Change Management

Some published articles

Mário Luís Tavares Ferreira

2009 Rev.1.0
http://globalentrepreneurship.wordpress.com
 Table of Contents

1. Introduction 3
2. Basic Concepts 3
2.1. Holism 3
2.2. Change 4
2.3. Transdisciplinarity 4
2.4. The change and the identity of an autopoietic organization 5
2.5. Organizational Culture 5
2.6. The Importance of the language in an autopoietic organization 5
2.7. Planning and flexibility in an autopoietic organization 6
2.8. Organizational Knowledge 6
2.9. Order from Noise Theory 6
2.10. Organization from Noise 6
2.11. The change potential in a self-organized system 6
2.12. Actions to leverage self-organizations 7
2.13. Conflict management 7
2.14. Order through Fluctuations Theory 7
2.15. Common aspects between autopoiesis, order from noise and order through fluctuations 8
2.16. Complexity 8
2.17. Complex Systems 8
3. Change Management 10
4. Change Management or Contemporary Management 11
5. Change as a Process 13
5.1. Individual differences and Personal needs 13
5.2. Ways to analyse and develop a change 14

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1. Introduction

More than ever, in these confused and changing times, management – enterprise management – will
need to be agile, will need to reinvent itself and break paradigms. Also, management will need to be
able to surpass the current challenges and the future ones generated by the current global crises,
coupled with the evolution of business practices, markets and consumers’ profiles.

For that, Change Management will have a fundamental role in the success of the organization. Also,
it will have an key role in the development of new organizational structures that will be necessary to
face the new way of doing businesses.

Before start developing the matter of change management some concepts need to be refreshed and
they are related with the systemic vision of changes. The objective is to have a broad vision of
processes that are related with change management.

There are several researchers that developed different perspectives and concepts about the change
process, chaos and complexity. They are from different scientific fields and with different
approaches and presented their conclusions to understand the causes and effects of organizational
changes in enterprises behavior, and its relationship with the environment.

We can mention, for example, Humberto Maturana, Francisco Varela, Ilya Prigogine, John Holland,
David Bohm, Edgar Morin, Kurt Lewin, and so on. Many of them presented their conclusions with a
transdisciplinary perspective, which is crucial to understand complex systems, change management,
and the current reality and events.

2. Basic Concepts
In this section, it will be discussed some basic concepts about chaos, complexity, changes,
organizational culture, holism, transdisciplinarity, besides other matters.

2.1. Holism

It is the whole; it is to have the vision of the “big picture”. It is an interconnected universal vision,
where everything is related with everything and interferes in everything. The subject and the object
are inseparable. The whole contains the parties and is contained therein. Knower, known and
knowledge are inseparable.

"... [The universe] is not a collection of accidents attached externally, as a patchwork quilt, ... [it is]
synthetic, structural, active, vital and creative in a growing way, which progressive development is
shaped by an unique holistic operational activity, .. [embracing] by the most sublime creations and
ideas of the human and universal spirit. The character of unity or synthetic totality, that permeates
everything and is in constant growth in these structures, leads us to the concept of holism as the

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fundamental underlying activity and coordinated with others, as well as a vision of the universe as a
Holistic Universe”.
Pierre Weil

2.2. Change

There are events that affect the reality, which without these events would be stable.

Change means the passage from one state to another different. It is the transition from one situation
to another different. The change implies transformation, disturbance, interruption and rupture,
depending on its intensity. The change is in everywhere: in the organizations, cities, countries, habits
of people, products and services, and in the climate.

Kurt Lewin was very successful when portraying the change process as a sequence of three distinct
stages (thaw, change, refroze), which, summarizing, are:

Thawing of the current standard of behaviour; it means the initial stage, where old ideas and
practices are melted down, abandoned and unlearned. If there is no thawing, the trend is the pure and
simple return to the normal pattern of behavior. The thaw means that the old ideas and practices are
melted and unlearned to be replaced by new ones, which must be learned.

Change; it is the stage where new ideas and practices are tested, exercised and learned. During the
process, the agent of change must promote new values, attitudes and behavior through processes of
identification and internalization. This means that members of the organization need to identify
themselves with the values, attitudes and behaviors of the agent of change for then, internalize them,
since they perceive its effectiveness in their performance. Identification is the process by which
people play new standards of behavior after having won some improvement with them. The
Internalization is the process by which people have new attitudes and adopt them as part of their
normal standard of behavior. The change is the phase in which new ideas and practices are learned,
so that people start to think and to implement in a new way.

Refrozen; it is the final stage where the new ideas and practices are definitively incorporated into the
behavior. Refrozen means what was learned, was integrated into the current practice. It becomes the
new way that people know and how they do their work. Knowing only the new practice, it is not
enough. The incorporation to the behavior (support) and the successful practice (positive
reinforcement) is the ultimate goal of the refrozen stage.

2.3. Transdisciplinarity

There are several definitions, as of Piaget, Michaud, Jantsch and Morin, however, contrasting the
definition of experts, in the early days it was not made the distinction between various areas of
science and knowledge. The reductionism emphasized this dichotomy between different areas of
knowledge.

Paraphrasing Edgar Morin, transdisciplinarity is the communication and interconnection of all

scientific domains, without this causes the reduction of the complex realities into simplifications. It

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is to substitute the current reductionist paradigm for one of completeness, which, at the same time,
separates and unites.

2.4. The change and the identity of an autopoietic organization

Autopoietic organization is an organization that takes itself and has a very strong identity. It is its
organizational culture that operates on the environment, and faces the environment as a threat or
opportunity.

In an autopoietic system, changes occur only when the living being (organism) perceives it and it is
in congruence with the environment. As the only possible survival is in sync with the environment,
the autopoietic system is in constant update with the environment.

To occur the autopoiesis process, it is necessary the existence of identity and relationship.

The dual ability of an organism to adapt to its environment and yet retain its identity as separate
from that environment is referred to as autopoiesis by the biologists. In organizations, it would be
identified when the organization, as a whole, retains its identity, even when collaborators
(employees) change.

Autopoiesis is a concept created by Humberto Maturana and Francisco Varela. They created the
Autopoiesis Theory that has a systemic perspective; they defined living systems as self-producing
units which self-maintain their essential form, they incorporated the role of the observer in defining
systems.

There are different approaches to the analysis of organizations and social systems. One of them is
the Niklas Luhmann views on social systems that defines the constituent elements of the social
systems as “communications”, so the require conditions and analysis are made in terms of
communications. One other approach is from Peter Hejl that explores the social systems as an
emergent effect of individual’s mutual interactivity. And, he sees the society as a process in which
individuals interact with one another and with their natural environment under the primacy of self-
preservation.

2.5. Organizational Culture

It is the interpretation process that gives meaning to the reality, translating it for the members of the
organization, in terms of a common meaning.

2.6. The Importance of the language in an autopoietic organization

The language, in its broad sense, is more than the mutual structural coupling, which is the
coordination of behaviors. The language is the coordination of behavior coordination.

Therefore, the linguistic domain is a history of interactions of guidance, pursuing to be well

succeeded within an organization.

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 2.7. Planning and flexibility in an autopoietic organization

When it needs a problem solving (planning), it associates with a resolution of a passed problem. If
not attends the necessities, creates a new standard based on previous experience. Key point is that
everything that the organization needs is in itself.

So, it develops its stocks of knowledge and develops diversified skills, and agility, to elaborate a
rapid assessment of the environment, with the constant exercise of intuition.

Consequently, creates the potential for planning in real-time.

2.8. Organizational Knowledge

It is the knowledge shared by the members of the organization, which means, the capacity to make
distinctions, which is shared between them.

2.9. Order from Noise Theory

The principle of Order from noise expresses, after the occurrence of disturbances, the increase of
information (complexity) when the transition occurs, from a lower level to a higher level.

But that only makes sense to an external observer, outside the system. To the system, the increase of
complexity is itself.

The two antagonistic variables of the order from noise theory are variety and redundancy. The
greater is the variety, the lower is the redundancy.

2.10. Organization from Noise

It possesses variety (diversity), has redundancy (repetition) and has a large number of interactions
between its components.

The interactions are the information stream that circulates in the organization.

It should be noted that the greater is the variety, the lesser is the redundancy, and the greater is the
redundancy, the lesser is the variety.

2.11. The change potential in a self-organized system

It is based in its informal network of interactions between people.

When the organization has a strong informal network, it is observed that people stay more time
together, they self-help, they are more emotional involved, and, by consequence, it emerges mutual
trust that generates security and it is a potential to the change process.

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The capacity of decision is directly connected with the base of information that must be completed,
or not, and that it is, many times, supplied by the informal network. Haven’t a good base of
information, the possible alternatives are reduced, and, also, the analysis of the results depends on a
precise feedback, which depends on the connections and relationships in the informal networks.

2.12. Actions to leverage self-organizations

Develop social abilities, to support relationships and strong connections, between people.

To have tolerance to mistakes, discuss and argue actions that they do not agree, explain the correct
actions and why the error occurred.

Keep the focus on the mission and vision of the organization, sustain the organization identity and
everyone should share that vision.

Be adaptable, need to be able to deal with changes and with attention to environmental changes, be
flexible and with open mind.

Delegate and know how to delegate, it is a fundamental characteristic to complexity works.

Exercise the power with authority, not imposing it, but by meritocracy.

2.13. Conflict management

The possibility of conflicts is directly proportional to the number of interactions between people.
More interactions larger are the possibility of conflicts.

Multiply the alternatives, which mean, when an impasse exists, it is interesting to have various
alternatives to diminish the conflict.

Balance of power, avoid imposing, or to have or create differences between hierarchical levels, or
enforce decision power, which may generate conflicts or future resentments.

Wait for the quality of consensus, try to understand what the “other” thinks, and try to obtain
suggestions to the solutions, place arguments based on clear facts and information, work with
principles, universally accepted.

2.14. Order through Fluctuations Theory

Or, dissipative structures theory (from Ilya Prigogine), is the order gain by fluctuations. A
dissipative structure is stable when energy is provided constantly and fluctuations are absorbed.
When fluctuation exceeds a threshold, it is generated an instability and a process of reorganization
starts, and a new dissipative structure emerges.

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The evolution (restructuration) within the new structure, and with a new complexity, happens in
qualitative jumps of increasing complexity, by structural changes with the simultaneously
destruction and creation of order.

It is the same to say: while energy is supplied to the system, the system keeps increasing its entropy
and evolves to a higher degree of order. A common example is the boiling water, its entropy
increases until it changes the state to vapor and reaches a new order.

To have the transformation, in organizations that evolve in “jumps”, it is necessary that

organizations move away from equilibrium, which means, it need to exist instability and stability,
disorder and reorder.

It is also necessary that self-organization exists, based on strong internal informal networks and that
the organization has space to experimentation, allowing the system to create new structures and
increase complexity.

2.15. Common aspects between autopoiesis, order from noise and

order through fluctuations

All the systems that self-organize when they notice “noise”, they increase the complexity moving,
again, to be in congruence with the environment.

2.16. Complexity

It is the circularity between instances of order and disorder.

Also, in self-organizations, information is complexity, more information, more complexity.

“To understand order, it is to pay attention to similar differences, and similarities of differences,
which mean, consider not only the similar differences, but, also, the different similarities of the
differences”.

David Bohm

2.17. Complex Systems

They are systems that exchange information, continuously, with the environment, so, they are
dynamic and, also, because of information exchange, they are influenced and they influence.

In constant redefinition of their own standards of internal behavior and operation, they are self-
organized systems.

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In a complex system, the self-organization is the spontaneous emergence of new, and each time
more, complex levels of organization.

The emergence of new stages of reorganization starts from a large number of interactions between
the components of the system, this happens when these components notice changes in the external
environment.

So, complex systems are adaptive in real-time, they don’t plan or define their future in an anticipated
way. By corollary, it can be deduced that the future state can’t be predicted, but, by other way, it
must be pursued to understand their dynamics.

Some differences between deterministic systems and complex systems:

Deterministic system:

• The system evolves according to a set of rules.

• Knowing the initial state and the rules, the next stage can be predicted.
• Positivism and mechanistic thinking (Newtonian and Cartesian thinking).

Complex system:

• Actors influencing each other.

• Feedback loops.
• Imperfect communication.
• Unpredictable outcomes.
• Emergence of standards.
• Butterfly effect.
• Without control.
• Everything is connected with everything and what happens is the result of everything that
happens.
• The whole is larger then the sum of the parts.

We finish these set of basic concepts with the sentence of Dorothy Leonard, from Harvard Business
School.

“The innovation occurs at the boundaries between mind sets

, not within the provincial territory of one knowledge and skill base.”

Dorothy Leonard

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3. Change Management
“... men always pursue to equate changes’ problems, but never have the concern with the problem of
change.”
Ruben Bauer, “Change Management, Chaos and Complexity in Organizations”

The objective of the introduction, last item, was to focus on “the problem of change”, in itself, and to
allow that the discussion of change management may have a broader and systemic vision.

According to Ruben Bauer, changes, in the plural, are perceived as single events, distinct, one of the
other, and they affect the reality, which without it, it will be stable. And, nowadays, what science
observes, it is that doesn’t exist changes, what exists is change. The balanced state is a particular
limit case in a universe of permanent evolution, consequently, in permanent change. Everything is a
stream, everything is in transformation, and everything is changing.

In organizations it is not different. As well it isn’t in management, sales, or in any other activity or
function.

What it is observed, nowadays, it is the change; the equilibrium is exactly the limit case. The
economy, employment, market, perspectives, people profiles, habits, and so on, are changing,
everything is changing, constantly and quickly.

So, now, more than ever, a systemic vision is necessary.

The change and change management can have many focuses, depending on the purpose and the
environment that should be analyzed.

It can be analyzed regarding the strategy, its dynamics, as well its roots, when analyzing
organization’s mission.

Could be in the perspective of the organizational architecture, or it could be in the change process of
the business structure, when modifying the business model or the operation. The focus could also be
on processes and innovation.

Change management, also, could have the focus on human resources and people management, where
leadership, behaviour, organizational culture, management innovations, and others issues are
analyzed.

Could, also, have the objective of changing the organizational positioning, or could be about a
product repositioning in a market.

Resuming, it means that change management must be present, and be considered vital, in all
activities or projects, or administration of any entrepreneurial activity, in the present or in the future.

If the focus is, for example, on management efficacy, according to Stephen Covey, the seventh habit
is to sharpen the saw, which mean, the balanced self-renewal, it is change and self-actualization.

If the focus is on modern organization, for example, learning organizations, according to Peter
Senge, the principal points are: personal mastery, mental models, shared vision, team learning, and

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systemic thinking. So, the organization is in continuous learning process and evolution, and, also, in
a continuous changing process.

If it is with a macro vision, but also related with administration. Peter Drucker, in his book -
Managing in the Next Society – says that some chapters are about traditional administration matters
and others are not. And none of them, presents panaceas, tools or techniques said as “certain” that in
many best sellers, in the decades of the 80s and 90s. However, it is a book for executives and
certainly deals with administration. The sub-adjacent theses to all chapters, it is that important
changes that are creating the Next Society will dominate the tasks of all executives in the next ten or
fifteen years and maybe more. They will be the greatest threats and opportunities to all organization,
big and small.

Also, later, in the same book, Peter Drucker writes, that, in fact, the social changes can be more
important than the economical events, to the success or failure of an organization.

With these examples, it can be deduced that the scope of change management is much more than the
presentation or planning of a management process, with focus on process creation or modification,
or only related with leadership, conflict management, profiles analysis of oppositions or facilitations,
or projecting, following and controlling processes’ implementation.

4. Change Management or Contemporary Management

The truth is that nowadays what we call change management could be named as contemporary
management of the XXI century. The Cartesian and Newtonian model of order, stability, linearity
and forecasting, doesn’t exist more, maybe, never existed.

If we look to the evolution of administration theories, it can be seen, at least, half dozen different
lines of thought (Taylor, Fayol, Weber, Mayo, McGregor, and so on). If it is analyzed the strategic
planning schools, at least ten schools will be found, as Henry Mintzberg explained in his book Safari
of Strategy. So, it can be said that, always, management was in evolution and dynamic, so, by
corollary, it was always in a continuous process of change, adaptation and evolution.

As already said, balance is a limit-case and not a general rule or state of contemporary times. It is
also true to internal and external environments of organizations, and in its most diverse forms and
perspectives, of those environments, and they are in continuous mutation and adaptation to the new
reality that, by itself, is dynamic and unpredictable.

The notion of time and change become more evident by the velocity and intensity in the current
transformations of our environments (in all dimensions), which took to highlight and reinforce the
concept of change management, that, in fact, always existed.

Organizations are developed and managed by people, so, the further sentences, about change
management, will have the focus on people and the necessary synergy to the dynamic process of
management occur with efficacy and efficiency.

To have a dynamic and continuous process of adaptation and evolution of the organization, it is
important that the organizational structure be able to learn and to practice the self-development. For

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that, the concept of learning organizations can be rooted with the “Five Disciplines” of Peter Senge,
that are:

Personal Mastery: it involves formulating a coherent picture of the results people most
desire to gain as individuals (their personal vision), alongside a realistic assessment of the
current state of their lives today (their current reality). Learning to cultivate the tension
between vision and reality can expand people's capacity to make better choices, and to
achieve more of the results that they have chosen.

Mental Models: it is focused around developing awareness of the attitudes and perceptions
that influence thought and interaction. By continually reflecting upon, talking about, and
reconsidering these internal pictures of the world, people can gain more capability in
governing their actions and decisions. One of the more powerful principles of this discipline
is the "ladder of inference," which can show how people leap instantly to counterproductive
conclusions and assumptions.

Shared Vision: it establishes a focus on mutual purpose. People learn to nourish a sense of
commitment in a group or organization by developing shared images of the future they seek
to create, and the principles and guiding practices by which they hope to get there.

Team Learning: through techniques like dialogue and skillful discussion, teams transform
their collective thinking, learning to mobilize their energies and actions to achieve common
goals, and drawing forth an intelligence and ability greater than the sum of individual
members' talents.

Systems Thinking: people learn to better understand interdependency and change, and
thereby to deal more effectively with the forces that shape the consequences of our actions.
Systems thinking is based upon a growing body of theory about the behavior of feedback and
complexity - the innate tendencies of a system that lead to growth or stability over time.
Tools and techniques such as system archetypes and various types of learning labs and
simulations help people see how to change systems more effectively and how to act more in
tune with the larger processes of the natural and economic world.

Endorsing the above principles and it is valid for team work as for individual initiatives, the “7
habits of Highly Effective People”, of Stephen Covey, are also fundamental in these times of
change. They are:

1 - Be proactive - Principles of Personal Visio

2 - Begin with the End in Mind
3 - Put first things first - Principles of Personal Management
4 - Think Win-Win - Principles of Interpersonal Leadership
5 - Seek first to Understand, Then to Be Understood
6 - Synergize - Principles of Creative Cooperation
7 - Sharpen de saw - Principles of Balanced Self-Renewal

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5. Change as a Process

In this last part, the objective is to revise some points about human resources and to present a more
pragmatic vision about change, with a perspective of a process. So that, in the overall, it will be
possible to have a systemic vision, as before mentioned, as well, to have a detailed vision of a
singular process of change.

Rephrasing last paragraph, you will have the vision of the whole, go to the parts and return to the
whole, which mean, systemic vision.

5.1. Individual differences and Personal needs

An aspect already stressed, using the Peter Senge and Stephen Covey perspectives, is the importance
that people have in the formation, management and development of teams.

The last two aspects that will be highlighted will be related with people, and they are: the individual
differences and interpersonal basic needs, when integrating a team.

The Personal differences can be about:

• Values and believes

• Psychic dominant functions (sensation, feeling, reason, intuition)
• Type of intelligence
• Culture
• Character
• Temperament

About interpersonal needs, they can be:

• Necessity of inclusion. It happens at the initial phase of the group formation. It is when they
are seeking for a positioning and acceptance inside the group, and also an identity match.
• Necessity of control. When we have games of power. In this phase we can have leadership
clashes.
• Necessity of affection. It is when we have exchange of communications, manifestations of
empathy and antipathy, joy and sadness, harmony and tension. It is when the differences are
recognized.

There are also studies about profiles, already made, about how each individual deals with changes
and negotiation processes, like: facilitator, pragmatic, entrenched, engaged, competitor, and so on.

However, understanding individual differences and personal needs, easily, any profile can be
analysed and defined.

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 5.2. Ways to analyse and develop a change

Example 1:

First stage, Identify the change:

• Awareness of the necessity of change
• Indentify the type of change

Second stage, Planning:

• Diagnostic
• Define the objectives and strategy
• Define the processes, methodologies and key process indicators

Third stage, Implementation:

• Structure: teams, resources, education, and so on.
• Change: the implementation.
• Consolidation.

Fourth stage, Control and Evaluation:

• Verify the results and KPI (key process indicators)
• Feedback the course corrections to the first stage.

Example 2:

• Start
• Define the Scope
• Risk Analysis
• Validation Test
• Change Planning
• Define the Change Manager (responsible)
• Define the team
• Prepare the communication process
• Define the implementation team
• Implement
• Evaluation tests
• Manage the updates and corrections
• Documentation
• Maintenance

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