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29.04.2015
Now that we have discussed the reasons people resist change and the forces that cause a change to happen, it is appropriate to begin discussing the models we can use to manage change within our organizations. The important thing to note about Kotter’s model is the ideology that in order for change to happen, people must be driven to make it happen. Theory O, on the other hand, makes the organizational purpose the development of human capability to implement strategy.
When creating change within an organization, there is constant tension between Theory E and Theory O. As you have probably guessed, most managers and leaders will use a combination of all approaches to change we have discussed.
The Beer and Nohria model focuses on the two philosophies behind change: Theory E and Theory O.
Change is a common thread that runs through all businesses regardless of size, industry and age.
Understanding Lewin's Model If you have a large cube of ice, but realize that what you want is a cone of ice, what do you do? We will be discussing three today and choosing which is the best fit a company needing many changes. In the last ten years, there have been numerous studies which all confirmed that between 60-80% of all change projects fail fully or partly: either the objectives of the project are not achieved or the projects cannot be completed in time or on budget. Awareness of these factors can help us, as leaders, understand if a Theory E or Theory O approach is necessary. In doing so, they are better able to understand all the nuances that may occur when change needs to happen. Theory E focuses on economic value, while Theory O focuses on human capital, culture, and commitment.
Understanding the Three Stages of Change Find out about Lewin's Change Management Model, in this short video. We'll use a little basic science to introduce the concept, after which you'll find enough information to allow you to unleash your knowledge of force fields on colleagues! Usually, a lot is at stake: money, personal reputation, and the health of the organization.
This type of organization is driven from the top, with decisions made at the top and trickled down to employees.


In Chapter 12, Section 3 "Guidelines for Change Implementation", we discuss how we can use these models as a guide for managing change in our organizations. Second, the organization must implement the culture and creation of new behavior for the change. Organizations that handle change well thrive, whilst those that do not may struggle to survive. There are many differences to each of these models that can be seen once we discuss them further. So, the 1 million dollar question for any change leader is: How can I make sure that my change project is successful? In our Jack Welch example, he realized that using only a Theory E approach was not sufficient, so he then switched to a Theory O approach. First, the managers and leaders themselves may have a different focus on how to manage change. Finally, refreezing occurs when new processes and other supporting mechanisms help the change become a reality. John Kotter, one of the leading management thinkers and writes has given his answer to this question by providing an eight step model for leading change. Jack Welch, the famous retired General Electric chief executive officer (CEO), took a Theory E approach when he first took over the company. In this approach, he called the organization “boundaryless” and encouraged new innovations. The Concept Let's start with a simple science experiment (this really is relevant, so stay with me for a moment please).
According to their research, there are two theories in relation to change—Theory O and Theory E. He demanded that every business unit at General Electric be the top one or two in its industry.
Figure 12.7 "Beer and Nohria’s Model" shows some examples of the various attitudes on a variety of possible changes. For example, failed companies like Enron used a Theory E approach—which is all about maximizing shareholder value. On the other hand, companies cannot only use a Theory O approach, since some of the focus of change certainly needs to be on economic value.


This is when General Electric implemented major downsizing and cut 113,000 workers from its high of 412,000. As a result, companies face a tension when trying to consider both E and O in their change processes. Kotter divides the steps into three categories: creating a climate for change, engaging and enabling the entire organization, and implementing and sustaining the change. Theory OA change theory with a focus on culture, human capital, and gain of employee commitment., on the other hand, aims to understand culture, human capital, and gain of employee commitment when making organizational changes.
Within each of these categories, Kotter discusses what needs to occur in order for each step to happen. Similar to any leadership action, these two approaches are guided by management assumptions about the purpose for and the meaning of organizational change. As leaders, we need to understand the three-step process in order to ensure all three steps happen.
If one step is missing—or not performed correctly—then it will be impossible to make the change “stick.” For example, in 1997, Apple hired back Steve Jobs after thirteen consecutive years of losses (this was after he had been fired once already for not being aligned with company strategy).
He restructured the organization to focus not only on computers but on consumer electronics. In doing so, he cut a major project called “Newton,” which had sucked countless hours and $150 billion from the company.Shontell, A. The amazing story of how Steve Jobs took Apple from near bankruptcy to billions in 13 years.
During the change phase, Jobs restructured the organization and put the core competency focus on new products such as the iPod. During the refreezing phase, Jobs awarded incentives to employees for creativity and new ideas.



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