choice of the method will also be influenced by the entrepreneurial risk propensity of the management, particularly in the case of opportunities. There is usually a tradeoff between early entries into the marketplace, which may secure a position of leadership for the firm, but which may turn out to be premature and costly, and delayed entries by the ‘also-rans,’ who cannot hope for leadership but are less prone to fail. Entrepreneurial managers will choose to move more forcefully. Cautious managers will stretch change over time.

Summary

There are three commonly observable methods by which organizations address discontinuous change: (1) coercive, which rapidly forces the change on the firm; (2) adaptive, which spreads the change over time; (3) crisis response , to survival threats under extreme time pressure. All three approaches are useful components of the management response repertoire, each appropriate under different conditions.

Historically, all three methods have usually been used without deliberate efforts by management to diagnose and manage resistance. The suggestions offered for resistance management in can be applied, to different degrees, in all three approaches, and thus make them more efficient and less disruptive.

When power is lacking or urgency is immediate, crisis management should be used. When power is adequate and the change is urgent, the coercive method is appropriate. When urgency is low, the adaptive method is attractive because it minimizes resistance and hence the need for power.

For conditions of moderate urgency, a new method, not normally observable in practice, called the managed resistance method, becomes attractive. It is to be described in detail in the next chapter.

Exercises

1.
Prepare a procedure for estimating the time 1 (see Fig. 23.1), which is available to the firm for responding to change. How will the estimate be affected by the risk propensity of the key managers?
1. a.
  Discuss the advantages and disadvantages of triggering off an artificial crisis .
2. b.
  How can an artificial crisis be made credible to the organization?
2.
During recovery from a crisis, what should be done to prevent an early resurgence of behavioral resistance?
3.
The management of your firm has decided that a major and unpopular change must be pushed through the firm.

The firm is an electronic component manufacturer, with a long record of success, whose position is being rapidly eroded by a new technology. The top management intends to cut out the major historical product line, reduce the present market’s scope to the still profitable segments, and make a crash effort to enter the new technology.

Your assignment is to prepare part of the transition plan for activities which will make the change as painless as possible.

23. Alternative Methods for Managing a Discontinuous Change